petitioner's brief, kourt security partners, llc v. judy’s ......the plaintiffs in this civil...

IN THE SUPREME COURT OF APPEAL OF WEST VIRGINIA No 16-0553

~~I I KOURTSECUJUTYPARTNERSLLC I

dba Select Security Defendant Below Petitioner

v

JUDYs LOCKSMITHS INC and JUDITH J RANSOM dba Judy Alarm Masters Plaintiffs Below Respondents

Appeal from the Circuit Court of Kanawha County West Virginia Civil Action No 09-C-1619

PETITIONERS BRIEF

Counsel for Petitioner

Charles J Kaiser Jr Esq (WV Bar No 1946) Jeffery D Kaiser Esq (WV Bar No 12284)

PHILLIPS GARDILL KAISER amp ALTMEYER PLLC 61 Fourteenth Street

Wheeling WV 26003 P (304) 232-6810 F (304) 232-4918

E cjkaiserpgkacom amp jefflcaiserpgkacom

w

P022S5951

TABLE OF CONTENTS

TABLE OF AUTHORITIES 4

ASSIGNMENTS OF ERROR bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 5

I The Circuit Courts Order entered March 12016 is erroneous and should be reversed because judgment was entered against Kourt Security without considering whether or not Betty Parmer had knowledge andor notice of the Respondents lien encumbering the Assets when they were purchased at the May 52012 secured party sale as required by W Va Code sect 38-4-9 (2016) 5

II The Circuit Courts Order entered March 12016 is erroneous and should be reversed because the Circuit Court failed to consider West Virginias statutory law regarding Writs of Execution on personal property (Writ ofFieri Facias) 5

ill The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because the Circuit Court ignored the fact that the May 5 2012 secured party sale was commercially reasonable and thus extinguished all subordinate debt interests - including that of the Respondents 5

IV The Circuit Courts Order entered March 1 2016 is erroneous and should be revered because the Circuit Court made numerous factual findings that are not supported by the record as required by West Virginia law 5

STATEMENT OF TIlE CASE 5

A Procedural History 5

B Statement of Facts 7

STANDARD OF REVIEW 10

SUMMARY OF ARGUMENT 41 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull10

STATEMENT REGARDING ORAL ARGUMENT AND DECISION 12

ARGUMENTbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull12

A The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because the Circuit Court failed to consider West Virginias statutory law regarding Writs of Execution on personal property (Writ of Fieri Facias) bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull12

(P022SS9SI) 2

B The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because judgment was entered against Kourt Security without considering whether or not Betty Parmer had knowledge andor notice of the Respondents lien encumbering the Assets when they were purchased at the May 5 2012 secured party sale as required by W Va Code sect 38-4-9 (2016) bullbull14

C The Circuit Courts Order entered March 1 2006 is erroneous and should be reversed because the Circuit Court ignored the fact that the May 5 2012 secured party sale was commercially reasonable and thus extinguished all subordinate debt interests - including that of the Respondent Judybullbull16

D The Circuit Courts Order entered March 12016 is erroneous and should be revered because the Circuit Court made numerous factual fmdings that are not supported by the record as required by West Virginia law 18

PMYER FOR RELIEFbullbullbullbullbullbullbullbullbullbullbullbullbull20

CERTIFICATE OF SERVICE bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull23

P02255951 3

TABLE OF AUTHORITIES

Painterv Peavy 451 SE2d 755 758 192 W Va 189 192 (1994) 10

In re Godfrey 537 BR 271 281 87 UCC RepServ2d 866 Case No1 12-bk-1473 Adv Proc

(1967) 5 18 1920

Anderson v Liberty Lobby Inc bull 477 US 242 249 106 SCt 2505 2511 (1986) 10

Andrick v Town ofBuckhannon 187 W Va 706421 SE2d 247 (1992) 10

Lamon v Gold 79 SE 728 72 W Va 618 (1913) 12

Brown v Hodgman 19 SE2d 910 124 W Va 136 (1942) 12

Hartman v Corpening 178 SE 430 116 W Va 31 (1935) l2 14

Westinghouse Lamp Co v Ingram 79 W Va 22090 SE 837 (1916) 12

Springston v Powell 113 W Va 638 169 SE 459 (1933) 12

Barber v Barber 464 SE2d 358 195 W Va 38 (1995) 12 13

No 113-ap-24 (NDW Va Bankr Ct 2015) 16

South Side Lumber Company v Stone Construction Company 152 SE2d 721 151 W Va 439

Bank of Chapmanville v Workman 406 SE2d 58 185 W Va 161 (1991) 16

Statutes

W Va Code sect 38-4-9 (2016) 14 15

W Va Code sect 38-4-5 (2016) 12

W Va Code sect 38-4-8 (2016) 12 13

W Va Code sect 38-4-6 (2016) 14

W Va Code sect 46-9-610 (2016) 16

W Va Code sect 46-9-617 (2016) 16 17

W Va Code sectsect46-9-617(a)(1-3) (2016) 16 17

W Va Code sect 46-9-61O(b) (2016) 16

Procedural Rules

W VARCIVP 56(c) 10

W VA R elV P 52(a) 1920

P02255951 J 4

ASSIGNMENTS OF ERROR

I The Circuit Courts Order entered March 12016 is erroneous and should be reversed

because judgment waS entered against Kourt Security without considering whether or not Betty

