Naomi Odell, a former accounting clerk for the $18.6 millionWallingford Municipal Federal Credit Union, has been awardedmore than $200,000 after a state judge ruled that the Wallingford,Conn., cooperative committed “statutory theft” in seizing thewoman's $13,801 Social Security disability benefit and using it torepay a loan she and her husband defaulted on.

After a three-year court battle, Connecticut Superior CourtJudge Robin L. Wilson in a 72-page ruling released Aug. 8 said thecredit union's move against Odell's benefits were illegal becauseSocial Security is exempt from debt collection.

“In the present case this court granted the plaintiff's (Odell)summary judgment as to the statutory theft count and thiscourt awards damages as to that count,” Wilson wrote in herruling. The judge also wrote in her opinion that the creditunion seizure of Odell's Social Security funds is against thepublic policy of both the federal and Connecticut government forprotecting exempt funds.

In 2005 Odell's husband, Nicholas, secured a loan fromWallingford Municipal FCU. Naomi, who was working at the creditunion, co-signed for the loan. Nicholas, however, later defaultedon the loan and the credit union successfully sued him for the$18,433 outstanding loan balance, according to court documents.

Odell was fired by the credit union in April 2007 after she hadbeen diagnosed with multiple sclerosis, according to courtdocuments and her lawyer Joanne Faulkner of New Haven. According toFaulkner, a doctor said Odell would not be able to work full-time,so she lost her full-time position.

In May 2007, Odell applied for Social Security disabilitybenefits. When she applied for those benefits, she provided heraccount information with Wallingford Municipal FCU because it wasthe only bank account she had at the time.

About a year later, Odell's Social Security benefits wereapproved and expected to receive a lump sum payment of $13,801,plus $1,300 a month.

Concerned that the Social Security funds would be sent to thecredit union, Odell contacted Manager/President Richard T.Cassello, asking him to return the funds to the Social SecurityAdministration. Odell had opened an account at another bank.

Odell informed Cassello that the Social Security funds wereexempt from debt collection. What's more, she also said that shewas going to lose her home to foreclosure and needed the money.

The credit union received Odell's Social Security paymentbenefit on June 2, 2008. Even though Odell's checking accounthad been closed, she still had a share account. The funds weredeposited in that account.

In a written statement, Cassello said the credit unionrespectfully disagrees with substantial portions of the ruling andplans to appeal by Aug. 28.

Odell has lost her home to foreclosure and lives in an apartmentin Middletown with her husband who also is also unable to work,according to her attorney, Joanne Faulkner of New Haven.

“There was no relief in sight after the money was taken,”Odell said in a statement released by her attorney Tuesday. “Ourworld had been turned upside down and the prospect of arrearage ofdisability pay and then a monthly benefit to continue to moveforward was what had kept us looking up.”

What astonished Faulkner about this case is how hard the creditunion fought to keep the $13,800.

“That ($13,800) meant a lot it her; it couldn't possibly havemeant all that much to the credit union,” she said. “They put a lotof resources into all of this – a major law firm, two lawyers atall times. It just seemed to me a misallocation of their resourcesto fight for $13,800.”