Brown v. Sperber-Porter

          ORDER

          BRIDGET S. BADE UNITED STATES MAGISTRATE JUDGE.

         Petitioners/Judgment Creditors Rickman Brown, Jeff Ross, Evans, Sholz, Williams & Warncke LLC, and Ross and Orenstein LLC f/k/a Ross, Orenstein & Baudry LLC (“Petitioners”) have filed a Motion to Compel Compliance with Subpoenas. (Doc. 256.) The motion pertains to subpoenas to testify at a deposition that Petitioners served on Respondents Joseph and Helen Baldino. (Docs. 252, 254; Doc. 256, Exs. A, B.) The Baldinos objected to the subpoenas and Petitioners filed the pending motion to compel.^[1] (Docs. 250, 256.) The motion to compel is fully briefed. (Docs. 262, 267.)

         Petitioners have also filed a Motion to Authorize Service of Subpoenas. (Doc. 293.) This motion pertains to subpoenas that Petitioners intend to serve on non-parties Vantage Retirement Plans LLC, Mortgages Ltd. Opportunity Fund MP15 LLC, and Mortgages Ltd. Opportunity Fund MP17 LLC (collectively the “Non-Party LLCs”). Petitioners filed a notice of intent to serve subpoenas on the Non-Party LLCs (Doc. 279), and the Baldinos filed an objection to the notice of intent to serve subpoenas. (Doc. 285.) In response to the objection, Petitioners did not serve the subpoenas and filed the pending motion to authorize service of the subpoenas. (Doc. 293.) The motion to authorize service of subpoenas is fully briefed. (Docs. 295, 299.)

         In their motion to compel, Petitioners request an order (a) granting their motion, (b) instructing the Baldinos to produce the documents described in the subpoenas, and (c) instructing the Baldinos to appear for depositions at mutually-convenient dates and times, but in any event no earlier than seven days and no later than fourteen days after production of the documents. (Doc. 256.) In the motion to authorize service of subpoenas, Petitioners request an order that (a) overrules the Baldinos' objections to subpoenas that Petitioners intend to serve on the Non-Party LLCs, and (2) authorizes Petitioners to serve the subpoenas on the Non-Party LLCs. (Doc. 293.) As set forth below, the Court grants Petitioners' motions.^[2]

         I. Background

         On December 16, 2016, the Court entered a judgment (the “Judgment”) in this action affirming an arbitrator's July 27, 2016 award in favor of Petitioners and against Respondents Eva Sperber-Porter, Baseline & Val Vista Associates, LP, Litchfield Road Associates, LP, Joseph Baldino and Helen Baldino, husband and wife, the Baldino Family Revocable Living Trust, and the Meridian Financial Corporation Profit Sharing and Retirement Trust (collectively the “Respondents”). (Doc. 33.) That Judgment entitled Petitioners to a 21.5 percent contingency fee in connection with the GT Settlement, post-settlement interest, attorneys' fees, and costs.^[3] (Doc. 33; see Doc. 313 at 2.) The Judgment provided for two types of damages: legal fees and costs (“Current Amount”), and contingency fees and post-settlement interest (“Delay Damages”). (Doc. 33; Doc. 313 at 3.)

         On November 27, 2017, Petitioners filed a petition for a charging order against the Baldinos' interest in Mortgages Ltd. Opportunity Fund MP17 LLC (“MP17”). (Doc. 168.) The Baldinos objected to this petition for a charging order, in part, because they asserted that Judgment Debtor Meridian's interest in MP17 was held in an individual retirement account (IRA) at Vantage Retirement Plans LLC for the benefit of Joseph Baldino. (Doc. 213.) On April 2, 2018, the Court held a hearing to address the petition and the Baldinos' objections. (Doc. 245.) At the parties' request, the Court set a discovery schedule and set a July 2, 2018 evidentiary hearing on the petition for a charging order.^[4] (Docs. 168, 247.)

         On January 25, 2018, Petitioners obtained a general writ of execution against the Baldinos. (Doc. 224.) On February 16, 2018, Petitioners obtained an amended writ of general execution (the “amended writ”) against the Baldinos that calculated damages after applying interest and recoveries already received. (Doc. 233.) On March 23, 2018, Petitioners served on Helen and Joseph Baldino subpoenas to appear at depositions. (Doc. 256, Exs. A, B.) On April 6, 2018, the Baldinos filed an objection to the subpoenas and, on April 10, 2018, Petitioners filed the pending motion to compel. (Docs. 250, 256.)