Panner had knowledge andor notice of the Respondents lien encumbering the Assets when they

were purchased at the May 5 2012 secured party sale as required by W Va Code sect 38-4-9

(2016)

II The Circuit Courts Order entered March 12016 is erroneous and should be reversed

because the Circuit Court failed to consider West Virginias statutory law regarding Writs of

Execution on personal property (Writ of Fieri Facias)

III The Circuit Courts Order entered March 12016 is erroneous and should be reversed

because the Circuit Court ignored the fact that the May 52012 secured party sale was

commercially reasonable and thus extinguished all subordinate debt interests - including that of

the Respondents

IV The Circuit Courts Order entered March 12016 is erroneous and should be revered

because the Circuit Court made numerous findings of fact that are not supported by the recorded

as required by South Side Lumber Company v Stone Construction Company 151 W Va 439

152 SE2d 721 (1967)

STATEMENT OF THE CASE

A PROCEDUREAL mSTORY

The Plaintiffs in this civil action Judys Locksmiths Inc and Judith J Ransom dba

Judys Alarm Masters (hereinafter Respondent Judy) filed their suit on September 1 2009 in

the Circuit Court of Kanawha County West Virginia The initial Defendants in the civil action

were Secure US Inc (hereinafter Secure US) and Serbian Fonz LLC (hereinafter Serbian

P022SS9S1 5

Fonz LLC) (hereinafter collectively referred to as the Brozik Defendants) Both Secure US

Inc and Serbian Fonz LLC were West Virginia entities owned and operated by Mitchell Brozik

Within its Complaint Respondent Judy alleged that the Brozik Defendants breached the tenns of

an Asset Purchase Agreement they had entered into in 2008 See Complaint dated September 1

2009 [Appx Pgs 8-10] On October 62011 Respondent Judy and the Brozik Defendants

reached an agreement or settlement as to all pending issues before the Court The Brozik

Defendants agreed to pay Respondent Judy the sum of$19100000 in installment payments over

thirty-six (36) months See Motion for Summary Judgment Against Defendant Kourt Security

Partners LLC Exhibit J [Appx Pgs 20]

Beginning in or around May of 2014 the Brozik Defendants ceased making the required

monthly payments As a result Respondent Judy moved the court to reopen the case and enter

judgment against the Brozik Defendants for the remaining balance owed - $4718424 plus costs

See Motion for Summary Judgment Against Defendant Kourt Security Partners LLC [Appx

Pgs 15-16] The Circuit Court subsequently entered an order granting Judgment against the

Brozik Defendants on June 192014 See Certified Docket Sheet Line 136 [Appx Pg 3] On

June 112015 Respondent Judy moved the Circuit Court for leave to amend its complaint to add

Kourt Security Partners LLC as a Defendant Respondent Judys motion was granted and their

Amended Complaint was filed on July 242015 See Amended Complaint [Appx Pgs 6-7] On

August 312015 Kourt Security answered Respondent Judys Amended Complaint denied the

allegations contained therein and demanded strict proof thereof See Kourt Security Partners

LLCs Answer and Affirmative Defenses [Appx Pgs 11-14]

On January 262016 Respondent Judy filed their Motion for Summary Judgment against

Kourt Security See Motion for Summary Judgment against Defendant Kourt Security Partners

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LLC [Appx Pgs 15-20] On February 222016 Kourt Security filed is Response to Respondent

Judys Motion for Summary Judgment See Defendant Kourt Security Partners LLCs Response

to Plaintiffs Motion for Summary Judgment [Appx Pgs 21-34 Exhibits on Appx Pgs 35-74]

On February 262016 a hearing was held regarding Respondent Judys Motion for Summary

Judgment and the Circuit Court granted Respondent Judys Motion from the bench See

February 262016 Hearing Transcript [Appx Pgs 79-107] The Plaintiff was instructed to draft

the order granting such motion

On February 29 2016 Respondent Judy submitted its proposed order to the Circuit Court

judge for entry On March 12016 the Circuit Court entered Respondent Judys Order as

submitted by Respondent Judy See Untitled Order Granting Plaintiffs Motion for Summary

Judgment [Appx Pgs 75-78] It is this March 12016 Untitled Order Granting Respondent

Judys Motion for Summary Judgment that Kurt Security is appealing herein

B STATEMENT OF FACTS

On April 1 2008 the Respondent Judy entered into an Asset Purchase Agreement with

the Brozik Defendants wherein Respondent Judy agreed to sell all of the assets it used in

connection with the operation of its security business in Charleston West Virginia in return for a

purchase price of $42099200 See Complaint [Appx Pgs 8-9]

At some point in early 2009 The Brozik Defendants ceased making the installment

payments required under the terms of the Asset Purchase Agreement At the time payments

ceased Respondent Judy alleged that the Brozik Defendants had only paid $20000000 of the

