Karla Knafel: The Affair, $5 Million Claim, and Jordan Lawsuit

Karla Knafel is a former aspiring singer from Indiana who sued Michael Jordan for $5 million, claiming he had promised that sum to keep their affair quiet and to head off a paternity suit. The Karla Knafel and Michael Jordan lawsuit ended in December 2007, when an Illinois appellate court ruled the alleged agreement unenforceable because DNA testing had established that Jordan was not the father of Knafel’s daughter.¹

How the Affair and the Alleged $5 Million Promise Arose

Knafel and Jordan met in December 1989 at a Chicago hotel, introduced by an NBA referee. A sexual relationship followed and continued through 1991, with the two meeting in various cities.²

In the spring of 1991, Knafel told Jordan she was pregnant and that the child was his. A daughter was born that July. Knafel later alleged that, upon learning of the pregnancy, Jordan agreed to pay her $5 million on his retirement from professional basketball in exchange for her silence about the affair and her promise not to file a paternity suit. She said Jordan reaffirmed the agreement in September 1998.³ Jordan denied ever making such a promise.

The Paternity Test That Undercut Knafel’s Claim

The claim that Jordan had fathered Knafel’s daughter did not survive genetic testing. DNA analysis identified Charles (C.L.) Penigar, a former minor league baseball player Knafel had been living with around the time of conception, as the biological father.⁴ Knafel’s own attorneys acknowledged that Jordan was not the father.⁵ That single fact would drive the outcome of every round of litigation that followed.

Jordan’s Extortion Suit and Knafel’s Counterclaim

Jordan filed first. On October 23, 2002, he brought a complaint for declaratory judgment and injunctive relief against Knafel in Cook County Circuit Court. He alleged she had already extorted $250,000 from him by threatening to expose the affair and was now trying to extort another $5 million with the same threat.⁶ He asked the court to declare the alleged agreement unenforceable. His attorney, Frederick Sperling, said any claim that Jordan had fathered one of Knafel’s children was “completely untrue.”⁷

Knafel countersued for breach of contract. She characterized the $250,000 Jordan had already paid as compensation for “mental pain and anguish” rather than extortion, and she asked the court to enforce the alleged $5 million promise.⁸

The 2005 Appellate Reversal

The case, docketed as 02 CH 19143, initially went before Judge Richard A. Siebel, who dismissed both Jordan’s complaint and Knafel’s counterclaim, finding the alleged contract “extortionate and against public policy.”⁹

Both sides appealed. On February 3, 2005, the Illinois Appellate Court reversed in Jordan v. Knafel, 355 Ill. App. 3d 534, holding that the alleged agreement “could be construed as a good-faith settlement of her paternity claim with a confidentiality provision which is not violative of public policy.” Whether the deal was in fact coercive or exploitive, the court said, required a fact-intensive inquiry that could not be resolved on the pleadings. The appellate panel declined to rule on the fraud and mutual mistake issues at that stage, observing that there was “no proper evidence presented to the court with which to conclude that Jordan was not the father of the child.”¹ The case was sent back for further proceedings.

The 2007 Ruling That Ended the Case

On remand, the case went to Judge Stuart E. Palmer. This time the evidentiary record included paternity test results from Dr. Charles M. Strom that categorically excluded Jordan as the biological father. On July 21, 2006, Judge Palmer granted summary judgment for Jordan, ruling that the alleged settlement contract was “voidable and unenforceable” due to either fraudulent misrepresentation or mutual mistake of fact regarding paternity. Knafel’s counterclaim was dismissed.¹⁰

Knafel appealed a second time. On December 12, 2007, the Illinois Appellate Court affirmed in Jordan v. Knafel, No. 1-06-2398, resting its decision on two independent grounds.

The first was fraudulent inducement. Knafel’s assertion that Jordan was the father was a material misrepresentation that drew him into the alleged agreement. She had not disclosed that she was having sexual relations with other partners around the time of conception, and her categorical claim of paternity violated “reasonable standards of fair dealing.” Jordan, the court held, was entitled to rely on her representation without conducting his own investigation.¹

The second ground was mutual mistake of fact. Even setting aside intent to deceive, both parties were mistaken about a basic assumption underlying the deal: the child’s paternity. Because paternity was the core of the bargain, being the reason for the promised forbearance of a paternity suit, the mistake rendered the contract voidable. The court concluded that Jordan did not bear the risk of that error, since the relevant information was more readily available to Knafel.¹

The appellate court also upheld the denial of Knafel’s requests to compel further discovery, noting she had refused multiple offers for additional paternity testing. The 2007 decision extinguished the $5 million claim for good.⁸

Knafel’s Libel Suit Against the Chicago Sun-Times

A separate lawsuit ran alongside the Jordan case. In 2003, Chicago Sun-Times columnist Richard Roeper wrote a column about the affair comparing Knafel to “someone who once worked in a profession that’s a lot older than singing or hair designing.” Knafel sued the newspaper for defamation, arguing that Roeper had effectively accused her of prostitution, which under Illinois law would be libel per se.¹¹

The U.S. Court of Appeals for the Seventh Circuit dismissed the suit on July 5, 2005, in Knafel v. Chicago Sun-Times, Inc. Applying Illinois’s innocent construction rule, the court held that Roeper’s words were reasonably capable of a non-defamatory meaning. Judge Terence Evans, writing for the panel, said the more likely reading was that Knafel was a “gold digger, a woman who wants a longer term relationship with a man because of his money,” not someone literally engaged in prostitution. Roeper’s phrasing that Knafel was “making herself sound like” such a person implied similarity rather than a direct accusation.¹²

1
FindLaw. Jordan v. Knafel, No. 1-06-2398
2
Chicago Tribune. Suit Alleges Jordan Reneged on Paying Woman Hush Money
3
FindLaw. Jordan v. Knafel, No. 1-03-2152
4
Chicago Tribune. Jordan Counters Woman’s $5 Million Hush Claim
5
Chicago Tribune. Woman Suing Jordan No Stranger to Civil Actions
6
CNN. Jordan Files Lawsuit Against Former Lover
7
ESPN. Jordan Sued by Former Lover
8
Courthouse News Service. Michael Jordan Doesn’t Owe Ex-Lover $5 Million
9
Justia. Jordan v. Knafel, No. 1-03-2152
10
ESPN. Judge Rules Jordan Doesn’t Owe Ex-Lover $5 Million
11
Reporters Committee for Freedom of the Press. Mistress Libel Suit Over Prostitution Reference Dismissed
12
FindLaw. Knafel v. Chicago Sun-Times, Inc.