Memo In Support Of Motion To Amend And Add Defendants
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
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, )
STANCIL SHELLEY, )
a/k/a Ford Shelley, )
G. BEN THOMPSON, )
and John or Jane Doe 1-12 whose true names )
are unknown, )
PLAINTIFF’S BRIEF IN SUPPORT OF MOTION FOR LEAVE
TO AMEND AND SUPPLEMENT COMPLAINT; AND
FOR JOINDER OF ADDITIONAL DEFENDANTS
COMES NOW Plaintiff Howard K. Stern, as Executor of the Estate of Vickie Lynn
Marshall a/k/a Anna Nicole Smith (the “Executor”) and, pursuant to Federal Rules of Civil
Procedure 15(a)(2), 15(d), and 20(a)(2), respectfully files this brief in support of his Motion for
Leave to Amend and Supplement Complaint; and for Joinder of Additional Defendants (“Motion
for Leave”), showing this Court as follows:
Two and a half years after Ford Shelley and his accomplices unlawfully removed Estate
property from Horizons and accessed, displayed, transferred, and exploited that stolen property,
the Executor continues to diligently pursue the wrongdoers who caused injury to the Estate and
to learn what precisely has been done with Estate property while it has been outside the
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Executor’s possession, custody and control. The information acquired by the Executor through
discovery has been staggering. Ford Shelley, his accomplices, and even his and Ben Thompson’s
attorney – an officer of the court – distributed Estate property to whomever they thought could
either help them or could hurt the Estate and the Executor, all while ignoring the Executor’s
repeated demands to surrender to his counsel all originals and copies of the Estate property. Each
one of these wrongdoers recognized they had no authority whatsoever to take any action with
respect to property that they concede is owned by the Estate. In spite of this acknowledgement,
in conscious awareness and apparent disregard of their tortious and – as the United States
District Court for the Northern District of Georgia categorized it – likely criminal conduct, Ford
Shelley and Attorney Susan M. Brown distributed Estate property to the media, parties and
counsel adverse to the Estate and the Executor, and voluntarily offered it up to California
authorities in order to promote a criminal prosecution of the Executor.
The Executor now seeks leave of Court to add as defendants in this action the additional
wrongdoers who injured the Estate of Anna Nicole Smith through conduct related to the property
that was unlawfully taken from Ms. Smith’s home the day after her death. In order for the
Executor to bring the known wrongdoers into this particular action, the Executor respectfully
requests leave of court to amend, supplement, and add party defendants to his original
Complaint. In doing so, the Executor can avoid litigating the same claims against different
parties in subsequent actions. Moreover, the current defendants and the party defendants the
Executor seeks to add have a responsibility to seek the return of the Estate property that they
have distributed, and this Court is the most knowledgeable and logical forum for the putative
new defendants to take whatever actions they may need to take to remedy their wrongs,
including, among other things, themselves adding additional persons and entities as third party
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defendants in an effort to mitigate damages and to comply with their obligations as converters of
STATEMENT OF FACTS
On August 4, 2008, the Executor filed his Complaint, setting forth a number of claims
against Defendants Stancil [“Ford”] Shelley (“Ford”) and G. Ben Thompson (“Ben”) for actions
concerning the unauthorized removal of Estate property from a home Anna Nicole Smith (“Ms.
Smith”) maintained at the time of her death (“Horizons”), Ford’s refusal to return the property to
the Executor, and Ford’s subsequent actions taken with respect to the property. [See generally
Compl. (DE 1).] The Complaint also named as defendants unknown persons who “acted in
concert with [Ford] concerning property belonging to the Estate.” (Compl. ¶ 5.) In the
Complaint, the Executor stated that once the identities of the Doe Defendants were ascertained
through discovery, they would be identified and named as party defendants in this action. (Id.
¶ 6.) The identifies of the Doe Defendants are now known and, through the Motion for Leave,
the Executor seeks leave of this Court to, among other things, (i) join Gaither Bengene
Thompson, III (“Gaither”), Melanie Thompson (“Melanie”), and Gina Shelley (“Gina”) as
named party defendants; and (ii) amend the caption of this case accordingly.
