Company sues bank to release insurance proceeds for hurricane damage
A Texas company claims its bank has refused to release money for a $175,000 check it received from the corporation's insurance company after Hurricane Rita struck.
At-Faso alleges it settled a claim with its insurance carrier in September 2005 after Hurricane Rita damaged its Jefferson County apartment complex.
When At-Faso received the $175,000 settlement, which was made payable to both At-Faso and Wachovia Bank, National Association, At-Faso endorsed the check, then forwarded it to Wachovia. According to the complaint filed March 1, At-Faso requested Wachovia endorse the check and release the funds to At-Faso.
However, Wachovia has kept the money and refuses to honor At-Faso's request, the suit states.
"Defendants have further refused to provide an accounting of the funds received from this insurance settlement and have refused to provide a justification for the retention of these funds," the complaint says.
At-Faso claims it did execute a promissory note for $2.65 million, which is secured by the apartment complex. Wachovia became the holder of the note after its original holder, Lehman Brothers Bank, went under, according to the complaint.
Still, there is no reason for Wachovia to be holding money from At-Faso, the complaint says.
"Payments have been made to this escrow and/or reserve account on a monthly basis in addition to the monthly installments due and payable on the Promissory Note," the suit states. "Taxes and insurance have been paid from the escrow and/or reserve account a surplus exists in connection with the escrow account. The excess funds in this account is an amount in excess of $400,000."
At-Faso wants Wachovia to provide it with an accounting of the funds it has received from At-Faso. In addition, At-Faso is seeking a judgment of more than $500,000, plus interest, attorneys' fees, costs and other relief to which the court may be entitled.
Walter D. Snider and Jason M. Byrd of Snider and Byrd in Beaumont will be representing it.
The case has been assigned to Judge Milton Shuffield, 136th District Court.
Jefferson County District Court case number: D186-144.