JPMorgan Chase Bank, N.A. v. Winget et al
Filing
936
MEMORANDUM AND ORDER DENYING WINGETS MOTION TO AMEND THE COURTS JULY 5, 2017 ORDER AND SEEK IMMEDIATE INTERLOCUTORY APPEAL (ECF No. 928). Signed by District Judge Paul D. Borman. (MVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JPMORGAN CHASE BANK, N.A.,
Plaintiff/Counter-Defendant,
Case No. 08-13845
v.
HON. AVERN COHN
LARRY J. WINGET and the
LARRY J. WINGET LIVING TRUST,
Defendants/Counter-Plaintiffs.
__________________________________/
MEMORANDUM AND ORDER
DENYING WINGET’S MOTION TO AMEND THE COURT’S JULY 5, 2017 ORDER
AND SEEK IMMEDIATE INTERLOCUTORY APPEAL (ECF No. 928)1
I. Introduction
This is a commercial dispute. J. P. Morgan Chase (Chase) is the administrative
agent for a group of lenders that extended credit to Venture Holdings Company, LLC
(Venture) under a credit agreement. In 2008, Chase sued Larry J. Winget (Winget) and
the Larry J. Winget Living Trust (Winget Trust) to enforce a Guaranty and two Pledge
Agreements entered into by Winget and signed by Winget and the Winget Trust in 2002,
guaranteeing the obligations of Venture. After years of litigation and multiple appeals,
on July 28, 2015, the Court entered an Amended Judgment in favor of Chase and
against Winget and the Winget Trust that enforced the Guaranty and Pledge
Agreements against Winget and the Winget Trust. Specifically, the judgment against
the Winget Trust was in the amount of $425,113.115.59. The judgment against against
1
Upon review of the parties’ papers, the Court deems this matter appropriate for
decision without oral argument. See Fed. R. Civ. P. 78(b); E.D. Mich. LR 7.1(f)(2).
Winget was limited to $50 million. (ECF No. 568). More than four years after this Court
entered the Amended Final Judgment holding that the Winget Trust’s Guaranty was
unlimited, and after three decisions from the Sixth Circuit recognizing Chase’s right to
enforce the Guaranty against the Trust and collect from the Trust’s assets, Winget has
filed the instant motion, inviting the Court to amend a July 2017 order to certify it for
interlocutory review. According to Winget, the Sixth Circuit should immediately address
the latest question on which, suddenly, “everything depends.” The Court declines the
invitation. For the reasons which follow, the motion is DENIED.
II. Background
The background of this case has been set forth in multiple prior orders of the
Court and the Sixth Circuit and will not be repeated. What follows is the background
relevant to the instant motion.
In July 2017, this Court granted Chase’s Motion for Judgment on the Pleadings,
holding that Winget’s revocation of the Winget Trust and retitling the Winget Trust
assets in his own name was a constructive fraudulent transfer under Michigan law (the
“Fraudulent Conveyance Order”). (ECF No. 732)
Winget did not appeal or seek leave to appeal the Fraudulent Conveyance Order
at that time. Instead, the parties proceeded with discovery as to the damages Chase
suffered from the revocation. After seven months of discovery, Winget voluntarily
re-formed the Trust, transferred all of the assets it previously held back into the Trust,
and filed an unsolicited “Notice of Compliance” announcing to the Court that he had
“rescinded his revocation of the Trust.” (ECF No. 777 at 1) Winget did not seek a stay
of enforcement or interlocutory review and discovery proceeded for another five months.
2
On August 15, 2018, the Court entered charging orders in Chase’s favor for the
LLCs that Winget had retitled in the name of the Trust (the “Charging Lien Orders”).
(ECF Nos. 839–53.) That same day, and in light of the reinstatement of the Trust, the
Court sua sponte stayed the fraudulent conveyance action and directed Chase to focus
its collection efforts on the assets held in the Winget Trust.
In September 2019, following proceedings before a Special Master, the Court
issued (1) a Writ of Execution against the corporations held in the Trust, and (2) a
Status Quo Order that enjoined Winget from, among other things, transferring any
assets held by the Trust. (ECF No. 915)
At no time in the more than two years between the entry of the July 2017
Fraudulent Conveyance Order and October 2019 did Winget ever suggest that “time
was of the essence” for appellate review of the Fraudulent Conveyance Case Order or
that such review was necessary to prevent irreparable harm. Winget has appealed the
Writ of Execution to the Sixth Circuit, but not the Status Quo Order.
Winget appealed the Charging Lien Orders, arguing that because Winget
“owned” all of the Trust property, the Guaranty did not allow Chase to attach that
property through charging liens or otherwise. The Sixth Circuit rejected Winget’s
argument, explaining that “it doesn’t matter who ‘owns’ the trust property,” because “a
party who has a contract with a trust can recover from the property held by the trust.”
