         IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FIFTH DISTRICT

                                                NOT FINAL UNTIL TIME EXPIRES TO
                                                FILE MOTION FOR REHEARING AND
                                                DISPOSITION THEREOF IF FILED


JOEANN MCCLANDON,

             Appellant,

 v.                                                      Case No. 5D16-3300

DAKEM & ASSOCIATES, LLC,

             Appellee.

________________________________/

Opinion filed May 26, 2017

Non-Final Appeal from the Circuit Court
for Seminole County,
Jessica J. Recksiedier, Judge.

Stephanie L. Cook and Robert Clayton
Roesch, of Shuffield, Lowman & Wilson,
P.A., Orlando, for Appellant.

Jon Marshall Oden, of Ball Janik, LLP,
Orlando, for Appellee.


PER CURIAM.

      This   appeal    arises   out   of   proceedings   supplementary    below   where

Appellee/judgment creditor Dakem & Associates, LLC is attempting to collect on a twelve-

year-old judgment from Appellant/judgment debtor, Joeann McClandon. Appellant has a

controlling interest in eleven limited liability companies ("LLCs").   Appellee filed the

proceedings supplementary to reach the distributions from these LLCs to satisfy its
judgment. The trial court granted a charging order in Appellee’s favor against Appellant’s

transferable interest in the LLCs. To enforce the charging order, the court appointed a

receiver to take control of four of the LLCs’ finances, acting as the de facto Chief Financial

Officer, and authorized the receiver to make financial management decisions.

        Appellant takes issue with the portion of the trial court’s order appointing a receiver.

She argues that section 605.0503, Florida Statutes (2015), permits a charging order as

the sole exclusive remedy to attach a judgment debtor’s interest in a multi-member LLC

and that there is no authority under that statute for the appointment of a receiver. On the

other hand, Appellee counters that the receiver is necessary to give the charging order

“teeth” and that the court was well within its jurisdiction to appoint a receiver pursuant to

subsections 605.0503(7)(c) and (d). We agree with the trial court in part and reverse in

part.

        Appellee obtained a judgment against Appellant in Nevada in 2005. In 2008,

Appellee domesticated the Nevada judgment in Florida and began proceedings to collect

the amounts owed, which culminated in the order at issue. Section 605.0503 permits the

court to enter a charging order against a judgment debtor’s transferrable interest and

requires the LLC to pay over to the judgment creditor any distribution that would otherwise

be paid to the judgment debtor. Subsection (3) dictates that “a charging order is the sole

and exclusive remedy by which a judgment creditor . . . or member's transferee may

satisfy a judgment from the judgment debtor’s interest in a limited liability company or

rights to distributions from the limited liability company.” § 605.0503(3), Fla. Stat. (2015).

That being said, subsection (7) provides that “[t]his section does not limit any of the

following”:




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               (c)    the availability of the equitable principles of alter ego,
               equitable lien, or constructive trust or other equitable
               principles not inconsistent with this section.

               (d)    the continuing jurisdiction of the court to enforce its
               charging order in a manner consistent with this section.

§§ 605.0503(7)(c)-(d). It is clear to this Court that the trial court did not abuse its discretion

when it appointed a receiver to enforce its charging order.1 However, it did abuse its

discretion in determining the scope of the receiver’s power – specifically, by authorizing

the receiver to have managerial control over the LLCs. The commentary under RULLCA

provides that:

               Under this section, the judgment creditor of a member or
               transferee is entitled to a charging order against the relevant


       1  Florida's Revised Limited Liability Act is based on the Revised Uniform Limited
Liability Company Act of 2006, as amended in 2011 (“RULLCA”). Section 503 of RULLCA
provides in part:

               SECTION 503. CHARGING ORDER.

               (a) On application by a judgment creditor of a member or
               transferee, a court may enter a charging order against the
               transferable interest of the judgment debtor for the unsatisfied
               amount of the judgment. A charging order constitutes a lien
               on a judgment debtor’s transferable interest and 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.

               (b) To the extent necessary to effectuate the collection of
               distributions pursuant to a charging order in effect under
               subsection (a), the court may:

               (1) appoint a receiver of the distributions subject to the
               charging order, with the power to make all inquiries the
               judgment debtor might have made; and

               (2) make all other orders necessary to give effect to the
               charging order.



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              transferable interest. While in effect, that order entitles the
              judgment creditor to whatever distributions would otherwise
              be due to the member or transferee whose interest is subject
              to the order. However, the judgment creditor has no say in the
              timing or amount of those distributions. The charging order
              does not entitle the judgment creditor to accelerate any
              distributions or to otherwise interfere with the management
              and activities of the limited liability company.

RULLCA § 503 cmt. Under RULLCA and section 605.0503, the charging order entered

by the court should have only directed the LLCs to divert Appellant’s rights to the LLCs'

profits and distributions to Appellee. Stated differently, the charging order should have

only divested Appellant of her economic opportunity to obtain profits and distributions

from the LLC, charging only her membership interest, not her managerial rights. To the

extent that the order appointing the receiver authorized the receiver to exercise

managerial control over the LLCs, it exceeded the permissible scope and is reversed. In

sum, the order granting the charging order and appointing the receiver is affirmed;

however, the portions of the order permitting the receiver to be the financial officer of the

LLC and exercise managerial control is reversed. The management control remains with

the LLCs.

       AFFIRMED in part and REVERSED in part.


PALMER and WALLIS, JJ., and JACOBUS, B.W., Senior Judge, concur.




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