                     In the Missouri Court of Appeals
                             Eastern District
                                      DIVISON FOUR

REGIONS BANK,                              )      No. ED101121
                                           )
       Plaintiff,                          )
                                           )
vs.                                        )
                                           )
ALVERNE ASSOCIATES, LLC and                )
RENE GREGG,                                )      Appeal from the Circuit Court of
                                           )      St. Louis County
                                           )
       Defendants,                         )
                                           )
and                                        )
                                           )
SAMUEL BERGER,                             )
                                           )
       Appellant,                          )
                                           )      Honorable Robert S. Cohen
and                                        )
                                           )
RBRE LOAN PORTFOLIO, LLC,                  )
                                           )
       Respondent.                         )      Filed: December 9, 2014

                                        Introduction

       Samuel Berger appeals a judgment of the Circuit Court of St. Louis County granting

RBRE Loan Portfolio’s application for a charging order. Berger claims the trial court erred in

failing to: (1) provide him at least five days’ notice and conduct a hearing before granting

RBRE’s application for a charging order; and (2) require RBRE to establish the amount of the
outstanding judgment and Berger’s membership interest in the limited liability companies sought

to be charged. We reverse and remand.

                               Factual and Procedural Background

       In 2008, Alverne Associates, LLC obtained a loan from Regions Bank and executed two

promissory notes evidencing loans in the original principal amounts of $911,483.24 and

$714,250.00. Berger signed the promissory notes on behalf of Alverne Associates as “Samuel

Berger, Managing Member of ALVERNE ASSOCIATES, LLC,” and he executed a commercial

guaranty to individually and personally secure the notes.1         Alverne Associates additionally

secured the notes by deeds of trust on real estate that it owned in the City of St. Louis.

       Alverne Associates failed to make the required payments on the promissory notes, and

Regions Bank filed an action against Alverne Associates and Berger for breaches of contract and

commercial guaranty. On August 31, 2011, the trial court entered summary judgment in favor of

Regions Bank in the amount of $1,775,618.67. The judgment assessed costs against Alverne

Associates and Berger and provided that “[p]ost judgment interest continues to accrue at the

highest lawful rate.” Regions Bank subsequently assigned the promissory notes and deeds of

trust to RBRE, and the trial court granted RBRE’s motion for substitution as party plaintiff.

       On November 6, 2013, RBRE filed its “Verified Application for Charging Order”

(Application) pursuant to Section 347.119.2 In the notarized application, RBRE alleged that the

trial court entered judgment against Berger and Alverne Associates in the amount of

$1,775,618.67 and the judgment remained unsatisfied in the amount of $820,489.58. RBRE

requested the court “issue a Charging Order requiring any limited liability company in which

1
  Rene Gregg also executed a commercial guaranty in relation to the loans. Regions Bank filed
the underlying cause of action against Alverne Associates, Berger, and Gregg, but later
dismissed Gregg from the lawsuit.
2
  All statutory citations are to RSMo 2000 as supplemented unless otherwise indicated.
                                                  2
Samuel B. Berger has an interest to pay Plaintiff amounts up to the unsatisfied amount of the

above judgment with interest from Samuel B. Berger’s interest in said limited liability company .

. . .” At the bottom of the Application appeared the signature: “Mante Dzakuma, RBRE Loan

Portfolio, LLC.”   RBRE attached two charts (“Exhibit B”)3 reflecting the alleged outstanding

balances on each promissory note and calculations of compound interest “at 9% per annum.”

       On the same date, counsel for RBRE filed a notice of hearing set for November 8, 2013

and a “Motion to Shorten Time,” requesting the trial court “[s]horten time and notice

requirements for hearing on its Application for Charging Order . . . .” In support of its motion to

shorten time, RBRE alleged: (1) the judgment against Berger and Alverne Associates remained

unsatisfied in the amount of $820,489.58; and (2) RBRE “has recently been apprised of

judgment creditor, Samuel B. Berger’s, interest in limited liability companies to which it as

judgment creditor may obtain a charging order from this Court . . . .” RBRE requested that the

trial court “grant its Motion to Shorten the notice and time requirements regarding hearing on its

Application for Charging Order and allow hearing to proceed on Friday, November 8, 2013.”

RBRE generally alleged that the reason for its request was “the amount of the outstanding

judgment” and averred that “no party will be prejudiced by” and “the interests of justice will be

served by this Court shortening the notice and time requirements for hearing” on the Application.

