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Snegirev v. Ovchinnikov

United States District Court, D. Oregon

August 10, 2017

AGAFYA SNEGIREV, individually and as co-trustee of the Yakov Ovchinnikov Trust, Plaintiffs,
v.
VICTOR OVCHINNIKOV, individually and as co-trustee of the Yakov Ovchinnikov Trust, et al., Defendants.

          OPINION AND ORDER

          MICHAEL J. MCSHANE, UNITED STATES DISTRICT JUDGE

         Plaintiff Agafya Snegirev and Defendant Victor Ovchinnikov are co-trustees of a family Trust which had contained a parcel of real property before Victor conveyed the Property from the Trust to himself and then from himself to his wife, Defendant Penny Ovchinnikov. No consideration was paid for the conveyances. Because there are federal tax liens and judgments for debts owed by Defendants Victor and Penny Ovchinnikov, when Victor transferred the Property into his name individually those liens and judgments attached to the Property.

         Plaintiffs bring this suit to set aside the conveyances and have the Property returned to the Trust. Plaintiffs assert three claims: (1) breach of Fiduciary Duty; (2) to Set Aside Conveyance; and (3) for Quiet Title against defendants Victor Ovchinnikov, Fred Ovchinnikov, Penny Ovchinnikov, and United States of America. Before this Court is Plaintiffs' motion for summary judgment on those three claims. Pl.s' MSJ, ECF No. 45.

         Defendant Fred Ovchinnikov responds with a Motion for Order (ECF No. 17) and Motion for Summary Judgment (ECF No. 48). Fred argues he is the valid owner of parcel 3 of the Property in that he is the original purchaser of the property, and only through a serious of unauthorized transfers did the property become an asset of the Trust before being transferred to Victor and then to Penny.

         United States of America has expressed an interest in preserving the amount and validity of its tax liens against Victor, but otherwise does not take a position on Plaintiffs' claims. USA's Resp. 2-3, ECF No. 51. If the Property is held by Victor or Penny Ovchinnikov, then the federal tax liens against Victor encumber the entire property. Id. If the property is held by the Trust, then the tax liens encumber only Victor's beneficiary interest share of the property. Id.

         Because Victor as a co-trustee conveyed the Property from the Trust to himself individually without any consideration, Victor acted contrary to the beneficiaries' interest, breached his fiduciary duty, and is ordered removed as co-trustee of the Trust. Because the two July 30, 2013 conveyances were without any consideration, the two conveyances are set aside. The Property is deemed to be an asset of the Trust. Because the two conveyances are set aside, the United States of America's tax liens and judgments attached only to Victor's fractional beneficiary interest. Plaintiffs' Motion for Summary Judgment (ECF No. 45) is GRANTED. Defendant Fred Ovchinnikov's Motion for Order (ECF No. 17) and Motion for Summary Judgment (ECF No. 48) are DENIED.

         PROCEDURAL BACKGROUND

         This action was original filed in the Circuit Court of Marion County, Oregon, where the Property at issue is located. Defendant United States removed this case to the U.S. District Court of Oregon pursuant to 28 U.S.C. § 1444.

         Entry of Default has been entered against Defendant Midland Funding LLC and Defendant Christopher Vandaam for failure to answer or otherwise appear. Entry of Default was entered against the State of Oregon with consent from the state with the understanding that a money judgment against the State of Oregon is prohibited under ORS 30.360(3). See Order, ECF No. 34 and Order, ECF No. 44.

         FACTUAL BACKGROUND

         Plaintiffs Agafya Snegirev, Kathy Efimov, Julie Ovchinnikov, and Tina Cesce, and Defendants Victor Ovchinnikov and Fred Ovchinnikov are siblings and the adult children of Yakov Ovchinnikov (“Yakov”) and Irina Ovchinnikov (“Irina). Declaration of Agafya Snegirev (“Snegirev Decl.”) ¶ 2, ECF No.46.

         In September 1997, Yakov created the Yakov Ovchinnikov Trust (“the Trust”) where he was the sole Trustee of the Trust during his lifetime. Sengirev Decl. ¶ 3 & Ex. 1, ECF No. 46; Pollock Decl. Ex. 10, Victor Ovchinnikov Depo, 7:24-8:1, ECF No. 47. Yakov then conveyed into the Trust title to the parcel of real property:

Parcel 3 of Partition Plan No. 95-67, recorded in Reel 1244, Page 574, Marion County Microfilm Records, together with a thirty (30) foot private access as ...

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