Court Opinion

ID: 4227678
Source: CourtListenerOpinion
Date Created: 2017-12-11 23:08:01.967029+00
Date Added: 2024-06-11T14:42:53.790375
License: Public Domain

2017 IL App (1st) 162808
                                              No. 1-16-2808
                                                                      Fourth Division
                                                                    December 7, 2017
     ______________________________________________________________________________

                                         IN THE
                             APPELLATE COURT OF ILLINOIS
                                     FIRST DISTRICT
     ______________________________________________________________________________

                                                    )
     INSURANCE BENEFIT GROUP, INC.,                )
                                                   )    Appeal from the Circuit Court
           Plaintiff-Appellee and Cross-Appellant,  )   of Cook County.
                                                   )
     v.                                            )    No. 11 CH 28150
                                                   )
     GUARANTEE TRUST LIFE INSURANCE                )    The Honorable
     COMPANY,                                      )    Margaret Ann Brennan,
                                                   )    Judge Presiding.
           Defendant-Appellant and Cross-Appellee. )
                                                    )
     ______________________________________________________________________________

        JUSTICE GORDON delivered the judgment of the court, with opinion.
        Presiding Justice Burke and Justice McBride concurred in the judgment and opinion.

                                                OPINION

¶1         Plaintiff Insurance Benefit Group, Inc., filed suit against defendant Guarantee Trust Life

        Insurance Company for violation of a marketing agreement. The matter proceeded to a bench

        trial on counts III and V of the complaint, and the trial court entered judgment in plaintiff’s

        favor on one part of count III; it entered judgment in defendant’s favor on the remainder of

        count III and on count V. Defendant appeals, arguing that the trial court should have found in

        defendant’s favor on the entirety of count III. Plaintiff cross-appeals, arguing that the trial

        court should have found in its favor on the entirety of count III and that the trial court erred
     No. 1-16-2808

        in finding in defendant’s favor on count V and in denying plaintiff leave to file a second

        amended complaint. For the reasons that follow, we affirm.

¶2                                             BACKGROUND

¶3                                                I. Complaint

¶4                                       A. Allegations of Complaint

¶5          On August 10, 2011, plaintiff filed a five-count complaint against defendant; the

        complaint was subsequently amended, and it is the first amended complaint that proceeded to

        trial. Counts III and V of the first amended complaint were the only counts at issue at trial,

        and plaintiff does not raise any arguments concerning any other counts. 1 Accordingly, we

        discuss only the two relevant counts of the first amended complaint.

¶6          Count III of the first amended complaint was for breach of a written contract and alleged

        that defendant sold various insurance products, including health insurance products, within

        the state of Illinois. In the course of this business, defendant had entered into a reinsurance

        agreement with Munich Reinsurance America, Inc. (Munich). In October or November 2007,

        Montgomery Edson, on behalf of defendant, approached Richard Hayes, plaintiff’s president

        and chief executive officer, to determine whether plaintiff would be interested in developing

        and marketing certain of defendant’s health insurance programs. After discussions between

        Edson and Hayes, on December 1, 2007, plaintiff and defendant executed a marketing

        agreement under which plaintiff agreed, among other things, to become the exclusive

        marketer of certain of defendant’s insurance products. In January 2008, based on plaintiff’s

            1
             Counts I and II were voluntarily dismissed by plaintiff, while count IV was dismissed by the trial
        court pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2010)).

                                                        2
     No. 1-16-2808

        agreement to become defendant’s exclusive marketer under the marketing agreement,

        Munich extended its reinsurance agreement with defendant for one year.

¶7         Under the terms of the marketing agreement, defendant authorized and appointed plaintiff

        as defendant’s exclusive marketer for various insurance programs offering health insurance

        policies within the territories listed in the marketing agreement, including 40 states within the

        United States. The size of the territory set forth in the marketing agreement “was a material

        consideration” for plaintiff entering into the marketing agreement.

¶8         Additionally, under the terms of the marketing agreement, “[defendant] agreed to pay

        [plaintiff] certain commissions,” consisting of:

                     “(a) Three percent (3%) of all premiums collected regardless of who sold the

               product;

                     (b) The allowable producer commission *** as set forth in the reinsurance treaty

               ***.”

        On August 1, 2009, plaintiff and defendant entered into an amendment of the marketing

        agreement which, among other things, amended the calculation of the producer commission,

        which had previously been calculated by reference to the reinsurance agreement with

        Munich. According to the complaint, “[t]he payment of commissions on both the original

        sale of a health insurance policy as well as the renewal thereof was a material consideration”

        for plaintiff entering into the marketing agreement.

¶9         The complaint alleged that sometime in July 2009, defendant began to discontinue certain

        health insurance programs that fell within the terms of the marketing agreement and replace

        them with others that defendant claimed did not fall within the terms of the marketing

        agreement. Hayes advised Edson that plaintiff objected to the replacement of these policies.