       Berger filed objections to RBRE’s motion to shorten time, asserting that Rule 44.01(d)

requires that parties serve motions and notices of hearings five days prior to the scheduled

hearing. Berger contended that the grounds RBRE asserted for shortening the time for notice of

the hearing – namely, “the amount of the outstanding judgment” – did not justify shortening the

notice to two days and that less than five days’ notice would prejudice him. Berger also filed

3
 The record on appeal contains an “Exhibit B” that was filed with the Application, but not an
“Exhibit A.”
                                                3
objections to the Application alleging, among other things, that the Application: incorrectly

calculated the outstanding balance on the judgment; improperly calculated post-judgment interest

on a compounding basis; failed to identify the LLC to be charged or Berger’s membership

interest in that LLC; and requested relief in excess of that authorized by Section 347.119.

       On November 8, 2013, counsel for both RBRE and Berger appeared before the trial

court. Without ruling on the motion to shorten time, the trial court granted RBRE’s Application

and entered a charging order. The order, in its entirety, stated:

          Cause called on Plaintiff, RBRE Loan Portfolio, LLC’s Application for
          Charging Order. The Court being duly advised hereby grants Plaintiff’s
          application for Charging Order and assesses a charging order pursuant to
          R.S.Mo. § 347.119 against Defendant, Samuel B. Berger’s membership
          interests in TMF Holdings, LLC, 816 Geyer, LLC and Maccabee Investments,
          LLC. TMF Holdings, LLC, 816 Geyer, LLC and Maccabee Investments, LLC
          are hereby ordered to pay all disbursements, draws and other monies otherwise
          owed to Samuel B. Berger to RBRE Loan Portfolio, LLC up to the unsatisfied
          amount of the outstanding judgment in the above matter with interest.

The record does not reflect whether Berger sought to present either evidence or an offer of proof

at the November 8, 2013 appearance.

       Berger filed a motion to reconsider denial of his objections to the Application and motion

to shorten time.4 In his motion, Berger argued that the trial court erred in: (1) failing to require

sufficient notice prior to a hearing; (2) refusing to conduct a hearing and allow Berger to present

evidence; and (3) entering a charging order “based upon a purported verification that was

inaccurate” and which “failed to disclose the amount of the unsatisfied judgment.” RBRE filed a

response to Berger’s motion to reconsider arguing that: (1) Section 347.119 does not require

notice or an evidentiary hearing; (2) the trial court did not abuse its discretion in shortening

notice and allowing the Application to proceed; and (3) the statutory post-judgment interest rate

4
 Berger also filed with the Court of Appeals a petition for writs of mandamus and prohibition,
which we denied by order dated November 20, 2013.
                                                  4
of 9% per annum applied to the outstanding judgment.5 The trial court denied the motion to

reconsider on February 7, 2014. Berger appeals the trial court’s grant of the Application and

subsequent entry of the November 8, 2013 charging order.

                                         Standard of Review

        Our review of a court-tried case is governed by the principles set forth by the Missouri

Supreme Court in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). This court will affirm

the trial court's entry of a charging order unless there is no substantial evidence to support it, it is

against the weight of the evidence, or it erroneously declares or applies the law. Deutsch v.

Wolff, 7 S.W.3d 460, 462 (Mo.App.E.D. 1999) (citing Murphy v. Carron, 536 S.W.2d 30 (Mo.

banc 1976)).

                                              Discussion

        In his first point, Berger claims the trial court erred in failing to require five days’ notice

prior to a hearing and conduct an evidentiary hearing on RBRE’s Application. In his second

point, Berger asserts that the trial court erred in entering the charging order because it “fail[ed] to

require RBRE to meet its burden and demonstrate entitlement to a charging order” under Section

347.119. Because the record contains insufficient evidence to support the charging order, we

need not resolve the question of whether entry of a charging order requires five days’ notice and

a hearing.6



5
  RBRE attached the following documents to its response: printouts from the website of the
Missouri Secretary of State listing Berger as the registered agent for Maccabee Investments,
LLC, 816 Geyer, LLC, and TMF Holdings, LLC; Articles of Organization of Maccabee
Investments, LLC and TMF Holdings, LLC; and Certificates of Organization of Maccabee
Investments, LLC and TMF Holdings, LLC.
6
  Although Section 347.119 has been in effect since 1993, no Missouri court has analyzed or
even cited this statute. We note, however, that our courts may find guidance in cases applying
Section 358.280.1, which predates Section 347.119 and allows a judgment creditor of an
individual partner to charge that partner’s partnership interest with payment of the unsatisfied
                                                   5
       A charging order is a post-judgment remedy that allows the judgment creditor of an

individual debtor-member of a limited liability company (or a partnership) to enforce a judgment

by charging the individual member’s distributional interest with the unsatisfied amount of a

judgment.   See Mo. Rev. Stat. § 347.119; see also Wills v. Wills, 750 S.W.2d 567, 574

