Thomas v. Weatherguard Construction Company, Inc. , 2015 IL App (1st) 142785 ( 2015 )

2015 IL App (1st) 142785
Nos. 1-14-2785, 1-14-2807 (cons.)
Fifth Division
September 30, 2015
____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
)
RAYMOND THOMAS, )
) Appeal from the Circuit Court
Plaintiff-Appellant and Cross-Appellee, ) of Cook County.
)
v. ) No. 07 L 13563
)
WEATHERGUARD CONSTRUCTION COMPANY, ) The Honorable
INC., ) Joan E. Powell,
) Judge Presiding.
Defendant-Appellee and Cross-Appellant. )
)
______________________________________________________________________________
JUSTICE GORDON delivered the judgment of the court, with opinion.
Justices Lampkin and Palmer concurred in the judgment and opinion.
OPINION
¶1 The instant consolidated appeals arise from the trial court’s finding, after a bench trial,
that defendant Weatherguard Construction Company, Inc., was plaintiff Raymond Thomas’
employer and owed plaintiff commissions on contracts that plaintiff procured on
Weatherguard’s behalf. Weatherguard appeals the trial court’s finding that it was plaintiff’s
employer, as well as the court’s findings concerning damages. Plaintiff appeals the trial
court’s application of the Wage Payment and Collection Act (Wage Payment Act) (820 ILCS
115/1 et seq. (West 2014)) as of the time of the filing of his complaint, instead of the
application of the amended Wage Payment Act, which was in force at the time of the court’s
Nos. 1-14-2785, 1-14-2807 (cons.)
judgment. For the reasons that follow, we affirm the trial court’s judgment in plaintiff’s favor
but remand the case to the trial court for the limited purpose of determining plaintiff’s
reasonable attorney fees.
¶2 BACKGROUND
¶3 On December 5, 2007, plaintiff filed a complaint against defendant; the complaint was
amended on July 14, 2008, and it is the amended complaint on which the parties went to trial.
The amended complaint contains four counts, and alleges that defendant is in the business of
repairing and replacing roofs, siding, doors, and windows for homes that sustained damage
due to weather conditions. The complaint alleges that “[o]n or around April 7, 2007,
Defendant hired Plaintiff as a commissioned sales representative to solicit orders (contracts)
for repair work for and on behalf of Defendant” and “promised to pay Plaintiff commissions
equal to twenty percent (20%) of the total value of any orders (contracts) that Plaintiff
secured for and on behalf of Defendant.” The complaint alleges that plaintiff performed to
the “reasonable satisfaction” of defendant and that plaintiff terminated his employment on
July 9, 2007, after having secured orders in the amount of $245,010.57. The complaint
alleges that based on this amount, plaintiff was entitled to commissions of $49,002.11, but
was only paid $1,335.57. Plaintiff sent defendant a letter demanding payment of the unpaid
commissions on September 4, 2007, but defendant refused to pay.
¶4 Count I of the complaint alleges that defendant violated the Sales Representative Act
(820 ILCS 120/1 et seq. (West 2008)), which requires a principal to pay a sales
representative earned commissions within 13 days after the sales representative’s termination
of employment. Count I requested that the court award plaintiff all unpaid earned
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commissions, as well as “exemplary damages equal to three (3) times the total amount of the
unpaid earned commissions” and attorney fees.
¶5 Count II, pled in the alternative, alleges that defendant violated the Wage Payment Act,
which required an employer to pay an employee final compensation at the time of the
employee’s separation from employment or at the next regularly scheduled pay period. Count
II requested that the court award plaintiff all unpaid final compensation, as well as attorney
fees pursuant to the Attorneys Fees in Wage Actions Act (705 ILCS 225/0.01 et seq. (West
2008)).
¶6 Count III, pled in the alternative, was for breach of contract and alleges that defendant
breached its oral contract with plaintiff by failing to compensate him as agreed. Count III
requested that the court award plaintiff $47,666.54 in unpaid compensation.
¶7 Finally, count IV, pled in the alternative, was based on unjust enrichment and alleges that
defendant was being unjustly enriched by receiving payment for service contracts that
plaintiff solicited and secured while not paying plaintiff compensation. Count IV requested
that the court award plaintiff $47,666.54 in unpaid compensation, as well as punitive
damages and attorney fees.
¶8 In its answer, defendant denied plaintiff was its employee, denied any business
relationship with plaintiff, and denied that it owed plaintiff any commissions.
¶9 On June 12, 2010, defendant filed a motion for summary judgment, claiming it owed no
liability to plaintiff because the Sales Representative Act did not apply to defendant.
Additionally, defendant argued that it was not plaintiff’s employer, claiming plaintiff was
employed by Dave Farbaky and his company DBar, an independent marketing company.
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¶ 10 On September 15, 2010, the trial court granted defendant’s motion for summary
judgment as to count I of plaintiff’s amended complaint, concerning the Sales Representative
Act, and denied the motion as to the other counts of the amended complaint.
¶ 11 On June 28 and 29, 2011, the parties appeared before the court for a bench trial. Plaintiff
testified on his own behalf that in 2007, he came across an ad by defendant on the Career
Builder website; the ad contained defendant’s name with no mention of Dave Farbaky or
DBar. He submitted an online application, along with his resume, and received a call “from
someone from the office for an interview.” The building at which he interviewed had
defendant’s name on it and plaintiff did not observe DBar’s name anywhere. When plaintiff
walked into the building he observed “several employees that had, like, [defendant’s]
uniforms and stuff on.”
¶ 12 Plaintiff testified that he was interviewed by Farbaky, who was wearing a Weatheguard
uniform. Plaintiff also spoke to Chad Hagen, who was also wearing a Weatherguard uniform.
