The opinion
IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA
FILED
February 27, 2026
THE SHUMARD FOUNDATION, INC.,
ASHLEY N. DEEM, CHIEF DEPUTY CLERK
Third-Party Defendant Below, Petitioner INTERMEDIATE COURT OF APPEALS
OF WEST VIRGINIA
v.) No. 23-ICA-290 (Cir. Ct. of Wood Cnty. Case No. CC-54-2022-C-21)
UMB BANK, N.A., in its capacity as Successor Master
Trustee under that certain Master Trust Indenture dated
as of August 31, 2007, between Ohio Valley University, Inc.,
and United Bank, Inc.,
Plaintiff Below, Respondent
and
B. RILEY FINANCIAL, INC.,
Receiver Below, Respondent
and
OHIO VALLEY UNIVERSITY, INC.,
Defendant Below, Respondent
MEMORANDUM DECISION
Petitioner The Shumard Foundation, Inc., (“Shumard”) appeals the Order
Determining Lien Priority entered by the Circuit Court of Wood County on June 5, 2023.1
Respondent UMB Bank, N.A. (“UMB”) filed a response.2 Shumard filed a reply.
1
This Court previously dismissed this appeal on jurisdictional grounds by order
entered on March 22, 2024. That order was subsequently reversed by the Supreme Court
of Appeals of West Virginia in a decision dated September 10, 2025, which also remanded
this matter to this Court for a ruling on the merits. Shumard Foundation, Inc., v. UMB
Bank, N.A., No. 24-225, 2025 WL 2614061 (W. Va. Sept. 10, 2025) (memorandum
decision). This Court entered an order on October 17, 2025, returning the case to our active
docket.
2
Shumard is represented by James W. Lane, Jr., Esq., Eric M. Johnson, Esq., and
L. Elizabeth King, Esq. UMB is represented by Shawn P. George, Esq., Jennie O. Ferretti,
Esq., and Charles E. Nelson, Esq. Neither Respondent B. Riley Financial, Inc., nor
Respondent Ohio Valley University, Inc., participated in this appeal.
1
This Court has jurisdiction over this appeal pursuant to West Virginia Code § 51-
11-4 (2024).3 After considering the parties’ arguments, the record on appeal, and the
applicable law, this Court finds no substantial question of law and no prejudicial error. For
these reasons, a memorandum decision affirming the circuit court’s order is appropriate
under Rule 21 of the Rules of Appellate Procedure.
This case involves a priority dispute between two competing creditors with
perfected security interests under the Uniform Commercial Code (“UCC”). The material
facts are not in dispute.
On January 1, 2007, Parkersburg Powell Limited Partnership (“PPLP”) executed a
Purchase Money Note in the original principal amount of $750,000 (the “PPLP Note”) payable
to Ohio Valley University, Inc. (“OVU”). Pertinent to this appeal, the PPLP Note states:
[PPLP] . . . (the “Maker”) promises to pay Ohio Valley University, a West
Virginia corporation having an address at 1 Campus Drive, Vienna, West
Virginia 26105 (the “Holder”), or at such other place as may be designated in
writing by the Holder, the principal sum of SEVEN HUNDRED FIFTY
THOUSAND DOLLARS ($750,000), with interest thereon to accrue annually,
non-compounded, from the date hereof, at the rate of 6%. The principal sum,
together with all accrued and unpaid interest, shall be due and payable on
January 1, 2022, unless paid sooner in accordance with the terms hereof.
To secure payment, PPLP executed a Deed of Trust which was duly recorded and
granted a lien in favor of OVU in an apartment complex known as the Powell Apartments (the
“PPLP Property”). Relevant here, the Deed of Trust sets forth:
[T]o secure the payment of said Loan in the amount of SEVEN HUNDRED
FIFTY THOUSAND DOLLARS ($750,000.00), lawful money of the United
States of America, to be paid with interest and periodic charges (said
obligations, interest, periodic charges and all other sums which may or shall
become due under the Loan Agreement, the Note executed by [PPLP] in
connection therewith being hereinafter referred to as the “[PPLP] Obligation”),
[PPLP] has mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed and assigned, and by these presents does mortgage, give,
grant, bargain, sell, alien, enfeoff, convey, confirm and assign unto Trustee for
3
As UMB and Shumard each state in their briefs, the June 5, 2023, Order
Determining Lien Priority completely resolved the case below as to Shumard. Because the
order completely resolves the case as to one party, we find that it approximates a final order
in its nature and effect. See Syl. Pt. 1, in part, State ex rel. McGraw v. Scott Runyan Pontiac-
Buick, Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995).
