Barbara J. Monrad and Carol Ann Crone v. Federal Deposit Insurance Corporation as Receiver for Independence Bank

In this action, appellees seek damages in the form of severance pay as former employees of the now-defunct Independence Bank from the Federal Deposit Insurance Corporation (FDIC), in its capacity as receiver for the bank. The district court granted appel-lees’ motion for summary judgment and awarded them severance pay, attorney fees, and costs. FDIC appeals, contending that severance pay is not owed because it properly repudiated the contracts of all bank employees in accordance with its statutory authority. FDIC also asserts that the district court abused its discretion in awarding penalties and attorney fees. We affirm in part and reverse in part.

I.

Appellee Carol Crone began working for Independence Bank in 1966. Appellee Barbara Monrad began working for the bank in 1979. Both held various positions with the bank, and each was an officer as of January 30, 1992. On that date the Superintendent of Banks of the State of California took possession of the bank. On the same day, the Federal Deposit Insurance Corporation was appointed receiver of the bank (FDIC-R).

FDIC-R’s bank liquidation specialist conducted a review of the bank contracts and determined that certain contracts,…