JPMorgan Chase Bank, N.A. v. Winget et al

Filing 1016

ORDER Granting 992 Motion For Entry of Final Judgment under FRCP 54(b), Denying as Moot 995 Motion for Order, Granting in Part 1003 Motion for Entry of Final Judgment under FRCP 54(b), Denying 1008 Motion for Leave to File Second Summary Judgment Motion, and Striking 1009 Sealed Motion for Summary Judgment. Signed by District Judge David M. Lawson. (SPin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ALTER DOMUS, LLC,
Plaintiff and Counter-Defendant,
v.

Case Number 08-13845
Honorable David M. Lawson

LARRY J. WINGET and the LARRY J.
WINGET LIVING TRUST,
Defendants and Counter-Plaintiffs.
___________________________________________/
ORDER GRANTING MOTIONS FOR ENTRY OF FINAL JUDGMENT UNDER
FEDERAL RULE OF CIVIL PROCEDURE 54(b), DENYING MOTION TO HOLD
DEFENDANTS IN CONTEMPT, DENYING PLAINTIFF’S MOTION TO FILE
SECOND MOTION FOR SUMMARY JUDGMENT, AND STRIKING MOTION FOR
SUMMARY JUDGMENT FILED UNDER SEAL
Both the plaintiff and the defendants have asked the Court to treat as final certain aspects
of its order entered on January 5, 2021 granting in part the plaintiff’s motion for partial summary
judgment as to its unjust enrichment claim, imposing a constructive trust, denying the defendants’
motion for summary judgment, and dismissing defendant Winget’s complaint for declaratory
relief. Although claims remain to be adjudicated in this post-judgment-collection phase of this
long-standing lawsuit, entry of a final judgment under Federal Rule of Civil Procedure 54(b) will
facilitate the parties’ return to the court of appeals for the twelfth time. The plaintiff also asks the
Court to order immediate compliance with the constructive trust ruling and to hold the defendants
in contempt for failing to do so.
Plaintiff Alter Domus has taken over for JP Morgan Chase as the agent of a group of lenders
seeking to collect a judgment from the defendants that has swelled to nearly a billion dollars. On
July 28, 2015, an amended final judgment was entered against the defendants as guarantors of a
loan to Venture Holdings LLC. The judgment at that time was for $425,113,115.59. Defendant

Larry Winget’s exposure under that judgment was limited to $50 million. The initial collection
efforts focused on the Larry J. Winget Living Trust. In January 2104, Winget removed all of the
trust assets, and on October 1, 2015 he filed a declaratory judgment action (Winget v. Chase, No.
15-13469, which has been labeled “the Avoidance Action”) seeking a declaration that then-agent
Chase had no further recourse against Winget or the assets that were once held in the Winget Trust.
Chase filed a counterclaim alleging that Winget’s asset stripping from the Trust was a fraudulent
transfer and unjustly enriched him. This Court’s predecessor, the Honorable Avern Cohn,
consolidated that case with the present one, reasoning that the proceedings, especially the
counterclaim, was akin to a collection proceeding for the amended judgment previously entered.
On July 5, 2017, Judge Cohn granted Chase’s motion for judgment on the pleadings on its
fraudulent transfer claim brought under the Michigan Uniform Fraudulent Transfer Act
(“MUFTA”) Mich. Comp. Laws § 566.35 (now the Michigan Uniform Voidable Transactions
Act). The order allowed Chase to prevail on liability only. That was one of the rare liability orders
entered in this case that was not appealed. About six months later, Winget informed the Court that
he had rescinded his revocation of the Winget Trust and retitled in the name of the Trust all
property interests that had been titled in the Trust’s name as of the day before he revoked the Trust.
Chase did not believe that action restored the status quo ante, and it maintained that actions Winget
took in the interim (the “Revocation Period”) damaged Chase’s recourse to the Trust assets and
unjustly enriched Winget.
Chase sought the imposition of a constructive trust on certain assets and proceeds generated
by Trust property during the Revocation Period and moved for summary judgment on the unjust
enrichment count of its counterclaim in the Avoidance Action that had been consolidated. Later,
Winget filed a motion for summary judgment in the Avoidance Action, seeking a declaration that