(Mo.App.E.D. 1988) (applying Section 358.280, which governs charging orders against

individual debtor-partners). Section 347.119 provides, in pertinent part: “On application to a

court of competent jurisdiction by any judgment creditor of a member, the court may charge the

member's interest in the limited liability company with payment of the unsatisfied amount of the

judgment with interest.” Mo. Rev. Stat. § 347.119. In other words, the charging order “requires

the limited liability company to pay over to the person to which the charging order was issued

any distribution that would otherwise be paid to the judgment debtor.”7 51 Am. Jur. 2d Limited

Liability Companies § 23.




amount of the judgment with interest. Mo. Rev. Stat. § 358.280.1; see also 359.421. In Feinberg
v. Feinberg, the trial court conducted an evidentiary hearing on the judgment creditor’s
application for a charging order. 924 S.W.2d 328, 330 (Mo.App.E.D. 1996). Likewise, in Gates
Rubber Co. v. Williford, the trial court “called upon” the individual debtor-partner and his
partners to answer the judgment creditor’s application for a charging order and “show cause why
[a charging] order should not be issued.” 530 S.W.2d 11, 13 (Mo.App. 1975). The trial court
held an evidentiary hearing prior to entering the charging order and, on appeal, the appellate
court stated that “this proceeding was an adversary one . . . .” Id. at 14; see also Phillips v.
Phillips, 155 Colo. 538, 542 (Colo. 1964) (“The ‘due application’ referred to in the [partnership
charging order] statute necessarily means an application made to the court upon adequate notice
to the persons whose rights might be adversely affected by the granting of the relief sought.”).
7
  However, judgment creditors who obtain charging orders under Section 347.119 have “only the
rights of an assignee of the member’s interest.” Mo. Rev. Stat. § 347.119. “The rights of an
assignee include[] only the right to future distributions without the right to participate in
management.” Carter G. Bishop, Desiderata: The Single Member Limited Liability Company
Olmstead Charging Order Statutory Lacuna, 16 Stan. J.L. Bus. & Fin. 222, 232 (2011); see also
Mo. Rev. Stat. § 347.115.1 (“An assignment of an interest does not entitle the assignee to
participate in the management of the business and affairs of the limited liability company or to
become or to exercise the rights of a member . . . .”).
                                               6
       To obtain a charging order, the judgment creditor must file an “application to a court of

competent jurisdiction.” Mo. Rev. Stat. § 347.119. Pursuant to Rule 55.26, “[a]n application to

the court for an order shall be by motion which . . . shall be in writing, shall state with

particularity the grounds therefor, and shall set forth the relief or order sought.” Rule 55.26; see

also Mo. Rev. Stat. § 509.280. A motion is not self-proving, and the movant has the burden of

proving the allegations contained therein. Keith v. Burlington N. R. Co., 889 S.W.2d 911, 925

(Mo.App.S.D. 1994). When an after-trial motion is based on facts not appearing in the record, a

movant may submit proof of facts in the form of affidavits, depositions, and oral testimony.

Rule 78.05; Powell v. State Farm Mut. Aut. Ins. Co., 173 S.W.3d 685, 689 (Mo.App.W.D.

2005). However, “exhibits attached to motions filed with the trial court are not evidence and are

not self-proving.” Ryan v. Raytown Dodge Co., 296 S.W.3d 471, 473 (Mo.App.W.D. 2009)

(quoting Powell, 173 S.W.3d at 689).