                                                     3
       No. 1-16-2808

          On January 1, 2010, defendant terminated the marketing agreement. The complaint alleged

          that the purpose for terminating the marketing agreement “was to avoid paying [plaintiff] the

          three percent (3%) commission and Producer Commissions rightfully due” plaintiff.

¶ 10         Count III alleged that defendant breached the express terms of the marketing agreement

          by (1) failing to maintain authority to sell certain insurance products in states that were part

          of plaintiff’s territory, (2) discontinuing insurance policies that fell within the terms of the

          marketing agreement and replacing them with policies that defendant claimed did not fall

          within the terms of the marketing agreement, (3) failing to pay plaintiff the 3% commissions

          due to plaintiff on policies already sold, (4) failing to pay plaintiff all of the producer

          commissions due to plaintiff, and (5) terminating the marketing agreement in violation of the

          terms of the marketing agreement. At trial, the focus was solely on the payment of two fees

          allegedly owed to plaintiff.

¶ 11         Count V of the first amended complaint was for breach of an oral agreement and alleged

          that in spring 2008, plaintiff determined that defendant was selling products in states in

          which defendant had not received approval to sell. According to the complaint, “[t]he

          products that were being sold without having been approved for such sale did not fall within

          the terms of the Marketing Agreement and [plaintiff] was not receiving any commissions for

          their sale.” When Hayes discovered that defendant was not approved to sell products in

          certain states, he advised Edson that defendant needed to obtain approvals in the states in

          which defendant was not in compliance. According to the complaint, “[w]ithout Richard

          Hayes’ original knowledge, Al Heindal, [defendant’s] Compliance and Licensing Officer,

                                                       4
       No. 1-16-2808

          asked Karen Marcozzi, an employee of [plaintiff],[2] to assist [defendant] in obtaining such

          approvals.”

¶ 12         When Hayes discovered that Marcozzi “was performing tasks which were not

          [plaintiff’s] responsibility under the Marketing Agreement,” Hayes advised Edson “that

          because it was not [plaintiff’s] responsibility under the Marketing Agreement to perform

          compliance work on products which were not governed under the terms of the Marketing

          Agreement and for which [plaintiff] was not being paid commissions, [plaintiff] would not

          allow Karen Marcozzi to continue to work with [defendant] on those efforts.” In response,

          Edson offered to Hayes “that if [plaintiff] would continue to allow Karen Marcozzi to assist

          [defendant] in seeking compliance for insurance products that were not governed by the

          terms of the Marketing Agreement and for which [plaintiff] was not being paid commissions,

          [defendant] would pay [plaintiff] for Karen Marcozzi’s services at Karen Marcozzi’s billing

          rate of $50.00 per hour.” Hayes accepted this offer on behalf of plaintiff, and Marcozzi

          continued to assist defendant in obtaining state approval for sale of the products. However, in

          breach of the oral agreement, defendant refused to pay plaintiff for the time and expenses

          incurred by Marcozzi.

¶ 13                                       B. Marketing Agreement

¶ 14         Attached to the complaint was a copy of the marketing agreement. Article III of the

          marketing agreement was entitled “Marketer’s Compensation” and provided, in relevant part:

                       “A. [Defendant] will pay Marketer, as full compensation for all duties and

                 responsibilities under this Agreement, the amounts set forth in Exhibit A.

                 Compensation will be paid to you based on Policies produced by you and your
             2
              According to the record, Marcozzi’s duties included regulatory compliance administration,
          meaning that she ensured that the policies plaintiff procured met state regulatory requirements.

                                                       5
       No. 1-16-2808

                 Producers. Any commission payable will be made on at least a monthly basis and

                 only after the receipt of premium by [defendant] for such Policy. Marketer shall

                 refund to [defendant] any compensation received on cancellations, refunds and return

                 premiums for such Policies.

                       B. Unless this Agreement is terminated for ‘cause’ as described below, your first

                 year and renewal year commission are vested.”

¶ 15         The marketing agreement also contained an integration clause, which provided:

                       “Entire Agreement. This Agreement supersedes all previous agreements, whether

                 written or oral, between [defendant] and Marketer, or their predecessors with respect

                 to the Business to be written under this Agreement.

                          1. This Agreement may be amended, altered or modified only in writing

                       signed by both parties.

                          2. Manuals, rules, regulations, guidelines, instructions and directions issued in

                       writing by [defendant] from time to time as provided in this Agreement, shall bind

                       the Marketer as though a part of this Agreement.”

¶ 16         Exhibit A to the marketing agreement, as amended, 3 provided, in relevant part:

                       “Compensation:

                       Marketer’s Fee: For all Policies/certificates issued on or after 12/1/07, Marketer

                 will receive 3% of all premiums collected by [defendant’s] third party administrator

                 for such Policies/certificates, less any returns or refunded premium amounts.

             3
              The compensation due plaintiff under the preamended version of Exhibit A is not at issue on
          appeal.

