# Third District Court of Appeal
State of Florida
Opinion filed January 13, 2021

. Not final until disposition of timely filed motion for rehearing.

________________ No. 3D1 9

- 2 513 Lower Tribunal No. 08

- 3 6794

________________ 

### Alvaro Gorrin Ramos , Appellant /Cross

- Appellee ,

vs. 

### Mississippi Real Estate Dispositions , LLC, et al., Appellee s /Cross

- Appellant s
. An Appeal from the Circuit Court for Miami

- Dade County, Jennifer D. Bailey , Judge.
Law Offices of Mendez & Mendez, P.A., and Sergio L. Mendez, Daniel J. Mendez and Lorena Friger , for appellant /cross

- appellee

. Carlton Fields, P.A., and Jose A. Loredo and Rachel A. Oostendorp , for appellee Mississippi Real Estate Dispositions, LLC ; Mark Pollack Law P.A. , and Mark E. Pollack (Boynton Beach), for appellee/ cross appellant Sunstate Bank

.

.

Before S CALES , H E NDON and MILLER , JJ.
SCALES , J.2 Appellant, the judgment deb tor below, Alvaro Gorrin Ramos (“Ramos” ) appeals a December 20, 2019 order in proceedings supplementary (the “Order”) that requires cross

- appellant Sunstate Bank (“Sunstate”) to pay t he sum of $2,827,034 to appellee , the judgment creditor below, Mississippi Real Estate Dispositions , LLC (“Mississippi”), for Ramos’s membership units in a Florida limited liability company. We reverse because the O rder provides Mississippi with a remedy not authorized by s ection 605.0503 of the Florida Statutes

. I . Facts
A. Proceedings Supplementary and t he Charging Order
In 2005 , Ramos and his son , Alvaro Gorrin, Jr. , personally guaranteed $56
million in loans that Ocean Bank provided to two development companies to finance the purchase of rental apartments in Orange County, Florida, and to convert the apartments in to residential condominium s. T he project s were unsuccessful and spawned multiple litigations

. In one of them, Poker Run Acquisitions, Inc. (“Poker Run”) , which had purchased the Ramos/Gorrin , Jr. loan/guaranty package from
Ocean Bank , sued Ramos and Gorrin Jr. for breach of the guaranties . In 2013, Poker
Run obtained a total judgment against Ramos and Gorrin Jr. of approximately $30
million. In February 2016, Poker Run initiated supplementary proceedings in aid of execution. Among other things, it sought execution against Ramos ’s 41,0853 membership units in Intercontinental Bankshares LLC, a multi

- member limited
li ability company re lated to Intercontinental Bank (the “Membership Units”). 1 The
M embership U nits were represented by Certificate 25. In 2010, however, Ramos had pledged the M embership U nits as coll ateral for
a loan Ramos received from a friend in Venezuela named Romulo Alberto Moncada Yepez (“Yepez”)

. In December 2014, Ramos filed in the trial court documents memorializing the Yepez loan transaction, including a Unit Pledge Agreement, a Hypothecation Security Agreement and a Promissory Note. According to the Yepez loan transaction documents, the Membership Units that secured the loan are held by escrow agent Enrique Vejar Santos (“Santos”)

. 2 Poker Run impleaded Intercontinental Bankshares LLC and , in May 2016, the
trial court entered a char ging order, constituting a lien against the M embership U nits ( the “Charging Order”). The Charging Order expressly states that its entry does not constitute an adjudication regarding priorities over any competing interest s in the

1 Alvaro Gorrin Jr. holds 415 membership units in Intercontinental Bankshares, LLC that are subject to a charging order but are not at issue in this appeal

.

2 In 2017 , Poker Run file d a Third Amended Complaint in Proceedings Supplementary, seeking, among other things, to add both Yepez and Santos as proceedings supplementary defendants. Poker Run, though, was unable to obtain service on either Yepez or Santos and, on June 26, 2018, the t rial court dismissed both men from the case. Hence, the trial court has no personal jurisdiction over Yepez or Santos.4 M embership U nits. Then , i n May 2018, Poker Run assigned its interests in the judgment against Ramos to Mississippi and Mississippi substituted into the case below as plaintiff /judgment creditor