       Based on the record before us, it appears that the trial court entered the charging order

based solely on the allegations contained in the Application.8 RBRE’s two-page Application,

entitled “Verified Application for Charging Order,” alleged the following: (1) on August 31,

2011, the trial court entered judgment in favor of RBRE and against Berger and Alverne

Associates in the amount of $1,775,618.67; (2) the judgment remained unsatisfied in the amount

of $820,489.58 “[i]n addition to attorney’s fees, court costs, expenses, and other contractually

authorized amounts”; and (3) RBRE sought a charging order “against [Berger’s] interest in any



8
 RBRE attached no affidavits to the Application, and the trial court did not hold an evidentiary
hearing. While counsel appeared before the trial court prior to its entry of the charging order,
“argument of counsel does not qualify as sworn and competent testimony and does not replace
movant's burden of proof requirement to produce competent and sworn testimony or evidence.”
Agnello v. Walker, 306 S.W.3d 666, 675 (Mo.App.W.D. 2010); see also Ryan, 296 S.W.3d at
473 (“[A]n appellate court cannot accept counsels’ statements as a substitute for record proof
even if there is no reason to doubt their accuracy.”).
                                                 7
limited liability companies in which [he] has an interest against which [RBRE] as judgment

creditor can execute for purposes of satisfying said judgment.” Mante Dzakuma signed the

Application, “Mante Dzakuma, RBRE Loan Portfolio, LLC,” and a notary public attested that

Mr. Dzakuma appeared before him and signed the Application.

       The relief that RBRE sought in the Application required resolution of factual matters not

appearing in the record – most importantly, the amount of the outstanding judgment and interest

Berger owed RBRE. See Powell, 173 S.W.3d at 689. Because the contents of the Application

constituted the sole “evidence” supporting RBRE’s request for a charging order, the Application

must be properly verified.    See Hinton v. Proctor & Schwartz, Inc., 99 S.W.3d 454, 458

(Mo.App.E.D. 2003).      A verified pleading “sets forth evidentiary facts with the personal

knowledge of the verifying signatory [and] is in substance an affidavit and is accorded the same

probative force as [an] affidavit.”9 3 Am. Jur. 2d Affidavits § 8 (2014). “In the absence of an

allegation of personal knowledge, the contents of an affidavit become inadmissible hearsay.”

Hinton, 99 S.W.3d at 459.

       Although the Application purported to be “verified,” it failed to allege that the facts it

contained were asserted on the personal knowledge of the signatory, Mr. Dzakuma. See, e.g.,

Morley v. Ward, 726 S.W.2d 799, 802 (Mo.App.E.D. 1987). Mr. Dzakuma apparently filed the

application on behalf of RBRE. However, Mr. Dzakuma neither declared that he had personal

knowledge of the facts pleaded in the Application nor identified the source of the information he

used to calculate the amount of the outstanding judgment. Nor can this court infer from the

contents of the Application that Mr. Dzakuma’s allegations were based on his personal

9
  “‘Personal knowledge,’ as requisite basis for affidavits, means something the witness actually
saw or heard as distinguished from what he or she learned from some other person or source. . . .
The affidavit must in some way show that the affiant is personally familiar with the facts so that
he or she could personally testify as a witness.” 3 Am. Jur. 2d Affidavits § 14.
                                                8
knowledge because he did not define his relationship to RBRE or even provide a job title. See,

e.g., May & May Trucking, L.L.C. v. Progressive Nw. Ins. Co., 429 S.W.3d 511, 515

(Mo.App.W.D. 2014); Standard of Beaverdale, Inc. v. Hemphill, 746 S.W.2d 662, 663

(Mo.App.E.D. 1988); cf. Midwest Precision Casting Co. v. Microdyne, Inc., 965 S.W.2d 393,

396 (Mo.App.E.D. 1998) (holding that the averment that affiant was an owner and employee of

the plaintiff did not satisfy the requirement that the affidavit be made on personal knowledge).

Because the Application was not properly verified, we cannot consider it proof of the facts

alleged. See, e.g., Morley, 726 S.W.2d at 802.

       Likewise, Exhibit B, which RBRE attached to the Application, is insufficient support for

the charging order. Exhibit B consisted of two charts, presumably generated by RBRE, stating:

the amount of the outstanding judgment on each promissory note, the monthly compound

“interest at 9% per annum,” the “total outstanding” amounts of each promissory note, and the

“Grand Total of Deficiency (as of 11/1/13)” of $820.489.58. Exhibit B was not in the form of an

affidavit, was never offered and admitted into evidence, and was not stipulated to but instead was

challenged by Berger. “Exhibits attached to motions filed with the trial court are not evidence

and are not self-proving.”10 Powell, 173 S.W.3d at 689; see also Ryan, 296 S.W.3d at 473. In

short, our review of the record reveals nothing – e.g., verified applications, affidavits, or

testimony – from which the trial court could find sufficient facts to determine with any degree of




