Iberia Parish woman accused of converting $142,000 insurance payment

Andrea Dearden Sep. 2, 2010, 2:26am

A mortgage servicing company is accusing an Iberia Parish woman of stealing insurance proceeds.

Specialized Loan Servicing LLC filed suit against Donyelle January, Assurant Specialty Property, American Security Insurance Co. and Capital One Bank in Orleans Parish District Court.

According to the petition, Specialized Loan Servicing services a mortgage agreement executed in November 2006 by Donyelle January.

January was required to maintain hazard insurance on her Missouri Street home. If she failed to do so, Specialized Loan Servicing had the right to force-place insurance on the property.

The petition alleges January failed to maintain insurance so Specialized Loan Servicing obtained insurance on the Missouri Street house through Assurant Specialty Property. The insurance policy issued by Assurant named Specialized Loan Servicing as the primary insurance and January as the secondary.

As a result of a fire in June 2009, January's home sustained significant damage. Assurant Specialty issued a check in the amount of $142,000 to compensate for the damages. The check, sent to Assurant, was allegedly forwarded to January with instructions on how to endorse the note and submit it to Specialized Loan Servicing.

Specialized Loan Servicing says January cashed the check at Capital One Bank in New Iberia in July 2009. The mortgage agreement between January and the lender authorized the lender to hold any insurance funds in escrow to ensure those funds were used for repair or applied to the loan.

Despite the contract, January allegedly cashed the checks and took the money, creating a breach of the mortgage agreement.

Assurant maintains the check issued to January included Specialized Loan Servicing as a payee. The company filed a fraud complaint with Capital One, accusing January of altering the check. Capital One denied the claim.

Specialized Loan Servicing accuses January of fraud, conversion and breach of contract. The company says Assurant's failure to protect the mortgage company's interest in the funds is also a breach of its contractual and fiduciary duties.

Capital One is accused of negligence for allegedly cashing a check that had been altered to remove one of the payees.

Specialized Loan Servicing is asking to be reimbursed for all damages, including the $142,000 insurance payment, court costs, attorney fees and interest.

John C. Morris IV, of Monroe, is representing the mortgage servicer.

Orleans Parish District Court Case No. 10-8894

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