MORGANTOWN - A Pennsylvania woman is suing three attorneys and MB Security for legal malpractice and negligence.
Mitchell Brozik, Thomas Lupec, Brandon Kupec and Gregory Morgan were also named as defendants in the suit.
In February 2004, Security US filed a lawsuit against Security Alarm Financing Enterprises Inc. alleging claims for tortious interference and defamation, according to a complaint filed Sept. 6 in Monongalia Circuit Court.
In March 2004, SAFE removed the action to the U.S. District Court for the Southern District of West Virginia and then filed counterclaims for defamation, tortious interference and common law unfair competition, according to the suit.
Betty Parmer, the plaintiff in the lawsuit, claims during a two-day trial, the Southern District found in SAFE's favor on both Secure US's claims and SAFE's counterclaims and, in addition to the compensatory damages that it award for Secure US's tortious interference with SAFE's contractual relationships, the Southern District also awarded $100,000 in punitive damages to punish Secure US for its malicious, oppressive, wanton and willful misconduct.
On Nov. 4, 2010, the Southern District entered a defense judgment in favor of SAFE and also entered a judgment on SAFE's counterclaims against Secure US in the amount of $1,132,028.42 plus interest and taxable costs, according to the suit.
"Because Secure US's assets were believed to be located primarily in Morgantown, SAFE properly registered a certified copy of the judgment with the United States District Court for the Northern District of West Virginia in July 2011," the complaint states.
Parmer claims on Aug. 16, 2011, the court issued a Writ of Fieri Facias and appointed a magistrate judge to seize and sell Secure US's assets in order to satisfy the judgment.
Under West Virginia law, SAFE obtained a lien upon Secure US's assets upon the delivery of the Writ of Fieri Facias to the magistrate judge, according to the suit.
Parmer claims in December 2011, SAFE filed a motion for sale of customer accounts with an attached list of Secure US's customer accounts subject to sale in order to execute on the judgment.
Secure US filed a response in which it opposed the sale of the customer accounts and Brozik contacted Parmer, who is his aunt, and asked her if she would by his company, which she declined to do so, according to the suit.
Parmer claims Brozik asked her to loan him some money, which she agreed to do so.
"In addition, the Milan Puskar Amended and Restated Revocable Trust ... which alleged that it had s superior lien on all of Secure US's property in the amount of approximately $4.4 million, moved to intervene so that it could oppose the sale," the complaint states.
Both Secure US and the trust opposed the sale on the basis that the sale proceeds would be insufficient to pay the $4.4 million that Secure US owed the trust, according to the suit.
Parmer claims she then met with Brandon Kupec and Brozik and discussed the terms of the proposed loan and then submitted briefs in support of their respective positions.
The magistrate judge held an evidentiary hearing on Feb. 3, 2012, and at the hearing, Secure US offered an expert witness who testified that Secure US had no material assets other than its customers accounts, according to the suit.
"Secure US's expert testified that, although a buyer would pay $3,710,000 for Secure US in a non-distressed situation, a buyer would only pay $2,590,000 for Secure US in a distressed situation," the complaint states.
Parmer claims on March 14, 2012, the magistrate judge entered an order granting SAFE's motion for sale of the customer accounts and both Secure US and the trust filed objections to the order with the court.
On April 12, 2012, the district court entered an order overruling the objections, affirming the order granting sale, denying the trust's expedited motion to stay the sale and directing the sale to proceed as scheduled, according to the suit.
Parmer claims Brandon Kupec, on behalf of her and Brozik, participated in arranging for and attending a closing at CENTRA Bank in Morgantown on April 19, 2012, wherein Parmer executed financing documents and borrowed approximately $2.5 million from CENTRA in order to purchase a note held by the trust.
On the same day, Brandon Kupec prepared and delivered a letter purportedly from Parmer to Secure US and Brozik demanding payment in full of the note, according to the suit.
Parmer claims Kupec also prepared and delivered a letter purportedly from Brozik to her, informing her he could not pay the note and advised her to take whatever action she felt appropriate.
On April 20, 2012, Thomas Kupec and Brandon Kupec, acting on behalf of Parmer, began the process necessary to foreclose on the property/assets of Secure US, which secured the note purchased by Parmer, according to the suit.
Parmer claims SAFE objected to the sale on April 22, 2012, because "certain irregularities existed in conjunction with the proposed sale by the secured party..."
On May 2, 2012, SAFE received a response letter from Morgan of Young, Morgan & Cann, and responded to the letter on May 4, 2012, and SAFE advised that the continued and deliberate withholding of the secured party's identity constituted an irregularity associated with the sale.
SAFE also advised Morgan that the notice imposed unusual terms and conditions that would discourage potential buyers from participating in the sale and limit the amount that a buyer would be willing to pay for Secure US's assets, according to the suit.
Parmer claims on the morning of the secured party sale, and despite multiple bidder requests, counsel and/or Secure US refused to allow the bidders to inspect the assets and customers accounts that were exposed to sale.
Secure US also denied potential buyers access to Secure US's large warehouse, according to the suit.
Parmer claims the sale was also not conducted by a professional and, instead, was conducted by Morgan.
Patrick Egan, a potential buyer, offered to purchase the assets for $3.6 million in cash, more than $1 million more than the amount that Secure US's expert testified at the evidentiary hearing that the assets would even receive in a distressed sale, according to the suit.
Parmer claims despite being more than $1 million more than she had paid to purchase the note from the trust just weeks earlier, Morgan, on behalf of her, did not accept the $3.6 million cash bid and the associated profit.
Instead, Morgan purchased the assets for $4 million by issuing a credit bid, meaning that no cash was paid at all, according to the suit.
Parmer claims Morgan did not have authorization from her to reject the $3.6 million cash bid or to make the $4 million credit bid.
In spite of being the owner of all the assets of Secure US, Parmer has also been denied access to any of her assets, any information about the company/assets shoe now owns as a result of the sale conducted on May 5, 2012, according to the suit.
Parmer claims the defendants were negligent and their actions constituted legal malpractice.
Parmer is seeking compensatory damages. She is being represented by S. Sean Murphy.
Monongalia Circuit Court case number: 13-C-651