Stormy Daniels, Michael Avenatti and Luke Janklow. (Daniels via Tasia Wells/Getty Images for XBIZ, Avenatti via Drew Angerer/Getty Images, Janklow via Meghann M. Cuniff)
The Manhattan literary agent who sent Stormy Daniels’ book payments to Michael Avenatti says the recent restitution order against the disgraced lawyer means Daniels’ lawsuit against the agent should be dismissed.
A lawyer for Luke Janklow and Janklow & Nesbit Associates said last week’s order from U.S. District Judge Jesse M. Furman “further reinforces” that only Avenatti is responsible for Daniels not receiving the last of three $148,750 payments she was due for her 2018 book Full Disclosure.
The “remedy” for Daniels’ missing money “is with Avenatti, not with the defendants in this action,” according to a five-paragraph letter to U.S. District Judge Mary Kay Vyskocil from Lani A. Adler, a lawyer in New York City.
Daniels’ lawyer Clark O. Brewster told Law&Crime Wednesday that Janklow shoulders blame for what happened because he “was Stormy’s trusted agent and fiduciary.”
“He concealed his true relationship with Michael Avenatti, then sent Stormy’s money to Avenatti, without talking with her or obtaining her consent,” said Brewster, of Brewster & De Angelis in Tulsa, Oklahoma. Brewster referenced a text message Janklow sent Avenatti in February 2019 as Daniels pressed him about her missing money, in which Janklow said he was no longer comfortable ignoring her and wasn’t used to “blanking a signed client.”
Despite that, Janklow “now takes the position that she must chase Avenatti to get the money Janklow sent to him,” Brewster said.
Janklow is the son of the legendary literary agent Morton Janklow, who before his death in May revolutionized the publishing industry through power-broking deals that earned him broad influence. Luke Janklow is president and managing director of his father’s agency, and he met Avenatti in 2018 through CNN anchor Anderson Cooper, a close friend to Janklow since childhood, as Avenatti was enjoying national attention for suing then-President Donald Trump over a nondisclosure agreement Daniels had signed regarding their sexual encounter.
At the time, Avenatti was deep in debt, his law firm in bankruptcy and an Internal Revenue Service investigation growing into unpaid taxes for his Tully’s Coffee venture. The IRS probe eventually became a criminal investigation that grew into a federal bankruptcy and wire fraud cause involving five clients. But along the way, he and Janklow became fast friends.
Jurors in Avenatti’s trial over his defrauding of Daniels saw a cache of messages between the men, including one in which Janklow told him: “You are not dependent on Stormy. She was the foot you kicked down the door with.” Testimony revealed Avenatti at one point had a $2 million book deal with Janklow, but he only collected $475,000 and the book never happened. Janklow never said why; Judge Furman halted the questioning at the request of Avenatti’s attorneys (he had not yet moved to represent himself). Jurors also saw messages in which Janklow referred to Avenatti as “Mr. Darrow” — as in famed early 20th century trial lawyer Clarence Darrow — and lamented that Avenatti had to deal with “deluded clowns” such as Daniels’ friends.
Janklow cooperated fully with investigators and testified against Avenatti as the first prosecution witness. But before he realized Avenatti’s schemes, he had cut Daniels out of financial discussions at Avenatti’s urging, despite a signed retainer agreement Daniels had with him and his agency, and sent her final two payments of $148,750 to Avenatti. Daniels learned during trial that Janklow had given Avenatti his own 2.5 percent, $26,250 commission, taking it out of Janklow’s negotiated 12.5 percent, $175,000 commission, but not telling Daniels about it.
Avenatti had also used a copy of Daniels’ signature without her permission after Janklow said he needed Daniels’ authorization to re-direct the payments from her account. As Adler’s new letter says, “That Defendants did not know that Avenatti had forged Ms. Daniels’ signature on the account authorization document is not in dispute.”