2
the benefit of [OVU] forever all right, title and interest of [PPLP] now owned,
or hereafter acquired, in and to the . . . Property. . . . PROVIDED ALWAYS,
and these presents are upon this express condition, that if [PPLP] or its
successors or assigns shall well and truly pay or cause to be paid unto [OVU],
its successor or assigns, the [PPLP] Obligation, and otherwise perform [PPLP’s]
Obligation under this Deed of Trust and the Note, then the estate hereby granted
shall cease, determine and be void.
On August 30, 2007, OVU entered into the Master Indenture, pursuant to which
OVU granted UMB (or “Master Trustee”) a security interest in, among other things, the
PPLP Note. The Master Indenture states that OVU pledged, assigned, conveyed,
transferred, and granted “a first priority security interest in, general lien upon, and the right
of set-off against . . . [a]ll of [OVU’s] Gross Receipts, Accounts, Bank Accounts, General
Intangibles and all Related Rights” (the “Master Trustee Lien”). The Master Indenture
defines the term “Gross Receipts” in part, as all of OVU’s right “to receive [monies]
whether in the form of accounts receivable, contract rights, chattel paper, instruments,
general intangibles, or other rights and the proceeds thereof[.]”
The Master Trustee Lien was initially perfected by a UCC-1 financing statement
filed on September 4, 2007, and perfected a second time when the Master Trustee filed a
UCC-1 on June 13, 2019. The Master Trustee Lien secures OVU’s repayment of nearly
$16,000,000 in bond proceeds owed to UMB as the Master Trustee.
In September of 2019, OVU defaulted under its obligation to UMB. Thereafter,
UMB and OVU entered into a Forbearance Agreement, which provided OVU with a
forbearance period through July 15, 2021.
On April 22, 2021, OVU and Shumard entered into a Collateral Assignment and
Pledge Agreement (the “Shumard Agreement”) wherein OVU gave Shumard an
assignment to the PPLP Note. As described in the Shumard Agreement, Shumard loaned
OVU $500,000 (the “Shumard Loan”), which was to be repaid in one year. The Shumard
Agreement included language creating a security interest (“Shumard Lien”); specifically:
Security Interest. [OVU] hereby grants a security interest in and assigns,
transfers and pledges to [Shumard], all rights, title, interests and benefits of
[OVU’s] in and to, all benefits of [OVU] under, and all monies due or to
become due to [OVU] under or in connection with the Assigned Note, the
[Deed of Trust] and the Sinito Agreement and under any and all additions,
amendments, supplements or other modifications thereof; now or hereafter
in effect [. . .] as collateral security for [. . .] any and all loans, advances,
indebtedness and other obligations of [OVU] owed to [Shumard] with
respect to the [Shumard Loan], the [Shumard] Note, and the other [Shumard]
Loan Documents[.]
3
The Shumard Lien was perfected by a UCC-1 financing statement filed on May 6,
2021. As further security for the Shumard Lien, OVU assigned the PPLP Deed of Trust to
Shumard.
On January 5, 2022, OVU ceased operations and defaulted under the Forbearance
Agreement. On February 17, 2022, OVU filed for Chapter 7 bankruptcy in the U.S.
Bankruptcy Court for the Northern District of West Virginia. Thereafter, on March 4, 2022,
the bankruptcy court entered an agreed order granting UMB relief from the automatic stay
to pursue its rights and remedies regarding certain collateral, which included the PPLP
Note and its related Deed of Trust. In the interim, UMB filed the underlying receivership
action against OVU in circuit court on February 14, 2022.