                                                        6
       No. 1-16-2808

                       Commissions:[4] For the GTL Forms identified below, [plaintiff] will receive a

                  commission on all base premium collected (no underwriting rate-up and no rate

                  increase    premium)      by   [defendant’s]     third   party    administrator    for    all

                  Policies/Certificates issues, less any returns or refunded premium amounts. The

                  commission rate shall be: 32% for policy/cert year 1; 10% for policy/cert year 2; and

                  8% thereafter as long as the policy/cert remains in force. These commission amounts

                  do not apply to any replacement policies issued within 12 months of the original

                  policy’s termination date or as a result of [defendant’s] Uniform Termination of

                  Coverage program under HIPAA.”

¶ 17                                                  II. Trial

¶ 18          At trial, Richard Hayes testified on behalf of plaintiff 5 that he was plaintiff’s 6 chief

          executive officer and sole shareholder. He signed the marketing agreement on behalf of

          plaintiff, and Montgomery Edson signed it on behalf of defendant. Hayes was given the

          marketing agreement on the stand, and testified to his understanding of certain terms within

          the agreement. He testified that his understanding of the word “vested” based on his

          extensive experience in the insurance industry was that “your rights to compensation cannot

          be taken away from you, at any time, except for cause. And those commissions and

          compensations will go on and on and on, according to your agreement, and can’t be taken

              4
              This provision was formerly entitled “Producer Commission” under the preamended Exhibit A.
          While the name has changed, the parties and the trial court continued to refer to it as the producer
          commission, and we will do the same.
              5
               We note that in its brief on appeal, defendant states that plaintiff called Hayes “as its sole
          witness.” However, as related later in this opinion, plaintiff in fact also called two of defendant’s
          employees as adverse witnesses. Defendant does not discuss the testimony of these witnesses in its
          brief.
              6
               Hayes testified that plaintiff changed its name and was now named Integra Benefits.

                                                         7
       No. 1-16-2808

          away from you, basically.” Hayes testified that “[t]he only time commissions would

          terminate is when the policyholder stops being a policyholder and stops paying his

          premiums.” With respect to the marketer’s fee, Hayes testified that it was not a one-time fee

          but was a continuing payment. Hayes testified that the difference between the marketer’s fee

          and the producer’s commission was that “one is level, like the 3 percent goes on and on and

          on, it doesn’t go down. Where the producer’s commission is different is because it starts at a

          level higher and then it goes down to where it’s a level renewal commission.”

¶ 19         Hayes testified that the marketing agreement was terminated effective January 1, 2010, as

          demonstrated by a letter drafted by Rob Baluk, legal counsel for defendant. At the time of the

          termination, there were still policies in effect that had been procured by plaintiff pursuant to

          the marketing agreement.

¶ 20         Hayes testified that Gilsbar, L.L.C. (Gilsbar), was defendant’s third-party administrator

          for the policies that plaintiff procured for defendant. Gilsbar remained the third-party

          administrator after the marketing agreement was terminated, and plaintiff continued to be

          paid for those policies after the termination in 2010.

¶ 21         Hayes testified that Karen Marcozzi was an employee of plaintiff’s from 2007 through

          2010, and her duties consisted of regulatory compliance administration, meaning that she

          ensured that the policies plaintiff procured pursuant to the marketing agreement met state

          regulatory requirements. Marcozzi also performed compliance work for policies that were

          not procured by plaintiff; Hayes testified that it came to his attention that she had been

          performing compliance work on some of defendant’s policies that predated the marketing

          agreement. In March or April 2008, Hayes had a telephone call with Edson about the issue,

          followed by a meeting in June or July. The telephone call also included Al Heindl,

                                                        8
       No. 1-16-2808

          defendant’s compliance officer. During the in-person meeting with Edson, “[w]e talked about

          Karen helping them in the prior block of business to make sure that they—regulatory and the

          compliance was happening so they wouldn’t get in trouble. And we agreed that Karen would

          receive $50 an hour, keep track of her work and then when the projects were all done, we

          would get reimbursed.” Hayes identified a document shown to him as “the records that Karen

          kept as she was doing the work and it’s the hours, the type of work she did and the totals for

          the [nonmarketing agreement] work that she was performing.” Hayes testified that her hours

          were kept under his direction and control and that “[s]he would perform the duties, put the

          hours and then communicate with me, on a frequent basis, what she was doing.” Once the

          document was prepared, Hayes gave it to Edson.

¶ 22          Plaintiff then moved to admit the document into evidence, and defendant objected. In

          response, plaintiff offered a “Certification Pursuant to Rule 902(11) of the Illinois Rules of

          Evidence” 7 prepared by Marcozzi. The memorandum reflecting the number of hours she

          spent on such services to be submitted to defendant was attached as exhibit A to her

          certification and reflected that she had spent 1463.5 hours performing the nonmarketing

          agreement services.

