1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Custom Dynamics, LLC, 

 Petitioner/Judgment 

Creditor, 

v. 

Michael Schultz d/b/a Everything 

L.E.D.- Harley, 

 Respondent/Judgment 

Debtor. 

No. 18-00011MC

REPORT AND RECOMMENDATION

TO THE HONORABLE G. MURRAY SNOW, UNITED STATES DISTICT JUDGE:

On October 18, 2019, Petitioner/Judgment Creditor Custom Dynamics, LLC 

(“Custom”), pursuant to Fed. R. Civ. P. 69 and A.R.S. § 29–655, filed a petition with the 

Court seeking a Charging Order against the interest of Respondent/Judgment Debtor 

Michael Schutz, d/b/a Everything L.E.D. – Harley (“Schultz”) in the Arizona limited 

liability company registered as Everything LED Harley Davidson, L.L.C. (“Everything 

LED”), of which he is a member. (Doc. 21.) On October 22, 2019, the Court referred the 

motion to undersigned United States Magistrate Judge (hereinafter “this Court”). (Doc. 

26.)

The Court issued its Order to Show Cause directing that Schultz and Everything 

LED appear before the Court on November 13, 2019 at 1:30 PM before Magistrate Judge 

Michelle H. Burns, to show cause why the relief requested in the Petition should not be 
- 2 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

granted, and on Friday, November 1, 2019 at 2:10 PM, the Petition and Order to Show 

Cause were served on Schultz and Everything LED. (Docs. 28, 30.)

The Court held the Order to Show Cause Hearing on November 13, 2019 and neither 

Schultz or any representative of Everything LED appeared. 

BACKGROUND

On January 23, 2018, the U.S. District Court for the Eastern District of North 

Carolina awarded Custom a Judgment against Defendant/Judgment Debtor Michael 

Schultz, d/b/a Everything L.E.D. – Harley, in the amount of $72,624.00, which was 

registered in this District on February 22, 2018. (Doc. 1.)

As of October 16, 2019, the outstanding balance due on the underlying Judgment, 

together with post-judgment interest, is in the sum of $74,877.43.1 Post-judgment interest 

will continue to accrue from that date at the rate of $3.62 per day. It is uncontested that 

Schultz has an interest in Everything LED.

Pursuant to Rule 69(a), Fed R. Civ. P., “[t]he procedure on execution [of a money 

judgment]—and in proceedings supplementary to and in aid of judgment or execution—

must accord with the procedure of the state where the court is located.” Pursuant to A.R.S. 

§ 29-655(A):

On application to a court of competent jurisdiction by any judgment creditor 

of a member, the court may charge the member’s interest in the limited 

liability company with payment of the unsatisfied amount of the judgment 

plus interest. To the extent so charged, the judgment creditor has only the 

rights of an assignee of the member’s interest.

A charging order is “[t]he exclusive remedy by which a judgment creditor of a 

member may satisfy a judgment out of the judgment debtor’s interest in the limited liability 

 

1 Pursuant to 28 U.S.C. § 1961, $1,299.97 of interest accrued at 1.79% on the $72,624.00 

principal for 365 days. Interest was compounded on 1/23/2019. $953.46 of interest accrued 

at 1.79% on the $73,923.97 principal for 263 days resulting in interest of $953.46, a 

principal of $73,923.97, and a total value of $74,877.43. 
- 3 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

company.” A.R.S. 655(C). Custom’s proposed charging order (1) charges the interest of 

Michael Schutz in Everything LED with payment of the unsatisfied amount of the 

Judgment; (2) orders Everything LED to refrain from paying any monies or profits due to 

Michael Schultz until the judgment is satisfied in full; (3) directs Everything LED to pay 

to Custom any monies or profits due or to become due; and (4) orders Everything LED to 

respond to or answer all inquiries from Custom or its counsel with regard to the limited 

liability company and to allow Custom or its counsel complete access to the books and 

records of the limited liability company.” (Doc. 21-1.)

This Court finds that Custom has established its right to the proposed charging order 

pursuant to the uncontested facts and authority cited. Wherefore,

IT IS RECOMMENDED that Movant’s Petition for Writ of Execution in the Form 

of a Charging Order, (Doc. 21), be GRANTED, and that the Court enter the following 

Charging Order: 

1. Custom is hereby granted an Order charging the interest of Michael Schutz 

in Everything LED Harley Davidson, L.L.C. with payment of the unsatisfied amount of 

the Judgment. 

2. Everything LED Harley Davidson, L.L.C., and its members and managers 

therein, are ordered to refrain from paying any monies or profits due to Michael Schultz or 

his assignees until Custom’s Judgment is satisfied in full.

3. Everything LED Harley Davidson, L.L.C., and its members and managers 

therein, are directed to pay to Custom any monies or profits due or to become due to 

Michael Schultz or his assignees. Payments are to be sent to Custom through their counsel 

of this record. 

4. Everything LED Harley Davidson, L.L.C., and its members and managers 

therein, are further ordered to respond to or answer all inquiries from Custom or its counsel, 

with regard to the limited liability company and to allow Custom or its counsel complete 

access to the books and records of the limited liability company.
- 4 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5. The Court having determined there is no just reason for delay, the Clerk is 

directed to enter this Order forthwith. 

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), 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); 

Rules 72, 6(a), 6(b), Federal Rules of Civil Procedure. Thereafter, the parties have fourteen 

days within which to file a response to the objections. Pursuant to Rule 7.2, Local Rules of 

Civil Procedure for the United States District Court for the District of Arizona, objections 

to the Report and Recommendation may not exceed seventeen (17) pages in length. Failure 

timely to file 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 

timely to file objections to any factual determinations of the Magistrate Judge will 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 Rule 72, 

Federal Rules of Civil Procedure.

Dated this 14th day of November, 2019.