author: JUSTICE DiVITO

text:
    NORTHERN LIFE INSURANCE COMPANY, Plaintiff and Counterdefendant-Appellant, v. IPPOLITO REAL ESTATE PARTNERSHIP et al., Defendants and Counterplaintiffs-Appellees.
    First District (2nd Division)
    No. 1—92—2223
    Opinion filed August 17, 1993.

      Peterson & Ross, of Chicago (J. Robert Geiman, David J. Novotny, and Donald A. Murday, of counsel), for appellant.
    Donald L. Johnson, of Chicago, and George T. Drost & Associates, Ltd., of Arlington Heights (George T. Drost and Thomas W. Kivlahan, of counsel), for appellees.
   JUSTICE DiVITO

delivered the opinion of the court:

John Ippolito, a hemophiliac, died of acquired immune deficiency syndrome (AIDS) in February 1987. He was the insured under six life insurance policies with plaintiff Northern Life Insurance Company (Northern Life or the company). Alleging that the policies were void because Ippolito had omitted material information on the amendment to his application, Northern Life brought this action for declaratory judgment or rescission against the beneficiaries of the policies, defendants Ippolito Real Estate Partnership, Ippolito Beauty Academy, Inc., and International Beauty Systems, Inc. (the Ippolito defendants), which counterclaimed to recover the insurance proceeds. After the circuit court granted partial summary judgment for Northern Life, the case proceeded to a bench trial. At the close of Northern Life’s case in chief, the circuit court entered judgment in the Ippolito defendants’ favor on their motion for a finding under section 2 — 1110 of the Code of Civil Procedure (111. Rev. Stat. 1991, ch. 110, par. 2 — 1110). We affirm.

The underlying facts are succinctly put in this court’s opinion in Northern Life I. Briefly, John Ippolito and his brother owned the businesses that are the defendants in this case. In late 1984, after meeting with their insurance agent, they decided that their life insurance polices were inadequate to fund stock repurchase agreements in the event of the death of either man, so in January 1985, Ippolito applied for five new policies, which differed only as to beneficiary/owner. On January 17, 1985, the Ippolito brothers met with their insurance agent, who transcribed Ippolito’s oral answers to the applications’ questions, including the following:

“Has any proposed insured ever had a weight change in the past year?”
“To the best of your knowledge and belief, is each person proposed for insurance free from mental and physical disorder?”

To the first, Ippolito had replied in the negative; to the second, he had replied affirmatively. The application also contained the following “Declaration”:

“To the best of my knowledge and belief, the answers shown in this application are true and complete ***.
*** I agree that the insurance for which I am applying will not become effective until (1) a policy is delivered, and (2) full payment of the first premium has been made to the Company. I further agree that both such conditions must occur while all persons proposed for insurance are (1) alive and (2) in the same health as stated in this application.”

On May 9, 1985, Ippolito executed an amendment to each application, which contained the following provision:

“By signing this form, you certify that all of the information stated in the application as amended by this form is true and correct in all material respects as of the date of this form. You also certify that the Proposed Insured *** [h]as continued in good health and has not suffered any accident or sickness, or consulted or been attended by a physician.” (Emphasis in original.)

Furthermore, the policies themselves stated:

“The entire contract is:
1. this policy; and
2. all applications, riders and amendments attached at the time of issue; and
3. all later applications, riders and amendments we may attach or send you to attach.
Unless fraudulent, all statements made by or on behalf of anyone covered by this policy are representations and not warranties. Only statements found in an attached application may be used to cancel this policy or as our defense if we refuse to pay a claim.”

Between executing the applications in January 1985 and the amendments in early May, Ippolito twice visited a physican for minor symptoms. In late July, however, he was admitted to the hospital with pneumocystic carinii pneumonia (PCP); the diagnosis was AIDS. He was discharged from the hospital about two weeks later and died the following February. This suit followed.

At trial, first to testify was Howard A. Jansen, an insurance salesman for 42 years, who had written insurance for Northern Life for three or four years. He had known John Ippolito and his brother for approximately 25 years and sold them insurance for about 20 years. During the last five years of Ippolito’s life, Jansen saw him 8 or 10 times a year; from January to May 1985, nothing about Ippolito’s appearance was different or suggested he was not in good health. This included no “distinguishable” change in Ippolito’s weight.

Jansen explained that after completing the applications, Ippolito had been required to submit to a medical examination by Northern Life’s physician, after which Jansen had sent a letter, his own report, and the applications to the Northern Life underwriter for approval. In addition to the approved policies themselves, Jansen later received “delivery requirements” for putting the policies in force, which included the amendments. Jansen informed Ippolito that he had to sign the amendments before the policies would go into effect.

Jeffrey Jacobson, a physician, testified as an expert in infectious diseases on behalf of Northern Life. He explained that prior to March or April 1985, when the test to screen blood products for the HIV virus became available, the only way to diagnose HIV was to have an “AIDS-defining” infection such as PCP. Neither sinusitis nor rhinorrhea (runny nose) was in that category. Nevertheless, from his review of Ippolito’s medical records from the hospital and from Ippolito’s physician, Dr. Jacobson determined that Ippolito had been HIV-infected in April 1985, based on the July 1985 diagnosis of PCP, which he characterized as an “AIDS-defining opportunistic infection.” In Dr. Jacobson’s opinion, the PCP in July, along with Ippolito’s exceptionally low lymphocyte count in August 1985, “defined [Ippolito] as having AIDS.” Dr. Jacobson added that Ippolito’s weight loss was yet another factor in his opinion, particularly coupled with Ippolito’s recurrent sinus infection, which, though by itself not an AIDS-defining infection, was consistent with AIDS patients’ enhanced susceptibility to more common and more severe “garden variety bacterial infections” than occurred in HIV-uninfected patients. From these facts he reasoned that Ippolito must have been HIV-infected more than two months prior to the PCP diagnosis at the end of July 1985, given that the estimated average incubation period for AIDS was at least eight years and only one reported adult AIDS case from a blood transfusion had occurred within three months of the transfusion. He could not testify within a reasonable degree of medical certainty, however, that Ippolito had been HIV-infected in December 1984, though he conceded that this was “possible, maybe even likely” and that it also was possible that Ippolito was HIV-infected as early as 1975.

Margaret Telfer, Ippolito’s physician since 1968, testified that at first she saw him every two or three months. When he began a home transfusion program for his hemophilia, however, she saw him less frequently, that is, only once a year for a checkup and for any new problem, and once or twice a year at Hemophilia Foundation meetings. In January 1985, Northern Life requested medical information on Ippolito, including dates, complaints and abnormal physical findings, duration of illness, diagnosis, treatment, or operation, as well as a history of his hemophilia and elevated blood pressure and copies of EKGs. In her reply, she gave the most recent exam date (August 1984), the blood pressure (normal), and an EKG and chemistry report; she mentioned his lifelong history of hemophilia and described his general health as good. Nothing in her records indicated any requests for additional information. In her opinion, Ippolito had been HIV-infected in January 1985, but at that time she “had absolutely no way of suspecting.”

In February 1985, Ippolito was seen by another doctor at Dr. Telfer’s office for symptoms including a blocked and runny nose for three days, coughing and bringing up clear sputum, and a low-grade fever; he had no shortness of breath or pain. The diagnosis was pharyngitis (sore throat), ruling out upper respiratory infection, and a sulfa-antibiotic was prescribed; he was not weighed. Dr. Telfer herself saw Ippolito when he again visited her office on April 26; this time he complained of a sinus headache and a stuffy, runny nose. According to her notes from that visit, she did not weigh him, but “he [wa]s clearly about 20 pounds thinner” than the last time she had seen him, but she had not weighed him then either. The last time she had weighed him, in October 1983, his weight had been 181 pounds. When she asked if he had been dieting or had been having problems with his appetite, he had said no. He did not volunteer that he had noticed the weight loss, but he agreed when she remarked on it. She described his white count at that time as “a little on the low side, but not dangerously so,” commenting that the drop could have been attributable to a viral infection, such as the sinus trouble. She determined that he had acute sinusitis, an inflammation of the membranes lining the sinuses, for which she prescribed the same antibiotic he had received before.

Even though none of Ippolito’s symptoms would have caused her at that time to diagnose him as having AIDS, Ippolito’s hemophilia enhanced the possibility of exposure to HIV through a blood transfusion. The weight loss coupled with the acute sinusitis had troubled Dr. Telfer, who had written in her notes that she was “very worried about a possible onset of either pre-AIDS or AIDS.” She had not conveyed her concern to Ippolito or to his family because her practice was to be absolutely sure before telling a patient that she “suspect[ed] something very bad.” She had not discussed with him the risk that hemophiliacs run for HIV infection, even though she and he had been present at a late 1984 symposium that had included a discussion of symptoms such as shortness of breath, “tremendous weight loss,” and the appearance of large lymph nodes or other masses in any area of the body. Her notes also indicated that if the problem continued, certain tests should be ordered; these tests were surrogate tests for HIV, for which there was then no test. The result of one test she ordered was that she discovered that Ippolito had been exposed previously to the Epstein-Barr virus. Her notes also suggested possible future use of an antiparasitic treatment, which had been effective in the short term against AIDS, according to an article in a British medical journal.

Dr. Telfer next saw Ippolito at a fundraising party in May 1985. She testified, “He was remarkably better. *** I could not detect the evidence of weight loss. In fact, I really wondered if I had been wrong. And he was cheerful and happy and back at work.” When asked if it appeared to her that in the space of a month Ippolito had put 20 pounds back on, she replied, “No, but the drawn features had disappeared. He really looked better. *** I wouldn’t say that [he had regained all the weight that he appeared in April to have lost], but he didn’t look — he didn’t look ill.” When she had complimented him that he seemed to be much better, he had replied, “Yes, I am.”