I. IDENTIFICATION OF THE DOE DEFENDANTS.
As an initial matter, Gaither and Melanie have conceded through counsel that they are
two of the Doe Defendants. Susan M. Brown (“Brown”), counsel-of-record for Ben and
erstwhile attorney for Ford, represented Gaither and Melanie in connection with their depositions
as third parties in this action. When Brown herself was subpoenaed to testify in a deposition and
produce certain documents, she moved to quash the subpoena. In her motion to quash, Brown
stated that “[d]uring the course of the litigation, Ms. Brown also came to represent and has acted
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as the attorney of record in representing Melanie Thompson and Gaither B. Thompson, two of
the John/Jane Doe Defendants named by Plaintiff in the Complaint.” (See Mem. of Law in Supp.
of Non-Party Susan M. Brown’s Mot. to Quash Subpoena Pursuant to F.R.C.P. 45(c), at 1-2, a
true and correct copy of which is attached hereto as Exhibit A.)
Furthermore, both Gaither and Melanie have testified that they were personally involved
in the unauthorized removal of Estate property from Horizons. On the day after Ms. Smith’s
death, Gaither entered Horizons with Ford, Melanie, and Gina and personally removed Estate
property, including pictures and a computer, to a car. [See Deposition of Gaither Bengene
Thompson, II, taken June 4, 2009 (“Gaither Dep.”) at 86-94, a true and correct copy of the
relevant portions of which are attached hereto as Exhibit B.]
Melanie also entered Horizons on the day after Ms. Smith’s death. (See, e.g., Gaither
Dep., at 88.) Upon return to the United States from the Bahamas, Melanie spent the evening
perusing the contents of Ms. Smith’s computer, which had been taken without authorization from
Horizons. [See Deposition of Gina Thompson Shelley, taken June 4, 2009 (“Gina Dep.”), at 93-
94, a true and copy of the relevant portions of which are attached hereto as Exhibit C.] Melanie
even took an Estate computer from Ford’s home and kept it at her own home for several days.
(Gaither Dep., at 106.)
Gina, Ford’s wife, was also one of his accomplices in removing property from Horizons.
She traveled to Horizons the day after Ms. Smith’s death and assisted in the entry into Horizons
and the party’s removal of Estate property. (See Gina Dep., at 81-83.) Like the others, Gina spent
the evening of their return to the United States from the Bahamas rummaging through the
contents of Ms. Smith’s computer. (Gina Dep., at 93-94.)
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Gaither, Melanie, and Gina are the accomplices of Ford referred to in the Complaint and
should, therefore, be identified as the Doe Defendants and joined as party defendants to this
II. ACTIONABLE CONDUCT OF SUSAN M. BROWN AND THE LAW OFFICES
OF SUSAN M. BROWN, P.C.
Brown, under the authority of her law firm, The Law Offices of Susan M. Brown, P.C.
(the “Law Firm”), has committed numerous unlawful acts concerning Estate property and
therefore, she and the Law Firm should be joined as party defendants to this action. Brown
unlawfully received Estate property from Ford that Ford, Gaither, Melanie, and Gina had
removed from Horizons, including copies of Estate computer hard drives. Rather than promptly
surrender the property to the Estate pursuant to the repeated demands of the Executor’s counsel,
Brown gave the Estate’s electronic files contained on the computer hard drives to The O’Quinn
Law Firm at a time that Brown knew that The O’Quinn Law Firm had engaged a computer
forensic expert to conduct unknown services on those Estate files. [Deposition of Susan M.
Brown, taken October 5, 2009 (“Brown Dep.”), at 22-25, 167-69 Exhibit 16, a true and copy of
the relevant portions of which are attached hereto as Exhibit D.]
In addition – and in violation of this Court’s Consent Order Entering Preliminary
Injunction [DE 39] – Brown copied Estate property and kept and maintained copies of Estate
property on her and the Law Firm’s computer. (Brown Dep., at 30-37.)
Brown and the Law Firm should be added as defendants in this action. They have
undertaken unlawful conduct as it relates to the Estate property that is at the center of this action.
Therefore, this Court should grant the Executor’s motion to join Brown and the Law Firm as
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III. ADDITIONAL ACTIONABLE FACTS DISCOVERED THROUGH DISCOVERY.
