Hicks v. Resolution Trust Corp.

• Decision Date: 23 May 1990
• Docket Number: No. 87 C 8593.,87 C 8593.
• Parties: John HICKS, Plaintiff, v. RESOLUTION TRUST CORPORATION as Receiver for Clyde Federal Savings and Loan Association, Sylvia Meidema, Robert Ropa, Valerian Musselman, Nicholas Lash, Ernest Melichar, Erwin Kucera, Steven Kuroski, and Lydia Franz, Defendants.
• Court: U.S. District Court — Northern District of Illinois

738 F. Supp. 279

John HICKS, Plaintiff, v. RESOLUTION TRUST CORPORATION as Receiver for Clyde Federal Savings and Loan Association, Sylvia Meidema, Robert Ropa, Valerian Musselman, Nicholas Lash, Ernest Melichar, Erwin Kucera, Steven Kuroski, and Lydia Franz, Defendants.

No. 87 C 8593.

United States District Court, N.D. Illinois, E.D.

May 23, 1990.

John Kneafsey, Stephen G. Kehoe, Nisen & Elliott, Chicago, Ill., for plaintiff.

George W. Groble, Groble & Groble, Ltd., Philip J. Fowler, Chicago, Ill., Edward J. O'Meara, Washington, D.C., for defendants.

MEMORANDUM OPINION AND ORDER

LINDBERG, District Judge.

This matter is before the court on plaintiff's motion to vacate a judgment of dismissal with prejudice and for leave to file a fourth amended complaint.

Initially, there is a disagreement between the parties as to whether plaintiff filed a timely motion to vacate the judgment.¹ As plaintiff points out in his brief, this court, by inadvertence, failed to comply with FRCP Rule 58 which requires judgment to be entered on a separate document. Rule 58 provides in relevant part: "Every judgment shall be set forth on a separate document. A judgment is effective only when so set forth and when entered as provided in Rule 79(a)." Rule 58 is designed to make certain when a judgment is effective in order to determine with certainty the time for filing notices of appeal and post-judgment motions. United States v. Indrelunas, 411 U.S. 216, 220-22, 93 S.Ct. 1562, 1564-65, 36 L.Ed.2d 202 (1973). In the instant case, when plaintiff attempted to file his motion for leave to file his fourth amended complaint, defendant objected because plaintiff had not moved to vacate the judgment of dismissal. The court granted plaintiff leave to file a motion to vacate in the mistaken belief that judgment pursuant to Rule 58 had been entered. Defendant argues that plaintiff's motion to vacate was not filed within ten days of the judgment and is therefore untimely and should be considered under FRCP Rule 60. However, Rule 58 is designed to avoid just this type of uncertainty and in light of this court's inadvertent failure to comply with Rule 58 any doubts should be resolved against finality. See Chicago Housing Tenants Organization, Inc., v. Chicago Housing Authority, 512 F.2d 19, 21 (7th Cir 1975). Accordingly, plaintiff's motion will be considered a motion for leave to file a fourth amended complaint and not as a motion to vacate judgment pursuant to FRCP Rule 59 or Rule 60.

Retaliatory Discharge Under Illinois Law

The court, in its order entered March 16, 1990, dismissed plaintiff's third amended complaint with prejudice for failure to state a cause of action for retaliatory discharge under Illinois law. 736 F.Supp. 812. Plaintiff seeks leave of the court to file his fourth amended complaint which again seeks to state a cause of action for retaliatory discharge under Illinois law. Plaintiff's fourth amended complaint adds additional legal and factual allegations which were not raised in plaintiff's prior complaints. Defendant argues these new allegations do not relate back to plaintiff's earlier complaint and are barred by the two year statute of limitations on tort actions in Illinois. Ill.Rev.Stat. ch. 110, par. 13-202 (Smith-Hurd 1984). Plaintiff contends that the cause of action, i.e., retaliatory discharge, is the same as prior complaints and arises out of the same facts already alleged. The court will address the relation back issue later in this opinion. Even if the court were to accept plaintiff's contentions that the new factual and legal allegations relate back to the original complaint, plaintiff's fourth amended complaint continues to fail to state a cause of action for retaliatory discharge under Illinois law.

Plaintiff's third amended complaint for retaliatory discharge alleged in substance that his employer, defendant Clyde, was violating the Federal Community Reinvestment Act ("CRA"). 12 U.S.C.A. §§ 2901 et seq. (West 1989). Specifically, Clyde, through the action of defendant board members, failed to adequately advertise its loan services and failed to provide VA and FHA mortgage programs to low and moderate income areas of Clyde's designated CRA community. Plaintiff alleged that Clyde and the board's failure and refusal to adequately advertise these services violated the CRA and was done with the intention to discriminate in the providing of loan services to black persons and persons of low and moderate income within Clyde's CRA community. Plaintiff alleged that his attempts to obtain Clyde's compliance with the CRA and to stop the alleged discrimination were rejected by Clyde and its board members. Plaintiff alleged that he was fired by the board in retaliation for his attempts to obtain Clyde's compliance with the CRA.

