___________

No. 94-3763

___________

Elmer Ernest Romines; *

Marjorie R. Romines; *

Marilyn F. Romines; *

Marjorie Ann Romines, *

* Appeal from the United States

Appellants, * District Court for the

* Eastern District of Missouri.

v. *

*

The Great-West Life Assurance *

Company, a corporation; Great- *

West Life Annuity Insurance *

Company, a corporation; *

Progressive Ozark Bank, a *

Federal Savings Bank, *

*

Appellees. *

___________

 Submitted: April 10, 1995

 Filed: January 19, 1996

___________

Before FAGG, Circuit Judge, HENLEY, Senior Circuit Judge, and

BOWMAN, Circuit Judge.

___________

HENLEY, Senior Circuit Judge.

This is a diversity of citizenship action by Elmer Ernest 

Romines and his wife and daughters (collectively, Romines) against

Progressive Ozark Bank of Salem and Houston, Missouri (Progressive

Ozark Bank) and two insurance companies, Great-West Life Assurance

Company and Great-West Life Annuity Insurance Company

(collectively, Great-West). Romines sought declaratory and other

relief under a Consulting Agreement he entered with a predecessor

of Progressive Ozark Bank and under the provisions of two annuity

contracts purchased from Great-West to fund payments due under the
 1

The Honorable George F. Gunn, United States District Judge,

Eastern District of Missouri.

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Consulting Agreement. The parties filed cross motions for summary

judgment and the district court1 granted summary judgment for

defendant, Progressive Ozark Bank. Romines v. Great-West Life

Assurance Co., 865 F. Supp. 607 (E.D. Mo. 1994). Romines filed a

timely notice of appeal from the judgement of the district court

under 28 U.S.C. § 1291. We affirm.

BACKGROUND

From October 1974 until his resignation in March 1991, Elmer

Romines served as president and chairman of the board of

Progressive Federal Savings Bank (Progressive Federal) of Houston,

Missouri. In order to allow Progressive Federal to begin a

transition to new management, in September 1988, Romines and

Progressive Federal entered into a Consulting Agreement. Under the

terms of the agreement, Romines would continue to serve in his

executive positions only so long as the bank board desired. In

addition, under the Consulting Agreement Romines agreed to take a

$12,000 per year reduction from his then current salary. In

return, the Consulting Agreement provided that Romines would be

paid $4,000 per month for consulting services for five years from

the date of the agreement and approximately $2,000 per month for an

additional ten years. As required by law, the Consulting Agreement

contained several provisions setting forth conditions to

Progressive Federal's obligation to continue payments under the

Consulting Agreement. Included in these conditions was a provision

that the Consulting Agreement would automatically terminate if

Progressive Federal was ever determined by federal regulators to be

in an unsafe and unsound financial condition.

To fund Romines' compensation under the Consulting Agreement,

Progressive Federal purchased two single premium annuities from

Great-West. The annuities provided that Progressive Federal was
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the owner of the annuity policies, Elmer Romines was designated the

payee, and Romines' wife and daughters were named as beneficiaries

in the event of his death. Beginning November 1, 1988 and

continuing until its termination in March 1991, Romines was paid

under the annuities pursuant to the Consulting Agreement.

Like many savings banks, Progressive Federal faced financial

difficulties in the late 1980s. In the autumn of 1990, separate

examinations of Progressive Federal by the Federal Deposit

Insurance Corporation (FDIC) and the Office of Thrift Supervision

(OTS) concluded that Progressive Federal was technically insolvent.

FDIC and OTS gave Progressive Federal the choice of either pursuing

a merger with another financial institution or being placed in

receivership. Thus, on December 21, 1990, in lieu of receivership,

Progressive Federal and OTS entered into a Consent Agreement under

which Progressive Federal acknowledged that it was insolvent and

could be placed in receivership and that both Progressive Federal

and OTS would seek a healthier institution to merge with

Progressive Federal. 

Although Romines disagreed with a number of the factual

findings of the FDIC and OTS reports, neither he nor Progressive

Federal formally challenged the audit reports. Under Romines'

leadership the board of Progressive Federal discussed merger

options with a number of other institutions. In March 1991,

Romines recommended a merger with Ozark Rivers Savings Bank (Ozark

Bank) of Salem, Missouri. 

