Nold brushed off the comment. “He’s mad because we wouldn’t be bullied,” he said.
Avenatti’s email also did not address questions about Tully’s.
“You will have to ask your questions to the new ownership group who long ago took on responsibility for various tax liabilities etc.,” he wrote, declining to specify who those owners are or when he divested his stake.
In various court filings and testimony last year, Avenatti described himself as the principal or chairman of the Tully’s chain. During a July deposition, he testified his law firm wholly owned Doppio Inc., a Delaware corporation that he said controlled 80 percent of Tully’s ownership firm, Global Baristas US.
Robert Sifuentez, 35, who worked for Tully’s for nine years until the store he managed in Seattle’s Virginia Mason Medical Center closed last month, said Avenatti’s “name was the only name on my paycheck … up until we closed.”
When the last few Tully’s stores closed in March, company spokeswoman Suzy Quinn described the moves as temporary under a long-term “rebranding process.”
But internal memos detailed an unplanned crisis after the coffee supplier for Tully’s cut it off. And in a federal lawsuit filed in January, Vermont-based coffee conglomerate Keurig Green Mountain — which actually owns the Tully’s trade name — claimed Global Baristas failed to pay $500,000 in licensing fees for the past two years. The suit contends Global Baristas had to stop using the Tully’s name.
Meanwhile, Tully’s stores have been evicted from several locations, including its corporate offices on Western Avenue, court records show.
Global Baristas’ purchase of the Tully’s chain drew controversy from the start. In August 2013, less than two months after the deal closed, Avenatti’s business partner sued him, claiming misrepresentation.
That partner, actor Patrick Dempsey of TV’s “Grey’s Anatomy,” contended in his suit Avenatti told him Global Baristas had enough money to operate the more than 40 Tully’s stores. But Dempsey, the suit claims, soon discovered Avenatti secretly had taken out a $2 million loan with an exorbitant 15 percent interest rate, pledging all Tully’s assets as security, the suit claimed. Avenatti quickly settled, and Dempsey walked away from the venture.
The case proved a harbinger of legal actions to come, including a battle against Nold’s client, Bellevue Square. For years, the shopping mall’s owner, Kemper Development, leased spaces for Tully’s stores in the Lincoln Square, Bellevue Place and Bellevue Square shopping centers.
After Kemper Development opted not to renew leases for Tully’s stores in Lincoln Square and Bellevue Place, Global Baristas vacated the Bellevue Square store amid a 10-year lease and a costly remodel.
In 2015, Bellevue Square and B-Squared Construction each sued, both claiming Global Baristas broke the lease and hadn’t paid for remodeling work done at its space in the mall.
Avenatti disputed both lawsuits. He claimed his firm didn’t pay the contractor due to unspecified construction defects, and contended Global Baristas only agreed to a re-up at Bellevue Square after Kemper Development assured it would renew Tully’s leases at its two other shopping centers. Such promises weren’t included in the lease agreement, but Avenatti claimed they were described in emails between him and his underlings.
But when a court ordered Global Baristas to produce the emails, Avenatti failed to do so. Last year, a judge granted default judgments in favor of Bellevue Square and imposed sanctions and fines against Global Baristas, ordering it to also cover Bellevue Square’s legal bills.
While Nold pursued collecting more than $1 million from Global Baristas last year, he learned Avenatti’s private law firm was in bankruptcy proceedings.
In March, arbitration on a former law partner’s claim that Avenatti’s firm owed him $14 million was about to start when a mysterious creditor filed an involuntary Chapter 11 petition against the law firm for $28,700 in unpaid services, according to court filings. The petition plunged Avenatti’s firm into bankruptcy proceedings, postponing the arbitration.
A federal bankruptcy judge later commented the case had a “stench of impropriety,” and the mystery creditor was never located. Avenatti later transferred $100,000 from Global Baristas to retain a Florida law firm to handle the bankruptcy, court records show.
After Nold argued the transfer was fraudulent due to Global Baristas’ obligations to his client, the Florida attorneys returned Avenatti’s check, records show.
Nold’s firm soon began tracking down Global Barista’s bank accounts to garnish for debts owed to Bellevue Square.
Turn for the worse
By last fall, daily operations at Tully’s stores took a noticeable turn for the worse, according to three former employees interviewed for this story.
Global Baristas also wasn’t keeping up with state and federal taxes, court records show. For years, the company lagged in paying quarterly taxes, leading Washington’s Revenue and Labor and Industries departments to repeatedly file warrants against it. Global Baristas often took months to make good on its delinquent tax debts.
As of last week, more than $1 million of court-filed warrants for unpaid state taxes remained unresolved. The IRS also filed liens in July and August against Global Baristas and Avenatti for more than $5 million in unpaid taxes dating back to 2015. No releases have since been filed showing that debt was paid.
In September, when Boeing announced a dozen Tully’s stores in its facilities around Puget Sound would close, the company issued a statement that business had “never been stronger.”
But lawsuits claiming unpaid rents mounted over the next few months. Among those winning default judgments was Eisenhower Carlson, a Tacoma law firm that represented Tully’s in its dispute with Bellevue Square. The firm received a $93,000 judgment against its former client.
Global Baristas often hasn’t responded to recent legal actions against it, records show.
After Green won default judgments and orders to evict Tully’s from its corporate office on Western Avenue and a downtown Seattle store, his clients sought to recoup some of the debts by auctioning off equipment left behind.
Shortly before a sheriff’s auction was set to occur, Avenatti filed claims the property didn’t belong to Global Baristas, the subject of the judgment, but to another LLC, Global Baristas US. The move delayed the auctions, Green said, forcing him to seek judgments against both LLCs.
Avenatti made a similar claim when Bellevue Square sought to auction off left behind items there, Nold said.
“He tries to use the LLCs to confuse everybody,” said Nold. “Only he was telling me exactly the opposite — that his other LLC owned the equipment.”
Several lawyers for clients with judgments against Global Baristas said they don’t expect to collect a dime. But Nold has been relentless, collecting more than $1 million against Avenatti.
Avenatti is now appealing the Bellevue Square case to Washington’s Court of Appeals.
Outside Washington, Global Baristas faces several other thorny legal disputes. Last week, Daytona International Speedway filed papers in a federal court in Florida seeking confirmation of a $760,000 arbitration award against Global Baristas related to an undisclosed contract breach.
Unused credit on loyalty cards may seem piddling by comparison, but some longtime Tully’s customers say they’re upset. Nancy Nordstrand said she and her husband each recently made deposits on their cards to get a 20 percent bonus offered at their local Tully’s. Now, with that store closed, the couple is out $187, she said.
“The irritation for me is they could’ve stopped those promotions if they thought they were going down,” said Nordstrand, who complained to the state attorney general after her calls to Tully’s corporate went unanswered.
Despite such Tully’s turmoil, Avenatti’s fame is only burgeoning.
The attorney, whose website boasts of more than $1 billion in verdicts and settlements won for clients, has become a fixture on cable TV, thanks to his latest high-profile case.
Sifuentez, the former Tully’s employee, said he can’t help but see the irony.
“He’s getting all this positive press for the Stormy Daniels thing, but at the same time, this (expletive) just cost hundreds of people their jobs,” he said.