For context, paragraph two of the March 4, 2022, bankruptcy order states: “The
automatic stay imposed by 11 U.S.C. § 362(a) is terminated such that the [Master] Trustee
may proceed to exercise its rights and remedies under applicable non-bankruptcy law with
respect to the following property . . . (c) The personal property defined as the ‘Campus
Personal Property[.]’” At paragraph three, the bankruptcy court further clarifies:
For the avoidance of doubt, the Campus Personal Property includes, without
limitation, that certain [PPLP] Note in the original principal amount of
$750,000.00, dated January 1, 2007, due and payable to Ohio Valley
University, Inc., on January 1, 2022, and executed by Parkersburg Powell
Limited Partnership, as amended by that certain Amended and Restated
[PPLP] Note in the original principal amount of $750,000.00, dated
December 1, 2007, due and payable to Ohio Valley University, Inc., on
March 31, 2038, and any documents related thereto.
Thereafter, with the consent of the bankruptcy trustee and UMB, the circuit court
entered an order on March 8, 2022, appointing a receiver to administer said properties. As
a result, the PPLP Note proceeds were paid to the receiver.
After entry of the receivership order, PPLP refinanced the PPLP Note with a third-
party lender. PPLP was aware of the competing claims of Shumard and UMB against the
PPLP Note and Deed of Trust. Before PPLP paid the PPLP Note, it sought assurances from
Shumard, UMB, and the receiver that all claims and liens related to PPLP or its real
property securing the PPLP Note under the Deed of Trust would be released upon PPLP’s
satisfaction of the note.
In order to allow PPLP to pay the PPLP Note and also to preserve Shumard’s and
UMB’s competing claims, PPLP, Shumard, UMB, and the receiver entered into a
stipulation agreement regarding the PPLP Note proceeds (“Stipulation”). The Stipulation
provides that the receiver would hold in escrow, and would not spend or distribute,
$590,000 (the “Disputed Proceeds”) derived from the payoff of the refinanced PPLP Note
4
pending the resolution of the competing claims of Shumard and UMB. The sum of the
Disputed Proceeds was sufficient to protect Shumard in the repayment of its loan to OVU
in the event that Shumard’s security interest prevailed over UMB’s security interest.
According to the Stipulation, upon PPLP’s payment of the PPLP Note to the
receiver, Shumard, UMB, and the receiver all agreed to waive, discharge, and release their
respective claims against PPLP, the PPLP Note, the PPLP Deed of Trust, and all collateral
documents. Shumard specifically agreed to execute a release of the PPLP Deed of Trust.
Notably, the Stipulation states:
The Creditor Parties reach no agreement at this time as to their respective and
competing rights, claims or liens they are asserting related to the Note, the
Property, or the Second Deed of Trust, except the Creditor Parties Agree that
any such rights, liens, claims or interests are transferred and shall attach to the
Disputed Proceeds in the same order, priority and validity as such rights, liens,
claims and interests had with respect to the Note, the Property or the Second
Deed of Trust immediately before Borrower’s payment of the Note Proceeds
to the Receiver. The creditor Parties reserve all rights related to such rights,
liens, claims or interests with respect to the Disputed Proceeds.
***
Upon Borrower’s payment of the Note Proceeds to the Receiver in accordance
with the Payoff Letter, the Receiver and the Creditor Parties and their officers,
directors, employees, affiliates, agents, professionals, successors and assigns
(the “Releasing Parties”) completely, unconditionally and irrevocably waive,
discharge and forever release, to the fullest extent permitted by law, the
Borrower Parties and their officers, directors, employees, affiliates, agents,
professionals, successors[,] and assigns (the “Released Borrower Parties”)
from any and all claims or causes of action whatsoever that the Releasing
Parties now have or hereafter may have, of whatsoever nature and kind,
whether known or not now known, contingent or liquidated, existing on or
before the date of this Stipulation, that relate to, arise out of or otherwise are
in connection with the Note, the Second Deed of Trust, the Property, the
Repurchase Agreement, the Master Indenture and Bond Documents, the
Shumard Documents, or any other related documents or transactions;
provided, however, that the Releasing Parties are not releasing any claims
related to the enforcement of this Stipulation.
