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Harold Peerenboom arrives in Palm Beach County Court in West Palm Beach April 13, 2016.Andrew Innerarity/The Globe and Mail

A wealthy Toronto businessman's defamation lawsuit against the billionaire CEO of Marvel Entertainment took a credibility hit after a Florida judge ruled that Harold Peerenboom illegally collected DNA samples.

Mr. Peerenboom is suing Isaac Perlmutter, who sold Marvel to Disney for $4-billion (U.S.) in 2009, alleging he launched a hate-mail campaign against him in a dispute over the tennis pro at the exclusive Palm Beach complex where they live.

The litigation includes DNA evidence collected from one of the letters that allegedly matches DNA on a water bottle that Mr. Perlmutter's wife, Laura, left in court in a separate case on Feb. 27, 2013. Mr. Peerenboom testified in court that he paid a private lab to conduct tests that showed a 97.6-per-cent possibility that the DNA from the bottle and the letter came from Laura Perlmutter.

Mr. Perlmutter's Miami lawyer, Roy Black, challenged the DNA evidence in court, accusing Mr. Peerenboom of conducting a "sting operation" to obtain the sample. He maintains the DNA is not Ms. Perlmutter's.

Palm Beach County Circuit Judge Meena Sasser recently ruled that Mr. Peerenboom and his lawyer at the time, William Douberly, "acted fraudulently" to obtain the DNA and released the results without the consent of the Perlmutters.

"Upon cross-examination, Peerenboom admitted to his involvement in the scheme to collect the Perlmutters' DNA under false pretenses and further admitted that he had continued to knowingly violate the DNA statute," Judge Sasser ruled.

Florida law makes it a crime to conduct DNA analysis without first obtaining consent from the person tested. The law also requires the person's consent before the results can be released to anyone.

Judge Sasser ruled that Mr. Douberly had subpoenaed the Perlmutters to testify in an unrelated defamation case for the purpose of obtaining DNA and, by doing so, put in motion the "crime-fraud exception to attorney-client privilege."

Attorney-client privilege protects communication between a lawyer and a client, but the privilege doesn't apply if the communication is used to further a fraud or crime.

Mr. Douberly will now face cross-examination by Mr. Black in the defamation litigation still before the courts. He must answer 16 questions related to the DNA collection, something he had refused to do when he claimed attorney-client privilege.

In a statement to The Globe and Mail, Mr. Perlmutter's lawyer said the ruling casts serious doubt on the credibility of Mr. Peerenboom and his defamation lawsuit.

"The court's ruling that Harold Peerenboom committed a crime in pursuit of this spurious lawsuit is a huge and decisive victory for the Perlmutters," Mr. Black said. "With no evidence to support his three-year-old suit against the Perlmutters, Harold Peerenboom violated Florida law by fraudulently obtaining and illegally testing the Perlmutters' DNA."

Mr. Peerenboom faces no legal sanction because the ruling dealt only with the breach of attorney-client privilege.

While the court found that the DNA evidence had been collected illegally, Judge Sasser did not throw it out of the defamation case, although that could happen after Mr. Douberly testifies.

Marc Kasowitz, who is Mr. Peerenboom's current lawyer and has acted for Donald Trump in numerous cases, said his client has a strong case against Mr. Perlmutter, despite the court ruling.

"The court's recent decision does not detract in any way from the evidence implicating the Perlmutters in that wrongful and illegal conduct," Mr. Kasowitz said in a statement. "Nothing in the court's decision, which did not deal with the merits of the DNA evidence at all, detracts from the fact that, as alleged in the complaint, the Perlmutters engaged in a hateful campaign to harass and defame Mr. Peerenboom to try to force him to leave his Florida home."

Mr. Kasowtiz said recent discovery proceedings in New York show that Marvel Entertainment resources were also used in "carrying out his [Mr. Perlmutter's] vicious anonymous hate-mail campaign against Harold Peerenboom."

But Mr. Black said he is confident that "there is no DNA match to either of the Perlmutters – and Mr. Peerenboom, who the court found not credible, knows it."

At the centre of the legal soap opera is Karen Donnelly, the tennis instructor at the ritzy Palm Beach complex where the two men reside. It is alleged that the 73-year old Mr. Perlmutter, an avid tennis player, was infuriated when Mr. Peerenboom wanted to hold a competitive bid for the position.

Soon after, the hateful letter campaign began. The first letters, in June, 2011, cited Canadian newspaper articles about Mr. Peerenboom's past legal entanglements in Canada, and escalated in December, 2012, to accusations that he was a murderer and a pedophile.

The Perlmutters deny they had anything to do with the hate letters.

Mr. Peerenboom, who owns an international executive search firm, recently paid $14-million (Canadian) to buy Conrad Black's Toronto mansion. He is allowing Mr. Black to stay in the house as a renter.