Porn actress Stormy Daniels' lawyer Michael Avenatti must pay $4.85 million to an attorney who worked at his former law firm, a California judge ruled Monday, marking the first time the potential presidential candidate is being held personally liable in the lawsuit over back pay.
Los Angeles Superior Court Judge Dennis Landin ordered the payout by Avenatti because he had personally guaranteed a settlement with attorney Jason Frank. Frank alleged that Avenatti's firm misstated its profits and that he was owed millions of dollars.
Avenatti, who is best known for representing Daniels in her lawsuit against President Donald Trump following an alleged 2006 affair, did not appear at Monday's hearing and never filed arguments in the case.
Jason Frank, right, and his attorney Eric George leave a Los Angeles County Superior Court on Monday, Oct. 22, 2108. On Monday a California judge has ordered Stormy Daniels' lawyer Michael Avenatti to pay $4.85 million to Frank, an attorney at his former law firm. The judge said Avenatti must pay the money because he personally guaranteed a settlement with Frank in a lawsuit over back pay. (AP PhotoAmanda Lee Myers)
He told The Associated Press that Frank owes him and the firm $12 million "for his fraud." He did not provide details and declined to comment further. It's unclear whether Avenatti has filed any litigation in the matter against Frank, whose attorney said Frank doesn't owe Avenatti a dime.
Avenatti, who is toying with a possible 2020 presidential run, can appeal the ruling but since he never filed arguments about why he shouldn't have to pay the $4.85 million, any such effort would be "dead in the water," said Frank's attorney, Eric George.
"He's managed to delay this for ages," George said. "At the end of the day, this is money that's owed. No matter how you try to spin it, it comes back to the fact that he took money, it wasn't his and now there's a judgment saying it's owed to my client."
FILE- In this Sept. 24, 2018, file photo, Michael Avenatti, attorney for porn actress Stormy Daniels, talks to reporters after a federal court hearing in Los Angeles. A California judge on Monday, Oct. 22, ordered Avenatti to pay $4.85 million to an attorney at his former law firm--the first time the potential presidential candidate is being held personally liable in the case. (AP PhotoAmanda Lee Myers, File)
Asked whether he thinks Avenatti will pay the sum, George said that "it'll be important to keep an eye on him and sources of money that are coming in, see what his assets are, and take it from there."
Frank had worked at Avenatti's former firm under an independent contractor agreement and was supposed to collect 25 percent of its annual profits, along with 20 percent of fees his clients paid, court documents say.
The action Monday comes after a U.S. bankruptcy court judge ordered Avenatti's former firm to pay $10 million to Frank in May. The $4.85 million for which Avenatti is now personally liable is in addition to that judgment.
In July, the Justice Department accused Avenatti of making misrepresentations in the bankruptcy case and said his former law firm owed more than $440,000 in unpaid federal taxes.
Avenatti's lawyer said at the time that the matter had been resolved. The Justice Department insisted that settlement negotiations were continuing but the debt was still owed.
The ruling against Avenatti comes a week after a federal judge dismissed Daniels' defamation lawsuit against Trump, saying the president made a "hyperbolic statement" against a political adversary when he tweeted about a composite sketch that Avenatti has released.
Daniels, whose real name is Stephanie Clifford, sued Trump in April after he said a composite sketch of a man she said threatened her in 2011 to keep quiet about an alleged affair was a "con job." Avenatti has appealed the ruling.
The defamation claim is separate from another lawsuit that Daniels filed against Trump, which is ongoing. Daniels was paid $130,000 as part of a nondisclosure agreement signed days before the 2016 election and is suing to dissolve that contract.
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SUPREME COURT-TRUMP-CAPITOL RIOT — AP Explains the latest election subversion case before the Supreme Court: Whether Donald Trump is immune from prosecution in a case charging him with plotting to overturn the results of the 2020 presidential election. Includes an AP reporter debrief from last week's hearing on whether federal prosecutors went too far in bringing obstruction charges against hundreds of participants in the Jan. 6, 2021, Capitol riot. Newsroom Ready and Consumer Ready edits sent on April 16.
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SUPREME COURT-TRUMP-CAPITOL RIOT — Supreme Court justices seem to agree on a basic truth about the American system of government: No one is above the law, not even the president. But former President Donald Trump and his legal team are putting that truth to the test when the high court takes up Trump’s bid to avoid prosecution over his efforts to overturn his 2020 election loss to President Joe Biden. SENT: 780 words, photo. UPCOMING: 1,100 words after 10 a.m. arguments. With TRUMP-CAPITOL RIOT-LISTENERS’ GUIDE — What to listen for during Supreme Court arguments on Trump and presidential immunity. Sent April 24.
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FAKE ELECTORS-INDICTMENT-ARIZONA — An Arizona grand jury has indicted former President Donald Trump ’s chief of staff Mark Meadows, lawyer Rudy Giuliani and 16 others for their efforts to use so-called fake electors to try to overturn Trump’s loss to Joe Biden in the 2020 presidential election. SENT: 1,200 words, photos, audio. With ELECTION 2020-MICHIGAN-FAKE ELECTORS — Investigator said Trump, allies were uncharged co-conspirators in plot to overturn Michigan election.
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ELECTION-2024-BIDEN-UNION — President Joe Biden picked up the endorsement of North America’s Building Trades Unions where the president and his allies set out to dismantle Republican Donald Trump’s reputation as a successful real estate developer. SENT: 380 words, photos, audio.
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President Joe Biden speaks before signing a $95 billion Ukraine aid package that also includes support for Israel, Taiwan, and other allies, in the State Dining Room of the White House, Wednesday, April 24, 2024, in Washington. (AP Photo/Evan Vucci)
