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SECOND DIVISION

SEPTEMBER 26, 2000

JUSTICE COUSINS delivered the opinion of the court:

The Board of Education of Reed-Custer Community Unit SchoolDistrict 255U (School) entered into a contract with A.J. MaggioCo. (Maggio), a general contractor, for the construction ofBraidwood Middle School, in Braidwood, Illinois. Maggiosubcontracted with Willis Construction (Willis) to construct andinstall a sanitary and storm sewer. Willis is owned by CoyWillis.

Pursuant to the contract between Willis and Maggio, Willisagreed that if the materials or workmanship it furnished weredeemed inadequate, Willis would perform the necessary repairs. If Willis failed to make these corrections, Maggio could deductthe cost sustained in making the necessary corrective work fromthe amount due Willis. Willis agreed that if this amount wasinsufficient to reimburse Maggio, it would pay the outstandingbalance.

The contract between Maggio and Willis also required Willisto carry comprehensive general liability insurance and to nameMaggio and others as additional insureds under the policy. Willis retained Tennant Insurance Agency (Tennant) to acquire theinsurance. The insurance policy Tennant procured for Willis was

written by Illinois Emcasco Insurance Company (Emcasco) andprovided coverage from September 11, 1991, through September 11,1992. The policy provided the correct type of insurance butfailed to provide coverage to Maggio as mandated by the contractbetween Maggio and Willis.

Tennant issued a certificate of insurance to Maggio, whichstated that Maggio was an additional insured on the policy, butin fact Maggio was not named as an additional insured on thepolicy. Subsequent to receiving the certificate of insurance,Maggio made requests to Tennant to be placed on the insurancepolicy, as an additional insured. The architect and School were added to the policy on May 18, 1992, yet Maggio was not.

Emcasco renewed the policy from September 11, 1992, throughSeptember 11, 1993. Again, Maggio was not named as an additionalinsured. Maggio alleges that Emcasco failed to add Maggio to thepolicy after being requested to do so.

Shortly after Willis completed installation of the sanitaryand storm sewer, sinkholes began to appear under driveways andsidewalks. Maggio requested Willis to perform the necessarycorrective work. Willis refused.

Under its contract with the School, Maggio was ultimatelyresponsible for any defective work. On October 12, 1993, theSchool notified Maggio that it should have the sewers fixedwithin seven days or the School would perform the repairs andback charge Maggio. Maggio hired another company to perform therepairs for $497,067. Maggio sent the bill to Willis but Willisrefused to pay.

After Maggio had paid $497,067 to correct the defectivework, the School, which was named as an additional insured on theinsurance policy issued by Emcasco, executed a written assignmenttransferring and assigning to Maggio any causes of action thatthe School may have had against Emcasco. The assignment, whichwas executed on October 18, 1995, purportedly authorized Maggioto sue Emcasco to recover the $497,067 spent on corrective work.

On October 30, 1995, Maggio filed a two-count complaint,where count I named Willis as a defendant and count II namedWillis, Emcasco, and Tennant as defendants. On February 22,1996, the trial court dismissed without prejudice count II ofMaggio's original complaint against Tennant pursuant to section2-615 of the Code of Civil Procedure (735 ILCS 5/2-619 (West1996)). On March 21, 1996, Maggio filed a two-count amendedcomplaint, in which count I again named Willis as a defendant andcount II named Willis, Tennant, and Emcasco as defendants. OnMay 28, 1996, the trial court dismissed without prejudice countII of Maggio's amended complaint against Tennant pursuant tosection 2-615.

On June 25, 1996, Maggio filed its second amended complaint.The complaint contained four counts, which were: (1) count I,breach of contract against Willis, (2) count II, third-partybreach of contract against Emcasco, (3) count III, assignment ofcause of action against Emcasco, and (4) count IV, subrogation ofcause of action against Emcasco. On July 15, 1996, Emcasco fileda motion to dismiss the second amended complaint pursuant tosection 2-615 and section 2-619 of the Code of Civil Procedure.

On August 22, 1996, the trial court granted Emcasco's motion todismiss count II without prejudice. On September 11, 1996,Emcasco filed a separate motion to dismiss counts III and IV ofthe second amended complaint pursuant to section 2-615. OnOctober 10, 1996, the trial court granted Emcasco's motion todismiss counts III and IV.

