Jordan v. Knafel
378 Ill.App.3d 219, 317 Ill. Dec. 69, 880 N.E.2d 1061 (2007)
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Rule of Law:
A settlement agreement based on a forbearance to sue for paternity is voidable if it was induced by a fraudulent misrepresentation of paternity or was based on a mutual mistake of a material fact regarding paternity.
Facts:
- In 1989 and 1990, Michael Jordan and Karla Knafel had a romantic relationship that included unprotected sex.
- In early 1991, Knafel learned she was pregnant and subsequently told Jordan that "she was pregnant with his child."
- During this time, Knafel was also having a sexual relationship with another man.
- In the spring of 1991, Jordan offered to pay Knafel $5 million upon his retirement from professional basketball in exchange for her agreement to forbear filing a paternity suit and to keep their relationship confidential.
- Knafel accepted Jordan's offer.
- In July 1991, Knafel gave birth to a child.
- Genetic tests conducted in August and September 1991 conclusively excluded Jordan as the biological father of Knafel's child.
- After Jordan retired from basketball again, Knafel's counsel contacted Jordan's counsel to collect the $5 million.
Procedural Posture:
- Michael Jordan filed a complaint for declaratory judgment against Karla Knafel in the circuit court.
- Knafel filed a verified counterclaim against Jordan for breach of contract.
- The trial court initially dismissed Jordan's complaint and Knafel's counterclaim.
- Both parties appealed to the Illinois Appellate Court (an intermediate appellate court), which reversed the dismissals and remanded the case back to the trial court.
- On remand, Jordan filed an amended complaint and a motion for summary judgment on Knafel's counterclaim, supported by DNA evidence.
- The circuit court (trial court) granted summary judgment in favor of Jordan on both Knafel's counterclaim and his own amended complaint.
- Knafel, as the appellant, appealed the circuit court's summary judgment order to the Illinois Appellate Court; Jordan is the appellee.
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Issue:
Does a settlement agreement, in which one party agrees to pay money in exchange for the other party's promise not to file a paternity suit, become unenforceable due to fraudulent inducement or mutual mistake of fact when paternity tests later prove the man is not the father?
Opinions:
Majority - Justice Theis
Yes, a settlement agreement to forbear a paternity suit is unenforceable if premised on a fraudulent misrepresentation or mutual mistake of fact regarding paternity. The court found the alleged agreement was voidable under both theories. For fraudulent inducement, Knafel's representation that Jordan was the father was a material fact that induced Jordan to enter the contract. The representation was fraudulent because Knafel stated paternity with certainty when she knew she had another sexual partner, meaning she lacked the basis for such certainty. Jordan reasonably relied on this representation, as a putative father is not required to independently investigate a mother's categorical assertion of parentage. Alternatively, the agreement is voidable due to mutual mistake. Both parties operated under the mistaken basic assumption that Jordan was the father, a mistake that had a material effect on the agreed exchange, and Jordan did not bear the risk of this mistake.
Analysis:
This decision reinforces that traditional contract defenses like fraud and mutual mistake apply forcefully to settlement agreements concerning intimate personal matters. The court's ruling establishes that a categorical assertion of paternity, when the asserter knows of other potential fathers, constitutes a fraudulent misrepresentation, satisfying the scienter element. This raises the bar from older precedents that may have only required a subjective "good faith" belief in the claim, signaling a modern judicial trend towards requiring disclosure of material facts in the formation of such agreements. The case serves as a strong precedent for invalidating so-called "hush money" agreements that are procured through the misrepresentation of foundational facts like paternity.