¶ 23          Additionally, Marcozzi stated in her certification that she was authorized to retain the

          services of Suzanne Heasley as an independent contractor to assist her in performing the

              7
                Rule 902(11) provides that “[e]xtrinsic evidence of authenticity as a condition precedent to
          admissibility is not required with respect to *** [t]he original or a duplicate of a record of regularly
          conducted activity that would be admissible under Rule 803(6) if accompanied by a written
          certification of its custodian or other qualified person.” Ill. R. Evid. 902(11) (eff. Jan. 1, 2011). The
          certification must be a written declaration under oath subject to the penalty of perjury and must
          certify that the record “was made at or near the time of the occurrence of the matters set forth by, or
          from information transmitted by, a person with knowledge of these matters”; “was kept in the course
          of the regularly conducted activity”; and “was made by the regularly conducted activity as a regular
          practice.” Ill. R. Evid. 902(11) (eff. Jan. 1, 2011).

                                                           9
       No. 1-16-2808

          nonmarketing agreement services for defendant. Heasley submitted a total of $9233.88 in

          bills to plaintiff, which plaintiff paid; these bills were also reflected in the memorandum

          prepared by Marcozzi.

¶ 24         Based on Marcozzi’s certification, the document was admitted into evidence. Following

          its admission Hayes testified that plaintiff did not receive any payment from defendant for

          the nonmarketing agreement services that Marcozzi had performed.

¶ 25         On cross-examination, Hayes admitted that the marketing agreement provided that

          “commissions” were vested and did not specify that the marketing fee was vested; he further

          admitted that the marketing fee and producer’s commission were separated into two

          provisions in the marketing agreement. Hayes also testified that after May 2011, no third-

          party administrator collected any premiums. Hayes testified that plaintiff would not be

          entitled to any producer’s commissions on policies that were replaced by replacement

          policies or for policies that were terminated. As to Marcozzi’s work, Hayes testified on cross-

          examination that he and Edson did not set a specific date for her contract to begin or end, and

          did not specify the length of the contract.

¶ 26         Robert Baluk testified both as an adverse witness on behalf of plaintiff and as a witness

          on behalf of defendant that he was defendant’s general counsel and was involved in the

          drafting of the marketing agreement and its amendment. Baluk testified that after the January

          1, 2010, termination date of the marketing agreement, defendant did not issue any health

          insurance policies that were subject to the marketing agreement but issued other health

          insurance policies using different forms. Baluk further testified that after the termination of

          the marketing agreement, plaintiff continued to be paid for any commissions it was owed

          through October 2010. However, plaintiff was not paid commissions on any premiums

                                                        10
       No. 1-16-2808

          collected by defendant after May 2011, when Gilsbar stopped being the third-party

          administrator.

¶ 27         Baluk testified that Montgomery Edson was a senior vice president of marketing for

          defendant and was in charge of defendant’s “fronting programs.” Baluk explained that under

          those programs, defendant “would pretty much take a small percentage of the risk, around 10

          percent usually, and then we’d farm out the administration to a third-party administrator. The

          marketing would be done by a marketer outside the company. And then the reinsurer would

          pick up 90 percent of all the costs as well as 90 percent of all the profits. We just received a

          small percentage of the risk and we received a small fee for allowing these other parties to

          basically sell our products.” Plaintiff was the marketer for one of these programs, and Gilsbar

          was the third-party administrator. Baluk testified that defendant was very structured in terms

          of agreements executed pursuant to these types of programs because there were many entities

          and contracts involved.

¶ 28         Baluk testified that plaintiff would only be entitled to the marketer’s fee so long as there

          was a third-party administrator collecting the premium and, if there was no third-party

          administrator, no fee would be owed. He further testified:

                       “Q. So under that scenario, as a hypothetical, [plaintiff] could have procured a

                 thousand policies the first month and a third-party administrator would be there to

                 administer them. The second month [defendant] could say, you know what, why are

                 we paying these fees? Let’s just terminate the third-party administrator and keep the

                 fees yourself. Is that your position?

                       A. I’m not sure I heard a question there. Keep in mind, as I testified earlier, the

                 fronting programs were structured so there were multiple outside parties outside of

                                                         11
       No. 1-16-2808

                  [defendant] that performed specific functions. That’s the way the fronting programs

                  worked. We weren’t able to administer or *** do a lot of these things internally

                  ourselves, so it would be unlikely that scenario would happen.

                       Q. But if it did happen, would it be your position that there be no compensation?

                       A. The program would no longer be in place, so yes.”

          Baluk testified that “[t]here were no policies remaining when the third-party administrator

          was terminated” and that “[t]hey were either cancelled through uniform termination of

          coverage or discontinuance of all coverage.”

