Praetorian Insurance Co. v. First Class Group, Inc.

Opinion

2026 IL App (1st) 231216-U No. 1-23-1216 Order filed July 29, 2026 Third Division

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). ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________ PRAETORIAN INSURANCE COMPANY, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) ) FIRST CLASS GROUP, INC., and AILEEN CHAN, ) ) Defendants-Appellants. ) Nos. 15 CH 14789 _______________________________________________ ) 16 L 6748 ) (Consolidated) FIRST CLASS GROUP, INC., ) (Refiled from 10 L 9165) ) Plaintiff-Appellant, ) ) Honorable v. ) Sophia H. Hall, ) and PRAETORIAN INSURANCE COMPANY, ) Honorable ) Clare J. Quish, Defendant-Appellee. ) Judges, presiding.

JUSTICE LAMPKIN delivered the judgment of the court. Justices Rochford and Reyes concurred in the judgment. No. 1-23-1216

ORDER

¶1 Held: 1. The circuit court properly granted summary judgment in favor of the insurance company and against the administrator on the insurance company’s breach of contract claim and the administrator’s fraud claim because there was no genuine issue of material fact regarding the administrator’s failure to comply with the condition precedent under the parties’ contract to send the premiums to the insurance company before the administrator would receive its profit commissions.

2. The circuit court had subject matter jurisdiction over the parties’ claims because the administrator waived its contractual right to arbitration.

3. The circuit court properly granted the insurance company’s motion to dismiss the administrator’s breach of contract claim where the administrator failed to comply with the condition precedent under the parties’ contract.

4. The insurance company is not entitled to reasonable appellate attorney fees and costs under the terms of the parties’ contract.

¶2 This appeal 1 involving consolidated cases arises from a compensation dispute based on a

contract between Praetorian Insurance Company (Praetorian) and its program administrator, First

Class Group, Inc. (First Class), and Aileen Chan, the president of First Class. First Class sued

Praetorian, alleging breach of contract and fraud. Praetorian filed a complaint for declaratory relief

against First Class and Ms. Chan, alleging, inter alia, breach of contract.

¶3 In 2017, the circuit court granted Praetorian’s motion to dismiss First Class’s breach of

contract claim. In 2021, the circuit court, inter alia, (1) granted summary judgment in favor of

Praetorian and against First Class on Praetorian’s breach of contract claim against First Class,

(2) denied First Class’s cross-motion seeking summary judgment or dismissal of Praetorian’s

complaint based on lack of subject matter jurisdiction, and (3) granted summary judgment in favor

of Praetorian and against First Class on First Class’s fraud claim against Praetorian. In 2023, the

1 Although this appeal was assigned to a different justice for disposition, fully briefed and ready for review and disposition in November 2024, this appeal was not assigned to the current authoring justice for review and disposition until May 26, 2026.

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circuit court granted Praetorian’s motion to dismiss with prejudice the remaining counts of its

complaint for declaratory relief, thereby disposing of the consolidated cases.

¶4 On appeal, First Class and Ms. Chan argue that the circuit court erred by granting summary

judgment in favor of Praetorian and against First Class on First Class’s fraud claim and

Praetorian’s breach of contract claim. Specifically, they argue that the circuit court failed to

consider Praetorian’s admissions in the pleadings and failure to fulfill the condition precedent of

calculating the commissions due to First Class. They also argue that the court lacked subject matter

jurisdiction over Praetorian’s claims based on the parties’ contractual mandatory arbitration

provision. In addition, they argue that the circuit erred by dismissing First Class’s breach of

contract claim for failure to state a claim because Praetorian improperly attempted to negate that

well pled claim with an affidavit.

¶5 For the reasons that follow, we affirm the judgment of the circuit court. 2 We also deny

Praetorian’s motion for appellate attorney fees and costs.

¶6 I. BACKGROUND

¶7 In June 2002, Praetorian (through its predecessor company Insurance Corporation of

Hannover (Hannover)) entered a contract with First Class (the Contract) retroactive to March 2001.

Ms. Chan signed the Contract as the president of First Class. Under the Contract, Praetorian

appointed First Class as its administrator to solicit and evaluate applications for its insurance lines

of business, to underwrite risks and determine premiums for those insurance policies, and to

collect, receive, and account for the premiums that it received. In exchange, Praetorian agreed to

2 In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this appeal has been resolved without oral argument upon the entry of a separate written order.

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pay First Class regular commissions and make First Class eligible for profit-sharing compensation

in the form of additional commissions and bonuses.

¶8 Under the Contract, any premiums that First Class collected on behalf of Praetorian were

to be held “in a fiduciary capacity for the benefit of [Praetorian] in an interest bearing premium

trust account” and forwarded to Praetorian within 45 days of the end of the month in which the

risk became effective. First Class had no authority to withdraw sums from this premium trust

account without Praetorian’s authorization. Under section VI(A) of the Contract, First Class was

not entitled to any commissions if it failed to remit premiums to Praetorian:

“Should [First Class] default on any such payment; all premiums on the unpaid business

produced by [First Class] under this Agreement will be due and payable immediately.

[Praetorian] may further withhold or offset payment of any commissions and/or profit-

sharing bonuses due [First Class] until all premiums or other money due from [First

Class] is received by [Praetorian].” (Emphasis added.)