. B. Sunstate and The Merger Agreement In March 2018, Sunstate entered into a merger agreement with Intercontinental Bank, the merger closing in August 2018 ( the “Merger Agreement”). Sunstate was the surviving entity of the merger . Mississippi obtained an order amending the Charging Order and i mplead ed Sunstate, Intercontinental
Bank and Intercontinental Bankshares LLC (the latter, after an earlier dismissal of it as a supplementary defendant). The Merger Agreement authorized Intercontinental Bankshares LLC ’s
members to redeem the ir membershi p units and receive a cash payment from
Sunstate. The Merger Agreement expressly provided that, to redeem their units for payment , holders of me mbership units (including Ramos ) must transmit to an escrow agent the original certificate representing the memb ership units, along with a
Transmittal Letter warrantin g that the membership units are free of encumbrance.
A fter being impleaded as a s upplementary d efendant, Sunstate filed a

r esponse stating to the trial cou rt that it could not pay Ramos for the Membership
Units until Ramos complied with the specific redemption provisions of the Merger Agreement

– that is, Ramos must surrender the original C ertificate 25 to Sunstate’s5 escrow agent together with the delivery o f the required Letter of Transmittal. T he
trial court entered a September 2018 order that enjoined Clear Trust , LLC, the exchange agent for the merger of Sunstate and Intercontinental Bank, from disbursing funds to Ramos pursuant to the Merger Agreement.
C. The Turnover Motions In November 2018, and again in Feb ruary 2019, Mississippi filed a Motion in Proceedings Supplementary to Turnover Funds to Satisfy Charging Orders (the “Turnover Motion”)

. In these motions, Mississippi sought an order from the trial court requiring Clear Trust , LLC , on behalf of Sunstate, to pay the redemption proceeds for the Membership Units to Mississippi. On October 1, 2019, the trial court entered an order partly granti ng Missis sippi’s February 2019 Turnover Motion.
This October 1 , 2019 order required Ramos to surrender the M embership U nits and
execute the Transmittal Letter

. In response to the order, Ramos declared t hat he was unable to comply because he was not in poss ession of the original C ertificate 25 , having pledged the M embership U nits , some nine years earlier , to Yepez as collateral for the Yepez loan

. Mississippi then filed its third T urnover M otion, in
which it asked the trial court to exercise it s equitable powers under section 56.29(6)6 of the Florida Statutes 3 and fashion a remedy to overcome Ramos’s inability to comply with the redemption provisions of the Merger Agreement

. D. The Order

O n November 26 , 2019, the trial court conducted a hearing on Mississippi’s
third T urnover M otion and, on December 20, 2019, entered the Order

. In the O rder,

t he trial court found that Ramos , by pledg ing the Membership Units as collateral for the Yepez loan, “created the circums tances of his inability to comply with the requi rements of the Merger Agreement

. ” The trial court , in reliance upon section 56.29(6), ordered Sunstate to remit to Mississippi the sum of $2,827,034 4 to satisfy the Charging Order , irrespective of the redemption provisions of the Merger Agreement

. Ostensibly to protect Sunstate from any claim by Yepez , the trial court
also required Mississippi to post a $3,000,000 surety bond for a period of five years , and obligated Mississippi to indemnify and hold Sunstate harmless from any future

3 In relevant part, this statute provides: “The court may order any property of the judgment debtor, not exempt from execution, or any p roperty, debt, or other obligation due to the judgment debtor, in the hands of or under the control of any person subject to the Notice to Appear, to be levied upon and applied toward the satisfaction of the judgment debt. The court may enter any orders, j udgments, or writs required to carry out the purpose of this section . . . against any person to whom a Notice to Appear has been directed and over whom the court obtained personal jurisdiction . . . , subject to applicable principles of equity . . . .” § 56.29(6), Fla. Stat. (2019).

4 The Merger Agreement established this value of the Membership Units by dividing the total purchase price of membership units by the outstanding number of membership units to yield a “Per Share Consideration.”7 claims related to the M embership U nits. Both Ramos and Sunstate timely appealed
th e Order. II. Analysis 5
Ramos and Sunstate argue that , in fashioning its remedy benefiting judgment creditor Mississippi under the auspices of section 56.29, the trial court contravened the express limitations set forth in section 605.0503 , which govern s a judgment creditor’s rights with respect to a judgment debtor’s membership inter est in a limited liability company

. Miss issippi counters by asserting that section 56.2 9 vests the trial
court with broad equitable powers in proceedings supplementary and provide s sufficient authori ty for the trial court to fashion the remedy prescribed in the Order

. Given the facts of this case, w e agree with Ramos and Sunstate that the trial court’s equitable powers to fashion remedies in proceedings supplementary are limited by the specific provisions of section 605.0503

. 6

5 W e review a question of law arising from supplementary proceedings below de novo . Longo v. Associated Limousine Servs., Inc. , 236 So. 3 d 1115, 1118 (Fla. 4th DCA 2018).

