Reply In Support Of Motion For Contempt For Sb

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Reply In Support Of Motion For Contempt For Sb

  1. 1. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 1 of 11 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA FLORENCE DIVISION HOWARD K. STERN, as Executor of the ) Estate of Vickie Lynn Marshall, ) a/k/a Vickie Lynn Smith, ) Civil Action No. 4:08-cv-2753-TLW a/k/a Vickie Lynn Hogan, ) a/k/a Anna Nicole Smith, ) ) Plaintiff, ) ) vs. ) ) STANCIL SHELLEY, ) a/k/a Ford Shelley, ) G. BEN THOMPSON, ) and John or Jane Doe 1-12 whose true names ) are unknown, ) ) Defendants. ) / REPLY IN SUPPORT OF THE EXECUTOR’S MOTION FOR CONTEMPT AND SANCTIONS AS IT CONCERNS SUSAN M. BROWN1 In her response brief, Susan M. Brown (“Brown”) tries to avoid the appropriate entry of an order finding her in contempt of the Consent Order Entering Preliminary Injunction (the “Order”) [DE 39] by arguing for the first time that (1) she misinterpreted what the Order required of her [see Resp. Br. (DE 86), at 9 (claiming she interpreted the Order differently from Plaintiff)]; and (2) she does not know whether the property that she maintained in her possession after entry of the Order really belongs to the Estate (see id. at 5, 8, 11-13). Having been caught engaging in contumacious conduct, Brown has apparently – and conveniently – forgotten her unequivocal sworn testimony that (1) she knew what the Order required of her (Brown Dep., at 1 The Executor also seeks sanctions and a finding of contempt against Defendant G. Ben Thompson; however, Thompson’s time to file a response brief has been extended. 1
  2. 2. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 2 of 11 35)2; and (2) some – if not all – of the property now at the center of the Executor’s contempt motion, which Brown kept in her possession after entry of the Order, was the rightful property of the Estate (Brown Dep., at 29-34). Not once in her entire response brief does Brown try to – nor can she – explain away or even address her sworn testimony. Brown cannot avoid the fact that her conduct satisfies the elements of civil contempt. I. Brown’s Revisionist History Demonstrates The Need For A Contempt Order. Brown’s attempt to rewrite history further supports the necessity of a finding of civil contempt. Brown attempts to paint a picture in which she had no obligation to return the Estate’s property and, once the Order was entered, she complied with it at all times without Court intervention. The contentions made by Brown in her brief are squarely at odds with the truth.3 A. Pre-Order Conduct. Brown’s conduct prior to entry of the Order is replete with deception toward the Executor and his counsel. Brown pretends that prior to entry of the Order, she had no obligation to return all of the Estate’s property, and misrepresents to the Court that the Executor apparently had no qualms about Estate property being in her possession. If anything, Brown suggests that the Executor should be faulted for waiting to file the Motion for Temporary Restraining Order until a year after learning that Brown had possession of the computer hard drives. As an initial matter, prior to entry of the Order, the Executor believed that as a duly licensed attorney and an officer of the court, Brown would act with some degree of professionalism and care in handling certain of the property at issue in this litigation. Apparently, 2 A true and correct copy of the relevant portions of Brown’s deposition is attached as Exhibit A to the Executor’s Memorandum of Law in Support of Motion for Contempt and Sanctions. [DE 79-2.] 3 Brown spends a good portion of her brief discussing ownership of Horizons. While ownership of Horizons is not relevant to this contempt proceeding, Brown gets a number of facts in this section of her brief incorrect, including the current status of the Horizons dispute. 2
  3. 3. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 3 of 11 the Executor was wrong. Brown’s pre-Order conduct demonstrates deceit toward the Executor with respect to the property, and Brown’s response brief not only glosses over that deceit but flat out misrepresents the facts surrounding the deceitful conduct. 