At the same time as the merger negotiations were ongoing, the

OTS became concerned about Romines' continued leadership of

Progressive Federal. In particular, OTS noted that the FDIC and

OTS audits had shown questionable expenditures by Progressive

Federal on items for Romines and his family. Moreover, given the

bank's precarious financial situation, OTS questioned the

continuing payments to Romines under the Consulting Agreement.

Accordingly, on March 7, 1991, Lyle A. Townsend, OTS Assistant

Director, sent Progressive Federal a letter stating that because
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OTS had determined that Progressive Federal was insolvent and thus

in an unsafe and unsound condition, its obligations under the

Consulting Agreement had automatically terminated. The letter

directed Progressive Federal immediately to cease all payments to

Romines under the Consulting Agreement.

Progressive Federal's board met on March 13, 1991 and voted to

approve the merger with Ozark Bank. The board also reviewed the

March 7 OTS letter but resolved to continue paying Romines under

the Consulting Agreement at least until the merger was completed.

After the adoption of that resolution, Romines resigned his

official positions as President, Chairman and Director of the Bank,

but continued his management role at the bank and continued to

collect his consulting fees.

On March 21, 1991, OTS' Townsend again wrote to the

Progressive Federal board regarding the directed termination of the

Consulting Agreement. The letter warned the members of the board

of directors that they might be held personally liable for future

payments under the Consulting Agreement. The letter also stated

that OTS would not approve the proposed merger as long as the

Consulting Agreement was still in place. After this second

warning, at a special board meeting on March 26, 1991, Progressive

Federal's board unanimously voted to terminate the Consulting

Agreement. In addition, the board directed Great-West to make

Progressive Federal the payee and beneficiary for all future

payments under the annuities. On May 14, 1991, OTS' Regional

Deputy Director, Donald W. Wente, and its Regional Director, Billy

C. Wood, confirmed in writing that Progressive Federal was unsafe

and unsound to transact business because it had substantially

insufficient capital. 

On May 30, 1991, Progressive Federal filed with OTS its

application for a voluntary supervisory conversion from a federally

chartered mutual savings bank to a federally chartered stock

savings bank and its simultaneous merger into Ozark Bank. The

application for the conversion and merger was approved by OTS on
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September 20, 1991. Thereafter the merged bank operated as

Progressive Ozark Federal Savings Bank.

PROCEEDINGS BELOW AND GROUNDS FOR APPEAL

 In September 1992, Romines (of Virginia) brought this

diversity action against Progressive Ozark Bank (of Missouri) and

Great-West (of Colorado and Canada) seeking a declaration that the

termination of the Consulting Agreement was invalid and seeking

recovery of annuity payments not made to Romines since March 1991

(now totalling in excess of $150,000). After discovery, the

parties filed cross motions for summary judgment. The district

court granted summary judgment for Progressive Ozark Bank on

grounds that (1) the Consulting Agreement had automatically

terminated by operation of law and (2) Romines had no rights under

the Consulting Agreement which had vested prior to its termination.

On this appeal, Romines' primary challenges are to these two

aspects of the district court's decision. Romines argues that the

district court was incorrect in holding that the Consulting

Agreement had terminated by operation of law. Romines contends

that under the terms of the agreement and the controlling federal

regulations only a formal decision by the Secretary of the Office

of Thrift Supervision that the bank was insolvent would terminate

the agreement and that such a formal finding by the Secretary

himself was never issued. Alternatively, Romines urges that even

if the Consulting Agreement was lawfully terminated his rights to

annuity payments thereunder were vested prior to the termination

and thus could not be abrogated by the bank without breaching the

agreement. 

In addition, Romines raises two subsidiary arguments. Romines

contends that the district court committed reversible error by

admitting into evidence internal, non-public documents of the OTS

and FDIC. Romines also contends that the district court erred in

holding its separate claims against Great-West on the annuity

contracts were moot. 
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We consider each of Romines' contentions in order.

