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                                     Appellate Court                           Date: 2018.02.08
                                                                               13:32:28 -06'00'




             Insurance Benefit Group, Inc. v. Guarantee Trust Life Insurance Co.,
                                 2017 IL App (1st) 162808



Appellate Court         INSURANCE BENEFIT GROUP, INC., Plaintiff-Appellee and
Caption                 Cross-Appellant, v. GUARANTEE TRUST LIFE INSURANCE
                        COMPANY, Defendant-Appellant and Cross-Appellee.



District & No.          First District, Fourth Division
                        Docket No. 1-16-2808



Filed                   December 7, 2017



Decision Under          Appeal from the Circuit Court of Cook County, No. 11-CH-28150; the
Review                  Hon. Margaret Ann Brennan, Judge, presiding.



Judgment                Affirmed.


Counsel on              Cornelius E. McKnight, Kevin Q. Butler, and Nathan P. Karlsgodt, of
Appeal                  McKnight, Kitzinger & Pravdic, LLC, of Chicago, for appellant.

                        William D. Kelly and James J. Karras, of Kelly & Karras, Ltd., of Oak
                        Brook, for appellee.



Panel                   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 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 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;

         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-
                    (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.
       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 [sic], [defendant’s] Compliance and Licensing Officer, 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

          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.

                                                  -3-
       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 titled “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
              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.
                  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

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

                                                    -4-
               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 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, 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

           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.

                                                        -5-
       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
       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

           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).

                                                       -6-
       2010. However, plaintiff was not paid commissions on any premiums 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
               [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

           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.

                                                      -7-
       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 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].”
¶ 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



                                                   -8-
       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
       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
       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.”
       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:

                                                     -9-
                    “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
                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
       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

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       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.
¶ 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. 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.


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       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
       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.

¶ 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

                                                    - 12 -
       (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.”).
¶ 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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