1. Brown refuses to return property she acknowledges is Estate property until ordered by the Court. As has been discussed in detail, the Executor made numerous demands to Brown for Ford Shelley and Ben Thompson to return the property that was wrongfully in their possession, custody, or control. (See true and correct copies of correspondence from the Executor’s counsel to Brown, attached hereto as Exhibit A.4) Throughout the Executor’s counsel’s communications with Brown, Brown acknowledged that the property at issue, specifically including the hard drives and their contents, belonged to the Estate, and she promised to return all property to the Executor’s attorneys. [See Ex. A, at 2 (noting that Brown admitted that “the information on those hard drives belongs to the Smith Estate”).5] Although Brown mentions the subpoena from Rita Cosby to Ford Shelley in her brief, Brown neglects to fully inform the Court of the circumstances surrounding the Executor’s counsel’s discussions with Brown about the Cosby subpoena. The Cosby subpoena prompted the Executor to file the Motion for Temporary Restraining Order. [DE 9.] On August 18, 2009, the Executor’s counsel confirmed that Brown would not be producing Estate property in response to the subpoena. (See the true and correct copy of correspondence from the Executor’s counsel to Brown attached hereto as Exhibit B.) The very next day, on August 19, 2009, the Executor filed the Motion for Temporary Restraining Order in which – because Brown, an officer of the court 4 These letters were also attached to the Complaint as part of Exhibit D. [DE 1-5.] 5 It is worth noting that Brown practices law in Georgia, and Georgia statutes create a presumption of admission when a recipient of a letter fails to respond to the letter when a response would be expected. O.C.G.A. § 24-4-23. 3
  4. 4. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 4 of 11 and someone who should know better, would not return Estate property as repeatedly promised – the Executor sought an order from this Court commanding the return of all Estate property in Shelley’s and Thompson’s possession, custody, or control. [See DE 9 & 10.] After filing the Motion for Temporary Restraining Order, counsel for the Executor demanded – apart from the demand contained in the Motion for Temporary Restraining Order – that Brown cause her client, Ford Shelley, to return those documents belonging to the Estate, which were contained in Shelley’s production to Cosby. (See true and correct copy of correspondence from the Executor’s counsel to Brown attached hereto as Exhibit C.) In this letter, another demand was made upon Brown to surrender the hard drives. (See Ex. C.) Brown’s acknowledgement of ownership of the property is further evidenced during the telephone conference with the Court concerning the Motion for Temporary Restraining Order. During the telephone conference Brown did not dispute that the property at issue belonged to the Estate. Brown’s past conduct demonstrates a clear acknowledgment of the Estate’s ownership of the property and her claims to the contrary now have no merit. 2. Without a Court order in place, Brown distributes to third parties property she acknowledges is Estate property. Particularly troubling is Brown’s distribution of property she admitted she knew belonged to the Estate at a time when the Executor was demanding its return. [Brown Dep., at 26, 65, 93, 101 (admitting she distributed to The O’Quinn Law Firm and Ford Shelley property she knew belonged to the Estate).] Prior to distributing Estate property to Shelley, Brown acknowledged that she told the Executor’s counsel that Shelley would not have access to the very property she subsequently gave to him. (Id., at 138-40.) Given Brown’s admitted knowledge of the Estate’s ownership of the property, her return of the property to the Executor was not only obligated but her distribution of the property to third parties and her continued 4
  5. 5. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 5 of 11 possession of the property constituted wrongful, and even criminal, acts. Brown has demonstrated time and again that her assurances are useless, making her current claim that she will comply with the Order in the future unpersuasive. 3. Brown has a documented history of concealing Estate property. Brown initially hid the existence of the computer hard drives from Estate counsel. (See Brown Dep., at 136-38.) With respect to the property at issue in this contempt proceeding, Brown now states that “[a]t some point in 2009, Brown discovered some photographs and videos on her laptop that she did not know were there and had never seen before.” (Resp. Br., at 8.) When Brown made this discovery, she did not immediately inform the Executor’s counsel, she did not delete the material, and she did not return this material to the Executor’s counsel. Instead, she filed a motion to quash a subpoena issued to her, which would have revealed that Brown maintained Estate property in her possession