Dispute Over Lottery Winnings Heard in Court : Lawsuit: Woman contends that the action involving her estranged husband and mother-in-law is a scheme to keep her from getting her share of $12.6 million.

A bitter family feud over $12.6 million in lottery winnings landed Wednesday in Orange County Superior Court, where allegations of greed and deceit were made by lawyers for both sides.

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The legal fight pits 66-year-old Joan F. Markham against her son, Brian D. Markham, and daughter-in-law, Nicole J. Markham, who are in the midst of a divorce.

An attorney for the 41-year-old Nicole Markham, relating her side of the story for the first time, said the lawsuit is really a scheme by her estranged husband to cheat her out of her share of the winnings.

“I firmly believe that this is just another step in Brian’s scheme to exclude his wife, Nicole, from community property proceeds,” attorney George C. Rudolph said.

“Brian went out and bought a lottery ticket. He doesn’t know what to do when he wins because he doesn’t want to share the proceeds with his wife. So, he held the ticket for three weeks until his mother came back from England and concocted a scheme where Joan went to the lottery office and claimed to be the winner,” Rudolph said.

The elder Markham, who is a British citizen, contends in a lawsuit filed Monday that the couple coerced her into signing over her 1994 lottery winnings last fall by threatening to keep her from seeing her grandchildren and threatening to have her deported. She is suing to have all the winnings returned to her.

In her lawsuit, Joan Markham, who lives in South County on a long-term visa, claims that she gave her son money to buy lottery tickets for her while she was on vacation in her native Great Britain.

Her attorney, Milford W. Dahl, said Monday that Brian Markham held onto the ticket for three weeks until his mother returned to claim the prize, which amounts to $631,000 a year for 20 years, or $454,320 annually after taxes.

Dahl said that after a “campaign of harassment and intimidation” by her son and daughter-in-law to get the money, Joan Markham signed her winnings over to her son in order to preserve her health and her relationship with her grandchildren. The attorney said his client is diabetic and had to be hospitalized after a confrontation with her daughter-in-law last September.

Rudolph said the elder Markham’s version of events is simply not true.

“Then only thing that we can do is sit back and wonder why we are here a year after this alleged incident has occurred,” he said.

Nicole Markham was the only family member who appeared in court Wednesday. Her attorney told Orange County Superior Court Commissioner Sheila B. Fell that his client was willing to immediately take the stand and tell her side of the story, but Nicole Markham declined to talk to reporters after the hearing.

Brian Markham, a resident of Newport Beach, was represented Wednesday by his divorce lawyer, Albert M. Graham Jr., who declined to comment on any of the allegations made by his client’s mother or wife.

The couple married in June, 1988, and have three children under the age of 5. Nicole Markham filed for divorce last Nov. 22.

On Wednesday, Fell scheduled a preliminary hearing for Aug. 11. She ordered that a lottery disbursement of more than $454,000, scheduled to be paid to the estranged couple this week be given to their respective attorneys until the matter is resolved.

Rudolph argued against any delays, saying his client needs her share of the money to live on. He said she spent most of her first payment to buy a new home in Coto de Caza. He said Nicole Markham did not ask for financial support in the divorce and does not have a job.

Deputy Atty. Gen. Angela Sierra, representing the California State Lottery, said the lawsuit has already resulted in the checks being delayed by two weeks. Sierra said the state does not want to be in the middle of the legal battle.