In Case No. A14A2029, Adam Gaslowitz, Adam R. Gaslowitz & Associates, LLC (“G&A, LLC”), and Gaslowitz and Associates, Inc. (“G&A, Inc.”) (collectively, the “appellants”), appeal from the trial court’s grant of Stabilis Fund I, LP’s (“Stabilis”) motion for partial summary judgment on Stabilis’s post-judgment petition for, among other relief, a charging order and an accounting. The appellants claim that the trial court erred in (i) issuing a charging order against Gaslowitz’s membership interest in G&A, LLC and (ii) ordering an accounting of the assets of G&A, LLC. For the reasons that follow, we affirm the order issuing the charging order, but we reverse the order for an accounting of the assets of G&A, LLC. In Case No. A15A0433, the appellants appeal the trial court’s order requiring that they, jointly and severally, post a supersedeas bond to preserve the supersedeas effect of their main appeal. For reasons set forth below, we affirm as to Gaslowitz but reverse as to G&A, Inc. and G&A, LLC.
Case No. A14A2029
Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.
(Citation omitted.) Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).
So viewed, the record shows that on June 21, 2011, Stabilis obtained a judgment in the Superior Court of Fulton County against Gaslowitz, and two others,
The evidence adduced in that proceeding shows that Gaslowitz is the sole member of G&A, LLC. In support of its motion for summary judgment, Stabilis’s representative averred that the $1,621,132.78 judgment against Gaslowitz remained unpaid. In opposition, the appellants adduced evidence that $848,000 of the judgment debt had been collected through foreclosure on two properties, and that Stabilis had garnished certain bank accounts in furtherance of its collection efforts, although the appellants maintained that they were unaware of the amount collected thereby. Stabilis did not come forward with evidence as to the amount of the judgment that remained outstanding. The trial court found that, “[t]o the extent that the remaining amount of the judgment is unknown, that is not a bar to the charging order.” Rather, the trial court held, because Stabilis was a judgment creditor of Gaslowitz, it was “entitled to a charging order against Mr. Gaslowitz’s membership interest in G&A, LLC, and to an accounting of the assets of that same company.” On this basis, the trial court granted Stabilis’s motion for summary judgment.
1. The appellants argue that Stabilis failed to adduce evidence of the amount of the judgment debt, if any, that remains due, and that the trial court therefore erred in granting summary judgment on Stabilis’s petition for a charging order. They also assert that it cannot be determined from the order what distributions are due Stabilis, nor when such distributions can again be paid to Gaslowitz, rendering the trial court’s order impermissibly vague and indefinite. We find no merit in these claims.
The Georgia Limited Liability Company Act, OCGA §§ 14-11-100 through 14-11-1109, provides a means by which a judgment creditor of a member may cause the diversion of monetary payments the member expects to receive from the limited liability company to the member’s judgment creditor. See generally Prodigy Centers/Atlanta v. T-C Assocs., 269 Ga. 522, 526 (4) (501 SE2d 209) (1998). Specifically,
[o]n application to a court of competent jurisdiction by any judgment creditor of a member or of any assignee of a member, the court may charge the limited liability company interest of the member or such assignee with payment of the unsatisfied amount of the judgment with interest.
As the appellants contend, Stabilis failed to come forward with evidence as to the exact amount of the judgment that remains unsatisfied.
The appellants also contend that, because the order issued by the trial court gives no direction to the parties as to the extent of funds to be distributed thereunder, the order is unenforceably vague. A charging order, however, cannot extend past the satisfaction of the underlying judgment because, by definition, the charge can only be against the “unsatisfied amount” of the judgment. OCGA § 14-11-504 (a).
2. The appellants also argue that the trial court erred in ordering that G&A, LLC provide an accounting of its assets to Stabilis. We agree with the appellants that Stabilis established no basis on which the trial court could order the accounting.
In its brief in support of its motion below, Stabilis contended that it was seeking “an accounting of Adam Gaslowitz’s membership interest in [G&A, LLC] to determine what assets can be used to satisfy [its] outstanding judgment,” and Stabilis claimed entitlement to this accounting “as a matter of a law.” Thus, Stabilis appears to have requested an accounting on the ground that the accounting would show assets that could be applied toward payment of its judgment. See Sampson v. Haywire Ventures, 293 Ga. App. 779, 781 (4) (668 SE2d 286) (2008) (party seeking corporate accounting would
Stabilis also argues that, because it is granted the rights of an assignee of Gaslowitz’s limited partnership interest by reason of the charging order, see OCGA § 14-11-504 (a), “that interest necessarily includes a right to an accounting.” The Limited Liability Company Act, however, does not expressly contemplate the remedy of an accounting. See St. James Entertainment v. Crofts, 837 FSupp.2d 1283, 1293 (II) (F) (N.D. Ga. 2011) (“While the Georgia Code specifically provides a right to accounting in regards to partnerships, OCGA § 14-8-22, it has no similar section in the chapter on limited liability companies.”) (punctuation omitted). Further, a judgment creditor does not become a member of a limited liability company by reason of a charging order, but only accedes to the “rights of an assignee” of a limited liability company interest, and the rights of an assignee of such interest are expressly limited and do not include a right to an accounting of company assets. See OCGA §§ 14-11-502 (3) (“An assignment of a limited liability company interest does not of itself. . . entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member[.]”); 14-11-504 (a) (“To the extent so charged, the judgment creditor has only the rights of an assignee of the limited liability company interest.”).
Stabilis further contends that an accounting of company assets would merely ensure that distributions are not being made in violation of the charging order, and that because Stabilis is a judgment creditor it is entitled to such relief. Stabilis does not show how an accounting of G&A, LLC’s assets would ensure that the charging order is honored, or why, as a judgment creditor of Gaslowitz, it is
Case No. A15A0433
3. In this case, the appellants appeal the order of the trial court requiring that they, jointly and severally, post a bond in the amount of $962,257.60 to preserve the supersedeas effect of their main appeal.