STANDARD OF REVIEW

We review a district court's grant of summary judgment de novo

and under the same standard which governed the district court's

decision. Lenhardt v. Basic Inst. of Technology, Inc., 55 F.3d

377, 379 (8th Cir. 1995). The question is whether the record, when

viewed in the light most favorable to the non-moving party, shows

that there is no genuine issue as to any material fact and that the

moving party is entitled to judgment as a matter of law. Fed. R.

Civ. P. 56(c); Maitland v. University of Minnesota, 43 F.3d 357,

360 (8th Cir. 1994).

APPLICABLE FEDERAL STATUTE AND REGULATIONS

Federally chartered savings banks such as Progressive Federal

are subject to an extensive scheme of federal regulation including

the Home Owners' Loan Act of 1933, as amended, 12 U.S.C. §§ 1461-

1468c, and regulations issued pursuant to the Act, 12 C.F.R. §§

500-591. 

Among the regulations promulgated pursuant to the Act

applicable at the time the Consulting Agreement became effective in

1988 was the requirement that every federally insured savings bank

include in each of its employment agreements the following:

(b) Required Provisions. Each employment

contract shall provide that:

(5) All obligations under the contract shall be

terminated, except to the extent determined that

continuation of the contract is necessary for the

continued operation of the association,

(ii) by the Federal Home Loan Bank Board, at the time

the Bank Board or its Principal Supervisory Agent (as

defined in 12 U.S.C. § 561.35 Subchapter D) approves a

supervisory merger to resolve problems related to

operation of the association or when the association is

determined by the Board to be in an unsafe or unsound

condition. Any rights of the parties that have already

vested, however, shall not be affected by such action.
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12 C.F.R. § 563.39(b)(5)(ii) (emphasis added). Paragraph seven of

the Consulting Agreement incorporated the above language verbatim.

 

After the Consulting Agreement was entered, but before it was

terminated by the board of directors, Congress enacted the

Financial Institutions, Reform, Recovery and Enforcement Act of

1989 (FIRREA), Pub. L. No. 101-73, 103 Stat. 183, which

substantially amended the Home Owners' Loan Act. Among the changes

brought by FIRREA was the replacement of the Federal Home Loan Bank

Board by the Office of Thrift Supervision as the primary regulator

of savings and loan associations and savings banks. Section

563.39(b)(5)(ii) was therefore modified to read as follows:

(b) Required Provisions. Each employment

contract shall provide that:

(5) All obligations under the contract shall be

terminated, except to the extent determined that

continuation of the contract is necessary of [sic] the

continued operation of the association

(ii) By the Director or his or her designee, at the time

the Director or his or her designee approves a

supervisory merger to resolve problems related to the

operation of the association or when the association is

determined by the Director to be in an unsafe or unsound

condition.

Any rights of the parties that have already vested,

however, shall not be affected by such action.

12 C.F.R. § 563.39(b)(5)(ii) (emphasis added). Thus, under the

amended statute and implementing regulations, all employment

contracts entered by savings and loans would still automatically

terminate in the event the institution was found unsafe; however,

responsibility for the determination was transferred to the

Director of the new Office of Thrift Supervision.

Although the text of the Consulting Agreement included the

language mandated by the pre-FIRREA version of § 563.39, both the

appellants and the appellees have argued this appeal based on their

interpretation of the post-FIRREA regulations. We will therefore
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assume (without deciding) for purposes of our discussion here that

the amended statute and regulations apply.

TERMINATION OF THE CONSULTING AGREEMENT BY OPERATION OF LAW

Both appellants and appellees assume that the Consulting

Agreement between Romines and Progressive Federal was an

"employment contract" covered by Section 563.39 and we accept that

assumption for purposes of this appeal. The parties dispute,

however, the question whether the Consulting Agreement was

automatically terminated by operation of law under Section 563.39.

Great-West and Progressive Ozark Bank contend, and the

district court held, that Romines had no further right to collect

under the Consulting Agreement once the Office of Thrift

Supervision determined that Progressive Federal was unsafe and

unsound. They argue that pursuant to Section 563.39 the Consulting

Agreement terminated automatically upon the finding of unsafe and

unsound condition and that Romines' right to payments under the

Agreement also were terminated as a matter of law. We agree.