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he always owned the property held by the Trust and that he could remove that property at his
discretion, despite Chase’s judgment against the Trust.
On January 5, 2021, the Court granted in part Chase’s motion for partial summary
judgment, imposed a constructive trust, denied the defendants’ motion for summary judgment,
dismissed Winget’s declaratory judgment complaint, and denied Winget’s motion to stay the
collection proceedings. The Court held that Winget unjustly enriched himself as to most of the
distributions subject to the motion but found that a trial was necessary to determine whether
Winget unjustly enriched himself with approximately $45 million in distributions in 2015 (before
the Amended Final Judgment became effective).
The January 5 order fully adjudicated Winget’s declaratory judgment complaint, but there
are open issues on Chase’s counterclaim that preclude entry of a final judgment in that consolidated
action. One issue related to an evidentiary hearing to determine if Winget is liable on the unjust
enrichment count for the aforementioned $45 million in distributions in 2015. Another is the
damages determination on the MUFTA count of Chase’s counterclaim. There are also other
collection issues concerning the procedures for a judicial sale of trust assets in accordance with the
Execution Order. Alter Domus also recently filed a motion seeking leave to file yet another
summary judgment motion addressing Winget’s conduct during the Revocation Period relating to
one of the business entities in which the Trust held stock.
I.
Larry Winget moves for entry of final judgment under Rule 54(b) as to the Court’s
dismissal of his complaint for declaratory relief. He reasons that if the court of appeals overturns
this Court’s ruling and holds that Winget had the right to transfer Trust assets and remove them
beyond the plaintiff’s reach, this case will be finished. Alter Domus does not oppose that relief,

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reasoning that it makes sense to get that inevitable appeal behind it so that perhaps its collection
efforts will be streamlined. It counters with a motion of its own to enter final judgment on the
unjust enrichment count of its counterclaim. It states that it abandons its claim to the remaining
$45 million in dispute, now rendering final the decision on that count. Winget opposes that motion
because more remains to be done of the MUFTA count, which is intertwined with the unjust
enrichment claim.
Rule 54(b) states that “[w]hen an action presents more than one claim for relief . . . the
court may direct entry of a final judgment as to one or more, but fewer than all, claims . . . only if
the court expressly determines that there is no just reason for delay.” Fed. R. Civ. P. 54(b).
Certification under this rule requires two separate findings. In Re Fifth Third Early Access Cash
Advance Litig., 925 F.3d 265, 273 (6th Cir. 2019) (citing Gen. Acquisition, Inc. v. GenCorp., Inc.,
23 F.3d 1022, 1026 (6th Cir. 1994)). “First, the district court must expressly direct the entry of
final judgment as to one or more but fewer than all the claims or parties in a case. Second, the
district court must expressly determine that there is no just reason to delay appellate review.” Ibid.
(quoting Gen. Acquisition, 23 F.3d at 1026) (cleaned up)). The Court must also explain how it
“concluded that immediate review of the challenged ruling is desirable.” Adler v. Elk Glenn, LLC,
758 F.3d 737, 738 (6th Cir. 2014) (citing Solomon v. Aetna Life Ins. Co., 782 F.2d 58, 601-62 (6th
Cir. 1986)).
There is no question that the Court’s decision granting summary judgment of dismissal on
Winget’s complaint in the Avoidance Action was final as to that complaint. That decision “ends
the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Catlin
v. United States, 324 U.S. 229, 233 (1945). In the same way, the decision granting the plaintiff
summary judgment on the unjust enrichment was final as to that count of the counterclaim,