¶9 Schedule D of the Contract, entitled “Profit Commission Agreement” (Commission

Agreement), described the formula for calculating the additional profit-sharing that First Class

might receive. First Class agreed under section V(a) of the Commission Agreement that

Praetorian’s “methods, records and calculations will be controlling with respect to all computations

made to determine the Profit Commission under the terms of this [Contract].” Section V(d) of the

Commission Agreement specifically stated that no bonus would be paid if First Class was

delinquent in the payment of any money due to Praetorian:

“If you are delinquent in the payment of any money due us or any of our affiliated

companies as of the end of any year no bonus will be paid to you. Further, no Profit

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Commission will be due hereunder and we will not pay you any Profit Commission for any

Year during which you have been delinquent three (3) or more times in the payment of any

Account Current Monthly Statement.” (Emphasis added.)

Illinois law governed the interpretation of both the Contract and the Commission Agreement. The

Commission Agreement states that it attaches to and amends the Contract.

¶ 10 Wayne Chan, Ms. Chan’s husband, raised questions about Praetorian’s profit commission

calculations. To address his concerns, Praetorian presented to the Chans exhibits, spreadsheets,

and summaries to explain all the components of the profit commission. In 2007, Praetorian met

with the Chans in person in South Carolina concerning the profit commission calculations.

¶ 11 In May or June of 2010, First Class terminated the Contract, convinced that Praetorian had

miscalculated certain bonus payments and used fictitious or improper data to materially reduce the

amount it owed First Class under the Contract. First Class reduced its payments to Praetorian of

the premiums to offset what First Class believed Praetorian owed First Class in bonus payments.

Based on Praetorian’s June and July 2010 agency statements, First Class owed Praetorian $980,620

in premiums. According to Praetorian, this sum increased to $1,241,728 as additional policies

issued by First Class went into effect and were uploaded to Praetorian.

¶ 12 In June 2010, Praetorian demanded First Class remit any outstanding premiums and

informed First Class that Praetorian would be filing an arbitration action if First Class failed to

remit these premiums. Later that month, Praetorian initiated an arbitration against First Class

pursuant to section XI of the Contract. The parties agreed to conduct the arbitration in New York.

Also in 2010, First Class filed a complaint against Praetorian in the Circuit Court of Cook County,

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initially alleging breach of contract for failing to fully pay First Class’s profit commissions, and

later amending the complaint to also allege a claim of fraud against Praetorian.

¶ 13 In March 2011, First Class filed its preliminary statement in the arbitration, wherein First

Class stated that it was “prepared to concede that as of a certain date *** premiums were withheld

from Praetorian because of the failure of Praetorian (and its predecessor) to honor their contractual

obligations [to pay certain commissions].” In a subsequent affidavit, Ms. Chan averred that First

Class had received about $1.1 million in premiums from insureds after First Class deducted certain

Contract commissions. In May 2011, Praetorian filed its statement of claim in the arbitration,

which sought more than $1.2 million in unpaid premiums. The parties then filed cross-motions for

summary judgment.

¶ 14 On October 25, 2011, the arbitration panel issued a partial final award, following briefing

by First Class and Praetorian. The arbitration panel specifically found that “gross premium in the

amount of at least US Dollars one million one hundred thousand is now due and owing to

Praetorian by First Class” and ordered First Class to deposit this sum into an account acceptable

to Praetorian within “five business days following the date of this Award.” A final hearing was set

for November 14, 2011, to address the final reconciliation of the “exact amount of gross premium

owed by First Class to Praetorian,” as well as the allocation of the costs, fees, and expenses of the

arbitration.

¶ 15 On November 10, 2011, the chair of the arbitration panel wrote to the parties’ counsel to

inform them that there would be no further awards or correspondence unless all outstanding bills

were paid. Specifically, First Class had both failed to comply with the partial final award and failed

to pay its share of the panel’s invoices. On May 4, 2012, the arbitration panel noted its work on

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the arbitration matter was concluded. Praetorian sought to confirm the panel’s partial final award,

but the New York state courts declined to confirm an award that was not final. First Class sought

to vacate or modify the partial final award, but the New York Supreme Court declined to do that.

¶ 16 After the arbitration panel’s partial final award, Praetorian moved the circuit court to

dismiss First Class’s complaint, arguing there was no reason to litigate whether Praetorian owed

some commission to First Class because it had failed to remit the necessary premiums to

Praetorian. The court denied Praetorian’s motion to dismiss in July 2012. In July 2014, Praetorian

moved the circuit court for leave to file a counterclaim to pursue the more than $1 million in

premiums that First Class was still refusing to remit. The court granted the motion over First

Class’s objections. In February 2015, First Class filed its answer and affirmative defenses to

Praetorian’s counterclaim. In July 2015, the parties entered an agreed order to voluntarily dismiss

their respective claims without prejudice, with one year to refile those claims.

¶ 17 In October 2015, Praetorian filed a complaint for declaratory judgment against First Class

and Ms. Chan (case No. 15 CH 14789). The complaint asserted seven causes of action against First

Class: breach of contract (Count I); breach of fiduciary duty (Count II); conversion (Count III);

fraud (Count IV); accounting (Count VII); faithless servant doctrine (Count VIII); and declaratory

judgment (Count IX). The complaint also asserted two causes of action against Ms. Chan: breach

of fiduciary duty (Count V), and conversion/piercing the corporate veil (Count VI). Praetorian

sought a declaration that it was owed its net premium and that under section VI(A) of the Contract,

Praetorian owed no profit commission to First Class. First Class answered all nine counts of

Praetorian’s complaint in July 2017.

