Magnolia Financial Group, LLC v. Antos

District Court, D. Nevada

Magnolia Financial Group, LLC v. Antos

Trial Court Opinion

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2

3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 MAGNOLIA FINANCIAL GROUP, Case No. 2:18-cv-01839-JAD-BNW 7 LLC,

8 Plaintiff, ORDER

9 v.

10 KENNETH ANTOS, et al.,

11 Defendants.

12 13 Presently before the court is plaintiff/judgment creditor Magnolia Financial Group, LLC’s 14 motion for charging order (ECF No. 6), filed on September 21, 2018. The motion is unopposed. 15 This case was reassigned to the undersigned magistrate judge on May 3, 2019. 16 The United States District Court for the Eastern District of Louisiana entered a judgment 17 in favor of Magnolia and against defendants/judgment creditors Kenneth Antos, David Becklean, 18 and KCI Investments, LLC, for $2,947,518.81, plus interest as stated in the judgment. (J. (ECF 19 No. 1) at 2-3.) Magnolia subsequently registered the judgment in this district. (Id. at 1.) 20 Magnolia served notice of the registration of the judgment in this district on the judgment debtors 21 by certified mail. (Notice (ECF No. 3).) Magnolia also served notice of the filing of the 22 judgment and affidavit of registration on the judgment by certified mail. (Notice (ECF No. 4); 23 Notice (ECF No. 5).) 24 According to Magnolia, Antos has a membership interest in a limited liability company 25 that owns real property in Nevada. Magnolia now moves for a charging order against any 26 distributions, disbursements, or other income provided to Antos by virtue of his membership 27 interest in the limited liability company. Specifically, Magnolia represents to the court that the 1 contract, with a closing date of October 31, 2018. Magnolia requests an order requiring any funds 2 received by the limited liability company from the sale be paid to Magnolia to satisfy its 3 judgment, rather than to the Kenneth and Sheila Antos Living Trust. The motion for charging 4 order was served on Antos by United States Mail. (Mot. for Charging Order (ECF No. 6) at 7.) 5 Given that the date of the sale has passed, the court ordered Magnolia to file a status 6 report indicating whether its motion for a charging order is moot. (Order (ECF No. 10).) 7 Magnolia represents that the sale of the real property did not close and that the entity continues to 8 hold assets, including the real property, such that Magnolia’s request for a charging order is not 9 moot. (Status Report (ECF No. 12).) 10 Title

28 U.S.C. § 1963

affords a federal district court the power to register a judgment 11 entered in any district court after the judgment has become final. “A judgment so registered shall 12 have the same effect as a judgment of the district court of the district where registered and may be 13 enforce in like manner.”

Id.

Rule 69 of the Federal Rules of Civil Procedure provides 14 mechanisms for executing judgments. Federal courts generally apply state law enforcement 15 procedures, unless a federal statute applies. Fed. R. Civ. P. 69(a). 16 Nevada law requires that when a foreign judgment is registered, the judgment creditor 17 must file an affidavit setting forth the name and last known address of the judgment debtor, 18 stating that the judgment is valid and enforceable, and the extent to which the judgment as been 19 satisfied.

Nev. Rev. Stat. § 17.360

(1)-(2). When a foreign judgment is registered in Nevada, a 20 30-day stay of execution applies.

Nev. Rev. Stat. § 17.360

(3). 21 Under Nevada Revised Statutes § 86.401, a judgment creditor of a member of an LLC 22 may seek satisfaction of the judgment by moving a court to charge the member’s interest in the 23 LLC.

Nev. Rev. Stat. § 86.401

(1); Weddell v. H20, Inc.,

271 P.3d 743, 749

(Nev. 2012). “A 24 charging order directs the LLC to make distributions to the creditor that it would have made to the 25 member.” Weddell,

271 P.3d at 749

(quotation omitted). Under a charging order, a judgment 26 creditor is entitled to only “the judgment debtor’s share of the profit and distributions, takes no 27 interest in the LLC’s assets, and is not entitled to participate in the management or administration 1 Here, is appears that Magnolia has complied with all applicable procedures for registering 2 || the foreign judgment in this district, has provided the required affidavit and notices under 3 || Nevada, waited the applicable 30-day period, and has demonstrated it is entitled to a charging 4 || order. Antos has not appeared in this case and did not respond to the motion for a charging order, 5 || which constitutes a consent to the granting of the motion. See LR 7-2(d). Accordingly, the court 6 || will grant Magnolia’s motion for a charging order. 7 IT IS THEREFORE ORDERED that plaintiff/jjudgment creditor Magnolia Financial 8 || Group, LLC’s motion for charging order (ECF No. 6) is GRANTED. 9 IT IS FURTHER ORDERED that Magnolia must file a proposed charging order for the 10 || court’s consideration by October 8, 2019. 11 12 DATED: September 26, 2019 13 Gx Lea WOE, BRENDA WEKSLER 15 UNITED STATES MAGISTRATE JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28

Reference

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