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Can an LLC Member Recover the Cost of an Appraisal of the Member’s Interest?

In a proceeding to appraise an LLC minority member’s interest, the Court shall determine the appropriate costs for a court-appointed appraiser and is obligated to assess them against the LLC. The exception is when the Court finds the members acted arbitrarily, vexatiously or not in good faith, which allows the Court to assess the costs against the involved members. Fla. Stat. § 605.1070(1).

Likewise, the Court in an appraisal proceeding also may assess the expenses incurred by the respective parties in the amount the Court finds equitable. The Court may:

  • Assess the expenses against the LLC and in favor of the members demanding the appraisal, if the Court finds the LLC did not substantially comply with its appraisal obligations under Chapter 605, Florida Statutes; or
  • Assess the expenses against either the LLC or the members demanding the appraisal, if the Court finds that the LLC or the other party acted arbitrarily, vexatiously, or not in good faith.

Fla. Stat. § 605.1070(2).

If the Court in an appraisal proceeding finds that the expenses incurred by a member were of “substantial benefit” to the other members, and therefore should not be assessed against the LLC, the Court may direct the expenses be paid out of the amount awarded to the benefiting members. Fla. Stat. § 605.1070(3).

If during an appraisal proceeding, the LLC fails to make the required payment of expenses for the appraisal, the member who demanded the appraisal may sue the LLC for the amount of the appraisal and recover attorneys’ fees and costs for having to bring suit. Fla. Stat. § 605.1070(4).

In sum, when a member invokes his or her appraisal rights, the LLC has a duty to cooperate and, absent abuse by the requesting member, must fund the appraisal. If the LLC refuses to pay for the appraisal, the member may sue the LLC and recover attorneys’ fees and costs.

If you are involved in an LLC member dispute relating to member appraisal rights, contact the attorneys at Rabin Kammerer Johnson at 561-659-7878 or 877-915-4040.


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