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¶ 18 Meanwhile, in July 2016, First Class refiled its lawsuit against Praetorian, alleging

Praetorian had failed to pay First Class’s profit commissions (case No. 16 L 6748). The complaint

asserted claims for breach of contract and fraud. After the court granted Praetorian’s motion to

dismiss, First Class filed, with leave of court, an amended complaint (its operative complaint),

alleging breach of contract (Count I) and fraud (Count II). Praetorian answered the fraud claim but

moved to dismiss First Class’s breach of contract claim under section 2-615 of the Code of Civil

procedure (Code) (735 ILCS 5/2-615 (West 2016)), arguing the provisions of the Contract barred

First Class’s recovery. In July 2017, the court consolidated case Nos. 15 CH 14789 and 16 L 6748.

¶ 19 On September 8, 2017, the court granted Praetorian’s motion to dismiss First Class’s

breach of contract claim. First Class’s appeal of this order is at issue here.

¶ 20 In August 2018, Praetorian moved for summary judgment on all issues in the consolidated

cases. In September 2018, First Class and Ms. Chan filed their opposition to Praetorian’s motion

for summary judgment, and moved for summary judgment on their fraud claim, which alleged

Praetorian had improperly calculated First Class’s profit commissions. The court ordered the

parties to limit their summary judgment briefing to three issues: (1) whether First Class and Ms.

Chan had breached their contract with Praetorian by withholding premiums, (2) the propriety of

Praetorian’s calculation of the profit commissions for purposes of First Class’s fraud claim, and

(3) whether the court had subject matter jurisdiction over Praetorian’s claims.

¶ 21 In August 2019, Praetorian moved for partial summary judgment on (1) its breach of

contract claim against First Class and Ms. Chan, (2) First Class’s fraud claim against Praetorian,

and (3) the issue of the court’s subject matter jurisdiction. Then, First Class and Ms. Chan filed

their cross-motion for summary judgment.

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¶ 22 On February 25, 2021, the court issued a written decision, which denied First Class’s cross-

motion for summary judgment, finding that the court had subject matter jurisdiction over the

lawsuit and that First Class could not prevail on its fraud claim. The court granted summary

judgment in favor of Praetorian and against First Class on (1) Praetorian’s breach of contract claim

against First Class, and (2) First Class’s fraud claim against Praetorian. As part of its written

decision, the court entered summary judgment for Praetorian and against First Class “in the amount

of $1,241,728.06, the net premiums due.” On May 21, 2021, the court reduced the decision to a

written order. First Class’s appeal of this order is at issue here.

¶ 23 Thereafter, the parties continued to file summary judgment motions and cross-motions

concerning Praetorian’s remaining claims against First Class and Ms. Chan. On June 12, 2023, the

court granted Praetorian’s motion to dismiss with prejudice its remaining claims against First Class

and Ms. Chan. With this order, the court disposed of this case, all claims having been adjudicated

or dismissed.

¶ 24 First Class and Ms. Chan timely appealed the courts orders of September 8, 2017; May 21,

2021; and June 12, 2023.

¶ 25 II. ANALYSIS

¶ 26 A. Summary Judgment Rulings

¶ 27 First, we address First Class and Ms. Chan’s arguments challenging the circuit court’s

summary judgment rulings.

¶ 28 This court reviews an order granting summary judgment de novo. Aalbers v. LaSalle Hotel

Properties, 2022 IL App (1st) 210494, ¶ 15. Summary judgment is proper when the pleadings,

affidavits, depositions, and admissions of record, construed strictly against the moving party, show

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there is no genuine issue as to any material fact and that the moving party is entitled to judgment

as a matter of law. Id. While the plaintiff does not need to prove its entire case during this stage of

litigation, the plaintiff is still required to present some factual basis and evidentiary facts to support

the elements of its cause of action. Id. “[S]peculation, conjecture, or guess is insufficient to

withstand summary judgment.” Id. A party opposing summary judgment cannot rely on the

allegations of its pleading to raise a genuine issue of material fact, “but must affirmatively

controvert evidence adduced by the moving party.” United Equitable Insurance Co. v. Calhoun,

2022 IL App (1st) 210525, ¶ 29. A court should ignore personal conclusions, opinions, and self-

serving statements, and consider only facts admissible in evidence, when deciding whether a

genuine issue of material fact exists in a summary judgment proceeding. Id. Summary judgment

is an appropriate tool for disposing of lawsuits or claims when the moving party’s right is clear

and free from doubt. Aalbers, 2022 IL App (1st) 210494, ¶ 15.

¶ 29 1. First Class’s Fraud Claim

¶ 30 First Class argues that the circuit court erred when it granted summary judgment in favor

of Praetorian and against First Class on First Class’s claim that Praetorian engaged in fraudulent

calculations to reduce First Class’s profit commissions. The circuit court’s decision was based on

the court’s ruling that First Class could not establish damages or a false statement of material fact.

