Mitchell Brozik and MB Security, LLC, Defendants Below, Petitioners
Betty Parmer, Plaintiff Below, Respondent, and Kourt Security Partners, LLC, Third-Party Defendant Below, Respondent And Betty Parmer, Plaintiff Below, Petitioner
Mitchell Brozik and MB Security, LLC, Defendants Below, Respondents, and Thomas Kupec and Brandon Kupec, Defendants Below, Respondents, and Gregory Morgan, Defendant Below, Respondent And Betty Parmer, Plaintiff Below, Petitioner
United Bank, Inc., a West Virginia corporation, and Randall Williams, Defendants Below, Respondents
County 13-C-651, 14-C-374
three consolidated appeals concern litigation sparked by a
series of financial transactions involving Betty Parmer;
Mitchell Brozik and his company, MB Security, LLC; Thomas
Kupec, Brandon Kupec, and Gregory Morgan, three Clarksburg,
West Virginia, attorneys; and United Bank and its loan
officer, Randall Williams. The appeals in Docket Nos. 16-0292
and 16-0400 stem from a jury trial in the Circuit Court of
Monongalia County, in which the jury returned a verdict in
favor of Betty Parmer and against Mitchell Brozik and MB
Security, LLC, in the amount of $1.5 million for breach of
fiduciary duties, breach of contract, and fraud, and an
additional $200, 000 in punitive damages, for a total award
of $1.7 million. The jury also heard Betty Parmer's
claims of negligence, legal malpractice, breach of fiduciary
duties, and fraud against Respondents/Defendants below Thomas
Kupec, Brandon Kupec, and Gregory Morgan, but found no
liability on the part of these three parties.
in Docket No. 16-0292, Petitioners/Defendants below, Mitchell
Brozik ("Mr. Brozik") and MB Security, LLC
("MB Security"), by counsel William J. Leon, appeal
the circuit court's "Trial Order, " entered on
December 21, 2015, and its "Order Denying Brozik and MB
Security [sic] Post Trial Motions, " entered on February
23, 2016. Respondent/Plaintiff below Betty Parmer ("Ms.
Parmer"), by counsel S. Sean Murphy, filed a response.
Additionally, Respondent/Third-Party Defendant below Kourt
Security Partners, LLC ("Kourt Security"), by
counsel Charles J. Kaiser, Jr. and Jeffrey D. Kaiser, filed a
response. Mr. Brozik and MB Security filed a reply.
Docket No. 16-0400, Ms. Parmer, by counsel S. Sean Murphy,
appeals the circuit court's "Trial Order, "
entered on December 21, 2015, and its order denying her
motion for amended judgment and/or for a new trial, entered
on March 15, 2016, as it related to the jury's adverse
verdict regarding her claims against the three attorney
defendants. Mr. Brozik and MB Security, by counsel William J.
Leon, filed a summary response. Thomas Kupec and Brandon
Kupec, by counsel, David D. Johnson, III and Larry A. Winter,
filed a response. Gregory Morgan, by counsel Peter T.
DeMasters, Kyle T. Turnbull, and Mina R. Gantous, also filed
the third consolidated case, Docket No. 16-0238, arises from
the dismissal of a separate, but related, civil action filed
by Ms. Parmer against United Bank, Inc. and Randall Williams
(collectively, "United Bank"). In this appeal, Ms.
Parmer, by counsel S. Sean Murphy, appeals the Circuit Court
of Monongalia County's order granting United Bank's
motion for summary judgment, entered on February 12, 2016,
and its order denying Ms. Parmer's motion to reconsider
the denial of her motion to amend her complaint, entered on
February 18, 2016. United Bank, by counsel Shawn P. George,
filed a response.
Court has considered the parties' briefs and the record
on appeal in each of the three above-styled cases. The facts
and legal arguments are adequately presented, and the
decisional process would not be significantly aided by oral
argument. Upon consideration of the standard of review, the
briefs, and the record presented, the Court finds no
substantial question of law and no prejudicial error. For
these reasons, a memorandum decision consolidating the
appeals and affirming the circuit court's orders is
appropriate under Rule 21 of the Rules of Appellate
and Procedural Background
Nos. 16-0292 and 16-0400: Ms. Parmer's claims against Mr.
Brozik, MB Security, Thomas Kupec, Brandon Kupec, and Gregory
appeals stem from a series of financial transactions, the
most important of which was a secured party sale of corporate
assets that occurred on May 5, 2012. At the sale, Ms. Parmer
foreclosed on assets owned by Secure US, a corporation owned
by Mr. Brozik. Ms. Parmer is Mr. Brozik's aunt, with
whom he enjoyed a close relationship throughout his life. Ms.