after entry of the Order. Given a documented pattern of concealment and attempted further concealment of Estate property, Brown must be held in contempt to ensure unequivocally her future compliance with the Order. B. Post-Order Conduct. While Brown’s pre-Order conduct gives a flavor for her state of mind, Brown’s post- Order conduct is at the heart of this contempt proceeding. Brown asks to be absolved of her misconduct because she allegedly did not transfer any Estate property after entry of the Order and she allegedly never possessed the original hard drives stolen from Horizons. None of these excuses matters. The clear unambiguous language of the Order provided that At or before 5:00 p.m. on the fifth business day after entry of this Consent Order Entering Preliminary Injunction, Susan M. Brown, attorney for Defendant G. Ben Thompson, shall deliver to the Executor’s attorneys at Bryan Cave Powell Goldstein, One Atlantic Center – Fourteenth Floor, 1201 West Peachtree Street, NW, Atlanta, Georgia 30309, any of the 5
  6. 6. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 6 of 11 Property belonging to the Estate which is in Ms. Brown’s possession or custody, including all originals and all duplicates of such Property, specifically including but not limited to the two (2) hard drives belonging to the Estate which are in Ms. Brown’s possession. [DE 39, at 2-3 (emphasis added).] There should be no question what this language required of Brown and no room for Brown to “interpret” this language differently from the Executor. Indeed, Brown admitted that she knew what the plain unambiguous language of the Order required her to do, and Brown knew that she violated it when she failed to return the documents, photographs, and videos she later ‘discovered.’ (Brown Dep., at 29-35.) Even in her response brief, Brown concedes that she knew what the Order required of her: “to turn over the two hard drives and any other material in her possession or custody that belonged to the Estate and was removed from Horizons after the death of Smith.” (Resp. Br., at 8.) Brown concedes that she “discovered” the photographs and videos on her laptop “[a]t some point in 2009.” (Resp. Br., at 8.) Brown, however, does not explain when she ‘discovered’ them. Though the timing of Brown’s ‘discovery’ is unclear, one thing is clear: the Executor would never have known of Brown’s ‘discovery’ had Brown not lost her motion to quash the subpoenas issued by the Executor to her and her law firm. In filing her motion to quash, Brown attempted to hide the existence of these documents and, therefore, her claim that she at all times complied with the Order without court intervention rings hollow. Brown also suggests that she was not really in contempt of the Order because she had maintained only a “relatively small amount of photographs” compared to what was on the drives as a whole. As an initial matter, the Executor does not concede that at least 245 photographs constitute a “small amount.” There is, moreover, no “de minimis” violation of a court order. Either Brown violated the Order or she did not violate the Order. By maintaining any originals or 6
  7. 7. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 7 of 11 duplicates of Estate property after 5:00 p.m. on the fifth business day after entry of the Order, Brown was in contempt of the Order. II. Brown Inexplicably Continues To Claim ‘Unintentional Contempt’ As A Defense. Although the Executor addressed the issue in his Motion for Contempt and Sanctions, Brown proffers ‘unintentional contempt’ as a defense. (See Resp. Br., at 9.) With regard to civil contempt, the law does not recognize a lack of intent to violate a court order as a defense. [See Mem. of Law in Supp. of Mot. for Contempt & Sanctions (DE 79-1), at 14 (discussing numerous authorities that provide that a party need not demonstrate intent to violate an injunction to be found in civil contempt).] The clear and convincing evidence establishes that Brown’s conduct satisfies each element of civil contempt. Indeed, Brown’s state of mind may be sufficient to warrant an imposition of criminal contempt. III. The Executor Has Suffered Damages Because Of Brown’s Conduct. Brown tries to claim that the Executor has not suffered any damages as a result of her contempt. This once again ignores the fact that Brown testified to the contrary. [See Brown Dep., at 185 (admitting that the Estate has expended attorney’s fees in trying to recover Estate property).] Moreover, Brown’s contention ignores the reality that the Executor was forced to expend attorney’s fees in learning of and correcting Brown’s contempt. Where an aggrieved party “expend[s] considerable resources to correct or thwart the effects of [the contemnor’s] blatant misconduct,” compensable loss exists. In re General Motors Corp., 61 F.3d 256, 259 (4th Cir. 1995). Brown cannot seriously contend that the Executor did not expend resources to correct the effects of her contempt. The Executor expended considerable resources to uncover Brown’s contempt, which she tried to conceal by filing a frivolous motion to quash in the United States District Court for the Northern District of Georgia. As this Court is 7