We do not believe that Romines' contrary arguments - that some

formal hearing procedure was mandated by Section 563.39 and that a

personal finding of unsafe and unsound condition by the Secretary

of the Office of Thrift Supervision was necessary - are consistent

with either the letter or spirit of the regulation. 

The Home Owner's Loan Act which established the Office of

Thrift Supervision granted broad authority to the Director of OTS

to provide for the "examination, safe and sound operation, and

regulation of savings associations [and savings banks]. 12 U.S.C.

§ 1463(a)(1). Similarly, the Act broadly authorized the Director

to issue "such regulations as the Director determines to be

appropriate to carry out the responsibilities" of OTS, 12 U.S.C.

§ 1463(a)(2), and to delegate "to any employee, representative, or

agent any power of the Director," 12 U.S.C. § 1462a(h)(4)(a).

Among the regulations adopted by the Director to carry out
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this broad authority was Section 563.39 providing for the

termination of employment contracts. Section 563.39 was intended

to afford federal regulators the flexibility to monitor and remedy

abusive or excessive employment contracts entered into by

institutions that later default or need regulatory assistance to

survive. See 47 Fed. Reg. 17,471 (1982). In particular, Section

563.39 provides that employment contracts terminate automatically

-and replacement agreements have to be approved by the regulators -

upon default or a finding of unsafe and unsound condition. Section

563.39 mandates no particular form of proceeding or finding for the

termination of such employment contracts but merely says that "all

obligations under the contract shall be terminated . . . by the

Director or his or her designee, . . . when the association is

determined by the Director to be in an unsafe or unsound

condition." 

In this case, both Romines and the bank were put on notice as

early as the fall 1990 audit reports and the December 1990 Consent

Agreement that Progressive Federal was insolvent under OTS

accounting guidelines and could not continue to be operated in its

present form. The Office of Thrift Supervision then confirmed in

the March 7, 1991 letter from OTS Assistant Director Townsend that

the institution's financial condition was unsafe and unsound and

that all employment contracts were accordingly terminated.

Townsend indicated in the letter that alternate compensation

arrangements could be established with Romines but that any such

arrangements required the approval of the OTS. The Progressive

Federal Board decided to terminate the Consulting Agreement but no

alternate compensation arrangements were ever made. 

At no point did Romines or Progressive Federal ever request

any formal hearing on the institution's solvency or challenge any

of the essential factual findings of the FDIC or OTS audits.

Romines and Progressive Federal consistently dealt with Assistant

Director Townsend and at no time challenged his authority to act on

the Director's behalf. Indeed, in the December 1990 Consent

Agreement, negotiated and signed by Townsend on behalf of OTS and
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negotiated and signed by Romines on behalf of Progressive Federal,

Progressive Federal acknowledged that it was insolvent and agreed

to seek a merger partner in lieu of receivership or liquidation.

Moreover, by signing the Consent Agreement Romines explicitly

agreed to the Consent Agreement's recital of the authority of

Townsend as the local OTS official authorized to review both

expenditures in general and employment contracts in particular.

Based on these facts, we believe that there is no doubt that

by the time payments to Romines under the Consulting Agreement were

halted at the end of March 1991 there had been a determination by

OTS communicated to Progressive Federal that it was in an unsafe

and unsound condition and that Romines' employment contract was

accordingly terminated as required by law. 

Our conclusion is fully consistent with the decisions of other

courts which have considered the termination of employment

contracts under Section 563.39. In several similar cases involving

employees of failed savings institutions, courts have ruled that

employment contracts were automatically terminated when the bank or

savings and loan was found to be in an unsafe and unsound condition

or when a receiver was appointed. 

In Modzelewski v. RTC, 14 F.3d 1374 (9th Cir. 1994), for

example, the Ninth Circuit held that the Salary Continuation

Agreements between a savings and loan and two officers were

automatically terminated under Section 563.39 when the Resolution

Trust Corporation took over the institution as receiver and that

summary judgment on that issue was appropriate. Similarly, in

Aronson v. RTC, 38 F.3d 1110 (9th Cir. 1994), the Ninth Circuit

held that the district court was correct to dismiss the claim of a

former savings bank officer for salary under an oral employment

agreement, because the agreement was terminated under Section

563.39 when the RTC assumed control of the bank. 

