Another Judge Eyeing Sanctions Against Law Firm for Filing Frivolous Lawsuits

A law firm that was called into a federal judge’s courtroom to explain why there were so many errors in the hurricane lawsuits it filed against insurers now finds itself in hot water with a second federal judge.

US District Judge David C. Joseph ordered principals of the McClenney Moseley & Associates law firm to attend a hearing in his court room today to explain why they did not attend a Dec. 21 hearing. The law firm has been called before the judge to explain why it had filed a lawsuit against a carrier that did not insure the property that was allegedly damaged.

Judge Joseph scheduled a hearing for 10 a.m. today in Lafayette, Louisiana to “show cause” for the unexcused failure to attend, and to answer charges that it had filed frivolous lawsuits.

In a pleading filed Tuesday, insurance defense attorney Matthew D. Monson says he has found 25 lawsuits filed by the McClenney Moseley firm against carriers that did not insure the subject property. He asked the court to “initiate attorney disciplinary proceedings to include consideration of all appropriate action against MMA and its attorneys, including suspension and/or disbarment.”

Attorney R. William Huye III, managing partner of MMA’s New Orleans office, offered a simple explanation in an email to the Claims Journal. “Our firm miscalendared a hearing and for this reason we missed it,” he said. “The court rescheduled the hearing and we certainly will be in attendance.”

Monson’s filing adds to a heap of legal troubles for the law firm. As reported Tuesday by the Claims Journal, MMA is accused of making errors in dozens of hurricane lawsuits filed in the US District Court for Western Louisiana. During a Dec. 13 hearing, US District Judge James D. Cain Jr. in Lake Charles, Louisiana told representatives of the law firm that they must personally appear before him if they want to settle any of the approximately 1,600 lawsuits that MMA filed in the Western Louisiana District.

Monson said in his pleading that the statute of limitations for damage claims related to Hurricane Laura passed on Aug. 28 and for claims related to Hurricane Delta on Oct. 10. That means the homeowners cannot file new lawsuits against the proper insurers, if there were, in fact, policies in effect at the time.

In each of the 25 lawsuits that MMA allegedly filed against the wrong insurers, the plaintiff is claiming damages of at least $75,000, which is the minimum amount necessary to invoke jurisdiction in federal court. Monson said in his pleading that this means the loss to Louisiana property owners may amount to more than $1,875,000.

“We also know that this firm has signed up at least 15,000 claimants in Louisiana alone,” the pleading says. “Accordingly, we have the opportunity and responsibility to prevent any more Louisianans from being harmed by the actions of MMA.”

Monson’s pleading compares MMA’s actions to the tactics of Florida plaintiffs attorney Scot Strems, who on Dec. 22 was disbarred by the Florida Supreme Court. The court said Strems filed frivolous lawsuits made misleading statements on affidavits and took greater attorney fees than allowed by his retainer contracts.

Joseph’s order directs MMA to “show cause” why monetary sanctions should not be imposed on the law firm for mishandling a lawsuit filed by Bobby Dyer against Allied Trust Insurance Co. The complaint states that Dyer’s home in Shreveport, Louisiana was damaged by both Hurricane Laura and Delta. Monson, however, said Allied Trust did not insure Dyer’s property. He said that his firm notified MMA of the mistake shortly after the lawsuit was filed but MMA took no action to correct the error.

MMA has “engaged in a systematic practice of filing lawsuits for which there is no factual basis” Monson’s pleading says.

Joseph’s order requires at least one “principal” of MMA to appear at today’s hearing — not just Dyer’s personal attorney, Grant P Gardiner. The order also requires the law firm to address “defendant’s allegations that plaintiff’s counsel failed to properly investigate the claim before filing suit as required by Rule 11(b) of the Federal Rules of Civil Procedure.”

Huye, during a telephone interview with the Claims Journal last Thursday, acknowledged that his law firm had made some mistakes, but he said MMA has also helped a large number of Louisiana residents recover from the four hurricanes that struck the state in 2020 and 2021.

Top photo: Bradley Beard walks with a shovel through his daughter’s destroyed trailer home, after searching in vain for the water shutoff valve for the property in the aftermath of Hurricane Laura, Saturday, Aug. 29, 2020 in Hackberry, La. (AP Photo/Gerald Herbert)