10
   Furthermore, in light of our conclusion that RBRE did not present proof upon which the trial
court could ascertain the amount of the outstanding judgment, we find that the charging order
itself was too indefinite to be valid and enforceable. See Am. W. Bonding Co. v. United Sur.
Agents, Inc., 134 S.W.3d 700, 704 (Mo.App.S.D. 2004). For a money judgment to be
enforceable when it does not state on its face the amount for which it was rendered, that sum
must be ascertainable from the record. Id.; see also 1010 St. Charles Unit 1002 LLC v. Kemper
Investors Life Ins. Co., 408 S.W.3d 253, 256 n.2 (Mo.App.E.D. 2013).
                                                 9
certainty the amount of the outstanding judgment. See, e.g., Deutsch, 7 S.W.3d at 462 (stating

that the entry of a charging order requires “substantial evidence to support it . . . .”).

        At oral argument, counsel for RBRE suggested that a charging order is “most analogous”

to an execution under Rule 76.01 and, therefore, does not require proof of the amount of the

unsatisfied judgment sought by the judgment creditor. In its brief, RBRE asserts that Rule

76.06(e) “offers the best guidance” and “[i]t is telling that 76.06(e) is included within Rule 76:

Execution.”

        Rule 76.01 provides: “An execution may be issued on application signed by the party or

his attorney and stating the address of the person making the application.” Unlike an application

for a charging order, which, under Section 347.119 must be presented “to a court of competent

jurisdiction,” a judgment creditor submits an application for execution to the clerk of the court. 11

Mo. Rev. Stat. § 513.025. In other words, “it is not a prerequisite to an execution that an express

order of the court be made for its issuance[,]” and “execution shall automatically issue upon the

judgment creditor’s application for execution under Rule 76.01.” Fielder v. Fielder, 671 S.W.2d

408, 410–11 (Mo.App.E.D. 1984).

        RBRE contends that this court should apply Rule 76 to charging orders issued pursuant to

Section 347.119 because Rule 76.06(e) states that “[a] levy upon an interest in a partner-ship

[sic] shall be made as provided in Section 358.280, RSMo.” RBRE implies that, because Rule

76.06(e) refers to the partnership charging order statute, the rules relating to execution apply to

charging orders. Contrary to RBRE’s reading of the rule, the fact that Rule 76.06(e) refers back

to Section 358.280 confirms that the statute (and not Rule 76.01) governs the method by which a

judgment creditor may reach a partner’s financial interest in the partnership. See Gose, J.

11
   We also note that the Circuit Court of St. Louis County provides judgment creditors a pre-
printed “Execution/Garnishment/Sequestration Application and Order” form.
                                                   10
Gordon, “The Charging Order Under the Uniform Partnership Act,” 28 Wash. L. Rev. 1, 18

(1953) (“The charging order statute appears to occupy fully the field of satisfaction of the claims

of judgment creditors against a partner’s interest . . . .”).

        Furthermore, this court held in Wills v. Wills that the “‘charging’ procedure is the

exclusive remedy for a partner’s individual creditor” and the “charging order on partnership

interests has replaced levies of execution as a remedy for reaching such interests.” 750 S.W.2d

567, 574 (Mo.App.E.D. 1988). This is because the purpose of the charging order is to “prohibit[]

any attachment or execution of specific partnership property by a judgment creditor of an

individual debtor-partner.” Id. The charging order procedure therefore “protects the interests of

the nondebtor partners by giving the judge wide latitude to control the creditor’s actions against

the partnership.” Christensen v. Oedekoven, 888 P.2d 228, 232 (Wyo. 1995); see also Keeler v.

Acad. of Am. Franciscan History, Inc., 943 A.2d 630, 633 (Md. Ct. Spec. App. 2008) (“The

purpose of the charging order is ‘to protect the partnership business and prevent the disruption

that would result if creditors of a partner executed directly on partnership assets.’”); Hellman v.

Anderson, 233 Cal. App. 3d 840, 849 (Cal. Ct. App. 1991) (“The charging order procedure has

replaced levies of execution as the remedy for reaching partnership interests.”). Based on the

charging order’s purpose and the statutory requirement of judicial oversight, we decline to

extend the rules governing executions to charging orders issued pursuant to Rule 347.119.

                                              Conclusion

        Because the record contains insufficient evidence to support the charging order, we

reverse and remand.




                                                   11
                                          Patricia L. Cohen, Presiding Judge

Roy L. Richter, J., and
Robert M. Clayton III, J., concur.




                                     12
