BUFFALO, N.Y. – Buffalo Fire Department FCU filed suit in federal court here, challenging a decision by CUNA Mutual Group’s CUMIS Insurance Society unit rejecting coverage of a $330,000 theft by its former president, Eve Hutchinson.
Hutchinson pleaded guilty to the theft in June 2008 and paid $60,000 in restitution, but CUMIS has denied the credit union’s claim for more than $250,000 still missing from its coffers. In a November 2008 letter to the credit union, CUMIS denied any obligation to indemnify the credit union for the embezzlement.
A lawyer for the credit union said Friday it believes the CUMIS bond clearly entitles the credit union to repayment of the losses due to the theft. "This was clear, obviously we think it should have been paid, otherwise we wouldn’t have taken it to suit," Joseph Makowski, an attorney with Buffalo’s Flaherty & Shea, told The Credit Union Journal Friday.
Officials with CUNA Mutual did not immediately respond to a request for comment.