Numerous cases in the federal district courts have also

followed this reasoning and held that employment contracts had
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automatically terminated under Section 563.39. See, e.g., Crocker

v. RTC, 839 F. Supp. 1291 (N.D. Ill. 1993) (claim of chairman of

savings association for consulting fees under employment agreement

rejected because contract automatically terminated under Section

563.39 when RTC became conservator); Cohen v. RTC, 193 U.S. Dist.

LEXIS 7317 (Civ. No. 90-1065) (S.D. Cal. 1993) (retention bonus

agreement with savings bank vice president automatically terminated

under Section 563.39 based on OTS letter that institution was

unsafe and unsound); Barnes v. RTC, 1992 U.S. Dist. LEXIS 1841

(Civ. No. 91-2011) (D. Kan. 1992) (employment contract of director

of savings association division terminated under Section 563.39

when RTC became conservator).

The only case cited by Romines in support of his argument that

the Consulting Agreement did not terminate by operation of law,

FSLIC v. Quinn, 922 F.2d 1251 (6th Cir. 1991), is inapposite. In

Quinn, thrift officials Quinn and Gannon were recruited by the

FSLIC as receiver to manage a failing savings and loan association.

Later, when efforts to save the troubled thrift were unsuccessful,

it was sold to another institution and the employment contracts of

Quinn and Gannon were terminated. The FSLIC then filed suit for

declaratory and injunctive relief on the ground that it did not owe

severance benefits to Quinn and Gannon under the employment

contracts. 

The Sixth Circuit noted that because the FSLIC had determined

that the thrift was in "unsafe or unsound condition" any obligation

of FSLIC under the contracts pursuant to Section 563.39 would

ordinarily be deemed terminated. 922 F.2d at 1253. However, the

court held that on the peculiar facts of the case an exception to

automatic termination under Section 563.39 applied. The FSLIC had

itself recruited and hired Quinn and Gannon to manage the thrift

after it became unsafe and the FSLIC had also specifically

negotiated with the officials to pay them severance benefits if

their employment was terminated before the end of their contract.

The Sixth Circuit found that these actions by the FSLIC amounted to

an FSLIC determination that the services of the two managers were
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necessary to keep the thrift afloat. 922 F.2d at 1253.

Accordingly, the court held that under an exception in Section

563.39 "continuation of the contract [was] necessary [to] the

continued operation of the institution," 12 C.F.R. § 563.39(b)(5),

and the FSLIC was accordingly obligated to pay the severance

benefits. 922 F.2d at 1256.

Quinn simply does not stand for the proposition asserted by

Romines that his employment contract did not terminate when the OTS

found that Progressive Federal was unsafe or unsound. It merely

holds that in certain circumstances a separate exception in Section

563.39 may foreclose the argument that an employment contract was

terminated if the regulatory agency has in effect determined that

continuation of the contract was necessary. We note that there is

absolutely no contention by appellants here that this exception in

Section 563.39 applies to Romines. Moreover, there are no facts to

suggest that OTS, Progressive Federal or anyone else considered

Romines' continued services under the Consulting Agreement to be

necessary to the continued operation of the savings bank. 

Similarly, Quinn does not stand for the additional

proposition, asserted by Romines, that the Office of Thrift

Supervision was obligated to hold a formal hearing on Progressive

Federal's insolvency and that the OTS Director was required to

issue a formal order that the savings bank was in an unsafe or

unsound condition. Indeed, Quinn supports the opposite conclusion:

that no particular form of agency action is required. In Quinn, as

in this case, the regulatory agency and the troubled thrift entered

into a consent agreement in lieu of formal proceedings. 922 F.2d

at 1256 n.5. In Quinn, as in this case, the agency's course of

administrative actions - even absent a formal agency proceeding on

the bank's unsafe condition - was held by the Sixth Circuit to be

"equivalent to a finding of 'unsafe and unsound' conditions." 922

F.2d at 1245. 

