Case 8:17-bk-11961-CB 1 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 1 of 24 5 Sara L. Chenetz, State Bar No. 206936 SChenetz@perkinscoie.com Amir Gamliel, State Bar No. 268121 AGamliel@perkinscoie.com PERKINS COIE LLP 1888 Century Park East, Suite 1700 Los Angeles, CA 90067-1721 Telephone: 310.788.9900 Facsimile: 310.788.3399 6 Attorneys for Jason Frank Law, PLC 2 3 4 7 UNITED STATES BANKRUPTCY COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 SANTA ANA DIVISION Desc 10 11 12 13 Case No. 8:17-bk-11961-CB In re EAGAN AVENATTI, LLP, Debtor. 14 15 Date: July 11, 2018 Time: 10:00 a.m. Place: Courtroom 5D 411 West Fourth Street Santa Ana, CA 92701-4593 16 17 18 JUDGE: HON. CATHERINE E. BAUER 19 20 AMENDED NOTICE OF MOTION AND AMENDED MOTION FOR ENTRY OF ASSIGNMENT AND RESTRAINING ORDER; MEMORANDUM OF POINTS AND AUTHORITIES AND AFFIDAVIT OF JASON M. FRANK IN SUPPORT THEREOF PLEASE TAKE NOTICE that on July 11, 2018 at 10:00 a.m., or as soon thereafter as 21 the matter may be heard, before the Honorable Catherine E. Bauer, United States Bankruptcy 22 Judge, at the United States Bankruptcy Court for the Central District of California, Santa Ana 23 Division, located at 411 West Fourth Street, Courtroom 5D, Santa Ana, California 92701, 24 judgment creditor, Jason Frank Law, PLC (the “Judgment Creditor”) will and hereby does move 25 this Court for entry of an order (“Order”): (1) instructing the judgment debtor, Eagan Avenatti, 26 LLP (the “Judgment Debtor”), to assign to Judgment Creditor all of Judgment Debtor’s interests 27 in any and all proceeds, attorney’s fees, costs, rights to payment and accounts receivable the 28 Judgment Debtor is or may be entitled to receive from the lawsuits and clients listed on Exhibit A 140306619.3 -1- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 2 of 24 Desc 1 to the accompanying Declaration of Jason M. Frank (collectively the “Lawsuit Receivables”), as 2 well as any rent payments from the Judgment Debtor’s tenants (together with the Lawsuit 3 Receivables, the “Receivables”), to the extent necessary to pay the Judgment Creditor’s judgment 4 in full, including accrued interest and reasonable attorneys’ fees and costs through the date(s) of 5 payment(s), and (2) restraining the Judgment Debtor and any servant, agent, employee, 6 representative, attorney or other professionals for the Judgment Debtor and any person(s) in 7 active concert or participation with any of them from encumbering, assigning, disposing or 8 spending any and all Receivables (“Motion”). 9 PLEASE TAKE FURTHER NOTICE that this motion is made on the grounds that this 10 Court issued a Judgment in favor of the Judgment Creditor and against the Judgment Debtor in 11 the amount of $10,000,000.00, plus interested thereon, reasonable attorneys’ fees and costs on 12 May 22, 2018 (Doc. No. 455), the balance due on which, including accrued interest to the date of 13 this notice exceeds $10,016,367.02, the Judgment Debtor has an assignable right to the 14 Receivables and there is a need to restrain the Judgment Debtor from disposing or otherwise 15 diverting the Receivables. 16 This motion is based on this notice of motion and motion, the accompanying declaration 17 of Jason M. Frank and its exhibits, the memorandum of points and authorities set forth below, the 18 prior proceedings in this case, and all judicially noticeable facts. 19 PLEASE TAKE FURTHER NOTICE that pursuant to Local Bankruptcy Rule 9013- 20 1(f), any party wishing to oppose or respond to the grant of any of the relief sought through the 21 Motion must file a written opposition or response with the Court and serve a copy of it upon the 22 undersigned counsel no later than fourteen (14) days prior to the hearing on the Motion. The 23 failure to properly file and serve such a written opposition may be deemed consent to the relief 24 sought through the Motion or a waiver of a right to oppose the Motion. 25 /// 26 /// 27 /// 28 140306619.3 -2- Case 8:17-bk-11961-CB 1 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 3 of 24 Desc WHEREFORE, Judgment Creditor respectfully requests this Court issue the Order and 2 grant such other relief as is just and proper. 3 Dated: June 20, 2018 PERKINS COIE LLP 4 By: /s/ Sara L. Chenetz_________________ Sara L. Chenetz 5 6 Attorneys for Judgment Creditor Jason Frank Law, PLC 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 140306619.3 -3- Case 8:17-bk-11961-CB 1 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 4 of 24 TABLE OF CONTENTS 2 3 4 5 6 7 8 9 Desc Page I. II. III. IV. V. INTRODUCTION .............................................................................................................. 1 THE COURT SHOULD ISSUE AN ASSIGNMENT ORDER DIRECTING THE JUDGMENT DEBTOR TO ASSIGN THE RECEIVABLES TO THE JUDGMENT CREDITOR .................................................................................................. 2 THE COURT SHOULD RESTRAIN JUDGMENT DEBTOR FROM ASSIGNING, DISPOSING OR OTHERWISE DIVERTING ITS RIGHTS TO PAYMENTS ....................................................................................................................... 4 JUDGMENT DEBTOR CANNOT CONCEAL ITS RIGHTS TO FEES BY USING THE NAME “AVENATTI & ASSOCIATES APC.” ........................................... 7 CONCLUSION ................................................................................................................. 11 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 140306619.3 -i- Case 8:17-bk-11961-CB 1 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 5 of 24 TABLE OF AUTHORITIES 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Desc PAGE CASES Bahamas v. Kimberly-Clark ............................................................................................................14 Bardis v. Oates, 119 Cal.App.4th 1 (2004) ...........................................................................................................8 Choice Hotels International, Inc. v. Singh, No. 2:15-mc-144-GEB-EFB, 2017 WL 3773774 (E.D. Cal. Aug. 31, 2017) ........................2, 3 Clifford v. Davidson, Case No. 2:18-cw-05052-RSWL ........................................................................................10, 16 Clifford v. Trump et al. Case No. 2:18-cv-02217-SJO ........................................................................................... passim Greenbaum v. Islamic Republic of Iran, 782 F. Supp. 2d 893 (C.D. Cal. 2008) ..............................................................................2, 3, 10 In re Cooper, No. 12-51833, 2015 WL 1228831 (Bankr. N.D. Cal., Mar. 10, 2015) .......................................2 Legal Additions LLC v. Kowalski, No. C-08-2754 EMC, 2011 