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

Filing 366

ORDER denying 345 Defendants' Motion for Summary Judgment on Count 1 Based on Res Judicata. Signed by District Judge Avern Cohn. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

JP MORGAN CHASE BANK, N.A.,
Plaintiff/Counter-Defendant,
v.

Case No. 08-13845
HON. AVERN COHN

LARRY WINGET and the LARRY WINGET
LIVING TRUST,
Defendants/Counter-Plaintiffs.
___________________________________/
ORDER DENYING DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
ON COUNT I BASED ON RES JUDICATA (Doc. 345)
I.
This is a commercial finance dispute. Plaintiff, JP Morgan Chase Bank, N.A.
(Chase, hereafter Agent)1 is the Administrative Agent for a group of lenders which
includes the Agent, that initially extended credit to Venture Holdings Company, LLC
(Venture) in 1999 under a Credit Agreement. Venture defaulted on the Credit
Agreement and eventually went into bankruptcy. Currently, over 400 Million Dollars is
unpaid under the Credit Agreement. The Agent is suing defendants, Larry Winget
(Winget) and The Larry Winget Living Trust (Winget Trust) to enforce a Guaranty and
two (2) Pledge Agreements entered into by Winget and signed by Winget and the

1

Initially, the Administrative Agent was First National Bank of Chicago; JP
Morgan Chase Bank, N.A. is the successor, by merger, to First National Bank of
Chicago. In its papers, the Agent has referred to itself as Chase, at the Court’s
direction. For purposes of this decision, the Court prefers to use the term Agent, rather
than Chase.

Winget Trust in 2002, guaranteeing the obligations of Venture under the Credit
Agreement. The Guaranty and Pledge Agreements are part of the Eighth Amendment
To Credit Agreement. The Agent makes three (3) claims:
Count I

Enforcement of Guaranty Against the Winget Trust

Count II

Enforcement of Guaranty Against Winget

Count III

Enforcement of Pledge Agreements Against Winget and the
Winget Trust

Before the Court is Winget is Winget’s Motion For Summary Judgment On Count
I Based on Res Judicata (Doc. 345).2 The Agent has responded (Doc. 358), and
Winget has replied. (Doc. 362). For the reasons that follow, the motion is DENIED.
II.
Winget says he and the Larry Winget Living Trust (Winget Trust) are entitled to
judgment as a matter of law on Count I of the complaint (Doc. 1) on the grounds that the
Agent failed to bring the claim the Winget Trust has unlimited liability in two (2) prior
lawsuits between the parties, to wit: a 2005 case (Case No. 05-CV-74141) and a 2004
case (Case No. 04-4564 Bkr. E.D. Mich.). Winget’s position has no merit.
The 2005 case is explained in JP Morgan Chase Bank, N.A. v. Larry J. Winget
and The Larry J. Winget Living Trust, 510 F3d 577, 585 (6th Cir. 2007):
JP Morgan has an explicit right to inspect the financial
records of Winget and the companies he controls in order to
ensure that there is sufficient collateral to satisfy Winget’s
2

Also pending before the Court is a decision on Winget’s counterclaim for
reformation as to Count I. In a footnote in its reply brief, Winget says that a favorable
decision on its counterclaim does not moot the present motion. While the Court is not
inclined to agree with Winget on this point, it make no difference in light of the fact that
the Court has denied Winget’s motion.
2

debt if JP Morgan needs to enforce its security interest at a
later time.
Inspection rights was the sole issue in the 2005 case. There is no identity
between this claim and the claim of unlimited liability asserted in this case.
The 2004 case was an adversary proceeding in the Venture bankruptcy to
enforce a Contribution Agreement. That action was based on different facts, involved
different rights of action and different evidence. There is no identity between the claims
in this case and Chase’s claim in this action. Res judicata “bars a party from bringing
any claim that should have been litigated in the earlier proceeding.” Winget v. JP
Morgan Chase Bank, N.A., 537 F3d 565, 580 (6th Cir. 2008). As stated in the Agent’s
response brief (Doc. 358, p. 10):3
Winget has provided no reason that [JP Morgan] should
have brought this claim in the. . .2004 Adversary
Proceeding.
SO ORDERED.

Dated: October 17, 2012

S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE

I hereby certify that a copy of the foregoing document was mailed to the attorneys of
record on this date, October 17, 2012, by electronic and/or ordinary mail.
S/Julie Owens
Case Manager, [phone]
3

The Agent also says, in a footnote, the motion should be denied because it
violates E.D. Mich. LR 7.1(b) which permits only one motion for summary judgment
without leave of Court. The Agent’s argument is based on a mistake of fact. Winget
withdrew the prior motion for summary judgment. See Doc. 186, motion for summary
judgment and Doc. 212, withdrawing the motion. Thus, only one summary judgment
motion was filed. The Agent was derelict in not so advising the Court.
3