United States District Court, D. Oregon, Portland Division
OPINION AND ORDER
MICHAEL W. MOSMAN, Chief United States District Judge
matter comes before me on the parties' Cross-Motions for
Summary Judgment [52, 54] and World Fuel's Motion to
Strike . For the reasons below, I GRANT in part and DENY
in part the Cross-Motions for Summary Judgment, and DENY as
moot the Motion to Strike.
case involves complicated dealings between an aviation
operations company, its subsidiaries, and several creditors.
Evergreen Holdings (“Holdings”), as its name
indicates, is a holdings company. Holdings provided aviation
services through two subsidiary companies: Evergreen
International Aviation (“Aviation”) and Evergreen
Vintage Aircraft (“Vintage”). Aviation also has a
number of subsidiary companies: Evergreen International
Airlines (“Airlines”), Evergreen Aviation Ground
Logistics Enterprises, Evergreen Trade, and Evergreen
Agricultural Enterprises. Holdings's assets appear to be
limited to its stock in Aviation and Vintage, and its
ownership of a property located in Yamhill County at 3800 NE
Three Mile Lane (the “Property”). Schweitzer
Decl. , Ex. 21. To complicate matters, Aviation and
Vintage are in bankruptcy proceedings, and the ownership of
the Property is disputed: the bankruptcy trustee claims it is
owned by Aviation and is seeking to impose a constructive
trust on the Property for the benefit of Aviation.
and Counter Defendant World Fuel Services and Defendant and
Counter Claimant Andrew Martin each claim a financial
interest in the Property. Both parties allege in this
litigation that the other's claim is based on a
fraudulent conveyance under O.R.S. §§ 95.230-
95.240 and should be avoided.
World Fuel Services' dealings with Airlines
World Fuel Services is an aviation fuel supplier who supplied
fuel and services to Airlines. Second Amended Complaint
(“SAC')  ¶¶ 1, 6-7; Sweitzer Decl.
, Ex. 1 at 10, 16-18. After Airlines had trouble paying
World Fuel for fuel, World Fuel and Airlines signed a series
of payment plan agreements in 2010 and 2012. Sweitzer Decl.
, Ex. 1 at 11-14. In May 2012, World Fuel and Airlines
attempted to address Airlines's payment problems by
signing a Continuing Guaranty and Joinder to Continuing
Guaranty. Sweitzer Decl. , Exs. 6, 7. On July 20, 2012,
Airlines and World Fuel signed two new agreements: one which
gave World Fuel interest in three vintage planes, and a
guaranty signed by Vintage and by Holdings (the
“Blanket Guaranty”). Sweitzer Decl. , Exs. 8,
Airlines continued to struggle with its debts to World Fuel.
By April 2013, Airlines and its affiliates owed World Fuel $9
million. Sweitzer Decl. , Ex. 11. At the time, Aviation
was in the middle of selling its stock in another related
company, Evergreen Helicopters, for $250 million. Sweitzer
Decl. , Ex. 10. In conjunction with the Helicopters sale,
Airlines negotiated an agreement with World Fuel to pay down
$6 million of its debt in exchange for the release of three
interests World Fuel held. Sweitzer Decl. , Ex. 13. World
Fuel received the first payment from this agreement for $5.2
million, but never received a second payment for $800, 000.
Sweitzer Decl. , Ex. 1 at 24-25. In September 2013, World
Fuel stopped supplying fuel to Airlines entirely after
Airlines did not answer a written demand for immediate
payment. Sweitzer Decl. , Ex. 16.
December 2013, World Fuel filed a lawsuit against Airlines,
Aviation, Holdings and several other affiliate companies in
Yamhill County, seeking payment of Airlines's debts.
Sweitzer Decl. , Ex. 18. Judge Carroll J. Tichenor
granted summary judgment in favor of World Fuel against
Holdings and Evergreen Agricultural Enterprises in December
2014 and entered a money judgment in February 2015 in the
amount of $9, 093, 297.57. Sweitzer Decl. , Ex. 19, 20.
This judgment appears as an encumbrance against the Property.
Sweitzer Decl. , Ex. 19, 20. There are at least two other
judgments encumbering the Property: a 2013 money judgment for
$227, 404.73 registered in Oregon by Aersale, Inc. in 2014,
and a 2010 judgment registered in Oregon in 2013 by Chemoil
Corp. Sweitzer Decl. , Exs. 24, 26, 27.
Mr. Martin's loan
Martin is a private lender who loaned $4.2 million to
Aviation in July 2013 after some complications with the April
2013 Helicopters sale. Martin Decl.  ¶ 11; Ex. 3.
According to Aviation's President, Blythe Berselli, the
Helicopters sale could not go through unless the parties paid
back Banner Bank, which held a trust deed against the
property. Stephens Decl. , Ex. 3, at 56-59. Ms.
Berselli testified that Aviation's owner, Delford Smith,
agreed to loan $3.5 million to Aviation via his limited
liability company, Ventures Acquisitions Company
(“VAC”), to allow the closing of the Helicopters
sale. Stephens Decl. , Ex. 3, at 59-60. On the day the
Helicopters sale closed, VAC wired $3.5 million to Aviation.
Stephens Decl. , Ex. 5.
then sought a lender to repay the loan to VAC. After two
banks declined to finance a loan, Aviation contacted Mr.
Martin via several intermediaries in June 2013. Martin Decl.
 ¶ 3. According to Mr. Martin, he reviewed numerous
documents, including an executive summary of the loan, the
referring broker's opinion letter, and hundreds of other
pages provided by Aviation, Holdings, and Delford Smith.
Martin Decl.  ¶¶ 4-9. The executive summary
provided to Mr. Martin stated that the loan funds would be
used as “[r]eimbursement to owner for $3.5M balance
payoff of Banner Bank debt (necessary to execute sale of
Evergreen Helicopter).” Martin Decl. , Ex. 1. On
July 17, 2013, Mr. Martin and Aviation signed a secured loan
agreement, with Holdings, Delford Smith, and Delford M.
Smith, LLC, serving as guarantors. Martin Decl. , Ex. 3.
In return for the secured loan agreement, Holdings provided
Mr. Martin with a Trust Deed to the Property, which was
appraised at $7.2 million at the time. Martin Decl. , Ex.
to the settlement statement issued upon closing of the loan,
Delford Smith was to receive $3.5 million and $36, 459.36 in
interest. Stephens Decl. , Ex. 4. But Aviation instructed
the title company via email to wire the interest and $3.5
million repayment to VAC, not Delford Smith. Stephens Decl.
, Ex. 6. Mr. Martin states he was not aware that the
funds were disbursed to VAC. Martin Decl.  ¶ 12.