$42099200 owed See Complaint [Appx Pgs 8] As a result Respondent Judy filed suit in the

Circuit Court ofKanawha County West Virginia See Complaint [Appx Pgs 8-9] During this

same time Secure US was having other financial difficulties In order to help alleviate those

financial difficulties Secure US struck a deal with Mr Brozks close personal friend - Mylan

(P02255951 7

Puskar Mr Puskar through the Mylan Puskar Amended and Restated Revocable Trust Dated

December 26 2009 (hereinafter the Trust) purchased the outstanding debt of Secure US held

by Bank ofAmerica in the amount of $350000000 and extended him an additional line of

credit in the amount of $90000000 See Recitals ofPurchase and Sale Agreement dated April

19th 2012 [Appx Pg 35] In November of201O a Judgment was handed down against Secure

US in the Southern District of West Virginia by the Honorable John T Copenhaver The

Judgment was in favor of Security Alarm Financing Enterprise Inc (better known as SAFE) to

the tune of $1 13202842 Shortly thereafter SAFE began the process of executing on its

judgment1 SAFEs judgment however was junior in priority to the debt held by the Puskar

Trust

On October 62011 Respondent Judy and the Brozik Defendants reached an agreement

of settlement as to all issues pending before the Kanawha County Circuit Court from the

September 1 2009 Complaint The Brozik Defendants agreed to pay Respondent Judy the sum

of$19100000 over thirty-six (36) months The Brozik Defendants made all required payments

until around March 2014

On April 19 2012 Betty Parmer Mr Broziks aunt purchased the Secure US debt held

by the Puskar Trust (having a face value ofmore than $400000000) by paying the sum of

$250000000 to the Puskar Trust See Purchase and Sale Agreement dated April 19th 2012

[Appx Pgs 35-59] After purchasing the debt Betty Parmer claimed default against Secure US

and subsequently moved to have Secure USs assets sold at auction to satisfy the debt On May

52012 a secured party sale was held in Morgantown West Virginia With a credit bid of

$400000000 Mrs Parmer purchased the Assets of Secure US See Bill of Sale and Receipt

1 See Secure US Inc v Security Alarm Financing Enterprises (USDC NDW Va Civil Action No Il-MC-20) (Stamp)

(P022SS9S1 ) 8

dated May 7 2012 [Appx Pgs 60-62] Pursuant to West Virginia Code sect46-9-617(a) the effect

ofthis sale was to (1) transfer the operating assets of Secure US from the company to Betty

Parmer and (2) discharge all subordinate security interests and subordinate liens which

encumber the assets

Shortly after she obtained ownership of the assets Mrs Parmer retained her nephew Mr

Brozik and his newly-formed company MB Security LLC to manage her assets

In May of 20 14 MB Security and Mr Brozik were removed as manager of Betty

Parmers assets and Kourt Security was hired to step in and manage the assets until they could be

sold2 During this same time Respondent Judy moved to have the case reopened and judgment

rendered against the Brozik Defendants for the remaining balance on the monies owed pursuant

to the October 2011 settlement - $4718424 plus costs See Certified Docket Sheet Line 129

[Appx Pg 3]

On June 192014 the Kanawha County Circuit Court entered an order granting judgment

against the Brozik Defendants However Respondent Judy did not request and receive an

abstract of said judgment until December 102014 See Certified Docket Sheet Lines 171 and

172 [Appx Pg 4] The abstract ofjudgment was subsequently recorded in Monongalia County

- the county in which both Secure US Inc and Serbian Fonz LLC are primarily located and

where substantially all of their assets are located - on December 182014

On November 25 2014 pursuant to the terms and conditions of a Confidential Asset

Purchase Agreement Betty Parmer sold all of the assets she obtained from the May 5 2012

2 Shortly after Betty Parmer purchased the assets at the May 5 2012 secured party sale SAFE sued Betty Parmer along with Secure US Inc in federal court See Security Alarm Financing Enterprises Inc v Betty Parmer et al (USDC NDW Va Civil Action No l2-CV-880)

(PO~SS9S1) 9

secured party sale to Kourt Security Partners LLC See Report on Status of Private Sale filed

December 12014 [Appx Pgs 63-66]

STANDARD OF REVIEW

Under West Virginia law the standard of review on appeal from an order granting (

summary judgment pursuant to Rule 56 of the West Virginia Rules of Civil Procedure is de

novo W VA R CIV P 56(c) See also Painter v Peavy 451 SE2d 755 758 192 W Va 189

192 (1994)

Under Rule 56(c) summary judgment is proper only where the moving party shows there

is no genuine issue ofmaterial fact and that it is entitled to judgment as a matter of law Painter

451 SE2d at 758 The circuit courts function at the summary judgment stage is not to weigh

the evidence and determine the truth of the matter but to determine whether there is a genuine

issue for trial Anderson v Liberty Lobby Inc 477 US 242 249 106 SCt 2505 2511 (1986)

