McBain v. Marcorp Financial, LLC

2024 IL App (3d) 230149-U

• Court: Appellate Court of Illinois
• Decided: June 6, 2024
• Docket: 3-23-0149
• Status: Unpublished

Opinion

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

2024 IL App (3d) 230149-U

Order filed June 6, 2024 ____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

MICHELE McBAIN, ) Appeal from the Circuit Court ) of the 18th Judicial Circuit, Plaintiff-Counter-Defendant-Appellee, ) Du Page County, Illinois, ) v. ) Appeal No. 3-23-0149 ) Circuit No. 19-L-1298 ) MARCORP FINANCIAL, LLC, a Delaware ) Limited Liability Company; SERVICES ) CAPITAL, LLC, an Illinois Limited Liability ) Company; and MICHAEL FAZIO, ) ) Honorable Defendants- ) Angelo J. Kappas, Counter-Plaintiffs-Appellants. ) Judge, Presiding. ____________________________________________________________________________

JUSTICE BRENNAN delivered the judgment of the court. Justices Hettel and Peterson concurred in the judgment. ____________________________________________________________________________

ORDER

¶1 Held: We affirm the jury’s verdict on plaintiff’s breach-of-contract claim, the jury’s denial of defendants’ breach-of-fiduciary-duty claim, and the trial court’s finding on plaintiff’s claim under the Illinois Wage Payment and Collection Act, as well as corresponding damages. Affirmed.

¶2 Plaintiff, Michele McBain, filed a complaint against her former employers, defendants

MARCorp Financial, LLC, its subsidiary Services Capital, LLC, and MARCorp’s 99% owner, Michael Fazio (collectively MARCorp), for breach of contract and violation of the Illinois Wage

Payment and Collection Act (Wage Act) (820 ILCS 115/1 et seq. (West 2018)). The claims were

alternative to one another in that they sought the same monetary relief. MARCorp filed affirmative

defenses and a counterclaim, alleging, inter alia, breach of fiduciary duty. The case proceeded to

a simultaneous bench and jury trial, where the plaintiff prevailed on her claims and MARCorp did

not prevail on its breach-of-fiduciary-duty affirmative defense and counterclaim. The trial court

and the jury each determined that MARCorp owed McBain $242,675 in unpaid, earned bonuses.

(Separately, the jury awarded MARCorp a $54,000 verdict on an unrelated breach-of-contract

counterclaim (not at issue on appeal)). MARCorp appeals the judgments against it. We affirm.

¶3 I. BACKGROUND

¶4 On November 18, 2019, McBain filed a complaint against MARCorp, alleging a violation

of the Wage Act and breach of contract. Both claims turned in large part on the question of whether

McBain had earned her 2018 bonus and whether MARCorp was required to pay it upon her 2019

resignation. As later noted by the trial court, the Wage Act and breach-of-contract claims were

“alternatively-pled claims” in that they each sought the same damages.

¶5 On February 18, 2020, MARCorp filed the operative answer, affirmative defenses, and

counterclaim. As to affirmative defenses to both claims, MARCorp argued: (1) McBain breached

her fiduciary duty and/or duty of loyalty by taking away a business opportunity from MARCorp

when she, along with others in MARCorp’s management team, invested in a brewery known as

Beer Church; and (2) any award to McBain should be offset by $50,000 plus 2% interest in

recognition of an outstanding loan from MARCorp to McBain.

¶6 MARCorp raised two counterclaims in relation to Beer Church: (1) breach of fiduciary

duty and/or duty of loyalty; and (2) tortious interference with a prospective economic advantage

2 (not at issue on appeal). MARCorp also raised two counterclaims in relation the alleged $50,000

loan: (1) breach of contract; and, alternatively, (2) unjust enrichment (neither of which are at issue

on appeal).

¶7 On December 16, 2021, the trial court denied cross-motions for summary judgment. On

September 20, 2022, the trial court began conducting a three-day simultaneous bench and jury

trial. The court would decide McBain’s Wage Act claim (and corresponding affirmative defenses).

The jury would decide all remaining claims (and corresponding affirmative defenses). We first

set forth the testimony pertaining to the general organization of MARCorp and to McBain’s

breach-of-contract and Wage Act claims. We then set forth the testimony pertaining to McBain’s

alleged breach of fiduciary duty based on her investment in Beer Church.

¶8 A. Testimony Pertaining to McBain’s Breach-of-Contract and Wage Act Claims

¶9 1. Michele McBain

¶ 10 McBain testified that she earned a B.S. in accounting from University of Illinois, passed

the CPA examination, earned an MBA from Northwestern University, and had been working in

the financial industry for 30 years. McBain had been employed as controller or chief financial

officer (CFO) for various business entities. She began working for MARCorp in 2014 in the role

of CFO.

¶ 11 MARCorp is a private equity company providing financing for other companies.

MARCorp had investments in the following types of companies: medical device, IT, drones, Fin-

Tech, and event services. MARCorp had “robust criteria” for the companies in which it invested.

It wanted control of the companies’ management, or at least involvement in the companies’

management. It wanted access to the companies’ “financials.” MARCorp’s smallest investment

in a single company had been $400,000. Its largest had been $7.5 million.

3 ¶ 12 McBain had reported directly to Jeff McCoy (who passed away in 2021). McCoy was a

partner at MARCorp and a 1% owner. Michael Fazio was the CEO and chairman (and the trust

for the benefit of his children, of which he was the trustee, was a 99% owner of MARCorp).

McBain was not listed as an officer in MARCorp’s operating agreement. To her knowledge, she

was never elected as an officer nor represented as an officer in the board meeting minutes.

¶ 13 In her role as CFO for MARCorp, McBain was “in charge” of the accounting. She prepared

financial records to send to outside accountants. She managed the line of credit with the bank,

which required her to prepare reports on collateral monthly and provide borrowing base certificates

as well as quarterly and annual financials. She “priced deals” for an affiliated company called

Services Capital.

¶ 14 Day-to-day, McBain shared office space near McCoy, Joe Lyons, and Lisa Schelli. Lyons,

an attorney, worked as an independent contractor for MARCorp. Schelli performed financial work

but had less seniority than McBain. McBain also worked with Gary Cullen and John McNally,

who performed due diligence for MARCorp and came into the office several times per week.

Fazio, who lived in London and later Texas, came into the office three to four times per year.

¶ 15 Typically, McBain was in the office weekdays from 8 a.m. to 5:30 or 6 p.m. McBain also

worked additional hours at home. She worked approximately 50 to 60 hours per week. McBain

served as the point of contact for anyone who might need to review documents outside of work

hours, including on the weekend. As a result, McBain brought home her work-issued laptop.

McBain’s work-issued laptop was her only laptop; she did not own a personal laptop.

¶ 16 McBain did not view it as her role at MARCorp to develop investment opportunities and

this was not a requirement of her employment. She was not the face between MARCorp and

prospective companies. However, if the managers of the prospective companies came into the

4 office, and she was available, she sat in on the meetings. She also performed due diligence when

asked, but she did not perform due diligence on every deal. Due diligence included a review of

existing leases and contracts, financial documents, assets, liabilities, and tax returns.

¶ 17 Only Fazio and McCoy made the ultimate decision to invest in a company. Once that

decision was made, an outside law firm prepared loan documents such as a loan and security

agreement or promissory note. After a deal was finalized, McBain studied the loan documents so

that the investment would be accurately accounted for in MARCorp’s financial records.

¶ 18 Before joining MARCorp, McBain had a series of telephone conversations with Fazio.

Fazio offered McBain a “low” base salary (ranging from $90,000 to $115,000 from 2014 to 2018)

that would be “heavily” bonused annually (reaching $240,000 at the highest). The agreement was

not memorialized in writing, but McBain considered this allocation of salary and bonus typical in

a private equity firm. The bonus would be based on profits that MARCorp earned during the past

year and would consider transactions that were likely to occur in the coming year. Setting aside

the $20,000 bonus for the partial year worked in 2014, the bonuses ranged from $45,000 to

$240,000 per year between 2015 and 2018. The bonuses for a given calendar year of work were

announced in February of the following year. The bonus for 2014 was announced and paid out in

February 2015.

