CLAYTON, JUDGE

NOT TO BE PUBLISHED APPEAL FROM WHITLEY CIRCUIT COURT
HONORABLE PAUL K. WINCHESTER, JUDGE
ACTION NO. 11-CI-00897
OPINION
AFFIRMING
BEFORE: CHIEF JUDGE ACREE; CLAYTON AND KRAMER, JUDGES. CLAYTON, JUDGE: Donna Vance appeals the Whitley Circuit Court's June 20, 2013 grant of Spring Hill Signs, LLC's motion for a charging order under Kentucky Revised Statute (KRS) 275.260. In addition, Spring Hills Signs, LLC (hereinafter "Spring Hill") filed a motion to dismiss the appeal that was passed to this panel for review on the merits. After careful consideration, we deny the motion to dismiss the appeal by separate order and affirm the charging order.

FACTS

This case arises out of a breach of contract suit. In December 2009, Spring Hill, pursuant to a purchase agreement, purchased real property, billboard signs, property leases, and accounts receivable of Vanbar Outdoor Advertising (hereinafter "Vanbar"), Jimmy Vance, and Donna Vance. As part of the purchase agreement, Donna agreed to pay Spring Hill $12,600 annually as rent for one of the billboards. The agreement was signed by Donna individually, on behalf of Vanbar, and as power of attorney for Jimmy Vance. After the initial payment in January 2010, no other payment was made to Spring Hill.

Then, in January 2010, Donna and V-B, LLC entered into another billboard contract wherein V-B would lease a billboard from Spring Hill. V-B was to pay Spring Hill $12,600 per year for five years or for as long as Jimmy Vance had an ownership interest. Donna paid in full for 2010 but, despite repeated efforts to collect, made no other payments.

Consequently, Spring Hill on November 4, 2011, filed a complaint seeking damages against four defendants - Donna, Jimmy Vance (now deceased), V-B, LLC, and Vanbar.

On August 27, 2012, the trial court granted Spring Hill summary judgment against Donna, V-B, LLC, and Vanbar Outdoor Advertising, LLC in the amount of $50,400 plus fees and 12% interest from the date of the judgment. As denoted on the face of this order, it was a final and appealable judgment. On December 17, 2012, summary judgment in the same amount was entered against the Estate of Jimmy Vance.

Spring Hill's attempts to collect were unsuccessful, and the judgment was not satisfied. On May 13, 2013, Spring Hill filed a motion for a charging order pursuant to KRS 275.260. It identified nine limited liability companies in which Donna and Jimmy Vance were listed as members. In its motion, Spring Hill asked the trial court to appoint a receiver over Donna's interest in her distributions and payments from these limited liability companies, require a monthly accounting, and also enter a charging order against the Estate of Jimmy Vance.

A hearing on the motion was held on May 20, 2013. After the hearing, Donna filed a response to the motion for the charging order on May 31, 2013, objecting to the appointment of a receiver and to a charging order being entered against the estate of Jimmy Vance but conceding that Spring Hill was entitled to a charging order against her.

On June 20, 2013, the trial court entered a charging order granting in part and denying in part Spring Hill's motion for the order. The charging order stated that Spring Hill had a lien on Donna's interest in eight limited liability companies. Based on that lien, Spring Hill had a right to receive payments and distributions from the limited liability companies made on Donna's behalf until the judgment was satisfied. The trial court clarified in its order that "[i]f any disbursements are made to other members, then a corresponding disbursement for Donna Vance's share/interest must be made at the same time" to Spring Hill's attorney until the judgment was satisfied. However, the trial court refused to appoint a receiver and denied the portion of the motion asking for a charging order against the estate of Jimmy Vance. Thus, the trial court provided Donna with the relief sought in her response to the charging order motion.

Donna now appeals from the charging order. She contends that the only issue on appeal is the application of KRS 275.260 as a means of enforcing a judgment and admits that no facts are in dispute. Donna proffers that the trial court, in entering a charging order, exceeded its authority in adjudicating the rights of non-parties. In doing so, she maintains that the issue was preserved in her response and objection to Spring Hill's motion for a charging order.

In response to Donna's appeal, Spring Hill questions whether our Court has jurisdiction over a post-judgment collection order when the time for appealing the judgment itself has lapsed and the post-judgment order is not designated as final and appealable and does not resolve all collection efforts; whether Donna can appeal an issue which was conceded at the trial court; and lastly, whether the rights of the other members of the limited liability companies are restricted. During the pendency of the appeal, Spring Hill filed a motion to dismiss the appeal.

ANALYSIS

In our assessment of the parties' arguments, we will address both the motion to dismiss the appeal and the charging order. We begin our discussion with Spring Hill's motion to dismiss.

Motion to dismiss

Spring Hill in its motion to dismiss the appeal asserted that the underlying summary judgment was a final judgment and any appeal of it was time-barred. Kentucky Rules of Civil Procedure (CR) 73.02. Also, Spring Hill maintained that Donna's appellate arguments were not before the trial court, and hence, not preserved. Finally, it stated that a charging order is not a final and appealable judgment. For these reasons, Spring Hill moved for our Court to dismiss the appeal.

First, we deal with Spring Hill's claim that Donna is attempting to appeal the August 2012 summary judgment. We disagree. Clearly, the record demonstrates that Donna did not appeal the summary judgment. First, the notice of appeal states:

Notice is hereby given that the defendant, Donna Vance, hereby appeals to the Kentucky Court of Appeals from the Charging Order entered by the circuit court on this matter on June 20, 2013, the judgment preceding the order having been entered on August 27, 2012.