On July 6, 2022, UMB filed its motion in circuit court, requesting an order
determining lien priority. Shumard filed a response and both parties filed briefs in support
of their positions. After considering the parties’ briefs and documentation of record, the
court entered the order now on appeal.
5
In its order, the circuit court found that UMB and Shumard each have valid security
interests against the PPLP Note, and that the UCC controlled the issue. Relevantly, the
court’s order found: (1) The UMB/Master Trustee Lien was first perfected by a UCC-1 filed
in 2007 and perfected a second time by a UCC-1 filing in 2019; (2) OVU is indebted to
UMB/Master Trustee in excess of $16 million; (3) OVU granted Shumard a security interest
in the PPLP Note on April 22, 2021, and Shumard perfected that security interest through a
UCC-1 filed in 2021; (4) OVU is indebted to Shumard in excess of $530,000; (5) the
collateral available to satisfy OVU’s creditors is less than $10 million; and (6) the
bankruptcy court’s March 4, 2022, order permitted the Master Trustee to pursue its rights
and remedies with respect to certain OVU property, which included its interest in the PPLP
Note. The circuit court further noted that the Disputed Proceeds are payment proceeds from
the PPLP Note, the note was an obligation of PPLP to OVU, and to secure the note, PPLP
executed a Deed of Trust granting an interest in the real property to OVU.
Thereafter, the circuit court determined that OVU assigned the PPLP Note and Deed
of Trust to Shumard with PPLP’s consent. However, it was further determined that PPLP
did not agree to pay or incur a separate or additional obligation to Shumard, PPLP did not
agree that the Deed of Trust secured OVU’s obligation to Shumard, and the PPLP Note has
been paid in full to the receiver, which satisfies PPLP’s obligation to OVU.
Ultimately, the circuit court concluded that UMB/Master Trustee’s UCC-1 financing
statement was filed first in time; therefore, UMB held the superior lien and was entitled to
the $590,000. The circuit court made several findings in support of its ruling. Particularly,
the circuit court found that the PPLP Note was an instrument as defined by the UCC and
noted that OVU’s assignment of the PPLP Note and Deed of Trust to Shumard was not an
absolute assignment, but rather, an assignment to create a collateral security interest, which
remained subject to the prior perfected security interest of the Master Trustee. Further, the
PPLP Deed of Trust only secured PPLP’s obligation to pay, and that under its terms and the
language of West Virginia Code § 38-12-1(a) (1987),4 the Deed of Trust had to be released
after the PPLP Note proceeds were paid to the receiver. The court also determined that the
Master Indenture granted the Master Trustee a security interest in all of OVU’s gross
4
This statute states:
Every person entitled to the benefit of any lien on any estate, real or personal,
or to the money secured thereby, whether the lien was created by conveyance,
judgment, decree, lis pendens, notice of attachment, deed of trust, contract or
otherwise, shall be required to furnish and execute an apt and proper written
release thereof free of charge to the debtor whose obligation secured by such
lien has been fully paid and satisfied, if the lien is of record in the proper
county. Such release shall be executed and furnished to the debtor within
thirty days after the debt has been satisfied.
6
receipts, which included the Disputed Proceeds from the PPLP Note. See W. Va. Code §
46-9-315(a)(2) (2000) (“A security interest attaches to any identifiable proceeds of
collateral.”).
Next, the circuit court addressed the issue of priority and noted that pursuant to West
Virginia Code § 46-9-322(a)(1) (2000), “[c]onflicting perfected security interests . . . rank
according to priority in time of filing or perfection. Priority dates from the earlier of the time
a filing covering the collateral is first made[.]” On that issue, the court observed that the
Master Trustee’s 2007 UCC-1 was filed in connection with a public finance transaction and
remained effective pursuant to West Virginia Code § 46-9-515(b) (2014) (stating that “an
initial financing statement filed in connection with a public-finance transaction . . . is
effective for a period of forty years after the date of filing[.]”),5 and that the Master Trustee’s
2019 UCC-1 remained effective pursuant to West Virginia Code § 46-9-515(a) (“[e]xcept
as otherwise provided . . . a filed financing statement is effective for a period of five years
after the date of filing.”). The circuit court found that both of the Master Trustee’s filings
occurred prior to Shumard’s filing of its UCC-1 in 2021, and as a result, the Master Trustee
Lien has priority over the Shumard Lien. This appeal followed.