¶ 31 First Class was required to present some factual basis and evidentiary facts to support the

elements of First Class’s fraud claim. The elements of a common law claim for fraud are (1) a false

statement of material fact, (2) knowledge by the defendant that the statement was false, (3) an

intention to induce the plaintiff to act, (4) reasonable reliance upon the truth of the statement by

the plaintiff, and (5) damage to the plaintiff resulting from this reliance. Avon Hardware Co. v.

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Ace Hardware Corp., 2013 IL App (1st) 130750, ¶ 15. Fraud-based claims require an especially

“high standard of specificity,” and require the plaintiff to show particular facts establishing the

elements of fraud, “including what misrepresentations were made, when they were made, who

made the misrepresentations and to whom they were made.” Merrilees v. Merrilees, 2013 IL App

(1st) 121897, ¶ 15. Summary judgment for the defendant is proper if the plaintiff fails to establish

any element of its fraud claim. Findlay v. Chicago Title Insurance Co., 2022 IL App (1st) 210889,

¶ 80.

¶ 32 First, First Class first argues that the circuit court failed to consider Praetorian’s judicial

admission to First Class’s fraud claim. According to First Class, Praetorian’s answer to First

Class’s operative complaint made no answer to the paragraphs that set forth First Class’s fraud

claim. First Class cites Gowdy v. Richter, 20 Ill. App. 3d 514, 520 (1974), for the proposition that

a defendant’s failure “to explicitly deny a specific allegation in the complaint will be considered a

judicial admission and will dispense with the need of submitting proof on the issue.” Specifically,

First Class contends that Praetorian failed to deny the allegations in the operative complaint that

First Class properly performed all of its obligations under the Contract by making all necessary

premium payments, thereby requiring Praetorian to calculate the profit commissions owed to First

Class according to the Contract’s terms. First Class contends that as a result of Praetorian’s failure

to deny these allegations, First Class did not need to submit proof on the issue of its damages and

the circuit court erred when it ruled that First Class failed to establish that it had met the condition

precedent under the Contract of paying the premiums due to Praetorian before First Class would

be paid its profit commissions.

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¶ 33 First Class forfeited review of this argument by failing to raise it below. Pennymac Corp.

v. Jenkins, 2018 IL App (1st) 171191, ¶ 21 (“arguments not raised before the circuit court are

forfeited and cannot be raised for the first time on appeal”). Forfeiture aside, this argument lacks

merit because the record establishes that Praetorian denied the allegations setting forth First Class’s

fraud claim and, thus, did not make any judicial admissions concerning that claim. Paragraphs 10

through 52 of First Class’s operative complaint concerned its contract claim and paragraphs 53

through 75 concerned its fraud claim. Praetorian made no answer to paragraphs 10 through 52

because those paragraphs concerned First Class’s breach of contract claim, and Praetorian had

concurrently filed a motion to dismiss that claim. Praetorian’s answer specifically addressed the

allegations of fraud, with specific admissions or denials for paragraphs 53 through 75. Praetorian

did not fail to answer First Class’s fraud claim.

¶ 34 Second, First Class argues that the circuit court overlooked evidence that showed

Praetorian failed to comply with the requirement under the Commission Agreement to first

determine the profit sharing calculation, which First Class asserts was a “critical component” of

the net premium determination and a condition precedent to First Class’s performance of its

obligations under the Contract and the Commission Agreement. According to First Class, the

amount of the premiums First Class owed Praetorian could not be determined until Praetorian

calculated and paid the profit commissions it owed First Class. First Class asserts that Praetorian

breached this condition precedent when Praetorian did not calculate the profit commissions for

2010 and, as a result, First Class was not able to determine the amount of net premiums due to

Praetorian under section VI of the Contract, so the circuit court erred when it ruled that First Class

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failed to meet the condition precedent of paying Praetorian the premiums before First Class could

receive payment of its profit commissions.

¶ 35 To support this argument, First Class cites section V(c) of the Commission Agreement,

which provides that “[o]n termination, [First Class] will be entitled to a final Profit Commission,

if any, for the year in which termination occurs.” First Class also cites Praetorian’s answers to First

Class’s interrogatories Nos. 6 and 7 that “[n]o calculation of [the profit commission] for 2010 was

performed due to cessation of the [parties’] relationship.”

¶ 36 First Class’s argument involves the meaning and construction of the Contract. The meaning

and construction of a written instrument are questions of law for the court when there are no

ambiguous terms, and questions of law are appropriate for summary judgment. USG Interiors, Inc.

v. Commercial & Architectural Products, Inc., 241 Ill. App. 3d 944, 947 (1993).

¶ 37 First Class’s argument lacks merit. A condition precedent is a condition “in which

performance by one party is required before the other party is obligated to perform.” Owen v.

Village of Maywood, 2023 IL App (1st) 220350, ¶ 26. “When contracts contain express conditions

precedent, strict compliance with such conditions is required.” Id. Without strict compliance, the

contract does not become enforceable or effective. Id. Under the plain language of the Contract

(supra ¶¶ 8-9), First Class is not entitled to any profit commission until it has remitted the full

amount of premiums to Praetorian. Furthermore, as established by Ms. Chan’s August 2011

affidavit, First Class admitted that it was withholding net premiums due to Praetorian. First Class’s

continuing failure to satisfy the necessary prerequisite for being eligible for commissions and

bonuses necessarily meant that First Class could not satisfy the damage element of its fraud claim.