¶ 19 McBain recorded everyone’s bonus on MARCorp’s monthly financial statement. A bonus,

whether deferred or not, would be shown on the income statement as an expense. It would be

shown on the balance sheet as a liability. Once a bonus is included on the balance sheet as a

liability, it is an earned bonus.

¶ 20 In 2016, MARCorp made a “sizable profit” from its investment in a medical device

company. However, when Fazio told McBain in February 2017 the amount of her 2016 bonus, he

5 also told her there that, for the first time, a portion of it would be deferred. The bonus for 2016

was $240,000. Fazio paid $160,000 of the $240,000 in February 2017, within the timeframe for

bonus payments in past years. Fazio deferred payment of the remaining $80,000. Fazio explained

that MARCorp would receive additional monies from the profits on the medical device company

in the following year. However, McBain’s knowledge of MARCorp’s financials led her to believe

that MARCorp had the funds to pay out her bonus in total. Although Fazio informed McBain of

the deferment, he did not inform her that she would need to remain employed to receive it. In

February 2018, Fazio paid McBain $116,401 in bonus payments for the 2017 work year and

deferred another $11,513 for the 2017 work year. Also in February 2018, Fazio paid $35,000 on

the 2016 and 2017 deferred bonuses, leaving $56,512 remaining ($80,000 + $11,513 - $35,000 =

$56,512). (It is not entirely clear from the record whether the $35,000 in deferred payments was

part of, or in addition to, the $116,401 in 2018 bonus payments.)

¶ 21 In February 2017, when she first learned that a portion of her 2016 bonus would be

deferred, McBain began to pursue a written employment agreement. These discussions continued

for over one year. In August 2018, Fazio asked McBain to stay for 90 days while he and McCoy

attempted to put her employment agreement in writing. McBain was paid a $150,000 “stay bonus.”

McBain testified: “A stay bonus is a bonus that is paid that’s above and beyond the regular earned

bonuses that an employee would receive and it is to have someone stay for a certain period of time.

So I was given a stay bonus and I was asked to stay for 90 days.” Neither Fazio nor McCoy ever

referred to the stay bonus as an advance or a loan. Nor did they suggest that the stay bonus would

offset the portions of the unpaid earned bonuses. Ninety days later, Fazio did not submit a draft

written agreement for McBain’s consideration.

6 ¶ 22 Instead, on February 14, 2019, Fazio issued the 2018 compensation sheets. McBain’s 2018

compensation sheet provided in relevant part:

“[McBain] 2018 Compensation Sheet Base Bonus** Other* Total

[McBain] 115,000 225,000 2,500 342,500 * Benefits ** Total Bonus for 2019

Bonus Payment Current Prev Def Subtotal Previous Pyt Total Paid

[McBain] -- 38,838 38,838 150,000 188,838

New Deferred Schedule*** 2020 2021 2022 Total

[McBain] 38,838 28,838 25,000 92,675

***To be paid in February of each year should person be employed

Previous deferral 56,513 Payments 38,838 2018 deferral 75,000 New Deferred balance 92,675

[McBain] Principal Loan Outstanding 50,000.” 1

¶ 23 McBain testified that she understood the $225,000 bonus, designated with asterisks to be

the “total bonus for 2019” to be the earned bonus from 2018.

1 The final notation concerning the $50,000 loan outstanding formed the basis of MARCorp’s counterclaim for breach of contract. Briefly, MARCorp alleged that it issued McBain a loan and she did not repay it. McBain presented evidence at trial that the $50,000 sum was not a loan but was given to her as an advance on her future carried interest, which she explained as being her share of the anticipated value of pending MARCorp investments. The jury ruled in favor of MARCorp on this claim, awarding it $50,000 plus 2% interest. This claim is not at issue on appeal. 7 ¶ 24 Looking down to the “Bonus Payment” section, the category marked “current” meant how

much of the earned bonus from 2018 would be paid in 2019. However, that category had a dash,

meaning that none of the earned bonus from 2018 would be paid in 2019. The category marked

“Prev Def,” showing an amount of $38,838, meant that $38,838 of the remaining $56,513 of the

deferred bonuses from 2016 and 2017 would be paid in 2019. The category marked “Previous

Pyt,” showing an amount of $150,000, meant that the $225,000 earned bonus from 2018 would be

offset by the $150,000 stay bonus from August 2018. The category marked “Total Paid,”

represented the sum of the deferred 2016 and 2017 bonuses paid in 2019 and the stay bonus from

August 2018.

¶ 25 Also, the chart showed that the “New Deferred balance” was $92,675. It appears that this

figure was reached by adding the previous deferral of $56,513 and the present deferral of $75,000

(which, itself, was reached by offsetting the $150,000 stay bonus from the $225,000 earned bonus

from 2018; as the “Bonus Payment” section indicated that no bonus would be paid in 2019, this

left a present deferral of $75,000) and subtracting the $38,838 of the deferred bonuses from 2016

and 2017 that would be paid in 2019. That $92,675 was set to be paid out in 2020, 2021, and

2022.

¶ 26 In McBain’s view, this chart did not make sense:

“Q. Now, that $150,000 though, was that paid in 2019?

A. No, that was paid in August of 2018.

Q. So when it says Total Paid in 2019, [it] looks like that’s more than just 2019;

right?

A. Right. That doesn’t make sense, correct.” (Emphasis added.)

8 ¶ 27 McBain testified that she was due $242,675. This represents the $225,000 earned bonus

from 2018 plus $17,675 from prior years’ bonuses that she had earned but had not been paid.

¶ 28 McBain had hoped that a written employment agreement would be released in conjunction

with the 2018 compensation sheets. It was not, and this, in combination with Fazio’s apparent

unilateral change in employment terms (continued employment required to receive bonuses,

deferment of the entire 2018 earned bonus, and offsetting the 2018 $150,000 stay bonus against

the 2018 earned bonus), prompted McBain to resign on February 19, 2019. She believed that if

she continued in her employment, she would be agreeing to Fazio’s February 2019 terms. Her

decision to resign was based on her own dissatisfaction with the 2018 compensation sheet and was

not related to anyone else’s decision to resign. She did, however, read a draft of McCoy’s

resignation letter prior to his sending it.

¶ 29 McBain, McCoy, and Lyons formed a new company, first called NEWCO and later called

Buffalo Strategic, with the purpose of servicing the MARCorp investments on their own terms.

The negotiations were primarily between Fazio (MARCorp) and McCoy (Buffalo Strategic), but

they never were able to come to an agreement as to this concept.

¶ 30 On cross-examination, McBain acknowledged that she was never given anything in writing

explaining how her bonus was going to be calculated. Nor was she ever told that she would receive

a specific percentage of MARCorp’s profits. In some years with negative profits, McBain

nevertheless received a bonus. McBain understood the bonus was earned when it was written on

the compensation sheet. She received a compensation sheet every year. From an accounting

standpoint the bonus is earned (because it is put in the books as a liability). She agreed, however,

that a bonus that has been put on the balance sheet as a liability can have other conditions attached

to it.

9 ¶ 31 2. Joe Lyons

¶ 32 Lyons testified that, when MARCorp engaged him, he owned his own law firm and was a

solo practitioner. Lyons maintained his separate practice while working for MARCorp, with

MARCorp’s consent. MARCorp paid Lyons a $10,000 and, later, a $12,500 monthly retainer,

with the expectation of a bonus.

¶ 33 Lyons’s 2016 bonus, announced in 2017, was deferred. His understanding was that “I had

earned it and it was mine.” Also, he thought he was going to be paid “within the year.” This did

not happen and when, the next year, it appeared that the deferred bonus would be spread out over

a couple of years, Lyons “got a little concerned.” Lyons wanted his pay structure documented.