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especially now that Alter Domus has abandoned any claim to the $45 million. The Court’s
decision did not dispose of all of the claims in the Avoidance Action because the extent of Alter
Domus’s damages on the MUFTA count of the counterclaim is an open question.
Is there any just reason for delaying entry of a final judgment on either of those claims in
order to pave the way for the parties’ return trip to the court of appeals? The Sixth Circuit points
the district court to the following non-exclusive list of factors for that decision:
(1) the relationship between the adjudicated and unadjudicated claims; (2) the
possibility that the need for review might or might not be mooted by future
developments in the district court; (3) the possibility that the reviewing court might
be obliged to consider the same issue a second time; (4) the presence or absence of
a claim or counterclaim which could result in set-off against the judgment sought
to be made final; (5) miscellaneous factors such as delay, economic and solvency
considerations, shortening the time of trial, frivolity of competing claims, expense
and the like.
Gen. Acquisition, 23 F.3d at 1030 (citations omitted).
Recall that this case is in post-judgment mode. After the amended final judgment was
entered in 2015, the parties focused their energy on the fight over who controlled the Trust assets
and whether Winget himself should have to pay anything beyond $50 million for interfering with
the plaintiff’s collection efforts from the Trust. This Court’s orders (Judge Cohn’s order granting
judgment on the pleadings on the MUFTA count and the January 2021 order adjudicating multiple
motions) have settled the liability question. Included in that resolution was an issue Winget
deemed pivotal: whether he could revoke the Trust and remove all the trust property. The court of
appeals once identified that as an open question. See JPMorgan Chase Bank, N.A. v. Winget, 942
F.3d 748, 750 n.1 (6th Cir. 2019) (observing that its holding that “a party who has a contract with
a trust can recover from the property held by the trust” did “not resolve whether Winget could
revoke the Trust and simply remove all the trust property,” and that “if Winget ‘owns’ the trust
property, that may affect whether the district court[‘s fraudulent conveyance decision] was
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correct”). This Court’s January 2021 order answered that looming question, but now Winget wants
a second (actually a twelfth) opinion from the court of appeals.
There is no just reason for delaying the entry of a final judgment on either the dismissal of
the declaratory judgment complaint or the unjust enrichment and MUTFA counts of the
counterclaim. As Winget reasons, if the Sixth Circuit concludes that Winget owns the Trust
property and lawfully revoked the Trust in 2014, it would end entirely this consolidated action as
Winget would be entitled to dismissal of all counterclaims against him. The collection proceedings
would also conclude because Alter Domus would have no property of value against which to
execute. Conversely, if the Sixth Circuit affirms the Court’s decision, then the collection process
will be expedited because Alter Domus’s right to execute on all interests in the Trust property
would be settled.
That reasoning applies with equal force to both motions for entry of a final judgment under
Rule 54(b). It is not undermined by the pendency of the damage component of the MUFTA count.
If Winget prevails on his argument, the MUFTA count fails. If he doesn’t, then collection
continues under that count and the unjust enrichment count. There is little chance that the court
of appeals would have to consider any issues twice. If Winget does not prevail on his avoidance
theory, the ruling on Alter Domus’s unjust enrichment claim is upheld; and if the plaintiff is able
to satisfy the amended judgment from the assets it collects, then the damage component of the
MUFTA claim need not be pursued. The plaintiff, after all, is entitled to only one satisfaction of
its judgment. And if the judgment is not fully satisfied, the damages component of the fraudulent
MUFTA count essentially will involve asset tracing, which is a conventional post-judgment
collection issue that can be taken up at the appropriate time.