Parmer is a resident of Harrisburg, Pennsylvania, and was 76
years old at the time of the transaction. Ms. Parmer and her
husband built, operated, and sold multiple businesses during
their marriage. Following their divorce in 1991, Ms. Parmer
received a business and other investments worth several
million dollars. It is undisputed that Ms. Parmer routinely
provided financial assistance to Mr. Brozik over the years
leading up to the 2012 transaction giving rise to her
transaction at the center of this case was the result of Mr.
Brozik seeking financial assistance from his aunt because he
was at risk of losing his business, Secure US. In short,
Secure U.S. had pledged all of its assets as collateral to
secure a loan that Ms. Parmer purchased from a creditor of
Secure U.S. in April 2012. Following the secured party sale
on May 5, 2012, Ms. Parmer became the owner of Secure
US's assets. Thereafter, Ms. Parmer and Mr. Brozik
entered into a management agreement that provided that a new
company formed by Brozik, MB Security, would manage Secure
US's assets that Ms. Parmer had purchased and would
continue to operate the business as usual.
Parmer filed suit in September of 2013, naming Mr. Brozik and
MB Security as defendants, and claiming breach of fiduciary
duties, fraud, conspiracy, and conversion. Ms. Parmer also
named as defendants three attorneys who were involved in the
transaction, Thomas Kupec, Brandon Kupec, and Gregory Morgan.
The Kupecs represented Mr. Brozik and Secure US; Gregory
Morgan is unaffiliated with the Kupecs and presided over the
secured party sale on May 5, 2012. Against the attorney
defendants, Ms. Parmer raised the same claims that she raised
against Mr. Brozik and MB Security, and added claims of
negligence, legal malpractice, and breach of contract. In
February of 2014, Ms. Parmer sought to terminate the
management agreement with MB Security. By agreed order, the
parties terminated the agreement and transferred operation of
the business to Ms. Parmer. Additionally, Mr. Brozik and MB
Security were unsuccessful in their attempts to have the
circuit court dismiss Ms. Parmer's fraud claim on the
basis that it lacked specificity.
Brozik and MB Security filed their answer and a counterclaim
in August of 2014. In their counterclaim, they asserted
breach of contract, tortious interference with business
opportunities, and conversion of Mr. Brozik's personal
property. In addition, Mr. Brozik and MB Security filed a
third-party complaint against Kourt Security, the entity that
had purchased the Secure U.S. assets from Ms. Parmer during
the pendency of this case below. Against Kourt Security, Mr.
Brozik and MB Security raised claims of tortious interference
and conversion, and sought indemnification and contribution
for any damages that may be awarded to Ms. Parmer.
discovery, the parties filed dispositive motions. Mr. Brozik
and MB Security moved for summary judgment on Ms.
Parmer's breach of fiduciary duty, fraud, and conspiracy
claims, and also argued that Ms. Parmer suffered no damages.
The circuit court denied Mr. Brozik's and MB
Security's motion by order entered in November of 2015.
Kourt Security was granted summary judgment with respect to
Mr. Brozik's conversion of lost wages and profits and
tortious interference claims. Mr. Brozik's claim that
Kourt converted his personal property, his claims of quantum
meruit for rent, and property damage claim survived summary
judgment. Additionally, the circuit court dismissed Mr.
Brozik's and MB Security's claim against Kourt
Security for indemnification and contribution. The circuit
court granted summary judgment in favor of the Kupecs and Mr.
Morgan only with respect to Ms. Parmer's conspiracy
claim. Finally, Ms. Parmer sought partial summary judgment in
which she sought a declaration that she purchased Secure
US's assets subject to a judgment lien held by Security
Alarm Financing Services, Inc. ("SAFE"), which the
circuit court denied.
addressing the parties' respective motions, the following
claims were presented to the jury: (1) Ms. Parmer's
claims of fraud, breach of contract, and breach of fiduciary
duty against Mr. Brozik and MB Security; (2) Ms. Parmer's
claims of fraud, breach of fiduciary duty, legal malpractice,
and negligence against the Kupecs and Mr. Morgan; and (3) Mr.
Brozik's and MB Security's claims of conversion of
personal property, property damage, and quanum meruit for
rent against Kourt Security. The case proceeded to a jury
trial in December of 2015.
