JUSTICE KNECHT delivered the opinion of the court:

Plaintiff, Diane James, filed a retaliatory dischargecase against her employer, defendant, Lifeline Mobile Medics. InMay 2002, plaintiff won a jury verdict of $243,969.64 and thetrial court entered judgment thereon. In August 2002, plaintiffstarted proceedings to collect her judgment and defendant filedan appeal (No. 4-02-0712). In September 2002, the parties agreedto settle the case with defendant to pay plaintiff $200,000 onSeptember 17 and $25,000 on October 17, 2002. Defendant failedto pay.

In October 2002, plaintiff issued new garnishmentsummonses, and the trial court entered a ruling purporting toreform the settlement agreement. Defendant did not pay. InNovember 2002, defendant moved to terminate supplementary proceedings and for sanctions. The trial court ordered defendant topay, dismissed the supplementary proceedings, and denied sanctions. Defendant paid by check, which bounced. The court againordered defendant to pay $227,052.76 by cashier's check.

Defendant paid. In December 2002, plaintiff requested a courtorder directing defendant to pay the $27,875.97 remaining due onher judgment, which the trial court denied. Plaintiff appeals,arguing (1) the trial court lacked jurisdiction in October 2002to alter plaintiff's judgment and grant defendant's motion toenforce the settlement agreement; and (2) the trial court erredin enforcing a contract defendant breached and procured throughmisrepresentation. We reverse.

I. BACKGROUND

On May 13, 2003, after a jury trial, plaintiff receiveda verdict in her favor and was awarded $243,969.64 damages. OnMay 31, 2002, defendant filed a motion for extension of time tofile a posttrial motion and also sought a stay of judgment. Thetrial court granted defendant the extension, and on July 8, 2002,defendant filed its posttrial motion. On August 6, 2002, afterthe denial of the motion in all respects, plaintiff startedproceedings to collect on her judgment. On August 26, 2002,defendant responded by filing a motion to stay enforcement of thejudgment, which it never noticed for hearing, and by filing anotice of appeal. James v. Lifeline Mobile Medics, 4-02-0712(January 22, 2003) (dismissed for defendant appellant's failureto file a docketing statement).

Meanwhile, defendant contacted plaintiff to discusssettlement, offering $150,000. On September 10, 2002, theparties agreed to settle. The settlement agreement provided, inexchange for plaintiff signing a release, defendant would payplaintiff $200,000 on or before September 17, 2002, and anadditional $25,000 on or before October 17, 2002.

Defendant did not make its first payment on September17, and when plaintiff demanded payment, defendant said the moneywas "available" and "can be paid at any time" but would not bepaid pending resolution of a tax issue that plaintiff had alreadyinformed defendant had no bearing on the settlement. Plaintiffthen had citations to discover assets issued in order to collecton her original judgment. Defendant filed a motion to stay thecitation proceedings, to enforce the settlement agreement, andfor sanctions. In response, plaintiff filed a motion for turnover order to collect the amount of the judgment from defendant. On October 17, 2002, the trial court held a hearing on allpending motions. The trial court took the matter under advisement. On October 21, 2002, plaintiff issued new garnishmentsummonses. On October 22, 2002, the trial court issued itsruling, "reforming" the settlement agreement to provide defendantshould pay plaintiff $225,000 plus "judgment interest" of 9% fromSeptember 17, 2002, until paid.

Defendant did not comply with the trial court's orderand on November 4, 2002, filed a motion to terminate the supplementary proceedings begun on October 21, 2002, and for sanctions. Plaintiff filed a response to this motion, claiming the court didnot have jurisdiction to modify the judgment that she still heldand was entitled to enforce as enforcement had never been stayed. On November 8, 2002, the court again ordered defendant to payplaintiff $225,000 plus interest, dismissed the supplementaryproceedings, and denied sanctions. Defendant issued a check toplaintiff, which bounced. On November 20, 2002, the courtordered defendant to pay plaintiff $227,052.76 by cashier'scheck. Plaintiff received the check and filed a notice of appealon November 21, 2002, appealing the court's orders of October 22and November 8 (No. 4-02-0972). On December 6, 2002, plaintifffiled a second motion for turnover order, requesting the courtorder defendant to pay the remainder due plaintiff on her judgment which, as of November 26, 2002, was $27,875.97. On December23, 2002, the trial court denied this motion. Plaintiff filed anotice of appeal that same day (No. 4-02-1069), and both appealswere later consolidated on plaintiff's motion.