  8. 8. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 8 of 11 aware, Brown’s motion to quash was denied based, in part, on a prima facie showing that Brown’s conduct concerning Estate property implicated the crime-fraud exception to the attorney-client privilege. [A true and correct copy of the order entered by the U.S. District Court for the Northern District of Georgia is attached as Exhibit G to the Executor’s Motion for Contempt and Sanctions (DE 79-8).] Moreover, while the Executor did not pay for the actual destruction of Brown’s hard drive, resources were expended to reach the agreement to destroy Brown’s hard drive as well as to coordinate and finalize the logistics of the destruction. These attorney’s fees are damages that are recoverable in civil contempt, and the Executor will prove them with specificity at an evidentiary hearing in the event that Brown is found to be in contempt of the Order. IV. Conclusion. This is a simple case of civil contempt: (1) there existed a valid order of which Brown, the contemnor, had actual knowledge; (2) the order was in the Executor’s favor; (3) Brown violated the terms of the order and had knowledge of such violations; and (4) the Executor suffered damages, at a minimum, in attorney’s fees. WHEREFORE, Howard K. Stern, as Executor of the Estate of Vickie Lynn Marshall a/k/a Anna Nicole Smith, respectfully requests that, with respect to Susan M. Brown’s contempt of the Order, that the Court hold an evidentiary hearing on this Motion and enter an order: A. Striking Ben Thompson’s defenses to the Executor’s Complaint; B. Entering judgment in favor of the Executor on his Complaint as against Ben Thompson; C. Awarding the Executor all of his expenses and reasonable and necessary attorneys’ fees incurred as a result of the violation of the Order, including but not limited to fees 8
  9. 9. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 9 of 11 incurred through discovery concerning the Property held by Brown in violation of the Order, attempts to retrieve the Property, and efforts taken to ensure the destruction of Brown’s hard drive; D. Ordering Ben Thompson and Brown to immediately turn over to the Executor’s attorneys all property belonging to the Estate – including all originals; and E. Granting such other and further relief as the Court deems appropriate. Respectfully submitted this 7th day of December, 2009. /s/ L. Lin Wood L. Lin Wood (Georgia Bar No. 774588) (Pro hac vice) Lin.Wood@BryanCave.com Nicole Jennings Wade (Georgia Bar No. 390922) (Pro hac vice) Nicole.Wade@BryanCave.com Luke A. Lantta (Georgia Bar No. 141407) (Pro hac vice) Luke.Lantta@BryanCave.com BRYAN CAVE LLP One Atlantic Center Fourteenth Floor 1201 West Peachtree Street, N.W. Atlanta, Georgia 30309 Telephone: (404) 572-6600 Facsimile: (404) 572-6999 /s/ Louis Nettles Karl A. Folkens (District Court ID No. 854) Karl@folkenslaw.com Louis Nettles (District Court ID No. 2521) Louis@folkenslaw.com FOLKENS LAW FIRM, P.A. 3326 West Palmetto Street 9
  10. 10. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 10 of 11 Florence, South Carolina 29501 Telephone: (843) 665-0100 Facsimile: (843) 665-0500 Attorneys for the Executor 10
  11. 11. 4:08-cv-02753-TLW -TER Date Filed 12/07/09 Entry Number 93 Page 11 of 11 CERTIFICATE OF SERVICE I hereby certify that on December 7, 2009, I electronically filed the foregoing document with the Clerk of Court, which will automatically send notification of such filing to the following attorneys of record: R. Scott Joye Susan P. MacDonald Joye, Nappier & Risher, LLC Nelson Mullins Riley & Scarborough LLP 3575 Highway 17 Business Beach First Center, 3rd Floor Murrells Inlet, SC 29576 3751 Robert M. Grissom Parkway Myrtle Beach, SC 29577 Carl E. Pierce, II Joseph C. Wilson, IV Pierce, Herns, Sloan, & McLeod, LLC P.O. Box 22437 Charleston, SC 29413 This 7th day of December, 2009. /s/ Louis Nettles Louis Nettles (District Court ID No. 2521) Louis@folkenslaw.com 6034676 11

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