Plaintiff received a business card from Hagen at the same time, which had defendant’s name
on it. After the interview, plaintiff received a call back from Farbaky, inviting plaintiff back
to the office. When plaintiff returned to the office, he was invited on a “ride-along” with
Farbaky to observe what the job entailed. Farbaky took plaintiff to customers’ homes and
informed plaintiff “about the company.” Plaintiff had the opportunity to perform a roof
inspection with Farbaky, who showed plaintiff the process of approaching the customer and
inspecting the roof for damage. Plaintiff observed Farbaky ring a prospective customer’s
doorbell and heard him state that “he was from Weatherguard Construction” and that they
were in the area inspecting roofs for hail damage. Plaintiff further observed Farbaky inform
the customer that if they observed damage on the roof, the customer could fill out
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defendant’s claim form and possibly qualify for a replacement roof. Once the form was
completed, an insurance adjuster would set up an appointment with defendant to inspect the
site and verify defendant’s report of damage. Once the insurance adjuster approved it, the
customer would be paid by the insurance company for the damage to the roof under the
customer’s insurance policy. The customer would then pay defendant to perform the roof
repairs.
¶ 13 After the ride-along, plaintiff called Farbaky and informed him that plaintiff “accepted,
you know, the position of coming aboard as far as being a claims specialist for
Weatherguard.” Plaintiff was given a map of the geographic territory, as well as a
Weatherguard hat and a Weatherguard jacket. Farbaky also provided plaintiff a script to read
in which plaintiff would identify himself as being “ ‘from Weatherguard Construction
Company.’ ”
¶ 14 In May 2007, Farbaky handed plaintiff a business card, which had the Weatherguard
name on it. At approximately the same time, plaintiff received business cards with plaintiff’s
name on them; those business cards also had the Weatherguard name on it. Farbaky also
applied for a solicitor’s permit on plaintiff’s behalf with the City of Naperville. Plaintiff
explained that the permit “allow[ed] Weatherguard employees” to solicit business in
Naperville. Plaintiff further testified that Farbaky arranged for Weatherguard logos to be
placed on the sides of plaintiff’s personal vehicle.
¶ 15 Plaintiff testified that after accepting the job, he began going out into his territory every
day and approaching customers. If he obtained a contract with a customer, he would either
bring a copy of the contract back to the office or would hand it to Farbaky if he was in the
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area. Plaintiff would then be contacted when the insurance adjuster was going to be at the
home so that plaintiff could be present for the inspection.
¶ 16 After approximately two weeks of work, plaintiff “started kind of feeling like [he had] a
kind of like suspicion about the company.” Upon beginning work, plaintiff “was expected to
be paid 20 percent of the total job,” based on his conversations with Farbaky. When he
received his first paycheck, it was a personal check from Farbaky with the word “ ‘draw’ ”
written on the memo line. Plaintiff was “in disbelief” that he was receiving a personal check
and asked Farbaky about it. Plaintiff was told that the term “ ‘draw’ ” meant that the check
was “[j]ust money being paid up front until [plaintiff] actually got the dollar amount that was
due [to him] from the jobs that [he] got.” Plaintiff continued to receive regular personal
checks from Farbaky with the word “ ‘draw’ ” written on the memo line. Plaintiff never
received a payroll check from Farbaky and never received any checks from defendant.
Plaintiff received a total of $2,900 in personal checks.
¶ 17 As time passed and plaintiff had not received any checks from defendant, he “wasn’t
feeling *** real [sic] good about the company,” but continued working for several months.
However, plaintiff was then offered a full-time job as a store manager at Lowe’s and plaintiff
decided to accept that position. Plaintiff testified that he worked for a total of three months
procuring contracts for defendant. During the month of April 2007, he worked 10 hours per
day; during May and June, he was involved in store manager training at Lowe’s and spent
approximately four to five hours a day procuring contracts for defendant. Plaintiff stopped
procuring contracts in July.
¶ 18 Plaintiff identified an exhibit that was admitted into evidence as a listing of all
homeowners whose contracts plaintiff had procured for defendant. In each instance, plaintiff
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had obtained the customer’s signature on the contract, had turned the contract in to
defendant, and had met with the insurance adjuster to inspect the damage. The list included
the contract price for each of the contracts, which plaintiff testified was a combination of
plaintiff’s own estimate as to the dollar value of the contract and what plaintiff had learned
about the contract’s value from insurance adjusters.
¶ 19 On cross-examination, plaintiff testified that Farbaky assigned plaintiff the area in which
plaintiff worked and that he never spoke with Brett or Matt MacDonald. Plaintiff never
received a paycheck, W-2, or 1099 from defendant and never completed a W-4 for
defendant. Plaintiff also testified that he did not have any documentation to support the prices
listed on the exhibit.
¶ 20 On redirect examination, plaintiff testified that he and Farbaky had discussed plaintiff’s
compensation and that “[plaintiff] was told by Dave that each contract would be 20 percent
of the total job.” Farbaky and plaintiff “talked about a salary in excess of a six figure salary,
talked about 100,000-plus just based off of the commission that you would get for each job.”
Plaintiff testified that when he first met Farbaky, Farbaky told him that his title was a “[f]ield
supervisor” and that his supervisor was Chad Hagen. Farbaky told plaintiff that he worked
for defendant and did not ever mention DBar.
¶ 21 Plaintiff called Brett MacDonald, 1 the president and owner of defendant, as a witness.
MacDonald testified that defendant obtained customers by hiring independent marketing
companies to solicit business after a storm. MacDonald testified that invoices that had been
admitted into evidence reflected payments and credits submitted to defendant.
1
MacDonald’s name is spelled “McDonald” in a number of places throughout the record on appeal. We use
the spelling MacDonald provided when asked to spell his name on the witness stand.
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¶ 22 MacDonald testified that defendant had an office in Schaumburg, that the Weatherguard
name appeared outside the office building, that Weatherguard employees worked in that
office, and that Farbaky had worked in that office. MacDonald testified that Weatherguard
had written checks to Farbaky and issued a 1099 to Farbaky. MacDonald testified that
Farbaky was never an employee of defendant and that he would “absolutely” tell Farbaky to
indicate that DBar was an independent marketing company.
¶ 23 MacDonald testified that he “knew that there were people going out and representing
themselves as claims specialists on behalf of Weatherguard” and admitted that there was
nothing in writing requiring the claims specialists to indicate that they were independent
contractors, not employees of defendant. However, he testified that “Dave, specifically, knew
not to tell people he’s an employee, absolutely.”