         In April 2018, Respondents paid $436, 340.86 of the $641.899.29 due on the Current Amount. (Doc. 313 at 4.) Respondents deposited the remainder, $205, 558.42, with the Court. (Id.) On April 20, 2018, the Baldinos filed a motion for relief from judgment pursuant to Rule 60(b)(5) and asserted that the Judgment had been satisfied. (Doc. 260.) Respondents Eva Sperber-Porter, Baseline & Val Vista Associates, LP, and Litchfield Road Associates LP (collectively “Sperber-Porter”) filed a joinder to the Baldinos' motion for relief from judgment. (Doc. 272.) Sperber-Porter also filed a motion to release judgment lien. (Doc. 276.) Similar to the Baldinos' motion for relief from judgment, Sperber-Porter's motion argued that the Judgment was satisfied and, therefore, the lien must be released. (Id.)

         On May 14, 2017, as part of the discovery related to the Baldinos' objection to the petition for a charging order, Petitioners filed a notice of intent to serve subpoenas duces tecum on the Non-Party LLCs. (Doc. 279.) Before Petitioners served the subpoenas on the Non-Party LLCs, the Baldinos filed an objection to the subpoenas on the ground that the Judgment had been satisfied. (Doc. 285.) Petitioners withheld service of the subpoenas pending resolution of the objection and, on May 23, 2018, filed the pending motion to authorize service of the subpoenas. (Doc. 293.) In their motion to authorize service of the subpoenas, Petitioners argued that the Judgment had not been paid and, therefore, the subpoenas are appropriate. (Id. at 4-5.)

         On July 20, 2018, while their motion for relief from judgment was pending, the Baldinos filed an Amended Motion for Satisfaction from Judgment Pursuant to Rule 60. (Doc. 302.) In the amended motion, the Baldinos again ask the Court to find that the Judgment was satisfied based on Petitioners' receipt of the GT Settlement funds. (Id.) Petitioners filed a response to the amended motion and dispute that the Judgment has been satisfied by the GT Settlement funds because they have not received the GT Settlement funds and, when they receive the funds, they will be interpleading those funds in the state court matter. (Doc. 307.) On August 6, 2018, the Baldinos filed a reply is support of their amended motion. (Doc. 314.) On August 10, 2018, Petitioners filed a motion for leave to file a sur-reply. (Doc. 316.)

         Meanwhile, on August 2, 2018, the Court denied the Baldinos' motion for relief from judgment and Sperber-Porter's motion to release judgment lien. (Doc. 313.) The Court noted that as of April 2018, the Current Amount was $641, 899.29. (Id. at 3.) In April 2018, Respondents paid $436, 340.86 of the $641.899.29 due on the Current Amount. (Id. at 4.) Respondents deposited the remainder, $205, 558.42, with the Court. (Id.) The Delay Damages were subject to, and contingent upon, Respondents' appeal of the GT Settlement. (Id.) On July 3, 2018, the Arizona Supreme Court denied Respondents' review petition and, therefore, the Court concluded that the “alleged contingency of the Delay Damages is moot.” (Id. at 3, 10.)

         In the August 2, 2018 Order, the Court stated that with the deposit of the $205, 558.43, “Respondents pay the remainder of the April 20, 2018 calculation of the Current Amount.” (Id. at 9.) The Court directed the Clerk of Court to pay Petitioners the $205, 558.43 that Respondents had deposited with the Court. (Id. at 10; see Docs. 315, 323.) The Court stated that “[t]he Judgment will not be satisfied until the funds are paid from the GT Settlement, as well as accrued interest since April 20, 2018.” (Doc. 313 at 9-10.) Therefore, the Court denied Respondents' motion for relief from judgment under Rule 60(b)(5). (Id. at 9.) The Court also denied Sperber-Porter's motion to release judgment lien. (Id.) The Court has not ruled on the Baldinos' amended motion for satisfaction of the judgment.

         II. Requests ...