In the present appeal, we apply the following standard of review:
In reviewing challenges to the findings and conclusions of the circuit court,
we apply a two-prong deferential standard of review. We review the final
order and the ultimate disposition under an abuse of discretion standard, and
we review the circuit court’s underlying factual findings under a clearly
erroneous standard. Questions of law are subject to a de novo review.
Syl. Pt. 2, Walker v. W. Va. Ethics Comm’n, 201 W. Va. 108, 492 S.E.2d 167 (1997).
On appeal, Shumard raises four assignments of error to challenge the circuit court’s
6
order. In its first assignment of error, Shumard asserts that that the court erred in finding
that the PPLP Note was an instrument under the UCC. Regarding this issue, the applicable
definition is found at West Virginia Code § 46-9-102(a)(47) (2013) and states:
5
Although West Virginia Code § 46-9-515 (2000) was the operative statute in effect
at the time the 2007 UCC-1 was filed, we cite to the current version of the statute because
the statutory language for subsection (b) remains the same.
6
In its reply brief, Shumard stated that it was withdrawing its second assignment of
error. Also, on December 19, 2023, Shumard filed a motion seeking leave of the Court to
withdraw its sixth assignment of error. The Court granted the motion by order entered on
January 26, 2024.
7
“Instrument” means a negotiable instrument or any other writing that
evidences a right to the payment of a monetary obligation, is not itself a
security agreement or lease, and is of a type that in ordinary course of
business is transferred by delivery with any necessary indorsement or
assignment. The term does not include: (i) Investment property; (ii) letters of
credit; or (iii) writings that evidence a right to payment arising out of the use
of a credit or charge card or information contained on or for use with the
card.
Under this statute, the parties dispute whether the PPLP Note qualifies as an
instrument under the “any other writing” portion of the statute.7 Shumard avers that the
PPLP Note does not qualify as an instrument because it is not “of a type that in ordinary
course of business is transferred by delivery with any necessary indorsement or
assignment.” Shumard interprets this language as meaning a simple assignment or
indorsement and argues that such an assignment or indorsement of the PPLP Note is not
permitted by the note’s terms, which state: “This Note may not be assigned collaterally or
otherwise by the Holder to any person or entity without the consent of Maker.” (“Anti-
Assignment Clause”). Because the Anti-Assignment Clause requires mutual consent of the
parties, Shumard contends that this requirement makes the PPLP Note extraordinary and,
thus, outside the scope of the statutory definition. Conversely, UMB contends that the UCC
broadly defines the term instrument, there is no limiting language within the statutory
language to support Shumard’s opinion that only simple assignments and indorsements
satisfy the definition, and therefore, the PPLP Note falls within the statutory definition. We
agree with UMB on this issue.
Here, Shumard cites no authority to support its position that only simple
assignments and indorsements are permitted; similarly, no argument is made that the statute
is ambiguous. Instead, Shumard’s argument is based on its subjective interpretation of the
statute. Looking at the statute’s plain language, the Court finds no language to support
Shumard’s interpretation. Particularly relevant to our determination is the official comment
for West Virginia Code § 46-9-102, which states at comment 5(c):
“Instrument”; “Promissory Note.” The definition of “instrument” includes
a negotiable instrument. As under former Section 9-105, it also includes any
other right to payment of a monetary obligation that is evidenced by a writing
7
In addition, Shumard avers that the PPLP Note cannot meet the definition because
it does not qualify as a negotiable instrument. See W. Va. Code § 46-3-104(a) (1998)
(defining the term negotiable instrument). However, UMB’s brief does not directly address
that portion of Shumard’s argument; instead, UMB summarily avers that the statute does
not limit its applicability to only “negotiable” instruments. Thus, we limit our discussion
to the arguments regarding the “any other writing” language because it is the portion of the
statute appropriately contested on appeal.