¶ 24 On July 13, 2011, defendant filed a motion for a directed finding, arguing that plaintiff
had failed to prove the allegations in his amended complaint. On July 22, 2011, the trial court
denied Weatherguard’s motion, finding that plaintiff had established a prima facie case
supporting the allegations of his amended complaint.
¶ 25 The bench trial resumed on November 9 and 10, 2011, with defendant’s case-in-chief.
Defendant’s only witness was MacDonald, who testified that defendant worked with
independent marketing companies to solicit business. MacDonald explained that “[i]f a storm
hits, what we need is a marketing force or people to go out and sell or market our services.
So what we do is we engage in a relationship with an independent company, whether it’s
they act as an individual or they hire on a group [of] people. That’s up to them. They
designate their own territory, and they implement their own marketing plan, and
Weatherguard will build out those contracts as they are turned in.” MacDonald testified that
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defendant and the marketing company would typically split the net commission: “[t]heir
responsibilities for that split are they handle everything with the homeowner, the insurance
company, the invoice, and the collections of payment, meeting the inspector, specking [sic] it
out. Weatherguard’s obligation is to provide the service of building the roof or the siding and
follow up on warranty work if there is a warranty issued.” MacDonald testified that at any
given time, defendant had no fewer than three to five marketing companies soliciting
business in the marketplace. Defendant did not have written agreements with the marketing
companies.
¶ 26 MacDonald testified that he was familiar with DBar Enterprises, Inc., which was “Dave
Farbaky’s company that we have done a lot of work with.” MacDonald testified that Farbaky
was never an employee of defendant and that DBar was an independent marketing company
with which defendant had a contract. Defendant placed no restrictions on the way in which
its independent marketing companies solicited business for defendant and did not advise
them as to how to conduct business or how to perform their hiring practices.
¶ 27 MacDonald testified that the first time he heard plaintiff’s name was when plaintiff’s
attorney contacted defendant. At the time that plaintiff was soliciting business for defendant,
MacDonald was the only person who could enter into an employment agreement with anyone
working on the sales side of defendant. MacDonald testified that he never entered into any
sort of contract with plaintiff, that nobody else had the authority to do so, and that Farbaky
did not have the authority to bind defendant to any agreements.
¶ 28 MacDonald testified that for an independent marketing company to earn a commission, it
was not enough simply to obtain a contract with a customer. MacDonald explained that “[f]or
the marketing company to earn a commission, they have to market for the business, so they
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have to find a territory that has damage. They have to get assigned. They have to meet with
the adjuster. They have to go over scope with the adjuster, measure the project, inspect the
project for the production, get the project turned into production. If there [are] any shortages
on the job, it’s something they have to manage. They have to handle customers’ particular
bills. They have to handle invoicing, and all checks, first payment and final payment.”
MacDonald testified that in situations where a marketing company left the job before it was
completed and another marketing company took over, the two marketing companies would
“come up with some sort of an arrangement” to split the commission.
¶ 29 MacDonald testified that when defendant and a marketing company decided to work
together, the marketing company was “granted access to use any marketing or promotional
[materials] we have.” MacDonald testified that “[a]ny job they turn into Weatherguard, ***
ten percent of that price goes into overhead. So it’s up to them. They can use as much of it or
as little as they want. They usually find it’s to their benefit that the more materials we have
out there they can use.” The overhead that the marketing companies paid also granted them
access to the use of defendant’s office space.
¶ 30 MacDonald testified that the agreement between defendant and DBar provided for a 40%
commission, so DBar would receive 40% of the net profit or loss once a job was paid in full.
¶ 31 MacDonald testified that he searched defendant’s records for all of the jobs that plaintiff
alleged he was owed commission on, and compiled an exhibit containing copies of
defendant’s payments for each of those jobs. Defendant’s exhibit no. 8, which was admitted
into evidence, was a summary chart, with the columns representing (1) the job number
defendant used to track the job, (2) the homeowner’s name, (3) whether commission was
paid on the job, (4) the total profit on the job, (5) DBar’s 40% commission, (6) the 20%
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commission plaintiff alleged he was owed, and (7) the check number used to pay the job. As
to the 20% commission, MacDonald testified:
“Q. So if the Court gets to damages, these are the damages that are appropriate.
That would be owed by DBAR to Mr. Thomas, just so we are clear on this, and so
the net if you deduct those out, the net commissions that Mr. Thomas should have
received from DBAR would have been what in addition?
A. I wouldn’t say should have. I would say what he potentially could have been
owed by DBAR would be 12,126.
Q. Why do you say potentially?
A. Because if he were to receive a full commission of 20 percent, that would be
what he would be owed. I know through the course of testimony that Thomas did not
stay around to complete the projects, so I don’t understand if I’m in Dave’s position
why Dave would be paying him a full commission for only doing a quarter of the
work that needed to be completed on the file.”
MacDonald further testified that defendant had paid DBar in full all commissions owed on
the jobs identified by plaintiff as jobs he had procured.
¶ 32 On January 25, 2013, the trial court issued a written order and opinion on the case. The
court found that defendant held Farbaky out as its agent and as a result an apparent agency
relationship occurred, finding:
“It allowed him to respond to job applications put into the market by Weatherguard. It
allowed its name to be the sole business entity on Farbaky’s and Thomas’ business
cards. It allowed use of its offices, address, hats, jackets, car boards, marketing
materials, web-site advertising, use of its name exclusively in training scripts, use of
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its secretarial staff and more. Weatherguard had some control over the day to day
practices of the claims specialists. It provided the contracts bearing its name. It
communicated with homeowners’ insurance adjusters and to arrange days when the
adjuster would view the house. It contacted the claims specialists to know the days
when the adjuster would be at the house so that the claim specialist could make a
point of being present. Further, Weatherguard’s production manager has final say on
whether the contract will be completed by Weatherguard.”