The Trial Evidence
evidence revealed that Mr. Brozik's financial
difficulties, at least as they related to the present
litigation, began around 2008. Secure U.S. defaulted on a
loan that it had obtained in 2007 from LaSalle Bank, which
was later acquired by Bank of America. Bank of America sued
Secure U.S. in the United States District Court of the
Northern District of Illinois as a result of the default, and
was granted summary judgment on the $3.5 million owed on the
LaSalle Bank note. Secure U.S. was ordered to turn over its
assets that it had pledged as collateral on the note. To
avoid Bank of America's collection efforts, in 2009, Mr.
Brozik sought help from Milan Puskar, a family friend. Mr.
Puskar agreed to purchase the loan in order to acquire all of
the related debt and security instruments and to extend Mr.
Brozik an additional $900, 000 in credit, resulting in Mr.
Brozik and Secure U.S. owing Mr. Puskar approximately $4
million. Mr. Brozik and Secure U.S. pledged their personal
property as collateral to secure the line of credit. The
Secure U.S. debt and security instruments were held by the
Puskar Family Trust. Because the indebtedness of Secure U.S.
and Mr. Brozik was prior in time to the SAFE Judgment lien,
Puskar lien was superior in priority.
of 2011, SAFE initiated efforts in the United States District
Court for the Northern District of West Virginia to execute
on its $1.132 million judgment against Secure US. As noted
above, the Kupecs represented Secure U.S. in the SAFE matter.
In March of 2012, a federal magistrate ordered that a
judicial sale of Secure US's assets be held on May 16,
2012. In the midst of SAFE's collection efforts, in
October of 2011, Mr. Puskar died unexpectedly. The Puskar
Trust sought to divest itself of the Secure U.S. debt and
security instruments, and was willing to accept $2.5 million
from Mr. Brozik for the note with a face value of over $4
million. Around early April of 2012, Mr. Brozik approached
Ms. Parmer to ask her if she was willing to loan him the $2.5
million. Ms. Parmer agreed to do so, and borrowed the
necessary money from Centra Bank (now United Bank) in
Morgantown, West Virginia. Ms. Parmer personally arranged for
the loan and negotiated the terms, without counsel, with bank
representative Randall Williams. Ms. Parmer's goal was to
assist her nephew in keeping his business operating.
rather than loaning Mr. Brozik the money, Ms. Parmer agreed
to purchase the notes from the Puskar Trust herself, and
then, according to Mr. Brozik and the attorney defendants,
further agreed to foreclose on Secure US's assets prior
to the SAFE judicial foreclosure scheduled for May of 2012.
The alleged plan was for Mr. Brozik to then repay Ms. Parmer
from the profits generated by continuing to operate the
business. Mr. Brozik advised Brandon Kupec of his agreement
with Ms. Parmer, and Brandon Kupec called Ms. Parmer and
confirmed her understanding of the
transactions. Ms. Parmer traveled to Morgantown for the
closing on her loan from United Bank, which took place on
April 19, 2012. That same day, following the closing on the
loan, Ms. Parmer met with representatives from the Puskar
Trust and executed the necessary documents for her to acquire
the LaSalle/Bank of America note, Puskar line of credit, and
related security instruments. As a result, Ms. Parmer stepped
into the shoes of the Puskar Trust and acquired the total
indebtedness of about $4 million secured by a first lien on
all of Secure US's assets, which was superior to
SAFE's $1.132 million judgment lien against Secure US.
Parmer's next action was to give notice to Secure U.S.
that she was calling on it to cure its default under the note
and line of credit. Mr. Brozik then responded to Ms.
Parmer's demand and stated that Secure U.S. was unable to
cure the default. By letter dated April 20, 2012, Ms. Parmer
requested that foreclosure proceedings commence. All of the
foregoing letters were drafted by Brandon Kupec on behalf of
Secure US. After discovering a conflict of interest with the
initial attorney selected, the Kupecs requested that Gregory
Morgan conduct the foreclosure sale. Mr. Morgan spoke with
Ms. Parmer by telephone and explained that he would be
conducting the foreclosure sale, and she confirmed that was
her intention. According to Mr. Morgan, he and Ms. Parmer
agreed that the goal of the sale was to make her the owner of
the Secure U.S. assets. Ms. Parmer authorized Mr. Morgan to
issue a bid of up to $4 million on her behalf.
secured party foreclosure sale took place on May 2, 2012. Of
the seventeen attendees, there were only two bidders: Patrick
Egan, owner of Kourt Security, and Mr. Morgan, on Ms.
Parmer's behalf. Mr. Egan made a final bid of $3.6
million. Mr. Morgan then placed the winning bid for Ms.