Dr. Telfer did not see Ippolito again until late July 1985, when he was admitted to Michael Reese Hospital. He weighed 161 pounds. He complained that “he was feeling lousy,” that he was very short of breath and had been sick for a while; he was coughing but not producing sputum. After a battery of tests, including an AIDS test that had become available in May or June 1985, she concluded that he had PCP and, therefore, AIDS and informed him of her diagnosis. Prior to Ippolito’s death the next year, only 1 of her 100 patients had developed AIDS.

Northern Life’s final witness was Michael Shanin, its vice-president in charge of life insurance underwriting, who described the elements of Ippolito’s files at the company. One was a Medical Impairment Bureau (MIB) report, which compares an applicant’s medical history with information given on other insurance applications. Shanin testified that other than the letters to and from Dr. Telfer and a credit check, no investigation of Ippolito’s applications had been performed, apparently overlooking the medical exam Northern Life had required in January 1985. The file contained no information about Ippolito’s February 4 or April 26 doctor visits, or about Ippolito’s weight loss and Telfer’s concern about AIDS or pre-AIDS. He gave two reasons for requiring the amendments to reestablish that there had been no change in Ippolito’s health between the date of the original applications and the date of acceptance of the policies: Ippolito’s request for an insurance plan different from that for which he initially had applied, and the lapse of time between the applications in mid-January and the delivery of the policies in early May.

Shanin testified that if Ippolito had not signed the amendments, Northern Life’s general practice dictated that the policies would not have been put into force. In response to the court’s query, Shanin agreed that if a policy is “stale,” “sometimes the company might ask for a follow-up from the personal physician as to anything new with this patient.” After Shanin explained again that Northern Life had no reason to believe that Ippolito had visited Dr. Telfer between January and May, the following colloquy occurred:

“THE COURT: Suppose [Ippolito] went [to a doctor] for a cold, for a runny nose, would you send a follow-up letter to the attending physician?
THE WITNESS: Not if we knew it was just a cold.
But here, again, it depends on the age, the amount of the insurance, and what medical condition—
THE COURT: I understand.
THE WITNESS: -the person had.
THE COURT: The exposure.
THE WITNESS: Right.
If we felt it was pure and simple just a cold, probably not.
Q. [Plaintiff’s counsel:] What if Northern Life’s information is just that here was a doctor’s visit?
A. And we didn’t know what the circumstances were, we would—
Q. Then what would be the policy?
A. On a case like this, we would have gone back to the doctor and asked for an update on the medical record.
THE COURT: Okay. And if that update on the medical records had shown that the treating doctor here, Dr. Telfer, had a concern about AIDS or pre-AIDS, would that had affected Northern Life’s underwriting decision?
A. If we would have received that, we, in all likelihood, would have declined. The very least we would have done would be to postpone for six months and say that we would entertain a new application at that time. ***
Q. If at the end of that six months the individual reapplied and it was disclosed to Northern Life that there was an AIDS diagnosis, in terms of Northern Life’s regular policy what would have happened?
A. A pure and simple decline.”

Shanin also testified that Northern Life would have imposed a six-month wait in the event of an unexplained weight loss of 10 or more pounds.

Shanin acknowledged that at the time of Ippolito’s insurance applications, it was “a hot topic and well-known in the insurance industry that hemophiliacs were at a greater risk [of AIDS], along with gays and people who used intravenous drugs.” The court then asked,

“With respect to your underwriting manual, what was your policy — small ‘p’ — in early 1985 with regard to hemophiliacs and the possibility of AIDS complications with this high-risk group?
THE WITNESS: There was no discussion in any of the printed manuals at that point in time with regard to hemophilia and AIDS or AIDS in any respect that early in the game.
THE COURT: Okay. And what did your manual say at that time with regard to weight loss?
THE WITNESS: Our policy with regard to any unexplained weight loss of 10 pounds or more [was that it] needs to be investigated.”

When Northern Life concluded its case in chief, the Ippolito defendants moved orally for judgment in their favor. Northern Life countered that the question before the court was not whether Ippolito had intended to deceive the company but whether, under section 154 of the Illinois Insurance Code (Ill. Rev. Stat. 1991, ch. 73, par. 766), Ippolito had made a material misrepresentation, that is, whether the applications (including the amendments) contained an untrue statement that was material to the risk. In the amendments, the company continued, Ippolito did not disclose that he had seen a doctor twice between January and May, and had Ippolito not omitted this information, it would have initiated a follow-up from which it would have learned Telfer’s concerns about AIDS or pre-AIDS, which in turn would have resulted in at least a temporary refusal to insure. Northern Life argued alternatively that a condition precedent to the policies was that they became effective only if, at delivery, the insured was in fact in the same health as stated in the original application. It did not matter that Ippolito did not know that he had HIV, Northern Life explained, likening the circumstance to the effect of a mutual mistake of fact in contract law generally.

The court granted the Ippolito defendants’ motion for judgment in their favor. It first focused on Ippolito’s lack of awareness of his HIV infection in January, as reflected in his decision to change the policy type and thereby draw out the application process, and on Dr. Telfer’s own lack of knowledge during the April visit. As for the omission of information about the two doctor visits, the court observed that Shanin had conceded that it was unlikely that Northern Life would have investigated further even if Ippolito had reported those visits as for a cold or runny nose.

I

We have recounted in detail the evidence presented by Northern Life at trial in light of the procedure for ruling on motions under section 2 — 1110 of the Code of Civil Procedure (111. Rev. Stat. 1991, ch. 110, par. 2 — 1110) and the applicable standard of review:

“In all cases tried without a jury, defendant may, at the close of plaintiff’s case, move for a finding or judgment in his or her favor. In ruling on the motion the court shall weigh the evidence, considering the credibility of the witnesses and the weight and quality of the evidence. If the ruling on the motion is favorable to the defendant, a judgment dismissing the action shall be entered.” (Ill. Rev. Stat. 1991, ch. 110, par. 2 — 1110.)

In applying this statute:

“[t]he trial court *** first must determine whether plaintiff has presented a prima facie case. If plaintiff has not, then the trial court should grant the motion and enter judgment in defendant’s favor. If plaintiff has set forth a prima facie case, the trial court then weighs the evidence. [Citations.] A trial court’s determination on the motion will not be reversed on appeal unless the decision is contrary to the manifest weight of the evidence.” (Emphasis in original.) Zannini v. Reliance Insurance Co. of Illinois, Inc. (1992), 147 Ill. 2d 437, 449, 590 N.E.2d 457, 462.

See also Kokinis v. Kotrich (1980), 81 Ill. 2d 151, 407 N.E.2d 43 (explaining burden of proof (presentation of some evidence of each element of cause of action) and distinguishing analysis from that applicable on a motion for directed verdict in a jury trial).

Thus, to survive the Ippolito defendants’ motion, Northern Life had to present some evidence during its case in chief that Ippolito made material misrepresentations in his applications, including the amendments, or that a condition precedent of the insurance contracts had not been met, or that Ippolito had breached his fiduciary duty to the company. If the company did meet its burden, Kokinis teaches that the circuit court then would have been obliged to weigh the evidence to determine whether any of the evidence necessary to the company’s prima facie case had been negated. Only if Northern Life met its initial burden and if, after weighing the evidence, the court determined that no evidence essential to Northern Life’s cause of action had been negated, would judgment for the Ippolito defendants have been improper. In reviewing the circuit court’s ruling, we will reverse only if, when we view the evidence in the light most favorable to the Ippolito defendants, we conclude that no rational trier of fact could have reached the circuit court’s decision. Chief Judge of the Circuit Court v. American Federation of State, County & Municipal Employees, Council 31 (1992), 153 Ill. 2d 508, 514, 607 N.E.2d 182, 185 (explaining manifest weight of the evidence standard in review of agency determination).

II

Northern Life insists that it presented a prima facie case for avoiding the insurance policies by offering some evidence of each of its three separate grounds for voiding the policy and that there was no evidence negating any of the essential elements it proved. We take each theory in turn, keeping in mind that “[insurance forfeitures are not favored as insurance serves important purposes in contemporary society, and courts should be quick to find facts which support coverage.” A.D. Desmond Co. v. Jackson National Life Insurance Co. (1992), 223 Ill. App. 3d 616, 620, 585 N.E.2d 1120, 1122.

A

With regard to the condition precedent, Northern Life stresses, Ippolito certified in the amendments as a condition precedent of coverage that he had continued in the same state of health, which he had assessed in his application as “excellent.” Because the testimony indicates that Ippolito was HIV-infected in April, it continues, he cannot have been in “excellent” health and free from physical disorder when the policy was delivered in May. Northern Life then reasons that it may avoid the policy because its condition precedent to coverage was not met in that between January and May he had become HIV-infected, had lost 20 pounds, and had developed sinusitis.