¶ 33 The court found plaintiff’s testimony credible and found that “[h]e offered sufficient
indicia to establish apparent agency, so the Court finds that Farbaky was at all relevant times
an agent of Weatherguard.” Consequently, the court found that defendant was bound by the
oral agreement between Farbaky and plaintiff for plaintiff to work as a claims specialist for
defendant. The court further explained:
“This is all to say that Weatherguard failed to sufficiently distance itself from the
claims specialists and independent contractors in its advertising and job applications.
That it allowed the use of its name and logo without explaining the company’s
internal structure, and that Weatherguard possessed full knowledge that claims
specialists represented themselves as Weatherguard people supports the notion that
the company did very little to distance itself from the benefits associated with having
customers assume the claims specialists were in fact Weatherguard agents and
employees.
Thomas gave clear and uncontradicted testimony that Farbaky wore a
Weatherguard uniform at the Weatherguard offices[;] that Farbaky responded to
Weatherguard job applicants at the Weatherguard office and explained the business;
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that Farbaky provided Weatherguard marketing material to Thomas including hat,
jacket, car logos, business cards, and customer introduction scripts; that Thomas
procured a solicitor permit d/b/a Weatherguard; that Farbaky trained Thomas to
represent that he was from Weatherguard[;] that customer contracts included
Weatherguard logos on them; and that the contracts were turned in to the
Weatherguard office. Mr. McDonald [sic] testified that he paid Dave Farbaky 40%
commission on the contracts and paid Farbaky by personal checks. He also testified
that Farbaky could call himself anything he wanted to and had knowledge that
Farbaky represented himself as a field manager and a claims specialist for
Weatherguard.”
¶ 34 The court found that “there seems to be some lack of clarity as to whether the 20%
commission was to be paid per contract secured minus any materials and build out costs” but
nevertheless found that “Thomas and Weatherguard had an oral contract whereby Thomas
was to receive commissions of 20% of the completed contract, the net, that he secured.” 2 The
court noted that plaintiff kept records of the contracts he secured, basing his commissions on
numbers supplied to him by the insurance adjuster on each contract or on “an educated
estimate based upon his walking the roof and reviewing the damage and what he had learned
on the job dealing with the insurance adjusters.” The court found that plaintiff was entitled to
a 20% commission on the net value of each of the 31 completed contracts plaintiff secured
and ordered that “[i]n determining the 20% net of each of the 31 contracts, the Court directs
the Parties to figure out the amount due on commissions according to the finding above. In
2
Since the trial court found that there was a contract, it declined to rule on plaintiff’s alternative unjust
enrichment claim.
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other words, use 20% of the net profits from each contract secured by Mr. Thomas that was
accepted and built out by Weatherguard.”
¶ 35 The court also found that defendant violated the Wage Payment Act. The court found that
defendant was plaintiff’s employer for purposes of the Wage Payment Act because “Mr.
McDonald’s [sic] conduct indicated a manifestation of mutual assent to enter into an
agreement with Mr. Thomas.” The court further found that defendant “assume[d] the duty to
pay Thomas according to a compensation formula.” The court found that “Weatherguard, per
contract with Farbaky, paid Farbaky approximately 40% commission on contracts he
secured. Farbaky told Thomas that Weatherguard would pay him 20% on contracts Thomas
secured. Weatherguard not only indirectly paid Thomas but by virtue of the Court’s finding
that Farbaky was Weatherguard’s agent, Weatherguard directly paid Thomas and assumed
the duty to pay per a compensation formula. Further, Thomas acted directly in the interest of
Weatherguard and the contracts he secured directly benefitted Weatherguard.” Due to
defendant’s violation of the Wage Payment Act, the court doubled the amount of the
commission award.
¶ 36 On April 4, 2013, defendant filed “Objections to the Court’s Procedure for Establishing
Damages and to Plaintiff’s Proposed Judgment Order,” in which it objected to the trial
court’s procedure for establishing damages. On April 5, 2013, the trial court entered an order
sustaining defendant’s objections and stating that the court would determine the amount of
damages to be awarded.
¶ 37 On April 17, 2014, the trial court entered a written order awarding plaintiff damages. The
court found that plaintiff was promised a commission of 20% per contract he secured for
Weatherguard but that “[a]t trial, Mr. Thomas failed to prove up his damages in terms of the
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net percentage of each contract he secured.” The court found that “[h]e gave credible
testimony that he secured thirty-one contracts which benefitted Weatherguard and that the
gross total on these contracts amounted to approximately two hundred twenty-three thousand,
nine hundred thirty-two dollars and sixty cents ($223,932.60).” However, although plaintiff
sought 20% of the gross amount of the contracts, the court had previously determined that he
was entitled to 20% of the net amount.
¶ 38 The court noted that “[n]o documents admitted into evidence at trial produced the amount
netted on the contracts,” but further noted that MacDonald’s testimony on behalf of
Weatherguard indicated that “materials costs and build out costs, among other costs, reduced
the gross amounts.” The court recounted MacDonald’s testimony that “in reviewing
Defendant’s exhibit #8, he reviewed all the jobs where Mr. Thomas alleged he should have
earned a commission and correlated these jobs to checks paid out by Weatherguard to D’Bar
[sic] and that amount is approximately twelve thousand, one hundred twenty-six dollars and
fifty-two cents ($12,126.52).” The court found:
“Because the court cannot rely upon the speculative amounts sought by the
Plaintiff, the court will rely upon the testimony of Mr. Brett MacDonald and award
Mr. Raymond Thomas a total amount of Eighteen thousand, four hundred fifty-three
dollars and four cents ($18,453.04). That number is calculated by the $12,126.52
amount less the draw amount already paid, which is two thousand, nine hundred
dollars ($2,900.00), or Nine thousand two hundred twenty-six dollars and fifty two
cents ($9,226.52[)], doubled, plus court costs.”
¶ 39 Defendant filed a motion to reconsider on May 16, 2014. In one of its arguments,
defendant claimed that the trial court’s doubling of the commission amount pursuant to the
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Wage Payment Act was an incorrect application of the law. In his response to defendant’s
motion to reconsider, plaintiff argued that the trial court should have applied the 2011
amendment to the Wage Payment Act, which added a provision providing for attorney fees
and increased the penalty for nonpayment of wages.