The appellants contend that because they did not appeal from a money judgment, and because the supersedeas bond was issued to
The trial court’s charging order concerns Gaslowitz’s property, particularly his limited liability company interest in G&A, LLC, and, under OCGA § 14-11-504 (a), Stabilis is afforded “rights of an assignee” to the extent of the charge. Accordingly, we hold that the charging order falls within the disposition-of-property provision of OCGA § 5-6-46 (a), and that Stabilis was entitled to a supersedeas bond to secure its use of that property for purposes of the charging order. See Duke Galish, LLC v. South Crest Bank, 314 Ga. App. at 805 (3) (finding that the trial court could require a security bond for an order denying the confirmation of a foreclosure sale and allowing the resale of the property because the judgment on appeal determined the disposition of property); Cloud v. Ga. Central Credit Union, 214 Ga. App. at 597 (5) (accord). Although the underlying money judgment to which the charging order relates was not entered in this case, it was appropriate for the trial court to consider that judgment in determining the amount of the bond. See Cloud v. Ga. Central Credit Union, 214 Ga. App. at597-598 (7) (concluding that the trial court did not abuse its discretion in fixing the amount of the supersedeas bond considering, among other things, the amount of the debt secured by the property); Ga. Farm Bldgs, v. Willard, 165 Ga. App. 325, 327 (2) (299 SE2d 181) (1983) (trial court did not err in requiring a supersedeas bond as the intent of the appeal was to preclude the appellees from collecting the monetary value of a previous judgment).
In view of the foregoing, we conclude that the trial court did not abuse its discretion in requiring that Gaslowitz post the supersedeas bond. We cannot reach the same conclusion, however, as to G&A, Inc. or G&A, LLC. No relief was ordered against G&A, Inc. As to G&A,
Judgment affirmed in part and reversed in part in Case No. A14A2029. Judgment affirmed in part and reversed in part in Case No. A15A0433.
The judgment is against Gaslowitz and two nonparties to this action, Gerie Gilbert and 685 Penn, LLC. See 685 Penn, LLC v. Stabilis Fund I, 316 Ga. App. 210, 211-212 (1) (728 SE2d 840) (2012). Neither G&A, LLC, nor G&A, Inc., is shown to be a judgment debtor of Stabilis.
A charging order is a statutory provision “that enables the judgment creditor [of a member of a limited liability company] to realize the value of the judgment debtor-member’s
The rights of a judgment creditor against the interest of a member of a limited liability company under OCGA § 14-11-504 (a) are similar to the rights of judgment creditors against the interest of a partner in a partnership or a limited partnership. See OCGA §§ 14-8-28 (a); 14-9-703 (a); 14-9A-52 (a).
The appellants did not, however, pierce the affidavit of Stabilis’s representative that the $1,621,132.78 judgment had not been collected and remained unpaid; rather, appellants pointed to evidence showing that approximately half of the debt had been collected. Accordingly, the undisputed evidence established that Stabilis was a judgment creditor of Gaslowitz when the trial court issued the charging order.
See, e.g., Atlanta Independent School System v. Atlanta Neighborhood Charter School, 293 Ga. 629, 631 (748 SE2d 884) (2013) (“Where the plain language of a statute is clear and susceptible of only one reasonable construction, we must construe the statute according to its terms.”).
See generally First Bank v. S&R Grandview, 755 SE2d 393, 396 (N.C. App. 2014) (“Inherent in the concept of a charging order is that once the judgment is paid, the debtor-member’s interest in the LLC is no longer charged.”).
We note that although Stabilis defends the relief ordered by the trial court, a review of Stabilis’s underlying petition shows that the accounting sought therein was for the “proceeds of G&A, LLC” to monitor and protect Stabilis’s rights, and not for an accounting of G&A, LLC’s assets. “Proceeds” are generally defined as “[t]he value of land, goods, or investments when converted into money,” and as any collateral that has changed in form. Black’s Law Dictionary (9th ed. 2009). Thus, a distribution on account of a limited liability company interest would be proceeds of that interest. Whether or not a court might lawfully require a limited liability company to report its distributions and other proceeds where its member’s limited liability company interest has been charged with payment of a judgment debt, that is not what the trial court ordered here.
See OCGA § 14-11-504 (b) (the charging order remedy “shall not be deemed exclusive of others which may exist”).
“This issue is not moot, for if certiorari were pursued on Case No. [A14A2029] but not Case No. [A15A0433], then the requirement of a supersedeas bond would still be in effect pending the final resolution of Case No. [A14A2029].” Barge v. St. Paul Fire & Marine Ins. Co., 245 Ga. App. 112, 116, n. 10 (535 SE2d 837) (2000). See Barngrover v. Hins, 289 Ga. App. 410, 414 (3) (657 SE2d 14) (2008) (accord).
Specifically, in such case, “the amount of the bond or other form of security shall be fixed at such sum as will cover the whole amount of the judgment remaining unsatisfied, costs on the appeal, interest, and damages for delay, unless the court after notice and hearing and for good cause shown fixes a lesser amount.” OCGA § 5-6-46 (a).
After the trial court granted Stahilis’s motion for partial summary judgment and the appellants filed their notice of appeal, initiating Case No. A14A2029, Stabilis requested that the trial court require a supersedeas bond “in an amount not less than $1,650,000 to protect the prior judgment.” In granting Stabilis’s request, the trial court noted that the charging order was “based directly on” the judgment that Stabilis had obtained against Gaslowitz and others, see n. 1, supra, and determined that the amount of the bond sufficient to protect Stabilis’s interests was $962,257.60.