Johnny Depp today took two steps forward and a significant step and a half back in his $25 million legal battle with his former business managers over the Pirates Of The Caribbean star’s finances.
While denying for now The Mandel Company’s desire for declaratory relief that Depp “caused his own financial waste,” a Los Angeles Superior Court judge Monday ruled that business manager’s claim of promissory fraud against the Oscar nominee in its countersuit can stand as the financially lurid case moves forward — though potentially much less salacious
After listening to arguments from lawyers on both sides in a demurrer from Depp’s team at a hearing downtown this morning, Judge Teresa Beaudet stood by most of her tentative ruling on the matter, first filed by Depp on January 13 with allegations of “gross mismanagement and sometimes outright fraud” over the actor’s long-term relationship with the company also known as The Management Group. With the matter moving forward after today’s hearing, the case is still set to go before a jury on January 24 next year — unless a settlement deal is struck before then.
Beaudet on Monday also agreed that some of the most revealing and seeming excessive examples of Depp’s use of his money are not really part of this case, after all. “The pages of allegations of Depp’s allegedly outrageous spending clearly have no relevance to the 5% commission allegedly owed TMG from the Pirates Of The Caribbean payout, or to the final work done by TMG on transitioning their files to Depp’s new representatives,” the judge said, striking that material. Of course, being that a giant spotlight has already been put on said spending, it is not like it will disappear from public memory. Additionally, such material could find a new home in future filings as these things tend to.
“TMG has not indicated how it can amend the declaratory relief cause of action,” Beaudet’s tentative on the matter also noted on the mainly technical issue of the relief. “Unless it provides some appropriate basis for so doing at the hearing, the demurrer is sustained without leave to amend.”
Still, Beaudet will let the declaratory relief claim be restated by TMG’s lawyers. “We can allege the mirror flip of that,” said TMG lawyer Suann Macisaac on Monday in arguing against the tentative, successfully seeking permission to amend the claim based on the fact Depp made a similar claim in his initial suit. The court altered the tentative to give TMG’s attorneys 10 days to amend and Depp’s side 30 days to respond.
“Today’s ruling was a clear victory for The Management Group because the Court ruled in favor of our fraud claim,” said reps for TMG in a statement today. “We intend to file an amended cross complaint for declaratory relief. All of the issues regarding Depp’s extravagant spending continue to be fully included in the case.”
“The Court also does not find that TMG’s allegations in its promissory fraud cause of action are based on duties arising from any previous agreement between the parties, and do not lie in tort,” the judge added of the other main issue of contention at stake Monday. “Contrary to Cross-Defendants’ contentions, TMG has not simply alleged that it was not paid for its services, thus constituting a breach of contract,” she noted in her tentative of earlier today. “Instead, TMG alleges additionally that all during the final two weeks of March while TMG was working to transition the files, in an effort to induce the completion of the work, Cross-Defendants perpetrated a fraud in misrepresenting repeatedly that they intended to pay when the transition was complete.”
TMG’s claims of breach of contract were not part of the dismissal motion before the court today.
Based supposedly on discoveries into his finances by his new business managers, Depp’s lawsuit of earlier this year alleged 11 complaints ranging from fraud to breach of contract to professional negligence. It claims TMG paid itself more than $28 million in contingency fees without a written agreement; failed to file or pay his taxes on time, resulting in more than $5.6 million in fees and penalties on his federal returns; and “loaning” nearly $10 million to third parties without Depp’s authorization or proper documentation.
At a hearing in late May, the judge allowed Depp’s side to file a new amended complaint which can include so-called whistleblower testimony from an ex-employee of TMG. That new complaint has not been submitted to the court as of yet.
In TMG’s initial countersuit filed January 31 and full of multi-million dollar details of the actor’s alleged extravagances and over-spending, Depp’s former biz managers claimed the company “did everything within its power over the last 17 years to protect Depp from himself and to keep Depp financially solvent.” The filing also noted that the actor himself is to blame for his supposed financial woes, citing examples such spending as $3 million to shoot Hunter S. Thompson’s ashes out of a cannon a dozen years ago and the $2 million he spends every month on every day expenses, which were often the least intriguing of the pay-outs.
“Contrary to Depp’ s recent public statements that his exorbitant purchases were him ‘investing’ his own money,” an amended compliant of May 1 added says, “Depp’s extravagant spending has often been marked by a lack of impulse control and often increased immediately after Mandel would confront Depp regarding his finances.”
The case is being handled for Depp, who last year signed with CAA after a 30-year stint at UTA, by lawyers at at bi-coastal firm Manatt, Phelps & Phillips, LLC. And Adam Waldman of the DC-based Endeavor Law Firm. Michael Kump and Suann Macisaac of Santa Monica’s Kinsella Weitzman Iser Kump & Aldisert LLP are representing TMG in the matter.