In sum, we find that based on the undisputed facts the

Consulting Agreement was clearly terminated by operation of law and
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we believe that the district court was correct to grant summary

judgment on this issue. Romines' contention that termination of

the Consulting Agreement required some additional action by the

Director of OTS was incorrect as a matter of law. Accordingly, no

disputed material issue of fact remained and summary judgment was

appropriate.

NO RIGHTS TO PAYMENT VESTED PRIOR TO TERMINATION

Romines' alternative argument for reversal - that even if the

Consulting Agreement was properly terminated by operation of law

his rights to payment thereunder were vested prior to termination

-is also unpersuasive. 

Section 563.39 provides that although a savings institution is

determined to be in unsafe or unsound condition and accordingly

employment contracts covered by Section 563.39 are terminated, "any

rights of the parties that have already vested . . . shall not be

affected by such action." 12 C.F.R. § 563.39(b)(5). There is no

definition of what is a "vested" right under either Section 563.39

or its authorizing legislation. Every court which has considered

the issue, however, has held that a right is vested if it is

unconditional, i.e., the employee holding the right is entitled to

claim immediate payment. See, e.g., Aronson, 38 F.3d at 1113;

Modzelewski, 14 F.3d at 1378. This definition furthers the

statute's policy of distinguishing between contract rights in the

nature of pension or retirement benefits which have already accrued

and should not be affected by termination of the contract on one

hand, and contract rights for payment for services not yet rendered

for which no payment should be owed on the other hand. 

In this case we believe there is little doubt that the

payments to be made to Romines under the Consulting Agreement were

payments in return for services he was to render. He was entitled

to be paid for those management services he had already provided

until the end of March 1991. However, he had no unconditional

right to receive payment for consulting services which he never

provided.
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Romines raises the additional claim that because the

Consulting Agreement provided that he would not be terminated

"without cause" he had a vested right to receive payments under the

agreement unless some cause for termination was put forward. This

is incorrect as a matter of law. The terms of the Consulting

Agreement specifically incorporated the language of Section 563.39

(5) providing that the agreement could be automatically terminated

by operation of law as well as for cause. 

Numerous courts have held that a "without cause" provision

does not preclude termination of the contract by operation of law

under Section 563.39. In Rush v. FDIC, 747 F. Supp. 575 (N.D. Cal.

1990), for example, the court held that Rush had no vested right to

payment under an employment contract which guaranteed payment of

severance benefits equalling one year's salary of $105,000 if he

was terminated without cause. The court held that the right to the

severance benefit vested only upon the occurrence of the condition:

termination without cause. Because the employee's contract

terminated by operation of law (when the bank was declared

insolvent) before the condition was met, his right remained merely

conditional and not vested. Accord, Aronson v. RTC, 38 F.3d 1110

(9th Cir. 1994) (right to pension benefit not vested if employment

contract terminated by operation of law before employee reached

retirement age); Modzelewski v. RTC, 14 F.3d 1374 (9th Cir. 1994)

(same); Crocker v. RTC, 839 F. Supp. 1291 (N.D. Ill. 1993) (right

of former thrift chairman to consulting fee not vested if

employment contract terminated by operation of law prior to

termination without cause). 

Romines' argument that Modzelewski and Aronson support his

contention that his right to payment under the Consulting Agreement

had vested prior to its termination under Section 563.39 is

misplaced. Romines contends that once the agreement was entered

into and became effective in 1988 he had an immediate right to

payment. Romines' argument, however, seriously misstates the

holding of the cited cases. In both Modzelewski and Aronson the

Ninth Circuit made clear that the right to payment does not vest
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merely upon the signing of an employment contract but only when all

conditions to payment are satisfied. In the case of retirement

benefits, Modzelewski and Aronson hold that the right to payment of

retirement benefits vests only when the employee reaches the

required retirement age.