JPMorgan Chase Bank, N.A. v. Winget, 942 F.3d 748, 750 (6th Cir. 2019). Winget now
seizes upon (and mischaracterizes) a footnote from the Sixth Circuit’s latest decision to
argue that the Fraudulent Conveyance Order should be the subject of immediate
3
interlocutory review.2 Id. at 750 n.1.
III. Analysis
Chase argues that Winget’s motion is procedurally improper and lacks merit.
The Court agrees. Each ground is discussed in turn below.
A. Procedure
Winget’s request that the Fraudulent Conveyance Order be certified for
interlocutory appeal appears to an attempt to bypass the Status Quo Order. That
Status Quo Order enjoins Winget from “transferring . . . or otherwise disposing of the
assets owned, titled in the name of, or otherwise held by the Trust or its trustee”—the
exact action Winget seeks to accomplish through his request for interlocutory appeal.
(ECF No. 915 at 2.) Contrary to Winget’s suggestion, the Status Quo Order was not
premised on the fact that the prior revocation had been ruled a fraudulent transfer.
Rather, the Court entered the Status Quo Order to oversee and protect Chase’s
collection efforts in light of the fact that Winget reinstated the Trust. Simply put, Winget
made a strategic decision to voluntarily reinstate the Winget Trust, return assets to the
Winget Trust, and thereby expose those assets to Chase’s collection efforts. Winget’s
request is nothing more than a belated request for yet another chance to advance a
2
The full footnote reads as follows: “To be sure, this does not resolve whether
Winget could revoke the Trust and simply remove all the trust property. Winget tried to
do exactly that back in 2014 but later reversed course. In related proceedings,
proceedings, the district court held that this revocation was a fraudulent conveyance
under Michigan law. See Mich. Comp. Laws § 566.35. But if Winget ‘owns’ the trust
property, that may affect whether the district court was correct. At oral argument, we
asked the parties whether we should address this issue in the current appeal. But they
did not pursue that suggestion. Our decision therefore does not address the fraudulent
conveyance issue.”
4
new legal theory. The request is improper.
B. Merits
Section 1292(b) states:
When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference
of opinion and that an immediate appeal from the order may materially advance
the ultimate termination of the litigation, he shall so state in writing in such order.
The Sixth Circuit has recognized that orders under Section 1292(b) should be granted
“sparingly.” In re City of Memphis, 293 F.3d 345, 350 (6th Cir. 2002). “It is to be used
only in exceptional cases where an intermediate appeal may avoid protracted and
expensive litigation and is not intended to open the floodgates to a vast number of
appeals from interlocutory orders in ordinary litigation.” Cardwell v. Chesapeake & Ohio
Ry. Co., 504 F.2d 444, 446 (6th Cir. 1974) (quoting Milbert v. Bison Labs., Inc., 260
F.2d 431, 433 (3d Cir. 1958)). Winget bears the burden to establish the exceptional
circumstances that warrant interlocutory review. In re A.P. Liquidating Co., 350 B.R.
752, 755 (E.D. Mich. 2006).
Winget has not met this burden. First, despite his protestations to the contrary,
there is no controlling issue of law, and no basis to believe the Sixth Circuit would
reverse itself and permit revocation of the Winget Trust. Winget suggests a substantial
difference of opinion exists between the Court and the Sixth Circuit based on a footnote
from the Sixth Circuit’s opinion. The footnote, however, is clearly dicta and simply says
that the Sixth Circuit was not addressing the fraudulent conveyance issue—an issue
that Winget told the Sixth Circuit it did not need to address. The panel never stated nor
implied that the Court had erred in holding the revocation was a fraudulent conveyance
5
under Michigan law. Winget’s reliance on dicta in the Sixth Circuit’s opinion does not
support interlocutory appeal. See Sanderson v. City of Farmington Hills, 2013 WL
5676318, at *1 (E.D. Mich. Oct. 18, 2013) (Cohn, J.) (denying defendant’s motion to
certify order for interlocutory appeal where defendant relied on dicta).
Second, there is no reason to believe an appeal will advance the ultimate
resolution of this case. Winget’s motion is the latest chapter in a long history of
attempting to forestall the inevitable—Chase’s satisfaction of its judgment. For nearly
two and a half years since entry of the Fraudulent Conveyance Order, neither the law
nor the facts have changed. All that is different is that the Sixth Circuit rejected
Winget’s position. That is not a reason for yet another appeal. Finality, which has been
elusive at best in this case, will be best achieved by allowing Chase to finish its
collection efforts.
SO ORDERED.
S/Paul D. Borman
Presiding U.S. District Judge for
Avern Cohn
U.S. District Judge
Dated: 12/19/2019
Detroit, Michigan
6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?