WL 3156724 (N.D. Cal. July 26, 2011) .........................................4 Lopez v. Musinorte Entertainment Corp., No. CV 11-01442 AMH, 2011 WL 2471927 (C.D. Cal. June 21, 2011) ...................................4 Novak v. Simpson, Case No. 6:18-cv-00922 ................................................................................................... passim 21 UMG Recordings, Inc. v. BCD Music Group, Inc., No. CV 07-05808 SJO, 2009 WL 2213678 (C.D. Cal. July 9, 2009).................................1, 3, 4 22 STATUTES 23 Cal. Bus. & Prof. Code § 708.510(d) ................................................................................................3 24 Cal. Bus. & Prof. Code § 708.510(e) ................................................................................................3 25 Cal. Bus. & Prof. Code § 6160 .........................................................................................................8 26 Cal. Bus. & Prof. Code § 6161 .........................................................................................................8 27 Cal. Code Civ. Proc. § 708.510...................................................................................................4, 10 28 140306619.3 -ii- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 6 of 24 Desc 1 Cal. Code Civ. Proc. § 708.510(a) ....................................................................................................2 2 Cal. Code Civ. Proc. § 708.510 (c) ...................................................................................................3 3 Cal. Code Civ. Proc. § 708.510(f).....................................................................................................3 4 5 6 7 8 9 10 11 Cal. Code Civ. Proc. § 708.520.....................................................................................................4, 7 Cal. Code Civ. Proc. § 708.520(a) ................................................................................................1, 4 Cal. Corp. Code § 13404 ...................................................................................................................8 OTHER AUTHORITIES Cal. Bar. Rule 3.154(A) ....................................................................................................................8 Cal. Bar. Rule 3.156(B) ....................................................................................................................8 Fed. R. Bankr. Pro. 2004 ...................................................................................................................6 12 Fed. R. Bankr. Pro. 7069 ...................................................................................................................2 13 Fed. R. Bankr. Pro. 9014 ...................................................................................................................2 14 Fed. R. Bankr. Pro. 9014(c) ..............................................................................................................2 15 Local Bankruptcy Rule 7069-1 .........................................................................................................2 16 Local Bankruptcy Rule 9013-1(f) .....................................................................................................2 17 18 19 20 21 22 23 24 25 26 27 28 140306619.3 -iii- Case 8:17-bk-11961-CB 1 2 3 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 7 of 24 Desc MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION On May 22, 2018, this Court entered a judgment in favor of Jason Frank Law, PLC 4 (“Judgment Creditor”) and against Eagan Avenatti, LLP (“Judgment Debtor”) in the amount of 5 $10,000,000.00, plus interest and reasonable attorneys’ fees and costs incurred in collecting the 6 judgment (“Judgment”). [Attached Declaration of Jason M. Frank (“Frank Decl.”), Exh. D.] On 7 June 6, 2018, a writ of execution was issued by the Clerk of this Court against Judgment Debtor 8 in the amount of $10,008,465.75, including $8,465.75 in accrued post-judgment interest (“Writ of 9 Execution”). [Id., Exh. E.] 10 By this motion, Judgment Creditor is seeking an assignment order requiring Judgment 11 Debtor, a law firm, to assign its interest in any and all proceeds, attorney’s fees, costs, rights to 12 payments and accounts receivable it is or may be entitled to receive from the lawsuits and clients 13 listed on Exhibit A to the Frank Decl. (collectively the “Lawsuit Receivables”), as well as any 14 rent payments from the Judgment Debtor’s tenants (together with the Lawsuit Receivables, the 15 “Receivables”). The lawsuits listed in Exhibit A are cases in which Judgment Debtor is or will be 16 potentially entitled to receive attorneys’ fees and costs for its legal services. [Frank Decl., ¶ 3.] 17 Judgment Debtor previously sublet part of its premises and collected rents from its subtenants. 18 [Frank Decl., ¶ 11.] 19 Judgment Creditor is further seeking a restraining order preventing Judgment Debtor and 20 any servant, agent, employee, representative, attorney or other professional for Judgment Debtor 21 and any person(s) in active concert or participation with them from encumbering, assigning, 22 disposing or spending any and all Receivables. This relief may be sought simultaneously with a 23 request for entry of an assignment order and is necessary to prevent the Judgment Debtor from 24 prejudicing Judgment Creditor’s ability to collect the Judgment. See Cal. Code Civ. Proc. § 25 708.520(a). 26 27 The requested assignment and restraining order (“Order”) are standard mechanisms for enforcing judgments in federal court. See, e.g., UMG Recordings, Inc. v. BCD Music Group, 28 140306619.3 -1- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 8 of 24 Desc 1 Inc., No. CV 07-05808 SJO, 2009 WL 2213678 (C.D. Cal. July 9, 2009). For the reasons stated 2 herein, the requested relief should be granted. 3 II. 4 THE COURT SHOULD ISSUE AN ASSIGNMENT ORDER DIRECTING THE JUDGMENT DEBTOR TO ASSIGN THE RECEIVABLES TO THE JUDGMENT CREDITOR. 5 Pursuant to Federal Rules of Bankruptcy Procedure Rule 7069(a), 9014 and Local 6 Bankruptcy Rule 7069-1, once a writ of execution is issued, a money judgment may be enforced 7 in accord with the procedures of the state where the court is located. Under California law, “the 8 court may order the judgment debtor to assign to the judgment creditor . . . all or part of a right to 9 payment due or to become due, whether or not the right is conditioned on future developments.” 