Despite Northern Life’s assertion that “Illinois courts routinely have held that an insurer is not liable under a policy when such conditions are not met,” it apparently is able to cite only a 1915 appellate court case and a 1935 Seventh Circuit case in addition to cases from other jurisdictions. We find these cases easily distinguishable. In Sulski v. Metropolitan Life Insurance Co. (1915), 196 Ill. App. 76, 77, aff'd (1916), 274 Ill. 516, 113 N.E. 862, the insurance policy stated that “no obligation is assumed by the company prior to the date hereof, nor unless on said date the insured is alive and in sound health”; the policy also noted that it would be void if the proposed insured had been treated by a physician for any serious disease or complaint or had had any pulmonary disease. The proposed insured had been treated for tuberculosis prior to the date of issuance, however, so it was obvious that he had tuberculosis on the issuance date and thus was not in good health on the day in question. In addition, Sulski does not indicate that the proposed insured had a subjective, albeit mistaken, belief that his health was good or that he was unaware of his tuberculosis. More on point, perhaps, is Continental Illinois National Bank & Trust Co. v. Columbian National Life Insurance Co. (7th Cir. 1935), 76 F.2d 733, cert. denied (1935), 296 U.S. 617, 80 L. Ed. 438, 56 S. Ct. 138, in which the proposed insured did not have leukemia when applying for insurance but did contract it by the delivery date. There too, however, the condition precedent was “sound health,” not, as here, “same health.” The same holds true for the cases from other jurisdictions on which Northern Life relies.

With regard to the construction of the documents at issue, our analysis begins with their plain meaning, mindful that courts use liberal construction and resolve any uncertainty in favor of the insured. (Bituminous Casualty Corp. v. Gust K. Newburg Construction Co. (1991), 218 Ill. App. 3d 956, 960, 578 N.E.2d 1003, 1005 (ambiguous duty to defend provision), appeal denied (1992), 143 Ill. 2d 636, 587 N.E.2d 1011.) Here, as noted above, Ippolito was not asked in the amendments whether he was in “good” or “sound” health. Instead, he was asked to certify that he was in the “same health as stated in [the January] application,” or, in other words, that he would have given the same answers in May that he had given in January. Accordingly, we look to the questions asked and the answers given in January, when he replied that he was free from mental and physical disorder and enjoyed excellent health, but only “to the best of his knowledge and belief.” From the evidence presented at trial, it appears that to the best of Ippolito’s knowledge and belief, he was still free from mental and physical disorder and was still in excellent health, given that Dr. Telfer had said nothing to him of her concerns about HIV infection, and Northern Life presented no evidence that Ippolito had increased his knowledge or otherwise had cause to change his belief. Certainly, Ippolito’s runny nose and other minor complaints would not have changed his assessment of his health, which he had described as excellent in spite of his hemophilia. As for the weight loss, Northern Life presented no evidence whatsoever of Ippolito’s weight between October 1983 and July 1985, so it is impossible to say that his weight had changed between the initial applications and the amendments. Lastly, from Shanin’s testimony, one may infer that a cold or similar minor illness was too inconsequential to be considered a “change in health” for the purposes of the application. Thus, for the purposes of the amendments’ condition precedent, Ippolito was indeed “in the same health as stated in the January application^]” when he executed the amendments in May.

Even if we were to ignore the application’s emphasis on Ippolito’s knowledge and belief, the result would be no different, for evidence of the essential elements of Northern Life’s theory was negated by other testimony. For example, with regard to the alleged change in Ippolito’s HIV infection between January and May, Northern Life’s own expert admitted that he could not testify with a reasonable degree of medical certainty that Ippolito was HIV-free in January 1985, volunteering that Ippolito was “possibl[y], maybe even likely” HIV-infected prior to January, and Dr. Telfer testified that in her opinion Ippolito had been HIV-infected in January. Similarly, although Dr. Telfer testified that she had believed that Ippolito had lost 20 pounds between October or November 1984 and April 1985, she also testified that when she saw him in May, she had wondered if she had been wrong, for she could detect no evidence of weight loss. Likewise, Jansen testified that he had noticed no weight loss between January and May. As noted above, moreover, Northern Life presented no evidence of Ippolito’s weight from October 1983 until January 1985. On his application, he stated that he weighed 168 pounds and at his medical examination for the insurance he weighed 163V2 pounds, or approximately 20 pounds less than his normal weight of 181, indicating that any weight loss had occurred before, not after, his initial application in January. Accordingly, we cannot say that the circuit court’s decision to grant the Ippolito defendants’ motion on Northern Life’s condition precedent theory was such that no rational trier of fact could have come to the same conclusion.

B

Alternatively, Northern Life claims that a potential insured has a fiduciary duty to notify an insurer of any changed condition arising during the pendency of an application if that change materially affects the insurer’s risk, and Ippolito’s breach of that duty permits it to avoid the insurance contract.

Contrary to Northern Life’s interpretation of our earlier opinion in this cause, we did not hold that an insured has a fiduciary duty to its insurer to disclose changes in health that arise during the pendency of an application. In Northern Life I, we merely explained that the law imposes on prospective insureds a duty of good faith and fair dealing, which requires that they notify the insurer upon discovering any facts that make portions of an application no longer true, if the new information would materially affect the risk undertaken by the insurer. Northern Life, 234 Ill. App. 3d at 803, 601 N.E.2d at 780-81.

We begin our analysis by noting that unlike the cases cited by Northern Life, here there is no evidence of fraudulent intent or lack of good faith. The “intervening discoveries” that Northern Life suggests are the weight loss and two illnesses that prompted Ippolito’s two visits to his doctor. As we explained above, however, the record makes plain that any weight loss occurred prior to January, not between January and May, and thus did not occur during the pendency of the application. As for the two illnesses and the resultant doctor’s visits that occurred between January and May 1985, they did not change the truthfulness of any of his answers to the original application, which asked only for his knowledge and belief. Likewise, following Stipcich v. Metropolitan Life Insurance Co. (1928), 277 U.S 311, 72 L. Ed. 895, 48 S. Ct. 512, we note that the record reveals that Ippolito did not discover any material facts from these events, for these illnesses were merely “garden variety bacterial infections” that even Shanin testified would have evoked no follow-up from Northern Life if reported as “just a cold.” Consequently, although Ippolito had a common law duty to disclose facts material to Northern Life’s risk if discovered during the pendency of his application, Northern Life did not present a prima facie case for Ippolito’s breach of that duty because it presented no evidence that the weight loss occurred during the application period, and it presented evidence that revelations about Ippolito’s sore throat and sinusitus, by themselves, would have had no effect on its assessment of its risk.

C

Northern Life’s third ground for reversal is that it made a prima facie case concerning Ippolito’s material misrepresentations on the amendments because, contrary to his certifications there, he had not continued in good health since the original application in January, he had suffered two illnesses, and he had consulted a physician twice. Thus, the Illinois Insurance Code allows it to avoid the policy because these misrepresentations materially affected its acceptance of the risk or hazard it assumed. Ippolito could not decide whether these facts were material, the company asserts, and he had a duty to disclose this information so that Northern Life could make that determination. Such vital information certainly was material, Northern Life insists, in that it would have declined to issue a policy if it had known that Ippolito’s doctor thought he might have developed AIDS or pre-AIDS.

The applicable statutory provision on which Northern Life’s argument is based is section 154 of the Illinois Insurance Code, which provides as follows:

“No misrepresentation or false warranty made by the insured or in his behalf in the negotiation for a policy of insurance *** shall defeat or avoid the policy unless it shall have been made with actual intent to deceive or materially affects either the acceptance of the risk or the hazard assumed by the company.” (111. Rev. Stat. 1985, ch. 73, par. 766.)

In this context, a “misrepresentation” is a statement of fact that is untrue, or an omission of fact; it is considered “material” if “reasonably careful and intelligent persons would have regarded the facts stated [or omitted] as substantially increasing the chances of the events insured against, so as to cause a rejection of the application.” (American Country Insurance Co. v. Mahoney (1990), 203 Ill. App. 3d 453, 463, 560 N.E.2d 1035, 1042-43, appeal denied (1990), 135 Ill. 2d 553, 564 N.E.2d 834; see also Northern Life, 234 Ill. App. 3d at 801, 601 N.E.2d at 779.) The statute permits avoidance of the policy even if the misrepresentation is the result of mistake or good faith. Ratcliffe v. International Surplus Lines Insurance Co. (1990), 194 Ill. App. 3d 18, 25, 550 N.E.2d 1052, 1057.

Here, there is no question that Ippolito’s answer in the amendments was that he had not seen a physician and he had not suffered a weight loss. As noted above, however, the company presented no evidence that the weight loss occurred between January and May, so that answer to the amendments was not false. As for the two illnesses and resultant visits to his doctor, even if we agree that Ippolito should have disclosed them to Northern Life, the company did not present any evidence that this information, standing alone, would have been material, that is, that to a reasonably careful and intelligent person, two visits to a doctor over a few months’ time for “garden variety bacterial infections” such as a runny nose and a sore throat would have substantially increased the chance of Ippolito’s death, thereby causing rejection of the application. On the contrary, Shanin testified that Northern Life would have issued the policy if it had known that the visits were for minor illnesses. Moreover, although the record demonstrates that if Northern Life had learned of Dr. Telfer’s concerns, it likely would have declined to insure Ippolito, the company did not present any evidence to the effect that it would have learned her thoughts if Ippolito revealed the visits: Northern Life had not asked for Ippolito’s medical records when reviewing his original application, and it did not provide any evidence that had it asked Dr. Telfer for an update, she would have shared her concerns. This prospect in fact is made particularly unlikely given Dr. Telfer’s testimony that at the time of the amendments, she herself wondered if she had been wrong about the weight loss, which had prompted her speculation in the first place. In light of this record, therefore, we believe that a rational trier of fact could have found that Ippolito’s two minor infections and the doctor’s visits were not the type of facts that a reasonably careful and intelligent person would have regarded as substantially increasing the chance of Ippolito’s death.

In short, Northern Life either failed to meet its evidentiary burden in presenting a prima facie case on one or more essential elements of each of its three theories, or if it met its burden, the evidence was negated. Consequently, the circuit court’s ruling that defendants were entitled to judgment was not against the manifest weight of the evidence.

For the reasons stated above, we affirm the judgment of the circuit court.

Affirmed.