¶ 29          Barbara Sloothaak testified both as an adverse witness on behalf of plaintiff and as a

          witness on behalf of defendant that she was defendant’s controller and, as such, oversaw all

          of defendant’s financial reporting. Sloothaak testified that a document compiling policies that

          defendant self-administered beginning in 2011 showed that defendant collected a total of

          $1,680,779.90 in premiums. Sloothaak further testified that all of these policies were a

          different type of policy than that marketed by plaintiff and that they all had different policy

          numbers than plaintiff’s policies. 8

¶ 30          On September 23, 2016, the trial court issued a memorandum decision and judgment, in

          which it found that Marcozzi’s certification “contained an after the fact compilation of

          estimated hours for the work performed. Due to the bills not being created concurrent with

          the work performed and the estimated nature of the bills, the court can afford little if any

          weight to the bills submitted.” The court also found that “Robert Baluk established that the

          Marketing Fee ceased once the Amended Marketing Agreement took effect. As such the

              8
             Kim Prevost, a business analyst at Gilsbar, testified via evidence deposition as to certain records.
          However, the evidence deposition does not appear in the record on appeal.

                                                          12
       No. 1-16-2808

          evidence supports [defendant’s] contention that no amount is owed for a breach of the

          Marketing Agreement with regards to the Marketing Fee.” The court further found that

          “Robert Baluk asserted that once [defendant] took over administering the policies, as no

          [third-party administrator] was involved, then no Producers Commission would be owed to

          [plaintiff]. This is an absurd reading of the contract.” The court found that the producer

          commission owed to plaintiff was $134,460, based on a producer commission of 8%.

¶ 31         The court made the following findings of fact and conclusions of law concerning the fees

          owed under the marketing agreement:

                       “The evidence clearly established Gilsbar was no longer the [third-party

                 administrator] after May 31, 2011. As such, [plaintiff] has not proved that [defendant]

                 breached the contract with regards to the Marketing Fee.

                       Concerning the Producers Commission, [plaintiff] must establish that [defendant]

                 failed to pay the Producers Commission on renewal policies. [Plaintiff] established

                 through the testimony of Kim Prevost that certain policies were cancel and replace

                 policies and therefore no commission would be owed on those policies. As to the

                 remaining policies, the evidence supports that premiums in the amount of $1,680,779

                 and therefore an 8% commission would be owed. Baluk’s and Sloothak’s claims that

                 all the policies were cancel and replace or UTC policies lacked any documentary

                 support and therefore strained all credibility with the Court. Additionally this Court

                 finds the claim that by bringing the work and attendant cost of administering policies

                 into [defendant], rather than using a [third-party administrator], somehow justified

                 cutting the fee to marketer absurd. Therefore, [plaintiff] has met its burden as to the

                 Producers Commission and will be awarded $134,460 on Count II [sic].”

                                                      13
       No. 1-16-2808

¶ 32         With respect to count V, which concerned payment for Marcozzi’s work, the court found:

                       “Concerning Count V, the oral contract for Karen Marcozzi’s services, [plaintiff]

                 has failed to meet its burden of proof as to that claim. *** The evidence

                 overwhelmingly established that compliance work was contracted for as part of [the]

                 Marketing Agreement, and there was no separate oral contract formed. *** If a

                 modification to the time frame was to be done, then the integration clause in the

                 Marketing Agreement required a writing. Additionally, no subcontractor was ever

                 contemplated in the Marketing Agreement, so there is zero support for those fees.

                 Lastly, the Court afforded very little weight to the fees of Karen Marcozzi as the ‘bill’

                 was an estimate of time spent, created long after the work was performed. Therefore,

                 judgment is entered in favor of [defendant] on Count V.”

¶ 33         Defendant filed a notice of appeal, and plaintiff filed a notice of cross-appeal.

¶ 34                                              ANALYSIS

¶ 35         On appeal, each party argues that the trial court should have entered judgment entirely in

          its favor on count III, and plaintiff argues that the trial court should have entered judgment in

          its favor on count V. Plaintiff also argues that the trial court should have permitted it leave to

          file a second amended complaint.

¶ 36                                               I. Count III

¶ 37         First, each party argues that the trial court should have entered judgment entirely in its

          favor on count III—defendant argues that the trial court should not have awarded plaintiff the

          producer commission, while plaintiff argues that it was also entitled to the marketing fee.

          “Generally, the standard of review in a bench trial is whether the order or judgment is against

          the manifest weight of the evidence.” Reliable Fire Equipment Co. v. Arredondo, 2011 IL

                                                       14
       No. 1-16-2808

          111871, ¶ 12. “[W]here findings of fact depend on the credibility of witnesses, it is

          particularly true that a reviewing court will defer to the findings of the trial court unless they

          are against the manifest weight of the evidence.” Eychaner v. Gross, 202 Ill. 2d 228, 251

          (2002). “A decision is against the manifest weight of the evidence only when an opposite

          conclusion is apparent or when the findings appear to be unreasonable, arbitrary, or not based

          on the evidence. [Citations.] ‘The court on review must not substitute its judgment for that of

          the trier of fact.’ ” Eychaner, 202 Ill. 2d at 252 (quoting Kalata v. Anheuser-Busch Cos., 144

          Ill. 2d 425, 434 (1991)). However, the trial also concerned the construction and interpretation

          of contractual terms. “The interpretation of a contract involves a question of law, which we

          review de novo.” Carr v. Gateway, Inc., 241 Ill. 2d 15, 20 (2011). De novo consideration

          means we perform the same analysis that a trial judge would perform. People v. McDonald,