As set forth in detail in the proposed First Amended Complaint attached as Exhibit A to
the Motion for Leave, the Executor has learned of additional transactions, occurrences, and
events that predate the filing of the original Complaint and that provide the Executor with
additional claims and grounds for relief against the Defendants. For example, the Executor
learned through discovery that Ford distributed Estate property to even more third parties than
originally suspected, including Geraldo Rivera with Fox News, [see Deposition of Stancil Ford
Shelley, Volume I, taken June 2, 2009 (“Ford Dep. – Vol. I”), at 140-41, a true and copy of the
relevant portions of which are attached hereto as Exhibit E]; The O’Quinn Law Firm, (see id., at
91-93); former television journalist Rita Cosby (see Brown Dep., at 163-64, Exhibit 14); and the
California Department of Justice, [see Deposition of Stancil Ford Shelley, Volume II, taken June
3, 2009 (“Ford Dep. – Vol. II”), at 29, a true and copy of the relevant portions of which are
attached hereto as Exhibit F; see also Brown Dep., at 199-201].
As discussed above and in greater detail in the proposed Amended Complaint, the
Executor has also learned that Brown distributed Estate property to third parties, including The
O’Quinn Law Firm. (Brown Dep., at 22-25.)
Through the Motion for Leave, the Executor seeks this Court’s permission for leave to
add these additional facts in order to afford the Estate full relief concerning the unauthorized
removal of Estate property from Horizons and the subsequent unlawful actions that were
committed with respect to that property.
IV. ADDITIONAL TRANSACTIONS, OCCURRENCES, AND EVENTS
OCCURRING POST-AUGUST 4, 2008 DISCOVERED THROUGH DISCOVERY.
Since August 4, 2008, additional events have occurred which warrant supplementing the
Complaint. For example, the Executor has learned that Brown maintained on her own computer
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copies of Estate property without ever disclosing this fact to the Executor or to the Court.
(Brown Dep., at 30-37.) The additional events that have occurred since August 4, 2008, which
concern the Estate property, warrant supplementing the Complaint.
ARGUMENT AND CITATION OF AUTHORITIES
I. THE COURT SHOULD GRANT LEAVE TO AMEND THE COMPLAINT.
Federal Rule of Civil Procedure 15(a)(2) applies to this Motion and provides that “a party
may amend its pleading only with the opposing party’s consent or the court’s leave.” The court
“should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). Trial courts have
been instructed that “this mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182 (1962).
The “right” to amend is broad; it encompasses the right to make “simple changes in
phraseology as well as to add a new cause or theory of action.” Farrell v. Hollingsworth, 43
F.R.D 362, 363 (D.S.C. 1968). Indeed, “[i]f the underlying facts or circumstances relied upon by
a plaintiff may be a proper subject for relief, he ought to be afforded an opportunity to test his
claim on the merits.” Pittston Co. v. United States, 199 F.3d 694, 705 (4th Cir. 1999). Moreover,
courts regularly allow plaintiffs to amend to “amplify” previously alleged claims. See 6 Wright
& Miller, Federal Practice & Proc., § 1474, n.9 (1990). The right to amend is so broad that
“leave to amend a pleading should be denied only when the amendment would be prejudicial to
the opposing party, there has been bad faith on the part of the moving party, or the amendment
would be futile.” Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999) (quoting
Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)) (emphasis in original).
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A. The Motion For Leave Is Timely.
The Executor has sought leave to amend the Complaint within the time prescribed by the
Court’s most recent scheduling order. [DE 75 (setting October 30, 2009 as the deadline to amend
pleadings).] Therefore, Defendants cannot claim that the Motion for Leave is untimely.
B. Defendants Cannot Demonstrate Prejudice.
Likewise, Defendants cannot claim sufficient prejudice to defeat the Motion for Leave.
Although the question of whether an amendment is prejudicial is determined on a case-by-case
basis, a common example of a prejudicial amendment is one that “raises a new legal theory that
would require the gathering and analysis of facts not already considered by the [defendant, and]
is offered shortly before or during trial.” Johnson v. Oroweat Foods Co., 785 F.2d 503, 510 (4th
Cir. 1986). A non-prejudicial amendment is one that merely adds an additional claim based on
facts already pleaded. See Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980)
(“Because defendant was from the outset made fully aware of the events giving rise to the action,
an allowance of the amendment could not in any way prejudice the preparation of the
Defendants will not suffer any prejudice by allowing the proposed Amended Complaint.