HARTMAN and SCARIANO, JJ., concur.

       Northem Life had moved for summary judgment on all six policies, but the circuit court entered summary judgment in its favor on only one policy, finding that Ippolito had made an intentional misrepresentation on that application by not revealing that he knew he had AIDS. The court denied the motion on the other five policies, finding that questions of material fact remained. The Ippolitto defendants appealed, and this court affirmed. Northern Life Insurance Co. v. Ippolitto Real Estate Partnership (1992), 234 Ill. App. 3d 792, 601 N.E.2d 773 (Northern Life I).

       Dr. Jacobson distinguished between HIV (human immunodeficiency virus) and AIDS (acquired immune deficiency syndrome), explaining that in the process of seroconversion, a patient who is HIV-antibody negative becomes HIV-antibody positive, which indicates active infection. He defined “HIV-infected” to mean that the virus has entered the body and is actively multiplying, whereas AIDS, the end-stage of that infection, occurs when the virus has multiplied and destroyed immune cells to the extent that the patient is susceptible to certain opportunistic (“defining”) infections.

       The count was 22, whereas the normal range is between 500 and 800. Dr. Jacobson explained that only AIDS causes this count to fall below 200, and that for those who develop AIDS, the drop per month is usually 30.

       Dr. Telfer defined “pre-AIDS” as AIDS-related complex (ARC), the symptoms for which included night sweats, chronic fever, chronic low-grade infections, and a 20% body weight loss. She testified that it is usually followed by AIDS; only “a handful” (3% or 4%) of those with ARC do not develop AIDS. Once infected with HIV, 60% develop ARC or AIDS.

       Northern Life also points out another unmet condition precedent, i.e., that Ippolito was not in “excellent” health in January because he was already HIV-infected. Northern Life has explicitly limited its challenge to the statements in the amendments, however, so we do not address the effect, if any, of Ippolito’s answers to the original application in January.

       As noted elsewhere, Northern Life did not challenge Ippolito’s statements on his application in January, including that he had not suffered a weight loss of 10 or more pounds in the six months prior to his application.


source: Caselaw Access Project

author: JUSTICE BRESLIN

license: Public Domain

text:
      In re MARRIAGE OF JAMES HARTMAN, Petitioner-Appellee, and KATHERINE HARTMAN, Respondent-Appellant.
    Third District
    No. 3—93—0398
    Opinion filed October 1, 1993.
    Frank R Andreano, of Joliet, for appellant.
    Law Offices of Edward R. Jaquays, of Joliet (Edward R. Jaquays, of counsel), for appellee.
   JUSTICE BRESLIN

delivered the opinion of the court:

Katherine Hartman appeals from the award of custody of the parties’ two-year-old daughter to her former husband, James Hartman. The trial court found that Katherine had made an unfounded allegation of child sexual abuse against James and relied on that as grounds for granting custody to James. Given the findings in this case, we affirm.

James and Katherine Hartman endured a short and stormy relationship. In the span of two months in 1990, Katherine discovered she was pregnant, she and James were married and the couple separated. Following their separation, James refused to contribute to Katherine’s support or pay for her medical treatment until the Illinois Department of Public Aid threatened suit against him. The baby, Lyndsey, was born in January 1991. James and Katherine resumed living together in March 1991, but the reconciliation was short-lived. The record contains references to a separation in July 1991, and to a final separation in July 1992. James filed his petition for dissolution of the marriage in December 1992. Both James and Katherine petitioned for custody of Lyndsey.

At trial, James offered evidence that Katherine had filed a complaint with the Department of Children and Family Services (DCFS) in which she alleged that she had seen James sleeping naked in the same bed with one of his daughters from his previous marriage. The alleged incident had taken place approximately two years before Katherine made the complaint, when the daughter in question was 12 years old. James then called his daughter to the witness stand and she unequivocally denied that such an event had ever taken place.

Katherine testified that James had been physically abusive toward her during the marriage. Further, she complained that James allowed Lyndsey to see him in the nude and to watch him while he urinated.

In announcing its determination of who would be awarded custody of Lyndsey, the trial court set out extensive findings of fact. It found that both parties had misused the Domestic Violence Act of 1986 (Ill. Rev. Stat. 1991, ch. 40, par. 2311 — 1 et seq.) and had raced to the courthouse to obtain ex parte orders of protection against each other. It discounted the testimony of the psychologists retained by the parties because neither psychologist conducted an independent investigation to determine whether he or she was being told the truth by Katherine and James; relying on the honesty of the parties diminished the doctors’ ability to objectively view the case. The trial court further discounted the reputation evidence offered by the parties because it was based only on the absence of negative reputation and not the presence of positive reputation. It found that there are no community standards which prohibit nudity in the privacy of one’s own home or urinating in front of a child. It did not detect even “the smell” of physical abuse of Lyndsey and found that both parties have equal good and bad qualities.

With regard to James, the court found that he had a good support system, although he was not Lyndsey’s primary care giver and had never been. Except when he is around Katherine, James is even-tempered. The trial court explained that the testimony of James’ daughters was more helpful than the testimony of his friends in this regard because the daughters would see what James is like behind closed doors, and, being teenagers, would be more likely to have disagreements with their parents. The court found that James is truthful, although he exaggerates or shades the truth to his benefit. He does not have an alcohol or drug abuse problem. James’ indication that he would rather leave Lyndsey with a baby-sitter than with Katherine showed an inability to work with Katherine. He had previously agreed to allow Lyndsey to stay with Katherine and then argued that Katherine was not the preferred custodian. He is a responsible person with a stable job. James contributed to the marital discord by, at least, a lack of sensitivity and, at most, physical abuse.

With regard to Katherine, the trial court found that she should get credit for having carried the child and undergone a caesarean section surgery to give birth to the child. She also has a good support system. She has no current alcohol abuse problem. She suffers mood swings and overreacts to provocation. She attempted to hit James while he was holding Lyndsey. She lied about her actions at a party during which she and James had a physical confrontation that resulted in her receiving 10 stitches. The court determined that Katherine had deliberately lied regarding allegations of sexual abuse by James of his 12-year-old daughter based on the testimony of James’ daughter, the length of time between the alleged incident and her complaint to DCFS and the fact that Katherine did not mention any suspicions of sexual abuse to the first psychologist to interview her.

The court then specifically set out its findings with regard to the factors listed in the statute covering awards of custody. With regard to the first factor, it goes without saying that the parents disagree about who should have custody. The court further found that the child is too young to express her wishes. The child interacts well with everyone involved and everyone loves her. Lyndsey has adjusted to living with her mother; her adjustment to school and the community means little given her age. Both Katherine and James are mentally and physically healthy. With regard to the threat of physical violence, the court found that both Katherine and James hit each other the entire time they were married, and although Katherine received more “souvenirs,” she hit as much as she was hit. Last, the court found that neither party exhibited a willingness to encourage a relationship with the other party.

The court went on to consider several factors suggested by James’ psychologist because the court found them helpful in its analysis. These factors included honesty, reliability, insight into self, willingness to work with others and willingness to put the child before self. The trial court found that Katherine’s deliberate lie with regard to the sexual abuse allegation was evidence that Katherine needed to win more than she wanted to do what was best for Lyndsey.

Based on all these factors and considerations, the trial court awarded custody to James. The court concluded that the deciding factor was the fact that Katherine had attempted to destroy the relationship between James and Lyndsey with her allegation of sexual abuse. The court opined, “J.D. Hartman did not win custody of his daughter, Katherine Hartman gave him custody of his daughter by making that allegation.”

The sole issue on appeal is whether the trial court abused its discretion in awarding custody to James.

Section 602 of the Illinois Marriage and Dissolution of Marriage Act provides that custody shall be determined in accordance with the best interests of the child. (750 ILCS 5/602(a) (West 1992).) To aid the court in this assessment, the legislature has listed seven factors to be considered. (750 ILCS 5/602(aXl) through (aX7) (West 1992).) For our consideration, two of these factors are most important. One is “the physical violence or threat of physical violence by the child's potential custodian, whether directed against the child or directed against another person.” (750 ILCS 5/602(aX6) (West 1992).) The second is “the willingness and ability of each parent to facilitate and encourage a close and continuing relationship between the other parent and the child.” (750 ILCS 5/602(aX7) (West 1992).) The trial court’s determination of custody will not be disturbed absent a clear abuse of discretion. In re Marriage of Wiley (1990), 199 Ill. App. 3d 169, 556 N.E.2d 809.

Katherine argues that the trial court is punishing her after concluding that she lied with regard to the allegation of sexual abuse. She further argues that the trial court failed to consider adequately the threat of physical violence posed by James.

We find no such defects in the court’s decision. To the contrary, we find that the court carefully and thoughtfully considered all the evidence presented to it. It articulated reasons for discounting that evidence which it discounted and gave each of the parties the benefit of the doubt with regard to past misbehavior. With regard to James’ potential for violence, the court found that he was even-tempered except when he is with Katherine. In short, the trial court exercised its discretion with caution and common sense. We find no abuse in its conclusion.

Indeed, we find support for the proposition that unfounded allegations of sexual abuse made by one parent can be grounds for granting custody to the other parent. In Mullins v. Mullins (1986), 142 Ill. App. 3d 57, 490 N.E.2d 1375, the court concluded that the mother had engaged in a scheme to terminate the father’s parental rights and destroy his relationship with the children by repeatedly complaining to DCFS that the children were being sexually abused. Based on this conclusion, the court upheld a transfer of custody to the father.