8
of a type that in ordinary course of business is transferred by delivery (and,
if necessary, an indorsement or assignment). Except in the case of chattel
paper, the fact that an instrument is secured by a security interest or
encumbrance on property does not change the character of the instrument as
such or convert the combination of the instrument and collateral into a
separate classification of personal property. The definition makes clear that
rights to payment arising out of credit-card transactions are not instruments.
The definition of “promissory note” is new, necessitated by the inclusion of
sales of promissory notes within the scope of Article 9. It explicitly excludes
obligations arising out of “orders” to pay (e.g., checks) as opposed to
“promises” to pay. See Section 3-104.
Pointedly, the statutory comment does not include a restriction on the nature of the
indorsement or assignment used, but rather, it explains that neither an indorsement nor an
assignment is always necessary for a writing to meet the definition. Therefore, Shumard’s
interpretation of the statute is untenable. Instead, the official comment supports UMB’s
contention that the definition is broadly inclusive. Accordingly, we find no error in the
circuit court’s determination that the PPLP Note is an instrument under the UCC.
In a parallel argument, Shumard also contends that the circuit court’s ruling is fatally
flawed because the court found that the PPLP Note is an instrument, but its order supports
that determination by incorrectly citing West Virginia Code § 46-9-102(a)(68), which
defines a promissory note. In Shumard’s opinion, this establishes that the court analyzed
the PPLP Note under the wrong statute, resulting in reversible error. We decline to adopt
Shumard’s assertion. Instead, we find that the erroneous citation is nothing more than a
clerical mistake, and because the court reached the correct result, we find the error to be
harmless.
Next, Shumard assigns error to the circuit court’s findings with respect to the agreed
order entered by the bankruptcy court on March 4, 2022. Specifically, Shumard takes issue
with the following finding by the circuit court regarding paragraph three of the bankruptcy
court’s order, which states: “The [b]ankruptcy [c]ourt specifically found that the PPLP
Note was included in the Master Trustee’s collateral.” From this isolated language,
Shumard contends that the circuit court erroneously found that the bankruptcy court’s order
determined the parties’ rights regarding the PPLP Note, including the validity of the
UMB/Master Trustee lien.
In framing Shumard’s argument on appeal, we note that Shumard does not contend,
and rightfully so, that the bankruptcy court lacked authority to grant the Master Trustee
relief from the stay to pursue its legal remedies outside of the bankruptcy proceeding.
Rather, Shumard focuses on the wording used by the circuit court to explain the meaning
of paragraph three of the bankruptcy court’s order and argues that the circuit court
incorrectly interpreted the paragraph to mean that the bankruptcy court was making a final
9
determination regarding the validity of UMB’s security interest in the PPLP Note.
According to Shumard, this constitutes error for multiple reasons: first, the bankruptcy
court order made no such finding; second, the law of the case doctrine does not apply; and
third, it is not customary for bankruptcy courts to make final rulings in proceedings related
to motions for relief from bankruptcy stays. The Court does not find Shumard’s arguments
compelling.
On this issue, Shumard’s challenge views the circuit court’s ruling in a vacuum and
fails to consider the totality of the court’s findings regarding the bankruptcy court’s order.
In that respect, the circuit court’s order addresses the bankruptcy order by quoting, in part,
the portion of the order granting the Master Trustee relief to “exercise its rights and
remedies under applicable nonbankruptcy law with respect to . . . the personal property
defined as the ‘Campus Personal Property.’” This is followed by the circuit court’s finding
that paragraph three of the bankruptcy court’s order clarified that the PPLP Note is part of
the Master Trustee’s “collateral,” or stated another way, that the note is included as part of
the Campus Personal Property that the Master Trustee was permitted to pursue outside of
the bankruptcy case. Notably absent from Shumard’s argument is any reference to
paragraph three of the bankruptcy order or discussion as to how the language used by the
circuit court distorts the intent of the bankruptcy court’s ruling, let alone how it directly
supports Shumard’s interpretation. Rather, Shumard merely relies upon the subjective
inferences it drew from the court’s language as the foundation of its argument. This is
insufficient to establish error on appeal.
