Couple blames mortgage co. for failing to pay insurance premiums

Kelly Holleran Apr. 2, 2010, 8:46am

A Hardin County couple claim their Dallas-based mortgage company failed to pay homeowners and windstorm insurance premiums out of the monthly mortgage payments the couple made, causing the insurance company to refuse to pay for damages the couple sustained to their property from Hurricane Ike.

Eanest Edward and Joseph Ann Jones filed a lawsuit March 30 in Jefferson County District Court against MGC Mortgage.

The Joneses allege they financed property at 660 Washington Blvd. in Beaumont through Citi Residential Mortgage. Out of the Jones' mortgage payments, Citi Residential should have paid homeowners and windstorm insurance premiums, according to the complaint.

Later, in August 2008, MGC Mortgage purchased the Jones' mortgage and continued to accept their premium insurance payments, but failed to forward those payments to an insurance company, the suit states.

Hurricane Ike struck in September 2008, causing property damage to the Jones' property, the complaint says. In October, they claim they notified their insurance company of the damages and requested the company cover the necessary repair costs.

However, the insurance company refused to reimburse the couple, saying no insurance policy existed because MGC failed to secure a policy for the Jones, according to the complaint.

Because of the ordeal, the Jones have lost the benefits that they should have been paid and suffered mental anguish, the complaint says.

"Defendants acted unfairly and in bad faith in dealing with Plaintiffs," the suit states. "Defendants took advantage of Plaintiff's lack of knowledge, ability, experience, or capacity to a grossly unfair degree."

The Joneses claim MGC's conduct violated the Texas Insurance Code and should be considered unconscionable and negligent.

The Joneses seek three times the amount of their actual and economic damages, plus exemplary damages, pre-judgment interest at the highest legal rate, attorney's fees, costs and other relief the court deems just.

Matthew C. Matheny of Provost and Umphrey Law Firm in Beaumont will be representing them.

The case has been assigned to Judge Gary Sanderson, 60th District Court.

Jefferson County District Court case number: B186-426.

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