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5/30/2013 @ 2:57PM |28,666 views

Anna Nicole Smith's Daughter Wins Sanctions From Marshall Estate

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Years later, a courtroom victory. (Photo credit: Wikipedia)

A federal judge in California has ordered the estate of J. Pierce Marshall to pay sanctions over “massive discovery abuse” in the Koch Industries Koch Industries heir’s scorched-earth legal battle against his late stepmother, the Playboy model Anna Nicole Smith. The decision could reward Smith’s daughter Dannielynn as much as $49 million.
In a harshly worded decision issued late yesterday, U.S. District Judge David O. Carter conceded he had to order an end to the more than decade-long effort by Smith’s estate to recover hundreds of millions of dollars from the estate of her late husband, J. Howard Marshall II. Marshall turned an early partnership with Fred Koch into a 16% stake in Koch Industries that was worth billions of dollars upon his death in 1995.

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The Oilman, The Playmate, And The Tangled Affairs Of The Billionaire Marshall Family Daniel Fisher Forbes Staff

Carter did order unspecified sanctions against the estate of J. Howard’s son Pierce, however, for using delaying tactics like shipping crucial legal documents to a lawyer in Lake Charles, La. to try and keep them out of the hands of Smith’s lawyers.

Pierce’s bad faith conduct was too pervasive and too egregious to be ignored, despite the fact that he has since passed away. It would promote disrespect for the authority of the federal courts to turn a blind eye to actions that so willfully and blatantly attempted to make a mockery of this justice system. Further, it would reward a party for win-at-all-costs tactics, to the deprivation of his opponent. Such behavior cannot be condoned.

Pierce died in 2006. His estate is still tangled in a dispute with the Internal Revenue Service over more than $100 million in taxes the government says it is owed because of questionable estate-planning moves involving the Koch stock.
The judge also ordered attorney Edwin Hunter, who represented the Marshall family holding company, to show cause why he shouldn’t pay sanctions as well. The judge previously found that Hunter had backdated documents and lied about researching various tactics to try and get the Koch stock out of J. Howard’s possession before he made large cash gifts to his young bride.
Judge Carter didn’t specify damages, but in a March, 2012 he suggested they could run as high as $49 million.
J. Howard married Vickie Lynn in June, 1994 and died 13 months later. She filed for bankruptcy the following year in California. Pierce, in a maneuver he probably later regretted, sued her for defamation for suggesting he’d used forgery and fraud to gain control of his father’s assets. The bankruptcy judge dismissed his case but awarded Vickie Lynn $475 million on a countersuit accusing Pierce of interfering in her inheritance. That judgment was reversed in 2011 after going to the U.S. Supreme Court twice.
The ruling by Judge Carter puts an end to the countersuit. He set an August 13 hearing for lawyers for Danielynn and the Smith estate to request sanctions. The estate is represented by Los Angeles celebrity lawyer Phil Boesch.
“This is a complete vindication of Anna Nicole’s rights and a total condemnation of what was done to her,” Boesch told me. “We are confident that the amount Anna’s estate and daughter Dannilynn will finally be awarded will be fair and substantial.”