¶ 34 The lack of pay structure documentation hit a “fever pitch” in August 2018, and Fazio gave

Lyons a stay bonus in exchange for staying 90 days. The pay structure was supposed to be

documented within that time, but Fazio failed to do so. In February 2019, Fazio released the 2018

compensation sheets. Lyons did not consider this an agreement as to pay structure, “It was just a

sheet.” Lyons knew McBain was unhappy with her 2018 compensation sheet, but he did not know

that she was going to resign until the day before she did so.

¶ 35 On cross-examination, Lyons acknowledged that he was a party to a lawsuit against

MARCorp for breach of contract concerning his bonus payment. MARCorp counter-sued him for

breach of fiduciary duty.

¶ 36 3. Michael Fazio

¶ 37 Fazio testified that he had an accounting degree and obtained his MBA from Pace

University in 1983. He worked for Arthur Anderson for 16 years, where he made partner.

Deutsche Bank recruited him to be its COO for the Americas, and Fazio accepted the position. He

then worked as a managing director for Houlihan Lokey, an independent investment banking firm,

10 for 13 years. He performed mergers and acquisitions and restructuring during the financial crisis

(of 2008). He started MARCorp while still working for Holihan Lokey.

¶ 38 Fazio testified to his 2014 pre-hire discussions with McBain. They discussed his vision

for MARCorp and McBain’s responsibilities for MARCorp. Fazio envisioned that McBain would

work 37.5 hours per week, perhaps more when it was “crunch time.” Further:

“I think she was hired at $90,000 initial base salary and the discretionary bonus—

we hope that we’re successful and can pay for bonuses, but, you know, we don’t know

until we’re—you know, work out the operations and make investments and, you know,

have profits off of those investments. So there is no promise. We don’t know what the

operations are going to entail.”

¶ 39 According to Fazio, a discretionary bonus meant that he could award $0 or “a few” million.

Fazio determined the bonus by looking at the overall performance of the company, whether the

objective of growing the company into a larger private equity firm was being met, and what might

be reasonable in his mind as growth toward a sizable private equity firm continued. Fazio could

award a bonus even in a year where the company lost money. There was no specific formula.

¶ 40 In January 2017, Fazio changed “how the discretionary bonuses were paid out.” He

explained:

“In January of 2017, we sold [a medical device company] and so we had a large

gain. So when you have a large gain in the portfolio *** and if your objective is to grow

your firm, if you paid everybody bonuses all on day one, you’re susceptible to leaving. So

what you do is you condition—you pay some current and we paid a very hefty amount

current, but then you defer a portion of the bonus to incent them to stay and grow the

company over the next three, four years[.]”

11 ¶ 41 Fazio testified to McBain’s August 2018, $150,000 stay bonus:

“Q. And why was that stay bonus provided to Ms. McBain?

A. Well, management was somewhat concerned *** that we didn’t have

documentation associated with their compensation, full documentation of all the

compensation, all the arrangements, and so *** the stay bonus was provided so that they

would stay until [McCoy] and I could work out the compensation arrangements and the

definition of what we’re going to do going forward[.]

Q. And what were the terms surrounding the stay bonus?

A. That [McBain] had to be there for 90 days.

Q. Anything else?

A. No.”

Also,

“Q. At any point, did you tell [McBain] that this stay bonus was going to be offset

by any future bonuses?

¶ 42 Fazio testified to the 2018 compensation sheets that he created. These sheets were his

“attempt to start trying to put stuff in writing while other terms were being negotiated.” He stated:

“Q. What does this document summarize?

A. *** McBain’s total compensation from a [GAP] accounting standpoint was

$342,500.

Q. And how did you get that number?

12 A. There’s a base component of $115,00 which was [McBain’s] base pay. There

is a discretionary bonus of $225,000. And there were other benefits of about $2500.

Q. And *** what made up that 225?

A. The 225 is made up of a couple components. First, it’s the stay bonus, so the

150 stay bonus. It’s also the current bonus if you were to—if there was a number in there,

there is a zero so her current bonus was zero and there was a deferral of $75,000. And so

if you add those three numbers, that’s 150 and 75 is 225,000.” (Emphasis added.)

¶ 43 Fazio testified to the continued-employment term:

“Q. *** What does it say next to [those] asterisks?

A. To be paid in February of each year should person be employed.

Q. Was this a new term you added?

A. No.

Q. Was this a term that was in place from day one of [McBain’s] employment?

A. Yes.

Q. And, again, these discretionary bonuses, you have full authority on what was

paid, how it was paid, to set the terms and conditions, right?

A. Absolutely.”

Although he had always imposed a continued-employment requirement, the first time he wrote it

down was on the 2018 compensation sheet.

¶ 44 On February 19, 2019, Fazio received resignation letters from McBain, McCoy, Lyons,

McNally, and Schelli. Fazio was “shocked.” Fazio engaged in negotiations with his former

management team (McCoy, McBain, and Lyons), now Buffalo Strategic, concerning a services

13 agreement. The former management team sought $55,000 in monthly fees (to be divided amongst

them). (It appears that they also wanted a certain percentage of the profits.) They also sought a

release from liability for any prior misdeeds while at MARCorp. This latter point, in particular,

proved to be a sticking point for Fazio and negotiations fell apart.

¶ 45 When questioned by McBain’s attorneys, Fazio agreed that he sent a June 21, 2018, email,

to McCoy, in which he labeled the continued-employment requirement as an “open item.” Fazio

nevertheless maintained that that “has always been the agreement.”

¶ 46 B. Testimony Pertaining to MARCorp’s Breach of Fiduciary Duty Claim

¶ 47 1. Michele McBain

¶ 48 McBain testified to her personal investment in a corporation called Beer Church

Hospitality. Beer Church ran a brewery in New Buffalo, Michigan and was owned by Lyons’s

friend. In early 2018, McBain, along with McCoy and Lyons, each invested $87,333 for a total of

$262,000 in Beer Church. The three formed a corporation for the purpose of the investment, “Holy

Hops,” merely because a liquor license was involved. Holy Hops was not a private equity firm.

It was “a corporation forum to hold a passive investment.”

¶ 49 McBain used her MARCorp issued laptop in her communications with Beer Church. That

was her only laptop. McBain spent a maximum of two hours per month on the Holy Hops/Beer

Church investment. McBain had never signed a restrictive covenant or non-compete agreement

with MARCorp. Fazio never asked McBain to perform due diligence on Beer Church.

¶ 50 In any event, McBain did not believe Beer Church would have been a suitable investment

for MARCorp. MARCorp “never invested in restaurants or breweries.” MARCorp typically

placed “robust conditions” on the companies in which it invested, seeking a high level of control

over the company, such as a board seat and access to the company’s financial documents.

14 However, Beer Church was looking for “friendly dollars,” meaning it was looking for a passive

investor who would not interfere with its business decisions. Beer Church had its own accountant.

Further, MARCorp did not invest in companies seeking the comparatively low loan amount

initially sought by Beer Church—$300,000 to $450,000.

¶ 51 As time went on, however, Holy Hops invested additional monies in Beer Church. It did

this because Beer Church was not having success as planned and, if other investors invested more

money than Holy Hops, those investors would “have rights” over Holy Hops. In the end, Holy

Hops invested $1,477,000 in an effort to protect its initial investment.

¶ 52 Holy Hops ultimately sued Beer Church, because Beer Church took on additional debt

without informing Holy Hops; Beer Church had payroll liabilities that they did not have “on the

books”; and Beer Church was delinquent on a tax liability. Holy Hops and Beer Church settled,

with Holy Hops earning just $120,000 over their total $1,477,000 investment.

¶ 53 In comparison, during 2018, MARCorp invested approximately $20 million in various

companies, including $7.5 million to a “FinTech” company, $7.5 million to Capitol Depot, $2.35

million to an event planning company, $2 million in Mark UAS, and $800,000 in a drone company.