¶ 40 On August 14, 2014, the trial court entered an order granting defendant’s motion to
reconsider in part and denying it in part. The court vacated the April 17, 2014, judgment in
part and awarded plaintiff $9,226.52 plus costs, striking the doubling of the damages award.
¶ 41 On September 11, 2014, plaintiff filed a notice of appeal in appeal No. 1-14-2785,
appealing the modification of the damages award. On September 12, 2014, defendant filed a
notice of appeal in appeal No. 1-14-2807. The two appeals were consolidated on November
4, 2014.
¶ 42 ANALYSIS
¶ 43 On appeal, defendant argues that the trial court’s finding that Farbaky was defendant’s
agent, its finding that plaintiff was entitled to a 20% commission, and its award of damages
to plaintiff were against the manifest weight of the evidence. We note that defendant does not
argue on appeal that it was not an employer under the Wage Payment Act or that plaintiff
was not an employee under the Wage Payment Act; the only issue on appeal is whether the
trial court erred in finding that plaintiff was defendant’s employee and not DBar’s. Thus, we
have no need to consider the propriety of the trial court’s rulings on the applicability of the
Wage Payment Act, other than its underlying findings that Farbaky had the apparent
authority to hire plaintiff on defendant’s behalf and to enter into a binding contract with him.
¶ 44 Plaintiff, by contrast, argues that the trial court should have applied the amended Wage
Payment Act to its damages award. We consider each argument in turn.
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¶ 45 I. Trial Court’s Findings
¶ 46 All three of defendant’s arguments are focused on the trial court’s findings. “The trial
judge, as the trier of fact, is in a position superior to a reviewing court to observe witnesses
while testifying, to judge their credibility, and to determine the weight their testimony should
receive.” Bazydlo v. Volant, 164 Ill. 2d 207, 214-15 (1995). “A reviewing court should not
overturn a trial court’s findings merely because it does not agree with the lower court or
because it might have reached a different conclusion had it been the fact finder.” Bazydlo,
164 Ill. 2d at 214. Consequently, we will not reverse the trial court’s judgment unless it is
against the manifest weight of the evidence. Farmers Automobile Insurance Ass’n v.
Gitelson, 344 Ill. App. 3d 888, 891-92 (2003). “A judgment is against the manifest weight of
the evidence only when an opposite conclusion is apparent or when findings appear to be
unreasonable, arbitrary, or not based on evidence.” Bazydlo, 164 Ill. 2d at 215.
¶ 47 A. Agency
¶ 48 Defendant first argues that the trial court erred in finding that defendant had created the
appearance that Farbaky had the authority to hire plaintiff on defendant’s behalf. “Generally,
the question of whether an agency relationship exists and the scope of the purported agent’s
authority are questions of fact.” Kaporovskiy v. Grecian Delight Foods, Inc., 338 Ill. App. 3d
206, 210 (2003). In the case at bar, we cannot find that it was against the manifest weight of
the evidence for the trial court to find that Farbaky was defendant’s apparent agent for the
purpose of hiring plaintiff.
¶ 49 Apparent authority is that authority which a reasonably prudent person would naturally
suppose the agent to possess, given the words or conduct of the principal. State Security
Insurance Co. v. Burgos, 145 Ill. 2d 423, 431-32 (1991). “It is a well-established precept of
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agency law that a principal will be bound by the authority he appears to give to another, as
well as that authority which he actually gives.” (Emphasis in original.) Burgos, 145 Ill. 2d at
431 (citing Lynch v. Board of Education of Collinsville Community Unit District No. 10, 82
Ill. 2d 415, 426 (1980)). Once the principal has created the appearance of authority, he is
estopped from denying it to the detriment of a third party. Burgos, 145 Ill. 2d at 432. To
establish apparent agency, the party alleging the existence of the agency must prove that (1)
the principal or its agent acted in a manner that would lead a reasonable person to believe
that the individual allegedly at fault was an employee or agent of the principal; (2) the
principal had knowledge of and acquiesced in the acts of the agent; and (3) the injured party
acted in reliance upon the conduct of the principal or its agent, consistent with ordinary care
and prudence. Wilson v. Edward Hospital, 2012 IL 112898, ¶ 18.
¶ 50 In the case at bar, as the trial court noted:
“Defendant allowed [Farbaky] to respond to job applications put into the market
by Weatherguard. It allowed its name to be the sole business entity on Farbaky’s and
Thomas’ business cards. It allowed use of its offices, address, hats, jackets, car
boards, marketing materials, web-site advertising, use of its name exclusively in
training scripts, use of its secretarial staff and more. Weatherguard had some control
over the day to day practices of the claims specialists. It provided the contracts
bearing its name. It communicated with homeowners’ insurance adjusters and to
arrange days when the adjuster would view the house. It contacted the claims
specialists to know the days when the adjuster would be at the house so that the claim
specialist could make a point of being present. Further, Weatherguard’s production
manager has final say on whether the contract will be completed by Weatherguard.”
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We agree with the trial court that such conduct would reasonably lead a person to believe that
he was employed by defendant or an agent of defendant, not an employee or agent of an
independent marketing company.
¶ 51 Defendant argues that this conduct demonstrated only that Farbaky was authorized to use
defendant’s name in selling its services, not that Farbaky had the authority to hire plaintiff. In
support, defendant cites Wing v. Lederer, 77 Ill. App. 2d 413 (1966). We do not find this
argument persuasive. In Wing, the court rejected the plaintiff’s apparent authority claim
because “[t]he plaintiff had no contact with [the defendant] either before or during the time in
which the work was done, and [the defendant] neither did nor failed to do anything which
would justify the plaintiff in assuming that [the purported agent] had authority to hire him.”