At best, Shumard’s argument on this issue can be pared down to a steadfast
disagreement with the circuit court’s view of the facts, coupled with an invitation for this
Court to look at the record and reach a more favorable conclusion. We decline to do so. It
is well established that on appeal, “an appellate court does not reweigh the evidence.” State
v. Thompson, 220 W. Va. 246, 254, 647 S.E.2d 526, 534 (2007) (citation modified); Coles
v. Century Aluminum of W. Va., No. 23-ICA-81, 2023 WL 7202966, at *2 (W. Va. Ct. App.
Nov. 1, 2023) (memorandum decision) (noting that an appellate court will not reweigh the
evidence presented below on appeal). As such, Shumard is not entitled to relief on this
issue.8
Shumard’s fourth assignment of error alleges the circuit court erred by finding that
UMB could enforce the PPLP Note as Master Trustee when UMB did not possess the
original. In other words, Shumard contends that it holds the only valid lien against the
PPLP Note. However, this argument fails.
8
Moreover, the circuit court independently reviewed the underlying facts and
determined that UMB had a valid lien which was superior to Shumard’s lien. Therefore,
any error in the circuit court's description of the bankruptcy court's order was harmless, as
it was not the basis of any of the circuit court’s rulings.
10
Here, Shumard’s argument simply rests on its citation to a few UCC statutory
provisions followed by the summary conclusion that the statutes apply and Shumard is
entitled to relief. Strikingly absent from Shumard’s argument is any application of statutes
to specific facts of this case. Moreover, Shumard’s argument on this issue is further
discredited by its complete lack of citation to the record below. To that end, Rule 10(c)(7)
of the West Virginia Rules of Appellate Procedure provides that “[t]he argument must
contain appropriate and specific citations to the record on appeal, including citations that
pinpoint when and how the issues in the assignments of error were presented to the lower
tribunal” and that “[t]he Intermediate Court . . . may disregard errors that are not adequately
supported by specific references to the record on appeal.” Significantly, Shumard fails to
cite where the allegedly invalid finding is contained in the circuit court’s order. Also,
Shumard fails to establish where in the record this argument was made below and, thus,
preserved for appeal. Thus, Shumard’s argument is merely an assertion, which does not
preserve this claim on appeal. See State v. Kaufman, 227 W. Va. 537, 555 n.39, 711 S.E.2d
607, 625 n.39 (2011). As such, we conclude that Shumard is not entitled to relief on this
issue.
In its final assignment of error, Shumard avers that the circuit court erred because it
failed to find that based upon the terms of the Stipulation, the PPLP Deed of Trust gave
Shumard the only valid lien against the PPLP Note. Here, Shumard’s argument centers on
certain conclusions of law in the circuit court’s order. First, Shumard takes aim at the circuit
court’s determination that the “PPLP Deed of Trust secured only the PPLP Obligation and
pursuant to its terms and [West Virginia] Code § 38-12-1(a), the Deed of Trust had to be
released when the [Disputed] Proceeds were paid to the Receiver.” Shumard asserts that
these determinations are erroneous because the Stipulation preserved the parties’ rights as
they existed immediately prior to PPLP’s payment in satisfaction of the PPLP Note to the
receiver, and even though Shumard released the deed of trust after PPLP’s payment in
accordance with the terms of the Stipulation, Shumard’s pre-payment rights remained
intact.
Second, Shumard takes issue with the circuit court’s conclusion that “[t]here is no
remaining interest in real estate, and the West Virginia recording act is not applicable here.”
The root of Shumard’s argument is that this matter is not governed by the UCC, but rather,
by real property law. To that end, Shumard contends that the circuit court failed to apply
real property law to the case and find that Shumard held the exclusive right to enforce the
PPLP Deed of Trust immediately prior to PPLP’s satisfaction of the PPLP Note. Shumard
believes its theory is supported because a deed of trust has been defined as “a deed that
conveys title to real property in trust as security until the grantor repays the loan.” Syl. Pt.
