REPORT AND RECOMMENDATION

MARK A. PIZZO, Magistrate Judge.

Despite persistent efforts since October 2009, Edward T. Saadi has been unable to collect his $90,000 judgment against Pierre Maroun (docs. 225, 230). But after some financial spadework, he now contends that Maroun, through a limited liability company (LLC), has an interest in a Clearwater condominium that is either ripe for a judicial sale (Saadi's main demand) or a charging order (his alternative demand). See doc. 280. Recommending the correct alternative to the district judge is what is before me, and that determination depends on the application of Fla. Stat. § 605.0503, a statute that deals with charging orders in the context of a limited liability company. In sum, if the LLC has Maroun as its only member, the Court "may" order the sale of Maroun's interest (assuming Saadi meets the statute's other predicates). See § 605.0503(4). If the LLC has more members than Maroun, then a charging order, which acts as a lien on Maroun's transferable interest in the LLC, is the sole statutory option. See § 605.0503(1). After the benefit an evidentiary hearing and the motion papers, I recommend the district judge issue a charging order as to Maroun's interest in Maroun's International, LLC.

Discussion

Fed.R.Civ.P. 69(a)(1) dictates that "[t]he procedure on execution — and in proceedings supplementary to and in aid of judgment or execution — must accord with the procedure of the state where the court is located[.]" And that puts Florida's Revised Limited Liability Company Act and § 605.0503 Fla. Stat. (2014) in particular front and center. That section provides generally that "a charging order is the sole and exclusive remedy by which a judgment creditor . . . may satisfy a judgment" from a member's interest in a limited liability company or distributions therefrom. § 605.0503(3). That remedy "constitutes a lien upon a judgment debtor's transferable interest and requires the limited liability company to pay over to the judgment creditor a distribution that would otherwise be paid to the judgment debtor." § 605.0503(1). And where the limited liability company has only one member, the statute allows a court to order a foreclosure sale, if a judgment creditor establishes that a charging order will not satisfy the judgment.1 Fla. Stat. § 605.0503(4); Regions Bank v. Hyman, No. 8:09-cv-1841-T-17MAP, 2015 WL 1912251, *5 (M.D. Fla. April 27, 2015).

No one disputes that Maroun lives at the Clearwater condominium, or that Maroun's International, LLC ("LLC") holds the deed to the place, or that Maroun has an interest in the LLC. What is hotly disputed, however, is the LLC's makeup — is it just Maroun or do others have an interest in it too? Deciding which from the evidence is a hazy proposition. Neither side's evidence is persuasive. Complicating all this is the fact that Florida's LLC scheme does not require an LLC to publicly reveal all its members.

Saadi says the LLC is just Maroun, relying primarily upon Florida Department of State records and Maroun's and the LLC's responses to Saadi's interrogatories. For example, the Electronic Articles of Organization for Maroun's International, LLC filed with the Secretary of State on May 6, 2006, and the annual reports for Maroun's International, LLC for the years 2007-2017 mention only Maroun and no one else. See doc. 335, Ex. 3, 4, and 5. From this, he posits the LLC is a single entity structure — and Maroun is the only stakeholder. But that conclusion assumes that Florida's LLC scheme requires an LLC to list all its members in such filings. And that is not the case. In fact, the process for setting up an LLC in Florida can be unsophisticated. Under the version of the statute applicable at the time the LLC was established, Florida required the filing of "articles of organization . . . with the Department of State" . . . "by one or more members or authorized representatives of the [LLC]." §608.407(1), Fla. Stat. (2006). The articles of organization were only required to include the following information:

Id. Nothing in the Act required the LLC to identify in its articles of organization all its members of the LLC. Similarly, the LLC's annual reports show Maroun as the "Managing Member/Manager" for the years 2009-2012 and the "Authorized Person" for the years 2013-2017. But as with the articles of organization, the legislative scheme did not require the LLC to list in the annual report all its members. Fla. Stat § 6-5.0212. That makes Saadi's conclusion that these filings evince a single-member LLC unconvincing.2

In response to interrogatories, Maroun stated he was "sole managing member, founder, and registered agent of Maroun's International, LLC." See doc. 335, Ex.3, 4. Bank records show too that Maroun uses the LLC's bank account to pay his rent, child support obligations, personal gifts, and the LLC's condo fees. Saadi adds that the LLC's failure to file tax returns shows that it must be singly owned since single member LLCs are not required to file tax returns; that the Defendant resides rent-free in the condo owned by the LLC; and that a multiple member LLC would not title its bank account in the manner this LLC has titled its Regions Bank account. See doc. 335, Ex. 11 and 13 (personal bank account titled "Pierre A. Maroun d/b/a MI7USA" and LLC account titled "Maroun's International LLC d/b/a/MI7USA").