10 Cal. Code Civ. Proc. § 708.510(a). “The plain language of the statute . . . contemplates that an 11 assignment order can be based on contingent rights” such as the right to contingency fees. 12 Greenbaum v. Islamic Republic of Iran, 782 F. Supp. 2d 893, 896-97 (C.D. Cal. 2008). It further 13 includes assignments of the following types of payments: rents, commissions, royalties, accounts 14 receivable, general intangibles, judgments and instruments. Id; Cal. Code Civ. Proc. § 15 708.510(a). 16 An assignment order assigns to the judgment creditor “the [judgment] debtor’s right to 17 payments due from a third person [obligor]” and may be applied to enforce money judgments in 18 federal court. Greenbaum v. Islamic Republic of Iran, 782 F. Supp. 2d at 896-97.1 The order 19 “does not make any property assignable that is not already assignable….” Id. at 896. 20 Consequently, “notice of the motion for an assignment order need not be provided to the obligor, 21 who is not affected by the assignment order until notice of the order is received.” Choice Hotels 22 International, Inc. v. Singh, No. 2:15-mc-144-GEB-EFB, 2017 WL 3773774 at *2 (E.D. Cal. 23 Aug. 31, 2017). The determination as to whether an obligor actually owes anything to the 24 25 26 27 28 Given this Court issued the Judgment in this case, it maintains jurisdiction to enforce the Judgment. See, e.g., In re Cooper, No. 12-51833, 2015 WL 1228831 at *1 (Bankr. N.D. Cal., Mar. 10, 2015) (“A proceeding to enforce or execute on a judgment ‘arising under’ the court’s jurisdiction continues under such jurisdiction until the judgment is satisfied”) (citing McCowan v Fraley (In re McCowan), 296 B.R. 1, 5 (9th Cir. B.A.P. 2003) (“proceedings to aid in execution of a judgment are considered a continuation and of and part of original proceedings.”); Fed. R. Bankr. Pro. 7069, 9014(c); L.B.R. 7069-2. 1 140306619.3 -2- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 9 of 24 Desc 1 Judgment Debtor is reserved for a later stage in the proceedings. Greenbaum, 782 F. Supp. 2d at 2 897. 3 “While a motion for an assignment order does not require detailed evidentiary support, a 4 party seeking an assignment order is required to identify the intended source that is obligated to 5 make payments to the judgment debtor.” Choice Hotels, 2017 WL 3773774 at *2 (E.D. Cal. 6 2017). “The court has broad discretion in determining whether to order an assignment.” 7 Greenbaum, 782 F. Supp. 2d at 895. Although the Court may take into consideration all relevant 8 factors, “the sole constraints placed on the Court are that the right to payment be assigned only to 9 the extent necessary to satisfy the creditor’s money judgment and that, where part of the 10 payments are exempt, the amount of the payments assigned should not exceed the difference 11 between the gross amount of the payments and the exempt amount.” UMG Recordings, Inc., 12 2009 WL 2213678 at *2; Cal. Code Civ. Proc. § 708.510 (c), (d), (e), (f). 13 Good cause exists to enter the requested assignment order. As shown in the 14 accompanying Frank Decl., the current balance due on the Judgment is at least $10,016,367.02, 15 including accrued interest, but excluding attorneys’ fees and costs. [Frank Decl., ¶ 8.] The 16 Judgment was entered less than 10 years ago and no order exists staying enforcement of the 17 Judgment. [Id., ¶¶ 6, 7.] Judgment Creditor has specifically identified a list of the third parties 18 and lawsuits from which it seeks the assignment of payment rights and accounts receivable. 19 [Frank Decl., Exh. A.] These are cases and clients from which Judgment Debtor may be entitled 20 to receive attorneys’ fees and costs for its services. [Id.] As such, Judgment Creditor has 21 satisfied the evidentiary requirements necessary to establish grounds for an assignment order. 22 See, e.g., UMG Records, 2009 WL 2213678 at *2 (holding that the judgment creditor was entitled 23 to an assignment order, where it provided a list of the “probable distributors, purchasers and/or 24 customers” that could potentially owe money to the judgment debtor). 25 Accordingly, Judgment Creditor respectfully requests this Court order an assignment of 26 Judgment Debtor’s rights to receive and collect the Receivables, in the amount necessary to pay 27 off the Judgment in full, including accrued interest and reasonable attorneys’ fees and costs. 28 140306619.3 -3- Case 8:17-bk-11961-CB 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 III. Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 10 of 24 Desc THE COURT SHOULD RESTRAIN JUDGMENT DEBTOR FROM ASSIGNING, DISPOSING OR OTHERWISE DIVERTING ITS RIGHTS TO PAYMENTS. As noted, under California Code of Civil Procedure Section 708.520(a), “[w]hen an application [for an assignment order] is made pursuant to [California Code of Civil Procedure] § 708.510, the judgment creditor may [also] apply to the court for an order restraining the judgment debtor from assigning or otherwise disposing of the right to payment that is sought to be assigned.” UMG Records, 2009 WL 2213678 at *3; Cal. Code Civ. Proc. § 708.520. Such a restraining order may be issued by a federal court in this state so that “the assigned rights to payment might be available for satisfaction of the judgment.” UMG Records., 2009 WL 2213678 at *3 (citing Sleepy Hollow, Inv. Co. No. 2, No. C 03-4792 MMC, 2006 WL 279349 at *3 (N.D. Cal. Feb. 3, 2006)). In order to establish grounds for such a restraining order, the judgment creditor must make a showing of need for the order. Id. The threshold for showing “need” for a restraining order is “relatively low.” Legal Additions LLC v. Kowalski, No. C-08-2754 EMC, 2011 WL 3156724 at *3 (N.D. Cal. July 26, 2011). For example, in UMG Records, the court concluded that the “need requirement” was satisfied because the judgment debtor had defaulted on a payment program under the settlement agreement and refused to voluntarily satisfy the judgment against it. 2009 WL 2213678 at *3. Similarly, in Lopez v. Musinorte Entertainment Corp., No. CV 11-01442 AMH, 2011 WL 2471927 (C.D. Cal. June 21, 2011) and Legal Additions, 2011 WL 3156724 at *3, the district court issued a restraining order because the judgment debtor had avoided payment after entry of the Judgment. In the present case, just like the situation in UMG Records, Judgment Debtor defaulted on the payment plan under the Court approved Settlement Agreement and has not made any payments on the Judgment. [Frank Decl., ¶¶ 6-9.] As such, for this reason alone, this Court should restrain Judgment Debtor and any servant, agent, employee, representative, attorney or other professional for Judgment Debtor and any person(s) in active concert or participation with them from assigning or otherwise disposing of any Receivables. UMG Records, 2009 WL 2213678 at *3. Moreover, there are additional reasons why a restraining order is necessary in this 28 140306619.3 -4- Case 