Kourt Security Partners, LLC v. Judy's Locksmiths, Inc., and Judith J. Ransom
239 W. Va. 757
| W. Va. | 2017Background
- Judy’s Locksmiths (Respondents) sold business assets to Brozik-owned companies in 2008; payment default led to litigation and a 2014 judgment in favor of Judy’s for $47,184.24 (judgment entered June 19, 2014; became a lien July 25, 2014).
- Brozik’s financial troubles prompted third parties to acquire interests: Mylan Puskar trust bought Secure US debt (2009), then Betty Parmer purchased that debt and acquired Secure US assets at a secured-party sale (May 5, 2012).
- Parmer initially retained MB Security (Brozik-related) to manage the assets, later replaced MB Security with Kourt Security Partners (Select Security) to manage and then sold the assets to Kourt (November 2014 sale to Petitioner).
- Respondents amended their complaint to add Kourt (Petitioner) in July 2015 and moved for summary judgment; the circuit court granted summary judgment for Respondents (March 1, 2016), awarding ~$48,731, finding Kourt/Parmer were not bona fide purchasers with notice.
- Petitioner appealed, arguing genuine issues of material fact existed about Parmer’s actual or constructive notice, commercial reasonableness of the 2012 sale, and other factual findings; the Supreme Court of Appeals reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Parmer (and thus Kourt) was a bona fide purchaser without notice of Respondents’ lien | Respondents: Parmer knew or was on notice of Respondents’ claims and thus purchasers were not bona fide purchasers | Petitioner: There are genuine factual disputes; judgment and lien recorded after Parmer’s 2012 purchase so she lacked notice | Court: Reversed summary judgment — genuine issues of material fact exist on bona fide purchaser/notice, so summary judgment improper |
| Whether summary judgment was appropriate on these facts | Respondents: Summary judgment proper because evidence showed awareness/participation | Petitioner: Summary judgment improper; issues of intent/knowledge require fact-finder | Court: Summary judgment inappropriate where motive/notice factual; doubts resolved against movant |
| Whether the 2012 secured-party sale extinguished subordinate claims as commercially reasonable | Petitioner: Sale was commercially reasonable and extinguished subordinate interests | Respondents: Sale did not defeat their rights due to notice/constructive knowledge | Court: Declined to resolve on appeal; left for lower court given factual disputes |
| Whether later jury findings in related Brozik v. Parmer affect notice inquiry | Petitioner: Related decision found Brozik fraudulently induced Parmer and she lacked awareness, supporting disputed facts | Respondents: Argued Parmer still had knowledge/participation | Court: Noted the related jury verdict supports existence of factual disputes about Parmer’s awareness; did not decide final impact |
Key Cases Cited
- Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (de novo review of summary judgment)
- Aetna Cas. & Sur. Co. v. Fed. Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (summary judgment standard; doubts resolved against movant)
- Williams v. Precision Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (summary judgment: nonmoving party must show essential-element proof)
- Kyger v. Depue, 6 W.Va. 288 (definition: bona fide purchaser buys in good faith)
- Pocahontas Tanning Co. v. St. Lawrence Boom & Mfg. Co., 63 W.Va. 685, 60 S.E. 890 (what puts purchaser on inquiry = notice)
- Clark v. Lambert, 55 W.Va. 512, 47 S.E. 312 (bona fide purchaser must acquire title before notice)
- Hanlon v. Bowman, 169 W.Va. 405, 287 S.E.2d 519 (issues of knowledge/intent often inappropriate for summary judgment)
- Masinter v. WEBCO Co., 164 W.Va. 241, 262 S.E.2d 433 (summary judgment unwarranted where motive/intent involved)
- Wolfe v. Alpizar, 219 W.Va. 525, 637 S.E.2d 623 (bona fide purchaser status where absence of documentation that should have alerted purchaser)
- Subcarrier Commc’ns, Inc. v. Nield, 218 W.Va. 292, 624 S.E.2d 729 (definition and requirements of bona fide purchaser)
- Hartman v. Corpening, 116 W.Va. 31, 178 S.E. 430 (lien of a perfected execution is immediate and progressive, but not retroactive)