7, in part, Arnold v. Palmer, 224 W. Va. 495, 686 S.E.2d 725 (2009). Thus, the PPLP Deed
of Trust is an assignment that is subject to our state’s recording act both as a contract and
deed pursuant to West Virginia Code §§ 40-1-8 and -9, both of which are required to be
recorded by the county clerk. See W. Va. Code § 38-12-9 (1882). Shumard maintains that
these statutes control the issue, and because Shumard was the only party with a recorded
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assignment on the PPLP Deed of Trust, it is the only party with a lien against PPLP’s real
property. Therefore, the circuit court’s ruling must be reversed and Shumard declared the
only party with a right to the Disputed Proceeds. We are not persuaded by any of Shumard’s
contentions under this assignment of error.
Shumard’s reliance upon the PPLP Deed of Trust is misplaced. As exhibited by
Shumard’s own argument, all that the PPLP Deed of Trust did was act as security for
repayment of the loan. See Arnold at 497, 668 S.E.2d at 727, syl. pt. 7, in part. In this case,
the deed of trust secured PPLP’s repayment of its obligation to OVU, which was the
$750,000 represented by the PPLP Note. The obligation was satisfied by PPLP’s payment
of the Disputed Proceeds to the receiver; thereafter, in accordance with the Stipulation,
Shumard released the deed of trust. However, Shumard’s release has no bearing on this
case because the Stipulation clearly states that the parties’ “rights, liens, claims or interests”
to the PPLP Note prior to repayment remained intact and were attached to the Disputed
Proceeds. Thus, contrary to Shumard’s position, disposition of this issue squarely rests on
the determination of which party’s UCC-1 has priority under Article 9 of the UCC.
West Virginia Code § 46-9-109(b) (2005) evidences this, stating: “The application
of this article to a security interest in a secured obligation is not affected by the fact that
the obligation is itself secured by a transaction or interest to which this article does not
apply.” West Virginia Code § 46-9-203(g) (2006) also states: “The attachment of a security
interest in a right to payment or performance secured by a security interest or other lien on
personal or real property is also attachment of a security interest in the security interest,
mortgage or other lien.” Moreover, as clarified by the official comment for West Virginia
Code § 46-9-203(g):
9. Collateral Follows Right to Payment or Performance. Subsection (g)
codifies the common-law rule that a transfer of an obligation secured by a
security interest or other lien on personal or real property also transfers the
security interest or lien. See Restatement (3d), Property (Mortgages) § 5.4(a)
(1997). See also Section 9-308(e) (analogous rule for perfection).
Article 9 also states that “a security interest in proceeds is a perfected security
interest if the security interest in the original collateral was perfected.” W. Va. Code § 46-
9-315(c) (citation modified). As detailed by the circuit court’s order, UMB’s perfected
interest stems from the Master Trustee Lien, and Shumard’s perfected interest was created
by the Shumard Lien. Thus, even without the Stipulation, a priority determination under
West Virginia Code § 46-9-322(a)(1) was inevitable for the circuit court in this case due to
the competing security interests. Turning to the circuit court’s priority determination, the
Court finds no error in the circuit court’s application of West Virginia Code § 46-9-
322(a)(1) to resolve the parties’ competing security interests. The Court concludes that the
record supports the circuit court’s ultimate determination that UMB holds the superior lien
and is entitled to the Disputed Proceeds because its UCC-1 was perfected prior to
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Shumard’s UCC-1. We also observe that Shumard offered no argument on appeal, even as
an alternative to its position that the UCC does not apply to this case, to contest the circuit
court’s reconciliation of the competing security interests under the statute.9 As such, we
find no error and affirm the circuit court’s June 5, 2023, Order Determining Lien Priority.
Accordingly, we affirm.
Affirmed.
ISSUED: February 27, 2026
CONCURRED IN BY:
Chief Judge Daniel W. Greear
Judge Charles O. Lorensen
Judge S. Ryan White
9
We observe that Shumard’s argument regarding the inapplicability of the UCC to
this case appears to be internally inconsistent with the majority of Shumard’s arguments
on appeal, which directly argue for or against the application of certain UCC provisions to
support Shumard’s theory that the circuit court committed reversible error. Nevertheless,
Shumard’s theory shift has no bearing on our decision herein.
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