8:17-bk-11961-CB 1 2 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 11 of 24 Desc case, as highlighted by the following facts. First, Michael Avenatti is the managing partner of Judgment Debtor, and owns a 3 controlling 75% interest in the firm through his personal corporation, Avenatti & Associates, 4 APC. [Frank Decl., ¶¶ 10-11, Exh. G at 51:17-25; 92:1 – 93:12.] As a result, Mr. Avenatti has 5 ultimate control over whether Judgment Debtor will assign its rights to attorneys’ fees and costs 6 on its cases to third parties or otherwise attempt to hide or transfer them. [Id.] One of the largest 7 assets of Judgment Debtor is its right to attorneys’ fees and costs in the Kimberly-Clark class 8 action. [Id., ¶ 12; Exh. F at 105:4-25; Exh. G at 59:2-61:2, 62:6-63:9.] Assuming the judgment 9 in that class action is affirmed on appeal, Judgment Debtor stands to be awarded millions of 10 dollars in attorneys’ fees and costs for its work on the matter. [Id.] However, on July 14, 2017, 11 while Judgment Debtor was a debtor-in-possession, Mr. Avenatti testified he may decide in the 12 future to assign an unspecified portion of the attorneys’ fees from the Kimberly Clark class action 13 to himself personally, as opposed to the law firm. [Id.] This, of course, would be to the detriment 14 of Judgment Creditor. 15 In its Opposition to Judgment Creditor’s Application for an Order Shortening Time, 16 Judgment Debtor all but confirms it is going to attempt to minimize the amount of fees it collects 17 in the Kimberly Clark class action, stating that “[Judgment Debtor] is entitled to only a small 18 portion of the fees from that case due to the fact the firm was never appointed class counsel in 19 that case.” [Doc No. 464 at 2:1-4 (emphasis added).] This is contrary to Judgment Debtor’s 20 bankruptcy schedules and Mr. Avenatti’s testimony at the initial 341(a) Meeting of Creditors, in 21 which he testified under oath that Judgment Debtor was entitled to $17 million in accrued fees 22 and a “significant portion of those fees are from the Kimberly Clark class action case.” [Frank 23 Decl., Exh. F at 105:4-25; Exh H (Doc 100) at 14 (Monthly Operating Report stating the 24 Judgment Debtor’s expected sales revenue is over $17 million.)] Apparently, Mr. Avenatti is 25 now going to take the position that he, as the managing partner of Judgment Debtor, is going to 26 negotiate with himself regarding how much of the fees should be allocated to Mr. Avenatti 27 personally, if any at all, as opposed to Judgment Debtor. The conflict of interest is obvious. 28 Absent entry of a restraining order, Mr. Avenatti would have the unfettered ability to allocate as 140306619.3 -5- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 12 of 24 Desc 1 little as possible to the firm to prevent Judgment Creditor from collecting on the Judgment.2 2 Accordingly, a restraining order is necessary to prevent such gamesmanship. 3 Second, prior to consenting to entry of an order for relief, Judgment Debtor purportedly 4 assigned the right to payment of $17 million to the X-Law Group, a law firm controlled by Mr. 5 Avenatti’s friend. [Frank Decl., ¶¶ 13-14, Exh. G at 68:9-69:21; 70:2-73:18.] Mr. Avenatti 6 claimed this agreement was in writing, but to the best of Judgment Creditor’s knowledge never 7 provided a copy of the agreement to the U.S. Trustee’s office after it was requested to do so.3 8 [Id.] Mr. Avenatti listed this $17 million assignment as an undisputed “secured claim” on the 9 Judgment Debtor’s initial bankruptcy schedules. [Id., Exh. I (Doc. No. 50) at Schedule D, ¶ 2.1.] 10 Judgment Debtor further began paying the X-Law Group’s rent and salaries pursuant to a 11 purported “oral agreement” reached between Mr. Avenatti and the X-Law Group, according to 12 Mr. Avenatti’s testimony. [Id., Exh. G at 68:9-69:21; 70:2-73:18.] While Judgment Debtor was a 13 debtor-in-possession it made such payments, as reflected through the most recent monthly 14 operating report filed in this case. [Id., Exh. J (Doc. No. 316) at 5 and 11.] For example, Thomas 15 23 Judgment Debtor’s suggestion that Mr. Avenatti is entitled to the majority of the fees personally as opposed to the firm is based on out-of-context dicta from an opinion denying Kimberly Clark’s ex parte application to decertify the class due to Judgment Debtor’s bankruptcy. [See Declaration of Michael Avenatti in Support of Opposition to Order Shortening Time (“Avenatti Decl.”), ¶ 5, Exh. 1 (Doc. No. 464-1).] Contrary to the suggestion in Mr. Avenatti’s declaration, the District Court in the Kimberly Clark class action has never ruled that Mr. Avenatti is entitled to a personal award of attorneys’ fees and costs separate and apart from the firm. [Id., Exh. 1 at p. 2. (holding that the Court would deny the ex parte application regardless of whether it treated Avenatti and the Judgment Debtor as separate entities, because there was no evidence or authority “suggesting that a law firm in Chapter 11 bankruptcy can no longer adequately serve as class counsel.”)] Based on a nationwide Westlaw search, there does not appear to be any case in the history of the United States where fees were separately awarded to the lawyer as opposed to his or her law firm. But this is a matter that can be raised with the District Court in the Kimberly Clark class action at the time Plaintiff moves for attorneys’ fees and costs. 24 3 16 17 18 19 20 21 22 25 26 27 28 2 In its Opposition to the Application to Shorten Time, Judgment Debtor notes that Judgment Creditor never moved to compel production of this purported assignment agreement with the XLaw Group. [Doc. No. 464 at 1.] It is unclear what point Judgment Debtor is trying to make. Regardless, this statement is misleading at best. Judgment Creditor and other creditors requested the purported assignment agreement with X-Law Group (among a host of other documents) in connection with proposed Rule 2004 exams and document requests, but it was never produced. Judgment Debtor and Mr. Avenatti then entered into settlement discussions and ultimately the Settlement Agreement with Judgment Creditor, which is why these discovery efforts ceased. 140306619.3 -6- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 13 of 24 Desc 1 Cassaro was then and is now an employee of X-Law Group and Damian Rogers was then and is 2 now a partner at X-Law Group. See www.thexlawgroup.com. (last visited June 19, 2018) 3 Mr. Avenatti never explained what Judgment Debtor received in return from the X-Law 4 Group that possibly could have been worth granting the right to $17 million to the X-Law Group 5 and paying the X-Law Group’s rent and salaries. [Frank Decl., ¶ 14, Exh. G at 68:9-69:21; 70:2- 6 73:18.] Notably, when Judgment Debtor later sought to dismiss the bankruptcy case and agreed 7 to pay off the claims of approved creditors (backed with consent judgments), Judgment Debtor 8 specifically excluded the X-Law Group’s claim. [Id., Exh. K (Doc. No. 343) at p. 5 n. 5.] 