Brown v. Sperber-Porter

          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 ...