The additional facts pleaded in the proposed Amended Complaint relate to the property that
Ford, Gaither, Melanie, and Gina removed from Horizons. There are no new theories of recovery
against the original defendants, but, instead, additional factual support has been provided for the
current theories, and additional accomplices and co-conspirators in the unlawful distribution of
the property have been identified. Moreover, the proposed new defendants cannot claim any
surprise by their formal inclusion as defendants. Apparently, Gaither and Melanie knew they had
been named as two of the Doe Defendants (see Ex. A, at 1), and Gina presumably knew the same
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given her own wrongful actions concerning the Estate property and her relationship with the
other defendants. With respect to Brown and the Law Firm, since June 2009, the Executor has
informed her that she would likely be added as a defendant. [See, e.g., Joint Request for Status
Conference (DE 58), at 1.] Additionally, all of these additional proposed defendants have already
been deposed in this action regarding their involvement in the removal and distribution of the
property taken from Horizons and were represented by counsel during their respective
depositions. Accordingly, this Court should grant the Executor leave to file the proposed
C. Defendants Cannot Demonstrate Futility.
A motion for leave to amend will be denied as futile when the proposed amendment is
“clearly insufficient or frivolous on its face.” Oroweat Foods Co., 785 F.2d at 510-11. The
Executor’s proposed Amended Complaint is not futile insofar as he has further fleshed out, or
amplified, known factual bases for his claims against the present defendants and against the
defendants the Executor seeks to add to this action. Therefore, this Court should grant the
Executor’s motion for leave to amend the Complaint.
II. THE COURT SHOULD GRANT LEAVE TO SUPPLEMENT THE COMPLAINT.
Federal Rule of Civil Procedure 15(d) allows a trial court, “[o]n motion and reasonable
notice, . . . [and] on just terms” to permit the pleader to serve a supplemental pleading “setting
out any transaction, occurrence, or event that happened after the date of the pleading to be
supplemented.” Fed. R. Civ. P. 15(d). Supplementation includes the ability to add new parties.
See Griffin v. County School Bd. of Prince Edward County, 377 U.S. 218, 227 (1964).
The standards employed by a trial court in ruling on a motion to amend are nearly
identical to the standards to be employed in ruling on a motion to supplement. Franks v. Ross,
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313 F.3d 184, 198 n.15 (4th Cir. 2002). Because the Executor has satisfied his obligations to
amend the Complaint, this Court should also permit the Executor to supplement the Complaint.
III. THE COURT SHOULD GRANT LEAVE TO AMEND TO JOIN GAITHER,
MELANIE, GINA, BROWN AND THE LAW FIRM AS PARTY DEFENDANTS.
Federal Rule of Civil Procedure 15(a) also permits a plaintiff to add or substitute parties.
See Canty v. City of Richmond, Virginia, Police Dep’t, 383 F.Supp. 1396, 1401 (D. Va. 1974),
aff’d 526 F.2d 587 (4th Cir. 1975) (plaintiff granted leave to amend to add as defendants
appropriate members of a police department once the police department was dismissed as a
defendant); see also Curry v. South Carolina, 518 F. Supp.2d. 661, 667 (D.S.C. 2007). For the
same reasons set forth in Section I, supra, this Court should permit the addition of the proposed
defendants pursuant to Rule 15(a).
In addition, Federal Rule of Civil Procedure 20 also applies to the joinder of parties when
a litigant seeks to add parties through amending the pleadings. See Truesdale v. Ashcroft, No.
C A 405-0078-DCN-BHH, 2006 WL 4071948 (D.S.C. March 29, 2006) (construing a motion to
amend brought under Rule 15 as a motion for joinder insofar as it sought to add an additional
defendant). Rule 20 permits joinder of multiple defendants if:
(1) Any right to relief is asserted against them jointly, severally, or in the alternative
with respect to or arising out of the same transaction, occurrence, or series of
transactions or occurrences; and
(2) Any question of law or fact common to all defendants will arise in the action.