McBain considered 2018 to be a “very busy” year for MARCorp, “many” of its investments made

money, and other investments were set to be sold at a later date.

¶ 54 It was McBain’s understanding that Fazio was aware of her investment in Beer Church:

“We all went out to lunch [at Giordano’s] several months after we [McBain,

McCoy, and Lyons] had invested. And we—it was myself, [Fazio], [McCoy], and [Lyons].

And we talked openly about Beer Church, about the construction, when it was going to be

done, when it was going to be open, those types of conversations.”

15 ¶ 55 During cross-examination, McBain testified to exhibit No. 21, the first promissory note

between Holy Hops and Beer Church. The $262,000 loan set forth an 8% interest rate. It also

provided Holy Hops with conversion rights against Beer Church. If Beer Church did not pay its

loan, Holy Hops could pursue an ownership interest in Beer Church. Following the initial loan of

$262,000, there was an option for a 13% ownership and following the total loan amount of

$1,477,000, there was an option for a 49% ownership. Holy Hops never exercised these

conversion rights. McBain agreed that, in the second promissory note, Holy Hops inserted a

requirement that Beer Church must obtain Holy Hops’s permission before taking out additional

debt.

¶ 56 McBain never personally told Fazio that she had invested in Beer Church. McBain never

saw any emails or documents where Fazio was alerted to Holy Hops’s investment in Beer Church.

McBain never saw any emails or documents where Fazio affirmatively stated that MARCorp was

not interested in investing in Beer Church. Although the group’s investment had been discussed

over lunch in front of Fazio, it was not specified that McBain had invested in Beer Church.

¶ 57 During redirect examination, McBain clarified that, when Holy Hops began investing in

Beer Church, McBain did not intend or think that Holy Hops would ultimately invest over $1

million. Holy Hops did not use their conversion rights against Beer Church, because “it was not

a good investment.”

¶ 58 Regarding the Giordano’s lunch with Fazio, when Beer Church was discussed: “Michael

was asking questions to all of us about how our investment was, when *** Beer Church was going

to open up, how is construction going. He was asking all those questions. So yes, it was a

collective, like our investment.” (Emphasis added.)

¶ 59 2. Joe Lyons

16 ¶ 60 Lyons testified to his investment in Beer Church. The owners were friends of his friends

from his days at Hope College in Michigan. Fazio noticed Beer Church materials on Lyons’s

office desk and the two began to talk. Lyons, Fazio, and Cullen decided to make the 90-minute

drive to Beer Church that weekend. Fazio’s behavior at Beer Church made Lyons

“uncomfortable.” Lyons explained:

“[Fazio] came in, had a lot of opinions about the way things were—should be. You

know, everything from the open sign or the flag down to how they should have it laid out,

what furniture they should have, what food they should serve, what beer they should serve.

You know, it was a little overbearing.”

When they sat down to talk with the owners, Fazio asked “a litany of questions about their personal

finances *** and made some inquiries that were *** beyond what at least I was aware they were

looking for.”

¶ 61 On the car ride home, Fazio said: “[T]hey don’t know what the heck they’re doing. We

could give them a million and a half and take the whole thing.” Lyons told Fazio that was

unreasonable and, while he may not have said so, Lyons took offense. After that meeting, Lyons

did not want Fazio to be involved in the Beer Church deal.

¶ 62 A week or so after the trip, Fazio sent Lyons an email about a London brewery in which

he had personally invested as a point of comparison. However, Fazio did not expressly ask Lyons

to perform due diligence on Beer Church on behalf of MARCorp. McBain was not included on

the email.

¶ 63 Lyons did not think that Beer Church was a good investment for MARCorp. At the time

Lyons himself initially invested, Lyons believed that Beer Church needed approximately

$300,000—a small investment by MARCorp standards. Also, MARCorp typically considered the

17 business aptitude and connections of the owners. For example, MARCorp invested in a drone

company partially because the president was “very known in the industry.” MARCorp invested

in an event planning company partially because the large conventions it hosted could lead to other

opportunities. Also, the Beer Church owners were “very resistant” toward relinquishing any sort

of control.

¶ 64 Lyons believed that Fazio knew, prior to Lyons’s investment, that Lyons was planning to

invest in Beer Church. In mid-February 2018, McCoy told Lyons and McBain that he (McCoy)

told Fazio that Lyons and McBain would be investing in Beer Church. 2 In addition, after Lyons

had invested, Lyons personally told Fazio that he, McCoy, and McBain had invested in Beer

Church. This conversation occurred in February or March 2018 while in a car with Fazio and

McCoy. Lyons kept Beer Church beer in the office refrigerator, and, occasionally, Fazio would

ask about Beer Church. Lyons “knew” that Fazio followed Beer Church’s social media. In August

2018, Fazio again indicated that he was aware that Lyons, McCoy, and McBain had invested in

Beer Church. This occurred at a group lunch at Giordano’s at which all four persons were present.

During the conversation, Lyons discussed that the investment amount had increased and there were

issues with the buildout. During none of these 2018 conversations did Fazio tell Lyons that he

was not allowed to invest in Beer Church or that the investment should have been on behalf of

MARCorp.

¶ 65 Initially, Lyons, McCoy, and McBain, through their company Holy Hops, invested

$262,000 in Beer Church. Eventually, the group invested more, as construction did not go as

planned. Still, further funds were needed as it began to look like Beer Church was a bad

2 The trial court ruled that Lyons was not an interested party under the Dead Man’s Act and therefore could testify to his conversations with McCoy. 18 investment, and Holy Hops sought to protect its initial investment. In the end, Holy Hops

negotiated with Beer Church to receive their money back, plus some interest. Although Holy

Hops’s loan to Beer Church came with conversion rights, Holy Hops never exercised those rights.

In the beginning, Holy Hops did not exercise its conversion rights because that was not the spirit

of the investment: “the impression we had is that these folks this was their dream. They didn’t

want to give up control.” Later, Holy Hops did not exercise its conversion rights because Beer

Church no longer appeared to be a good investment.

¶ 66 On cross-examination, Lyons agreed that no one at Beer Church told him that they did not

want to do business with Fazio. Lyons later clarified, however, that Beer Church’s owners were

not informed that Fazio wanted to “take the whole thing.”

¶ 67 Lyons also testified that Beer Church’s owners emailed Lyons their sales information, and

Lyons forwarded that email to Fazio. Further, while he informed Fazio that he invested in Beer

Church, he did not inform Fazio that he formed Holy Hops. Lyons used both his law firm and his

MARCorp email addresses in his Holy Hops correspondence. He did not create a separate Holy

Hops email address.

¶ 68 On redirect examination, Lyons testified that Fazio asked him to perform document review

of investments and assets that were owned by Fazio personally and not MARCorp. Fazio did not

pay Lyons for this work outside of his MARCorp salary. The court overruled Fazio’s objection as

to relevance. The court allowed “a little leeway” to the extent that Lyons’s testimony informed

the question of whether Fazio created a work culture that tolerated the use of MARCorp resources

in personal investment matters.

¶ 69 3. Gary Cullen

19 ¶ 70 Cullen, an attorney, worked as an independent consultant for MARCorp from March 2017

to January 2018. Cullen performed due diligence, reviewed documents, and provided legal

assistance for MARCorp.

¶ 71 Cullen accompanied Fazio and Lyons on the December 2017 visit to Beer Church. The

trio discussed a possible investment with the owners. Cullen got the impression that the owners

were not looking for any sort of assistance in running their operation. Cullen sensed that Fazio

made the owners uncomfortable. Fazio asked the owners about their requirements for financing

and getting the operation up and running, but Fazio also asked the owners about their personal

finances, their car loans, and their credit card balances. Fazio suggested that “any financing that

he might be involved with should also finance all their personal indebtedness.”