II. ANALYSIS

On appeal, plaintiff contends that (1) the trial courtdid not have jurisdiction in October 2002 to alter her judgmentor enforce the settlement agreement once defendant's appeal wasfiled and (2) the settlement agreement was unenforceable in anycase because it was both breached by defendant and obtained bydefendant as a result of misrepresentation.

A. Trial Court Had Jurisdiction

Plaintiff contends the trial court lacked jurisdictionto take the actions it did because once defendant's appeal wasfiled jurisdiction was limited to the "supplementary proceedings"provided in section 2-1402 of the Code of Civil Procedure (735ILCS 5/2-1402 (West 2002)). The question is whether a trialcourt retains jurisdiction to enforce a settlement agreementreached after the court otherwise lost jurisdiction because ofthe filing of a notice of appeal. Enforcement of a settlementagreement is a collateral matter and is not governed by theissues raised in defendant's appeal, i.e., that defendant has noliability to plaintiff or, alternatively, that the amount ofdamages is too high. The trial court had jurisdiction to entertain supplementary proceedings involving the settlement agreementand enforcement as well as to consider plaintiff's efforts tocollect her judgment. The question now presented is whether thesettlement agreement still existed and could be enforced orreformed by the trial court.

B. Propriety of Enforcing Purported Settlement Agreement

Settlement agreements are governed by contract law. Inre Marriage of Schmidt, 292 Ill. App. 3d 229, 234, 684 N.E.2d1355, 1359 (1997); City of Chicago Heights v. Crotty, 287 Ill.App. 3d 883, 885, 679 N.E.2d 412, 413 (1997). Under contractlaw, a party in breach may not enforce the contract. Goldsteinv. Lustig, 154 Ill. App. 3d 595, 599, 507 N.E.2d 164, 167-68(1987). A party seeking to enforce a contract has the burden ofproving he has substantially complied with all material terms ofthe agreement. Goldstein, 154 Ill. App. 3d at 599, 507 N.E.2d at168. A party who materially breaches a contract cannot takeadvantage of the terms of the contract that benefit him, nor canhe recover damages from the other party to the contract. Goldstein, 154 Ill. App. 3d at 599, 507 N.E.2d at 168.

1. Defendant Breached Agreement

In this case, the settlement agreement required defendant to pay plaintiff $200,000 on or before September 17, 2002,and $25,000 on or before October 17, 2002. Defendant made nopayments at all. At the hearing on October 17, 2002, evidencewas presented defendant did not pay any of the money owed plaintiff under the settlement agreement because defendant's counselconsulted a tax expert, who informed him that FICA withholdingwould be due on that portion of the settlement amount thatencompassed the $13,499.64 in damages awarded by the jury forlost medical benefits to plaintiff. Plaintiff's counsel disputedany FICA withholding was necessary. Further, evidence indicatedthe amount of FICA due under the tax expert's theory was approximately $1,000.

The amount possibly due for FICA withholding was only asmall portion of the settlement amount due plaintiff. The recordoffers no indication why defendant could not have made at leastthe first installment payment to plaintiff of $200,000 if notalso most of the second installment of $25,000 while a definitivedetermination was made on the tax-liability issue. Thus, defendant did not demonstrate it performed the contract, nor did itoffer a legally recognized excuse for its failure to perform. Defendant breached the settlement agreement by not paying plaintiff anything and, therefore, is not entitled to enforcement ofthe agreement.

