Florida appeals court reverses decision in case over 12-year-old judgment

By Charmaine Little | Jun 5, 2017

DAYTONA BEACH — Florida's 5th District Court of Appeal recently issued a mixed ruling in a case in which a creditor is attempting to collect on a 12-year-old judgment.

The case started after Dakem and Associates LLC tried to collect money from Joeann McClandon based on a judgment from 12 years ago. Dakem won the original judgment against McClandon in 2005 and tried to collect on the debt three years later but was unsuccessful, according to court records.

McClandon has a controlling interest over the interest of 11 limited liability companies (LLCs), according to court documents. Dakem sought to be given a portion of the companies to cover the judgment McClandon owed. The trial court sided with Dakem and selected a receiver who could head four of the companies as the de facto chief financial officer and gave the receiver permission to decide on major financial factors. 

McClandon appealed that decision, arguing that section 605.0503 of the Florida statutes states that the trial court did not have the power to select a new receiver. But Dakem argues that a receiver is the only way to ensure the trial court’s ruling will be carried out properly. 

The appeals court partially affirmed the trial court's ruling and said the trial court didn’t err when it selected a receiver. But it did not agree with the lower court’s decision to have the receiver control the companies. 

Instead, the court decided that the charging order the trial court ruled on “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," court records state.

The appeals court confirmed the charging order of selecting a receiver but reversed the decision to make the receiver a financial officer.

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