United States District Court, E.D. Louisiana
FINDINGS OF FACT AND CONCLUSIONS OF LAW
TRICHE MILAZZO UNITED STATES DISTRICT JUDGE
action on a promissory note was removed from the 29th
Judicial District Court for the Parish of St. Charles. On
November 11, 2013, KCI Investments, LLC (KCI), Kenneth Antos
(Antos) and David .Becklean (Becklean) executed a Secured
Promissory Note (Note) with Magnolia Financial Group, LLC
(MFG) for the principal sum of $2, 000, 000 with an interest
rate of 15% per annum. Defendant Becklean also executed a
Pledge and Security Agreement (Security Agreement) in favor
of MFG wherein he pledged his interest in the proceeds of a
Settlement Agreement dated September 2012 among Twin Towers
Trading Site management, LLC (Twin Towers), Becklean, SMG
Group and others. The Pledge and Security Agreement was
recorded and perfected by filing of the UCC-1. Subsequently,
on January 13, 2015, Defendants, Becklean, Antos and KCI
entered into an agreement to borrow an additional $100, 000
from MFG (Second Note). No principal payments were made on
the notes by the maturity dates and the entire principal
amount plus significant interest remained due and owing. On
November 20, 2015, MFG filed suit seeking recovery of the
amounts .due under the notes.
Court granted MFG partial summary judgment in July of 2016,
recognizing MFG as “attorney in fact for the purposes
of carrying out the provisions of the Security Agreement and
establishing plaintiff's rights to collect attorney fees
and costs of collection at the termination of the
litigation.” ECF 25. Subsequently, this Court granted
MFG's partial motion for summary judgment as to amounts
due under the promissory notes from Antos, Becklean and KCI.
Towers Trading Site Management, LLC intervened in this action
by filing of Interpleader in August of 2016 with regard to
the amounts due MFG from the Settlement Agreement proceeds.
MFG responded averring that Twin Towers was not entitled to
Interpleader relief and asserted Crossclaims against Twin
Towers, Donald Porges, Porges and Eisenberg CPA, LLC, their
insurers, and Antos, Becklean and KCI for both contractual
and tort-based claims, including fraud. The insurers were
dismissed on coverage defenses prior to trial and the
insurers all filed for Rule 54(b) dismissals, which were
matter came on for trial on March 12, 2018, against the
remaining defendants. During the course of the trial,
Plaintiff in Cross-Claim, Magnolia Financial Group, LLC and
Defendants in Cross-Claim, Donald Porges, Porges and
Eisenberg, CPA, LLC and Twin Towers Trading Site Management,
LLC settled and resolved all their respective claims. The
settlement was entered on the record and accepted by the
Financial Group, LLC, reserved its rights as to the remaining
party defendants, Kenneth Antos, David Becklean and KCI and
continued to trial as to those remaining claims and parties.
Antos, David Becklean and KCI failed to participate in the
preparation of the pre-trial order; failed to appear or
participate in the pre-trial conference, and despite service
and notice failed to appear for trial. As a result, the court
on motion, struck those parties' pleadings and defenses.
Financial Group. LLC entered and admitted into evidence,
without objection, documentary evidence, including exhibits
Jl through 116; Pl through P45; and Dl through D8. Also, the
deposition testimony of Kenneth Antos and David Becklean was
entered into evidence without objection, as P46 and P47.
Additionally, certain factual stipulations were entered of
record, without objection, and accepted by the Court.
Finally, the Court· entered oral reasons in support of
its acceptance of the factual stipulations based on the
evidence and testimony presented.
considered the evidence admitted at trial and the arguments
of counsel, this Court makes the following findings of fact
and conclusions of law. To the extent a finding of fact
constitutes a conclusion of law, and vice versa, the Court
adopts it as such.
previous facts and findings of law as set forth in previous
Orders of this Court particularly ECF 25 and ECF 220, are
adopted and incorporated into the final judgment of the
Court. Those findings include that Becklean, Antos and KCI
were in default as of October 21, 2015; the Notes are valid
and enforceable as written; and MFG is due the amount of $2,
947, 518.81 as of June 13, 2017 from David Becklean, Kenneth
Antos and KCI, in solido, together with legal interest from
date of judicial demand; plus attorney fees and costs. The
Court will refer the calculation of attorney's fees and
costs to the Magistrate Judge, which amount will be included
as part of the final judgment rendered in this matter.
all times material, Porges was a manager of Twin Towers; a
member of KCI and member of the Board of Directors of KCI; a
member/manager of Porges and Eisenberg CPA, LLC; the
accountant for KCI; and an accountant for Antos.
all times material, Antos was a member/manager of KCI and was
signatory to the loans entered with MFG on behalf of himself
personally and on behalf of KCI and his actions are
attributable to himself personally and to KCI.
all times material, Antos, Becklean, KCI, Porges and Twin
Towers: (a) knew of the Notes entered with MFG; (b) knew of
the Pledge and Security Agreement by and between Becklean and
MFG; (c) knew of the Settlement Agreement; and (d) knew of
the Release and Indemnity Agreement.
all times material, MFG had a contractual relationship with
Antos, KCI and Becklean arising from the notes. Additionally,
MFG had a contractual relationship with Becklean arising from
the Pledge and Security Agreement.
all times material, Twin Towers held the "settlement
payment" funds to be paid to MFG under the terms of the
Pledge and Security Agreement; 7. On or about November 11,
2013, defendants KCI Investments, LLC ("KCI"),
Kenneth Antos ("Antos") and David Becklean
("Becklean") entered into a Secured Promissory Note
("Note") with plaintiff Magnolia Financial Group,
LLC ("Magnolia") for the principal sum of TWO
MILLION Dollars ($2, 000, 000.000) with an interest rate of
fifteen percent (15.00%) per annum.
Note(s) also provided for payment of attorney fees and all
expenses incurred in collection.
Pursuant to the Note, defendant Becklean executed a Pledge
and Security Agreement ("Pledge" or "Security
Agreement") in favor of Magnolia (See, Exhibit J3)
pledging Becklean's interest in the proceeds of a
Settlement Agreement of September 22, 2012 between Twin
Towers Trading Site Management, LLC ("Twin
Towers"), Becklean, Antos and others.
Pledge and Security Agreement was recorded by filing of the
UCC-1 which perfected MFG's security interest in the
Pledge and Security Agreement is valid and enforceable per
its terms and conditions. ECF 220.
connection with the execution of the Pledge by Becklean, in
November of 2013 correspondence was forwarded to MFG from
Donald Porges at the request and direction of Antos
confirming that Twin Towers was authorized by both Becklean
and Antos to make settlement payments to Magnolia in case of
representations and agreements set forth in the Porges
Letters, which were made at the urging and behest of Antos,
were material to MFG making the loan to KCI, Antos and
Porges, manager of Twin Towers, was also a member of the
board of KCI, an investor/stockholder in KCI and provided
accounting services to KCI, Antos and Twin Towers.
Becklean, Antos and KCI did not disclose their business
relationship with Mr. Porges to MFG at the time of entering
the notes with MFG in November of 2013.
made the loan (which was used to fund KCI) to Becklean, Antos
and KCI based on the fact that MFG reasonably believed and
relied on the security and could be repaid from the
settlement funds in the event of default. MFG was not repaid
upon default as promised.
monies provided by MFG under the notes was used to fund KCI
and PRBI 18. In connection with the entering the Notes, and
as inducement and consideration to fund the loans, MFG was
also given shares of stock in KCI and was given position on
the board of directors of KCI.
never had any business relationship with Antos, Becklean,
KCI, Porges or Twin Towers prior to entering the notes with