Insurance Benefit Group, Inc. v. Guarantee Trust Life Insurance Company
2017 IL App (1st) 162808
| Ill. App. Ct. | 2017Background
- Insurance Benefit Group (plaintiff) and Guarantee Trust Life Insurance Co. (defendant) entered a December 1, 2007 marketing agreement appointing plaintiff as exclusive marketer for certain health insurance programs; Exhibit A provided a 3% "marketer’s fee" and separate tiered "producer commissions."
- Producer commissions were expressly stated to be "vested" unless terminated for cause; the marketer’s fee contained no vesting language and was payable on premiums "collected by [defendant’s] third party administrator."
- Defendant terminated the marketing agreement effective January 1, 2010, later ceased use of the third‑party administrator (Gilsbar) after May 31, 2011, and began self‑administering certain policies.
- Plaintiff sued for breach of the marketing agreement (Count III) and for breach of an oral agreement to pay for compliance work by plaintiff’s employee Marcozzi (Count V); trial focused on two fees: the marketer’s fee and producer commissions, and on Marcozzi’s billed hours.
- The trial court found plaintiff not entitled to the marketer’s fee (because no premiums were collected by a third‑party administrator after May 31, 2011), but awarded $134,460 in producer commissions (8% on $1,680,779 of premiums); it found for defendant on Count V, rejecting Marcozzi’s post‑hoc time memorandum and concluding compliance work was covered by the written marketing agreement.
- Both parties appealed (defendant arguing no producer commission was owed; plaintiff arguing it also was owed the marketer’s fee and challenging denial of leave to amend to add unjust enrichment/quantum meruit claims). The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff was entitled to the 3% marketer’s fee after defendant ceased using a third‑party administrator | The marketer’s fee is a continuing payment tied to policies and should survive self‑administration | Fee payable only on premiums "collected by [defendant’s] third party administrator," so no fee due once defendant self‑administered | No marketer’s fee owed: plain contract language requires premium collection by third‑party administrator |
| Whether plaintiff was entitled to vested producer commissions after defendant stopped using the third‑party administrator | Vesting language applies to "commissions," so producer commissions survive the change in administration and remain payable on renewals | Same literal phrase refers to premiums collected by third‑party administrator, so no commissions due after self‑administration | Producer commissions are vested and payable on renewal policies; court awarded $134,460 |
| Whether an enforceable separate oral contract existed to pay Marcozzi $50/hr for compliance work | Plaintiff: Edson agreed to reimburse Marcozzi at $50/hr for non‑agreement compliance work; plaintiff relied on Marcozzi’s time memorandum and certification | Defendant: compliance work fell within duties under the written marketing agreement; integration clause bars oral modification; time memorandum unreliable | No separate oral contract: trial court’s finding not against manifest weight; damages not proven because hours memo was created after the fact |
| Whether the trial court abused discretion by denying leave to file a second amended complaint adding unjust enrichment/quantum meruit | Plaintiff: should be allowed to amend to assert equitable claims for Marcozzi’s unpaid work | Defendant: amendment untimely, would prejudice, and facts were known long before trial | Denial affirmed: proposed amendment was untimely, added new claims shortly before trial, and plaintiff offered no explanation |
Key Cases Cited
- Reliable Fire Equip. Co. v. Arredondo, 2011 IL 111871 (standard of review in bench trial)
- Eychaner v. Gross, 202 Ill. 2d 228 (deference to trial court on witness credibility)
- Thompson v. Gordon, 241 Ill. 2d 428 (contract interpretation; give effect to parties’ intent and avoid rendering provisions meaningless)
- Carr v. Gateway, Inc., 241 Ill. 2d 15 (interpretation of contract is a question of law reviewed de novo)
- Foutch v. O’Bryant, 99 Ill. 2d 389 (appellant’s duty to provide complete record; missing record presumed to support trial court)