Jordan v. Knafel

880 N.E.2d 1061, 378 Ill. App. 3d 219, 317 Ill. Dec. 69, 2007 Ill. App. LEXIS 1283
Appellate Court of Illinois·Decided December 12, 2007·No. 1-06-2398·Published·Cited by 28 cases

Opinion

JUSTICE THEIS

delivered the opinion of the court:

This action arises from a complaint for declaratory judgment originally filed by plaintiff Michael Jordan alleging that defendant Karla Knafel was attempting to extort $5 million from him by threatening to publicly expose their relationship. Knafel filed a counterclaim asserting breach of contract based on Jordan’s alleged agreement to pay her $5 million when he retired from basketball in exchange for her agreement not to file a paternity suit against him and to keep their romantic involvement confidential. Ultimately, Jordan filed a motion for summary judgment on Knafel’s counterclaim and on his amended complaint. The circuit court granted the motions for summary judgment, finding that the alleged settlement agreement was unenforceable because it would have been either fraudulently induced by Knafel’s false statement to Jordan that “she was pregnant with his child” or would have been based on a mutual mistake of fact as to the paternity of her unborn child.

On appeal, Knafel contends that the circuit court erred in granting Jordan’s motions for summary judgment on her verified counterclaim and his amended complaint where: (1) material issues of fact remain regarding the validity of the paternity tests; (2) material issues of fact remain on the elements of good faith, intent, materiality, and reliance in connection with Jordan’s defenses of fraudulent inducement and mutual mistake of fact; and (3) there was no evidence that she ever threatened Jordan to substantiate his claim of extortion. Additionally, Knafel contends that the circuit court abused its discretion in denying her motions to compel Jordan’s deposition and the production of certain documents.

BACKGROUND

On October 23, 2002, Jordan filed his original complaint for a declaratory judgment and injunctive relief against Knafel. Therein, he alleged that he had a relationship with Knafel more than a decade earlier, but denied the existence of any agreement to pay Knafel $5 million. Jordan further alleged that Knafel had previously extorted $250,000 from him under threat of publicly exposing their relationship and that, pursuant to a purported second agreement, she threatened to publicly expose their relationship unless Jordan paid her an additional $5 million. He sought a declaratory judgment that her demand for payment, even if an agreement existed, was unenforceable because (1) extortionate agreements violate public policy; (2) there would be no consideration to support any such agreement due to Knafel’s existing obligation not to publicly expose their relationship; (3) any such agreement would violate the statute of frauds; and (4) any such agreement would be barred by the statute of limitations. Additionally, Jordan sought an order enjoining Knafel, and any other person acting on her behalf, from engaging in further efforts to extort money from him.

Knafel responded to the complaint by filing a verified answer and affirmative defenses denying the material allegations of the complaint. Therein, she admitted that Jordan paid her $250,000 but stated that it was for her mental pain and anguish arising from their romantic relationship. In addition, Knafel filed a verified counterclaim asserting theories of breach of contract and anticipatory breach of contract based on Jordan’s alleged breach of his promise to pay Knafel $5 million “when he retired from professional basketball in exchange for her agreement not to file a paternity suit against him and for her agreement to keep their romantic involvement publicly confidential.”

The following relevant facts were alleged in the verified counterclaim. In the spring of 1989, Knafel, a singer, was performing in a band at a hotel in Indianapolis, Indiana. The Chicago Bulls were also in town to play the Indiana Pacers. After her performance, Knafel was approached by a National Basketball Association referee, who eventually introduced her to Jordan over the telephone. Although Knafel declined Jordan’s invitations to meet during the spring and summer of 1989, she and Jordan continued long-distance telephone conversations during that time.

In December 1989, three months after Jordan had married his wife, Knafel traveled to Chicago to meet Jordan, where they had unprotected sex. Thereafter, in November 1990, Knafel stayed with Jordan in Phoenix, Arizona, where they again had unprotected sex. In early 1991, Knafel learned that she was pregnant. She “was convinced that she was carrying Jordan’s baby,” but kept silent about the pregnancy for some time. The Bulls were on their way to their first NBA championship and Jordan was earning large sums of money in product endorsements. Knafel alleged that as a result, Jordan was “troubled” when she told him “she was pregnant with his child” in the spring of 1991. He was worried about destroying his public image, which he and his agent had carefully cultivated, and was concerned about the loss of future endorsements. Knafel further alleged that Jordan demanded that she abort the baby, but because of her personal beliefs, she refused.

According to Knafel, during several conversations about the impending birth of the baby, she and Jordan “discussed possible resolutions of their dilemma.” In the spring of 1991, Jordan offered, and urged Knafel to accept, his proposed settlement agreement to “resolve their problems.” Jordan offered to pay her “$5 million when he retired from professional basketball in return for her agreement not to file a paternity suit against him and for her agreement to keep their romantic involvement publicly confidential.” Knafel accepted Jordan’s offer. In consideration for his promise to pay her, she agreed to forbear filing a public paternity action against him and agreed to keep their romantic relationship confidential.

In July 1991, Knafel’s child was born. Jordan paid certain hospital bills and medical costs and paid Knafel $250,000 for “her mental pain and anguish arising from her relationship with him.” Knafel did not file a paternity suit against Jordan and she kept their relationship confidential.

Thereafter, in October 1993, Jordan announced his retirement from the Bulls, but in March of 1995, he returned again to the NBA to play for the Bulls. Knafel had not contacted Jordan to demand her payment of the $5 million which he had allegedly promised her until the summer of 1998, amid public speculation that Jordan would soon retire again. In September 1998, Knafel approached Jordan while he was vacationing in Las Vegas. During their conversation, Knafel reminded Jordan of his obligation to pay her the money under their agreement. Knafel alleged that Jordan reaffirmed his agreement to pay her the $5 million. A few months later, Jordan again retired from professional basketball.

Two years later, after Jordan failed to pay the $5 million under the alleged agreement, Knafel’s counsel contacted Jordan’s counsel to resolve their contract dispute. Jordan denied that he had promised to pay Knafel $5 million and eventually filed his complaint for declaratory judgment and an injunction. Knafel’s counterclaim sought $5 million for breach of contract. Additionally, at the time Knafel filed her counterclaim, it was alleged that Jordan was playing basketball for the Washington Wizards. Accordingly, she also alleged an anticipatory breach of their 1991 contract and 1998 reaffirmation.

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Jordan v. Knafel, 880 N.E.2d 1061, 378 Ill. App. 3d 219, 317 Ill. Dec. 69, 2007 Ill. App. LEXIS 1283 (Ill. Ct. App. 2007).

880 N.E.2d 1061 (Jordan v. Knafel) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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