          2016 IL 118882, ¶ 32.

¶ 38         “In construing a contract, the primary objective is to give effect to the intention of the

          parties.” Thompson v. Gordon, 241 Ill. 2d 428, 441 (2011) (citing Gallagher v. Lenart, 226

          Ill. 2d 208, 232 (2007)). The court will first look to the language of the contract itself to

          determine the parties’ intent, and the contract must be construed as a whole, “viewing each

          provision in light of the other provisions.” Thompson, 241 Ill. 2d at 441. “The parties’ intent

          is not determined by viewing a clause or provision in isolation, or in looking at detached

          portions of the contract.” Thompson, 241 Ill. 2d at 441. “If the words in the contract are clear

          and unambiguous, they must be given their plain, ordinary and popular meaning.” Thompson,

          241 Ill. 2d at 441 (citing Central Illinois Light Co. v. Home Insurance Co., 213 Ill. 2d 141,

          153 (2004)). “A court will not interpret a contract in a manner that would nullify or render

          provisions meaningless, or in a way that is contrary to the plain and obvious meaning of the

                                                       15
       No. 1-16-2808

          language used. [Citation.] Further, when parties agree to and insert language into a contract,

          it is presumed that it was done purposefully, so that the language employed is to be given

          effect. [Citation.]” Thompson, 241 Ill. 2d at 442.

¶ 39         Compensation under the marketing agreement was governed by article III, which

          provided, in relevant part:

                       “A. [Defendant] will pay Marketer, as full compensation for all duties and

                 responsibilities under this Agreement, the amounts set forth in Exhibit A.

                 Compensation will be paid to you based on Policies produced by you and your

                 Producers. Any commission payable will be made on at least a monthly basis and

                 only after the receipt of premium by [defendant] for such Policy. Marketer shall

                 refund to [defendant] any compensation received on cancellations, refunds and return

                 premiums for such Policies.

                       B. Unless this Agreement is terminated for ‘cause’ as described below, your first

                 year and renewal year commission are vested.”

          Exhibit A, in turn, provided, in relevant part:

                       “Compensation:

                       Marketer’s Fee: For all Policies/certificates issued on or after 12/1/07, Marketer

                 will receive 3% of all premiums collected by [defendant’s] third party administrator

                 for such Policies/certificates, less any returns or refunded premium amounts.

                       Commissions: For the GTL Forms identified below, [plaintiff] will receive a

                 commission on all base premium collected (no underwriting rate-up and no rate

                 increase     premium)     by   [defendant’s]   third   party   administrator    for   all

                 Policies/Certificates issues, less any returns or refunded premium amounts. The

                                                       16
       No. 1-16-2808

                 commission rate shall be: 32% for policy/cert year 1; 10% for policy/cert year 2; and

                 8% thereafter as long as the policy/cert remains in force. These commission amounts

                 do not apply to any replacement policies issued within 12 months of the original

                 policy’s termination date or as a result of [defendant’s] Uniform Termination of

                 Coverage program under HIPAA.”

¶ 40         In the case at bar, the parties focus on what they call the trial court’s inconsistent readings

          of the marketer’s fee and producer commission. Specifically, both provisions refer to

          premiums “collected by [defendant’s] third party administrator,” but the trial court found that

          plaintiff was entitled to one and not the other. However, we cannot agree that the trial court’s

          interpretation of the marketing agreement was inconsistent given the other important

          distinction between the provisions—namely, that, as a commission, the producer commission

          was vested while the marketing fee was not.

¶ 41         First, with respect to the marketing fee, as noted, the marketing agreement provided that,

          “[f]or all Policies/certificates issued on or after 12/1/07, Marketer will receive 3% of all

          premiums collected by [defendant’s] third party administrator for such Policies/certificates,

          less any returns or refunded premium amounts.” It is undisputed that defendant self-

          administered its policies after May 31, 2011. Under the plain language of the provision, then,

          because there were no “premiums collected by [defendant’s] third party administrator,” there

          was no marketing fee due. We cannot find that the trial court erred in reaching this

          conclusion.

¶ 42         The analysis becomes slightly more complex, however, when taking the producer

          commission into account. The marketing agreement provided that “[plaintiff] will receive a

          commission on all base premium collected (no underwriting rate-up and no rate increase

                                                       17
No. 1-16-2808

   premium) by [defendant’s] third party administrator for all Policies/Certificates issues, less

   any returns or refunded premium amounts. The commission rate shall be: 32% for policy/cert

   year 1; 10% for policy/cert year 2; and 8% thereafter as long as the policy/cert remains in

   force.” At first glance, the same analysis would apply as with the marketer’s fee—because

   there was no “premium collected *** by [defendant’s] third party administrator,” plaintiff

   would not be entitled to compensation under this provision. Indeed, this is the way that

   defendant urges us to read this provision. However, we cannot do as defendant wishes and

   merely view the phrase “premium collected *** by [defendant’s] third party administrator”

   in isolation, because “[t]he parties’ intent is not determined by viewing a clause or provision

   in isolation, or in looking at detached portions of the contract.” Thompson, 241 Ill. 2d at 441.