Furthermore when analyzing any permissible inference from the underlying facts of the case

must be viewed in the light most favorable to the party opposing the motion Andrick v Town

ofBuckhannon 187 W Va 706421 SE2d 247 (1992)

SUMMARY OF ARGUMffiNT

The law and facts of this case not only require reversal of the order granting Respondent

Judys Motion for Summary Judgment but also require as a matter oflaw the granting of

summary judgment in favor ofKourt Security Respondent Judys Motion for Summary

Judgment is based upon the inaccurate position that Betty Parmer acquired Secure US and sold

it to Kourt Security Partners without notice to plaintiffs or any payment to plaintiffs and the

unsupported position that Kourt Security took the assets cum onere or subject to a charge or

P022SS9Si 10

burden See Untitled Order Granting Plaintiffs Motion for Summary Judgment [Appx Pgs 75shy

78] Both of these positions are wholly-unfounded in the record of this civil action

In addition the Circuit Courts Untitled Order Granting Plaintiffs Motion for Summary

Judgment is erroneous and should be reversed for three (3) reasons First Respondent Judy failed

to put forth any evidence showing there is no genuine issue of material fact that Betty Parmer

had notice that Respondent Judy had (i) filed suit against the Brozik Defendants or (ii) had

obtained judgment andor an agreement to pay the monies owed Second Respondent Judy

failed to put forth any evidence showing there is no genuine issue ofmaterial fact as to the

commercial reasonableness of the May 5 2012 secured party sale and as a result any lien or

debt encumbering the assets at that time would have been extinguished pursuant to West

Virginias Uniform Commercial Code (sect 46-9-617) Third the Circuit Court failed to take into

account West Virginia statutory law regarding Writs ofExecution on personal property (Writ of

Fieri Facias) which does not become a lien encumbering such property until the writ is delivered

to the Sheriff Respondent Judy did not obtain a judgment against the Brozik Defendants from

the Kanawha County Circuit Court until June 192014 See Docket Sheet Line 136 [Appx Pg

3] Furthermore a writ of execution (writ of fieri facias) was not obtained by the Judy

Respondents until July 25 2014 - over two years after Betty Parmer purchased the assets from

Secure US

As a result ofthese errors West Virginia law requires not only the reversal of the Circuit

Courts untitled order granting Respondent Judys Motion for Summary Judgment it requires

judgment as a matter oflaw to be ruled in favor ofKourt Security

P022SS9Si 11

STATEMENT REGARDING ORAL ARGUMENT AND DECISION

This appeal involves assignments of error in the application of settled law as well as

insufficient evidence of a result against the weight of the evidence and thus is appropriate for

Rule 19 Oral Argument pursuant to Rule 19( a)( 1) and (3) of the West Virginia Rules of

Appellate Procedure

ARGUMENT

A The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because the Circuit Court failed to consider West Virginias statutory law regarding Writs of Execution on personal property (Writ of Fieri Facias)

The lien ofa judgment is a right created by statute and the legislature has prescribed

requirements for the preservation of that right Lamon v Gold 79 ~E 728 729 72 W Va 618

(1913) Noncompliance with those prescribed requirements will operate to divest and defeat that

right Id Furthermore a judgment lien can only attach to the interest of the judgment debtor

BrownvHodgman 19SE2d910 124 W Va 136(1942)3 In addition alienofaperfected

execution is both immediate and prospective but not retroactive (Emphasis Added)

Hartman v Corpening 178 SE 430 116 W Va 31 (1935)

An execution on a judgment obtained for money is known as a writ of fieri facias which

becomes a lien on personal property or estate or interest in estate owned by judgment debtor at

time writ is delivered to sheriff W Va Code sect 38-4-5 (2016) Barber v Barber 464 SE2d

358 195 W Va 38 (1995) West Virginia Code sect 38-4-8 states the process that must be

following in order to obtain a proper lien encumbering personal property

A writ of fieri facias or execution shall create a lien from the time it is delivered to the sheriff or other officer to be executed upon all of the personal property or the estate or interest therein

3 We believe that the controlling principle is that in the absence of some additional showing the lien ofa judgment attaches to the interest of the judgment debtor nothing more and nothing less Id (citing Westinghouse Lamp Co v Ingram 79 W Va 220 90 SE 837 (1916) Springston v Powell 113 W Va 638 169 SE 459 (1933raquo

P022SS9S1) 12

owned by the judgment debtor at the time of such deliver of the writ or which he may acquire on or before the return day thereof although such property was not levied on or capable of being levied on under the provisions of section six (sect 38-4-6) of this article (Emphasis Added)

W Va Code sect 38-4-8 (2016)

In this litigation the record shows that Respondent Judy did not obtain a judgment

against the Brozik Defendants (and specifically Secure US) until June 162014 See Certified

Docket Report Line 136 [Appx Pgs 3] Furthermore Respondent Judy did not obtain a writ of

execution (writ of fieri facias) until July 252014 and pursuant to West Virginia law the

judgment would not become a lien against the Brozik Defendants assets until the writ of

execution (writ of fieri facias) was properly issued and delivered to the Sheriff W Va Code sect