Wing, 77 Ill. App. 2d at 417. In the case at bar, by contrast, plaintiff testified that he
responded to an advertisement of defendant, arrived at defendant’s building, observed people
with Weatherguard uniforms, and was given a Weatherguard business card, all of which
MacDonald corroborated was permitted by defendant. Plaintiff further testified that Farbaky
exclusively used defendant’s name and never mentioned DBar to plaintiff, even when
plaintiff was interviewing for employment. We cannot find that it was against the manifest
weight of the evidence for the trial court to conclude that a reasonable person would have
believed that he was being hired to work for defendant.
¶ 52 Defendant further argues that plaintiff failed to exercise any diligence in determining
whether Farbaky had the authority to hire him to work for defendant. Defendant is correct
that one dealing with an agent has to act with reasonable diligence and prudence in
determining the scope of the agent’s authority. Cove Management v. AFLAC, Inc., 2013 IL
App (1st) 120884, ¶ 27. However, plaintiff testified that when he received a personal check
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from Farabaky, he questioned Farbaky about it and was assured that it was merely an
advance payment until plaintiff received his entire commission. The trial court heard
plaintiff’s testimony and we will not second-guess the weight to be given his testimony. See
Bazydlo, 164 Ill. 2d at 214-15 (“The trial judge, as the trier of fact, is in a position superior to
a reviewing court to observe witnesses while testifying, to judge their credibility, and to
determine the weight their testimony should receive.”). Accordingly, we cannot find that the
trial court’s finding that Farbaky was defendant’s apparent agent was against the manifest
weight of the evidence.
¶ 53 B. Oral Contract
¶ 54 Defendant next argues that the trial court erred in finding that Fabarky and plaintiff had
agreed that plaintiff was entitled to 20% of the net profits on the contracts plaintiff secured.
Plaintiff testified that Farbaky promised him that plaintiff would “be paid 20 percent of the
total job.” In ruling, the trial court noted that “there seems to be some lack of clarity as to
whether the 20% commission was to be paid per contract secured minus any materials and
build out costs” but nevertheless found that “Thomas and Weatherguard had an oral contract
whereby Thomas was to receive commissions of 20% of the completed contract, the net, that
he secured.” We cannot find this finding to be against the manifest weight of the evidence.
¶ 55 “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). In the case at bar, the trial court heard plaintiff’s testimony and determined that there
was an oral contract in which plaintiff was entitled to a 20% commission on the net amount
of the contracts he secured. Defendant contends that the trial court “rejected” plaintiff’s
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testimony about the contract. However, the trial court merely noted that there was “some lack
of clarity” as to whether the 20% was paid on a gross or net figure, and concluded that it
should be paid on the net figure. Indeed, the trial court expressly noted that it found
plaintiff’s testimony to be credible. Accordingly, it was not against the manifest weight of the
evidence for the trial court to find that plaintiff and Farbaky had an oral contract for plaintiff
to receive a 20% commission on the net amount of each contract plaintiff secured on behalf
of defendant.
¶ 56 C. Damages
¶ 57 Finally, defendant argues that the trial court erred in awarding damages to plaintiff
because plaintiff failed to prove his damages. “Damages 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, defendant argues that the trial
court acknowledged that plaintiff’s evidence as to damages was speculative and accordingly,
judgment should have been entered in its favor when it made its motion for a directed
finding. We do not find this argument persuasive.
¶ 58 The trial court noted that plaintiff kept records of the contracts he secured, basing his
commissions on numbers supplied to him by the insurance adjuster on each contract or on
“an educated estimate based upon his walking the roof and reviewing the damage and what
he had learned on the job dealing with the insurance adjusters.” Additionally, while testifying
in plaintiff’s case-in-chief, MacDonald testified that invoices that had been admitted into
evidence reflected payments and credits submitted to defendant. In determining whether a
directed finding is appropriate, “[a] plaintiff must present at least some evidence on every
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essential element of the cause of action or the defendant is entitled to judgment in his or her
favor as a matter of law.” Sullivan v. Edward Hospital, 209 Ill. 2d 100, 123 (2004). Here,
plaintiff did provide some evidence on damages in his case-in-chief and, accordingly,
defendant was not entitled to a directed finding.
¶ 59 Furthermore, while testifying in defendant’s case-in-chief, MacDonald testified to a more
precise damages amount, which the trial court relied on in its calculation of damages.
Defendant argues that the trial court “mischaracterized” MacDonald’s testimony because he
“testified that the $12,126.52 was not necessarily owed to” plaintiff. However, the trial court
did not use MacDonald’s testimony to determine that plaintiff was entitled to 20% of the net
proceeds. Instead, the trial court first determined that plaintiff was entitled to 20% of the net
proceeds. Then, after making that determination, the trial court relied on MacDonald’s
testimony, in which MacDonald had supplied the dollar amounts representing 20% of the net
proceeds for each contract that plaintiff had secured. Thus, the trial court did not
“mischaracterize” MacDonald’s testimony in any way. Accordingly, we cannot find that the
trial court erred in awarding plaintiff damages and affirm the trial court’s judgment in
plaintiff’s favor.
¶ 60 II. Wage Payment Act
¶ 61 In his appeal, plaintiff argues that the trial court erred by refusing to apply the 2011
amendment to section 14 of the Wage Payment Act retroactively. The 2011 amendment
added new language to the Wage Payment Act, which now provides:
“(a) Any employee not timely paid wages, final compensation, or wage supplements
by his or her employer as required by this Act shall be entitled to recover through a
claim filed with the Department of Labor or in a civil action, but not both, the amount
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Nos. 1-14-2785, 1-14-2807 (cons.)
of any such underpayments and damages of 2% of the amount of any such
underpayments for each month following the date of payment during which such
underpayments remain unpaid. In a civil action, such employee shall also recover
costs and all reasonable attorney's fees.” 820 ILCS 115/14(a) (West 2010).
Plaintiff argues that both the 2% monthly interest on unpaid wages and the attorney fees
provisions of the amendment should be applied retroactively. We note that defendant does
not make any argument concerning the applicability of the 2% monthly interest payment on
unpaid wages. However, we consider both provisions in our analysis.