¶ 72 On the car ride home, Fazio stated to Cullen and Lyons that he was “interest[ed] in

providing as much debt financing as possible and [Fazio] went so far as to say that *** their

business would be ripe for taking it over when they couldn’t pay back the debt.” Lyons responded

to the effect of “Boy, the last thing I want to do is take this operation away from my friend.”

¶ 73 After the trip to Beer Church, Fazio did not ask Cullen to perform due diligence. Cullen

did not believe that Fazio ever talked to him about Beer Church again, “keeping in mind,

[however], that [Cullen] dissociated [himself] from MARCorp *** shortly after that.”

¶ 74 4. John McNally

¶ 75 McNally worked as an independent contractor for MARCorp from September 2017 to

February 2019. He performed due diligence on behalf of MARCorp and reported to Fazio and

McCoy. Fazio never asked McNally to perform due diligence on Beer Church. McNally left

MARCorp voluntarily. He did not believe it had a future, because Fazio and McCoy did not see

eye-to-eye.

20 ¶ 76 On cross-examination, McNally testified that he spoke “a couple of times a day” with

Fazio, mostly brief conversations. McNally spoke with Lyons about Beer Church, but he never

spoke with McBain about Beer Church.

¶ 77 5. Michael Fazio

¶ 78 Fazio testified that, in December 2017, Lyons presented him with the Beer Church

opportunity. The opportunity very much piqued Fazio’s interest on behalf of MARCorp: “[I]t’s

structured right and I had looked at some of their presentation. It was a great concept. If you just

think about having a brewery in an old church.” Soon after December 2017, Fazio, Lyons, and

Cullen drove to Beer Church and spoke with the owners regarding financial needs, projections,

and due diligence. The meeting lasted several hours. During the car ride home, Fazio “strongly”

conveyed his interest in Beer Church to Lyons and Cullen. The three discussed the mechanics of

the potential investment, including how to address Beer Church’s debt. Fazio opined that he

thought a $1.2 to $1.5 investment was necessary.

¶ 79 After visiting Beer Church, Fazio did “a lot” of research on breweries and “very little” due

diligence. However, he communicated to Lyons that he expected due diligence on the Beer Church

opportunity. He did not believe he communicated to McBain that he expected due diligence on

the Beer Church opportunity. Still, he believed that McBain knew that he had visited Beer Church

because he expensed the miles to MARCorp.

¶ 80 Months later, at a business lunch that included Lyons and McCoy and a few clients, Fazio

learned that Lyons had personally invested in Beer Church. Lyons told Fazio that “the

management team concluded that it was too small for MARCorp and they only needed a couple

hundred thousand.” Lyons left Fazio with the impression that only he (not McCoy and McBain)

had invested in Beer Church. Fazio did not learn that McBain had invested in Beer Church until

21 six months after she left MARCorp. Fazio did not learn that McBain, McCoy, and Lyons had

formed Holy Hops until that same time.

¶ 81 Fazio testified to whether Beer Church would have been an appropriate investment for

MARCorp. When choosing companies to invest in, Fazio cared about high profit and low risk.

Fazio was “agnostic” as to the industry. Fazio disagreed that MARCorp required “control” over a

company before investing in it. Fazio defined control as owning more than a 50% interest in the

company. However, Fazio provided examples of influence he sought over the companies in which

he invested: covenants concerning how the company manages debt, board seats (“a lot of times”),

and one example of owning a 10% interest in a company. In another instance, MARCorp provided

a “straight [$7.5 millon] loan off of [the company’s] receivables. We didn’t have any equity rights

on that.”

¶ 82 When questioned by McBain’s attorney, Fazio agreed that McBain was not a decision

maker for MARCorp. For example, on August 14, 2018, he wrote McCoy an email which stated,

“Jeff, I’m not copying [McBain] as she shouldn’t be involved in the sausage making.”

¶ 83 C. Jury Verdict

¶ 84 On September 22, 2022, the jury found in favor of McBain on her breach-of-contract claim,

awarding her $242,675. It rejected MARCorp’s affirmative defense of breach of fiduciary duty

and/or duty of loyalty. It found against MARCorp on its counterclaims for breach of fiduciary

duty and/or duty of loyalty, tortious interference, and unjust enrichment.

¶ 85 The jury found in favor of MARCorp on its breach-of-contract counterclaim, awarding it

$54,064.20.

¶ 86 D. Trial Court’s Ruling

22 ¶ 87 On November 9, 2022, the trial court found in favor of McBain on her Wage Act claim.

The court noted three requirements to establish a violation of the Wage Act: (1) defendant was an

employer; (2) the parties entered into an employment agreement; and (3) plaintiff was due final

compensation under the Act. The first requirement was not in dispute. As to whether there was

an employment agreement, the court explained:

“The *** ultimate problem here is the failure of sophisticated business individuals

*** to adequately communicate and document clearly in writing. However, the Wage Act

does not require *** a formal contract[.] Instead, all that’s needed [is] clear, mutual assent

without either party unilaterally changing those terms.”

Here, the parties agreed that McBain would receive a base salary and that she would be “heavily

bonused.” The court noted that the mutually agreed to, heavily bonused portion of the wages was

discretionary and could fluctuate. The question was whether and when a discretionary bonus

becomes “earned” under the Act. To answer this question, the court relied on its credibility

determinations as well as the evidence.

¶ 88 The court reasoned that the instant facts fell somewhere between the cases cited by the

parties, Schultze v. ABN AMRO, Inc., 2017 IL App (1st) 162140 (McBain), and Tao v. Simplex

Investments, LLC, 2022 IL App (1st) 211040-U (MARCorp):

“There is clearly no metric, as [in] Schultze. This situation is also different than

Tao because a discretionary bonus can eventually be earned, just as a lawyer, who may

earn a year-end discretionary bonus. The bonus amount or whether one is given may be

discretionary, but once it is given, it has been earned.”

Also, “the mutual assent was to provide a salary and bonus, the bonus is no longer discretionary

in this instance, once the employer put the exact amount to be given.” The court held that the

23 continued-employment requirement constituted an unenforceable unilateral change after McBain

performed the work. (“The mutual assent is that this bonus is for work performed.”) The court

acknowledged that the continued-employment requirement “might” have been Fazio’s intent all

along, but his failure to communicate or document the requirement went against his credibility.

¶ 89 The trial court awarded $242,675 in damages, the same amount awarded by the jury in the

breach-of-contract action. The court explained that MARCorp admitted on the 2018 compensation

sheet that it owed $225,000 for the bonus component of McBain’s 2018 compensation. While

MARCorp alleged on that sheet for the first time that McBain had to continue employment to

receive the bonus, the court found this was not mutually assented to. The court also noted that

$17,675 remained due from prior years’ deferred bonuses. The court rejected MARCorp’s position

that the award should be reduced by $150,000, representing the stay bonus that McBain received

in August 2018. The court explained that the testimony established that the $150,000 stay bonus

was a separate agreement and that McBain complied with the terms of that agreement. There had

never been any condition that the $150,000 would offset the bonus component of McBain’s 2018

compensation. Further, as a successful plaintiff under the Wage Act, McBain was entitled to 2%

statutory interest and attorney fees (which could be proved in a subsequent proceeding.)3

¶ 90 The trial court rejected MARCorp’s affirmative defense of breach of fiduciary duty and/or

loyalty. The court explained that, while McBain had a fiduciary duty to MARCorp, there was no

evidence of breach or damages. Moreover, the “credibility of the witnesses supports [McBain’s]

theory *** that Fazio was not interested in this [Beer Church] investment.” Fazio was aware

3 On March 9, 2023, the trial court awarded $133,000 in attorney fees.

24 through his discussions with Lyons that “something was moving forward regarding Beer Church,”

but Fazio never took issue with that until the instant lawsuit.

¶ 91 Following unsuccessful posttrial motions, including a motion for judgment

notwithstanding the verdict (j.n.o.v.), new trial, and a remittitur of damages, this appeal followed.

