A Santa Barbara judge has decided a civil lawsuit against Michael Avenatti will be transferred to Orange County Superior Court.
According to a tentative ruling published Wednesday, Judge Maxwell ordered plaintiffs William Parrish and E. Timothy Fitzgibbons to pay Mr. Avenatti $3,500 in fees and expenses.
The plaintiffs are represented by Santa Barbara law firm Cappello & Noël.
On April 2, the plaintiffs sued Mr. Avenatti and his partner Michael Egan for professional negligence, breach of fiduciary duty, fraud by concealment, conversion and promissory estoppel.
They allege “professional misconduct and dereliction of duty” by Mr. Avenatti and his law firm Egan Avenatti according to the tentative ruling.
Plaintiffs say in 2008 they hired Egan Avenatti to represent them in a malicious prosecution lawsuit in Santa Barbara County Superior Court and executed a fee agreement in Santa Barbara.
The plaintiffs’ former employer, FLIR Systems Inc., sued the plaintiffs when they left the company to form their own business in 2006. They successfully defended the lawsuit and in 2011, FLIR agreed to pay $39 million to settle the malicious prosecution case.
Plaintiff’s claim Egan Avenatti improperly deposited the settlement funds into their firm client trust account. $23.5 million was wired to the plaintiffs and the rest was transferred from the trust into the Egan Avenatti operating account even though it contained money earned by other firms. Plaintiffs say once Egan Avenatti had control of the money, they attempted to cut another firm out of their share of the settlement.
“This commingling of funds was done without Plaintiffs’ knowledge or consent,” read the complaint.
Co-defendants Jason M. Frank and Scott Sims did work for the plaintiffs through Egan Avenatti in Orange County.
On July 18, the defendants filed a motion to transfer the case to Orange County. None of the defendants reside in Santa Barbara County.
In her tentative ruling, Judge Maxwell found venue in Orange County was proper because “when a plaintiff brings an action against several defendants, both individual and corporate, in a county in which none of the defendants reside, an individual defendant has the right to change venue to the county of his or her residence,” she wrote.
Defense attorneys argued for more than $11,000 in costs associated with preparing the change of venue motion, but Judge Maxwell limited their recovery to $3,500 for attorney work hours.
An attorney for Cappello & Noël asked Judge Maxwell to note that the fee award is not a sanction during Tuesday’s hearing.
