Security Alarm Financing Enterprises, Inc. v. Parmer et al

Filing 194

MEMORANDUM OPINION AND ORDER ADOPTING MAGISTRATE JUDGE'S ORDER OF SALE AND OVERRULING DEFENDANT'S OBJECTIONS. The Court overrules the Defendant Brozik's 191 Objections to Order Granting Motion for Sale of Assets and the 192 Suppl emental Objection and adopts the Magistrate Judge's 186 Order Granting Motion for Sale of Assets and 187 Amended Order Attaching Notice of Sale to Order Granting Motion for Sale of Assets. The sale shall proceed at the time and place designated in said orders. Signed by Senior Judge Frederick P. Stamp, Jr. on 9/5/14. (mh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
SECURITY ALARM FINANCING
ENTERPRISES, INC.,
Plaintiff,
v.

Civil Action No. 1:12CV88
(STAMP)

BETTY PARMER, SECURE US, INC.,
and MITCH BROZIK,
Defendant.
MEMORANDUM OPINION AND ORDER
ADOPTING MAGISTRATE JUDGE’S ORDER OF SALE
AND OVERRULING DEFENDANT’S OBJECTIONS
I.

Background

In this civil case, defendant Mitch Brozik (“Brozik”) objects
to the sale of assets to satisfy a judgment that this Court awarded
to plaintiff Security Alarm Financing Enterprises, Inc. (“SAFE”) on
May 22, 2014.

This case involves an alleged sham sale of Brozik’s

former company, Secure US, Inc. (“Secure US”), to his aunt, Betty
Parmer (“Parmer”).

Brozik allegedly sold Secure US to Parmer to

avoid a monetary judgment that plaintiff received.

On May 22,

2014, this Court entered a judgment for plaintiff against Parmer
equaling $1,132,028.42. Then on May 28, 2014, this Court issued an
order granting the plaintiff’s writ of fieri facias and appointed
United States Magistrate Judge James E. Seibert as the officer to
seize and sell the property of Secure US in order to satisfy the
judgment against it.

On June 19, 2014, SAFE filed a motion seeking an order of sale
of

assets.1

Following

this,

the

magistrate

judge

held

an

evidentiary hearing on July 15, 2014, where all parties involved
presented evidence and testimony regarding SAFE’s motion.

During

the hearing, all witnesses testified that as time passed, the
assets’ value would decrease.

Magistrate Judge Seibert entered an

order granting the motion for sale of assets finding (1) the
testimony and evidence presented credible, aside from Brozik’s
testimony to the contrary and (2) that the sale should proceed
because it is in the best interests of the parties.

Brozik

asserted that a pending state court claim, scheduled for September
2,

2014,

remained

pending

between

ownership of the assets to be sold.

him

and

Parmer

regarding

Thus, he argued, the sale

should not be granted until the pending state court claim was
resolved.

Despite this, Magistrate Judge Seibert found it in the

best interest of the parties to enter an order for the sale of
assets because of the continued decline in the assets’ value
resulting from this continued litigation.

Under the Sale Orders,

the sale was scheduled to occur on Tuesday, September 9, 2014, at
9:30 a.m.

1

Brozik’s objections in this opinion specifically refer to
Magistrate Judge Seibert’s “Amended Order Attaching Notice of Sale
to Order Granting Motion for Sale of Assets” (ECF No. 187).
However, this later amended order incorporates the terms of the
prior order of sale (ECF No. 186). Thus, this Court refers to both
orders collectively as “Sale Orders” and applies Brozick’s
objections to both.
2

Following Magistrate Judge Seibert’s Sale Orders, Brozik filed
both an objection and supplemental objection on August 25, 2014.
Brozik objects to the Sale Orders on four grounds.

First, Brozik

argues that sale should include no vehicles, referring to testimony
he claims shows that the vehicles were not included in the sale of
Secure US to Parmer.
Second, Brozik claims that his testimony has credibility
regarding the assets’ value.