¶ 92 II. ANALYSIS

¶ 93 On appeal, MARCorp challenges: (1) the jury’s verdict that MARCorp breached its oral

employment contract with McBain by failing to pay her 2018 earned bonus, as well as other years’

remaining deferred bonuses; (2) the trial court’s determination that MARCorp violated the Wage

Act on essentially the same basis; (3) the $242,675 damages amount; and (4) the jury’s

determination that MARCorp did not prove its breach-of-fiduciary duty claim, as well as both the

jury’s and the trial court’s rejection of the same as an affirmative defense to the breach-of-contract

and Wage Act claims.

¶ 94 MARCorp’s arguments implicate questions of fact, and we will reverse the jury’s and the

trial court’s findings only if they are against the manifest weight of the evidence. Chicago

Investment Corp. v. Dolins, 107 Ill. 2d 120, 124 (1985) (questions of fact reviewed according to

the manifest-weight standard). A verdict or finding is against the manifest weight of the evidence

“where the opposite conclusion is clearly evident or where the [findings] are unreasonable,

arbitrary, and not based upon any of the evidence.” (Internal quotation marks omitted.) Maple v.

Gustafson, 151 Ill. 2d 445, 454 (1992). Also, we defer to the trial court’s reasonable inferences

from the evidence and its findings regarding the credibility of the witnesses. Gretencord v. Cryder,

336 Ill. App. 3d 930, 934 (2003). MARCorp argues that we should apply the heightened standard

for motions for directed verdicts or j.n.o.v., which the trial court denied. That standard may be

met when “all of the evidence, when viewed in its aspect most favorable to the opponent, so

25 overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.”

(Internal quotation marks omitted.) Maple, 151 Ill. 2d at 453. However, as we determine that

MARCorp cannot meet the manifest-weight standard, we need not consider the heightened

standard applied to motions for j.n.o.v.

¶ 95 A. McBain’s Breach-of-Contract Claim

¶ 96 To establish the existence of a contract, a party must show: (1) an offer and acceptance; (2)

consideration; and (3) definite and certain terms. Hirsch v. Feuer, 299 Ill. App. 3d 1076, 1082,

(1998). To be valid, an oral contract for employment must contain clear and definite terms and be

supported by adequate consideration. Koch v. Illinois Power Co., 175 Ill. App. 3d 248, 252 (1988).

MARCorp argues that the evidence did not establish that McBain and MARCorp had formed a

contract entitling her to her bonus payments, because the terms of the employment agreement

pertaining to bonus requirements and parameters were too indefinite to be enforced. MARCorp

has the burden of persuading us that the judgment below was entered in error (Yamnitz v. William

J. Diestelhorst Co., Inc., 251 Ill. App. 3d 244, 250 (1993)), and, as we explain, it has not done so.

¶ 97 MARCorp likens this case to Koch, 175 Ill. App. 3d at 252,4 which held that “clear and

definite language is required as courts should not rewrite a contract by imposing an obligation

where none is intended.” In Koch, the plaintiff alleged that his employer promised him that he

would retain his union contract protection against job termination if he accepted a non-union

position. Id. at 251-52. The plaintiff left his union position and was subsequently forced to resign

from the non-union position without, in the plaintiff’s view, adequate protections. Id. at 251. The

trial and appellate courts determined that the plaintiff failed to adequately allege definite and

Koch has been called into question for its analysis concerning consideration, not at issue here. See 4

McInerney v. Charter Golf, Inc., 176 Ill. 2d 482, 486 (1997). McBain, in turn, cites several Wage Act cases in support of her common-law, breach-of-contract arguments. Neither of these discrepancies impact our analysis.

26 certain terms concerning protections against job termination. Id. at 252 (“he was unable to state

anything more specific than the idea he was to have the same protection he had had while in the

union.”). The court could not enforce an agreement that it would have to restructure with new,

more definite terms. Id.

¶ 98 MARCorp argues that, as in Koch, McBain’s allegations concerning an agreement for

“heavy” bonus payments is too vague to be enforced. It also asserts that, because Fazio had the

discretion to determine the amount of the bonus payment, including issuing a bonus of $0, McBain

could not seek to enforce payment of a bonus. It further argued: “McBain agree[s] [that Fazio had

the discretion to determine the amount of the bonus payment], testifying that a bonus is not

‘earned’ until it was calculated at [Fazio’s] discretion and presented to an employee.”

¶ 99 Even if we were to accept for the purpose of analysis that Fazio could, in his reasonable

discretion, award a bonus of $0, MARCorp’s argument fails to distinguish the facts here from a

situation where a bonus amount is yet to be announced. This is not a case where McBain resigned

in December 2018, before her bonus was awarded, and sought to enforce the payment of some

undefined bonus. Rather, this is a case where McBain resigned after the announcement of her

bonus. In its own argument, MARCorp has stated that there was some evidence, such as McBain’s

testimony, that, once a bonus was announced, it was earned. Lyons testified similarly. Further,

McBain testified that, once the bonus for the prior year was declared on a compensation sheet, it

entered MARCorp’s books as a liability.

¶ 100 MARCorp next argues that, even if the bonus amount was sufficiently definite to enforce

payment, there was no breach. In MARCorp’s view, it was not required to pay McBain her bonus

because “McBain knew the consequence [that] leaving MARCorp [would have] on her deferred

bonus payments and chose to leave regardless.” In support, MARCorp highlights Fazio’s

27 testimony that MARCorp had always imposed a condition of continued employment as part of its

overall goal to retain employees and incentivize them to stay with the company and that McBain

understood this.

¶ 101 However, Fazio’s testimony in this regard is subtly undermined by his own earlier

testimony. When initially recounting the bonus terms he laid out for McBain when he hired her

in 2014, Fazio did not describe a continued-employment term. While Fazio circled back to this

term in later testimony, the continued-employment requirement is inconsistent with the $150,000

stay bonus. Fazio’s testimony is contrary to that of McBain and Lyons, who testified that that they

were never informed as to the condition of continued employment until it was stated on the 2018

compensation sheets. Fazio’s testimony is also undermined by the June 21, 2018, email, where

Fazio labeled the question of continued employment an open item.

¶ 102 At oral argument, in apparent recognition that at least some evidence supported that the

continued-employment condition was announced for the first time in 2019, MARCorp argued that

McBain accepted that condition when she accepted a $38,838 bonus payment. As McBain

responded at oral argument, the $38,838 bonus payment she received represented bonuses earned

in 2016 and 2017 and were independent of new terms imposed in 2019. See supra ¶ 24.

¶ 103 The trial court for its part expressly stated that Fazio was not credible on the issue of

continued employment and the jury may have reasonably found the same. MARCorp has failed

to persuade us that the jury’s determination that MARCorp breached its employment contract with

McBain was against the manifest weight of the evidence.

¶ 104 B. Wage Act

¶ 105 To avoid the damages award, MARCorp must also persuade us that it did not violate the

Wage Act. The Wage Act allows employees to sue for timely and complete payment of earned

28 wages or final compensation. Schultze, 2017 App (1st) 162140, ¶ 22. Final compensation “shall

be defined as wages, salaries, earned commissions, earned bonuses, and the monetary equivalent

of earned vacation and earned holidays, and any other compensation owed the employee by the

employer pursuant to an employment contract or agreement between the [two] parties.” (Emphasis

added.) 820 ILCS 115/2 (West 2020). The “employer shall pay the final compensation of

separated employees in full, at the time of separation, if possible, but in no case later than the next

regularly scheduled payday for such employee.” Id. § 5. Under the Wage Act, a successful

plaintiff is also entitled to 2% monthly interest and attorney fees. Id. § 14.

¶ 106 Here, the parties do not dispute that McBain was an employee and MARCorp and/or Fazio

was an employer under the Wage Act. Instead, the parties dispute whether the $225,000 bonus

was an “earned bonus” as well as the terms of McBain’s “employment contract or agreement.”

