By: Faith Gingrich-Goetz
Though Johnny Depp is most well-known for his starring roles in movies, such as Pirates of the Caribbean, Edward Scissorhands, Sweeney Todd: The Demon Barber of Fleet Street, and more, in 1995, he took on a different role: Kentucky horse farm owner.[i] Depp owned the farm from 1995 to 2001, when he sold the property for $1 million, only to buy it back in 2005 for $2 million.[ii] The farm features a main ranch house that haswith 6 bedrooms and 6.5 bathrooms, a guesthouse, and many more farm and equestrian buildings.[iii] Working with Halfhill Auction Group, on September 15, 2017, Depp held an auction on September 15, 2017, to try to sell the 41.32-acre horse farm for $2.9 million.[iv]
The timing of this auction suggests that it may be related to recent legal complications that Depp has been facing withregarding his former money managers.[v] Despite earning between $10-20 million per film, Depp found himself to be $40 million in debt, asserting that his fortune was mismanaged by his former money managers.[vi] These managers are currently under investigation by three federal agencies for fraud and money laundering.[vii] Prior to the investigations starting, Depp sued the money management firm for $25 million in January 2017.[viii] Though Depp appeared desperate to sell the horse-farm, the auctioneer failed to get the property sold at the auction held on September 15, 2017.[ix]
In general, an auctioneer owes a “basic duty of competence and fairness to the seller.”[x] The auctioneer is an agent of the seller and has a duty to represent the seller reasonably.[xi] With this in mind, Halfhill Auction Group did not accept the highest bid placed on Depp’s farm, $1.4 million-, less than half of what was being asked.[xii] However, notably, under Kentucky law, in auctions or sales related to equine under Kentucky law, the auctioneer is considered a “dual agent,” meaning they not only owe a duty to the seller, but also to the buyer.[xiii] This means if any of Depp’s horses were also being auctioned in addition to the farm, the auctioneer owed a duty to not only Depp, but to the buyer as well.[xiv] Furthermore, under Kentucky law, if the auctioneer was the principal broker, this means that they would also be considered a “dual agent,” and have a duty to both the seller and the buyer.[xv] Given these statutes, it seems that Depp’s auctioneer was not acting completelyfailed to act “reasonably” for Depp, who has beenis in a heated multi-million dollar legal battle with his previous money managers;, nor does it seem that Depp’s auctioneer was acting “reasonably” for the potential buyer who placed the highest bid at the auction.
[i] Mark David, A Kentucky Horse Farm Owned by Johnny Depp Heads to Auction, Variety.com (Aug, 30, 2017, 12:09 PM), http://variety.com/2017/dirt/real-estalker/johnny-depp-kentucky-horse-farm-1202543122/.
[vii] Rachel Cao, Johnny Depp’s Ex-Business Managers Face Federal Probes for Fraud, CNBC.com (Aug. 15, 2017, 3:01 PM), https://www.cnbc.com/2017/08/15/johnny-depps-ex-business-managers-face-federal-probes-for-fraud.html.
[ix] Taysha Murtaugh, Johnny Depp’s Kentucky-Farm Failed to Sell at Auction, Country Living.com (Sep. 20, 2017), http://www.countryliving.com/real-estate/news/a44879/johnny-depp-kentucky-farm-fails-at-auction/.
[x] Duties of Auctioneer, USLegal.com, https://auctions.uslegal.com/duties-of-auctioneer/ (last visited Nov. 2, 2017).
[xii] Cao, supra note vii.
[xiii] Ky. Rev. Stat. Ann. § 230.357 (LexisNexisJun. 26, 2007).
[xv] Ky. Rev. Stat. Ann. § 324.121 (LexisNexisJun. 25, 2009).