Parmer in the amount of $4 million. As a result, Ms. Parmer
became the owner of Secure US's assets.
the time of the sale in May of 2012, Mr. Brozik organized MB
Security for the purpose of operating the security business
using the former Secure U.S. assets. At Mr. Brozik's
request, Brandon Kupec contacted Ms. Parmer to discuss her
signing a management agreement with MB Security, which
obligated MB Security to pay the $2.5 million note that Ms.
Parmer obtained from United Bank and entitled MB Security to
receive all profits and gains from the management of the new
company. Ms. Parmer requested that Brandon Kupec make several
modifications to the agreement, which he did. Ms. Parmer then
signed the agreement in August of 2012.
believed that it was aggrieved by the May 5, 2012, secured
party sale, and filed suit against Ms. Parmer, Mr. Brozik,
and Secure U.S. in the United States District Court for the
Northern District of West Virginia on May 22, 2012. SAFE
alleged that the sale was a fraudulent attempt to deny it the
benefit of its $1.132 million judgment against Secure US.
SAFE sought a declaration that its judgment lien survived the
secured party sale and that Ms. Parmer be found personally
liable for its judgment against Secure US. The District Court
denied SAFE's motion for summary judgment that its
judgment survived the sale and further ruled that Ms. Parmer
could not be held personally liable under the theory of
successor liability. However, despite these rulings, Ms.
Parmer and SAFE entered into a settlement agreement wherein
Ms. Parmer stipulated that (1) she was not a good faith
purchaser of the Secure U.S. assets; (2) she took the Secure
U.S. assets subject to SAFE's judgment lien; and (3) she
was personally liable for SAFE's judgment
lien. The crux of Ms. Parmer's claims in the
present lawsuit was that she was unaware that she would
become the owner of Secure US's assets; she alleged that
she merely intended to help her nephew in his time of
the December of 2015, jury trial, the jury returned the
following verdict: (1) neither Thomas nor Brandon Kupec
breached any fiduciary duties owed to Ms. Parmer; (2) Mr.
Brozik and MB Security breached both a contract with and
fiduciary duties owed to Ms. Parmer; (3) neither Thomas Kupec
nor Mr. Morgan committed negligence or malpractice; (4)
Brandon Kupec committed negligence and malpractice in his
representation of Ms. Parmer, however, the jury found Brandon
Kupec and Ms. Parmer each to be 50 percent at fault; (5) Mr.
Brozik and MB Security made false representations, untrue
statements, failed to provide Ms. Parmer necessary and
important information, and fraudulently induced Ms. Parmer
into a series of transactions that made her the owner of
Secure US's assets; (6) neither Thomas Kupec nor Brandon
Kupec committed fraud; (7) Mr. Brozik and MB Security acted
in a willful, wanton, and reckless manner; and (8) neither
Thomas Kupec nor Brandon Kupec acted in a willful, wanton,
and reckless manner. The jury found no liability on any of
Mr. Brozik's conversion claims, real property claims, or
quantum meruit/rent claims against Kourt Security.
respect to damages, the jury awarded a judgment in favor of
Ms. Parmer in the amount of $750, 000 against Mr. Brozik and
MB Security for breach of contract and breach of fiduciary
duty; $750, 000 against Mr. Brozik and MB Security for fraud;
and $200, 000 against Mr. Brozik and MB Security in punitive
damages. The circuit court memorialized the jury's
verdict in a "Trial Order" entered on December 21,
The Post-Trial Motions
Brozik and MB Security filed a post-trial motion in which
they requested that the circuit court set aside the verdict
and grant a new trial. The circuit court denied Mr.
Brozik's and MB Security's motion by order entered on
February 23, 2016. Ms. Parmer also filed a motion seeking a
new trial with respect to her claims against the Kupecs and
Mr. Morgan. The circuit court denied Ms. Parmer's
post-trial motion by order entered on March 15, 2016. Mr.
Brozik/MB Security and Ms. Parmer each appealed to this
Parmer's claims against United Bank and Randall Williams
April of 2014, while her suit against Mr. Brozik, MB
Security, the Kupecs, and Gregory Morgan was pending, Ms.
Parmer filed a separate action against United Bank and its
loan officer, Randall Williams, concerning their role in the
transaction. She alleged claims of negligence, breach of
fiduciary duty, and conspiracy. Specifically, Ms. Parmer
alleged that when she closed on the $2.5 million loan from
United Bank in April of 2012, she was unaware of the SAFE
judgment or that her nephew was the subject of an Internal
Revenue Service investigation. Rather, she alleged that she
believed she was merely signing a note for her nephew to help
him with his debt to the Puskar Trust. Ms. Parmer further
alleged that United Bank was involved in every step of the
alleged scheme that formed the basis of her claims against
Mr. Brozik, MB Security, the Kupecs, and Greg Morgan.