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Accordingly, we conclude that the circuit court correctly granted summary judgment in favor of

Praetorian on First Class’s fraud claim.

¶ 38 Third, First Class argues that the court overlooked evidence that Praetorian kept two

separate sets of books concerning items related to its policies, premiums, claims, and losses.

According to First Class, one set of books contained accurate figures upon which Praetorian should

have calculated First Class’s profit commissions, but Praetorian used the other set of books, which

misrepresented those figures and resulted in Praetorian paying First Class insufficient bonuses and

commissions. According to First Class, its losses from the unpaid bonuses and commissions are

not less than $1.6 million.

¶ 39 First Class’s fraud claim required it to show what misrepresentations were made, when

they were made, who made them, and to whom. See Merrilees, 2013 IL App (1st) 121897, ¶ 15.

First Class, however, failed to make any such showing. To support its claim of fraud, First Class

cites a May 2005 e-mail from Brad Diericx, who was a vice president of finance and operations.

He was an employee of Hannover, Praetorian, or their parent companies and computed annual loss

ratios. This e-mail concerned the First Class program for Praetorian. Diericx stated that the

difference in numbers he had reported in the past resulted from trying to use financials that were

created in Itasca for 2002 and 2003, and that the financials produced first in New York and then

Los Angeles “had major issues” with the Itasca financials. He stated that, “[i]n creating this

separate set of books, there becomes a need at some point to get back to using the [New York]

numbers as they are the true book of record.”

¶ 40 First Class fails to show how Diericx’s reference to a separate set of books meant Praetorian

misrepresented material facts, induced First Class’s reliance, and otherwise damaged First Class.

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According to the 2015 deposition testimony of Michael Paul, a former vice president of finance

and operations at Praetorian, Diericx’s reference to separate books related to the merger of two

different companies, which had different systems and booked items differently. After the merger,

there was a need to “harmonize what was going on” between the two companies in their respective

offices in Los Angeles and New York. Consequently, Diericx created a separate set of books for

the Itasca office to harmonize “what was going on” in Los Angeles and New York. Ultimately the

books Diericx created for the Itasca office were harmonized into one set of books for Praetorian

as a company. First Class has not refuted this explanation or otherwise provided any evidence of

fraudulent bookkeeping or fabricated entries. See Turzynksi v. Libert, 122 Ill. App. 2d 352, 359

(1970) (fraud cannot be established upon mere suspicion). We conclude that Diericx’s e-mail fails

to provide support for any of the required elements of misrepresentation for First Class’s fraud

claim.

¶ 41 First Class also refers to a Nebraska Department of Insurance 2011 audit of Acceptance

Insurance Company (Nebraska audit) to support its claim that Praetorian committed fraud.

Specifically, First Class states that, under the Contract, Praetorian’s liability for insurance policy

claims was a component of the profit commission calculation that could reduce the amount of the

profit commissions Praetorian owed to First Class. First Class argues that Praetorian improperly

used losses incurred by Acceptance Insurance Company (Acceptance) to reduce First Class’s profit

commissions even though Praetorian never incurred Acceptance’s losses. To support this

argument, First Class refers to pages 8 through 9 of the Nebraska audit, which sets forth

information related to the historical reinsurance agreements of Acceptance, which is referred to as

“the Company.” The audit states:

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“Redland Insurance Company – Acceptance Insurance Companies Inc. sold its

wholly owned insurance subsidiary, Redland Insurance Company (Redland), to Clarendon

National Insurance Company (Clarendon) effective as of July 1, 2000. Note that Redland

was merged with Praetorian Insurance Company in 2010. The transaction included the

appointment of the Company as producer and administrator for the business the Company

wrote through Clarendon and Redland. The Company reinsured 100% of the business for

policies prior to the sale of Redland to Clarendon through the pooling agreement. Any

subsequent business written on Redland or Clarendon paper, for which the Company

produced and managed, was assumed by the Company with a 100% quota share

agreement.”

¶ 42 According to First Class, this statement in the Nebraska audit demonstrates that

Acceptance, and not Praetorian, was “liable for any claims *** that may have been bought at any

time in the future for any policies issued through March 1 to July 31, 2001, and that Praetorian had

no liability for those claims under the July 1, 2000 agreement [whereby Acceptance sold its

subsidiary insurance company to a subsidiary of Hannover.]” The Nebraska audit, however,

neither refers to these dates nor explains how Praetorian would be calculating the commissions

and bonuses of its administrators. Instead, First Class’s assertion that Praetorian had no liability is

based on the self-serving and unsubstantiated August 30, 2019, affidavit of Ms. Chan, and a “self-

serving affidavit with no other evidence does not create a genuine issue of material fact.” National

Union Fire Insurance Co. of Pittsburgh v. DiMucci, 2015 IL App (1st) 122725, ¶¶ 2, 79. Moreover,

the assertions in Ms. Chan’s affidavit are refuted by the 2019 affidavit of Daniel Czabaj, a former

employee of Praetorian who was involved in the computation of profit commissions for First