In light of the particular circumstances of this case, and considering all of the evidence, we cannot say that the trial court abused its discretion. The trial court is in a better position than we are to view the conduct of the witnesses and to determine their sincerity and credibility. While we hold that one false allegation does not constitute a “scheme,” as in Mullins v. Mullins, such an allegation may be considered with other evidence in finding where the best interests of the child lie. We affirm the decision of the trial court in this case.

Accordingly, the judgment of the circuit court of Will County is affirmed and the mandate shall issue immediately.

Affirmed.

BARRY and LYTTON, JJ., concur.


author: JUSTICE McCULLOUGH

text:
    BUNGE CORPORATION, Plaintiff-Appellee, v. THE NORTHERN TRUST COMPANY, as Trustee, et al., Defendants-Appellants (Mary Blake, Indiv., and as Custodian for Therese M. Blake, et al., Defendants).
    Fourth District
    No. 4—93—0144
    Argued September 14, 1993.
    Opinion filed October 22, 1993.

      Steven M. Helm, of Dukes, Martin, Helm & Ryan, Ltd., of Danville, and Stephen C. Sandels (argued), of McDermott, Will & Emery, of Chicago, for appellants.
    Stephen R. Patton (argued) and David T. Erie, both of Kirkland & Ellis, of Chicago, and Howard W. Small, of Thomas, Mamer & Haughey, of Champaign, for appellee.
   JUSTICE McCULLOUGH

delivered the opinion of the court:

This case involves the interpretation of a stock purchase agreement and whether plaintiff Bunge Corporation (Bunge) is entitled to a purchase price adjustment under the terms of that stock purchase agreement. The trial court held Bunge was so entitled and entered judgment in the amount of $587,916.40. We affirm.

In 1978, Bunge began acquisition negotiations to purchase Lauhoff Grain Company (Lauhoff), a business which produced textured vegetable protein (TVP), a substance used in the production of pet food, from its shareholders (sellers). After approximately three face-to-face meetings and numerous telephone conversations, the parties entered into a stock purchase agreement on October 5, 1978. Under the agreement, the sellers, some 66 individuals or entities, sold all 2.5 million outstanding shares of stock of Lauhoff to Bunge for a total price of $37.5 million. At the time of the negotiations, 1.5 million of the outstanding shares of stock were held in trust by the Northern Trust Company (Northern Trust), trustee of the trusts of Howard J. Lauhoff, founder and principal owner of Lauhoff, and Bernice D. Lauhoff. Under the terms of the stock purchase agreement, the “Representing Sellers” were the estate of Howard J. Lauhoff, Floyd W. Brown and James G. Davis. The Representing Sellers owned 1.59 million shares of stock in Lauhoff. The purchase price was payable in three installments, and the first payment of $28.75 million was paid at closing on January 3, 1979. The second installment of $5 million (minus certain purchase price adjustments) was paid on June 11, 1979, and the final installment of $3.75 million (minus certain purchase price adjustments) was paid on January 3, 1983, the fourth anniversary of the closing date.

Paragraph 3(aXi) of the stock purchase agreement provides that the purchase price of the stock was based on, among other things: “the accuracy of the representations and warranties set forth in Exhibit C attached hereto as of the date hereof and as of the Closing Date.”

Paragraph 3(a) further provides:

“If it should be found that *** (iii) there are any liabilities of or claims against the Corporation arising out of any contract or commitment in breach of the representations or warranties made by the Representing Sellers in paragraph 6 hereof except as shall have been reflected or accrued in said Financial Statements or any contract or commitment entered into by the Corporation in violation of the provisions set forth in paragraph 5 thereof ***, then, in any and all such events the purchase price for all the shares of the Common Stock will be reduced pro rata accordingly on a dollar-for-dollar basis.”

Paragraph 6 is entitled “Representations and Warranties” and provides, in pertinent part, that the Representing Sellers:

“hereby represent and warrant to the Buyer that the statements set forth in Exhibit C attached hereto are true as of the date hereof and shall be true as of the Closing Date as if given on and as of the Closing Date.”

Paragraph 6(c) provides:

“All representations and warranties made by the Representing Sellers or by the Buyer in this agreement shall survive the Closing Date; provided, however, that except for the representations and warranties set forth in paragraphs (c), (d), (e), (f), (g) and (q) of Exhibit C, after the Closing Date the Buyer’s sole remedy for any breach of a representation or warranty made by the Representing Sellers shall be limited to the right to make a claim, pursuant to paragraph 3(b) hereof, that the purchase price is subject to adjustment in accordance with paragraph 3(a) hereof.”

Finally, the warranty relevant to this appeal, warranty (l), is found in exhibit C to the stock purchase agreement, and provides:

“[(¿)] The Corporation owns, is permitted to use, or licensed under all formulae, secret processes, know-how, patents, patent applications, trademarks, trade names and copyrights, if any, used by it in its present business. The Representing Seller does not own any direct or indirect interest in any such formula, secret process, know-how, patent, patent application, trademark, trade name, copyright or license.”

In June 1976, Ralston Purina Company (Ralston) wrote a letter to Lauhoff advising it had a patent covering the production of TVP and it would be willing to grant Lauhoff a license under that patent. In August 1976, Lauhoff replied it was not interested in a license from Ralston since it had a license to produce TVP from Archer Daniels Midland (ADM).

In early May 1981, Ralston informed Lauhoff that it had instituted a patent infringement lawsuit against Far-Mar-Co in Federal court in Kansas. Once it obtained a favorable ruling, Ralston intended to sue all other patent infringers, presumably including Lauhoff. Ralston again offered Lauhoff a license to produce TVP. Again, Lauhoff replied to Ralston that, although it was aware of the availability of a license under Ralston’s patent, such a license was unnecessary because Lauhoff had a license from ADM to produce TVP. As of May 11, 1981, Bunge notified Northern Trust of a possible purchase price adjustment due to this alleged patent infringement.

Next, as the fourth anniversary of the closing date was approaching, on November 29, 1982, Bunge informed the sellers that the final installment was due and that certain purchase price adjustments were to be made. The undetermined Ralston patent infringement claim was alleged by Bunge to be something which could cause a purchase price adjustment.

On January 3, 1983, Bunge sent Northern Trust a check for approximately $3.75 million representing the final installment of the purchase price. This amount included certain purchase price adjustments as listed in the November 1982 letter. However, the Ralston patent infringement claim was not included because it was still undetermined. The following paragraph was included in this letter:

“The purchase price will be subject to further adjustment if and when the amounts of items 12 and 13 of the schedule dated 11/30/82 are determined, or if any additional items should arise.”

Items 12 and 13 of the “schedule dated 11/30/82” were included in Bunge’s November 1982 letter as were the Ralston patent infringement claim and another similar undetermined patent infringement claim. At this time, Bunge’s collateral was released.

On January 15, 1983, after Bunge’s check had been deposited and cleared, Northern Trust sent a letter to Bunge thanking it for the cooperation in effecting payment on the remaining portion of the purchase price. Northern Trust stated:

“In Mr. Goodrow’s letter dated January 3, 1983[,] transmitting the payment of the remaining portion of the purchase price, the statement is made that ‘[t]he purchase price will be subject to further adjustment if and when the amounts of items 12 and 13 of the Schedule dated 1/30/82 [sic] are determined or if additional items should arise.’ We disagree with that statement. The Stock Purchase contract does not contemplate any refund of purchase price paid, but rather only an adjustment of purchase price to be paid. As all of the purchase price has been paid, no further adjustment can be made.”

On January 19, 1983, Bunge replied that it disagreed with this paragraph of the letter. In its letter Bunge stated:

“Adjustment of the purchase price, as provided in paragraph 3 of the agreement (including any adjustment that might arise by virtue of paragraph 6(c)), is in no way limited by the timing of the purchase price payments made according to the schedule set forth in paragraph 2.”

Bunge further stated in its letter:

“if there had been any such limitation (or even any suggestion of one when we discussed my letters to you of November 29 and 30, 1982) there would have been a full or partial hold back, of course, of the payment that was made on January 3, under cover of Mr. Goodrow’s letter.”

In April 1984, Ralston informed Lauhoff that it had won its patent infringement case against Far-Mar-Co. Northern Trust received a copy of this letter. The court of appeals affirmed the district court’s decision. Ralston Purina Co. v. Far-Mar-Co (Fed. Cir. 1985), 772 F.2d 1570.

Ralston filed a lawsuit against Lauhoff in November 1985 for patent infringement. Bunge notified Northern Trust, which declined to participate in settlement negotiations. In May 1986, Bunge and Ralston eventually reached a settlement for $1.2 million. In this settlement agreement, Lauhoff admitted liability for past infringement of Ralston’s patent.

Bunge then demanded from the sellers a purchase price adjustment in the amount of $648,000 (54% of the settlement amount), which figure was calculated pursuant to paragraph 3(a) of the stock purchase agreement. In response, Northern Trust filed a preemptive suit in the United States District Court for the Northern District of Hlinois seeking a declaration that the sellers were not liable for a purchase price adjustment. Bunge counterclaimed for the same amount as the alleged purchase price adjustment allegedly due under the stock purchase agreement.

The district court found Lauhoff did not own or have a license to use one of the processes being used in its business, namely Ralston’s patent for making TVP. This failure was a breach of the warranty provided for in the stock purchase agreement. The district court granted Bunge’s motion for summary judgment on liability. (Northern Trust Co. v. Bunge Corp. (N.D. Ill. May 10, 1988), No. 86—C—4805 (unpublished decision).) Northern Trust appealed and the court of appeals sua sponte raised the issue of whether Northern Trust had properly brought suit in Federal court. On March 30, 1990, the court of appeals dismissed Northern Trust’s action and Bunge’s counterclaim on the ground the Federal jurisdiction was lacking. Northern Trust Co. v. Bunge Corp. (7th Cir. 1990), 899 F.2d 591.

