Application of LM Property Development Limited and Mirko Kovats

Filing 44

ORDER: Accordingly, it is hereby ORDERED AND ADJUDGED that the Magistrate Judge's Report and Recommendation (DE 41 ) is APPROVED AND ADOPTED. Petitioner' Motion for Additional Contempt Remedies and Discovery Sanctions (DE 38 ) is GRANTED IN PART AND DENIED IN PART. Signed by Judge Raag Singhal on 1/3/2025. See attached document for full details. (wce)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 22-62185-CIV-SINGHAL/VALLE
IN RE:
APPLICATION OF LM PROPERTY
DEVELOPMENT LIMITED and MIRKO
KOVATS PURSUANT TO 28 U.S.C. § 1782
TO CONDUCT DISCOVERY FOR USE IN
FOREIGN PROCEEDINGS.
______________________________________/
ORDER
THIS CAUSE is before the Court on Petitioners’ Motion for Additional Contempt
Remedies and Discovery Sanctions (DE [38]) against Respondent, Azul Destinations,
LLC (“Azul”). On February 12, 2024, the Court found Azul in contempt for failing to obey
two orders of the magistrate judge compelling Azul to respond to a subpoena issued by
this Court. (DE [37]). As sanctions, the Court imposed a $100 per day fine that will
continue to accrue until Azul purges itself of contempt by complying with the subpoena
and the discovery orders.
Notwithstanding the $100 daily fine, Azul has not produced the subpoenaed
documents. On April 17, 2024, Petitioners sought relief from the Court because Azul
again failed to comply with the Court’s Orders. In their Motion for Additional Contempt
Remedies, Petitioners requested that the Court put Azul into receivership, that the daily
fine be increased, that they be permitted to take discovery of Azul’s assets, and that
Petitioners be awarded reasonable costs and attorneys’ fees incurred in making the
motion.
Upon referral by this Court, the Magistrate Judge issued a Report and
Recommendation (DE [41]), recommending that the Motion for Additional Contempt
Remedies and Discovery Sanctions be granted in part and denied in part. Specifically,

the Magistrate Judge recommended that (1) Azul continue to be held in civil contempt;
(2) the request to put Azul into a receivership and to conduct discovery into Azul’s assets
be denied; (3) the daily fine for noncompliance be increased to $500 per day; and (4)
Petitioners be awarded $2,000 in reasonable attorneys’ fees and costs incurred in
connection with their efforts to compel compliance.
Azul -- which has never entered an appearance in this matter -- did not object to
the Magistrate Judge’s recommendations. Petitioners did file an objection, but only to the
Magistrate Judge’s finding that taking discovery in aid of execution is premature.
Petitioners argue that, even though a final judgment has not been entered, the Court has
broad discretion to fashion equitable remedies such as permitting discovery into Azul’s
assets.
The Court agrees with the Magistrate Judge that conducting discovery is
premature. It also appears to be somewhat of a fool’s errand as Azul has continued to
ignore the subpoena and multiple court orders and there is no showing that it would
comply with another subpoena. That is not to say that the Court’s orders are toothless.
As set forth below, additional sanctions will be imposed if Azul does not comply by
January 31, 2025. Accordingly, it is hereby
ORDERED AND ADJUDGED that the Magistrate Judge’s Report and
Recommendation (DE [41]) is APPROVED AND ADOPTED. Petitioners’ Motion for
Additional Contempt Remedies and Discovery Sanctions (DE [38]) is GRANTED IN
PART AND DENIED IN PART as follows:
1. Azul continues to be in contempt. The daily fine for noncompliance with the
Court’s orders is increased to $500 per day effective January 13, 2025. Azul
can purge this contempt and this fine by producing the subpoenaed documents.
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The fine will continue to accrue until such time as Azul complies with the Order
or the Court reduces the fine to a judgment.
2. Azul shall pay Petitioners’ a total of $2,000 for reasonable costs and attorneys’
fees incurred in the making of this motion. This sanction will not be purged.
3. Azul shall have until January 31, 2025, to comply with the subpoena and the
Court’s April 27, 2024, Paperless Order (DE [23]) by producing all documents
responsive to the subpoena served on January 26, 2023, see (DE [19-1]), and
to pay the $2,000 attorneys’ fee award.
4. Petitioners shall file a Notice with the Court on February 3, 2025, stating
whether Azul has complied with this Order. Upon a filing of a Notice of NonCompliance the Court will issue an Order to Show Cause and Notice to Appear
to Azul Destinations, LLC, and its managers.
5. Petitioners shall serve a copy of this Order on Azul’s Registered Agent, Sherif
M. Assal, at 16850 Berkshire Court, Southwest Ranches, FL 33331. Petitioners
shall also serve Manager Carlos T. De Navarra, 5520 Maggiore Street, Coral
Gables, FL 33146, and Manager Sherine Assal, 3354 Palo Vista Dr., Rancho
Palos Verdes, CA 90275, with a copy of this Order.
DONE AND ORDERED in Chambers, Fort Lauderdale, Florida, this 3rd day of
January 2025.

Copies furnished counsel via CM/ECF

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