Attorney Michael Avenatti suffered a loss in court on Monday in a case where he was the defendant and not merely an advocate. Avenatti had been sued by former law partner Jason Frank, who claimed that he failed to make good on a previous settlement agreement.
Frank claimed that when he worked with Avenatti’s former firm Eagan Avenatti, he had an independent contractor arrangement that said he would receive 25% of the firm’s annual profits and 20% of his client’s fees. Frank said he was also supposed to get copies of the firm’s tax returns and other financial records. His lawsuit, filed in May of this year, alleged that the firm didn’t provide the records, misstated what their profits were, and didn’t pay him the amount due to him. In February 2016 he filed a demand to go to arbitration, and resigned from the firm months later.
The case hit a snag a month after the arbitration filing, days before Avenatti was to sit for a deposition, the lawsuit said. A person using the name “Gerald Tobin filed an involuntary bankruptcy petition against Eagan Avenatti, and the firm said this prevented any deposition or trial from taking place. According to Frank’s lawsuit, a judge said that the bankruptcy “has a stench of impropriety,” and gave the firm days to consent to the bankruptcy, which they did.
In December 2017, the two sides reached a settlement agreement, whereby the firm would pay Frank $4.85 million, and in March 2018 the bankruptcy was dismissed. Frank sued when he did not receive any payment by the deadline set in the agreement.
At the time the lawsuit was filed, Avenatti told Law&Crime that it was “Frivolous and baseless.”
Apparently the court did not agree.
In a statement to Law&Crime, Avenatti responded to the verdict by saying, “Any amount awarded Jason Frank will be deducted from the $12 Million he owes me and my firm for his outright fraud in stealing clients, etc.”
Eagan Avenatti had another legal battle on Monday, which it lost. The firm was evicted from their California office space due to an alleged $213,253 in unpaid rent.
Frank’s lawsuit claims that Avenatti’s owns an interest in Eagan Avenatti through his personal corporation Avenatti & Associates, but Avenatti claims he has “no responsibility for anything relating to the lease and haven’t for some time.”
Note: This article has been updated with the result of Eagan Avenatti’s eviction case, and details of the initial case brought by Frank and the firm’s bankruptcy.
[Image via NBC screengrab]