¶ 62 As an initial matter, defendant argues that plaintiff’s request to apply the amended statute
is untimely, as it was raised for the first time in plaintiff’s response to defendant’s motion to
reconsider. However, as plaintiff points out, part of defendant’s motion to reconsider was
arguing that the trial court had not properly applied the Wage Payment Act in doubling
plaintiff’s damages award. Thus, the proper application of the Wage Payment Act was raised
by defendant in its motion to reconsider. Furthermore, forfeiture is an admonition to the
parties, not a limitation upon the powers of courts of review. Flynn v. Ryan, 199 Ill. 2d 430,
438 n.1 (2002). Accordingly, we choose to consider the merits of plaintiff’s argument.
¶ 63 Whether an amendment to a statute will be applied prospectively or retroactively is a
matter of statutory construction. Deicke Center-Marklund Children’s Home v. Illinois Health
Facilities Planning Board, 389 Ill. App. 3d 300, 303 (2009). Therefore, we review this issue
de novo. Chicago Title Land Trust Co. v. Board of Trustees of the Village of Barrington, 376
Ill. App. 3d 494, 498 (2007). De novo consideration means we perform the same analysis that
a trial judge would perform. Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011).
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¶ 64 When called upon to determine whether an amended statute may be applied retroactively,
Illinois courts follow the approach set forth by the United States Supreme Court in Landgraf
v. USI Film Products, 511 U.S. 244 (1994). People ex rel. Madigan v. J.T. Einoder, Inc.,
2015 IL 117193, ¶ 29. “The Landgraf analysis consists of two steps. First, if the legislature
has expressly prescribed the statute's temporal reach, the expression of legislative intent must
be given effect absent a constitutional prohibition. Second, if the statute contains no express
provision regarding its temporal reach, the court must determine whether the new statute
would have retroactive effect ***.” Allegis Realty Investors v. Novak, 223 Ill. 2d 318, 330-31
(2006). Absent a retroactive effect, or impact, the amended statute will apply retroactively.
Caveney v. Bower, 207 Ill. 2d 82, 91 (2003); see also Schweickert v. AG Services of America,
Inc., 355 Ill. App. 3d 439, 442 (2005).
¶ 65 In Caveney v. Bower, 207 Ill. 2d 82, 94 (2003), the supreme court noted that Illinois
courts will rarely need to go beyond step one of the Landgraf analysis. This is because an
amendatory act which does not, itself, contain a clear indication of legislative intent
regarding its temporal reach, will nevertheless be presumed to have been framed in view of
the provisions of section 4 of the Statute on Statutes (5 ILCS 70/4 (West 2000)). Caveney,
207 Ill. 2d at 92. Construing this statutory language, the supreme court held that section 4
“represents a clear legislative directive as to the temporal reach of statutory amendments and
repeals: those that are procedural in nature may be applied retroactively, while those that are
substantive may not.” Caveney, 207 Ill. 2d at 92.
¶ 66 “ ‘Procedure is the machinery for carrying on the suit, including pleading, process,
evidence and practice, whether in the trial court, or in the processes by which causes are
carried to the appellate courts for review, or laying the foundation for such review.’ ” Deicke,
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Nos. 1-14-2785, 1-14-2807 (cons.)
389 Ill. App. 3d at 303 (quoting Ogdon v. Gianakos, 415 Ill. 591, 596 (1953)). On the other
hand, a substantive change in the law establishes, creates or defines rights. Schweickert, 355
Ill. App. 3d at 443. Only those amendments that are procedural in nature may be applied
retroactively. Schweickert, 355 Ill. App. 3d at 442.
¶ 67 However, even if a statutory amendment is procedural, it may not be applied retroactively
if the statute would have a retroactive impact. Commonwealth Edison Co. v. Will County
Collector, 196 Ill. 2d 27, 38 (2001). An amended statute will be deemed to have retroactive
impact if application of the new statute would impair rights a party possessed when he acted,
increase a party's liability for past conduct, or impose new duties with respect to transactions
already completed. Allegis Realty, 223 Ill. 2d at 331.
¶ 68 In the case at bar, the parties agree that the 2011 amendment does not specifically
indicate the temporal, or retroactive, reach of the amended statute. Thus, we begin by
determining whether the 2011 amendment to section 14 of the Wage Payment Act is
procedural or substantive. Defendant argues that the attorney fees portion of the 2011
amendment cannot be applied retroactively because it creates a new type of liability and is
therefore a substantive change. We do not find this argument persuasive.
¶ 69 Defendant relies primarily on People ex rel. Madigan v. J.T. Einoder, Inc., 2015 IL
117193. In Einoder, the State filed a complaint against operators of an unpermitted landfill,
alleging that the operators were dumping solid waste without a permit, in violation of the
Environmental Protection Act (415 ILCS 5/1 et seq. (West 2000)). Einoder, 2015 IL 117193,
¶ 1. During the period that the landfill was operating, the part of the Environmental
Protection Act that pertained to injunctions only permitted prohibitory injunctive relief, to
restrain future violations. Einoder, 2015 IL 117193, ¶ 27. Accordingly, the State sought a
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Nos. 1-14-2785, 1-14-2807 (cons.)
preliminary injunction to prevent the landfill operators from future dumping of waste.
Einoder, 2015 IL 117193, ¶ 14.
¶ 70 After the landfill had ceased operating and after the complaint was filed, the legislature
passed an amendment to section 42(e) of the Environmental Protection Act, which allowed
the State to seek a mandatory injunction to address past violations. Einoder, 2015 IL 117193,
¶ 1. Consequently, at the remedies phase of the bifurcated trial, the State additionally sought
a mandatory injunction to force the landfill operators to remove the pile of solid waste.
Einoder, 2015 IL 117193, ¶ 17. The landfill owners’ witness testified that the removal could
cost between $65 and $130 million. Einoder, 2015 IL 117193, ¶ 18. While the State disputed
the actual amount of the cost, even the State’s expert admitted that the mandatory injunction
could cost the landfill owners $6.8 million in cleanup costs. Einoder, 2015 IL 117193, ¶ 18.
The State argued that the amendment to section 42(e) was procedural in nature because it
related to remedies, so it could apply retroactively. Einoder, 2015 IL 117193, ¶ 35.