38-4-8 Barber v Barber 464 SE2d 358 195 W Va 38 (1995) As noted earlier this did not

happen until July 25 2014 Certified Docket Report Line 137 [Appx Pgs 3] Thus

Respondent Judys lien did not begin to encumber the Brozik Defendants (and specifically

Secure USs) assets until over two years after Betty Parmer purchased substantially all of Secure

USs assets at a secured party sale4 See Bill of Sale and Receipt dated May 7 2012 [Appx Pgs

60-62] This would mean that as a matter oflaw Respondent Judys judgment lien did not

attach to the assets of Betty Parmer that were eventually purchased by Kourt Security After all

a lien created pursuant to a perfected execution is both immediate and prospective but not

retroactive (Emphasis Added) Hartman v Corpening 178 SE 430 116 W Va 31 (1935)

As a result of that secured party sale and as a result of a writ of execution not being

issued until over two years after Betty Parmer purchased and obtained the assets Betty Parmer

became a purchaser assignee ofthe property for valuable consideration and thus obtained the

(P022SS9SI) 13

4

assets free and clear of any liens or other encumbrances - including the alleged encumbrances of

Respondent Judy See W Va Code sect 38-4-6 (2016) Hartman v Corpening 178 SE 430 116

W Va 31 (1935) It should also be noted that Respondent Judy never moved the Kanawha

County Circuit Court for leave to add Betty Parmer as a defendant after she became the owner of

substantially all Secure USs assets by submitting the highest bid at the secured party sale See

Certified Docket Report [Appx Pgs 1-5] Instead Respondent Judy chose to continue to pursue

the Brozik Defendants See Certified Docket Report [Appx Pgs 1-5]

When the Circuit Court ofKanawha County granted Respondent Judys Motion for

Summary Judgment it failed to take into account the fact that Betty Parmer became the owner of

the assets over two years before the Judy Respondents obtained its judgment and writ of

execution As a result when Kourt Security purchased the assets from Betty Parmer in

November of2014 Respondent Judys judgment against the Brozik defendant did not attach to

Betty Parmers assets and thus does not encumber any of the assets Kourt Security subsequently

purchased from Betty Parmer and now holds As a result The Circuit Court ofKanawha

Countys Untitled Order Granting Respondent Judys Motion for Summary Judgment is

erroneous and as a matter of law must be reversed

B The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because judgment was entered against Kourt Security without considering whether or not Betty Parmer had knowledge andor notice of the Respondents lien encumbering the Assets when they were purchased at the May 5 2012 secured party sale as required by W Va Code sect 38-4-9 (2016)

Pursuant to West Virginias black letter law

the lien ofa writ of fieri facias shall not be good as against a purchaser or assignee of the property subject to the lien for a valuable consideration without notice of such lien unless at the time of such purchase or assignment the writ shall have been actually leVied upon the property and the property shall have been in the actual possession of the officer ofsome person other than

(P02255951) 14

the judgment debtor holding such property for the officer

w Va Code sect 38-4-9 (2016) In its Motion for Summary Judgment Respondent Judy took the

position that Betty Parmer had notice of their judgment andor lien Motion for Summary

Judgment Against Defendant Kourt Security Partners LLC [Appx Pg 18] However no

evidence was put forth by Respondent Judy establishing that Betty Parmer had actual or

constructive notice ofRespondent Judys encumbrances and certainly not enough to establish

that there was no genuine issue of material fact with respect to whether Betty Parmer had actual

or constructive notice of Respondent Judys judgment andor lien There is but one self-severing

and conclusory line addressing Betty Parmers knowledge ofthe lien andor judgment Mitch

Broziks Aunt Betty (parmer) knew all about Mitchs problems and the judgment against him

and his companies Motion for Summary Judgment Against Defendant Kourt Security

Partners LLC [Appx Pg 18] This is not enough for one to properly conclude there is not

genuine issue of material fact as to Betty Parmers actual or constructive knowledge of

Respondent Judys judgment andor lien As a result W Va Code sect 38-4-9 becomes applicable

and Betty Parmer obtained the assets without them being encumbered by a Respondent Judy

lien5

Accordingly the evidence put forth and the facts surrounding this case establish that

Respondent Judy wholly failed to establish there was no genuine issue of material fact as to

Betty Parmers knowledge of a judgment or lien encumbering the Assets As a result the

granting ofRespondent Judys Motion for Summary Judgment in the Kanawha County Circuit

Court was erroneous and should be reversed

S It is undisputed that Betty Parmer purchased the assets for valuable consideration She was the high bidder at the May 5 2012 Secured Party Sale held on May 5 2012 See Bill of Sale and Receipt dated May 72012 [Appx Pgs 60-62]

P0225595 J 15

C The Circuit Courts Order entered March 1 2006 is erroneous and should be reversed because the Circuit Court ignored the fact that the May 5 2012 secured party sale was commercially reasonable and thus extinguished aU subordinate debt interests shyincluding that of the Respondent Judy