On September 6, 1989, the Federal district court in Peoria, Illinois, held that the Ralston patent was unenforceable because it had been procured in 1976 by means of conduct on the part of Ralston that defrauded the United States Patent and Trademark Office. (Ralston Purina Co. v. A.E. Staley Manufacturing Co. (C.D. Ill. Sept. 6, 1989), No. 84—1378 (Staley).) This decision was affirmed by the court of appeals on July 5, 1990. Ralston Purina Co. v. A.E. Staley Manufacturing Co. (Fed. Cir. 1990), 909 F.2d 1494.

Bunge filed this action on August 1, 1990. Both Bunge and Northern Trust filed motions for summary judgment which were denied. These orders are not being appealed. Before the trial began, Bunge settled with a group of shareholders representing approximately 30% of the shares sold. The trial commenced against the Lauhoff trusts represented by Northern Trust and eight individual shareholders. Following a week-long bench trial, the trial court entered judgment in favor of Bunge. Specifically, the court made the following findings:

“1. Bunge has established that Warranty (l) was breached by Lauhoff.
2. Bunge is entitled to a purchase price adjustment after the final installment was paid on January 3,1983.
3. Bunge settled the Lauhoff action with Ralston in good faith with reasonable anticipation of liability.
4. Bunge did not fail to mitigate damages.
5. Bunge’s damages were incurred as a result of a breach of warranty rather than its own actions.”

A final judgment order was entered on January 22, 1993, and Northern Trust timely filed its notice of appeal. Four of the eight individual shareholders elected not to appeal. Findings (4) and (5) are not at issue here.

Northern Trust essentially alleges two arguments to support its contention that the trial court erred in entering judgment in favor of Bunge. First, Northern Trust alleges the language and structure of the stock purchase agreement indicate no purchase price adjustment was due. Second, Northern Trust alleges the judgment below should be reversed because Bunge’s settlement with Ralston was not made in good faith, i.e., in reasonable anticipation of liability. Northern Trust asserts Bunge knew or should have known that Ralston had engaged in conduct amounting to fraud upon the patent office in procurement of the patent which Lauhoff allegedly infringed.

I. Language And Structure Of The Stock Purchase Agreement

Northern Trust first asserts that the stock purchase agreement must be strictly construed against Bunge as the party which drafted it when resolving questions of ambiguity. Murray Warschauer, secretary and general counsel for Bunge, prepared the initial draft of the stock purchase agreement in early September 1978. The draft then underwent a number of changes through negotiations with Stanley Meadows, a partner at the law firm of McDermott, Will and Emery, counsel for Northern Trust. The parties had three face-to-face meetings and 10 telephone conversations regarding the language and structure of the stock purchase agreement.

The record on appeal shows there were two highly sophisticated parties negotiating this stock purchase agreement. For Bunge, Warschauer has been licensed to practice law for 43 years, has worked for Bunge for 28 years and has been involved with dozens of transactions like this. On the other hand, Meadows has been licensed for 22 years and his specialty involves corporate practice, securities offerings, and mergers and acquisitions such as this. He has handled 60 such acquisitions. Accordingly, the policy reasons for strict construction against the drafter of a document, i.e., the avoidance of adhesion contracts and requiring the party who chose the words used in the document to be bound by those words, are not present in this instance. Further, the doctrine of contra proferentem is at best a secondary rule of interpretation, a last resort which may be invoked after all the ordinary interpretative guides have been exhausted. (Farwell Construction Co. v. Ticktin (1980), 84 Ill. App. 3d 791, 798, 405 N.E.2d 1051, 1057.) Thus, we need only resort to this rule of construction if we cannot otherwise ascertain the parties’ intent.

The primary objective in construing a contract is to effectuate the parties’ intentions when entering the agreement. Absent ambiguity, the intention of the parties must be gathered from the language used in the contract, not from a party’s construction of that language. A contract is ambiguous if it is subject to more than one reasonable interpretation. The existence of an ambiguity in a contract must be determined as a question of law by the court. If the terms of an alleged contract are ambiguous or are capable of more than one interpretation, parol evidence is admissible to ascertain the parties’ intent. (Pre-Fab Transit Co. v. Northbrook Property & Casualty Insurance Co. (1992), 235 Ill. App. 3d 103, 106, 600 N.E.2d 866, 868-69.) However, a document is not ambiguous merely because the parties fail to agree upon its meaning. In determining the intent of an unambiguous instrument, the court must consider the entire document, giving words their plain and ordinary meaning.(Little v. Tuscola Stone Co. (1992), 234 Ill. App. 3d 726, 728, 600 N.E.2d 1270, 1272.) Factual determinations regarding the meaning of contract language should not be overturned unless they are contrary to the manifest weight of the evidence. Marathon Plastics, Inc. v. International Insurance Co. (1987), 161 Ill. App. 3d 452, 459-60, 514 N.E.2d 479, 483.

A. Warranty (l)

Northern Trust contends the trial court erred in concluding that warranty (l) was a noninfringement warranty. Warranty {l) states:

“[(£)] The Corporation owns, is permitted to use, or licensed under all formulae, secret processes, know-how, patents, patent applications, trademarks, trade names and copyrights, if any, used by it in its present business. The Representing Seller does not own any direct or indirect interest in any such formula, secret process, know-how, patent, patent application, trademark, trade name, copyright or license.”

The trial court found:

“The first sentence is a representation that the corporation was permitted to use any patent. This appears to the court to be a non-infringement warranty. The second sentence is a representation that the stockholders did not own any interest in any patent and was meant to prevent royalties being paid to shareholders after the' company had been purchased. That second sentence was clearly an ownership warranty.”

Northern Trust alleges that the first sentence in warranty (l) is not a noninfringement warranty because the words “infringe” or “infringement” do not appear in this sentence. Rather, it suggests both sentences in warranty (l) are “ownership” warranties and are the obverse of each other, i.e., the corporation owns or is permitted to use all the necessary licenses and permits for its business and the Representing Sellers do not own any of these intellectual property rights. Northern Trust notes that Bunge could have tried to negotiate a non-infringement warranty into exhibit C had it desired one, but further notes that broad noninfringement warranties are unusual and a buyer normally would have to pay additional money for such a warranty because of the large assumption of risk.

Bunge first counters that the plain language of warranty (l) refutes Northern Trust’s interpretation. Bunge contends Northern Trust’s interpretation that both sentences of warranty (l) were ownership warranties would render the first sentence meaningless. Bunge also disputes the contention that the first sentence must contain the words “infringement” or “infringe” in order to be a noninfringement warranty. Bunge asserts warranty (1) applies to any claim that Lauhoff was using any intellectual property right that it did not own or did not have the right to use.

Warranty (l) is not ambiguous. In reading this clause and giving the words their ordinary and usual meaning, the first sentence simply states that Lauhoff has all the necessary permits, licenses, or patents to do its business. The language “permitted to use” can be construed to mean that it is not infringing on somebody else’s intellectual property rights. If Lauhoff was doing something (i.e., using a patented process) that it was not “permitted to use,” then it would be infringing upon that patent. Thus, this sentence is a noninfringement warranty. Moreover, the second sentence merely states that the Representing Seller does not own any interest in the intellectual property rights used by Lauhoff in its business. If the Representing Seller did own an interest in such intellectual property rights, Lauhoff would have to pay the Representing Seller a fee for using that right. Thus, this sentence merely states that the Representing Seller does not own any interest in any of the patents or other intellectual property rights used by Lauhoff in its business. The trial court’s determination as to the meaning of warranty (l) was not against the manifest weight of the evidence.

As further support that warranty (l) is not a noninfringement warranty, Northern Trust asserts that the trial court’s construction would conflict with the “use of property” exclusion in paragraph 3(aXi) of the stock purchase agreement. Paragraph 3(a)(i) provides there may be a purchase price adjustment:

“[i]f it should be found that (i) there are any liabilities of the Corporation, whether accrued, absolute, contingent, or otherwise existing on January 31, 1978, *** arising out of any transaction entered into, or state of facts existing on or before said date; but excluding *** use of property after January SI, 1978.” (Emphasis added.)

Northern Trust believes this exclusion covers any “use” of intellectual property rights covered by a patent owned by a third party, because infringing upon a patent involves an “improper use” of the intangible property and the right to the exclusive use of the patented invention. Northern Trust concludes that if the first sentence of warranty (Z) is a noninfringement warranty, it is in direct conflict with this section.

The trial court stated:

“The court finds that the word ‘use’ in that paragraph [3(aXi)] is not the type of use of property envisioned by warranty [(Z)]. The ‘use’ of a thing means that one is entitled to hold or in some manner benefit therefrom. That is the intent of the parties when the term is used in warranty [(Z)]. The court finds that the word ‘use’ found in paragraph 3(a)(i) simply refers to a verb. Therefore, there is no inconsistency in finding that warranty [(Z)] is a non-infringement warranty and in giving effect to paragraph 3(a) in adjusting a purchase price.”

Paragraph 3(aXi) states that if there are certain kinds of liabilities of Lauhoff not reflected in the financial statements existing on January 31, 1978, the purchase price may be subject to adjustment. However, that paragraph specifically excludes liabilities for the “use of property” after that date. This paragraph is ambiguous, and thus the trial court properly considered parol evidence to ascertain the parties’ intent. Warschauer testified this paragraph could include a patent infringement which could be a contingent liability not reflected in the financial statements. This would trigger a purchase price adjustment. Likewise, Meadows testified the “use of property” as used in this paragraph could include the use of both tangible and intangible property and simply excluded liability for that use of property after January 31, 1978. His interpretation of that provision was that the sellers were not to be obligated for the operations of the business after January 31, 1978, and that liabilities and obligations for use of property after that date were excluded.