Additionally, she alleged that, without her knowledge, United
Bank loaned an additional $827, 000 to MB Security pursuant
to the management agreement and took as collateral the former
Secure U.S. assets she owned. However, Ms. Parmer admitted
that she signed the management agreement; that she contacted
United Bank to originate the loan; and that Mr. Williams did
not advise her one way or the other about whether to borrow
December 16, 2015,  eighteen days before discovery closed in
her suit against United Bank, Ms. Parmer moved to extend
discovery, which United Bank opposed. Nevertheless, United
Bank made their expert available and Ms. Parmer took the
deposition. Additionally, United Bank's representative
and Mr. Williams agreed to be deposed, but Ms. Parmer
Bank filed a motion for summary judgment on January 6, 2016.
Rather than file a response, Ms. Parmer filed two motions: a
motion to disqualify the presiding circuit court
judge and a motion to reconsider the previous
denial of her motion to amend her complaint to allege fraud.
The Chief Justice denied the disqualification motion by
Administrative Order on January 22, 2016. Ms. Parmer then
timely filed a response to United Bank's summary judgment
order entered on February 12, 2016, the circuit court granted
United Bank's motion for summary judgment. In sum, the
circuit court ruled that (1) Ms. Parmer's negligence
claim failed for a lack of valid legal duty; (2) Ms. Parmer
had no breach of fiduciary duty claim because she did not
allege a breach of contract and United Bank owes no fiduciary
duty to a borrower absent special circumstances not present
in this case; and (3) Ms. Parmer's civil conspiracy claim
failed because she did not present any evidence of wrongdoing
by United Bank. By order entered on February 18, 2016, the
circuit court denied Ms. Parmer's motion to reconsider
the denial of her motion to amend her complaint. Ms. Parmer
appeals both orders to this Court.
first address the assignments of error raised on appeal by
Mr. Brozik and MB Security in Docket No. 16-0292, which are
as follows: (1) that the circuit court erred in denying their
Rule 50(a) motions for judgment as a matter of law and
seeking dismiss[al] [of] Ms. Parmer's fraud claim; (2)
that the circuit court erred in denying their Rule 50(b)
post-trial motion for judgment as a matter of law; (3) that
the circuit court erred in ruling that Mr. Brozik breached a
fiduciary duty; (4) that the circuit court erred in denying
their Rule 50 motions asserting that Ms. Palmer suffered no
damages; (5) that the circuit court erred in denying their
motion to disqualify Judge Wilkes; and (6) that the circuit
court failed to conduct a post-trial analysis of the
jury's punitive damages award as required by Alkire
v. First National Bank of Parsons, 197 W.Va. 122, 475
S.E.2d 122 (1996).
50(a) of the West Virginia Rules of Civil Procedure, which
governs a circuit court's entry of judgment as a matter
of law, provides as follows:
(1)If during a trial by jury a party has been fully heard on
an issue and there is no legally sufficient evidentiary basis
for a reasonable jury to find for that party on that issue,
the court may determine the issue against that party and may
grant a motion for judgment as a matter of law against that
party with respect to a claim or defense that cannot under
the controlling law be maintained or defeated without a
favorable finding on that issue.
(2) Motions for judgment as a matter of law may be made at
any time before submission of the case to the jury. Such a
motion shall specify the judgment sought and the law and the
facts on which the moving party is entitled to the judgment.
this Court has held that
[i]n ruling . . . on a motion for a judgment notwithstanding
the verdict, . . . the evidence must be viewed in the light
most favorable to the nonmoving party. If on review, the
evidence is shown to be legally insufficient to sustain the
verdict, it is the obligation of this Court to reverse the
circuit court and to order judgment for the appellant.
Syl. Pt. 1, in part, Mildred L.M. v. John O.F., 192
W.Va. 345, 452 S.E.2d 436 (1994). We expanded upon this
standard by holding in syllabus point three of
[t]he granting of a motion for judgment notwithstanding the
verdict is reviewed de novo, which triggers the same
stringent decisional standards that are used by the circuit
courts. While a review of this motion is plenary, it is also
circumscribed because we must review the evidence in a light
most favorable to the nonmoving party.
[w]e review the rulings of the circuit court concerning a new
trial and its conclusion as to the existence of reversible
error under an abuse of discretion standard, and we review
the circuit court's underlying factual findings under a
clearly erroneous standard. Questions of law are subject to a
de novo review.
Kizer v. Harper, 211 W.Va. 47, 51, 561 S.E.2d 368,
respect to claims of fraud, this Court has held that the
plaintiff is required to show the following ...