In its Motion for Summary Judgment Respondent Judy failed to put forth any evidence shy

or even allege - that the secured party sale held on May 5 2012 was not commercially

reasonable and thus failed to extinguish subordinate interests and subsequent liens See Motion

for Summary Judgment against Defendant Kourt Security Partners LLC [Appx Pgs 15-20]

West Virginias Uniform Commercial Code governs the disposition ofcollateral after a default

See W Va Code sect 46-9-610 Specifically it states that [a]fter default a secured party may sell

lease license or otherwise dispose ofany or all collateral in its present condition or following

any commercially reasonable preparation or processing Id at 61O(a) West Virginia requires

all aspects of the sale be commercially reasonable See W Va Code sect 46-9-610(b) See also

Bank of Chapmanville v Workman 406 SE2d 5861-62 185 W Va 161 164-65 (1991)

Whether or not aspects of the sale are commercially reasonable are questions of fact not law

See In re Godfrey 537 BR 271 282 87 UCC RepServ2d 866 Case No 112-bk-1473 Adv

Proc No1 13-ap-24 (NDW Va Bankr Ct 2015)6

The West Virginia Code also dictates the status of the collateral after disposition [a]

secured partys disposition ofcollateral after default (1) transfers to a transferee for value all of

the debtors rights in the collateral (2) discharges the security interest under which the

disposition is made and (3) Discharges any subordinate interest or other subordinate lien

(Emphasis added) W Va Code sect 46-9-617(a)(1-3) (2016) If we assume for the sake of

argument that Respondent Judy did have an interest or lien which encumbered the Brozik

6 In Summary Issues regarding commercially reasonable disposition notification and the timing of the notification are questions of fact - not law Id at 282

(P0225595I ) 16

Defendants (and specifically Secure USs) property on or before May 5 2012 this lien would

have been junior to that ofBetty Panner and thus would have been extinguished after the secured

party sale pursuant to W Va Code sect 46-9-617(a)(l-3) The only way this would not have been

the case is if the sale was ruled not commercially reasonable In their argument within their

motion for summary judgment and their argument at the hearing on February 26 2016

Respondent Judy did not put forth documents affidavits testimony statements or other

evidence which would support the position that would be necessary for a motion for summary

judgment to be properly granted there is no genuine issue ofmaterial fact as to the commercial

reasonableness of the May 5 2012 secured party sale

When Kourt Security argued as much in its response to Plaintiffs Motion for Summary

Judgment Respondent Judy (1) did not file a reply refuting Kourt Securitys argument and (2)

did not address Kourt Securitys argument at the Febuary 262016 hearing See Defendant

Kourt Security Partners LLCs Response to Plaintiffs Motion for Summary Judgment [Appx

Pgs 30-32] See also The fact that - pursuant to W Va Code sect 46-9-6 I 7(a)(l-3) - the May 5

2012 secured party sale would have worked to discharge any subordinate interest or lien

encumbering the Secure US assets Betty Panner was purchasing was seemingly ignored by both

Respondent Judy and the Circuit Court of Kanawha County See Plaintiffs Motion for

Summary Judgment against Defendant Kourt Security Partners LLC [Appx Pgs 15-20] See

also February 262016 Motion for Summary Judgment Hearing Transcript [Appx Pgs 96-98]

See also Untitled Order Granting Plaintiffs Motion for Summary Judgment [Appx Pgs 75-78]

When the facts from the record are taken in the light most favorable to the non-moving

party as required under a Rule 56 motion for summary judgment analysis the Circuit Court of

Kanawha Countys order granting judgment in favor ofRespondent Judy was undoubtedly

P022SS9S1 17

erroneous Consequently because Respondent Judy wholly failed to establish by way of

submitted evidence that there is no genuine issue ofmaterial fact that the May 5 2012 secured

party sale was not commercially reasonable and the Circuit Court ofKanawha Countys untitled

order granting Respondent Judys Motion for Summary Judgment must be reversed

D The Circuit Courts Order entered March 12016 is erroneous and should be revered because the Circuit Court made numerous factual fmdings that are not supported by the record as required by West Virginia law

The Circuit Courts Untitled Order Granting Plaintiffs Motion for Summary Judgment

entered March 1 2016 must be reversed and the case remanded for additional factual

consideration because the Circuit Court made numerous findings of facts which were either (1 )

completely unsupported by the record or (2) which were contradicted by the record This

violates Headnote 3 and 4 of South Side Lumber Company v Stone Construction Company 152

SE2d 721 151 W Va 439 (1967) and as a result the Order should be reversed and remanded

for further consideration

First the Circuit Courts Untitled Order finds that Betty Parmer solicited the defendant

Kourt Security Partners LLC dba Select Security to help her assist her nephew Untitled Order

Granting Plaintiffs Motion for Summary Judgment [Appx Pgs 75-76] This statement is

incorrect and is not supported in any way by the record Kourt Security was hired by Betty

Parmer to manage her assets after she fIred MB Security LLC and Mitchell Brozik and forced

him out by Court Order entered May 6 2014 in Civil Action No 13-C-651 in the Circuit Court

ofMonongalia County West Virginia Kourt Security never assisted Mr Brozik and his

companies and Respondent Judy has put forth no evidence whatsoever asserting as much

