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In Re v. the Bank of New York Mellon

December 14, 2012

IN RE: GENNADY TIKHONOV AND ALBINA TIKHONOV, DEBTORS. GENNADY TIKHONOV; ALBINA TIKHONOV, APPELLANTS,
v.
THE BANK OF NEW YORK MELLON TRUST CO., N.A., APPELLEE.



Appeal from the United States Bankruptcy Court for the Central District of California Honorable Maureen Tighe, Bankruptcy Judge, Presiding Bk. No. SV 11-15614-MT

SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

MEMORANDUM*fn1

Submitted Without Oral Argument on November 15, 2012*fn2

Filed - December 14, 2012

Before: MARKELL, BEESLEY*fn3 and PAPPAS, Bankruptcy Judges.

INTRODUCTION

Gennady and Albina Tikhonov ("Debtors") appeal from a bankruptcy court order granting relief from stay under 11 U.S.C. § 362(d)(1)*fn4 to the Bank of New York Mellon Trust Co., N.A., formerly known as the Bank of New York Trust ("BONY"). We hold that the appellants lack standing, and thus we DISMISS this appeal. Even if the appellants had standing, however, we would AFFIRM.

FACTS

A. The parties, the debt and the encumbered property The following facts reflect this Panel's understanding of the key players, the debt incurred and the encumbrances against the relevant parcel of real property: a single-family residence located in Sherman Oaks, California ("Residence"). For the most part, we have drawn these facts from the various deeds, notes and other transaction documents offered as exhibits by the parties. Neither party has attempted to challenge the authenticity of these documents, or the propriety of our considering them. While the parties' respective statements of fact focus on different parts of the record, neither effectively has challenged the 1 existence or the basic nature of the real estate and lending 2 transactions leading up to their dispute. 3 On or about April 6, 2006, a man named Leonid Ovsovich 4 ("Ovsovich") owned the Residence. On that date, he borrowed 5 roughly $1 million from Mortgageit, Inc. ("Mortgageit"). In 6 exchange for the loan, Ovsovich executed an Adjustable Rate Note 7 ("Note") and a Deed of Trust ("First Trust Deed"), both dated 8 April 6, 2006.

9 The First Trust Deed was recorded on April 18, 2006, in the 10 Official Records of Los Angeles County, as instrument number 11 06-0841080. The First Trust Deed identified Ovsovich as the 12 borrower, Mortgageit as the lender, and Mortgage Electronic 13 Registration Systems, Inc. or "MERS" as the beneficiary, but 14 "solely as nominee for Lender and Lender's successors and 15 assigns." The First Trust Deed elsewhere reiterated that "MERS 16 is a separate corporation that is acting solely as a nominee for 17 Lender and Lender's successors and assigns. MERS is the 18 beneficiary under this Security Instrument." Under the First 19 Trust Deed, Ovsovich acknowledged his understanding and 20 agreement, on the one hand, that MERS only held a legal interest 21 to the property described under the First Trust Deed, and on the 22 other hand, that MERS had the right/authority as nominee for the 23 lender and the lender's successors and assigns to exercise all of 24 their rights and interests under the First Trust Deed, to the 25 extent "necessary to comply with law or custom."

26 On November 2, 2006, Ovsovich borrowed another $25,000 27 against the Residence, this time from Reliant Group, Inc. 28 ("Reliant"). In exchange for this loan, Ovsovich executed a 1 promissory note and a Deed of Trust ("Second Trust Deed"), both 2 dated November 2, 2006. The Second Trust Deed was recorded on 3 November 9, 2006, in the Official Records of Los Angeles County, 4 as instrument number 06-2491932.

5 In 2007, Reliant conducted foreclosure proceedings against 6 the residence, which culminated in a trustee's sale held on 7 December 10, 2007, at which the Akselrod Revocable Family Trust 8 ("Akselrod Family Trust") was the successful bidder. That same 9 day, the trustee under the Second Deed of Trust executed a 10 Trustee's Deed Upon Sale conveying the Residence to the Akselrod 11 Family Trust. The Trustee's Deed Upon Sale was recorded on 12 January 10, 2008, in the Official Records of Los Angeles County, 13 as instrument number 20080057975.

14 In July 2008, one of the Debtors, Albina Tikhonov, purchased 15 the Residence from the Akselrod Family Trust. In furtherance of 16 this sale, the Akselrod Family Trust executed a Grant Deed in 17 favor of Albina Tikhonov, dated July 2, 2008. The Grant Deed 18 was recorded on July 9, 2008, in the Official Records of Los 19 Angeles County, as instrument number 20081215761. In conjunction 20 with this sales transaction, Albina Tikhonov promised to pay the 21 Akselrod Family Trust $100,000 and executed a Deed of Trust 22 ("Third Trust Deed") dated July 15, 2008, to secure her $100,000 23 debt. The Third Trust Deed was recorded on July 22, 2008, in the 24 Official Records of Los Angeles County, as instrument number 25 20081303344.

26 Because the Second Trust Deed was junior to the First Trust 27 Deed, the Akselrod Family Trust and its successor in interest, 28 Albina Tikhonov, took title to the the Residence subject to the First Trust Deed.*fn5

B. The Debtors' bankruptcy case and BONY's relief from stay motion

The Debtors filed their chapter 13 bankruptcy case in May 2011, and the bankruptcy court entered an order in October 2011 confirming their second amended chapter 13 plan ("Confirmed Plan"). The Debtors' Confirmed Plan did not provide for any payments to secured creditors. Moreover, the Confirmed Plan explicitly provided that the Debtors were immediately and unconditionally surrendering the Residence to the Akselrod Family Trust. As the Confirmed Plan put it:

The Debtor hereby surrenders the following personal or real property (Identify property and creditor ...


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