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Group. Czabaj averred that the assertions by First Class and Ms. Chan about the reinsurance and

transfer of risks from Acceptance in 2001 are incorrect. Specifically, Czabaj avers that Hannover,

which was Praetorian’s predecessor, purchased its book of program business from Acceptance in

March 2001; “100% of the unearned premium and all liabilities associated with those policies were

reinsured out of Acceptance and into [Hannover]”; while the Nebraska audit “references

Acceptance reinsuring the business 100%, the company accepting that business was [Hannover]”;

and the premiums and losses associated with that book “became part of [Hannover’s] premium

and [Hannover’s] losses.” The unsupported allegations and personal conclusions in Ms. Chan’s

affidavit are not facts and are not sufficient to show that a genuine issue of material fact exists to

preclude a court from awarding summary judgment. See Calhoun, 2022 IL App (1st) 210525,

¶ 29. We conclude that the circuit court correctly granted Praetorian summary judgment because

First Class could not satisfy the misrepresentation element of its fraud claim.

¶ 43 2. Subject Matter Jurisdiction

¶ 44 First Class and Ms. Chan argue that the circuit court erroneously denied First Class’s

motion for summary judgment based upon a mandatory arbitration provision applicable to all of

Praetorian’s claims in its complaint for declaratory relief. First Class and Ms. Chan argue that the

circuit court lacked subject matter jurisdiction for its rulings on Praetorian’s claims because those

claims were required to be submitted to arbitration. The circuit court rejected this argument,

finding that First Class had waived its right to insist on arbitration when it failed to pay the

arbitrators their fee. On appeal, First Class and Chan claim that there is no evidence in the record

upon which the circuit court could have concluded that it failed to pay the arbitrators’ fees.

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¶ 45 Illinois considers arbitration to be a favored method of settling disputes. Midland Funding

LLC v. Hilliker, 2016 IL App (5th) 160038, ¶ 27. A party, however, can waive the right to arbitrate

a dispute when that party engages in conduct that is inconsistent with the arbitration clause. Id.

This waiver can happen when a party invokes the judicial process and substantially participates in

the litigation to a point “inconsistent with an intent to arbitrate, to the detriment or prejudice of the

other party.” Id. That is what happened here.

¶ 46 First Class’s conduct was inconsistent with an intent to arbitrate. On November 10, 2011,

the arbitration panel chair wrote to counsel to inform them that there would be no further awards

or correspondence unless all outstanding bills were paid. Moreover, both Ms. Chan and the New

York Supreme Court confirmed the fact that First Class had failed to pay the panel’s invoices. In

a sworn affidavit, Ms. Chan averred that “First Class Group has not paid any of the fees due and

owing to the Chairman of the Arbitration ***.” The New York Supreme Court also specifically

found that “Respondent [First Class] did not pay its share of the Panel Chair’s fees in connection

with the arbitration.” The failure to pay arbitration fees is an act inconsistent with arbitration and

waives the right to pursue arbitration. See Freeman v. SmartPay Leasing, LLC, 771 F. App’x 926,

933 (11th Cir. 2019) (a party waives “its right to arbitration by failing to pay arbitration fees”);

Pre-Paid Legal Services, Inc. v. Cahill, 786 F.3d 1287, 1294 (10th Cir. 2015) (“A party’s failure

to pay its share of arbitration fees breaches the arbitration agreement.”).

¶ 47 Praetorian was therefore free to pursue its claims in the circuit court after the arbitration

was terminated due to First Class’s failure to pay the fees. Once Praetorian was back in the circuit

court, First Class (twice) answered Praetorian’s complaint. In July 2014, Praetorian moved for

leave to file a counterclaim in order to pursue the more than $1 million in premiums that First

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Class was still refusing to remit. After the circuit court granted the motion, First Class filed its

answer and affirmative defenses to Praetorian’s counterclaim. In October 2015, Praetorian filed

its complaint for declaratory judgment and other relief against First Class and Ms. Chan. Rather

than move to compel arbitration, even after another year of litigation, First Class again answered

Praetorian’s complaint. This answer did not include any affirmative defense addressing arbitration

or the lack of subject matter jurisdiction. This too was a waiver of First Class’s right to pursue

arbitration. See Watkins v. Mellen, 2016 IL App (3d) 140570, ¶ 14. Filing an answer without

asserting the right to arbitrate results in waiver. Caterpillar Inc. v. Century Indemnity Co., 2019

IL App (3d) 190032, ¶ 29.

¶ 48 Contrary to First Class’s argument on appeal, Praetorian was not trying to avoid the results

of the arbitration process. Praetorian twice sought to enforce the partial judgment it received from

the arbitration panel, but was unsuccessful because the arbitration was deemed terminated due to

First Class’s failure to pay the fees before any final award could be entered.

¶ 49 We conclude that the circuit court had subject matter jurisdiction over the parties’ claims

because First Class waived its right to arbitrate.

¶ 50 3. Praetorian’s Breach of Contract Claim

¶ 51 First Class argues that the circuit court erred when it granted summary judgment in favor

of Praetorian and against First Class on Praetorian’s breach of contract claims. Specifically, First

Class argues, similar to its arguments concerning its fraud claim, that the court failed to consider

Praetorian’s admissions in the pleadings and overlooked First Class’s argument that no net

premium was due to Praetorian under the Contract.

