"The defendant's seizure of the plaintiff's social security funds is against the public policy of both the federal and Connecticut government in protecting exempt funds," Wilson wrote in her ruling. 

Odell was additionally awarded $41,403 in punitive damages, included in the $200,505 total judgment, because Wilson found on the preponderance of evidence that the credit union's conduct was egregious and constituted a reckless disregard or willful violation of Odell's rights.

Nevertheless, Wilson also noted in her ruling that the credit union's conduct, as far as the evidence demonstrates, was an isolated incident, and that it did not repeatedly engage in such conduct. 

Odell filed a civil lawsuit against the credit union in June 2010. But the lawsuit had its origins in 2005 when Odell's husband, Nicholas, secured a loan from Wallingford Municipal FCU. Naomi, who was working at the credit union, co-signed the loan. The couple later defaulted on the loan and the credit union successfully sued for the $18,433 outstanding loan balance, according to court documents.

Odell was fired by the credit union in April 2007 after she had been diagnosed with multiple sclerosis, according to court documents and her lawyer Joanne Faulkner. According to Faulkner, a doctor said Odell would not be able to work full-time, so she lost her full-time position as an accounting clerk. 

In May 2007, Odell applied for Social Security disability benefits. When she applied for those benefits, she provided her account information with Wallingford Municipal because it was the only account she had at the time. 

About a year later, Odell received word that her Social Security benefits were approved and that she would receive a retroactive lump sum payment of $13,801, plus $1,300 a month. She also contacted the Social Security Administration to tell them her credit union account had been closed after she applied for disability benefits and that she opened a new account with another bank.

Concerned that the Social Security funds would be sent to the credit union, Odell contacted Cassello and asked him to return the funds to the Social Security Administration.

According to court documents, Cassello told Odell if the funds came to the credit union, he would take it and apply it against the judgment.

Odell told Cassello the funds were exempt from debt collection. Court documents said she also told her former manager she was going to lose her home to foreclosure and needed the money to catch up on her mortgage payments. 

The credit union received Odell's benefit on June 2, 2008. Even though Odell's checking account had been closed, she still had a share account, and Cassello advised employees to re-direct the funds to Odell's share account, according to court documents.

When Odell hired a lawyer who demanded in a letter to the credit union that it return the funds because they were exempt, Wallington Municipal FCU refused.

The credit union said in court documents it relied on the loan agreement, the default judgment it had against Odell and the Federal Credit Union Act as a basis for seizing the money. The credit union also claimed it was not aware the funds were exempt at the time the seizure.

"The credit union's attempt to claim ignorance is unavailing," Wilson wrote. "First, as the court has found, that the (credit union) knew as early as May 2008, that (Odell's) Social Security funds could be exempt, and even after being put on notice, made no attempt to at the very least to investigate the matter. The (credit union) seized the funds and simply refused to return them claiming ignorance of the exempt status of the funds."

In a written statement via email, Cassello said the credit union respectfully disagrees with substantial portions of Wilson's decision.

Next Page: Weighing Options, Including Appeal

"The credit union is weighing its options and intends to vigorously defend its position, including by way of appeal," he said.

Credit union attorney Michael T. McCormack of law firm Hinckley Allen in Hartford, Conn. said any appeal would be filed by Aug. 28. McCormack declined to comment on the grounds for the appeal.

Generally speaking, however, appeals courts typically only review questions or errors in law of lower court decisions, said Maurice Smith, who is president/CEO of the $1.3 billion Local Government FCU in Raleigh, N.C. and also a lawyer. 

"When you appeal it is because of some error in law, so the judge (may have interpreted) the law wrong or didn't handle a motion correctly, or there was an objection the judge didn't rule on correctly," Smith said.

Annandale, Va.-based credit union attorney Steven Bisker speculated that the credit union may base its appeal on the $41,403 awarded in punitive damages because courts generally don't view punitive damages favorably.

Wilson said she decided to award punitive damages, in part, because of the credit union's conduct in seizing Social Security funds that it knew were, or could be, exempt in violation of state and federal law. Despite that knowledge, it refused to return the funds, she said.

"The fact that the plaintiff (Odell) was financially vulnerable and was deprived of benefits awarded to her because of her inability to work as a result of a medical disability, tips the scale even further as an aggravating factor," Wilson said in her decision.

Bisker pointed out, however, that Wilson acknowledged the credit union's conduct in this case was an isolated incident. Because the judge noted there was no evidence the credit union repeated this type of behavior with other members, he said the concession may serve as grounds for the credit union to challenge the punitive damages award. 

"You hit someone with punitive damages not because someone (messed up) one time, it's usually because they've been doing this and … we are going to teach them a lesson everyone else will learn from," Bisker said. "But the court recognized that this was just a one-off situation at the credit union. They never did this before. Well, then, something was amiss. My gut tells me, based upon my general knowledge of the law, that at a minimum the credit union would appeal the punitive damages."

Odell has lost her home to foreclosure and now lives in an apartment in Middletown with her husband who also is also unable to work, according to her attorney.