United States District Court, D. Arizona
REPORT AND RECOMMENDATION
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 (collectively,
“Petitioners”), and Respondents/Judgment Debtors
Joseph Baldino and Helen Baldino, the Baldino Family
Revocable Trust, and the Meridian Financial Corporation
Profit Sharing & Retirement Trust (collectively, the
“Baldino Debtors”), have filed a Stipulation Re:
Pending Petitions for Charging Orders Against Baldino
Debtors' Interests in Mortgages Ltd. Opportunity Fund
MP15 LLC and Mortgages Ltd. Opportunity Fund MP17 LLC. (Doc.
329.) As set forth below, the Court recommends the entry of
the parties' proposed stipulated charging orders.
Petitioners
have filed petitions for charging orders against the
interests of the Baldino Debtors in the Arizona limited
liability companies registered as Mortgages Ltd. Opportunity
Fund MP 15 LLC (“MP 15”) and Mortgages Ltd.
Opportunity Fund MP 17 LLC (“MP 17”), and motions
for orders to show cause why the Court should not grant the
relief requested in the petitions for charging orders. (Docs.
167, 168.) The Court granted the motions for orders to show
cause, ordered the Baldino Debtors to serve MP 15 and MP 17
with copies of the petitions for charging orders, and ordered
the Baldino Debtors, MP 15, and MP 17 to show cause why the
Court should not granted the relief requested in the
petitions for charging orders. (Docs. 201, 235.) The Baldino
Debtors responded to the order to show cause pertaining to
the petition for a charging order against their interests in
MP 17, and Petitioners filed a reply. (Doc. 213, 218.) The
Baldino Debtors did not respond to the order to show cause
pertaining to the petition for a charging order against their
interests in MP 15.
On
April 2, 2018, the Court held a hearing on the petition for a
charging order pertaining to MP 17. (Doc. 245.) The parties
requested a period of discovery on issues related to the
petition and an evidentiary hearing. The parties agreed to
submit a stipulated charging order against the Baldino
Debtors' interest in MP 15. The Court granted the request
for a period of discovery, set a discovery schedule, and set
an evidentiary hearing for July 10, 2018. (Doc. 247.)
Petitioners subsequently filed several motions related to
various discovery requests, and the Baldino Debtors filed a
motion for relief from judgment under Rule 60 (the
“Rule 60 motion”). (Docs. 256, 260, 287, 293.)
The parties then filed a joint motion to vacate the discovery
schedule and the evidentiary hearing until the Court ruled on
the pending motions. (Doc. 300.) The Court granted the
motion, vacated the July 10, 2018 evidentiary hearing, and
ordered the parties to file a status report within seven days
of a ruling on the Rule 60 motion. (Doc. 301.) The Court
denied the Rule 60 motion on August 2, 2018. (Doc. 313.)
On
August 22, 2018, the Court held a hearing on the pending
motions, including the petitions for charging orders. At that
hearing, the parties stated that they believed they had
resolved most of the issues related to the petitions for
charging orders, except the Baldino Debtors' objections
to a charging order against the interest of Meridian
Financial Corporation Profit Sharing & Retirement Trust
(“Meridian”) in MP 17. The parties also agreed
that they had not completed discovery related to
Meridian's interest in MP 17. Petitioners stated that
they would consider withdrawing the petition for a charging
order against Meridian's interest in MP 17, without
prejudice to refiling after completing discovery. On August
23, 2018, Petitioners and the Baldino Debtors filed the
pending stipulation addressing the pending petitions for
charging orders against the Baldino Debtors' interests in
MP 15 and MP 17. (Doc. 329.)
Based
on the briefing on the petitions for charging orders (Docs.
167, 168, 213, 218), Ariz. Rev. Stat. § 29-655, the
parties' arguments at the April 2, 2018 and August 22,
2018 hearings, and the stipulation regarding the petitions
for charging orders (Doc. 329), the Court finds that the
petitions for charging orders against the Baldino
Debtors' interests in MP 15 and MP 17 should be granted
and the parties' stipulated proposed charging orders
should be entered. The Court also finds that Petitioners'
petition for a charging order against Meridian's interest
in MP 17, which Petitioners have withdrawn, should be denied
as moot and without prejudice to refiling after the parties
complete discovery.
Accordingly,
IT IS RECOMMENDED that Petitioners'
petitions for charging orders (Docs. 167, 168) be
GRANTED and that the Court enter charging
orders against the Baldino Debtors' interests in MP 15
and MP 17, as set forth in attachments A and B.
IT
IS FURTHER RECOMMENDED that Petitioners'
petition for a charging order against Meridian's interest
in MP 17 (Doc. 168) be DENIED as moot and
without prejudice to refiling.
This
recommendation is not an order that is immediately appealable
to the Ninth Circuit Court of Appeals. Any notice of appeal
pursuant to Rule 4(a)(1) of the Federal Rules of Appellate
Procedure should not be filed until entry of the District
Court's judgment. The parties shall have fourteen days
from the date of service of a copy of this recommendation
within which to file specific written objections with the
Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P.
6, 72. The parties have fourteen days within which to file a
response to the objections. Failure to file timely objections
to the Magistrate Judge's Report and Recommendation may
result in the acceptance of the Report and Recommendation by
the District Court without further review. See
United States v. Reyna-Tapia, 328 F.3d 1114,
1121 (9th Cir. 2003). Failure to file timely objections to
any factual determinations of the Magistrate Judge may be
considered a waiver of a party's right to appellate
review of the findings of fact in an order or judgment
entered pursuant to the Magistrate Judge's
recommendation. See Fed. R. Civ. P. 72.
ATTACHMENT
A
CHARGING
ORDER AGAINST THE INTERESTS OF THE BALDINO DEBTORS IN
MORTGAGES LTD. OPPORTUNITY FUND MP 15 LLC
Petitioners/Judgment
Creditors Rickman Brown, Jeff Ross, Evans, Scholz, Williams
& Warncke LLC, and Ross and Orenstein LLC f/k/a Ross,
Orenstein & Baudry LLC (“Petitioners”) filed
a petition with the Court on November 27, 2017, seeking a
Charging Order against the interests of Respondents/Judgment
Debtors Joseph Baldino and Helen Baldino, husband and wife
(the “Baldinos”); The Baldino Family Revocable
Trust, dated May 26, 1994, Joseph Baldino and Helen Baldino,
trustees (the “Baldino Trust”); and The Meridian
Financial Corporation Profit Sharing Plan & Retirement
Trust, dated March 18, 1985, Joseph Baldino and Helen
Baldino, trustees (collectively, with the Baldinos and the
Baldino Trust, the “Baldino Debtors”) in the
Arizona limited liability company registered as Mortgages
Ltd. Opportunity Fund MP 15 LLC (“MP
15”), of which they are members. (Doc. 167.)
The
Court issued its Order to Show Cause directing that the
Baldino Debtors and MP 15 to show cause why the relief
requested in the Petition should not be granted. Neither the
Baldino Debtors nor MP 15 responded to the Order to Show
Cause. The Court held hearings on the Petition on April 2 and
August 22, 2018.
The
Court having considered the argument of counsel, the order to
show cause, and the materials presented to the Court at the
hearings ...