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¶ 52 To prevail on a breach of contract claim, Praetorian must show (1) the existence of a valid

and enforceable contract, (2) that Praetorian performed the contract, (3) that First Class breached

the contract, and (4) that Praetorian was harmed by the breach. Batson v. Oak Tree, Ltd., 2013 IL

App (1st) 123071, ¶ 35. Praetorian satisfied each of these elements.

¶ 53 The Contract is a binding and enforceable contract between Praetorian and First Class.

Under the Contract, Praetorian appointed First Class as its administrator to solicit and evaluate

applications for its insurance lines of business, to underwrite risks and determine premiums for

those insurance policies, and to collect, receive, and account for the premiums that it received. In

exchange, Praetorian agreed to pay First Class regular commissions and make First Class eligible

for profit-sharing compensation. Under the Contract, any premiums that First Class collected on

behalf of Praetorian were to be held in a fiduciary capacity for the benefit of Praetorian in an

interest bearing premium trust account and forwarded to Praetorian within 45 days of the end of

the month in which the risk became effective. Under the Contract, First Class had no authority to

withdraw sums from this premium trust account without Praetorian’s authorization.

¶ 54 The circuit court found that First Class breached the agreement by failing to remit more

than $1.2 million in premiums to Praetorian. The undisputed evidence shows that First Class has

withheld more than $1.2 million in premiums from Praetorian. First Class has not rebutted this

number or disputed that it has failed to remit this money. To the contrary, First Class has admitted

to withholding Praetorian’s premiums. On May 17, 2010, First Class informed Praetorian that it

was reducing the amount in commissions it was allegedly owed by “taking a credit” against

Praetorian’s premiums. On March 23, 2011, First Class filed its preliminary statement in the

arbitration proceeding, in which it stated that it was “prepared to concede that as of a certain date

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*** premiums were withheld from Praetorian because of the failure of Praetorian (and its

predecessor) to honor their contractual obligations [to pay certain bonus commissions].”

(Emphasis added.) In her August 2011 affidavit, Ms. Chan acknowledged the amount of premium

at issue, averring that First Class had received about $1.1 million in premiums from insureds after

First Class deducted certain Contract commissions (but not the profit commissions).

¶ 55 As addressed above (supra ¶¶ 33, 37), we conclude that there is no merit to First Class’s

arguments alleging that (1) Praetorian’s pleadings contain judicial admissions that First Class

complied with all of its obligations under the Contract, and (2) Praetorian was required under the

Contract and Commission Agreement to calculate and pay First Class its profit commissions before

any premium was due to Praetorian.

¶ 56 We conclude that the circuit court correctly granted summary judgment in favor of

Praetorian on its breach of contract claim where there was no genuine of material fact concerning

First Class’s failure to comply with the condition precedent to remit more than $1.2 million in

premiums to Praetorian.

¶ 57 B. First Class’s Breach of Contract Claim

¶ 58 First Class argues that the circuit court erred when it dismissed First Class’s breach of

contract claim, which alleged that Praetorian failed to properly calculate First Class’s profit

commissions, because Praetorian’s motion to dismiss improperly attempted, with an affidavit, to

negate the well-pleaded allegations of that claim.

¶ 59 This court reviews de novo an order granting a motion to dismiss under either section 2-

615 or 2-619 of the Code. Station Place Townhouse Condominium Ass'n v. Village of Glenview,

2022 IL App (1st) 211131, ¶¶ 25-26. This de novo standard permits this court to affirm a dismissal

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on any basis present in the record, “even if the trial court dismissed on an improper ground.” Id.

This means the appellee “may urge any point in support of the judgment on appeal, even though

not directly ruled on by the trial court, so long as the factual basis for such point was before the

trial court.” Travelers Casualty & Surety Co. v. Bowman, 229 Ill. 2d 461, 470-71 (2008).

¶ 60 The meaning and construction of a written instrument are questions of law for the court

when there are no ambiguous terms, and questions of law are appropriate for summary judgment.

USG Interiors, Inc., 241 Ill. App. 3d at 947. The construction of contract language is also

appropriate at the motion to dismiss stage. See, e.g., iMotorsports, Inc. v. Vanderhall Motor Works,

Inc., 2022 IL App (2d) 210785, ¶¶ 15-28; Hubbard Street Lofts LLC v. Inland Bank, 2011 IL App

(1st) 102640, ¶¶ 18-22.

¶ 61 First Class alleged Praetorian breached the Commission Agreement by failing to accurately

calculate First Class’s profit commissions. The circuit court found that First Class could not prevail

on this claim and dismissed it.

¶ 62 First Class cannot show that Praetorian breached the Commission Agreement because First

Class, as discussed above (supra ¶ 37), failed to remit the premiums to Praetorian, which was a

condition precedent to the Commission Agreement. See Owen, 2023 IL App (1st) 220350, ¶ 26 (a

condition precedent requires performance by one party before the other party is obligated to

perform and strict compliance is required when a contract contains an express condition

precedent). Id. Under section VII of the Contract, any premiums that First Class collected on behalf

of Praetorian were to be held in a fiduciary capacity for the benefit of Praetorian. Under section

VI(A) of the Contract, First Class was not entitled to any commissions if it failed to remit premiums

to Praetorian. The clear language of section VI(A) provides that Praetorian could withhold any

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commissions or profit-sharing bonuses until “all premiums or other money due from the

Administrator is received by [Praetorian].” Section V(d) of the Commission Agreement contained

similar language, stating “no bonus will be paid” if First Class was delinquent in the payment of

any money due to Praetorian. (Emphasis added.)

