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Estate battle goes on in courts

February 09, 2007|David G. Savage | Times Staff Writer

WASHINGTON — The long-running legal battle over the $1.6-billion estate of Anna Nicole Smith's late husband, Texas oilman J. Howard Marshall, has survived both parties to the dispute.

In June, E. Pierce Marshall, the son and main heir to the fortune, died unexpectedly at 67, just weeks after suffering a defeat in the Supreme Court. But his widow and heir, Elaine Marshall, carried on the legal dispute with Smith.

With Smith's death, the suit is likely to continue in the name of her infant daughter, Dannielynn Hope, whose paternity is the subject of additional legal action.

At issue in the Marshall estate case, most recently, is an $89-million judgment in favor of the former model that was handed down by a federal judge in Orange County five years ago.

Last year, the Supreme Court sent the case back to the U.S. 9th Circuit Court of Appeals in San Francisco to resolve several remaining questions.

"She was seeking the $89 million. We contend she is entitled to nothing," said Eric Brunstad, a lawyer in Hartford, Conn., who represents the Marshall family.

"I spoke to the family today. They were shocked, and they extend their deepest condolences to her family," he added.

Kent L. Richland, a Los Angeles lawyer who has represented Smith, said it was hard to know what would happen next. "Things were sort of up in the air before this," he said.

The legal battle began with the question of who was promised what by the 89-year-old billionaire before his death in 1995. His will left the estate to his eldest son, but Smith said he had promised half of it to her.

The dispute ran on parallel tracks, one in California and one in Texas.

When the widow was facing bankruptcy in Los Angeles, she filed a claim contending that E. Pierce Marshall had schemed and altered documents to cheat her out of her share of the estate. A bankruptcy judge agreed and awarded her a nearly $450-million judgment in 2000. That amount was later reduced to $89 million by a federal district judge in Orange County.

Separately, a Texas probate judge in Houston ruled that the will signed by J. Howard Marshall gave all of his assets to his son E. Pierce Marshall.

Marshall's lawyers took the fight to California and won a ruling from the 9th Circuit that threw out Smith's claim. The appellate judges, based in San Francisco, said disputes over estates were to be resolved in state courts, not federal bankruptcy courts.

Smith's lawyers appealed to the U.S. Supreme Court, which unanimously ruled for her last May. The case was known as Marshall vs. Marshall, since Smith used her married name of Vickie Lynn Marshall.

Justice Ruth Bader Ginsburg said this was not a typical probate dispute. The widow had sued over fraud and deception, and federal judges "often address conduct of the kind Vickie alleges," Ginsburg said.

The ruling revived her claim for the $89 million, but it did not resolve the matter. The Supreme Court noted that the first court to decide an issue usually gets the last word, and it was unclear whether the bankruptcy judge in Los Angeles or the probate judge in Houston had handed down its decision first.

david.savage@latimes.com

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