See Fed. R. Civ. P. 20(a)(2). “Rule 20(a) permits ‘the broadest possible scope of action
consistent with fairness to the parties [and] joinder of claims, parties and remedies is strongly
encouraged.’” King v. Ralson Purina Co., 97 F.R.D. 477, 479 (W.D.N.C. 1983) (citing United
Mine Workers of America v. Gibbs, 383 U.S. 715, 724 (1966)); cf. Rumbaugh v. Winifrede R.R.
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Co., 331 F.2d 530, 537 (4th Cir. 1964) (stating that the foundation of Rule 20(a) lies in “avoiding
a multiplicity of suits and expediting the final determination of litigation”). Joinder is appropriate
if both prongs of Rule 20(a) are satisfied. See Coffin v. South Carolina Dep’t of Social Servs.,
562 F. Supp. 579, 592 (D.S.C. 1983).
The claims that the Executor seeks to assert against Gaither, Melanie, Gina, Brown and
the Law Firm arise out of the same transaction, occurrence, or series of transactions or
occurrences as those currently alleged against Ford and Ben, and, thus, joinder is appropriate.
See Alonso v. McAllister Towing of Charleston, Inc., 595 F. Supp.2d 645, 653-54 (D.S.C.
2009). Specifically, the Executor seeks to join Gaither, Melanie, Gina, Brown and the Law Firm
in its claims for conversion, wrongful taking of Estate property, unjust enrichment, unfair
competition, and civil conspiracy. Indeed, Rule 20 has enabled the joinder of defendants
specifically in the context of joining subsequent converters of property. See Sudderth v. National
Lead Co., 272 F.2d 259 (5th Cir. 1959). The Executor seeks to join Brown and the Law Firm in
its claims for statutory and common law commercial appropriation of Ms. Smith’s right of
publicity and violation of the Computer Fraud & Abuse Act.
Moreover, since the claims against all defendants are the same claims all arising from
conduct concerning the property unlawfully removed by Ford, Gaither, Melanie, and Gina from
Horizons, there will be multiple questions of law or fact common to all defendants, and,
therefore, joinder is appropriate. See Alonso, 595 F. Supp.2d at 654.
Having satisfied the two prongs of Rule 20, the only remaining question is whether
joinder would destroy jurisdiction. See Gum v. General Electric Co., 5 F. Supp.2d 412, 414-15
(S.D. W.Va. 1998) (denying motion for leave to amend where adding parties would destroy
diversity jurisdiction). It would not. The Executor is a resident of California, while Gaither,
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Melanie, and Gina are all residents of South Carolina, and Brown and the Law Firm are residents
of Georgia for purposes of diversity jurisdiction. Accordingly, joinder is appropriate.
Based on the Foregoing, the Court should GRANT the Executor’s Motion for Leave, and
thereby permit the Executor to file his First Amended Complaint, which, among other things,
expands upon the factual bases for the current claims; identifies and joins the Doe Defendants as
named parties; adds Susan M. Brown and The Law Offices of Susan M. Brown, P.C. as party
defendants; and amends the caption of this action.
Respectfully submitted this 27th day of October, 2009.
/s/ Louis Nettles
L. Lin Wood
(Georgia Bar No. 774588) (Pro hac vice)
Nicole Jennings Wade
(Georgia Bar No. 390922) (Pro hac vice)
Luke A. Lantta
(Georgia Bar No. 141407) (Pro hac vice)
BRYAN CAVE LLP
One Atlantic Center
1201 West Peachtree Street, N.W.
Atlanta, Georgia 30309
Telephone: (404) 572-6600
Facsimile: (404) 572-6999
Karl A. Folkens
(District Court ID No. 854)
(District Court ID No. 2521)
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FOLKENS LAW FIRM, P.A.
3326 West Palmetto Street
Florence, South Carolina 29501
Telephone: (843) 665-0100
Facsimile: (843) 665-0500
Attorneys for the Executor
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CERTIFICATE OF SERVICE
I hereby certify that on October 27, 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
Susan M. Brown
The Law Offices of Susan M. Brown P.C.
525 Clubhouse Drive
Peachtree City, GA 30269
This 27th day of October, 2009.
/s/ Louis Nettles
(District Court ID No. 2521)