Actor Johnny Depp, the star of the “Pirates of the Caribbean” movies, which have grossed over $4.5 billion worldwide, has sued his former attorneys for improperly generating about $30 million in contingent legal fees.
Depp, who also starred in “Edward Scissorhands”, “The Lone Ranger”, and dozens of other movies, filed a lawsuit in Los Angeles County Superior Court state court on 10/17/17, against Beverly Hills, California-based Bloom Hergott Diemer Rosenthal LaViolette Feldman Schenkman & Goodman and firm lawyer Jacob Bloom, who represented him from 1999 until early this year.
He alleges legal malpractice, breach of fiduciary duty, unjust enrichment, and violation of several chapters of the California Business and Professional Code.
Depp is represented by a small army of lawyers in his malpractice suit, including Washington, DC-based The Endeavor Law Firm and Stein Mitchell Cipollone Beato & Missner, and local counsel from Buckley Sandler’s office in Santa Monica, California.
Malpractice Complaint
The complaint alleges that Bloom and his firm “engaged in self-dealing and pursued and undertook transactions in the face of undisclosed conflicts of interest for their own financial benefit over that of their clients”, and collected more than $30 million in fees despite not having a written contract with Depp, as required under California law.
Depp also alleges that Bloom and his law firm failed to failed to discover and disclose “years of misconduct” by Depp’s business managers (see below).
Depp claims that the firm’s conduct jeopardized his finances:
“Like many successful artists who depend upon professionals to advise them, Mr. Depp trusted and reasonably relied on defendants, as his attorneys, to handle his legal affairs competently and ethically…Instead of protecting Mr. Depp’s interests, defendants engaged in misconduct for their own financial benefit and violated some of the most basic tenets of the attorney-client relationship, all to Mr. Depp’s serious financial detriment.”
Law Firm’s Response
Bloom Hergott said in a statement to The Los Angeles Times, “In light of the longstanding relationship between the Bloom Firm and Mr. Depp, the Firm is extremely disappointed that Mr. Depp has decided to file this lawsuit”, and the firm intends to defend the lawsuit “vigorously.”
Complaint Against Business Managers
Earlier in this year, Depp sued his former business managers at The Mandel Company Inc. (d/b/a/ The Management Group (TMG)).
That suit accused TMG of taking more than $28 million in fees from Depp that he never agreed to pay, and allegedly failed to perform basic tasks, such as filing his taxes on time and keeping accurate records of his finances.
Depp further alleged that TMG effectively “treated Mr. Depp’s income as their own,” investing the actor’s money in businesses in which TMG held an ownership stake, and loaning his money to third parties without authorization.
Cross-Complaint
TMG filed a cross-complaint against Depp and other parties, claiming that “TMG repeatedly warned and advised Depp to reduce his spending and sell unnecessary assets.” However, “Depp listened to no one, including TMG and his other advisors.”
He “lived an ultra-extravagant lifestyle that often knowingly cost… in excess of $2 million per month to maintain, which he simply could not afford…Depp, and Depp alone, is fully responsible for any financial turmoil he finds himself in today.”
Malpractice Insurance Issue
If the Bloom Hergott firm refunds fees to Depp, i.e., to settle his allegation of unjust enrichment, or if Depp is awarded punitive damages, any such payment won’t be covered by the firm’s malpractice insurance policy.
The wording in Aspen American Insurance Company’s policy is typical:
I. INSURING AGREEMENTS
A. Coverage
The Company will pay on behalf of the Insured all sums in excess of the deductible that the Insured shall become legally obligated to pay as damages
Words in bold type, i.e., “damages” are defined in the policy:
III. DEFINITIONS
E. Damages means any compensatory sum and includes a judgment, award or settlement, provided any settlement is negotiated with the Company’s written consent.
Damages do not include:
- The return, reduction or restitution of fees, expenses or costs for professional services performed, or to be performed, by the Insured and injuries that are a consequence of the foregoing;
- Fines, penalties, forfeitures, or sanctions;
- The multiplied portion of any multiplied awards;
- Injunctive or declaratory relief; or
- Punitive or exemplary damages.
(Emphasis added).
FURTHER READING
Vanity Fair article on Johnny Depp’s financial troubles
About Curtis Cooper