9 Based on these facts, it appears obvious the purported $17 million assignment to X-Law 10 Group was not a legitimate assignment, but instead an abandoned attempt by Judgment Debtor 11 and Mr. Avenatti to prejudice the rights of Judgment Debtor’s actual creditors. In its Opposition 12 to the Application to Shorten Time, Judgment Debtor argues this is irrelevant because “there is no 13 evidence of a purported transfer of assets to the X-Law Group or any other firm for that matter” 14 [Doc 464 at 1:19-20] – ignoring that Judgment Debtor once listed this as undisputed secured 15 claim. [Frank Decl., Exh. I (M.D. Fla. Doc. No. 48) at Schedule D, ¶ 2.1.] But this misses the 16 point. Even though the notion that the X-Law Group had a secured claim was later abandoned 17 (after facing scrutiny by the U.S. Trustee and an undisputed lack of perfection), the fact that Mr. 18 Avenatti and Judgment Debtor even attempted this improper transfer and prioritization of this 19 unsubstantiated claim demonstrates the need for the restraining order to prevent such future 20 improper dispositions of rights to property. See Cal. Code Civ. Proc. § 708.520. 21 IV. 22 23 24 25 26 27 28 JUDGMENT DEBTOR CANNOT CONCEAL ITS RIGHTS TO FEES BY USING THE NAME “AVENATTI & ASSOCIATES APC.” In its Opposition to the Application Shortening Time, Judgment Debtor claims it is not entitled to any fees in the lawsuits filed on behalf of Stephanie Clifford, aka “Stormy Daniels” (the “Clifford matters”), because Mr. Avenatti did not list Judgment Debtor’s firm name in the pleadings, but instead listed “Avenatti & Associates, APC.” [Doc 464 at 1 n.1; Doc 464-1 at ¶¶ 12-13, Exhs. 6, 7.] On or about June 13, 2018, after the initial filing of this motion, Mr. Avenatti filed another lawsuit (Novak v. Simpson) where he listed his firm as “Avenatti & Associates, 140306619.3 -7- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 14 of 24 Desc 1 APC” in the signature block. [Frank Decl., Exh. T.] This appears to be part of an improper 2 scheme to conceal Judgment Debtor’s rights to payments in these cases and to avoid Judgment 3 Creditor’s Judgment, as the evidence below establishes.4 4 First, there is no separate law firm called Avenatti & Associates, APC. The California 5 State Bar has confirmed that Avenatti & Associates, APC has never registered as a law firm or 6 corporate entity authorized to practice law in this state. [Frank Decl., ¶¶ 18-19, Exhs. L, M.] 7 California Corporations Code § 13404 provides that “no professional corporation shall render 8 professional services in this state without a currently effective certificate of registration issued by 9 the government agency regulating the profession . . . pursuant to the applicable provisions of the 10 Business & Professions Code.” Cal. Bus. & Prof. Code §§ 6160 and 6161 require professional 11 corporations, such as Avenatti & Associates, APC, to register with the California State Bar. The 12 California State Bar Rules further provide that a law corporation “is not entitled to practice law” 13 without a currently effective certificate of registration which must be renewed each year. See Cal. 14 Bar. Rule 3.154(A), Rule 3.156(B). Simply put, Avenatti & Associates, APC is not and has never 15 been a law firm or separate entity authorized to render professional services or practice law. 16 Second, as established above, Avenatti & Associates, APC is Mr. Avenatti’s personal 17 corporation in which he holds his 75% equity interest in Judgment Debtor. [Frank Decl., ¶¶ 10- 18 11, 21, Exh. G at 51:17-25; 92:1 – 93:12.] It is not, and has never been, a separate law firm. 19 Judgment Debtor remains an ongoing business that has continued to file cases on behalf of 20 clients, including a new case filed two months ago in which the firm is correctly identified as 21 “Eagan Avenatti, LLP.” [Id., Exh. U.] Mr. Avenatti remains the managing partner of Judgment 22 Debtor, with fiduciary duties to Judgment Debtor; consequently, any contention he can divert 23 cases to his personal corporation, or pick and choose which firm name he wants to use to the 24 financial detriment of Judgment Debtor and its creditors is not permissible under the law. See, 25 e.g., Bardis v. Oates, 119 Cal.App.4th 1, 6 (2004) (“As managing partner, [the defendant] was 26 27 28 The Stephanie Clifford and Novak matters appear to be the only three cases on Exhibit A in which Mr. Avenatti attempted this name change maneuver. Notably, the Clifford v. Trump case was filed on or about March 6, 2018, while Judgment Debtor was a debtor-in-possession. 4 140306619.3 -8- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 15 of 24 Desc 1 prohibited from engaging in self-dealing in any way, shape or form. The law does not permit a 2 fiduciary to deal with himself in any transaction in his individual capacity.”) (citations omitted). 3 Third, Avenatti & Associates, APC’s corporate filings with the California Secretary of 4 State confirm it is acting on behalf of or is effectively Judgment Debtor. [Frank Decl., ¶¶ 20-21, 5 Exh. N.] Specifically, in Paragraph 16 of its Statement of Information -- filed with the Secretary 6 of State on or about January 4, 2016 -- Avenatti & Associates, APC was asked to “Describe the 7 Type of Business of the Corporation” and responded “Eagan Avenatti, LLP.” [Id.] 8 9 Fourth, the address for the law firm listed on the caption pages and dockets in the Clifford and Novak matters is the same address for Judgment Debtor, i.e., 520 Newport Center Drive, 10 Suite 1400, Newport Beach, CA 92660. [Frank Decl., ¶ 23, Exhs. O, P, T; Avenatti Decl., Exhs. 11 6, 7.] The signs at the door at this office are for “Eagan Avenatti, LLP.” [Frank Decl., ¶ 24, Exh. 12 Q.] There are no signs for “Avenatti & Associates, APC. [Id.] Further, the Judgment Debtor’s 13 bankruptcy schedules do not indicate that any entity named Avenatti & Associates, APC was 14 renting space at the firm. [Id., Exh. I; Doc. Nos. 105, 108, 148.] 