Next, Spring Hill maintains in its motion to dismiss that the two arguments proffered by Donna in her prehearing statement were not before the trial court. Although we agree that these issues were not presented to the trial court, whether an issue has been preserved for our review does not support the dismissal of an appeal.

Finally, Spring Hill puts forth the idea that a charging order is not a final and appealable judgment, and as such, is interlocutory and should be dismissed. Nevertheless, Spring Hill provides no legal precedent for this position. Relying only on its own reasoning, Spring Hill supports its rationale by observing that the two issues cited by Donna in the prehearing statement were not before the trial court. However, as we explained above, this reasoning implicates preservation of an issue not jurisdiction of the Court of Appeals.

Furthermore, we also believe that a charging order, while not a judgment, is a final order. Generally, a final judgment or order adjudicates all the rights of all the parties. CR 54.01; King Coal Co. v. King, 940 S.W.2d 510 (Ky. App. 1997). As stated in CR 54.01, "[a] judgment is a written order of a court adjudicating a claim or claims in an action or proceeding." Here, the charging order adjudicated all of Spring Hill's claims to post-judgment relief in terms of a charging order against Donna's interest in these limited liability companies. And the order adjudicated all her rights to distributions in the limited liability companies.

Moreover, even though the order itself is not designated as "final and appealable," the plain language of CR 54.01 does not necessitate this denotation for finality if all the parties' rights have been determined. The language of CR 54.01 explains the dictates of a final order by using an "or" to describe a final order as adjudicating all parties' rights or a judgment made final under CR 54.02. Hence, an order is final if it adjudicates all of the rights of the parties or if it is made final under CR 54.02. Knott v. Crown Colony Farm, Inc., 865 S.W.2d 326, (Ky. 1993). Thus, we determine that no reason has been supplied for us to grant the motion to dismiss, and it is denied.

Charging Order

KRS 275.260 is the statutory and exclusive remedy by which a judgment debtor's interest in a limited liability company may be charged with payment of an unsatisfied portion of a judgment. A charging order only gives the judgment creditor the right to receive distributions to which the member would otherwise be entitled. Such "charging order" constitutes a lien on the judgment debtor's interest in, and right to receive, distributions from, the limited liability company until the judgment is satisfied. KRS 275.260(3). Under the statute, the trial court may appoint a receiver over all "distributions due or to become due to the judgment creditor" and make "all other orders, directions, accounts, and inquiries . . . the circumstances of the case may require to give effect to the charging order." KRS 275.260(2).

Before addressing Donna's argument that the trial court exceeded its power in its application of KRS 275.260, we must consider, as alluded to above, whether the argument in her appellate brief has been preserved for our review. Donna claims in her appellate brief that the argument was preserved for our review in her response to Spring Hill's motion for a charging order.

Yet, a perusal of Donna's response to Spring Hill's motion for a charging order states:

The plaintiff [Spring Hill] does have a judgment against Donna Vance and from the undersigned's review of KRS 275.260(3) it does appear that the plaintiff is entitled to a charge against whatever interest Donna Vance may possess in the limited liability companies set forth in their motion. There would not, however, appear to be the need for an appointment of a receiver.



. . .



Therefore, ...the plaintiff does appear entitled to an order charging any right to distributions which Ms. Vance may have in the limited liability companies.

And the two objections that she made to the motion for a charging order - that a receiver not be appointed and that the estate of Jimmy Vance could not be subject to a charging order were well received by the trial court. Consequently, the trial court denied the request by Spring Hill when it entered the charging order. In other words, she prevailed on these two issues she contested in her response, and apparently, agreed that KRS 275.260 applied to her.

Therefore, the argument now proffered by Donna on appeal was not argued before the trial court, and consequently, it had no opportunity to respond. Thus, we have nothing to review since her argument was not preserved.

Nonetheless, we believe that Donna's allegation that the trial court's charging order assumed jurisdiction over these eight limited liability companies, which were not parties to the action, when it restricted the method or means by which these limited liability companies made distributions to their members, is without merit. Donna herself notes that KRS 275.260(2) indicates that a limited liability company is not a necessary party to an application for a charging order.

She asserts that the trial court misconstrued the remedy of KRS 275.260(1) by restricting the method or means by which a judgment can be collected from a member of a limited liability company. This assertion is patently false. The trial court's order, tracking the language of the statute, indicated that only if and when the limited liability company chose to make a distribution to its members would Donna's distribution be paid to Spring Hill, her creditor.

The order specifically states that "[i]f any distributions are made to other members, then a corresponding disbursement for Donna Vance's share/interest must be made at the same time to" Spring Hill's attorney. Thus, as directed by the statutory language, Spring Hill only has the right of an assignee and has no right to participate in the management of these limited liability companies. KRS 275.260(3). In essence, Spring Hill has a "lien on and the right to receive distributions made with respect to the judgment debtor's limited liability company interest." Id. Therefore, the trial court did not exceed its authority when it entered the charging order.

Regarding her assertion that these limited liability companies must be made parties to the action, there is no language in KRS 275.260 mandating that such companies be made parties. The charging order does not impact the limited liability companies' operation in any way other than if it chooses to make a distribution to its members, Donna's membership interest will be paid to Spring Hill.

CONCLUSION

We deny Spring Hill's motion to dismiss the appeal, and we hold that Donna's argument on appeal was not preserved for our review. The decision of the Whitley Circuit Court is affirmed.

ALL CONCUR. BRIEF FOR APPELLANT: Darrell L. Saunders
Corbin, Kentucky
BRIEF FOR APPELLEE: Aaron M. Howard
Corbin, Kentucky