Martinez
is the sole proprietor of Airline Insurance, an independent
insurance agency and multi service company in
Harris County, Texas.[2] Airline previously had four locations in
Houston and eight employees.[3] Martinez opened a business
account with Defendant in 2019.[4] Martinez "applied for and
received a PPP loan on behalf of Airline Insurance from
Customers Bank in the amount of
$7,292.00."[5] The funds were dispersed to Martinez's
business account with Defendant.[6] "Airline Insurance used
the funds for approved purposes under the CARES Act by using
loan proceeds on payroll costs and other eligible expenses
related to payroll within her business."[7]"Customers
Bank forgave the PPP loan on October 8,
2021."[8]
"On
or about October 8, 2021 [Martinez] was made aware that her
business account was frozen by [Defendant] when business
transactions began to be declined."[9]Defendant informed
Martinez that it had frozen her Airline Insurance business
account and her other accounts and that it would close all of
her accounts "due to an 'unauthorized PPP loan.'
1[10] "Plaintiff informed Defendants that
they were incorrect and demanded that the assets of Airline
Insurance remain available to her but, Capital One refused to
do so."[11] Defendant required documentation that
Martinez "had employees and proof that Airline Insurance
was in operation." [12]Martinez complied.[13]She "made
countless calls to [Defendant]," but each time "she
is told that she will need to send her documents to prove
existence of her business and employees and wait for the
review of said documents."[14]Martinez "has sent
the documents as instructed and each time she follows up,
[she] is told that the documents were not received or that
they are in the process of reviewing the documents.
"[15]Defendant "has failed to provide any
explanation for their actions and every inquiry into the
matter has revealed no results to their
investigations."[16] "Finally in January 2022
[Martinez] sent a demand for the release of the funds which
were frozen and notice of Deceptive Trade Practices.
"[17]"Defendant[] did not
respond."[18]
Defendant
has continued to withdraw a monthly maintenance charge from
Martinez's frozen account.[19]Airline Insurance collects
insurance premiums from insureds on behalf of other insurance
companies .[20] Those insurance companies continued to
attempt to collect the premiums that had been paid to
Airline, but the account freeze prevented these
transactions.[21] Defendant charged the account $30 for
each of these returned transactions for a total of
$510.[22] One insurance company terminated its
relationship with Airline because Airline could not pay them
the premiums.[23]
Airline
also offers an auto title processing service. It
"collects the cost of title, tax, registration and
license plates from the client, . . . prepare[s] the
documents on behalf of the client and a runner will go to the
Harris County Tax Office and process the title change for a
fee."[24]Some title clients' funds were in the
frozen account, and "a total of (6) six checks [were]
returned to the Harris County Tax Office for title services
that the business had conducted. "[25]"The
Harris County Assessor-Collector sent a 10 day demand"
for the title funds plus returned
check fees, a total of $4,988.55. The Harris County Tax
Office also threatened criminal action against Plaintiffs,
and Airline risked "losing [its] license to conduct
business as a title service in Harris County.[26]
The
company providing payroll services to Airline was unable to
debit the frozen bank account and therefore blocked access to
Airline's payroll account.[27] Plaintiffs lost "access
to employee hours, withholding totals, employee insurance and
401k contributions required to be made by
Airline.[28]
Defendant
continued to accept deposits, automatic commissions, and
credit card payments by clients into the frozen
account.[29] "The total sum of Merchant
processed credit card payments collected by Defendant and
held was ($18,870.44) ."[30] It was two weeks before
Plaintiffs had new accounts at other banks ready "to
accept credit for commissions and payment credits which had
normally gone to [Defendant] .[31] Plaintiffs also shared a joint
personal checking account kept by Defendant, which was frozen
along with the Airline business account.[32] "In or
around March 2022 [Defendant] closed the
Plaintiffs' personal joint checking account and mailed
Plaintiff a check for the funds that remained in the
account."[33]
Airline
was delayed in doing payroll, "became delinquent in
rental payments," and "closed one location and laid
off 4 employees."[34] "The actions of [Defendant]
effectively soured several business relationships, clients
began to call the office and appear in person, demanding
their money back and accusing the business publicly of
theft.[35]"At least one valuable employee
resigned after reporting being pressured by her family that
she might be blamed for the transactions she processed for
clients. Another staff member resigned after the stress of
the clients calling and leveling accusations of theft and
threatening staff over refunds for title transactions coupled
with delays in payroll."[36] "Though the Plaintiffs
were eventually able to pay the Harris County Tax Assessor
and the insurance companies, they now retain 4 employees and
operate 2 locations.[37]Plaintiffs "were forced to rent out
their home and are currently staying in the guest room of a
friend so that they were able to recover from the financial
setback [Defendant] caused.[38] "The Plaintiffs primary
residence was nearly defaulted on the loan and the mortgage
company which holds the loan on a rental property is still
threatening foreclosure."[39] Martinez's credit score
has also been lowered because of Defendant's
actions.[40]
"In
or around April of 2022, Plaintiff received a bank statement
for Airline Insurance showing that on March 25, 2022 there
was a check paid for the amount of $7,292.00, when Plaintiff
called Capital One she was told that no information can be
given to her and she was transferred to the fraud department.
Capital One fraud reported that they could not give any
information on who authorized the check but that someone
would contact Plaintiff by phone and no more information
could be given. "[41] "Plaintiff did not draw any
check or authorize for any check to be paid from the Airline
Insurance business account improperly frozen by [Defendant} .
"[42]
