$1 million suit charges bank with insurance payment error

David Yates Jun. 20, 2007, 2:57am

John S. Morgan

Clarissa Provost thought her home insurance premiums were paid every month through an escrow account at Wells Fargo Bank. After discovering the coverage had lapsed a few months before Hurricane Rita hit Southeast Texas, Provost is now suing the bank for almost $1 million.

According to the plaintiff's original petition, filed with the Jefferson County District Court on June 18, Capitol County sent a notice of policy cancellation to Wells Fargo in June of 2005, but Provost says the bank never forwarded her the notice.

She submitted a $22,000 claim to her Capitol County following Rita and was baffled to learn her coverage had lapsed, the suit said. Provost claims Wells Fargo's forgetfulness violates the Texas Finance Code.

Seeking to recover pecuniary relief, Provost is suing the bank for not informing her that the insurance lapsed. She is also suing her insurance provider, Capitol County Mutual Fire Insurance Co., for refusing to settle her claim.

Provost also claims Capitol County violated the Texas Insurance Code, Unfair Settlement Practices by refusing to settle her claim – even though she was technically no longer insured by the company.

In addition, she also alleges both defendants are guilty of violating the Texas Deceptive Trade Practices Act, a violation Provost and her attorney, John S. Morgan, feel is worth $350,000.

She is also suing for $200,000 in consequential damages, $300,000 for "bad faith dealing," and around $50,000 for attorney fees.

Provost is demanding a trial by jury.

Judge Milton Shuffield, 136th District, has been assigned to the case.

Case No. D179-518

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