In Magistrate Judge Seibert’s order,

he states that Brozik is not credible regarding determinations of
the assets’ value, where Brozik argued that the assets would not
decline in value.

In objecting to the order, Brozik refers to Pat

Egan (“Egan”), who currently manages the assets, suggesting that
Egan’s statements were incorrect and thus Egan, rather than Brozik,
lacks credibility.
Third, Brozik objects to the funds not being placed in escrow.
Under Magistrate Judge Seibert’s order, Brozik would be reimbursed
for any variations from the sale prices in his favor that arise
from the state court claims regarding the ownership of the assets.
Fourth, Brozik argues that his personal property should not be
included in the asset sale because the value from the sale will
fail to fully reimburse him regarding the personal property’s
intrinsic and sentimental value.
On August 25, 2014, Brozik filed a supplemental objection that
provides a fifth objection.

Brozik here claims that the assets

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would be subject to a state court hearing to determine ownership on
September 2, 2014.

Because the ownership of assets remained in

controversy, Brozik argues that the sale should be postponed until
after the state court claims regarding ownership are litigated.
In response to Brozik’s objections, SAFE filed a response on
August 29, 2014.

In the response, SAFE asserts three claims.

First, SAFE argues that the state court proceedings concluded in
its favor.

Second, SAFE claims that Brozik’s credibility argument

against Pat Egan’s testimony concerning the ownership of the
vehicles is irrelevant. Specifically, plaintiff points to the bill
of sale on record, which indicates that at the time of conveyance,
the vehicles were included in the assets conveyed to Parmer.
Finally, plaintiff argues that it will suffer irreparable harm
should the sale date be moved because of the harm to the assets’
value.
For the reasons stated below, this Court upholds the order of
sale and overrules Brozick’s motion
II.

Applicable Law

Title 28, United States Code, Section 636(b)(3) provides that
“[a] magistrate judge may be assigned such additional duties as are
not inconsistent with the Constitution and laws of the United
States.”

See also L. R. Civ. P. 72.01 (stating that a magistrate

judge of this district is designating to perform, and may be
assigned, any duty allowed by law to be performed by a magistrate

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judge).

This “additional duties” clause of § 636 does not provide

a statutorily defined standard of review. However, because “orders
relating to postjudgment execution . . . are more analogous to
nondispositive pretrial discovery dispositions,” this Court applies
the “clearly erroneous” standard of review to the magistrate
judge’s order. Fuddruckers, Inc. v. KCOB I, L.L.C., 31 F. Supp. 2d
1274, 1276 n.1 (D. Kan. 1998); see also 12 Charles A. Wright &
Arthur R. Miller, Federal Practice and Procedure § 3068.1 (2d ed.
1997)

(“[o]rders

discovery,

for

regarding
example,

the

hardly

scheduling
seem

to

of

postjudgment

warrant

de

novo

reexamination by the district court”).
Under the clearly erroneous standard, the court must accept
the trier’s findings of fact and the conclusions drawn from it,
unless “after scrutinizing the entire record, [the court] form[s]
a strong unyielding belief that a mistake has been made.”

Avery

v. Hughes, 2010 WL 1009987, No. 09-CV-265 (D.N.H. Mar. 16, 2010)
(quoting Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 4 (1st
Cir. 1999)).

Or, stated differently, clearly erroneous means that

“although there is evidence to support it, the reviewing court on
the entire evidence is left with the definite and firm conviction
that a mistake has been committed.” United States v. United States
Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 92 L. Ed. 746 (1948);
see also Story v. Norwood, 659 F.3d 680, 685 (8th Cir. 2011)
(expounding on clear error standard).
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III.

Discussion

As mentioned above, Brozik first argues that the sale should
include no vehicles.

He refers to Egan’s testimony that vaguely

suggests Egan may not have thought the vehicles were to be included
in the sale.
demonstrate

Brozik also provides other testimony he claims may
that

the

vehicles

should

not

be

included.

The

magistrate judge found this assertion fruitless, and ordered the
cars to be included in the sale.

