MORGANTOWN — The state Supreme Court has closed another chapter in the years-long legal-battle saga of former Morgantown businessman Mitch Brozik and his aunt, Betty Parmer.
This case doesn’t involve Brozik but legal fees connected to a $2.5 million loan Parmer took from Centra Bank (now United Bank) to buy Brozik’s former security company. Parmer took the loan in 2013 and later defaulted on it.
In its recent memorandum decision, the court unanimously upheld a 2019 Monongalia County Circuit Court ruling in United’s favor to enforce a settlement agreement between Parmer and United – an agreement in which Parmer’s attorney mistakenly sent $212,500 to a fraudulent company posing as United.
In September 2013, in Monongalia County Circuit Court, Parmer sued Brozik, his company MB Security (successor to Secure US), and two attorneys.
Parmer claimed she was fraudulently induced to buy the assets of Secure US for $2.5 million, duped into signing over the company management to Brozik through MB Security, and denied access to her assets. Parmer acquired the $2.5 million through a loan from Centra Bank, claiming she thought she was lending Brozik the money.
That case was adjudicated in Parmer’s favor and there were various other cases associated with the affair, but this is one of several involving the loan. Following litigation, Parmer wired the remaining principal of the loan, $606,961.62 to United. But she still owed legal fees totaling $294,956.48. She failed to pay and United initiated this case in April 2016.
Parmer filed counterclaims that the circuit court dismissed in December 2018. In the meantime, United claimed entitlement to an additional $25,000 for legal and court fees in the current case.
They entered mediation in April 2019 and settled on an amount of $212,500 that Parmer was to pay within 10 days. It included a “hypothecation agreement” holding the assets of Brozik’s former company, now owned by Lancaster, Pa.-based Kourt Security, which does business as Select Security.
Two days later, Parmer’s lawyer emailed United for the information to transfer the funds and received account information for a Texas company called CB Ventures at a Texas Chase Bank. The lawyer wired the money.
Three weeks later, Parmer’s lawyer objected to the hypothecation agreement and in the ensuing conversation both sides learned the parties behind CB Ventures had somehow hacked into the email exchanges and sent the lawyer fraudulent instructions, leading Parmer to pay the hackers instead of United.
In August 2019, both sides moved to enforce the settlement. United because it didn’t receive the money, Parmer because she sent it and it wasn’t her fault it went to the wrong place.
In a December hearing, Parmer also challenged the collateral agreement, believing it still held her liable for the loan. United said the agreement didn’t hold her liable for anything, it just maintains its rights over the collateral.
In January this year, the circuit dismissed the case, saying Parmer still owed the legal fees and that she took too long to object to the collateral agreement, so it was still valid.
So Parmer appealed to the state Supreme Court, alleging the circuit court committed four errors. The Supreme Court found no errors and upheld the circuit court’s ruling.
“Ms. Parmer did not dispute United’s representations to the court or claim that the formal settlement agreement and release contained a term that varied in any material respect from the agreement reached at mediation, despite having ample opportunity to do so,” the Supreme Court said.
And the failure to verify that Parmer’s lawyer was sending her money to the right place falls on the Parmer and her lawyer, the court said. Parmer had previously sent money to United and had the correct information.
“Ms. Parmer suggests that United was actually in the best position to prevent this fraud, but she does not explain how. In reality, had Ms. Parmer or her counsel exercised reasonable care and verified the wire transfer instructions her counsel received, the loss could have been averted.”
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