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Paris Settles Slander Suit

Wed., Aug. 22, 2007 2:10 PM PDT by Gina Serpe

For Paris Hilton, a diamond heiress could be a girl's best friend. Or at the very least, no longer her mortal enemy.

The hotel heiress has avoided another trip to the courthouse, amicably settling her $10 million slander lawsuit—and, presumably, feud—with fellow socialite Zeta Graff, lawyers for the two announced Wednesday. Terms of the settlement were not disclosed. [View the original lawsuit here]

"Both parties are glad that the matter could be resolved without the time and expense of a trial," the heiress' lawyers said in a joint statement. "The resolution is confidential, and no one will comment further."

The confidential deal was signed off by Santa Monica Superior Court Judge Linda K. Lefkowitz.

Word of a settlement came the same day jury selection was set to begin in the long-pending trial. Sources said the two sides have been working hard toward negotiating a settlement for the past few days. Opening statements weren't expected in Lefkowitz's courtroom until sometime next week.

The showdown was initially delayed earlier this year, when an "emotionally distraught and traumatized" Hilton was busy working through her more serious legal issues.

Graff, who preceded Hilton as a two-year paramour of Greek shipping heir—and fleeting Hilton fiancé—Paris Latsis, filed suit against Hilton back in July 2005. The complaint alleged that Hilton had planted a New York Post gossip item containing "vicious lies" about Graff.

According to the Post, Graff, Latsis and Hilton all showed up separately to the late-night London hot spot Kabaret. Graff subsequently went "berserk" after spotting the new couple and attempted to both strangle Hilton and then swipe her $4 million diamond necklace, per the newspaper. Adding insult to injury, the Post claimed the necklace was loaned to Hilton by the jeweler Graff, owned by the rival heiress' ex-husband, François.

Graff not only long denied the entire report but claimed that after she arrived at the club, Hilton approached her and said, "I'm going to destroy you," and then attempted to have Graff kicked out of the club.

Hilton's publicist at the time, Rob Shuter, backed Graff's side of the tale. During a deposition, he admitted that Hilton had him feed the story to the Post and that all quotes from the item, attributed to various "sources," had all been dictated to him by Hilton.

The trial was slated to kick off in May, but Hilton managed to get the case postponed after her psychiatrist, Dr. Charles Sophy, testified that she was too rattled with the details of her impending DUI jail stint to deal with another court battle.