United States District Court, E.D. Michigan, Southern Division
MEMORANDUM AND ORDER GRANTING CHASE'S MOTION TO
STRIKE JURY DEMAND (Doc. 782) 
COHN UNITED STATES DISTRICT JUDGE
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 (2) 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
Winget was limited to $50 million. (Doc. 568). Because Winget
later satisfied his portion of the judgment, Chase began
collection efforts against the Winget Trust. As will be
explained, Winget revoked the Winget Trust and then filed a
separate action seeking a declaration that the Winget Trust
had no remaining obligations to Chase. See No. 15-13469.
Chase filed counterclaims, essentially asserting that the
revocation was fraudulent. The Court consolidated the
declaratory action and Chase's counterclaims with this
case. (Doc. 686). Winget then demanded a jury on Chase's
counterclaims. (Doc. 691 at p. 26). Chase moved to strike
Winget's jury demand based on a jury waiver in the
Guaranty. The Court agreed with Chase and struck the jury
demand. (Doc. 770). Chase then filed amended counterclaims to
clarify the remedies it seeks. (Doc. 771). Winget filed an
amended answer and again demanded a jury. (Doc. 772).
the Court is Chase's motion to strike the jury demand on
the grounds that the waiver still controls. (Doc. 785). For
the reasons that follow, the motion will be granted.
October 2002, Winget and the Winget Trust executed the
Guaranty which contained an explicit provision in which they
“IRREVOCABLY WAIVE[D] ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THE GUARANTY.” (Dkt. 1-3 at 9 (capitalization in
Court has already found this waiver valid and applicable to
Chase's counterclaims. Indeed, this Court has said that
“Chase's [fraudulent transfer] counterclaims
unequivocally arise out of and relate to the Guaranty”
and are therefore subject to this waiver. (Doc. 770 at p. 4.)
This is so because “Chase's counterclaims stem
directly from its status as a creditor of the Winget Trust, a
status that was created by and that would not exist without
the Guaranty.” Id. at p. 7.
however, says that its jury demand is valid because of recent
events in the case which now provide Winget with the right to
a jury trial. Chase says that the recent developments do not
affects the Court's original conclusion that its
fraudulent transfer claims are subject to the Guaranty's
jury waiver. The Court agrees with Chase.
Winget says that the “reinstatement” of the
Winget Trust more than four years after the initial
revocation changes the nature of Chase's counterclaims.
(Doc. 784 at p. 3; see also Doc. 777 (explaining that the
reinstatement is “[i]n compliance” with the
Court's order granting Chase's Motion for Judgment on
the Pleadings).). This argument does not carry the day.
Chase points out, it does not concede that Winget's
attempt to “resurrect” a trust several years
after its revocation was either legally effective or
permissible. It also notes that “[m]uch has occurred
between the initial revocation on January 1, 2014 and the
supposed ‘reinstatement' of the dissolved Trust on
February 26, 2018. Assets have been transferred. Businesses
have been reorganized. Millions of dollars in distributions
have been made to Mr. Winget.” (Doc. 782 at p. 2-3).
Thus, Winget's contention that he has returned the Winget
Trust to the status as of January 2014 does not necessarily
absolve Winget of any responsibility for fraudulently
transferring the assets in the first instance.
Winget's argument that the reinstatement would negate the
jury waiver is based upon a misreading of the law that the
Court has already considered and rejected. Winget cites
Foodland Distributors v. Al-Naimi, 220 Mich.App. 453
(1996) for the proposition that money damages against the
first transferee are not available when the property is
returned to the judgment debtor in toto except to the extent
the assets have been diminished in value. Putting aside that
the portion Winget relies on is in a concurring opinion,
Foodland is distinguishable. In Foodland,
the Michigan Court of Appeals was evaluating a different
statute-the Michigan Uniform Fraudulent Conveyance Act-which
did not include the remedial provisions set forth in the
Michigan Uniform Fraudulent Transfer Act (MUFTA). Unlike the
remedial provisions of the version of the statute at issue in
Foodland, section 8 of the MUFTA permits a creditor
to “recover a judgment for the value of the asset
transferred . . . or the amount necessary to satisfy the
creditor's claim, whichever is less” against
“[t]he first transferee of the asset or the person for
whose benefit the transfer was made.” M.C.L. §
566.38. In granting Chase's motion to amend its
counterclaims, the Court has acknowledged that the statute
allows a request for monetary relief.
also argues, without citation to any authority, that any
claim against Winget for diminution in the value of assets
“should be tried to a jury.” (Doc. 784 at p. 5.).
This contention lacks merit. The availability of certain
remedies does not change the fact that Chase is pursuing
fraudulent transfer claims based on “its status as a
creditor of the Winget Trust, a status that was created by
and that would not exist without the Guaranty.” (Dkt.
770 at 7.). Chase's fraudulent transfer claims clearly
arise out of and relate to the Guaranty.
also argues that Chase's amendment to explicitly seek all
remedies available under MUFTA-including a money judgment
against the first transferee as permitted by statute-somehow
changed the fundamental nature of its counterclaims. The
Court disagrees. Although Chase's amended counterclaims
identified specific forms of relief sought under MUFTA, the
substantive allegations of the counterclaims are the same.
The original counterclaims and the amended counterclaims
share the same parties, the same factual bases, and the same
legal theories. The Court has already determined that the
original counterclaims are subject to the Guaranty's
unambiguous jury waiver. So too are the amended
Chase's amendment did not change the landscape of the
dispute. Chase only clarified the remedies it is seeking. The
amended counterclaims, like the original counterclaims,
“arise out of and are related to the Guaranty and the
transactions contemplated by ...