This “use of property” provision could include the use of intellectual property and Lauhoff’s improper use of someone else’s patented process. However, as Bunge notes, the clauses found in paragraph 3(a) are independent bases for purchase price adjustments and because a certain claim may not be made under one provision does not necessarily mean it cannot be made under another provision. Thus, even though liability for the use of property after January 31, 1978, would not be a ground for a purchase price adjustment under paragraph 3(a)(i), under paragraph 3(a)(iii) there could still be a purchase price adjustment for a breach of warranty (1) made by the Representing Sellers. Thus, the trial court’s conclusion that construing warranty (l) as a noninfringement warranty does not conflict with the “use of property” provision of section 3(a)(i) was not against the manifest weight of the evidence.

Northern Trust also asserts that construing warranty (l) as a non-infringement warranty would conflict with warranty (h) of exhibit C. Northern Trust argues that the settlement in 1986 with Ralston arose in the ordinary course of business because Ralston sued Lauhoff for an alleged infringement of the TVP process which it had used for years “in the ordinary course of its business.”

Warranty (h) provides:

“(h) Except as and to the extent reflected in full and accrued in full and the audited consolidated financial statements of the Corporation and its subsidiaries as of January 31, 1978, prepared and certified by Coopers and Lybrand, Certified Public Accountants, (hereinafter called ‘Financial Statements’), the Corporation has not incurred any material liability or obligation of any nature whether absolute, accrued, contingent or otherwise, and whether due or to become due, without limiting the generality of the foregoing, any liability for taxes, Federal, state or local, income, excise, sales or others, except for matters disclosed herein and liabilities incurred subsequent to the date of the Financial Statements in the ordinary course of business." (Emphasis added.)

As to warranty (h), the trial court concluded:

“In warranty (h) the sellers represent that the corporation has not incurred any material liability of any nature due or to become due except for liability incurred in the ordinary course of business subsequent to the date of the financial statements. The parties differ as to whether a relationship exists between warranty (h) and warranty [(i)]. The sellers say that there is a relationship and, because of that relationship, there can be no recovery. The buyer argues that there is no such relationship. The court finds that, even if the two warranties are related, warranty (h) in this case will not apply since a patent infringement is not a liability incurred as a part of the ‘ordinary course of business.’ ”

Bunge contends that warranty (l) and warranty (h) are separate and independent bases for purchase price adjustments and even if the warranty (h) exclusion for liabilities incurred in the ordinary course of business applied to this case, that would not necessarily mean warranty (I) was not breached. Moreover, Bunge asserts, as did the trial court, that patent infringement is not a liability normally incurred as a part of the ordinary course of business.

Giving these words their plain and ordinary meaning, we conclude that this clause merely states Lauhoff has no liabilities except those reflected in the financial statements as of January 31, 1978, or those incurred in the ordinary course of business. Because this company is an ongoing business, there will always be liabilities incurred in the ordinary course of business, i.e., grain purchases, overhead expenses, salaries, et cetera. As the court noted, liability for patent infringement is not normally the type of liability incurred in the ordinary course of business. Thus, construing warranty (l) as a noninfringement warranty does not conflict with warranty (h) and the trial court’s conclusion was not against the manifest weight of the evidence.

B. Was Warranty (1) Breached?

Bunge is only entitled to a purchase price adjustment if warranty (l) was breached. Northern Trust offers several alternatives to show that warranty (l) was not breached. Each alternative will be briefly addressed below.

First, Northern Trust contends that since it had a license from ADM to produce TVP, the representations of warranty (l) were true. As to this argument, the trial court responded:

“The fact that Lauhoff was licensed to use a different patent — that is that patent belonging to ADM — is not relevant. The sellers did not warrant that Lauhoff was licensed to use a patent. They warranted that Lauhoff owned, was permitted to use, or was licensed under all patents used by it in its present business. In addition, whether it was Ralston’s ‘process’ that Lauhoff used without a license or Ralston’s ‘patent’, makes no difference. The sellers’ warranty was that Lauhoff owned or was permitted to use all processes and patents in its business.” (Emphasis in original.)

Warranty (l) provides Lauhoff owned, was permitted to use or was licensed under all patents used in its business. In fact, Lauhoff was using a patent (the one owned by Ralston) to produce TVP, without permission, i.e., it had no license from Ralston to use that patent, as evidenced by the correspondence between Lauhoff and Ralston. Thus, the representations of warranty (l) were not true.

Northern Trust also asserts there was no breach of warranty (l) because Lauhoff had permission from Ralston to use the patent up until May 6, 1981, when Ralston indicated it planned to prosecute any infringers when, and if, it won its litigation with Far-Mar-Co. Northern Trust asserts warranty (l) had to be breached as of the closing date, January 3, 1979, and this warranty was not being breached as of that date because Lauhoff still had permission from Ralston to use the patent. Northern Trust alleges this permission is evident from the letters from Ralston to Lauhoff offering a license, for a royalty fee, to use the patent to produce TVP.

As Bunge notes, Ralston was not giving “permission” to use its patent because it offered a license to Lauhoff in exchange for a royalty. If Ralston was truly giving permission, it would not be seeking monetary compensation for the use of the patent. Moreover, the letters between Ralston and Lauhoff indicate that their purpose was merely to bar any potential laches defense by Lauhoff.

The trial court concluded:

“The court finds that the non-infringement warranty was breached by Lauhoff’s use of a patent for manufacturing texturized vegetable protein. The patent belonged to RalstonPurina Company and Lauhoff did not own it, was not permitted to use it and was not licensed under that patent.”

Thus, the record on appeal does not support Northern Trust’s contention that Lauhoff had permission to use the Ralston patent. The correspondence indicated a contrary intent by Ralston.

Finally, Northern Trust alleges that when the Federal district court held in Staley that the Ralston patent was obtained through fraud, the patent was rendered void ab initio. (Staley, No. 84 — 1378 (unpublished decision).) Thus, because the patent was as if it never was issued, there could be no breach at closing, and Bunge is not entitled to a purchase price adjustment.

The law is clear that an invalid patent cannot be infringed. (Union Carbide Corp. v. American Can Co. (N.D. Ill. 1983), 558 F. Supp. 1154, 1162 (and cases cited therein).) Northern Trust may be correct in its proposition that an invalid patent is void from its inception; however, the Federal district court in Staley declared the patent unenforceable rather than invalid. In a transcript of its oral pronouncement (included in this court’s record on appeal), the district court stated: “I have no problem in making that change [from a finding of invalidity to a finding of unenforceability] and saying that as a result of the inequitable conduct that I have found that the patent is not enforceable.” Further, in its written supplemental findings, the court found: “Patent number 3940495 is held to be unenforceable by virtue of inequitable conduct.” (Staley, No. 84—1378, slip op. at 5 (unpublished decision).) Moreover, the court of appeals affirmed the district court’s decision that this patent was unenforceable because of inequitable conduct. Ralston Purina Co., 909 F.2d 1494.

Thus, Ralston’s patent on the process to produce TVP is only unenforceable against alleged infringers. It is still an existing and valid patent. Accordingly, as of the closing date, Lauhoff could have still been infringing upon Ralston’s patent, thereby breaching warranty (Z). However, Ralston simply could not bring any action against Lauhoff for that infringement. Whether a breach of contract has occurred is a question of fact which will not be disturbed unless the finding is against the manifest weight of the evidence. (Borys v. Rudd (1990), 207 Ill. App. 3d 610, 618, 566 N.E.2d 310, 315.) The trial court’s conclusion that the sellers breached warranty (Z) was not against the manifest weight of the evidence.

C. What Remedy is Available to Bunge?

Since the sellers breached warranty (Z), the final question is whether Bunge has any remedy available. Northern Trust first alleges Bunge is not entitled to a purchase price adjustment since the final installment of the contract price has been paid. Northern Trust asserts that since the final installment has been paid, Bunge is in fact seeking a “refund” rather than a “purchase price adjustment,” and such a “refund” is not contemplated by the stock purchase agreement.

Bunge contends the plain language of the stock purchase agreement expressly provides that all warranties shall survive the closing date and specifies no ending date. Paragraph 3(b) of the stock purchase agreement provides that Bunge must notify the sellers of a potential price adjustment within a “reasonable time” after the likelihood of such reduction becomes known, except inventory adjustment claims which have to be made within 60 days of closing. Bunge asserts that the fact that there is a 60-day time limit for inventory claims, but no such time limit for other claims, indicates the parties intended for there to be no such time limit for all other claims. Bunge refutes Northern Trust’s “refund” and “adjustment” distinction, noting “adjustment” is broader than “refund” and could include “adjustments,” both before and after the final installment is paid.

Finally, Bunge notes that it believed that an adjustment could be made after the final installment was paid, most notably evidenced by its January 3, 1983, letter transmitting the final installment, in which it specifically stated the purchase price would be subject to further adjustment if and when the amounts of the Ralston claim became determined. Bunge notes that Northern Trust did not take issue with this understanding before it deposited and cashed the check and it was only after it had actually received the money that it began to dispute that there could be such a purchase price adjustment.