2. Whether Defense Counsel Misrepresented

Defendant's Financial Situation

Plaintiff also contends the settlement agreement wasobtained by defendant as the result of misrepresentations made byits counsel to plaintiff's counsel and is unenforceable for thatreason.

"Broadly speaking, for a misrepresentation toconstitute fraud which invalidates a contract, it must be a representation in theform of a statement of a material fact, madefor the purpose of inducing a party to act;it must be false and known by the party making it to be false, or not actually believedby him, on reasonable grounds, to be true;and the party to whom it is made must beignorant of its falsity, must reasonablybelieve it to be true, must act thereon tohis damage, and in so acting must rely on thetruth of the statement." Wilkinson v.Appleton, 28 Ill. 2d 184, 187, 190 N.E.2d727, 729-30 (1963).

Ordinarily, erroneous statements as to matters of opinion, suchas representations of the value of property, do not amount tofraud avoiding a contract made in reliance thereon. Wilkinson,28 Ill. 2d at 188, 190 N.E.2d at 730. However, where a misrepresentation relates to a specific extrinsic fact materially affecting the value of matters at issue and where that fact is onepeculiarly within the knowledge of the speaker and the statementis made with knowledge of its falsity or what the law regards asthe equivalent of knowledge and is acted upon to the injury ofthe other party, such misrepresentation will amount to fraudwarranting a court to set aside the contract induced in whole orin part thereby. See Wilkinson, 28 Ill. 2d at 188-89, 190 N.E.2dat 730.

A party cannot benefit from a contract it obtainedthrough misrepresentation.

"Where one makes a positive statement toanother, upon which the other acts in confidence of its truth, and such statement isknown to be false by the party making it,such conduct is fraudulent and from it theparty guilty of fraud can take no benefit."

Halla v. Chicago Title & Trust Co., 412 Ill.

39, 46, 104 N.E.2d 790, 794 (1952).

The question to be determined is whether under all the circumstances, the party seeking relief had the right to rely on therepresentations made. The representations must be viewed inlight of all the facts of which the injured party had actualknowledge and also such as he might avail himself of by theexercise of ordinary prudence. Halla, 412 Ill. at 47, 104 N.E.2dat 794. Whether a party used ordinary prudence and due diligenceis a question of fact to be determined by the trial court. SeeHalla, 412 Ill. at 47, 104 N.E.2d at 794-95.

The allegedly fraudulent statements at issue in thiscase include a letter from defense counsel to plaintiff's counseldated August 19, 2002, in which it is stated:

"As I discussed, [defendant's] financialpicture is dire if not desperate. This non-for-profit [sic] is losing $20,000 per month,and all indications are that losses willincrease in the coming months as Medicare andMedicaid payments continue to be reduced. The company appears to have just enough cashon hand to meet its payroll and other outstanding obligations.

As I mentioned to you on Friday, I ampassing along to you the full extent of Lifeline's ability to pay with this offer. Infull settlement of the above matter, we areoffering your client $150,000. I recognizethis is not the figure that you were afternor does it meet the amount of the judgment,but it is the best that Lifeline can do without the specter of bankruptcy.

If [plaintiff] decides to execute on thejudgment, bankruptcy will likely be the onlyoption for [defendant]. Its current assetssimply cannot [meet] a payment of the judgment and the payment of salaries to her co-workers. [Plaintiff's] co-workers will losetheir jobs and, equally important, there willbe no paramedic provider for Bloomington,Normal[,] or McLean County (fire fighters arenot trained paramedics). In short, if[plaintiff] decides to execute on this judgment, there will be no paramedic service forour community."