¶ 71 The supreme court rejected the State’s argument that the amendment was procedural.
Einoder, 2015 IL 117193, ¶ 36. Instead, the supreme court held that even though the
amendment related to remedies for the State, the amendment also created an entirely new
type of liability for the landfill owner, one that was not available under the preamended
section 42(e). Einoder, 2015 IL 117193, ¶ 36. Citing Caveney, 207 Ill. 2d at 95, the supreme
court held that the amendment’s creation of a new liability was a substantive change to the
law that could not be applied retroactively. Einoder, 2015 IL 117193, ¶ 36.
¶ 72 Plaintiff argues that the amendment in this case is distinct from that at issue in Einoder
because attorney fees were available prior to the 2011 amendment. We agree. The
amendment in this case did not create the remedy of attorney fees in suits under the Wage
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Payment Act. Prior to the 2011 amendment, attorney fees could be sought in Wage Payment
Act suits, under the Attorneys Fees in Wage Actions Act (705 ILCS 225/1 (West 2010)). The
Attorneys Fees in Wage Actions Act provided a process to obtain attorney fees whenever an
“employee brings an action for wages earned and due and owing according to the terms of
the employment.” 705 ILCS 225/1 (West 2010). A suit brought under the Wage Payment Act
falls within that category. See Andrews v. Kowa Printing Corp., 351 Ill. App. 3d 668, 683
(2004), aff'd, 217 Ill. 2d 101 (2005); Schackleton v. Federal Signal Corp., 196 Ill. App. 3d
437, 440 (1989). Thus, the provision of the 2011 amendment to section 14 of the Wage
Payment Act that granted attorney fees merely changed the source of the statutory authority
for a remedy that was already available to claimants.
¶ 73 By contrast, in Einoder, the amendment to the Environmental Protection Act provided a
remedy to the State that was not available prior to the enactment of that amendment. At both
the commencement of the lawsuit and all times when the landfill was operating, the landfill
owners had no reason to suspect that they would be required to pay millions of dollars to
remove the pile of solid waste. Not until the landfill ceased to operate was the mandatory
injunction an option for the State. The mandatory injunction was an entirely new remedy and
an entirely new liability. Therefore, the amendment in Einoder did more than alter procedure
for remedies available to the State; it created a brand new one. See Einoder, 2015 IL 117193,
¶ 36. Because the attorney fees provision of the 2011 amendment does not create a new
liability, but merely alters the statutory authority for that liability, that provision of the
amendment is procedural.
¶ 74 However, while we agree with plaintiff concerning the attorney fees provision of the
amendment, we cannot agree with its argument concerning the addition of an award of 2%
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monthly interest on the unpaid wages. To argue that the entire 2011 amendment to section 14
of the Wage Payment Act is procedural, plaintiff relies in part on the analysis of the Northern
District of Illinois in Brandl v. Superior Air-Ground Ambulance Service, Inc., No. 09 C
06019, 2012 WL 7763427 (N.D. Ill. Dec. 7, 2012). The Northern District addressed the
portion of the 2011 amendment to the Wage Payment Act that pertained to the 2% monthly
interest on the unpaid wages. Brandl, 2012 WL 7763427, at *2. The court found that the
amendment was procedural because it only related to remedies, which were traditionally
given retroactive application in Illinois. Brandl, 2012 WL 7763427, at *2 (quoting Shoreline
Towers Condominium Ass’n v. Gassman, 404 Ill. App. 3d 1013, 1023 (2010)). Therefore, the
court applied the 2% monthly interest to the unpaid wages.
¶ 75 We decline to follow the Northern District’s reasoning in Brandl in light of the supreme
court’s more recent decision in Einoder. The supreme court made clear in Einoder that when
an amendment to a law creates a new liability, unavailable under the previous version of the
law, that new liability is a substantive change. Einoder, 2015 IL 117193, ¶ 36. While the
attorney fees were always a potential liability in this case, the 2% monthly interest on unpaid
wages was not. Therefore, the 2% charge for each month of underpayment is a substantive
change in the law and cannot be applied retroactively. Only the attorney fees provision of the
amendment is procedural in nature.
¶ 76 A finding that the statutory change is procedural in nature, however, does not end our
inquiry. Even if a statutory amendment is procedural, it may not be applied retroactively if
the statute would have a retroactive impact or effect. An amended statute has a retroactive
impact or effect if it (1) impairs rights that a party possessed when it acted, (2) increases a
party's liability for past conduct, or (3) imposes new duties with respect to transactions
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already completed. Schweickert, 355 Ill. App. 3d at 444. The attorney fees provision does not
impair rights of the parties. The attorney fees provision also does not impose new duties on
the parties, so the final step of our analysis considers the second possible retroactive impact:
increased liability for past conduct.
¶ 77 We agree with plaintiff that the attorney fees do not increase liability for past conduct
because the attorney fees were available before and after the 2011 amendment. Whether the
amendment applied or not, defendant could be charged with reasonable attorney fees, either
under the Attorneys Fees in Wage Actions Act or under the Wage Payment Act. The
reasonableness of the fees would not change regardless of whether the amendment applied;
so neither would the amount of the fees. Therefore, the attorney fees provision of the
amendment does not have a retroactive impact and may be applied retroactively.
¶ 78 In the case at bar, the trial court denied plaintiff’s request for attorney fees because
plaintiff did not meet the requirements for attorney fees under the Attorneys Fees in Wage
Actions Act. Because the Wage Payment Act does not contain those requirements, we
remand this case to the trial court for the limited purpose of applying the attorney fees
provision of the 2011 amendment retroactively and awarding plaintiff “costs and all
reasonable attorney's fees.” 820 ILCS 115/14(a) (West 2012).
¶ 79 CONCLUSION
¶ 80 We affirm the trial court’s judgment in plaintiff’s favor. However, we remand the case to
the trial court for the limited purpose of determining reasonable attorney fees, as required by
the 2011 amendment to the Wage Payment Act.
¶ 81 Affirmed; cause remanded for determination of attorney fees.
29