Kourt Security Partners, LLC ("Kourt Security"), by
counsel Charles J. Kaiser, Jr. and Jeffery D. Kaiser, appeals
the Circuit Court of Monongalia County's "Order
Granting Plaintiff's Motion for Summary Judgment, "
entered on November 28, 2016. Respondent United Bank, Inc.
("United Bank"), by counsel Shawn P. George, filed
a response. Kourt Security filed a reply.
Court has considered the parties' briefs and the record
on appeal. 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
affirming the circuit court's order is appropriate under
Rule 21 of the Rules of Appellate Procedure.
and Procedural Background
underlying litigation in this case, United Bank sought a
declaratory judgment that Kourt Security was indebted to it
for the amounts due on two loans that United Bank made to
another company, MB Security, Inc. ("MB Security"),
in 2012. MB Security was a company established by Mitchell
Brozik to manage the assets of his former security and alarm
business, Secure US, Inc. ("Secure US"). Kourt
Security purchased those assets in 2014 from Mr. Brozik's
aunt, Betty Parmer. Kourt Security disputed that United Bank
had any claim against it, arguing that it was a good faith
purchaser of the assets. Prior to the close of discovery, the
circuit court granted summary judgment in favor of United
Bank, and this appeal followed.
understand the present dispute, it is necessary to briefly
examine several prior financial transactions involving Mr.
Brozik and Ms. Parmer. In 2007, Secure U.S. obtained a loan
from the predecessor bank of Bank of America. Mr. Brozik then
experienced financial difficulties and sought the assistance
from a family friend, Milan Puskar, who purchased the Bank of
America note for $3.5 million. Mr. Brozik borrowed an
additional $900, 000 from the Puskar Trust. After Mr. Puskar
died in 2011, the Puskar Trust held both debts.
U.S. had been engaged in litigation in federal court with
another security company, Security Alarm Financing
Enterprises, LLC ("SAFE"). In this federal
litigation, SAFE obtained a judgment against Secure U.S. for
more than $1.1 million in 2010. In 2012, SAFE attempted to
collect on the judgment, and a federal magistrate ordered a
foreclosure sale of the Secure U.S. assets for May 16, 2012.
The Puskar Trust lien on the Secure U.S. assets was senior to
the SAFE judgment. At this point, Ms. Parmer agreed to assist
Mr. Brozik with his debts. In April of 2012, Ms. Parmer
obtained a loan from Centra Bank (now United Bank) in
Morgantown, West Virginia, and purchased the Puskar Trust
debt for $2.5 million. As a result, Ms. Parmer stood in the
shoes of the Puskar Trust, obtaining all of the rights that
it held in the debts.
Parmer then demanded payment from Mr. Brozik, who responded
that he was unable to make the payment. Ms. Parmer then
arranged for the Secure U.S. assets to be sold at a
foreclosure sale, which occurred on May 5, 2012. At the sale,
Ms. Parmer purchased the assets for $4 million, making her
the owner of the Secure U.S. assets. As owner of the Secure U.S.
assets, Ms. Parmer signed an agreement in August of 2012
granting Mr. Brozik the authority to manage, protect, and
borrow upon the assets through a newly-established company,
August and September of 2012, MB Security and Mr. Brozik
obtained two loans from United Bank, totaling $827, 000, that
are relevant to the present case. First, they refinanced a
$150, 000 vehicle loan. This loan was secured by vehicles
already owned or subsequently used in the Secure U.S.
business. In the second loan, Mr. Brozik and MB Security
borrowed $677, 000 from United Bank to satisfy existing
creditors and supply working capital for the business. This
latter loan was allegedly secured by the Secure U.S. assets,
as evidenced by agreements signed by Mr. Brozik as Ms.
Parmer's power of attorney.
September of 2013, Ms. Parmer filed suit against Mr. Brozik
and MB Security, among others, claiming that the transactions
which led her to own the Secure U.S. assets were conducted
without her full understanding and consent. She further
alleged that Mr. Brozik used MB Security to convert the
Secure U.S. assets for his own use. Thereafter, in that
litigation, the circuit court granted Ms. Parmer partial
summary judgment, which relieved her of the obligation to
comply with the management agreement with MB Security and
required Mr. Brozik and MB Security to relinquish control of
the former Secure U.S. assets that she owned. In May of 2014,
Ms. Parmer entered into a management agreement with Kourt
Security to manage the assets.
May of 2014, the federal court in the SAFE litigation held
that the SAFE lien on the Secure U.S. assets was not
extinguished by the May 5, 2012, foreclosure sale; Ms. Parmer
was liable for the SAFE judgment; and granted SAFE a judgment
against Ms. Parmer for $1.1 million. In November of 2014,
Kourt Security purchased the Secure U.S. assets from Ms.
Bank filed the present action against Kourt Security in
November of 2015, claiming that Kourt Security was liable for
the two loans that United Bank made to MB Security in 2012,
which were allegedly secured by the Secure U.S. assets that
Kourt Security bought from Ms. Parmer in 2014. In its
defense, Kourt Security denied that United Bank possessed any
enforceable liens encumbering the Secure U.S. assets.
Additionally, Kourt Security filed interrogatories and
requests for production for documents related to the
origination, processing, management, and enforcement of the
United Bank loans and security interests at issue.
Bank moved for summary judgment, arguing that it had a first
priority secured lien in the Secure U.S. assets at the time
Kourt Security purchased them; that the lien survived the
sale and remains intact; that Kourt Security bought the
Secure U.S. assets subject to United Bank's senior
security interest; and that United Bank was entitled to take
possession of the collateral. United Bank argued that it
never authorized the disposition of the Secure U.S. assets
free of its security interest. Kourt Security argued it was a
good faith purchaser of the assets and United Bank has no
claim against it. By order entered on November 28, 2016, the
circuit court granted United Bank's motion for summary
judgment, ruling that United Bank had a perfected ...