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JPMorgan Chase Bank, N.A. v. Winget

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

December 19, 2019

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



          Paul D. Borman, Presiding U.S. 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). 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.

         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 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 ...

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