Courts deciding Wage Act cases have relied on the Illinois Administrative Code for its

interpretation of the terms “earned bonus” and “employment agreement.” See Schultze, 2017 IL

App (1st) 162140, ¶ 23 (employment agreement); McLaughlin v. Sternberg Lanterns, Inc., 395 Ill.

App. 3d 536, 544 (2009) (earned bonus).

¶ 107 Under the Wage Act, an employment agreement is more expansive than an employment

contract because “an ‘agreement’ merely requires a manifestation of mutual assent by the parties

without requiring the formalities and accompanying legal protections of a contract.” Schultze,

2017 IL App (1st) 162140, ¶ 23 (citing Ill Adm. Code 300.450). Employers and employees may

manifest mutual assent by conduct alone, including past practice. Id.

¶ 108 Section 300.500, title 56, of the Administrative Code discusses earned bonuses:

“A bonus is compensation given in addition to the required compensation for

services performed. The Department does not maintain jurisdiction over discretionary or

29 gratuitous bonuses. In order to receive compensation under the Act, the bonus must be

earned.

a) An employee has a right to an earned bonus when there is an unequivocal

promise by the employer and the employee has performed the requirements set

forth in the bonus agreement between the parties and all of the required conditions

for receiving the bonus set forth in the bonus agreement have been met. Unless one

of the conditions for the bonus is that the employee be on the payroll at the time of

the bonus payout, the bonus is due and owing to the employee at the time of

separation.” (Emphasis added.)

¶ 109 As the trial court noted, Schultze, 2017 IL App (1st) 162140, is instructive. In Schultze,

for more than 20 years, the executive received an annual bonus which was calculated according to

established methodology, including the amount of bonuses those in similar positions had

historically received. Id. ¶¶ 29-30. Thus, when the executive accepted a certain position within

the company that had previously been bonused at approximately $2 to $5 million, he expected a

bonus in that range. Subsequently, he was shocked to receive just a $200,000 bonus. Id. ¶ 29.

The appellate court held that, based on the parties’ past conduct, they had manifested an agreement

amounting to an unequivocal promise on the company’s part that the executive would be bonused

and would be bonused in a certain range. Id. ¶ 30. The appellate court affirmed the trial court’s

$2 million (less $200,000) award plus statutory interest and attorney fees. Id. ¶ 38.

¶ 110 MARCorp attempts to distinguish the instant bonus scheme from the established

methodology in Schultze. It argues that, here, the alleged substance of the bonus payment plan

consisted entirely of McBain’s assertion that she was promised to be “heavily bonused” and that

this assertion was too vague to demonstrate an assent. To the contrary, the evidence showed that

30 the parties understood that McBain would receive a base salary and a bonus consistent with the

private equity market. Although McBain did not testify to her pre-MARCorp compensation

packages, she did testify that she had an MBA from Northwestern, 30 years of experience in the

financial industry, and had formerly held two different CFO positions. Among other

responsibilities, she oversaw the financials for more than $20 million in investments in a single

year for MARCorp and worked 50 to 60 hours per week over five years for MARCorp. It is in

this context that the Du Page County jury would have considered McBain’s testimony that her

base salary of $90,000 to $115,000 was “low” and was to be supplemented by a “heavy” bonus.

¶ 111 Equally significant, as demonstrated by the parties’ past practice over five years, the earned

bonus for a given calendar year was announced the February following the year to which the bonus

was attributed. At that time, the bonus was deemed “earned” and was recorded as a company

liability. Beginning in 2017, by accepted practice, a portion of the bonus payment was subject to

deferment. However, as we have discussed, the parties never agreed that continued employment

was a condition to receive the payment of a bonus that was reflective of growth, work performed,

and other factors from a year that may very well be long past. Instead, McBain resigned when that

term was proposed.

¶ 112 MARCorp cites numerous cases for the proposition that an unpromised, discretionary

bonus is not recoverable under the Wage Act. However, each of these cases are distinguishable

because they involve situations where the employer had not announced the bonus amount prior to

the employee’s separation. See Seenu v. Radix Trading, LLC, 2024 IL App (1st) 231034, ¶ 10 (the

company released and distributed quarterly bonus awards two weeks after it terminated plaintiff’s

employment); McLaughlin, 395 Ill. App. 3d at 545 (employee who was terminated in October

2006 was not entitled to a pro rata share of his discretionary bonus, which would have been

31 declared in January 2007); Tao, 2022 IL App (1st) 211040-U , ¶¶ 3, 8-9 (the employee was fired

the day before the company informed its employees of the amount of their bonus; the employee’s

offer letter had informed her as to her “eligibility” in a “discretionary” bonus plan); see also Hess

v. Bresney, 784 F.3d 1154, 1162 (7th Cir. 2015) (employee was terminated before the fees which

would have formed the basis of his bonus were received by the employer).

¶ 113 The trial court here recognized this distinction when it explained: “a discretionary bonus

can eventually become earned.” MARCorp does not address this distinction, rendering its reliance

on the above cases unavailing.

¶ 114 As we have discussed, the trial court reasonably determined that once the bonus for the

prior year was announced, it was earned. There was no discretion remaining to be exercised in

determining the bonus amount. The questions of whether MARCorp unequivocally promised

McBain a bonus for the year 2018 and whether the amount of that bonus was discretionary are no

longer relevant once the bonus is, in fact, awarded. For this case to be like those cited by

MARCorp, McBain would have had to quit prior to the February 2019 announcement of the 2018

bonus amount. Crediting McBain’s testimony that MARCorp assured her she would be heavily

bonused, together with the parties’ past performance of significant bonus amounts, MARCorp’s

February 2019 release of the 2018 bonus amount was an unequivocal promise to award McBain a

bonus for the year 2018. This finding was certainly not against the manifest weight of the

evidence.

¶ 115 MARCorp seeks to escape this result by arguing that McBain did not meet the “required

conditions for receiving the bonus set forth in the bonus agreement” and that the condition of

continued employment is permissible in the Wage Act context. (Emphasis added.) 56 Ill. Admin.

Code § 300.500(a). While imposing a condition of continued employment may be permissible in

32 the Wage Act context, the trial court’s determination that this was not a condition of McBain’s

bonus compensation (see supra ¶¶ 101-03) was not against the manifest weight of the evidence.

¶ 116 C. Damages

¶ 117 MARCorp argues that the trial court abused its discretion in denying its motion to remit

damages. “Remittitur should not be employed when the award falls within the flexible range of

conclusions that can be reasonably supported by the facts.” Miyagi v. Dean Transportation, Inc.,

2019 IL App (1st) 172933, ¶ 20. The denial of a motion for remittitur is reviewed for an abuse of

discretion. Id. A court abuses its discretion where no reasonable person would take its view. Id.

¶ 118 MARCorp first challenges the $225,000 component of the $242,675 in damages, which

the trial court and presumably the jury determined represented McBain’s 2018 earned bonus.

MARCorp asserts that, the 2018 earned bonus, “at the moment it was made” was expressly

conditioned on remaining employed at MARCorp. MARCorp continues that, if it had the

discretion to set the bonus at $0, then it also had the discretion to go above that amount with

conditions such as continued employment.

¶ 119 The trial court and jury were not required to accept this theory of the case. As discussed,

evidence supported that the parties had agreed that McBain would receive a salary and a “heavy”

bonus, which, once declared, was earned. The evidence further supported that McBain worked 50

to 60 hours per week in 2018 with the understanding that the bonus announced in early 2019 would

be representative of the completed 2018 work year as opposed to being conditioned on future work

years. As such, we determine that the trial court’s refusal to remit the damages award on this

ground was not an abuse of discretion.

¶ 120 MARCorp next argues that McBain’s 2018 earned bonus can, at most, be $75,000, because

she has already been paid $150,000. Granted, though not clearly articulated by MARCorp, an

33 argument could be made that Fazio intended to award a $75,000 earned bonus. That is, if the

$225,000 bonus is not broken down into a $75,000 earned bonus and a $150,000 stay bonus, then

the $150,000 stay bonus is not otherwise accounted for in the first line of the 2018 compensation

sheet’s “Total” amount of $342,500 ($115,000 base + $225,000 bonus + $2500 benefits).

