Judge dismisses lawsuit filed against Sauk Valley Bank

A McHenry County judge has dismissed a lawsuit filed against Sauk Valley Bank that claimed the Sterling-based bank conspired to and lured four State Bank employees – along with customers and businesses worth about $4 million – to a new branch it set up down the road from State Bank in Harvard.

The suit came to light locally when a direct mail flyer, designed to look like a news article, circulated throughout the area last month, reporting that Sauk Valley Bank was being sued for “breach of fiduciary duties and conspiracy,” but offering very little other information. Who sent it and why was not included in the flyer, but a U.S. Postal Service shipment verification form showed that it was sent by the plaintiff, Wonder Lake-based State Bank Group.

The flyer appears to have no bearing on the suit, which was filed Dec. 19 against Sauk Valley Bank and two of the four former State Bank employees.

On a motion from the defense arguing that the complaint was not legally sufficient to proceed, the suit was dismissed April 13.

In a nutshell, Sauk Valley Bank’s attorney, Tim Zollinger of Ward, Murray, Pace & Johnson, said the facts State Bank put forth, including that the two employees, former vice presidents Vern Sisson and Brenda Gratz, were, by definition, officers of State Bank – a finding required before a breach of fiduciary duty can be found – weren’t backed up by the required evidence.

As for the charges that Sauk Valley Bank engaged in a conspiracy to harm State Bank, Zollinger argued that competition does not equal conspiracy: It was not illegal for the employees to talk with Sauk Valley Bank officials about coming to work for them, nor is it illegal for the bank to open a branch in Harvard that competes with State Bank.

State Bank has 28 days – until May 11 – to file an amended complaint, and if it does, Sauk Valley Bank has 21 days after that to respond.

Sauk Valley Bank had been considering opening a Harvard location long before it actually did, Sauk Valley Bank President and CEO Dirk Meminger said.

Additionally, officials did not approach Sisson and Gratz until learning they were not satisfied with their jobs and planned to leave; that’s when they suggested they apply with Sauk Valley Bank, Meminger said.