On April 27, 1999, the trial court granted Maggio's motionto file an amended count II to its second amended complaint,which Maggio went on to file on May 10, 1999. On May 27, 1999,Emcasco filed a motion to vacate the order allowing Maggio tofile an amended count II. On August 20, 1999, the trial courtgranted the motion to vacate. On August 27, 1999, the trialcourt denied Maggio leave to file an amended count II and foundthat there was no just reason to delay enforcement or appeal ofthat order or the order of October 10, 1996, dismissing countsIII and IV. Maggio appeals.

We affirm.

ANALYSIS

I

Maggio maintains the trial court erred in granting Emcasco'smotion to dismiss its assignment claim, count III of the secondamended complaint, for failure to state a cause of action. Wedisagree.

When a complaint is dismissed pursuant to section 2-615 ofthe Code of Civil Procedure (735 ILCS 5/2-615 (West 1996)), thestandard of review is de novo. Vernon v. Schuster, 179 Ill. 2d338, 344, 688 N.E.2d 1172, 1175 (1997). The question presentedby a section 2-615 motion to dismiss is whether the allegationsof the complaint, when viewed in a light most favorable to theplaintiff, are sufficient to state a cause of action upon whichrelief can be granted. Vernon, 179 Ill. 2d at 344, 688 N.E.2d at1175. A cause of action should not be dismissed on the pleadingsunless it clearly appears that no set of facts can be provedunder the pleadings that entitle the plaintiff to recover. Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 86-87,672 N.E.2d 1207, 1214 (1996).

As a general rule, "[a]n assignment *** is the transfer ofsome identifiable property, claim or right from the assignor tothe assignee." Buck v. Illinois National Bank & Trust Co., 79Ill. App. 2d 101, 106, 223 N.E.2d 167, 169 (1967). Theassignment operates to transfer to the assignee all the right,title or interest of the assignor in the thing assigned. American Sand & Gravel Co. v. Chicago Gravel Co., 184 Ill. App.509 (1914). For an assignment to be valid, the assignor musteither actually or potentially possess the thing that he attemptsto assign. North Chicago Street R.R. Co. v. Ackley, 171 Ill.100, 111, 49 N.E. 222, 226 (1897). "[T]he assignee can obtain nogreater right or interest than that possessed by the assignor,inasmuch as one cannot convey that which he does not have." Litwin v. Timbercrest Estates, Inc., 37 Ill. App. 3d 956, 958,347 N.E.2d 378, 379-80 (1976).

According to Maggio, the School suffered damage from thedefective sewer work and this damage entitled it to file a claimpursuant to the insurance policy written by Emcasco. Maggiocontends that the School has assigned to it the right to placethis claim.

According to Emcasco, however, Maggio's assignment claim wasproperly dismissed because the School had no claim under thepolicy in the first place. Emcasco relied upon one argument asto why the School had no claim before the trial court and onappeal, and another in its petition for rehearing. We willaddress the two arguments in turn.

Emcasco successfully argued before the trial court that theSchool did not have a claim because it never incurred a loss. The School never incurred a loss, Emcasco explained, because itelected to require Maggio to have the repairs made. At thatpoint, the argument proceeds, the School no longer had any basisfor a claim with Emcasco. Emcasco's contention is not wellfounded. Webster's defines "loss" as follows: "[T]he amount ofan insured's financial detriment due to the occurrence of astipulated contingent event (as death, injury, destruction, ordamage) in such a manner as to charge the insurer with aliability under the terms of the policy." Webster's Third NewInternational Dictionary 1338 (1986). Accordingly, "damage" and"loss" are synonymous and any damage to the School's propertyconstituted loss. We disagree with Emcasco's contention that anyclaim possessed by the School could not have been assigned toMaggio after Maggio had the damage repaired. An insured's claimunder a policy may be assigned after a loss. Service AdjustmentCo., Inc. v. Underwriters at Lloyd's, London, 205 Ill. App. 3d329, 334, 562 N.E.2d 1046, 1049 (1990).

