Geragos can’t end suit related to Avenatti extortion attempt

Attorney Mark J. Geragos, whom U.S. prosecutors named as an unindicted co-conspirator in Michael J. Avenatti’s scheme to extort $25 million from Nike Inc., on Friday failed to get a related lawsuit dismissed.

Superior Court Judge Michael L. Stern said youth basketball coach Gary Franklin and his attorney, Trent Copeland of Browne George Ross O’Brien Annaguey & Ellis LLP, had adequately pleaded fraud, conspiracy to commit fraud, and aiding and abetting fraud, among other causes of action in their first amended complaint against Geragos.

“Whether Mr. Franklin has properly alleged a fraudulent scheme depends upon the facts that are presented by both sides and argued by both sides beyond the purpose of the demurrer,” Stern said. “But in this situation, regarding an alleged conspiracy, the facts are adequately pleaded for fraud.”

The lawsuit alleges, among other things, that Geragos committed legal malpractice and concealed a $1.5 million settlement offer Nike would have paid Franklin over a contract dispute if Geragos and Avenatti hadn’t used the coach’s confidential client information in an attempt to extort the sportswear giant for up to $25 million. While Geragos said he has never met Franklin, he told Nike executives that Franklin was his client during negotiations, according to the complaint.

Stern stressed he wasn’t ruling on the merits of the complaint Friday and any role Geragos may have played as Franklin’s attorney “remains to be seen.”

After Stern asked Encino defense attorney Tommy Q. Gallardo of Nemecek & Cole if Geragos planned to file a cross complaint, Gallardo said he needed more time to consider it but “there is a possibility of a cross.”

Copeland, who like Gallardo appeared via video Friday, said he wanted to schedule a trial date that very day, and called Gallardo’s request for more time to mull over a cross complaint a “delay tactic.”

“I don’t know if it will be reasonable for defense counsel to file a good faith cross complaint,” Copeland said. “I think this is a delay tactic. We’ve had a number of delays now with these demurrers and motions to strike. We would ask the court to move this matter along.”

Saying he didn’t “have a magic eight ball” to determine whether a cross complaint would be filed, Stern set a case management hearing for Sept. 14 and said he would set a trial date at that time.

Avenatti, who was found guilty of extortion by threatening to publicly accuse Nike of bribing young basketball players, was sentenced earlier this month to 30 months in prison by U.S. District Judge Paul Gardephe in New York. When handing down the sentence, Gardephe wondered aloud why Geragos was not also charged.

According to Franklin’s suit, Geragos acted as a middleman in the plot to extort Nike by introducing Avenatti to Nike executives at Geragos’ New York office in March 2019.

Gary Franklin v. Mark Geragos, 20STCV37797. (L.A. Supt Ct., filed Oct. 1, 2020).

Before Avenatti was sentenced, Franklin wrote a letter to Gardephe, saying he was deceived by both Avenatti and Geragos. However Geragos denied the allegations in a phone interview a day later, pointing to an email filed as an exhibit in the criminal case that he says suggests Franklin and Copeland were the ones trying to extort Nike.

“If the email is true and it’s his, that would appear to most people to be an extortionate discussion,” Geragos said.

Responding to Geragos that day, Copeland said, “If Mr. Geragos persists in making wild, untrue allegations concerning my communications with a client, he is inviting another lawsuit.”