Plaintiff's fourth amended complaint adds the additional allegations that Clyde's actions violated federal civil rights laws and certain federal regulations concerning applications for loan programs with the Federal Home Loan Bank Board ("FHLBB") and the Department of Housing and Urban Development ("HUD"). Plaintiff's fourth amended complaint alleges that in signing a series of purchase and servicing agreements with the FHLBB concerning certain loans by Clyde, Clyde guaranteed that it had complied with all applicable federal civil rights laws and other anti-discrimination legislation including the CRA. Similarly, in applying for authorization with HUD to provide VA and FHA mortgage loans, Clyde guaranteed that it was in compliance with all federal anti-discrimination laws including the CRA. These assertions of compliance were false in light of Clyde's CRA violations. Plaintiff also alleged that he refused to sign a loan purchase contract on behalf of Clyde with the FHLBB because he knew the warranties of compliance were false in light of the CRA violation by Clyde. Over plaintiff's objections, the board authorized Clyde to enter into the agreement which contained guarantees as to Clyde's compliance with federal antidiscrimination laws and regulations. Plaintiff also alleged for the first time that in response to inquiries from the FHLBB about Clyde's CRA compliance, plaintiff responded to the FHLBB that although Clyde was not yet meeting CRA requirements, Clyde was undertaking to remedy the situation. Plaintiff, in addition to his prior allegations that he was fired for seeking Clyde's compliance with the CRA, alleges in his fourth amended complaint that (1) he was fired because the board wanted to cover up the fact that they had submitted applications to the FHLBB and HUD which falsely stated their compliance with federal anti-discrimination legislation and regulation; and (2) he was fired because he had advised the FHLBB that Clyde's CRA compliance statement was false.

The substance of plaintiffs cause of action is still the same. Plaintiff claims he was fired in retaliation for seeking to prevent and/or remedy Clyde's allegedly discriminatory lending practices as evidenced by Clyde's failure or refusal to adequately advertise or otherwise provide loans in black, and low and moderate income areas of Clyde's CRA community pursuant to the requirements of the CRA.

The court recognizes the serious and disturbing nature of plaintiff's allegations. However, plaintiff's reliance on the CRA and federal civil rights law does not answer the question of whether the Supreme Court of Illinois would recognize a cause of action for the tort of retaliatory discharge in Illinois. The relevant inquiry on the issue has already been addressed in this court's March 16, 1990 order and will not be restated here. Upon further consideration and research, the court has found additional support for its determination of March 16, 1990 that plaintiff cannot state a cause of action under Illinois law.

As indicated by the Illinois Supreme Court, the public policy of the State of Illinois is to be found in the State's constitution, statutes, and when they are silent, in its judicial decisions. Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876 (1981). The public policy of Illinois concerning violations of civil rights, including discrimination based upon race, is to be found in the Illinois Human Rights Act ("IHRA"). Ill. Rev.Stat. ch. 68, par. 1-101 et seq. (Smith-Hurd 1989); Mein v. Masonite Corporation, 109 Ill.2d 1, 92 Ill.Dec. 501, 485 N.E.2d 312 (1985); Dale v. City of Chicago Heights, 672 F.Supp. 330 (N.D.Ill.1987). Section 4-102(A) of the IHRA prohibits unlawful discrimination by financial institutions, like defendant Clyde, in the denial of its services which it normally offers. Ill. Rev.Stat. ch. 68, par. 4-102(A) (Smith-Hurd 1989). Further, Section 6-101 of the IHRA makes it a civil rights violation in Illinois for a person, or two or more persons, to conspire to retaliate against a person because he or she has opposed that which he or she reasonably and in good faith believes to be unlawful discrimination as defined under the IHRA. Ill.Rev.Stat. ch. 68, par. 6-101(A) (Smith-Hurd 1989). Therefore, there is a public policy in Illinois against Clyde's alleged discriminatory practices in providing its loan services. However, the IHRA in section 6-101(A) specifically provides a remedy for the type of retaliatory discharge alleged by plaintiff. Further, the IHRA provides a coherent administrative enforcement procedure designed to remedy an alleged retaliatory discharge in violation of the public policy of the IHRA. See Ill.Rev.Stat. ch. 68, par's. 7-101 et seq., 8-101 et seq. (Smith-Hurd 1989); Dale, 672 F.Supp. 330. Additionally, and most importantly, the remedy under the IHRA is exclusive. Ill.Rev.Stat. ch. 68, par. 8-111(C) (Smith-Hurd 1989).

One of the main reasons the Supreme Court of Illinois recognized an independent civil cause of action for the tort of retaliatory discharge was the absence of a remedy to vindicate the public policy involved. Brudnicki v....