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There is no just reason for delaying entry of a final judgment on rulings that dismissed the
declaratory judgment complaint and the orders granting judgment on liability on the MUFTA and
the unjust enrichment counts of the counterclaim, which also imposed a constructive trust over
certain assets.
II.
In the January 2021 order, the Court imposed a constructive trust on the following assets
in Winget’s possession or control:
A. Cash Distributions in the amount of $104,775,478, which were distributed to
defendant Larry J. Winget between August 11, 2015 and February 26, 2018;
B. a $135 million demand promissory note issued by JVIS on June 29, 2017 to the
Larry J. Winget 2015 Retained Annuity Trust that was assigned to Winget;
C. a $15 million demand promissory note issued by JVIS on June 29, 2017 to
Winget; and
D. a $22.5 million payment, plus any other payments made to Winget on account
of the promissory notes.
The Court also ordered Winget to:
A. pay to Chase the $104,775,478 in Cash Distributions;
B. assign the promissory notes referenced in paragraphs B and C, above, to Chase;
and
C. pay Chase the amounts paid on the promissory notes, including the $22.5
million payment.
Following a status conference with the Court on January 20, 2021, Winget’s counsel
apparently told counsel for the plaintiff that his client did not intend to comply with the
constructive trust order, taking the position that the order was interim in nature and that immediate
compliance was not required. Alter Domus then filed a motion for an order compelling Winget’s
immediate compliance with the Court’s order and requiring Winget to show cause why he should
not be held in contempt.
A party may be held in contempt for the failure to abide by a judgment ordering the
turnover of property. Fed. R. Civ. P. 70(e). Winget maintains that January 2021 order, however,
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is not a “judgment” within the contemplation of Rule 70. Alter Domus says that doesn’t matter,
because the constructive trust imposed by the Court is a form of post-judgment equitable relief
entered pursuant to the Court’s broad discretion under Federal Rule of Civil Procedure 69(a)(1)
and Michigan law.
Rule 69 governs the execution of money judgments. It provides that “[t]he procedure on
execution — and in proceedings supplementary to and in aid of judgment or execution — must
accord with the procedure of the state where the court is located.” Fed. R. Civ. P. 69(a)(1). Upon
the entry of a final judgment, Michigan law provides courts with “‘extremely broad’ authority to
execute on their judgments.” Winget, 942 F.3d at 751-52 (quoting Rogers v. Webster, No. 841096, 1985 WL 13788, at *1 (6th Cir. Oct. 22, 1985)).
There already is a judgment entered in this case. When the Court imposed a constructive
trust, it emphasized that “[i]t bears repeating that this case is in post-judgment collection posture,
where Chase has a judgment allowing it to recover from the trust property.” Op. Re: MSJs, ECF
No 986, PageID.31893; see also Order Granting Mot. to Strike Jury Demand, ECF No 770,
PageID.26848 (“As such, the Court has already indicated that [the Agent’s] counterclaims are part
of the [2008] litigation over the Guaranty.”); Order Adopting R&R, ECF No. 914, (“In further
pursuit of its post-judgment remedies, [the Agent] filed the Corporate Stock Motion and the
Constructive Trust Motion, as supplemented.”). Despite Winget’s adamant representations, the
fact that the plaintiff’s claims were brought as counterclaims to Winget’s 2015 declaratory
judgment complaint, rather than proceedings ancillary to judgment in the 2008 action, does not
matter. The plaintiff filed its compulsory counterclaims under Federal Rule of Civil Procedure 13
because Winget filed a separate declaratory judgment action after revoking the Trust in an attempt

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to avoid his Trust’s guarantee obligation. Had Winget never filed a separate action, the plaintiff
would have sought the exact same relief in the 2008 action.
Moreover, there is a final judgment entered against Winget. As the Sixth Circuit observed,
“[the district court entered judgment [against Winget and his Trust] over four years ago. . . . Winget
has already paid Chase $50 million, so he no longer owes the bank any money (at least for the
guarantee). But the Trust has yet to satisfy its obligation under the agreement and now owes the
bank over $750 million.” Winget, 942 F.3d at 749. Rather than viewing the counterclaims in the
Avoidance Action as a separate case against Winget individually, this proceeding is actually a
post-judgment effort to collect property from the Trust that had been fraudulently removed by the
Trust beneficiary. The Court’s order, therefore, is more properly viewed as post-judgment
equitable relief.
The significance of that distinction tends to fade even more, now that the Court has certified
the decision as a final judgment under Rule 54(b).