   In the case at bar, the producer commission is labeled as a “commission” and, under the

   express terms of the marketing agreement, “your first year and renewal year commission are

   vested.” Thus, if we simply interpreted provisions the same way, plaintiff would cease to be

   entitled to its commission once defendant decided to self-administer the policies, rendering

   the vesting provision meaningless. See Thompson, 241 Ill. 2d at 442 (“A court will not

   interpret a contract in a manner that would nullify or render provisions meaningless, or in a

   way that is contrary to the plain and obvious meaning of the language used.”). The only way

   to read the vesting provision and the producer commission provision in harmony is to find

   that the producer commission remains in effect even after the third-party administrator has

   ceased administrating the policies. We also note that all of the policies for which plaintiff

   seeks commissions would be renewal policies, as opposed to new policies. Thus, all of these

   policies had premiums that had at one time been collected by the third-party administrator,

   even if they were now being self-administered.

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       No. 1-16-2808

¶ 43         We are unpersuaded by plaintiff’s attempt to read the marketing agreement’s vesting

          language as applying to the marketer’s fee. The marketer’s fee is labeled a “fee” and not a

          “commission.” This is not a distinction without a difference because the marketing

          agreement expressly gives commissions special treatment by providing that they are vested.

          Furthermore, the parties clearly drew a distinction between a fee and a commission by

          choosing to use both terms in separate provisions of exhibit A. They did so not only in the

          original marketing agreement but also amended the agreement upon the termination of the

          reinsurance agreement and again included the two distinct terms. There is simply no basis for

          treating the marketer’s fee as though it was a commission. Accordingly, we cannot find that

          the trial court erred in finding that plaintiff was entitled to the producer commission but not

          the marketer’s fee.

¶ 44         As a final matter, we note that, at oral argument, defendant made several comments

          challenging the evidence presented at trial concerning the amount of plaintiff’s damages.

          Defendant raised this issue for the first time on appeal in its reply brief, where the argument

          consisted of two brief paragraphs with no citations to authority and merely the claim that

          “there is simply no evidentiary support for” the trial court’s findings of fact as to the damages

          calculations. Defendant also stated that “it is impossible to recite the entire transcript of

          proceedings in this brief to prove this assertion” and “instead challenge[d] counsel for

          [plaintiff] to pinpoint and quote the evidence in the record that supports these two findings of

          fact.” Leaving aside the fact that the appellee does not respond to arguments made in a reply

          brief and therefore plaintiff would have no opportunity to meet defendant’s “challenge,”

          defendant, as the appellant, bears the burden of persuasion as to its claims of error. City of

          Chicago v. Janssen Pharmaceuticals, Inc., 2017 IL App (1st) 150870, ¶ 29; Yamnitz v.

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       No. 1-16-2808

          William J. Diestelhorst Co., 251 Ill. App. 3d 244, 250 (1993). Furthermore, it is well settled

          that “[p]oints not argued [in the appellant’s brief] are waived and shall not be raised in the

          reply brief, in oral argument, or on petition for rehearing.” Ill. S. Ct. R. 341(h)(7) (eff. Jan. 1,

          2016). Finally, during oral argument, defendant several times referenced the evidence

          deposition of Kim Prevost in support of this argument. However, as noted, the evidence

          deposition is not included in the record on appeal, but only in the appendix to defendant’s

          brief on appeal. “[A]n appellant has the burden to present a sufficiently complete record of

          the proceedings at trial to support a claim of error, and in the absence of such a record on

          appeal, it will be presumed that the order entered by the trial court was in conformity with

          law and had a sufficient factual basis.” Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984).

          See also Pine Top Receivables of Illinois, LLC v. Transfercom, Ltd., 2017 IL App (1st)

          161781, ¶ 2 n.1 (“because including a document not a part of the record in an appendix is

          improper, we will not consider this document”); Oruta v. B.E.W., 2016 IL App (1st) 152735,

          ¶ 32 (“This appendix also includes documents that are not in the appellate record and thus

          must be disregarded.”); People v. Wright, 2013 IL App (1st) 103232, ¶ 38 (“The inclusion of

          evidence in an appendix is an improper supplementation of the record with information

          dehors the record.”). Accordingly, we will not review defendant’s claims as to any

          inadequacy of the proof of damages.

¶ 45                                               II. Count V

¶ 46         Plaintiff also argues that the trial court erred in finding in defendant’s favor with respect

          to the oral contract for Marcozzi’s work. “Oral agreements are binding so long as there is an

          offer, an acceptance, and a meeting of the minds as to the terms of the agreement.” K4

          Enterprises, Inc. v. Grater, Inc., 394 Ill. App. 3d 307, 313 (2009). “The existence of an oral

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       No. 1-16-2808

          contract, its terms, and the intent of the parties are questions of fact, and the trial court’s

          determinations on those questions will be disturbed only if they are against the manifest

          weight of the evidence.” Anderson v. Kohler, 397 Ill. App. 3d 773, 785 (2009).