Further, the magistrate judge

also provided that if any assets later proved to be owned by
someone other than Parmer, then Brozik may be reimbursed if the
circumstances warrant.
argues

that

Brozik’s

In its response to this objection, SAFE
credibility

argument

against

Pat

Egan’s

testimony concerning the ownership of the vehicles is irrelevant.
Specifically, SAFE points to the bill of sale on record, which
indicates that at the time of conveyance, the vehicles were
included in the assets conveyed to Parmer.
This Court agrees with the magistrate judge’s Sale Orders.
Brozik bases his entire objection regarding the vehicles on only a
handful of irrelevant and ambiguous phrases muttered by Egan. This
hardly demonstrates that the magistrate judge clearly made a
mistake.

Thus, this Court affirms the magistrate judge’s Sale

Orders and overrules Brozik’s objection.
Brozik

next

claims

that

regarding the assets’ value.

his

testimony

has

credibility

In Magistrate Judge Seibert’s order,

6

he states that Brozik is not credible regarding determinations of
the assets’ value, where he argued that the assets would not
decline in value.
to

Egan’s

In objecting to the order, Brozik refers again

testimony,

suggesting

that

Egan’s

statements

were

incorrect and thus Egan, rather than Brozik, lacks credibility.
However, in the magistrate judge’s Sale Orders, he points out that
SAFE used the testimony of witnesses who have vast experience both
in the security industry and with the assets at issue.
This Court affirms the magistrate judge’s Sale Orders and
findings as to that objection. The testimony Brozik provided is not
convincing.

At most, the testimony provides instances where

witnesses misidentified individuals that lacked any consequence to
the action, or attempts to corroborate Brozik’s testimony so as to
increase his credibility.
Orders should proceed.

This is irrelevant to whether the Sale

Thus, this Court affirms the magistrate

judge’s order and overrules Brozik’s objection.
Next, Brozik objects to the funds not being placed in escrow.
Further, he also objects that his personal property should not be
included in the sale of assets because the value from the asset
sale will fail to fully reimburse him regarding the personal
property’s intrinsic and sentimental value. Under Magistrate Judge
Seibert’s

Sale

Orders,

Brozik

would

be

reimbursed

for

any

variations from the sale prices in his favor that arise from the
state court claims regarding the ownership of the assets.

7

The

magistrate judge provided this reimbursement contingency which will
protect any value Brozik may deserve from the sale.

The potential

for reimbursement protects Brozik in the event that he may be owed
anything from the sale or if future proceedings impact ownership of
the assets.

Thus, this Court agrees with the magistrate judge’s

order and overrules Brozik’s objection.
Finally, Brozik objects to the Sale Orders because the assets
are subject to a state court proceeding to determine ownership on
September 2, 2014.

Because the ownership of assets remained in

controversy, Brozik argues that the sale should be postponed until
after the state court claims regarding ownership are litigated.
Again, the magistrate judge provided in the order that Brozik would
be reimbursed for any value he may be owed after the sale, should
circumstances warrant or ownership of the assets change.

Further,

SAFE argues that Brozik’s point is probably moot, in that the state
court just recently provided a report finding that all the assets
belong to Parmer, not Brozik.

However, this state court report

will not be adopted until after a hearing. Nonetheless, this Court
affirms

the

magistrate

judge’s

order

and

overrules

Brozik’s

objections.
Brozik’s contentions fail to demonstrate a “strong unyielding
belief that a mistake has been made” so as to have this Court alter
the magistrate judge’s order of sale.

Id.

His objections fail to

convince this Court that the magistrate judge made any errors.

8

This Court overrules all of Brozik’s objections to the magistrate
judge’s Sale Orders.
IV.

Conclusion

For the reasons stated, Mitch Brozik’s objections to the order
of sale are OVERRULED.

The sale shall proceed at the time and

place designated in the orders of sale by Magistrate Judge Seibert
(ECF Nos. 186 and 187).
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:

September 5, 2014

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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