¶ 63 First Class never remitted the necessary premiums to Praetorian, as required by the

Contract. Indeed, First Class has withheld more than $1.2 million in premiums from Praetorian, a

number First Class had not rebutted. First Class still does not argue it remitted the premiums to

Praetorian. Instead, First Class argues the “net premiums” could not be determined until Praetorian

calculated the profit-sharing numbers. This argument is a non sequitur and does not address the

fundamental requirement that First Class remit the premiums in order to be eligible for any bonuses

or profit-sharing commissions. As the circuit court noted, the Contract provisions do not authorize

First Class to withhold the net premiums pending payment of the profit commissions and First

Class could not “hold the premiums hostage” while it disputed the amount of the bonuses or

commissions.

¶ 64 First Class argues the circuit court erred by considering two of Ms. Chan’s affidavits at the

motion to dismiss stage. This argument lacks merit. First, there is no indication the circuit court

relied on Ms. Chan’s affidavits in its decision. During the hearing on Praetorian’s motion to

dismiss, the circuit court stated that it was dismissing First Class’s breach of contract claim based

on the plain language of the Contract. Second, a circuit court can consider judicial admissions at

the motion to dismiss stage. iMotorsports, Inc., 2022 IL App (2d) 210785, ¶ 13. An affidavit is an

example of a judicial admission and is binding on the party who prepared the affidavit. Capital

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One Bank, N.A. v. Czekala, 379 Ill. App. 3d 737, 744 (2008). The circuit court could have

considered Ms. Chan’s two affidavits at the motion to dismiss stage had it wanted to do so.

¶ 65 We conclude that the circuit court correctly dismissed First Class’s breach of contract

¶ 66 C. Praetorian’s Motion for Appellate Fees and Costs

¶ 67 Praetorian has filed with this court a motion to recover its reasonable costs and attorney

fees incurred as part of this appeal, pursuant to section X(I) of the Contract.

¶ 68 In response, First Class and Ms. Chan argue, inter alia, that the Contract required that all

claims thereunder be arbitrated and, thus, the circuit court and this court lack subject matter

jurisdiction over claims arising under the Contract. As discussed above, (supra ¶¶ 45-49), this

argument lacks merit. In the alternative, they argue, without citation to any authority, that a request

for fees is not proper in this court because Praetorian did not petition the circuit court for fees and

costs.

¶ 69 Section X of the Contract is entitled “Termination and Suspension.” Subsection X(I)

provides:

“All documents, files, computer software, computer data, office supplies or any

other property (both tangible or intangible) (hereinafter collectively ‘Property’) provided

to [First Class] by [Praetorian] will remain the property of [Praetorian]. [First Class] agrees

that upon termination of this [Contract], immediately upon request by [Praetorian], [First

Class] will turn over to [Praetorian] *** all Property owned by [Praetorian], which

[Praetorian] had provided to [First Class] for its use during the term of this [Contract].

[First Class] agrees to indemnify [Praetorian] for all costs (including attorneys’ fees and

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costs) incurred by [Praetorian] to retrieve its Property from [First Class] should [First

Class] fail or refuse to return [Praetorian’s] Property as required by this paragraph. ***.”

¶ 70 Generally, a party is responsible for his own attorney fees. Abdul–Karim v. First Federal

Savings & Loan Ass'n of Champaign, 101 Ill. 2d 400, 412 (1984). An exception exists when a

contract provides for an award of attorney fees. Mirar Development, Inc. v. Kroner, 308 Ill. App.

3d 483, 488 (1999). Contractual provisions for an award of attorney fees must be strictly construed,

and the court must determine the intention of the parties regarding the payment of fees. Id.

¶ 71 Subsection X(I) is not the typical fee-shifting provision that broadly provides for the

prevailing party to be reimbursed for its attorney fees and costs by the losing party in the event of

a breach of the contract or any litigation arising from a dispute concerning the parties’ contract.

Instead, relief under subsection X(I) is limited to the costs Praetorian incurs to retrieve its Property,

as defined in this section, from First Class if it fails or refuses to return the Property to Praetorian.

Although First Class refused to give Praetorian the premiums that were due to Praetorian, we

cannot conclude that those premiums are Property for purposes of subsection X(I) of the Contract.

Specifically, Property is limited to documents, files, computer software and hardware, computer

data, office supplies or any other tangible or intangible property that Praetorian provided to First

Class for its use during the term of the contract. Clearly, Praetorian did not provide the premiums

to First Class for its use.

¶ 72 We deny Praetorian’s motion to recover its costs and reasonable attorney fees as part of

this appeal.

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¶ 73 III. CONCLUSION

¶ 74 For the reasons stated, we affirm the circuit court’s judgments in favor of Praetorian and

against First Class on the parties’ motions for summary judgment concerning First Class’s fraud

claim, subject matter jurisdiction, and Praetorian’s breach of contract claim. We also affirm the

circuit court’s judgment dismissing First Class’s breach of contract claim.

¶ 75 Affirmed.

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