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JPMorgan Chase Bank, N.A. v. Winget

United States District Court, E.D. Michigan, Southern Division

September 11, 2019

JPMORGAN CHASE BANK, N.A., Plaintiff/Counter-Defendant,
v.
LARRY J. WINGET and the LARRY J. WINGET LIVING TRUST, Defendants/Counter-Plaintiffs.

          MEMORANDUM AND ORDER LIFTING STAY [1] AND GRANTING CHASE'S MOTION FOR COSTS AND EXPENSES [2] (ECF NO. 862)[3]

          AVERN COHN, UNITED STATES DISTRICT JUDGE

         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 Winget was limited to $50 million. (ECF No. 568). The Court also issued an order awarding Chase $11, 154, 874.65 in attorney fees and expenses (Fee Order) associated with its efforts to enforce the Guaranty and Pledge Agreements through May 31, 2015. (ECF No. Doc. 671).

         As will be explained, this is Chase's third motion for expenses. The prior two motions were granted. In the current motion, Chase requests expenses in the amount of $3, 553, 612.22. Chase says that this amount represents the services of Sidley Austin LLP and Dickinson Wright PLLC between December 1, 2016 and June 30, 2018. For the reasons that follow, the motion is GRANTED.

         II. Background

         In the Amended Judgment, the Court determined that Winget and the Trust are liable to Chase for the attorneys' fees and related expenses incurred in pursuing Chase's rights under the Guaranty signed by Winget and the Trust. (Doc. 568 at 3; see also Doc. 487-1 at 8-9 (Guaranty).)

         Chase previously moved for an award of expenses under Section 17 of the Guaranty incurred through May 31, 2015. (Doc. 563). The Court granted the motion in part and awarded Chase $11, 154, 874.65 in expenses (Fee Order) associated with its efforts to enforce the Guaranty and Pledge Agreements through May 31, 2015. (Doc. 671). Winget and the Winget Trust appealed the Fee Order.

         Winget then moved for partial satisfaction of the Amended Judgment, contending that his payment of $50 million satisfied the Fee Order (Doc. 672). The Court denied the motion (Satisfaction Order). (Doc. 683). Winget and the Winget Trust appealed both the Satisfaction Order and the Fee Order. The Court stayed proceedings on Chase's motion for expenses pending the outcome of the appeal. (Doc. 732).

         The Sixth Circuit affirmed, finding that the Court had properly interpreted the language of the Guaranty to hold both Winget and the Winget Trust responsible for the full payment of costs and expenses correctly held there had been no “partial satisfaction” of the award of costs and expenses, and properly determined that the doctrine of res judicata did not apply. Chase v. Winget, No. 16-2130 (6th Cir. Jul. 21, 2017) (Doc. 735) In light of the Sixth Circuit's ruling and mandate, on Chase's motion, the Court lifted the stay. (Doc. 752).

         Chase then filed a second motion for expenses incurred since the issuance of the Fee Order in the amount of $2, 000, 316.24. Chase said the amount represented the services of Sidley Austin LLP and Dickinson Wright PLLC between June 1, 2015 and November 30, 2016. See ECF No. 709. The Court, over Winget and the Winget Trust's objections, granted the motion. See ECF No. 773. Winget and the Winget Trust appealed. The Sixth Circuit dismissed the appeal for lack of jurisdiction, i.e. the order was not final. Chase v. Winget, No. 18-1143 (6th Cir. Apr., 10, 2019). (ECF No. 903.

         III. Discussion

         Winget first argues that the Court should not rule on Chase's fee petition while appeals are pending. As noted above, Winget's appeal of Chase's second fee petition was dismissed, leaving only the appeal relating to the Court's entry of Charging Orders. Winget contends that claims that if the Sixth Circuit agrees with him on either of his appeals, Chase would have no right to an award of fees. This argument misreads the final judgment and the Guaranty. Chase is entitled to “all costs and expenses . . . incurred by Chase in endeavoring to collect the Guaranteed Obligations from, or in prosecuting this or any related or future actions against, Winget and the Winget Trust.” (ECF No. 568 at p. 3). Chase's expenses arising from post-judgment efforts to collect on the final judgment were plainly incurred in “endeavoring to collect” the Guaranteed Obligations awarded in July 2015. See Daws Excavating, LLC v. Camp Retreats Found., 2018 WL 842900, at *3 (Mich. Ct. App. Feb. 13, 2018) (noting that a judgment creditor “may pursue relief under the [fraudulent transfer statute] against an asset fraudulently transferred by the judgment debtor in postjudgment supplementary collection proceedings. . . .”). The fact that the current costs and expenses were incurred in prosecuting counterclaims in a related action brought by Winget himself is irrelevant, and indeed was expressly contemplated by the Court by providing that Chase could recover in either the original or “any related or future proceeding.” (ECF No. 568 at p. 3.)

         Further, the outcome of the Charging Order appeal is not relevant to Chase's right to recover attorneys' fees arises out of the Guaranty. Chase's right to damages under the Guaranty was established and reduced to judgment.

         Winget also argues that certain hours are excess and reflect duplicate work, arguments he presented in response to Chase's prior fee petitions. As an initial matter, both prior fee orders were based on hourly rates which the Court found reasonable. This holding is the law of the case. ...


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