Second The Circuit Courts Untitled Order fmds that [o]n May 7 2012 Betty Parmer

purchased Secure US Inc and all of its assets from herself by virtue of the security agreement

(P02255951) 18

she bought from the Milan Puskar Trust in the northern federal district court case Untitled

Order Granting Plaintiffs Motion for Summary Judgment [Appx Pgs 77] This finding is

contradictory to the record of this case Betty Parmer did not purchase Secure US Inc Betty

Parmer purchased substantially all of the assets of Secure US Inc See Bill of Sale and Receipt

dated May 72012 [Appx Pgs 60-62] Nowhere in the record is there evidence establishing that

Secure US Inc was purchased by Betty Parmer and the Bill of Sale and Receipt dated May 7

2012 - which clearly Sh9wS that only assets were purchased - was never refuted by Respondent

Judy There is a very big difference - both legally and factually - between purchasing all of the

stock ofa company and purchasing substantially all of its assets As a result this finding was

incorrect and erroneous

Third The Circuit Courts Untitled Order finds that [i]n May 2014 she (Betty Parmer)

entered into a management agreement with defendant Kourt Security Partners dba Select

Security at which time Kourt was already aware ofplaintiffs judgment Untitled Order

Granting Plaintiffs Motion for Summary Judgment [Appx Pgs 76] This finding is incorrect

and contrary to the evidence in the record Respondent Judy did not obtain its judgment against

Secure US Inc until June 162014 - over one month after Kourt Security was hired by Betty

Parmer to manage her assets See Certified Docket Report Line 136 [Appx Pgs 3] It is simply

impossible for Kourt Security to have had knowledge about a judgment before said judgment

was even issued

As Headnotes 3 and 4 in South Side Lumber Company v Stone Construction Company

along with Rule 52(a) of the West Virginia Rules of Civil Procedure make clear the Court must

adopt fmdings of fact and conclusions of law that are supported by the record See W VA R

(P0225595i) 19

CIV P 52(a) See also Headnotes 3 and 4 Southside Lumber Company v Stone Construction

Company 152 SE2d 721 151 W Va 439 (1967) The Court explained why within its opinion

The foregoing provision ofthe rule was intended to require the trial judge to make his fmdings of

facts prior to or at the time judgment is entered in the case The reason for such requirement is

that findings of facts are helpful in the decision ofa case are important factors in the proper

application ofthe doctrines ofres judicata and estoppel by judgment and are also an aid to an

appellate court in considering a case on review Id at 725 and 443

Here the serious errors in the factual fmdings of the Circuit Courts Untitled Opinion

renders it fatally deficient and is the type oferror that rises to the level or requiring the Order to

be reversed and remanded for further consideration Failure to do so would allow wholly

unproven - and at times contradicted ~ facts to be established as truth and act as an injustice to

~ourt Security

PRAYER FOR RELIEF

WHEREFORE for the reasons stated herein Petitioner Kourt Security Partners LLC

pray that their petition for appeal be granted and that they be granted the following relief

1 The Circuit Courts Untitled Order Granting Plaintiffs Motion for Summary Judgment be

vacated and reversed and remanded with specific instructions that the Circuit Court is to

properly consider West Virginia statutory law regarding Writs ofExecution on Personal

Property (Writ ofFieri Facias)


vacated and reversed and reman4ed with specific instructions that the Circuit Court is to

properly consider whether or not Betty Parmer had actual or constructive knowledge andor

notice ofRespondent Judys judgment andor lien

P022SS9S1 20



properly consider whether or not the May 5 2012 secured party sale was commercially

reasonable and thus extinguished all subordinate debt interests



after additional briefing and additional argument issue findings of fact that are properly

supported by the record and

5 Grant any and all other relief this Honorable Court deems reasonable and just

Respectfully Submitted

KOURTSECUErrTYPARTNERSLLC Petitioners by Counsel

Charles J Kaiser Jr Esq (WV Bar No 1946) Jeffery D Kaiser Esq (WV Bar No 12284) PHILLIPS GARDILL KAISER amp ALTMEYER PLLC 61 Fourteenth Street Wheeling WV 26003 P (304) 232-6910 F (304) 232-4918 E cjkaiserpgkacom amp jeffkaiserpgkacom

P02255951 21

CERTIFICATE OF SERVICE

I Jeffery D Kaiser Esq hereby certify that I served the attached Petitioners Brief on

the parties below by placing the same in the United States Mail first class postage prepaid on

this 13th day of September 2016

Mr Charles E Hurt Esq The Law Offices ofCharles E Hurt 1671 Woodvale Drive Charleston WV 25314 Counsel for Respondents Judys Locksmiths Inc And Judith J Ransom

Mr Mitchell Brozik 3101 N Greystone Drive Morgantown WV 26508 Owner ofSecure Us Inc and Serbain Fonz LLC

