Federal Judge in Louisiana Suspends Texas Law Firm Over Hurricane Claims
A federal judge has suspended a Texas law firm from practice in the western district of Louisiana over ethical questions raised about its handling of hundreds of hurricane insurance claims.
In an order dated March 4, District Judge James Cain Jr. suspended the Houston-based law firm McClenny, Moseley and Associates (MMA) and its lawyers for 90 days, after which he said a full panel of judges will consider a permanent suspension.
Justice Cain and others have been probing the MMA lawyers over their representation of clients with claims arising from Hurricanes Laura, Delta, and Ida and the firm’s mass filing of hundreds of cases.
Cain said his own review of the cases raised several issues, including duplicate filings, cases filed against insurers that had no policy in place with the plaintiffs, and cases filed on behalf of plaintiffs who had already settled their hurricane claims with their insurer.
Despite two hearings and other opportunities, MMA “did little to assuage these concerns and instead raised new issues relating to client communication, the way MMA had been retained, and handling of settlement proceeds,” Cain wrote.
“These issues stand in stark contrast to the way thousands of other hurricane cases have proceeded through this court since December 2020,” Cain asserted.
The judge said more than half of the 7,000 Hurricane Laura and Delta cases filed have already been resolved and “no firm has drawn anything close to the level of ethical concerns as MMA.”
In October, Cain stayed MMA’s cases after an initial hearing to review the submissions and prevent MMA from mass-settling cases.
In testimony at his hearings, Cain heard other complaints including allegations of the firm attempting to mass-settle hurricane claims; using an unlicensed “estimator” for establishing damages; improperly endorsing a settlement check; dismissing a client’s suit without communicating with her; filing a petition on behalf of a client who terminated its services without his knowledge; and filing numerous suits against insurers that had never issued a policy to the plaintiff.
Cain said a suspension is necessary to “protect the interest of its current clients” in the district because the court is concerned that MMA is “committing ongoing misconduct through its poor client communication, use of legal marketing program Velawcity, and failure to properly document its expenses for settlement approval.” The law firm has acknowledged using the marketing software that “pre-screens” claimants.
The court’s suspension order affects the law firm and all affiliated with the firm, including attorneys R. William Huye III, Claude Favrot Reynaud III, Cameron Sean Snowden, Grant P. Gardiner, John Moseley, and James McClenny.
A Clams Journal email to the firm’s defense attorney had not been answered by press time.
The law firm is under scrutiny elsewhere as well.
The state of Louisiana is investigating the firm for possible insurance fraud. Louisiana Insurance Commissioner Jim Donelon has accused MMA of making more than 850 misrepresentations to insurance companies, stating that policyholders had retained the law firm even though that wasn’t true. The law firm actually represented a roofing company and a restoration company that solicited customers door to door in hurricane-damaged neighborhoods, according to witness testimony.
MMA’s hurricane insurance cases are also being questioned in the Eastern federal district court in New Orleans. Magistrate Judge Michael B. North has called owners of the law firm back into his courtroom to decide if the law firm should be sanctioned — and if so, how much — for making misrepresentations to insurers.
Photo: In this aerial photo taken with a drone, flood waters surround storm damaged homes on Aug. 31, 2021, in Lafourche Parish, La., as residents try to recover from the effects of Hurricane Ida. (AP Photo/Steve Helber, File)
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