The other allegedly fraudulent statement was made in atelecopier transmittal from defense counsel to plaintiff'scounsel dated August 21, 2002:

"[Plaintiff's counsel], [p]lease call me atyour earliest re: settlement in this matter.[Defendant's] board has decided to engageBankruptcy counsel and the window of opportunity to resolve this claim is closing--[Defense counsel]"

Evidence at the hearing on October 17, 2002, indicatedbankruptcy counsel may have been consulted at some time butnothing was actually done. Further, in correspondence datedSeptember 18, 2002, only a month after the earlier communications, defendant's counsel stated "The $200,000 is available andcan be paid at any time." Finally, Anna Lee Fenger, chairman ofthe board for defendant, testified at the time the letter ofAugust 19 was sent, unknown to plaintiff's counsel, defendant hada net worth of $1,400,000, $400,000 of which was in cash. Fengeralso testified she signed the settlement agreement on September11, 2002, to pay plaintiff the $200,000 on September 17 and the$25,000 on October 17, and after the agreement was signed,defendant transferred $200,000 to its checking account to makethe payment.

Plaintiff argues she reluctantly negotiated withdefendant based on these representations and agreed to accept thesettlement. However, the evidence shows defendant had the fundsto pay the actual judgment amount without filing for bankruptcy,and the settlement agreement should be rescinded because when aperson is induced into a contract based on a misrepresentation,the contract may be rescinded. See Sciarabba v. Chrysler Corp.,173 Ill. App. 3d 57, 61, 527 N.E.2d 368, 371 (1988).

The trial court found defendant had sufficient assetsto pay the full amount of the judgment although it also appearedto have an uncertain financial future. The court further found,however, defendant's claims of impending bankruptcy to be "financial 'gloom and doom' hyperbole," which did not rise above thelevel of acceptable negotiation technique and plaintiff shouldhave requested further financial information before concludingthe settlement agreement.

The evidence suggests the representations of defensecounsel about defendant's financial situation to be misrepresentations that go beyond the usual hyperbole of accepted negotiation techniques. We need not further address the issue becausewe have concluded the settlement agreement was breached and maynot be enforced. Plaintiff is entitled to collect on her judgment.

III. CONCLUSION

For the foregoing reasons, we reverse the trial court'sjudgment.

Reversed.

APPLETON, J., concurs.

McCULLOUGH, J., dissents.

JUSTICE McCULLOUGH, dissenting:

I respectfully dissent. The standard of review, beingmanifest weight, supports affirming the trial court.

The majority concludes that the settlement agreementwas breached and cannot be enforced. Wilkerson is discussed withrespect to plaintiff's contention that the settlement agreementwas obtained by misrepresentation of defendant's counsel toplaintiff's counsel. Wilkerson discussed proof of misrepresentation sufficient to constitute fraud and the issue of fraud inrelation to breach of fiduciary relation.

As to misrepresentation and fraud the trial courtstated:

"Plaintiff contends she was fraudulentlyinduced into the agreement by representationsof defense counsel as to defendant's financial status. *** Defense counsel did represent that if the defendant was forced to paymore than $150,000.00 defendant might facethe 'spectre of bankruptcy.' This type offinancial 'gloom and doom' hyperbole (thedefendant actually had sufficient assets topay the full amount of the judgment althoughit appears that defendant does have an uncertain financial future) does not rise abovethe level of negotiation technique. Theplaintiff could have requested financialinformation from defendant to verify defendant's financial position before finalizingany settlement."

Wilkerson supports the trial court's order.

As to plaintiff's request that the agreement be rescinded, the trial court further stated:

"Plaintiff asks for rescission of the agreement as the remedy for defendant's nonpayment. Plaintiff points out that she hasreceived no money yet and defendant couldhave tendered all the money except for thewithholding claim by the defendant (approximately $1,000.00). Defendant contends thatit is ready, willing and able to tender thesettlement amount and just wants a determination of the tax question. Rescission is anequitable remedy and in view of the strongpolicy of the law in favor of settlement ofdisputes (Cameron v. Bogusz, [305 Ill. App.3d 267, 711 N.E.2d 1194 (1999))], this Courtwill not rescind the settlement agreement. However, as a court of equity the court willreform the agreement to provide that defendant pay plaintiff, in addition to the fullsettlement amount of $225,000.00, judgmentinterest at the rate of 9% from the date ofSeptember 17, 2002, to the date of payment."

As stated, I would affirm the trial court.