Charles J Kaiser Jr Esq (WV Bar No 1946) Jeffery D Kaiser Esq (WV Bar No 12284) PHILLIPS GARDILL KAISER amp ALTMEYER PLLC 61 Fourteenth Street Wheeling WV 26003 P (304) 232-6910 F (304) 232-4918 E cjkaiserpgkacom amp jeftkaiserpgkacom

(P02255951) 22

TABLE OF CONTENTS

TABLE OF AUTHORITIES 4

ASSIGNMENTS OF ERROR bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull 5

I The Circuit Courts Order entered March 12016 is erroneous and should be reversed because judgment was entered against Kourt Security without considering whether or not Betty Parmer had knowledge andor notice of the Respondents lien encumbering the Assets when they were purchased at the May 52012 secured party sale as required by W Va Code sect 38-4-9 (2016) 5

II The Circuit Courts Order entered March 12016 is erroneous and should be reversed because the Circuit Court failed to consider West Virginias statutory law regarding Writs of Execution on personal property (Writ ofFieri Facias) 5

ill The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because the Circuit Court ignored the fact that the May 5 2012 secured party sale was commercially reasonable and thus extinguished all subordinate debt interests - including that of the Respondents 5

IV The Circuit Courts Order entered March 1 2016 is erroneous and should be revered because the Circuit Court made numerous factual findings that are not supported by the record as required by West Virginia law 5

STATEMENT OF TIlE CASE 5

A Procedural History 5

B Statement of Facts 7

STANDARD OF REVIEW 10

SUMMARY OF ARGUMENT 41 bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull10

STATEMENT REGARDING ORAL ARGUMENT AND DECISION 12

ARGUMENTbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull12

A The Circuit Courts Order entered March 1 2016 is erroneous and should be reversed because the Circuit Court failed to consider West Virginias statutory law regarding Writs of Execution on personal property (Writ of Fieri Facias) bullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbullbull12

(P022SS9SI) 2






P02255951 3




(1967) 5 18 1920












Statutes

W Va Code sect 38-4-9 (2016) 14 15

W Va Code sect 38-4-5 (2016) 12

W Va Code sect 38-4-8 (2016) 12 13

W Va Code sect 38-4-6 (2016) 14

W Va Code sect 46-9-610 (2016) 16

W Va Code sect 46-9-617 (2016) 16 17


W Va Code sect 46-9-61O(b) (2016) 16

Procedural Rules

W VARCIVP 56(c) 10

W VA R elV P 52(a) 1920

P02255951 J 4






(2016)







the Respondents




152 SE2d 721 (1967)







P022SS9S1 5
























P0225595I 6

























(P02255951 7










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22






P02255951 3




(1967) 5 18 1920












Statutes

W Va Code sect 38-4-9 (2016) 14 15

W Va Code sect 38-4-5 (2016) 12

W Va Code sect 38-4-8 (2016) 12 13

W Va Code sect 38-4-6 (2016) 14

W Va Code sect 46-9-610 (2016) 16

W Va Code sect 46-9-617 (2016) 16 17


W Va Code sect 46-9-61O(b) (2016) 16

Procedural Rules

W VARCIVP 56(c) 10

W VA R elV P 52(a) 1920

P02255951 J 4






(2016)







the Respondents




152 SE2d 721 (1967)







P022SS9S1 5
























P0225595I 6

























(P02255951 7










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22




(1967) 5 18 1920












Statutes

W Va Code sect 38-4-9 (2016) 14 15

W Va Code sect 38-4-5 (2016) 12

W Va Code sect 38-4-8 (2016) 12 13

W Va Code sect 38-4-6 (2016) 14

W Va Code sect 46-9-610 (2016) 16

W Va Code sect 46-9-617 (2016) 16 17


W Va Code sect 46-9-61O(b) (2016) 16

Procedural Rules

W VARCIVP 56(c) 10

W VA R elV P 52(a) 1920

P02255951 J 4






(2016)







the Respondents




152 SE2d 721 (1967)







P022SS9S1 5
























P0225595I 6

























(P02255951 7










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22






(2016)







the Respondents




152 SE2d 721 (1967)







P022SS9S1 5
























P0225595I 6

























(P02255951 7










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22
























P0225595I 6

























(P02255951 7










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22

























(P02255951 7










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22










Trust














(P022SS9S1 ) 8




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22




encumber the assets








[Appx Pg 3]










(PO~SS9S1) 9



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22



STANDARD OF REVIEW




192 (1994)
















P022SS9Si 10


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22


















Secure US




P022SS9Si 11





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22





Appellate Procedure

ARGUMENT
















P022SS9S1) 12


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22


W Va Code sect 38-4-8 (2016)



















(P022SS9SI) 13

4




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22




















(P02255951) 14
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22
















lien5







P0225595 J 15






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22






















(P0225595I ) 16
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22
























P022SS9S1 17























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22























(P02255951) 18



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22



















was even issued




(P0225595i) 19












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22












~ourt Security

PRAYER FOR RELIEF











P022SS9S1 20













P02255951 21








(P02255951) 22













P02255951 21








(P02255951) 22








(P02255951) 22

petitioner's brief, kourt security partners, llc v. judy’s ......the plaintiffs in this civil...

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