15 Fifth, the telephone and facsimile numbers listed on the caption pages and dockets in the 16 Clifford and Novak matters are the numbers for Judgment Debtor, i.e. (949) 706-7000 and (949) 17 706-7050. [Frank Decl., ¶ 25, Exhs. O, P, T; Avenatti Decl., Exhs. 6, 7.] In fact, up until at least 18 one week prior to the filing of this motion, when you called the telephone number, the 19 receptionists would answer, “Hello, Eagan Avenatti.” [Frank Decl., ¶ 25.] Apparently, after the 20 initial filing of this motion, the receptionists now answer, “Law Offices.” [Id.] 21 Sixth, the attorneys in the Clifford and Novak matters work for Judgment Debtor, such as 22 Ahmed Ibrahim, as reflected in the Judgment Debtor’s Bankruptcy Schedules. [Frank Decl., ¶ 23 26; Compare Exh. J (Monthly Operating Report listing Ahmed Ibrahim as employee of Judgment 24 Debtor) with Exhs. O, P and Avenatti Decl., Exhs. 6, 7 (listing Mr. Ibrahim as counsel for 25 Stephanie Clifford).] Notably, Mr. Avenatti’s and Mr. Ibrahim’s registrations at the State Bar 26 likewise indicate they work at “Eagan Avenatti, LLP” not “Avenatti & Associates, APC.” [Id., 27 Exhs. R, S.] 28 140306619.3 -9- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 16 of 24 Desc 1 Seventh, the email addresses for “Avenatti & Associates, APC” are the same email 2 addresses for Judgment Debtor. [Frank Decl., ¶ 27; Exhs. O, P; Avenatti Decl., Exhs. 6, 7.] For 3 example, in its Opposition to the Motion to Shorten Time, Judgment Debtor provided a copy of 4 the dockets in Clifford v. Trump et al. and Clifford v. Davidson to prove that counsel of record 5 was “Avenatti & Associates, APC” not “Eagan Avenatti.” [Avenatti Decl., Exhs. 6, 7.] 6 However, upon closer inspection, it reflects the email addresses for both lawyers are 7 mavenatti@eaganavenatti.com and aibrahim@eaganavenatti.com. [Id.] Mr. Avenatti also used 8 an older version of Judgment Debtor’s email address (mavenatti@eoalaw.com, 9 aibrahim@eoalaw.com) on the caption pages for these cases. [Frank Decl., ¶ 27.] 10 In sum, these are exactly the types of improper tactics to avoid Judgment Creditor’s 11 Judgment that necessitate a restraining order. Not only is Avenatti & Associates, APC not a 12 separate law firm, but the facts above demonstrate that Judgment Debtor would be entitled to 13 compensation even if Avenatti & Associates, APC was a separate firm. In other words, assuming 14 arguendo that Avenatti & Associates, APC was a separate and independent firm (and it is not), 15 Judgment Debtor would undoubtedly be entitled to compensation by virtue of the fact that 16 Judgment Debtor is providing its attorneys, office and infrastructure for the Clifford and Novak 17 matters. The fact that Mr. Avenatti and Judgment Debtor are even attempting to divert the 18 Judgment Debtor’s business in this manner vividly illustrates the need for the requested 19 assignment and restraining orders. In any event, as discussed in the previous section, the 20 determination as to whether a third-party obligor actually owes anything to the Judgment Debtor 21 is reserved for a later stage in the proceedings. Greenbaum, 782 F. Supp. 2d at 897. 22 The proper procedure under California Code of Civil Procedure Section 708.510 is to issue an 23 assignment order for any and all rights the Judgment Debtor may possess for payments in the 24 Clifford and Novak matters. Id. Upon notice of the assignment order, if any third parties wish to 25 challenge whether Judgment Debtor is owed any money, such challenges can be resolved at that 26 time. 27 28 140306619.3 -10- Case 8:17-bk-11961-CB 1 2 3 4 5 V. Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 17 of 24 Desc CONCLUSION For the foregoing reasons, Judgment Creditor respectfully requests the Court enter the requested Order and grant such other and further relief as is just and proper. Dated: June 20, 2018 PERKINS COIE LLP 6 By: /s/ Sara L. Chenetz_________________ Sara L. Chenetz 7 Attorneys for Judgment Creditor Jason Frank Law, PLC 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 140306619.3 -11- Case 8:17-bk-11961-CB 1 2 Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 18 of 24 Desc AFFIDAVIT OF JASON M. FRANK I, Jason M. Frank, declare as follows: 3 1. I am the owner and president of the judgment creditor, Jason Frank Law, PLC (the 4 “Judgment Creditor”). I am admitted to practice law before all federal and state courts in the 5 State of California, and I am a member in good standing of the State Bar of California. I have 6 personal knowledge of the facts set forth herein, unless stated on information and belief, and if 7 called as a witness, I could and would competently testify thereto. I make this declaration in 8 support of the amended motion filed by Judgment Creditor for Entry of Assignment and 9 Restraining Order (the “Assignment Motion”). 10 2. I have been a member in good standing of the State Bar of California since 1997. I 11 received my J.D. degree from the University of Michigan in 1997, and my B.A. degree from the 12 University of Michigan in 1994. I was formerly a litigation partner at Paul Hastings Janosfky & 13 Walker LLP. From February 2009 through May 20, 2016, I was an attorney at Eagan Avenatti, 14 LLP (the “Judgment Debtor”), either as an employee or through a contract between Judgment 15 Debtor and Judgment Creditor. I am currently a partner and founder of Frank Sims & Stolper 16 LLP. 17 3. Attached as Exhibit A is a list of lawsuits in which the Judgment Debtor will be 18 potentially entitled to receive attorneys’ fees and costs. I am informed and believe that the rights 19 to payments on these matters sought to be assigned have not been previously assigned. 20 4. The first 23 cases listed on Exhibit A were disclosed in Judgment Debtor’s 21 Amended Schedule of Assets, filed on or about July 11, 2017 (Doc. No. 149, Exh. B-75), a true 22 and correct copy of which is attached as Exhibit B. 23 5. I identified the remaining cases listed on Exhibit A from conducting a search of 24 filings in California and federal courts by Judgment Debtor and Michael Avenatti, the managing 25 partner of Judgment Debtor. A true and correct copy of these search results are attached as 26 Exhibit C. 27 28 6. On May 22, 2018, this Court entered a judgment in favor of Judgment Creditor and against Judgment Debtor in the amount of $10,000,000.00, plus reasonable attorneys’ fees 140306619.3 -12- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 19 of 24 Desc 1 and costs incurred in collecting the judgment (the “Judgment”). A true and correct copy of the 2 Judgment is attached as Exhibit D. The Court issued the Judgment after the Judgment Debtor 3 failed to make the first settlement payment due under the Court approved Settlement Agreement 4 with Judgment Creditor. 5 7. The Judgment is final and enforcement thereof is not stayed. 