Darlene Lutz -- Madge's former art consultant and friend -- filed docs saying she and Madonna settled a very bitter dispute back in 2004 ... and part of the deal was that Darlene gave Madonna cash and in return Madge agreed never to go after Darlene for anything.
Madonna essentially says Darlene stole the letter, along with other personal items including panties and letters to and about various celebrities.
Lutz says in her new docs, filed by attorney Judd Grossman, that the material wasn't private since Madonna mailed the panties to a former BF. Darlene says, "If Madonna truly wanted privacy, then mailing her lingerie was not the way to go."
As we reported ... Madonna got a judge to block the auction, which has since removed the items from its website.
Darlene wants that order thrown out so auction can go ahead as planned.
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