On petition for rehearing, Emcasco has introduced a newargument for its position the School never had a claim that itcould have assigned to Maggio. We note that Emcasco has arguablywaived this new argument since it did not raise it, either beforethis court or the court below, until the petition for rehearing. Supreme Court Rule 341(e)(7) provides: "Points not argued arewaived and shall not be raised in the reply brief in oralargument, or on petition for rehearing." 155 Ill. 2d R.341(e)(7). See Schlenz v. Castle, 132 Ill. App. 3d 993, 477N.E.2d 697 (1985). This rule applies to appellees as well as toappellants. Drollinger v. Merrell, 57 Ill. App. 3d 792, 799, 373N.E.2d 407, 412 (1978).

Nevertheless, here, as elsewhere, the waiver rule is alimitation on the parties and not on the courts. People v.Walsh, 101 Ill. App. 3d 1146, 1149, 428 N.E.2d 937, 940 (1981). In this case, we choose to proceed to the merits of the newissue.

In its petition, Emcasco raised the issue that the policy inquestion was a commercial general liability policy and, thus, theSchool was only insured for liability, and not for propertydamage.

"[C]omprehensive general liability policies *** areintended to protect the insured from liability forinjury or damage to the persons or property of others;they are not intended to pay the costs associated withrepairing or replacing an insured's defective work andproducts." Qualls v. Country Mutual Insurance Co., 123Ill. App. 3d 831, 833-34, 462 N.E.2d 1288, 1291 (1984).

The insurance policy reads in pertinent part: "We will paythose sums that the insured becomes legally obligated to pay asdamages because of 'bodily injury' or 'property damage' to whichthis insurance applies." The amendment adding the schooldistrict provides that the policy "is amended to include as aninsured the person or organization shown in the Schedule, butonly with respect to liability arising out of 'your work' forthat insured by or for you." (Emphasis added.)

Accordingly, in our view, the School never had a claim toassign and, thus, the dismissal of the count for assignment wasproper.

II

Maggio's subrogation claim fails for similar reasons. Subrogation is a method whereby one who has involuntarily paid adebt or claim of another succeeds to the rights of the other withrespect to the claim or debt so paid. Dix Mutual Insurance Co.v. Terrence LaFromboise, 149 Ill. 2d 314, 319, 597 N.E.2d 622,624, (1992). One who asserts a right of subrogation must stepinto the shoes of, or be substituted for, the one whose claim ordebt he has paid and can only enforce those rights which thelatter could enforce. Dix, 149 Ill. 2d at 319, 597 N.E.2d at624. Recovery by subrogation is available only where theplaintiff is under a legal obligation to pay the debt of another. Bernot v. Primus Corp., 278 Ill. App. 3d 751, 753, 663 N.E.2d464, 466 (1996).

Maggio can only enforce by subrogation rights that the

School could enforce. Once again, since the School did not havea claim under the policy, Maggio could not step into its shoes toenforce any such claim.

III

Maggio further contends that Tennant had apparent authorityto issue a certificate of insurance and obligate Emcasco toprovide coverage to Maggio under the insurance policy. However,Emcasco argues that Maggio raised the issue of apparent authorityneither in its original complaint nor in its second amendedcomplaint. If an issue is not raised in a complaint, it cannotbe considered on appeal. Eagan v. Chicago Transit Authority, 158Ill. 2d 527, 534-35, 634 N.E.2d 1093, 1097 (1994). In response,Maggio argues it sufficiently alleged facts in count II of itssecond amended complaint that raised the issue of apparentagency. We disagree.

Apparent authority arises when the principal holds an agentout as possessing the authority to act on its behalf, and areasonably prudent person, exercising diligence and discretion,would naturally assume the agent to have this authority in lightof the principal's conduct. Gilbert v. Sycamore MunicipalHospital, 156 Ill. 2d 511, 523, 622 N.E.2d 788, 795 (1993). Toprove the existence of an apparent authority, the plaintiff mustshow: (1) the principal consented to or knowingly acquiesced inthe agent's exercise of authority; (2) based on the actions ofthe principal and agent, the third person reasonably concludedthat the party was an agent of the principal; and (3) the thirdperson justifiably relied on the agent's apparent authority tohis detriment. Letsos v. Century 21-New West Realty, 285 Ill.App. 3d 1056, 1065, 675 N.E.2d 217, 224 (1996).

