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Court of Appeal:
Avenatti’s First Wife Must Turn Over $717,723, Artwork
Order by Judge Moreton—Based on Finding That Lawyer/Felon Sought to Shield Assets From Attachment By Judgment Creditors Though Putting Them in the Name of Former Spouse—Is Affirmed
By a MetNews Staff Writer
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CARLIN |
The Court of Appeal for this district yesterday affirmed an order that the first wife of convicted felon Michael J. Avenatti, once a prominent lawyer but now impovershed and imprisoned, turn over $717,723 in cash and certain artwork to a judgment creditor of her ex-husband, the firm of a former law partner of his.
Jason Frank Law PLC will be the recipient of the assets, to be relinquished by Christine Carlin, who was wed to Avenatti in 1994 and divorced him 13 years later. Jason Frank was a partner in Avenatti’s firm, Eagan Avenatti LLP, from 2009 to 2016 and is now a partner in Frank Sims & Stolper LLP in Costa Mesa.
“[T]he record reflects Frank adduced substantial evidence to meet the required prima facie showing that Avenatti was hiding his money under Carlin’s name,” Justice Gregory Weingart of Div. One said in yesterday’s unpublished opinion.
Burden Not Met
That prima facie showing, he noted, shifted the burden to Carlin to show by a preponderance of the evidence that her claim that she was the owner of the property was in good faith and, Weingart wrote, that burden was not met. The only supporting evidence, Weingard said, was Avenatti’s testimony that he had given Carlin money and conveyed artwork to herin payment of support obligations; Carlin had refused to provide testimony or documents, invoking the Fifth Amendment.
The opinion affirms an order by Los Angeles Superior Court Judge Edward B. Moreton Jr. Frank’s law firm obtained a $5,054,287.75 Los Angeles Superior Court judgment against Avenatti, personally, arising from his nonpayment of funds that were due pursuant to the settlement of a dispute stemming from Avenatti’s alleged breach of a partnership agreement. (Frank also has a $10 million judgment against Eagan Avenatti LLP which is unrelated to the collection effort that is the subject of the Court of Appeal opinion.)
Statutory Procedures
The turn-over order stems from a proceeding pursuant to Code of Civil Procedure §708.180(a) which applies where a third party who is believed to hold property belonging to, or is indebted to, the judgment debtor is subjected to a debtor’s examination. The provision says that if the person being examined “claims an interest in the property adverse to the judgment debtor or denies the debt, the court may, if the judgment creditor so requests, determine the interests in the property or the existence of the debt.”
Weingart noted that if a judge determines that such a claim is made in bad faith, a turn-over order may be made summarily. Moreton made such a finding, then acted pursuant to Code of Civil Procedure §708.205(a) which provides:
“[T]he court may order the judgment debtor’s interest in the property in the possession or under the control of the judgment debtor or the third person or a debt owed by the third person to the judgment debtor to be applied toward the satisfaction of the money judgment if the property is not exempt from enforcement of a money judgment.”
Frank’s Argument
Weingart wrote:
“During the proceedings, Frank repeatedly argued he made a prima facie showing that Avenatti provided his property to Carlin. Carlin is correct that this is not the applicable test. Under section 708.180, the judgment creditor must make a prima facie showing that the judgment debtor has an interest in the property held by the third person….Carlin ignores, however, that Frank also argued that Avenatti’s transfer of the monies and artwork to Carlin was a farce to evade enforcement of Frank’s judgment and that ‘Avenatti was attempting to hide his money under Carlin’s name.’ (Italics added.)
“Thus, Frank did in fact argue to the trial court that Avenatti retained interest in the Property.”
True Ownership
The justice recited evidence the judgment creditor adduced. It showed that Carlin had remarried; Avenatti’s spousal support obligation vanished around 2009; child support payments were set at $4,070 per month; Avenatti nonetheless paid a monthly average of at least $8,750 in 2012 as high as $14,833.33 in 2014; the lawyer purchased Avenatti’s art an auction for $18,000 and turned it over to Carlin, who acknowledged a $20,000 credit against supposed arrearages in support payments.
Jason Frank Law also showed that on May 7, 2019, Avenatti opened a bank account, depositing a $1 million from an insurance company, withdrew $871,821.03 the following day, then provided Carlin with a cashier’s check in the amount of $717,723.
“Collectively, these facts were sufficient to support a prima facie showing that the Property still belonged to Avenatti, because he did not in fact owe over $737,000 to Carlin at the time he transferred the Property,” Weingart wrote.
The case is Jason Frank Law v. Avenatti, B304816.
Carlin was represented by her current husband, Newport Beach attorney Brian C. Carlin. Irvine attorney Timothy Carl Aires acted for Jason Frank Law PLC.
Avenatti, who is suspended from law practice, is currently incarcerated at the Federal Correctional Institution at Terminal Island in Los Angeles County. He has incurred multiple felony convictions in the U.S. District Court for the Central District of California and the U.S. District Court for the Southern District of New York.
His crimes included wire fraud, extortion, and tax evasion.
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