The Consulting Agreement between Romines and the bank was not

a pension or retirement plan for which he had immediate right to

claim payment upon reaching a certain age. It was a contract for

Romines to provide management services to the bank in return for

monthly payments. Romines' right to payment of the entire total

amount of consulting fees did not vest upon the signing of the

Consulting Agreement but accrued monthly as he provided the

services contracted for. When the Consulting Agreement was

terminated by operation of law under Section 563.39, Romines lost

the right to claim payment for consulting services he would have

provided in the future had the agreement not been terminated. 

We believe that this holding is consistent with the policy

behind Section 563.39 of allowing the OTS the flexibility it needs

to deal with troubled savings institutions while at the same time

ensuring payment to employees of salary and benefits already

earned. As other courts have noted, Section 563.39 "is necessary

to relieve a troubled or insolvent savings and loan institution

from burdensome obligations such as substantial contracts for

severance pay. The interpretation that plaintiff urges - that

severance agreements vest upon formation - denies the [agency] the

flexibility it required to manage unsound savings and loan

associations." Rush v. FDIC, 747 F. Supp. 575, 578 (N.D. Cal.

1990). Accord, Rice v. RTC, 785 F. Supp. 1385, 1391 (D. Ariz.

1992), rev'd on other grounds, Modzelewski v. RTC, 14 F.3d 1374

(9th Cir. 1994).

 Accordingly, we follow other federal courts that have

considered this issue and hold that on the undisputed facts Romines

did not have a vested right to payment under the Consulting

Agreement which survived the termination of the contract under
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563.39. The district court properly granted summary judgment for

appellees on this issue.

THE DISTRICT COURT DID NOT ERR BY ADMITTING INTO EVIDENCE FDIC AND

OTS DOCUMENTS

Romines contends that the district court committed reversible

error by admitting into evidence the reports of the OTS and FDIC

audits which found Progressive Federal was insolvent as well as the

May 1991 OTS letter confirming that Progressive Federal was in

unsafe and unsound condition. Romines' principal contention

appears to be that these documents were irrelevant as a matter of

law because they were not documents of public record. 

We reject this claim. The audit reports as well as the OTS

letter were clearly relevant to determining the central issue

raised by Romines' lawsuit, the question whether Progressive

Federal's employment contracts were terminated by operation of law

because the bank was found to be in unsafe and unsound condition.

The district court did not err by admitting these documents into

evidence or relying in part upon them in reaching its decision.

ROMINES HAS NO INDEPENDENT RIGHT TO RECOVER FROM GREAT WEST UNDER

THE ANNUITY CONTRACTS

We also reject Romines' final claim: that even if Progressive

Ozark is not obligated to him for the amount of consulting fees he

would have earned under the Consulting Agreement he is nonetheless

entitled to recover that same amount from Great-West. Romines

contends that, because he was designated the payee on the annuities

issued by Great-West and his family members were designated the

beneficiaries in the event of his death, their right to payment

under the annuities was irrevocable. Thus, Romines argues that

Great-West had no right to make payments under the annuities to

Progressive Federal (and after the merger to Progressive Ozark)

rather than to Romines once the Consulting Agreement was

terminated. 

Nothing in the terms of the annuity contracts supports the

suggestion that the payee designations were irrevocable. Indeed,
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because the contracts clearly stated that the bank was the owner of

the annuity contracts we believe the implicit assumption was that

as owner the bank could also change the payee. Romines has cited

no case law or other authority to support his claim that the payee

and beneficiaries should be assumed to be irrevocably designated.

Moreover, Romines has offered no basis at all in public policy for

allowing him to recover from Great-West what we have held he is not

entitled to recover from Progressive Ozark.

Although the district court granted Progressive Ozark's motion

for summary judgment, it denied the motion of Great-West as moot.

We believe that the logic of the district court's decision was that

if Romines had no right to payment under the Consulting Agreement

with Progressive Ozark, then by definition he had no right to

payment under the annuity contracts which were entered solely to

fund the consulting fee payments. Thus, we conclude that the

district court implicitly and correctly held that the termination

of the Consulting Agreement also terminated Romines' right to claim

payment from Great-West under the annuity contracts entered into to

fund the consulting fee payments. 

For the reasons stated above, the judgment of the district

court is in all respects affirmed.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.