Courts are to construe pleadings liberally, with the view todo substantial justice between the parties. Disc Jockey ReferralNetwork, Ltd. v. Ameritech Publishing of Illinois, 230 Ill. App.3d 908, 912, 596 N.E.2d 4, 7 (1992). No pleading is defective insubstance if it contains facts that reasonably inform theopposite party of the nature of the charge to be answered. Skorek v. Przybylo, 256 Ill. App. 3d 288, 289, 628 N.E.2d 738,739 (1993). However, our review of the pleadings establishesthat Maggio failed to adequately allege facts that would havereasonably informed Emcasco the issue of apparent authority wasbeing raised. Specifically, Maggio makes no allegations thatEmcasco held Tennant out as its agent.

A controlling case on this issue is Connick v. Suzuki MotorCo., Ltd., 174 Ill. 2d 482, 499, 675 N.E.2d 584, 592 (1996). InConnick, a complaint involving the same issue was considered bythe Illinois Supreme Court. The Connick court held the complaintin that case insufficient and wrote: "In short, plaintiffs havealleged no facts to support a claim that Suzuki held out thelocal dealers as Suzuki's agents, thus giving them apparentauthority." Connick, 174 Ill. 2d at 499, 675 N.E.2d at 592.

IV

Maggio maintains that the circuit court erred in its refusalto allow Maggio leave to file an amended count II to its secondamended complaint. The trial court's determination whether toallow or deny an amendment to a complaint is a matter ofdiscretion and will not be reversed absent an abuse ofdiscretion. In re Estate of Hoover, 155 Ill. 2d 402, 416, 615N.E.2d 736, 742 (1993). The factors used when determiningwhether the trial court's denial of a motion to amend a complaintconstituted an abuse of discretion are: (1) whether the proposedamendment will cure the defective pleading; (2) whether theproposed amendment would surprise or prejudice the opposingparty; (3) whether the proposed amendment was timely filed; and(4) whether the movant had previous opportunities to amend. Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263,273, 586 N.E.2d 1211, 1215-16 (1992).

Maggio's amended count II alleges third-party beneficiarybreach of contract against Emcasco. Emcasco argues the proposedamendment does not cure the defective pleading. According toEmcasco, the proposed amendment fails to effectively show thatMaggio was an intended third-party beneficiary under theinsurance policy between Emcasco and Willis and as such should bedismissed.

In Illinois, the promisor's intention must be evidenced byan express provision in the contract identifying the third-partybeneficiary. Wheeling Trust & Savings Bank v. Tremco Inc., 153Ill. App. 3d 136, 140, 505 N.E.2d 1045, 1048 (1987). However, aperson who is not a party to a contract may nevertheless suebased on the contract if that person is directly benefitted bythe contract. Paukovitz v. Imperial Homes, Inc., 271 Ill. App.3d 1037, 1039, 649 N.E.2d 473, 475 (1995). A person's status asa third-party beneficiary depends upon the intent of the partiesto the contract and must be determined on a case-by-case basis. Paukovitz, 271 Ill. App. 3d at 1039, 649 N.E.2d at 475. Liability to a third party must affirmatively appear from thecontract's language and from the circumstances surrounding theparties at the time of its execution and cannot be expanded orenlarged simply because the situation and circumstances justifyor demand further or other liability. Ball Corp. v. BohlinBuilding Corp., 187 Ill. App. 3d 175, 177, 543 N.E.2d 106, 107(1989).

We need not make a decision as to whether Maggio could haveadequately alleged a third-party breach of contract againstEmcasco, however, for the ground that the trial court relied uponin refusing to allow the amendment, untimeliness, is sufficient. Maggio filed its original complaint on October 30, 1995. Alittle more than 3-1/2 later, on May 10, 1999, Maggio filed anamended count II.

An instructive case is Wingate v. Camelot Swim Club, Inc.,193 Ill. App. 3d 963, 967, 550 N.E.2d 665, 668 (1990). InWingate, the court held that filing an amended complaint fouryears after filing the original complaint was untimely. In theinstant case, Maggio attempted to amend five months short of fouryears. In our view, Maggio's attempt to file an amended count IIwas untimely. Accordingly, we affirm the trial court's decisiondenying leave to amend count II alleging third-party breach ofcontract against Emcasco.

Affirmed.

McBRIDE, J., and McNULTY, P.J., concur.