Jpmorgan Chase Bank, N.A. v. Winget

Citation920 F.3d 1103
Decision Date10 April 2019
Docket NumberNo. 18-1143,18-1143
Parties JPMORGAN CHASE BANK, N.A., Plaintiff-Appellee, v. Larry J. WINGET; Larry J. Winget Living Trust, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

ARGUED: Thomas V. Hubbard, DREW, COOPER & ANDING, P.C., Grand Rapids, Michigan, for Appellants. James W. Ducayet, SIDLEY AUSTIN LLP, Chicago, Illinois, for Appellee. ON BRIEF: Thomas V. Hubbard, John E. Anding, DREW, COOPER & ANDING, P.C., Grand Rapids, Michigan, for Appellants. James W. Ducayet, Kendra L. Stead, SIDLEY AUSTIN LLP, Chicago, Illinois, for Appellee.

Before: DONALD, LARSEN, and NALBANDIAN, Circuit Judges.

NALBANDIAN, Circuit Judge.

This appeal is not the first time we have seen Larry Winget and JPMorgan Chase. Nor will it likely be the last. Winget’s appeal du jour follows the district court’s award of interim attorneys’ fees to Chase. But because this order is not a "final decision" under 28 U.S.C. § 1291, we lack jurisdiction and therefore dismiss Winget’s appeal.

I.

We need not revisit each "chapter in [this] longstanding dispute between the parties." JPMorgan Chase Bank, N.A. v. Winget , 602 F. App'x 246, 248 (6th Cir. 2015) (" Winget I "). Suffice it to say, Chase sued Winget "to recover millions of dollars owed to it under a credit agreement between Chase and entities owned and operated by [Winget]." JPMorgan Chase Bank, N.A. v. Winget , 678 F. App'x 355, 356 (6th Cir. 2017) (" Winget II "). We decided the merits of the dispute and awarded Chase over $ 425 million. But there was a catch. While Winget’s personal trust was on the hook for the full amount, Winget himself—protected by a limitation in his personal guaranty—owed Chase only $ 50 million (which he has since paid). Winget I , 602 F. App'x at 258–59.

The parties then litigated attorneys’ fees—and whether Winget was personally liable for Chase’s $ 12.6 million in fees and expenses. JPMorgan Chase Bank, N.A. v. Winget , 704 F. App'x 410, 413–14 (6th Cir. 2017) (" Winget III "). Chase won again. Id. at 414–16. And we explained in that appeal that despite Winget’s limited personal guaranty, he "is still liable for Chase’s costs and expenses associated with collection of the Guaranteed Obligation." Id. at 418. The district court then entered a final amended judgment against Winget and his trust. So one thing is clear: Winget and his personal trust owe Chase a lot of money.

But Chase’s final judgment against Winget did not end this decade-long saga. Rather than use the trust’s assets to pay Chase, Winget transferred the assets out of his trust and filed a new lawsuit—asking the district court to declare that Chase had no recourse against those assets. In response, Chase filed counterclaims against Winget, alleging that the transfers were fraudulent conveyances designed to avoid paying Chase. The district court consolidated the new lawsuit with the previous litigation, characterizing it as "the functional equivalent of post-judgment proceedings." (Order, R. 686 at 2.)

The parties are still engaged in these post-judgment proceedings. For example, Winget is fighting over what assets Chase can collect, how Chase can collect those assets, and what those assets are worth. And as these collection efforts drag on, Chase periodically asks the district court for more attorneys’ fees. The district court granted one such motion—awarding Chase another $ 2 million. These fees covered Chase’s expenses from June 2015 through November 2016. But in doing so, the district court recognized the interim nature of the award, noting that "Chase’s efforts to collect the Guaranteed Obligations are ongoing." (Order, R. 773 at 1.) These ongoing efforts include charging orders, depositions, requests for constructive trusts, writs of executions on stocks, continued discovery on the value of the assets in the trust, a potential trial to determine Chase’s damages from Winget’s fraudulent conveyances, and more requests for attorneys’ fees. In sum, Chase’s collection efforts continue in the district court.

II.

Winget now appeals the $ 2 million interim attorneys’ fees award. To start, however, we "must determine that [we] have jurisdiction before proceeding to the merits." Lance v. Coffman , 549 U.S. 437, 439, 127 S.Ct. 1194, 167 L.Ed.2d 29 (2007). We generally have jurisdiction only from "final decisions of the district courts." 28 U.S.C. § 1291. A final decision "generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Gnesys, Inc. v. Greene , 437 F.3d 482, 485 (6th Cir. 2005) (quoting Budinich v. Becton Dickinson & Co. , 486 U.S. 196, 199, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988) ). But this definition is not entirely helpful here. As the Supreme Court explained, "a claim for attorney’s fees is not part of the merits of the action to which the fees pertain." Budinich , 486 U.S. at 200, 108 S.Ct. 1717. In other words, an award of attorneys’ fees cannot end the litigation on the merits.

