JPMorgan Chase Bank, N.A. v. Larry J. Winget , 920 F.3d 1103 ( 2019 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0069p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JPMORGAN CHASE BANK, N.A., ┐
Plaintiff-Appellee, │
│
> No. 18-1143
v. │
│
│
LARRY J. WINGET; LARRY J. WINGET LIVING TRUST, │
Defendants-Appellants. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
Nos. 2:08-cv-13845; 2:15-cv-13469—Avern Cohn, District Judge.
Argued: December 5, 2018
Decided and Filed: April 10, 2019
Before: DONALD, LARSEN, and NALBANDIAN, Circuit Judges.
_________________
COUNSEL
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.
_________________
OPINION
_________________
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
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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
No. 18-1143 JPMorgan Chase Bank, N.A. v. Winget, et al. Page 3
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 (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 (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. 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
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appeal, to be deferred until final judgment has been entered.” Mohawk Indus., Inc. v. Carpenter,
558 U.S. 100, 106 (2009) (quoting Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863,
868 (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 (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,
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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; 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 the district court entered final judgment on remand, it awarded Chase
attorneys’ fees post-judgment. Winget III, 704 F. App’x at 414. These attorneys’ fees covered
Chase’s expenses for the previous years of litigation. We affirmed these fees. And if Winget
had used the trust’s assets to pay the judgment and attorneys’ fees, this case would be over.
But he did not—and so we now find ourselves in a different scenario. Winget appeals an
interim award of attorneys’ fees post-judgment, where the post-judgment proceedings are
ongoing. In other words, this award of attorneys’ fees did not end the post-judgment litigation.
Thus, applying the post-judgment completeness rule, this appeal is not from a final, appealable
order.
The Eleventh Circuit confirmed this rule and result—dealing specifically with a post-
judgment fee award. Mayer v. Wall Street Equity Grp., Inc., 672 F.3d 1222, 1224 (11th Cir.
2012) (per curiam) (citing Delaney’s Inc. v. Illinois Union Ins. Co., 894 F.2d 1300, 1304 (11th
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Cir. 1990)). The district court had competing post-judgment motions for attorneys’ fees. After
the district court denied one motion—but before the court decided the other motion—the
plaintiff appealed the decision. The Eleventh Circuit treated the post-judgment proceedings as a
separate and “free-standing” lawsuit—and dismissed the appeal for lack of jurisdiction because
the post-judgment litigation was ongoing—i.e., “the other fee motion . . . remain[ed]
outstanding.” Id. The Eleventh Circuit explained when the parties should appeal in this
situation: “Only if a postjudgment order is ‘apparently the last order to be entered in the action’
is it final and appealable.” Id. (quoting Delaney’s Inc., 894 F.2d at 1304 (quoting 9 Moore’s
Fed. Prac. ¶ 100.14[1], 196–97 (2d ed. 1988))). This rule makes sense, “to hold otherwise
invites litigants to appeal every attorney’s fees order, even if other requests remain outstanding,
resulting in a proliferation of piecemeal or repetitious appeals.” Id.
This is the situation we face here. The district court has not completed the post-judgment
litigation. The parties are still fighting over what assets Chase can collect, how Chase can collect
those assets, and what those assets are worth. See supra p. 3. And Chase continues to incur
attorneys’ fees in these collection efforts. Indeed, both parties admit that the post-judgment
litigation is not final. According to Winget, the $2 million fee award is “premature” because
“there is no final judgment.”1 (Winget’s Reply Br. at 4; Winget Supp. Br. at 3.) And while
Chase prefers to confirm its fees sooner rather than later (arguing that we have jurisdiction),
Chase still described its motion for fees as “interim in nature” and that it “will from time to time
return to this Court to seek further orders for the recovery of costs and expenses.” (Mot. for
Costs, R. 709 at 4; see also Chase’s Br. at 14 (explaining that Chase is still “endeavoring to
collect” and has not “finally prevailed in its second collection action”).) This is exactly what
Chase did in October 2018—filing another motion for attorneys’ fees. (Mot. for Costs, R. 862
1Winget’s main argument is that the district court mistakenly considered the 2015 litigation as part of the
2008 litigation. But this distinction does not matter. Whether we consider the ongoing litigation as “post-judgment”
collection efforts—or instead, a separate lawsuit—Winget concedes that “there is no final judgment in the 2015
Action.” (See Winget Supp. Br. at 3.) Essentially, Winget wants to eat his cake and have it, too. Winget wants us
to have jurisdiction to reverse the fee award—but he wants us to reverse the fee award because there is no final
judgment. But if the 2015 litigation is a separate lawsuit, then the general rule applies and “orders awarding interim
fees in the course of litigation are not appealable.” Webster, 846 F.2d at 1035; see also Wright & Miller, Fed. Prac.
& Proc. § 3915.6 (2d ed. 2018) (“Ordinarily[,] [an] appeal is not allowed from an order granting an interim award
[of fees], even if it is immediately enforceable.”).
No. 18-1143 JPMorgan Chase Bank, N.A. v. Winget, et al. Page 7
at 1 (asking for fees from December 2016 through June 2018).) The district court has not
resolved this latest motion.