¶ 47         In the case at bar, the trial court found that “[t]he evidence overwhelmingly establishes

          that compliance work was contracted for as part of [the] Marketing Agreement, and there

          was no separate oral contract formed.” We cannot find that this conclusion was against the

          manifest weight of the evidence. The marketing agreement provided, as part of plaintiff’s

          duties, that plaintiff would “file and secure approval of all policy, certificate, application and

          related forms” and “assure that the policies, certificates and related forms comply with all

          applicable state and federal laws, and regulations.” The marketing agreement also contained

          an integration clause providing that “[t]his Agreement may be amended, altered or modified

          only in writing signed by both parties.” Thus, we cannot find that it was against the manifest

          weight of the evidence for the trial court to find that any oral discussions about Marcozzi’s

          work did not constitute a separate oral contract.

¶ 48         Furthermore, “[d]amages are an essential element of a breach of contract action and a

          claimant’s failure to prove damages entitles the defendant to judgment as a matter of law.”

          In re Illinois Bell Telephone Link-Up II & Late Charge Litigation, 2013 IL App (1st)

          113349, ¶ 19. In the case at bar, the trial court expressly stated that it would afford little

          weight to Marcozzi’s memorandum of her hours worked because it was “an estimate of time

          spent, created long after the work was performed.” Accordingly, plaintiff also failed to

          properly establish damages, so the trial court properly found in favor of defendant on count V

          of the complaint.

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       No. 1-16-2808

¶ 49                                    III. Amendment of Complaint

¶ 50         As a final matter, plaintiff argues that it should have been permitted leave to file a second

          amended complaint. “A trial court decision to deny leave to file an amended complaint will

          not be disturbed absent a clear abuse of discretion.” Harding v. Amsted Industries, Inc., 276

          Ill. App. 3d 483, 494 (1995). “A court abuses its discretion if allowing the amendment

          furthers the ends of justice.” W.E. Erickson Construction, Inc. v. Chicago Title Insurance

          Co., 266 Ill. App. 3d 905, 911 (1994).

¶ 51         “ ‘[T]he factors which are to be considered in reviewing the propriety of the denial of a

          motion to amend the pleadings include (1) whether the proposed amendment would cure the

          defective pleading; (2) whether the proposed amendment would cause prejudice or surprise

          to the defendant; (3) the timeliness of the proposed amendment; and (4) whether previous

          opportunities to amend the pleadings could be identified.’ ” Zubi v. Acceptance Indemnity

          Insurance Co., 323 Ill. App. 3d 28, 40 (2001) (quoting Kennedy v. King, 252 Ill. App. 3d 52,

          55 (1993)); see also Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 273

          (1992). “However, the primary consideration is whether amendment would further the ends

          of justice.” Regas v. Associated Radiologists, Ltd., 230 Ill. App. 3d 959, 968 (1992); see also

          Cantrell v. Wendling, 249 Ill. App. 3d 1093, 1095 (1993) (“The most important question is

          whether amendment will be in furtherance of justice, and amendment of defective pleadings

          should be permitted unless it is clear that the defect cannot be cured thereby. Any doubts

          should be resolved in favor of allowing amendments.”).

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       No. 1-16-2808

¶ 52          In the case at bar, on July 28, 2016, 9 plaintiff sought to amend the complaint to add two

          additional counts concerning Marcozzi’s work—one for unjust enrichment and one for

          quantum meruit. The motion for leave to file the second amended complaint did not provide

          any explanation as to why these counts had not been previously included in either the

          original complaint or the first amended complaint. The trial court denied the motion on

          August 8, 2016, and denied plaintiff’s motion to reconsider on August 30, 2016. Trial began

          on September 12, 2016.

¶ 53          We cannot find that the trial court abused its discretion in denying leave to amend the

          complaint to add the two new causes of action. The proposed amendment was filed shortly

          before trial, after the parties had already been litigating the matter for nearly five years, and

          added two new causes of action. Plaintiff offered no explanation for why it was adding these

          counts so late in the process, especially since the facts underlying the causes of action were

          known to it from the inception of the lawsuit. Accordingly, we cannot find the denial of leave

          to amend to constitute an abuse of discretion.

¶ 54                                              CONCLUSION

¶ 55          For the reasons set forth above, we affirm the trial court’s judgment that plaintiff was

          entitled to the producer commission but was not entitled to the marketer’s fee. We further

          affirm the trial court’s judgment that plaintiff failed to prove a breach of an oral contract

          concerning Marcozzi’s work. Finally, we cannot find that the trial court abused its discretion

          in denying plaintiff’s motion for leave to file a second amended complaint.

¶ 56          Affirmed.

              9
                The copy of the motion for leave to file the second amended complaint contained in the record
          on appeal is not file-stamped. However, the parties do not dispute that plaintiff filed such a motion or
          its date.

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