¶ 121 However, other aspects of the 2018 compensation sheet support that Fazio intended to

exclude the $150,000 stay bonus from the $225,000 bonus category. For example, the 2018

compensation sheet noted that the $225,000 bonus was the total bonus for 2019, the year in which

the 2018 earned bonus would have been announced, according to past practice. The separate

$150,000 stay bonus was announced and paid in 2018, so it could not have been part of the

$225,000 bonus announced in 2019.

¶ 122 In addition, Fazio himself testified, albeit equivocally, that the $225,000 bonus represented

McBain’s “discretionary bonus.” See supra ¶ 42. The $150,000 stay bonus was not a discretionary

bonus. There was abundant evidence that the $150,000 stay bonus constituted a separate

agreement, the terms of which McBain satisfied.

¶ 123 Accordingly, a reasonable trier of fact could have concluded that declining to award

McBain the full $225,000 amount would allow Fazio to improperly alter the separate $150,000

stay agreement through the 2018 compensation sheet. Given the conflicting evidence and the trial

court’s assessment of Fazio’s credibility, we cannot say that the trial court abused its discretion in

determining that the $242,675 award could be reasonably supported by the evidence. The trial

court’s refusal to remit damages was not an abuse of discretion.

¶ 124 D. Breach of Fiduciary Duty

¶ 125 Finally, we address MARCorp’s challenge to the jury’s determination that MARCorp did

not prove its breach-of-fiduciary-duty claim as well as both the jury’s and the trial court’s rejection

34 of the same as an affirmative defense to the breach-of-contract and Wage Act claims. This claim

relates to McBain’s personal investment in Beer Church and MARCorp’s alleged interest in it.

¶ 126 The elements of a claim for breach of fiduciary duty are: (1) the defendant has a fiduciary

duty to the plaintiff; (2) the defendant breached that duty; and (3) the defendant’s breach

proximately caused the plaintiff’s injury. Lawlor v. North American Corporation of Illinois, 2012

IL 112530, ¶ 69. As to the first element, a fiduciary duty exists when one person, a principal,

manifests assent to another person, an agent, that the agent shall act on the principal’s behalf and

the agent manifests an intent to so act. Advantage Marketing Group, Inc. v. Keane, 2019 IL App

(1st) 181126, ¶ 27. Therefore, the question of whether the agent defendant is a corporate officer

or an employee is not dispositive; rather, the agent defendant has a duty to act on behalf of the

principal in all matters related to the agency and a duty of loyalty to refrain from competing with

the principal. Id. The nature and intensity of the duty depends in part on the reasonable

expectations of the parties at the formation of the relationship. Id.

¶ 127 As to the second element, the alleged breach implicates the corporate opportunity doctrine

and the prohibition against corporate competition. See Id. ¶¶ 23-24. “The corporate opportunity

doctrine prohibits a corporation’s fiduciary from misappropriating corporate property and from

taking advantage of business opportunities belonging to the corporation.” Id. ¶ 23. A corporate

opportunity is one that is “reasonably incident” to the corporation’s present or prospective business

and is one in which the corporation has the capacity to engage. Id. ¶ 35. In assessing whether the

corporation has the capacity to engage, or is interested in the opportunity, the trier of fact should

consider whether the corporation had an actual or expectancy interest in the opportunity and

whether the fiduciary’s acquisition of the opportunity would hinder or defeat the corporation’s

purpose in carrying on or developing the business for which it was created. Id. Thus, if a fiduciary

35 wants to avail himself to a business opportunity that is in the corporation’s “line of business,” the

fiduciary must first disclose and tender the opportunity to the corporation. Id. The corporation, in

turn, must be given the “opportunity to decide, upon full disclosure of the pertinent facts, whether

it wishes to enter into a business that is reasonably incident to its present or prospective

operations.” Id. (internal quotation marks omitted) (quoting Kerrigan v. Unity Savings Ass’n, 58

Ill. 2d 20, 28 (1974)). The related concept of corporate competition occurs when the corporate

employer already has or is actively seeking to establish a business relationship with a third party

only to have its efforts thwarted by its own employees seeking a business relationship with the

same third party for their own benefit. Id. ¶ 24.

¶ 128 As to the third element, courts have found injury, or at least adequately pled injury, when

an employee forms a competing business that solicits and serves the principal’s existing customers,

employs several of the principal’s former employees, or causes annual profits to drop. Advantage,

2019 IL App (1st) 181126, 44 (customers); Veco Corp. v. Babcock, 243 Ill. App. 3d 153, 162

(1993) (customers, employees, and profits); Smith-Shrader Co., Inc. v. Smith, 136 Ill. App. 3d 571,

576-77 (1985) (customers, employees, and profits dropped from $642,000 to $50,000)).

¶ 129 Initially we agree with MARCorp that the trial court correctly concluded that McBain had

a fiduciary duty to MARCorp not to usurp a corporate opportunity or compete with it. McBain

cursorily notes that she was not an owner of the company nor was she the ultimate decision-maker

regarding investments but was merely a member of the management team. However, while the

nature of McBain’s agency may affect the scope of her duties to MARCorp, the case law

nevertheless obligates all employees not to usurp corporate opportunities so as to compete with

the principal corporation. See Advantage, 2019 IL App (1st) 181126, ¶ 27. That having been said,

36 the evidence allows for a reasonable trier of fact to determine that MARCorp failed to prove a

breach.

¶ 130 McBain presented evidence that Beer Church was not a corporate opportunity for

MARCorp, in that an investment in Beer Church would not have been “reasonably incident” to

MARCorp’s investment goals. Beer Church initially sought less funding than MARCorp typically

invested in its companies and Beer Church was less open to outside control than MARCorp

typically sought to exert over its companies. Other evidence, however, supported that a Beer

Church investment could have been consistent with MARCorp’s business interests if MARCorp

was able to force a takeover.

¶ 131 Still, even if the triers of fact determined that Beer Church was a corporate opportunity for

MARCorp, they would have had to consider whether MARCorp declined that opportunity. The

trial court determined that Fazio’s interest in Beer Church on behalf of MARCorp had faded upon

his initial visit and that Fazio consented to McBain, Lyons, and McCoy’s personal investment in

the same. The jury was free to make that determination as well. Indeed, while the evidence showed

that Fazio made an initial visit to Beer Church with Lyons and Cullen and followed up by sending

Lyons an email about the London brewery, McBain, Lyons, Cullen, and McNally each testified

that Fazio never expressly asked them to perform due diligence on a potential Beer Church

investment. Further, Lyons testified that he had conversations with Fazio regarding his personal

investment. Similarly, Lyons and McBain testified that they were present at a lunch wherein Fazio

expressed his understanding that the group had personally invested in Beer Church. Never during

these conversations did Fazio state that MARCorp, rather than McBain, Lyons, and McCoy, should

have invested in Beer Church. While Fazio disputed the characterization of these interactions and

conversations, the fact finders were entitled to credit the accounts of McBain and Lyons. As a final

37 point, we are not persuaded by the underlying premise of Fazio’s assertion that he did not know

that McBain, in particular, as opposed to just Lyons and possibly McCoy, invested in Beer Church.

Fazio was aware that some of his employees were investing in Beer Church and that MARCorp

was not, supporting McBain and Lyons’s testimony that they did not believe MARCorp was

interested in the investment. Given this, the record does not support that knowledge of McBain’s

investment, in particular, would have prompted Fazio to pursue the Beer Church opportunity.

Accordingly, the trial court’s and jury’s finding that McBain did not breach her fiduciary duty was

not against the manifest weight of the evidence.

¶ 132 III. CONCLUSION

¶ 133 The judgment of the circuit court of Du Page County is affirmed.

¶ 134 Affirmed.