6 Because we reverse on this ground, we do not reach, and express no opinion on, Sunstate’s argum ent that section 56.29’s authority for the trial court to fashion an equitable remedy in proceedings supplementary does not include the power to alter the express terms of a bilateral agreement, such as the Merger Agreement, when one of the parties to the agreement (Sunstate) is neither a judgment creditor nor a debtor. Additionally , while we are concerned that the Order m ight have affected the collateral securing the Yepez loan

– a loan made before Poker Run’s judgment

– because of our reversal of the Order on other grounds, we need not, and therefore do8 Section 605.0503 provides , in relevant part, as follows: “On application to a court of competent jur isdiction by a judgment creditor of a member . . . , the court may enter a charging order against the transferable interest of the member . . . for payment of the unsatisfied amount of the judgment with interest . . . . [A] charging
order constitutes a lie n 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), Fla. Stat. (2019). Critically, s ubs ection 605.0503(3) further provides that the charging order authorized by subsection 605.0503(1): “

... is the sole and exclusive remedy by which a judgment creditor

. . . may satisfy a judgment from the judgment debtor’s interest in a limited liability company or r ights to distribution from the limited liability company.” § 605.0503(3), Fla. Stat. (2019) (emphasis supplied ). 7
Florida’s courts have concluded that section 605.0503(3)’s “sole and exclusive remedy” language restricts courts from providing a remedy be yond t he narrow scope of the permissible charging order authorized in s ection 605. 0 503( 1 ).

not, reach the issue as to whether the trial court’s lack of personal jurisdiction over Yepez and Santos provides an additional basis for reversal of the Order

.
7 Sections 605.0503(4) and (5) provide broader remedies to a creditor of a debtor who is a member of a limited liability company with only one member , but th e se sections are inapplicable because International Bankshares LLC is a multi

- member LLC.9 One such case

– with clear echoes of the instant case

– is Gorrin v. Poker Run Acquisitions , Inc. , 237 So. 3d 1149 ( Fla. 3d DCA 2018). There, Alvaro Gorrin, Jr. transferred most of his ownership in an LLC (not the LLC of the instant case) to a family trust after Poker Run filed suit on the Ramos /Gorrin, Jr. Ocean Bank guaranties. In pr oceedings supplementary, Gorrin, Jr. maintained that the transfer
was for an es tate planning purpose rather than for the fraudulent purpose alleged by
Poker Run

. Id. at 1152. The trial court granted both summary judgment and a charging order in favor of Poker Run against Gorrin Jr. ’s interest in the LLC. Id. at
1153. In furtherance o f the charging order, the trial court ordered that the “status quo be preserved as to all as sets” of the LLC, which, Gorrin, Jr. argued, amounted to an unauthorized permanent injunction against the LLC. Id.
T his Court, emphasizing the limited remedy pro vided by the statute, held that the portion of the order freezing the assets of the LLC “exceeded the scope of that
allowed under section 605.0503.” Id. at 1156 ; see M c Cl andon v. Dakem & Assocs

. , LLC , 219 So. 3d 269, 271 (Fla. 5th DCA 2017) ( reversing a portion of a charging
order that, to give the charging order “teeth , ” also appointed a receiver to take
control of the LLCs’ finances ) ; Young v. Levy , 140 So. 3d 1109 , 1112 (Fla. 4 th
DCA 2014 ) ( reversing the trial court’s garnishment order that required a multi

member LLC to disburse the LLC’s profits to a creditor, based on the “sole and exclusive remedy” provision of section 605.0503’s predecessor statute) ; see also10 Abukasis v. MTM Finest, Ltd. , 199 So

. 3d 421 , 423 (Fla. 3d DCA 2016) (reversin g

a post

- judgment order that transferred the judgment debtor’s membership units in a n LLC to the judgment debtor). Like the lower court orders reversed by the appellate courts in those cases, the
Order in this case went beyond what section 605.0503(1) permits

– t hat is, a charging
order merely restricting Ramos’ s alienability of the Membership Units and requir ing
that Mississippi be paid distributions otherwise payable to Ramos. While we are not unsympathetic to the trial court ’s attempt to craft a fair and practical result in this
difficult case , it is well settled that a trial court may not exercise its equitable powers to contravene statutory law. See State v. Hernandez , 278 So. 3d 845, 849 (Fla. 3d DCA 2019).
III. Conclusion
S ection 6 05.0503(3) plainly states that the charging lien provided for in

s ection 605. 0 503 (1) is a judgment creditor’s “sole and exclusive remedy” r egard ing a judgment debtor’s membership interest in a multi

- member limited liability
company. Hence, notwithstanding the equitable powers vested in a trial court pursuant to section 56.29( 6 ), we are compelled to reverse the Order because the relief provided therein to Mississippi exceeds the express scope of relief a t rial court may afford a judgment creditor under section 605.0503(1).
Reversed

.