Daniels received her first $148,750 payment, and Avenatti used a loan from celebrity attorney Mark Geragos to give her the second payment weeks after he spent the original money on other things, including a payment to a client he admitted to defrauding in his California wire fraud case. Throughout this, Avenatti was engulfed in litigation over his bankrupt law firm and a $15 million debt to a former law partner. A handful of journalists had reported on deep financial irregularities involving him that had prompted suspicions from two longtime clients in California, but cable TV news pundits continued to put him on air without mentioning the reporting.
As established in trial, Janklow stuck with Avenatti into February 2019 but eventually provided Daniels an accounting of her payments after the book publisher, Elizabeth Beier of St. Martin’s Press, spoke with Daniels on the phone and realized Daniels wasn’t confused — she really hadn’t received her third payment, even though Avenatti had received it long ago.
Filed in February shortly after Avenatti’s trial, the lawsuit on behalf of Daniels and Stormy Entertainment Inc. seeks money from Janklow to compensate her for that missing payment as well as the second payment, arguing he breached his duties to her on that one, too. It has three claims: breach of contract, breach of fiduciary duty and fraudulent concealment.
Adler filed a dismissal motion in May that referenced Avenatti’s Feb. 4 convictions for wire fraud and aggravated identity theft, saying Daniels’ missing money has already been addressed through Avenatti, and that Avenatti not only defrauded Daniels, but Janklow and his literary agency.
“The facts adjudicated in the Avenatti trial establish that Mr. Janklow did not knowingly breach any duty to Plaintiff by failing to timely pay any book agreement proceeds and that Plaintiffs’ alleged damages were caused by Avenatti and not caused by Mr. Janklow,” according to the motion.
Daniels’ response said the motion should be disregarded because it doesn’t properly challenge her claims, rather, it makes “a factual challenge to causation” that is not relevant in a dismissal motion.
“The facts adjudicated in the Avenatti trial establish that Mr. Janklow did not knowingly breach any duty to Plaintiff by failing to timely pay any book agreement proceeds and that Plaintiffs’ alleged damages were caused by Avenatti and not caused by Mr. Janklow,” according to the brief from Brewster’s law partner Guy A. Fortney. “Defendants’ attachment of documents and testimony from the trial of Michael Avenatti only underscores the viability of Plaintiffs’ allegations and highlight Defendants’ actions, which give rise to liability.”
Adler’s reply emphasizes that Daniels’ lawyers “conspicuously fail to even reference the existence of the Forged Authorization, bearing Ms. Daniels’ actual signature, that Avenatti sent to Defendant.”
Vyskocil, a 2019 Trump appointee in the Southern District of New York, has had the motion fully briefed since June 30. Her colleague Judge Furman’s Sept. 23 restitution order followed a request from prosecutors. It prioritizes Daniels’ payments ahead of the $259,800.50 that U.S. District Judge Paul G. Gardephe ordered Avenatti pay as restitution to Nike, Inc., for the bills the companies incurred from its Boies Schiller Flexner LLP attorneys while dealing with that jurors concluded were Avenatti’s extortionist threats.
Furman’s order calls for Avenatti to pay $25 per quarter or 50 percent of his earnings toward restitution, depending on his job in prison. Once he’s released, any income he earns will be docked 15 percent every month, starting 30 days after his release. Right now, that’s scheduled for Jan. 27, 2026, But he’s yet to be sentenced in his California client fraud case, which could net him several years more behind bars. Sentencing is scheduled for Nov. 7 before Senior U.S. District Judge James V. Selna in Santa Ana.
Daniels’ lawsuit, Janklow’s dismissal motion and his lawyer’s recent letter are posted below.
Lawsuit:
Motion:
Letter:
(Images: Daniels via Tasia Wells/Getty Images for XBIZ, Avenatti via Drew Angerer/Getty Images, Janklow via Meghann M. Cuniff)
Have a tip we should know? [email protected]