Maroun represented himself at the hearing; the LLC appeared through counsel. Both contend that Maroun is not the only member and presented an Operating Agreement of Maroun's International, LLC purportedly executed in Jordan on August 28, 2012. See doc. 308, Ex.A; doc. 331-1, Ex. 1. Schedule A annexed to the Operating Agreement indicates that Pierre Maroun's interest in the LLC is 21%, Omar T. Qawasmi's interest is 49%, Jian Suleiman Maroun's interest is 15%, and Ahmad S. Kamel's interest is 15%. The LLC also presented a Promissory Note with the same date (August 28, 2012) signed only by Maroun. See doc. 309, Ex. B; doc. 331-2, Ex.2. The Promissory Note provides:

doc. 309-2, Ex.B; doc. 331-2, Ex.2.

After the hearing, both sides submitted additional evidence, and both claim none of this was available for the hearing. Saadi adds a few pages of a deposition he took after the hearing, that of John C. Dotterrer, an attorney who Maroun identified as the drafter of the LLC's operating agreement. See doc. 341, at p.59, lines 13-20 (Maroun's testimony). Dotterrer denied being its author. See doc. 343, p.6, lines 15-19. Post-hearing, Maroun, who has now hired counsel, states that Dotterrer prepared an Operating Agreement for a different LLC. In short, Maroun seeks to correct his testimony. He, not the lawyer, prepared Maroun International's Operating Agreement, and that he modeled it after Dotterrer's work. See doc. 345. He adds too the Promissory Note presented at the hearing but now filed with Pinellas County Clerk of Court on December 20, 2017; the deed to the real property located at 500 N. Osceola Avenue, Unit 102, Clearwater, Florida owned by the LLC; and sworn affidavits of the members of the LLC (Omar Al-Qawasmi who owns 49%, Ahmad Kameh who owns 15%, and Jean Maroun who owns 15%). See doc. 340, Ex. A-E. And he has filed a corrected affidavit of Omar Al-Qawasmi; an application for use of the fictitious name MI7USA by Maroun's International dated October 31, 2011; eight letters between various dignitaries in the Jordanian government and MI7USA that purportedly show that the LLC is a viable business entity; a copy of the original mortgage that Omar Al-Qawasmi took out on his house in Jordan dated August 29, 2012; and a copy of the wire transfer evidencing that Omar Al-Qawasmi deposited money into the Regions Bank account on September 6, 2012.3 See doc. 354, Ex. A-E.

After considering the evidence before me, including the post-hearing evidence, I find that Saadi has failed to show that Maroun is the sole member of Maroun International, LLC. Saadi's evidence for proving that the LLC is just Maroun is not convincing. The LLC's Operating Agreement and its annual reports did not need to disclose the identities of all of its members. And I find that none of the record evidence shows that Maroun was its sole member, especially at the pertinent time-now. To find otherwise would be speculation. Thus, the only remedy available to Saadi is the charging order against Maroun's interest in the LLC, and for that he clearly makes his case.4 Accordingly, it is hereby

RECOMMENDED:

1. That a charging order should be entered against the transferable interest of the Defendant for the unsatisfied amount of the judgment pursuant to Fla. Stat. §605.0503(1). A proposed Charging Order is attached to this Report and Recommendation.

2. That in all other respects the Plaintiff's renewed motion for order directing assignment of Pierre Maroun's interest in Maroun's International, LLC to the U.S. Marshal's for judicial sale and motion for a charging order against Pierre Maroun's interest in Maroun's International, LLC (doc. 280) be DENIED.

IT IS SO REPORTED.

NOTICE TO PARTIES

Failure to file written objections to the proposed findings and recommendations contained in this report within fourteen (14) days from the date of its service shall bar an aggrieved party from attacking the factual findings on appeal. 28 U.S.C. § 636(b)(1).

CHARGING ORDER

The Court has heard and considered the Plaintiff Edward T. Saadi's ("Plaintiff") application for a charging order. The Court finds that on October 2, 2009, this Court entered a judgment in favor of the Plaintiff and against the Defendant Pierre A. Maroun ("Defendant") in the amount of 90,000 (doc. 230); that the judgment has not been satisfied; that the Plaintiff is entitled to a charging order against any interest of the Defendant in any limited liability company in which he may be engaged and that the Defendant is a member of Maroun's International, LLC, a limited liability company which operates in the State of Florida. This Charging Order imposes a lien upon the Defendant's transferrable interest in Maroun's International, LLC, including the Defendant's right to receive distributions from Maroun's International, LLC, until the entire amounts of the judgment (doc. 230) has been satisfied. Accordingly, it is hereby

ORDERED:

1. The interest of the Defendant as a member in Maroun's International, LLC be subjected to an encumbrance and charging order in favor of and for the benefit of the Plaintiff.

2. The Defendant shall file with the Clerk of Court a sworn answer reporting to the Court all amounts distributable or payable to the Defendant at the time of service of this Order and at all subsequent times attributable to any interest owned in the limited liability company; and in such sworn answer and report the Defendant shall state the value, at the time of service of this Order and at all subsequent times, of both the capital and income accounts attributable to the interest of the Defendant in Maroun's International, LLC.

DONE AND ORDERED.