The trial court concluded:

“The Court finds that Paragraph 3(a) does not limit purchase price adjustments to pre-closing claims. Paragraph 6(c) of the Agreement expressly provides that sellers’ warranties extend beyond closing: ‘All representations and warranties made by the Representing Sellers or by the Buyer in this Agreement shall survive the closing date.’ It is clear that the intent of the parties in this Section was to overcome the Doctrine of Merger and the problem arising if the Buyer didn’t know of a breach at the time of the closing. The second part of Paragraph 6(c) limited the Buyer’s remedy after closing to the right to make a claim for a purchase price adjustment in accordance with Paragraph 3(a) of the agreement.
Paragraph 3(b) required the Buyer to notify the Seller of any potential payment that could result in a reduction of the purchase price under Subparagraph (a) within a ‘reasonable’ time after the likelihood of such a reduction became known to Buyer. There was a requirement that if the possible reduction was due to any inventory adjustment, notice was to be given no later than 60 days after date of closing. As to other claims, there was no post-closing time limit after which there could be no reduction of a purchase price.
It is true that Paragraph 6(a) makes reference to the closing date. That reference refers to the time when the accuracy of the Sellers’ warranty was to be judged. It does not apply to the time period for which damages are claimed. That paragraph does not state the damages resulting from breaches of warranty must exist as of the closing. As a practical matter, a claim for damages for breach of warranty nearly always arises after closing.”

Neither of Northern Trust’s contentions establishes that Bunge is not entitled to a purchase price adjustment. The “refund” versus “adjustment” argument is merely a semantical distinction. As Bunge notes, an “adjustment” could be a “refund.” An adjustment merely means a change in the price, either an increase or a decrease. An adjustment after the final payment is a refund. The stock purchase agreement does not state a time limit for when Bunge had to make a purchase price adjustment, except for the provision regarding notice within 60 days for inventory adjustment claims.

Moreover, Northern Trust had notice from Bunge that it would be seeking a further purchase price adjustment upon determination of the Ralston claim. Bunge clearly reserved its right to seek a purchase price adjustment, even after the final payment, through its correspondence with the final payment. Northern Trust never contested this claim and accepted the payment with this condition. It was only after the money was received that it raised the issue that there could be no further purchase price adjustment.

Finally, Northern Trust contends Bunge is not entitled to a purchase price adjustment for a claim or liability that merely arose from a breach of warranty but rather it can only have a purchase price adjustment for a claim or liability that arose from a contract or commitment in breach of a warranty.

Paragraph 3 of the stock purchase agreement is entitled “Adjustment of Purchase Price.” The pertinent language of paragraph 3(a) provides:

“If it should be found that *** (iii) there are any liaMlities of or claims against the corporation arising out of any contract or -commitment in breach of the representations or warranties made by the representing sellers in paragraph 6 hereof except as shall have been reflected or accrued in said financial statements or any contract or commitment entered into by the corporation in violation of the provisions set forth in paragraph 5 hereof; *** then, in any and all such events the purchase price for all of the shares of the common stock will be reduced pro rata accordingly on a dollar for dollar basis.” (Emphasis added.)

Northern Trust contends Bunge has failed to satisfy the requirements of this clause. It alleges that a simple breach of a warranty is not a reason for a purchase price adjustment under this paragraph, but there must be a liability of or claim against the corporation arising out of any contract or commitment in breach of the warranty. Bunge contends, on the other hand, Northern Trust’s interpretation would render many of the other warranties of exhibit C which did not arise from a contract or commitment (such as the representation that the corporation had paid all of its taxes, that it was a duly organized and validly existing corporation and the financial statements were prepared in accordance with generally accepted counseling principles) remediless and, therefore, meaningless. Bunge contends the trial court simply construed the contract in a commonsense way which gives meaning to all of the provisions contained therein.

The trial court concluded:

“The Defendant argues that whatever liability existed in this case did not arise from a contract or commitment due to a breach of warranty. It should first be noted that Paragraph 3(a)(iii) not only refers to liability but also claims against Lauhoff. The same paragraph does refer to a “contract or a commitment” but does not preclude relief for the seller’s breach of warranty. In Exhibit C to the Stock Purchase Agreement, the Sellers made representations which did not arise from a contract or commitment. As an example, the Sellers represented that all taxes had been paid. The court does not believe that the parties intended to exclude breaches of that type of warranty from Paragraph 3(aXiii)’s remedy provisions.
The ‘contract or commitment' language is broad enough to include liabilities for which Northern would have been responsible, should the claim or liability have presented itself before the agreement was signed. This would include Lauhoff’s liability to Ralston, which arose from a commitment or obligation to pay Ralston a license fee which existed as of closing.
The very essence of the warranties would be defeated, and the intent of the Agreement would be negated, if Buyers were not permitted to adjust the purchase price when facts later surfaced evidencing that the value of the business was considerably less than what was represented. The argument that this would leave Sellers liable ad infinitum is without merit since there are statutes of limitations which apply.”

Section 3(aXiii) requires that the liability of or claim against Lauhoff arise out of a contract or commitment in breach of a warranty or representation made in exhibit C. Lauhoff had a commitment from ADM to produce TVP, through the granting of a license. However, that commitment was insufficient to protect Lauhoff because Lauhoff needed a license from Ralston to avoid infringing upon Ralston’s patent. Thus, since the license from ADM fell short of insulating Lauhoff from liability to Ralston, there was “a liability of and claim against Lauhoff arising out of a commitment in breach of warranty [(£)].” Bunge was entitled to a purchase price adjustment under paragraph 3(aXiii).

II. Was The Settlement Made In Good Faith?

Finally, Northern Trust asserts, as an alternative argument to that concerning the language and structure of the stock purchase agreement, that Bunge is not entitled to a purchase price adjustment because the 1986 settlement with Ralston was not made in reasonable anticipation of liability. Northern Trust argues that the settlement was not made in good faith, i.e., in reasonable anticipation of liability, because Bunge knew or should have known that Ralston procured its patent by committing fraud against the United States Patent and Trademark Office. Northern Trust contends Bunge had this knowledge through its awareness of the existence of certain documents and records of Ralston, which Bunge knew about because Far-Mar-Co had attempted to discover those documents during its litigation with Ralston, which Lauhoff and Bunge monitored. Northern Trust also suggests Bunge believed this fraud defense was well grounded in fact because it pleaded it as an affirmative defense after Ralston sued Lauhoff.

Bunge counters that it did not have knowledge of the information in those documents. Far-Mar-Co had moved to compel the production of those documents but its motion to compel was denied by the trial court, based on Ralston’s claim of privilege. Bunge did not know what was in those documents nor could it know that another court would allow those documents to be discovered, as did the court in the Staley case. As to this issue, the trial court concluded:

“Warranty [(Z)] covers the use of a patent or process. While the Staley case says that Ralston’s patent was a nullity, that finding only takes effect when a court announces it. That does not necessarily mean that the settlement made prior to the ruling was not entered into in good faith. While Northern Trust had the option of choosing not to participate in the settlement negotiations, they are bound by the settlement unless actual fraud is shown. To find otherwise would mean that Bunge could never have settled their suit with Ralston.”

Northern Trust contends it is not trying to undo the settlement agreement but merely wishes to establish that it should not be liable for any portion of the settlement because Bunge did not enter into it in good faith, i.e., in reasonable anticipation of liability. It is not clear that, as Northern Trust suggests, entering into a settlement in good faith means it must be in “reasonable anticipation of liability.” The case Northern Trust relies upon for that principle of law (Nogacz v. Proctor & Gamble Manufacturing Co. (1975), 37 Ill. App. 3d 636, 347 N.E.2d 112) had to do with implied indemnity claims and the principal defendant’s right to proceed both under the third-party action and to effectuate a good-faith settlement in the principal action.

Even if this is the proper standard for determining good faith, it can be argued that Bunge did in fact settle in reasonable anticipation of liability. Ralston had already been successful in its lawsuit against Far-Mar-Co for patent infringement. It was undisputed that the process used by Lauhoff was the identical process used by Far-Mar-Co, which was found to have infringed upon Ralston’s patent. Furthermore, as noted above, Far-Mar-Co’s attempt to discover the documents which would allegedly prove the fraud conducted upon the patent office had been rejected by the court in that litigation. There was no reason for Bunge to assume that it too would not have been faced with the denial of a motion to produce these documents and thus defeat its fraud claim. It had no way of knowing that the court in Staley would uphold the discoverability of those documents and allow such a defense to be pleaded. Thus, Bunge certainly could reasonably have believed it would be liable to Ralston for the patent infringement; thus, its settlement was made in good faith because it was in reasonable anticipation of liability.

Illinois public policy favors peaceful and voluntary resolutions of claims through settlement agreements; to establish the invalidity of such an agreement, clear and convincing evidence is required. The Illinois Supreme Court has stated that when considering whether an agreement was made in good faith, the entire circumstances surrounding the settlement must be taken into account. Courts therefore have refused to place great emphasis on any single factor as being determinative of good faith. A settlement may be considered made in good faith when no tortious or wrongful conduct on the part of the settling party has been shown. (Jachera v. Blake-Lamb Funeral Homes, Inc. (1989), 189 Ill. App. 3d 281, 285-86, 545 N.E.2d 314, 317.) Challenges to good-faith settlements have been based upon (1) the ratio of the amount of the settlement to the eventual jury verdict; (2) that the settlement did not accurately reflect the jury’s ultimate apportionment of liability; (3) lack of consideration in the settlement; (4) collusion between the settling parties; and (5) the absence of meaningful discovery prior to settlement. (Jachera, 189 Ill. App. 3d at 286, 545 N.E.2d at 317-18.) Northern Trust has not asserted any of these other potential challenges to the good-faith settlement by Bunge with Ralston. Even if it did assert such challenges, none appear to be applicable to the facts of this case. Clearly, Bunge had a reasonable belief that it would be liable to Ralston for the patent infringement and thus properly settled the claim.

For the foregoing reasons, the judgment of the circuit court of Vermilion County is affirmed.

Affirmed.

STEIGMANN, P.J., and COOK, J., concur.