There should be no doubt about the

enforceability of the constructive trust and turnover order.
Winget’s questioning of the finality of the January 2021 order was not baseless, though.
The imposition of the constructive trust and the order to disgorge certain assets was based on the
plaintiff’s unjust enrichment claim that was not finally adjudicated because of the lingering
question over Winget’s liability for $45 million in distributions. Moreover, Rule 70 allows the
Court to hold a party in contempt for failing to “perform [a] specific act [ordered by the Court] . . .
within the time specified.” Fed. R. Civ. P. 70(a), (e) (emphasis added). The Court’s opinion never
actually specified a time for compliance.
Of course, it is a “basic proposition that all orders and judgments of courts must be
complied with promptly.” Maness v. Meyes, 419 U.S. 449, 458 (1975). But a finding of contempt,

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and even lesser sanctions, must be based on the violation of a court order that is “clear and
unambiguous.” Liberty Capital Grp., LLC v. Capwill, 462 F.3d 543, 550-51 (6th Cir. 2006) (“This
Court requires that the prior order be ‘clear and unambiguous’ to support a finding of contempt
. . . . Ambiguities must be resolved in the favor of the party charged with contempt.”). The Court
cannot make such a finding under the present circumstances.
III.
Alter Domus also has filed a motion for leave to file another summary judgment motion
on its counterclaim filed in the Avoidance Action. That motion purports to address Winget’s
conduct during the Revocation Period with respect to the business operations of companies in
which the Trust owned stock, known as Mayco International LLC and Mayco Freight LLC, which
in turn had been held by a trust entity called PIM. Alter Domus alleges that Winget transferred
the Mayco business from PIM into a newly created entity, placing certain revenues beyond the
Trust and the grasp of the plaintiff as a judgment creditor. That conduct, argues the plaintiff, is
relevant to its damages on the MUFTA count of its counterclaim. Winget, of course, vehemently
denies those allegations.
The Court sees no utility in entertaining that motion at this time, particularly since the
underlying basis of the claim will be subject to an appeal, if one is filed, of the Rule 54(b) judgment
that will be entered. If Winget does not file an appeal from that judgment (which is extremely
unlikely), then the plaintiff may renew its motion. For now, however, the motion for leave to file
another summary judgment motion will be denied and the underlying motion for summary
judgment, filed under seal, will be stricken.

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IV.
There is no just reason for delaying entry of a final judgment on (1) the dismissal of the
declaratory judgment complaint, (2) the order granting judgment on the pleadings on liability on
the MUFTA count of the counterclaim, and (3) the grant of summary judgment on the unjust
enrichment count of the counterclaim and imposition of a constructive trust over certain assets.
Accordingly, it is ORDERED that the defendants’ motion for entry of a final judgment
under Federal Rule of Civil Procedure 54(b) (ECF No. 992) is GRANTED.
It is further ORDERED that the plaintiff’s motion for entry of a final judgment under
Federal Rule of Civil Procedure 54(b) (ECF No. 1003) is GRANTED IN PART. Final judgment
will be entered on the unjust enrichment count of the counterclaim. The motion is DENIED in all
other respects.
It is further ORDERED that final judgment will enter on the order granting judgment on
the pleadings on the fraudulent transfer count (see ECF No. 732) and the order granting summary
judgment on the unjust enrichment count (see ECF No. 986) of the Avoidance Action
counterclaim, and the order granting summary judgment of dismissal of the declaratory action
complaint in the Avoidance Action (see ECF No. 986).
It is further ORDERED that the plaintiff’s motion for immediate compliance with the
Court’s previous orders (ECF No. 995) is DENIED as moot.
It is further ORDERED that the plaintiff’s motion for leave to file a second summary
judgment motion (ECF No. 1008) is DENIED.

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It is further ORDERED that the plaintiff’s second motion for summary judgment filed
under seal (ECF No. 1009) is STRICKEN.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: June 1, 2021

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