In sum, it is undisputed that this award for attorneys’ fees is not the last order to be
entered in the action. Instead, there is plenty left for the district court to resolve. Thus, viewing
Chase’s post-judgment collection efforts as separate and ongoing litigation, the interim award of
attorneys’ fees is not a final, appealable decision under 28 U.S.C. § 1291.
III.
There are, of course, exceptions to 28 U.S.C. § 1291, such as the “collateral order”
doctrine. See Webster, 846 F.2d at 1035. “[T]he collateral order doctrine accommodates a
‘small class’ of rulings” that do not end the litigation—but which we still consider “final.” Will
v. Hallock, 546 U.S. 345, 349 (2006) (quoting Behrens v. Pelletier, 516 U.S. 299, 305 (1996)).
The Supreme Court has refused to expand this “small class” of cases—choosing instead to keep
“it narrow and selective in its membership.” Id. at 350. This “small category includes only
decisions that are conclusive, that resolve important questions separate from the merits, and that
are effectively unreviewable on appeal from the final judgment in the underlying action.”
Mohawk Indus., Inc., 558 U.S. at 106 (quoting Swint v. Chambers Cty. Comm’n, 514 U.S. 35, 42
(1995)).
Chase argues that this case fits within one of these narrow exceptions: post-judgment
monitoring cases. In these “monitoring” cases, our sister circuits have allowed parties to appeal
interim awards of attorneys’ fees. But these cases are unique. They typically stem from consent
decrees between parties—agreeing that long open-ended monitoring is needed to cure
constitutional violations. For example, in one of the cases Chase relies on, Balla v. Idaho, there
was a “twenty-year-old injunction” in place to fix constitutional violations in prisons. 677 F.3d
910, 912 (9th Cir. 2012); see also Madrid v. Gomez, 190 F.3d 990, 994 n.4 (9th Cir. 1990)
(finding that it had jurisdiction to review “[a] periodic fee award made during the remedial phase
of a prisoner civil-rights” matter in a similar long-term monitoring case).
This reveals the key commonality in the monitoring cases that is missing here—the
inability to obtain post-judgment finality. See Gates v. Rowland, 39 F.3d 1439, 1450 (9th Cir.
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1994) (“The compliance period has not been limited to a definite time frame.”). Because
monitoring cases can go on indefinitely, a party can immediately appeal an interim fee award;
otherwise, in some circumstances, the parties could never appeal. See Gautreaux v. Chicago
Hous. Auth., 491 F.3d 649, 654 (7th Cir. 2007) (“Another reason for allowing an immediate
appeal is that a decree might never be dissolved, so that to treat fee awards as interlocutory might
defer appeal to the end of time.”) (citation omitted); Interfaith Cmty. Org. v. Honeywell Int’l,
Inc., 426 F.3d 694, 702 (3d Cir. 2005) (“We are persuaded by this logic [in Gates]. In a complex
environmental [clean-up], monitoring will likely continue well into the future . . . for years if not
decades.”); Walker v. U.S. Dep’t. of HUD, 99 F.3d 761, 766 (5th Cir. 1996) (“[C]onsidering the
ongoing and possibly permanent nature of monitoring and preventing further changes to the City
Consent Decree, it is unlikely that there ever will be a ‘final judgment’ for this court to review.”).
We have recognized this same commonality. Webster, 846 F.2d at 1035. In Webster, we
had jurisdiction to resolve an appeal from an interim fee award. But unlike typical interim fee
awards, the district court “imposed . . . a prospective burden of large monthly fee payments with
no definite cutoff date,” and it was undisputed that “repayment in the event of appellate reversal
could not be assured.” Rosenfeld v. United States, 859 F.2d 717, 721 (9th Cir. 1988)
(distinguishing Webster); see also Cobell v. Jewell, 802 F.3d 12, 22 (D.C. Cir. 2015) (“The post-
settlement fees and costs . . . could continue indefinitely[.]”).
But here, despite the long litigation between the parties, Chase’s collection efforts will
have an end date. The district court will eventually enter a final amended judgment, resolving
which assets Chase can collect from, and calculating Chase’s total attorneys’ fees. See, e.g.,
Cent. States, 971 F.2d at 6 (“A contested collection proceeding [unlike monitoring cases] will
end in a judgment or a series of judgments granting supplementary relief to the plaintiff.”). And
neither Winget nor Chase suggest that irreparable harm would result if we defer review of this
interim award until the district court completes the rest of the post-judgment litigation.
As a result, the $2 million interim attorneys’ fee award is not a “final decision.” And
because our jurisdiction is limited to “final decisions of the district courts,” 28 U.S.C. § 1291, we
lack jurisdiction to decide whether the district court correctly awarded Chase additional fees.
We dismiss the appeal without addressing the merits. See Firestone Tire & Rubber Co. v.
No. 18-1143 JPMorgan Chase Bank, N.A. v. Winget, et al. Page 9
Risjord, 449 U.S. 368, 379 (1981) (“If the appellate court finds that the order from which a party
seeks to appeal does not fall within [its appellate jurisdiction], its inquiry is over.”).