6 8. On June 6, 2018, a writ of execution was issued against Judgment Debtor in the 7 amount of $10,008,465.75, including $8,465.75 in accrued post-judgment interest (the “Writ of 8 Execution”). The amount of interest accruing each day is approximately $564.38. A true and 9 correct copy of the Writ of Execution is attached as Exhibit E. 10 9. No payments whatsoever have been received from Judgment Debtor or anyone to 11 be applied to this Judgment. There is now due and owing the amount of $10,000,000.00, plus 12 interest from the date of entry of judgment in the amount of at least $16,367.02. I have not 13 included a liquidated amount of counsel fees and costs incurred to date to enforce the Judgment, 14 as that amount increases nearly daily. But I, on behalf of the Judgment Creditor, expressly 15 reserve the right to seek such amounts in the future as provided for in the Judgment. 16 10. I personally attended the 341(a) Meeting of Creditors in which Mr. Avenatti 17 testified under oath on behalf of Judgment Debtor on June 12, 2017 and July 14, 2017. A true 18 and correct copy of the cited pages from the transcripts of Mr. Avenatti’s testimony are attached 19 as Exhibit F (June 12, 2017) and Exhibit G (July 14, 2017). I can personally verify that these 20 pages accurately reflect Mr. Avenatti’s testimony, as I was in attendance. 21 11. Based on my years working at Judgment Debtor, and my review of Judgment 22 Debtor’s bankruptcy schedules and testimony, I am personally aware that Michael Avenatti is the 23 managing partner of Judgment Debtor and owns a controlling 75% interest in the firm through his 24 personal corporation, Avenatti & Associates, APC. Since at least 2012, I have also personally 25 observed and am aware that Mr. Avenatti has ultimate control over Judgment Debtor’s financial 26 decisions, including any decision to assign rights to attorneys’ fees and costs to third parties. 27 Similarly, I am aware that Judgment Debtor has at times sublet part of its premises to subtenants 28 and collected rent from them. 140306619.3 -13- Case 8:17-bk-11961-CB 1 12. Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 20 of 24 Desc One of the largest assets of Judgment Debtor is its right to attorneys’ fees and costs 2 in the Bahamas v. Kimberly-Clark class action, in which Judgment Debtor obtained a judgment of 3 over $20 million on behalf of the class, which is currently on appeal. Assuming the judgment in 4 that class action is affirmed on appeal, Judgment Debtor stands to be awarded millions of dollars 5 in attorneys’ fees and costs for its work on the matter. At the initial 341(a) Meeting of Creditors 6 held on June 12, 2017, Mr. Avenatti testified that Judgment Debtor will be entitled to over $17 7 million in accrued fees in the future and a “significant portion of those fees are from the Kimberly 8 Clark class action case.” [See Exh. F at 105:4-25.] Mr. Avenatti included this same estimate in 9 his monthly operating reports when Judgment Debtor was a debtor-in-possession, as reflected on 10 Page 14 (“Gross Sales Revenue”) of Judgment Debtor’s April 2017 Amended Monthly Operating 11 Report (Doc. No. 100), a true and correct copy of which is attached as Exhibit H. However, 12 during the 341(a) Continued Meeting of Creditors held on July 14, 2017, Mr. Avenatti testified he 13 may decide in the future to assign an unspecified portion of the fees from the Kimberly-Clark 14 class action to himself personally, rather than the firm. [See Exh. G at 59:2-61:2, 62:6-63:9.] 15 Based on Mr. Avenatti’s sworn statements, I am concerned that Mr. Avenatti will seek to divert 16 this money to himself or another entity or third party under his control to avoid the Judgment in 17 favor of my company. 18 13. During the 341(a) Continued Meeting of Creditors held on July 14, 2017, Mr. 19 Avenatti testified that at some unspecified time after I left the firm, he purportedly caused 20 Judgment Debtor to assign the right to $17 million to the X-Law Group, a law firm controlled by 21 Mr. Avenatti’s friend. Mr. Avenatti testified the agreement was in writing, but failed to provide a 22 copy of the agreement to Michael Hauser at the U.S. Trustee’s office after he was requested to do 23 so. Mr. Avenatti listed the X-Law Group as possessing an undisputed “secured” claim for this 24 $17 million amount on the Judgment Debtor’s initial bankruptcy schedules, which were filed on 25 or about April 6, 2017 in the United States Bankruptcy Court for the Middle District of Florida. 26 [Exhibit I, Schedule D, ¶ 2.1.] A true and correct copy of the initially filed Judgment Debtor’s 27 Schedules of Assets and Liabilities (Official Form 206D),(Florida Doc. No. 48) is attached as 28 Exhibit I. 140306619.3 -14- Case 8:17-bk-11961-CB 1 14. Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 21 of 24 Desc During the 341(a) Continued Meeting of Creditors, Mr. Avenatti testified that 2 Judgment Debtor was paying the X-Law Group’s rent and salaries pursuant to an “oral 3 agreement” reached between Mr. Avenatti and the X-Law Group. [Exh. G at 68:9-69:21; 70:2- 4 73:18.] Mr. Avenatti never explained what Judgment Debtor received in return from the X-Law 5 Group that possibly could have been worth granting the right to $17 million from the Judgment 6 Debtor and paying the X-Law Group’s rent and salaries. The most recent Monthly Operating 7 Report (“MOR”) filed by the Judgment Debtor while it was a debtor-in-possession reflects that it 8 made such payments. A true and correct copy of this MOR is attached as Exhibit J. For 9 example, the MOR shows the Debtor making payments to Thomas Cassaro who was then and 10 seemingly remains an employee of the X-Law Group and Damian Rogers who was then and 11 seemingly remains a partner at the X-Law Group. See www.thexlawgroup.com and Exh. J at 5 12 and 11. 13 15. When Judgment Debtor later sought to dismiss the bankruptcy case and agreed to 14 pay off the claims of approved creditors (backed with consent judgments), Judgment Debtor 15 specifically excluded the X-Law Group’s claim. See Debtor’s Motion for Order Approving 16 Settlement and Dismiss Case (Doc. No. 343) at p. 5 n. 5, a true and correct copy of the page with 17 this reference is attached as Exhibit K. 18 16. As the above examples demonstrate, there is a need to restrain the Judgment 19 Debtor from encumbering, assigning, disposing of or spending any fees and costs it may receive 20 in the future from the cases listed in Exhibit A, because there is a substantial risk Judgment 21 Debtor may dispose of these receivables or spend the payments received without such a 22 restraining order. 23 24 Information Relating to Avenatti & Associates, APC 17. After the filing of the initial Assignment Order Motion, I learned that Mr. Avenatti 25 claimed that Judgment Debtor, and thereby Judgment Creditor, is not entitled to fees on the cases 26 he recently filed on behalf of Plaintiff Stephanie Clifford (aka “Stormy Daniels”), because Mr. 27 Avenatti did not list Judgment Debtor’s name on the pleadings, and instead identified the law 28 firm as “Avenatti & Associates, APC.” 140306619.3 -15- Case 8:17-bk-11961-CB 1 18. Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 22 of 24 Desc I then contacted the State Bar of California to inquire if Avenatti & Associates, 2 APC has ever been certified to act as a law firm in this state. I was informed that Avenatti & 3 Associates, APC has never been registered or certified by the State Bar and is not authorized to 4 act as a law firm in California. Attached as Exhibit L is an email exchange with Nina Hester 5 from the California State Bar’s Law Corporations Program confirming this information in 6 writing. 7 19. Attached as Exhibit M is a true and correct copy of the “No Record” certification 8 from the State Bar of California confirming that Avenatti & Associates, APC is not a registered 9 law firm in California. 10 20. I obtained copies of Avenatti & Associates, APC’s Statement of Information filed 11 with the California Secretary of State (“SOS”) from its website. Attached as Exhibit N is a true 12 and correct copy of the Statement of Information filed by Avenatti & Associates, APC on or 13 about January 4, 2016 with the SOS. In Paragraph 16, Avenatti & Associates, APC was asked to 14 “Describe the Type of Business of the Corporation” and responded “Eagan Avenatti, LLP.” 15 21. The 2016 SOS filing is consisting with my understanding of Avenatti & 16 Associates, APC. During the time I worked at Judgment Debtor, I was aware that Avenatti & 17 Associates, APC is Mr. Avenatti’s personal corporation through which he owns his equity interest 18 in Judgment Debtor. As noted above, Mr. Avenatti confirmed these facts during the 341(a) 19 Meeting of Creditors. [Exh. G at 51:17-25; 92:1 – 93:12.] The List of Equity Security Holders 20 filed in this case lists Avenatti & Associates, APC and Mr. Michael Q. Eagan as the two equity 21 holders of Eagan Avenatti, LLP. [Doc. No. 53.] I have never known Avenatti & Associates, 22 APC to be a separate law firm. 23 22. I have reviewed the caption pages for the cases filed on behalf of Plaintiff 24 Stephanie Clifford. Attached as Exhibits O and P are examples of two such caption pages from 25 the matters entitled Clifford v. Trump et al. Case No. 2:18-cv-02217-SJO and Clifford v. 26 Davidson, Case No. 2:18-cw-05052-RSWL (collectively, the “Clifford matters”). I have also 27 reviewed the dockets for these matters attached as Exhibits 6 and 7 to the Declaration of Michael 28 140306619.3 -16- Case 8:17-bk-11961-CB Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 23 of 24 Desc 1 Avenatti in support of Judgment Debtor’s Opposition to the Application to Shorten Time. [Doc. 2 No. 464]. 3 23. Based on my years working at Judgment Debtor and the pleadings filed in this 4 case that I have reviewed, I recognize the address listed for “Avenatti & Associates, APC” on the 5 caption pages and the dockets in the Clifford matters is the same address as Judgment Debtor’s 6 office. 7 24. Prior to Judgment Debtor defaulting on the Settlement Payments, I visited 8 Judgment Debtor’s office on April 5, 2018 at 520 Newport Center Drive, Suite 1400, Newport 9 Beach, CA 92660. The signs at the door and in the entry way both state “Eagan Avenatti, LLP.” 10 There were no signs for “Avenatti & Associates, APC.” Attached as Exhibit Q is a photograph I 11 took from the entry way. 12 25. Based on my years working at Judgment Debtor, I recognize the telephone and 13 facsimile numbers listed for “Avenatti & Associates, APC” on the caption pages and dockets in 14 the Clifford matters are the same numbers for Judgment Debtor, i.e. (949) 706-7000 and (949) 15 706-7050. I have called Judgment Debtor’s office from time to time during the last few months, 16 including approximately on or about June 5, 2018. On that day, and all other days I called prior 17 to June 5, 2018, the receptionists consistently answered, “Hello, Eagan Avenatti.” On June 11, 18 2018 and June 13, 2018, after filing the Assignment Order Motion, I called the same number and 19 the receptionists answered, “Law Offices.” I hung up the telephone without speaking to anyone. 20 26. The lawyers listed on the caption pages and dockets in the Clifford matters are 21 Michael Avenatti and Ahmed Ibrahim. I worked with Ahmed Ibrahim at Judgment Debtor for 22 years. This is confirmed in Judgment Debtor’s Bankruptcy Schedules, listing its then current 23 employees, including Mr. Ibrahim. [See Exhibit J.] I have never known Mr. Ibrahim to be 24 employed by Avenatti & Associates, APC, nor do I believe he is now. I looked up Mr. Avenatti 25 and Mr. Ibrahim’s filings with the California State Bar. Both indicated they work at Judgment 26 Debtor (“Eagan Avenatti, LLP”), not Avenatti & Associates, APC. A true and correct copy of 27 Mr. Avenatti and Mr. Ibrahim’s profiles on file with the California State Bar, as of the morning of 28 June 15, 2018, are attached as Exhibits R and S. 140306619.3 -17- Case 8:17-bk-11961-CB I 27. Doc 470 Filed 06/20/18 Entered 06/20/18 15:09:11 Main Document Page 24 of 24 Desc Based on my years working at Judgment Debtor, I recognize the email addresses Mr. Avenatti arrd Mr. Ibrahim on the tllffird matters are Judgtnent Debtor's email 2 used by 3 addresses. On the case dockets, it lists their email addresses as r,naverr4lti@eaganavenatti,cont 4 and aib:rahim@.gAsanavenatli.conr. [See Avenatti Decl., Exhs. 6, c their email addresses as rnaverlatti@,eoalaw,qom and aibrahim@,eualaw,c,om. lExhibits O, P.] 6 The address "eoalaw.corn" is the old emaii address for Judgment Debtor, when it was previously 7 known as Eagan O'Malley & Avenatti. LLP (hence the initials "eoa.") I personally used botlr an 8 "eaganavenatti.com" and an "eoalaw.cotn" email address when I worked at Judgment Debtor. 9 28. 7.] On the caption pages, it lists On or about Jure 13, 2018, a complaint was filed in the Middle District of Florida 10 entitled Novakv. Simpson, CaseNo. 6:18-cv-00922. In the signature blockforthecomplaint,Mr. 11 Avenatti listed his firm as 'oAvenatti l2 1400, Newpoft Beach, 13 established above, this is the address, telephone number and fax number for Judgrnent Debtor. l4 true and correct copy of the Novak complaint is attached as Exhibit T. 15 l6 l7 l8 29. on or about & Associates, Al'C" at "520 Newport Center Drive, Suite CA 92660, Telephone: (949) 706-7000; Fax: (949) 706-iA50." As Attached as Exhibit U is the caption page of a compiaint filed by Judgment Debtor April 5, 2018, in which Juclgment Debtor lists its correct name, Eagan Avenatti, LLP. I declare under penalty of perjury under the laws of the United foregoing this true and correct. Executed this 20th day ofJune 2018 19 2A 2t 22 23 24 25 26 27 28 1403066r9.3 A -18- of that the