So how then do we determine when a fee award is appealable? In most cases, the timing of the award provides the answer. For example, the district court can award attorneys’ fees before it decides the merits of the case. We know the answer in this situation; "orders awarding interim fees in the course of litigation are not appealable." Webster v. Sowders , 846 F.2d 1032, 1035 (6th Cir. 1988) ; see also In re Diet Drugs Prods. Liab. Lit. , 401 F.3d 143, 156 (3d Cir. 2005) (collecting cases) ("[A]n interim award of attorneys’ fees is not, in almost all cases, an appealable final order because it foresees further and additional action by the district court, thus continuing, but not concluding, the fee litigation."). And we would lack jurisdiction because the appeal would be too early. Instead, the general rule would apply: "a party is entitled to a single appeal, to be deferred until final judgment has been entered."

Mohawk Indus., Inc. v. Carpenter , 558 U.S. 100, 106, 130 S.Ct. 599, 175 L.Ed.2d 458 (2009) (quoting Digital Equip. Corp. v. Desktop Direct, Inc. , 511 U.S. 863, 868, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994) ).

The district court can also award attorneys’ fees at the same time it decides the merits of the case. Or it can give itself time to award attorneys’ fees at substantially the same time. Compare Fed. R. Civ. P. 54(d)(2)(B)(i) (requiring a party to move for attorneys’ fees "no later than 14 days after the entry of judgment"); with id. 58(e) (allowing the district court to extend the time for filing a notice of appeal to award fees if it "act[s] before a notice of appeal has been filed"), and Fed. R. App. P. 4(a)(4)(A)(iii) (explaining that the "time to file an appeal runs from the entry of ... attorney’s fees under Rule 54 if the district court extends the time to appeal under Rule 58"); Wikol ex rel. Wikol v. Birmingham Pub. Schs. Bd. of Educ. , 360 F.3d 604, 607–10 (6th Cir. 2004) (explaining the complexity of these rules). Either way, the result is the same. When the district court resolves the merits of the case and the issue of fees together , the general rule applies: a party is entitled to a single appeal.

Still, the district court can award attorneys’ fees after it decides the merits of the case. This scenario is a familiar one—courts routinely resolve attorneys’ fees and costs post-judgment. See Fed. R. Civ. P. 58(e) ("Ordinarily, the entry of judgment may not be delayed, nor the time for appeal extended, in order to tax costs or award fees."); see also, e.g. , White v. New Hampshire Dep’t. of Emp’t Sec. , 455 U.S. 445, 453–54, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982). But in this situation, the timing of the award is not as helpful. Although some post-judgment awards of attorneys’ fees are immediately appealable, others are not. To solve this problem, our sister circuits employ a useful rule: "a postjudgment proceeding, for purposes of appeal, must be viewed as a separate lawsuit from the action which produced the underlying judgment." In re Joint E. & So. Dists. Asbestos Litig. , 22 F.3d 755, 760 (7th Cir. 1994) ; see also In re Deepwater Horizon , 793 F.3d 479, 490 (5th Cir. 2015) (dismissing appeal for lack of jurisdiction following a post-judgment discovery order); Cent. States, Se. & Sw. Areas Pension Fund v. Express Freight Lines, Inc. , 971 F.2d 5, 6 (7th Cir. 1992) (same); Rouse Constr. Int’l, Inc. v. Rouse Constr. Corp. , 680 F.2d 743, 745–46 (11th Cir. 1982) (same); Richmark Corp. v. Timber Falling Consultants, Inc. , 937 F.2d 1444, 1449 (9th Cir. 1991) (dismissing appeal for lack of jurisdiction following a post-judgment order granting a debtor examination).

This approach especially makes sense here, where the post-judgment proceedings, in large part, were prompted by a new lawsuit—albeit one the district court consolidated into the existing case. Thus, while "[a] postjudgment order might seem final by definition because the judgment is already behind it," we still do not have a "final decision" under § 1291 until the district court completes the post-judgment proceedings. In re Asbestos Litig. , 22 F.3d at 761 (quoting Cent. States , 971 F.2d at 6 ); Wright & Miller, Fed. Prac. & Proc. § 3916 (2d ed. 2018) ("Appeal ordinarily should not be available as to any particular post-judgment proceeding before the trial court has reached its final disposition. Once the district court has completely disposed of the matter, its decision should be found final.").

This rule is easily applied in most post-judgment cases. A district court typically resolves all attorneys’ fees in a single, final order; completing the post-judgment proceedings. In this situation, we would have independent jurisdiction over an appeal from the final fee award (distinct from any previous appeal on the merits). See Budinich , 486 U.S. at 202, 108 S.Ct. 1717 ; Gnesys, Inc. , 437 F.3d at 488. Indeed, this is the scenario we faced in Winget III . After we decided the merits of the dispute and ...

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