The "Jay Leno Special Edition" that Wasn’t
Our sister publication, Corvette Market, reported the sale of a 2007 "Jay Leno Special Edition" Corvette at the Barrett-Jackson Palm Beach auction in April. The well-optioned, 1,873-mile Corvette was in show-car condition. Leno reportedly "handpicked" the car from a Carson, California Chevrolet dealer. The Corvette was autographed on the valve cover by Leno, carried Jay Leno signature exterior badging and a laser-inscribed Jay Leno dash plaque.
The lot also included a selection of Jay Leno memorabilia, including an autographed photograph of Leno with President George W. Bush, and a genuine Corvette jacket and golf cap, both with Leno’s signature embroidered on them. The car came with a certificate of authenticity. The "Leno-Vette" brought $44,000, which was about $5,000 more than a comparable Corvette.
There is only one problem-Jay Leno believes he may well have signed the valve cover, but otherwise he didn’t have anything to do with the car.
As you might imagine, not everyone involved in this deal wants to talk about it. However, based on interviews with some of the players and informed sources whom we believe to be reliable, here is what seems to have happened.
Free isn’t good enough
A bank bought the Corvette new from the Carson dealer. The car was a prize in a contest among the bank officers. One of the bank’s directors, who also happens to be one of Leno’s attorneys, thought he would sweeten the pot and get Leno to autograph the car.
A bank employee drove the car to Leno’s hangar, Leno autographed the valve cover, the bank employee and the car left, and Leno forgot all about the entire matter until reading about it in Corvette Market.
The bank awarded the Corvette to the winning officer, who immediately sold it online to a Tucson-area hairdresser. The hairdresser’s salon is in the same strip mall as a sports memorabilia shop owned by an acquaintance, who happened to have the aforementioned autographed Leno/Bush photograph in his inventory.
Building the Package
The facts get fuzzy here, but somehow the photograph and the car became the germ of a special-edition, one-of-one collectible package. The hairdresser had the memorabilia dealer create a Certificate of Authenticity for the car.
The dealer did that by comparing the valve-cover signature to the signature on the photograph from his inventory, deeming them identical, and certifying the signature as authentic. The certificate wrongly states that Leno purchased the car from the Carson dealer, but the memorabilia dealer included that only because it was what he was told by the hairdresser. The dealer points out that his only opinion was that the signature was authentic. To round out the package, the hairdresser had a local embroidery shop add the Leno signature to the Corvette jacket and the golf cap and created the Leno badging for the car-all to create a more valuable package.
The hairdresser then traded the package to a Florida dealer for another car, and the Florida dealer consigned the entire lot to the auction.
What does the law say?
"Legal Files" deals with the legal aspects of the collector car hobby, which in situations such as this, comes down to the theoretical question: "Who could sue whom?"
Let’s start with the buyer. There is little doubt that the car was misrepresented to him, and he would seem to have a pretty good claim that he should at least get his money back. The analysis of his claims is governed both by general principles of the law and by his bidder’s agreement with the auction company.
Under the law, an auction company essentially acts as a broker. Its descriptions of the cars being auctioned are necessarily based upon information provided by the seller. Bidder agreements typically make that clear. As long as an auction company sticks to the information provided, and it isn’t obviously inaccurate, the auction company generally faces no greater liability than refunding the purchase price of the car, if that much. The consignor, however, can face much greater liability.
Barrett-Jackson, the company that auctioned this Corvette, prides itself on its documentation procedures, and employees ran this car through their usual analysis: title verification, VIN search, review of documentation provided by the seller, and so on.
Barrett-Jackson President Steve Davis explained that they always go above and beyond the minimum legal requirements and verify as much information about their consigned cars as possible. Davis was clear that all the usual procedures were followed here, and turned up nothing wrong with this car.
"But if I did make any mistake at all," Davis said, "I should have called Jay."
Davis may be a bit too hard on himself here. The auction team probably did all they really could to verify the story behind this Corvette. It’s just that much of the information given was not easily verifiable. The only parts of the lot that had any direct connection to Leno were the autographs on the valve cover and the photograph, both of which turned out to be genuine.
Calling him to verify the autographs might be too much to expect, as Leno told "Legal Files" that he autographs all kinds of stuff. "People bring car parts to the show for me to sign three to four times per week," Leno said. "I’ve signed valve covers, glove box doors, you name it."
To their credit, Barrett-Jackson has been very professional here.
"They have been terrific, and very straightforward," Leno said. "They acknowledged the situation right away, and said they would take care of it."
And that they did. Barrett-Jackson contacted the buyer immediately and explained the situation. They refunded his money and took the car back without hesitation, taking on the task of sorting out the situation.
Owner liability
There is no doubt that the Florida dealer is going to end up holding the hot potato. After all, he was the seller, and he gave the story to the auction company. The consignment agreement between the owner and an auction company typically makes it crystal-clear that the owner is responsible for all misstatements about the consigned car.
"Legal Files" would expect that any auction company’s agreement would make the seller, in a case such as this, liable not only for refunding the sales price, but also the auction company’s lost profits on the sale, attorney fees, and incidental expenses. And the buyer may have additional damage claims against the seller, above and beyond the buyer’s claims against the auction company.
We don’t have sufficient information to evaluate whether the dealer can recover the purchase price of the car from the hairdresser. That depends on what was said between them, and "Legal Files" was unable to reach either for comment. It seems highly doubtful that the dealer would have claims against the memorabilia dealer, since the hairdresser stands between them. Further, the certificate accurately claimed Leno’s signatures were genuine, and that may be all that it really said.
Leno’s position
The same as any other TV or movie star, Jay Leno’s entire persona-name, likeness, signature, and so on-is an extremely valuable asset. Making use of any part of it without authorization is certainly actionable. The persons who misappropriate it-here, the hairdresser and possibly the memorabilia dealer-can be required to give up any profit gained from the misappropriation, reimburse the celebrity’s legal fees, and perhaps pay even greater damages.
When the subject was raised, Leno quickly rejected the idea that he would sue anybody over this.
"It’s really not that big a deal," Leno said. "I was mainly worried that someone might be paying for something that they weren’t really getting. As for me, the whole thing was just an annoyance."
And, what seemed to annoy him the most was, "The very idea that I would own a Corvette with an automatic transmission!"
Learning from the story
SCM readers know that provenance is often a considerable element of the value of a particular collector car. When that provenance involves something like celebrity ownership, that history can be difficult to verify. And, when something is difficult to verify, it becomes very easy to fabricate.
If you are going to pay a premium for a Ferrari F40 because it was once owned by Mother Teresa, you’d better spend some time and money researching the car and verifying the story. Without a copy of a certificate of title issued to the celebrity-which can easily be faked-previous ownership can be very difficult to establish.
Your due diligence process may not be very easy, and it may well involve some significant expense for experts to do the research for you, but it is necessary to avoid situations such as this one. The Leno-Vette seems to be a "Special Edition" that was created by one of the owners of the car, acting on his own. That shows how easy it can be to blend a little fact with a lot of fiction to create something that never existed.
photo credit: © 2010 classiccars.com
text credit: Bryan Wolfe / © 2010 sports car market magazine inc.
