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LOUISIANA RECORD

Saturday, April 27, 2024

Texas law firm accused of pattern of duplicative, improper property insurance litigation

Lawsuits
David joseph us senate

Federal Judge David Joseph has sanctioned the MMA law firm over an insurance filing that proved bogus. | U.S. Senate

A Houston-based law firm that has filed thousands of property insurance lawsuits in Louisiana has engaged in a pattern of questionable legal practices that demand judicial sanction, a motion filed by an insurer in federal court in Louisiana says.

The motion was filed last month in the Eastern District of Louisiana by attorney Matthew Monson, who represents Allied Trust Insurance Co. in the company’s defense against duplicative and “improper” claims filed by the McClenny, Moseley & Associates law firm.

In a Jan. 23 memorandum filed in the case of Tricia Rigsby Franatovich v. Allied Trust Insurance Co., Manson alleges that MMA improperly worked with a contractor, Apex Roofing, and  marketing company called Velawcity ID to make legal claims on behalf of homeowners without their knowledge.

“MMA are the architects and perpetrators of these rogue schemes, which have already involved at least 15,000 residents of Louisiana, to the detriment of the entire legal profession,” the memorandum states.

MMA has said the firm has used complex technology to provide representation to clients on a large scale in the wake of Hurricane Ida. In the process, homeowners have signed assignment-of-benefits contracts, which are legal in the state unless specifically excluded in policies and confer policy rights to third parties.

In December, Western District of Louisiana Judge David Joseph sanctioned MMA to the tune of $15,914 to reimburse a defense attorney for the time taken to respond to bogus litigation. Defendants are pressing for additional sanctions in federal court, but Monson’s filing indicates that such sanctions are inadequate to deter a law firm that has filed millions of dollars in claimed damages.

The MMA’s activities are on the radar screen of the Louisiana Department of Insurance.

“The LDI is aware of what is going on with McClenny, Moseley & Associates, but I cannot confirm whether any investigation is ongoing,” department spokesman John Ford told the Louisiana Record in an email. “The LDI does encourage anyone with information about activities related to insurance fraud to contact our Office of Insurance Fraud at 1-800-259-5300.”

The filings in the Allied Trust case compare MMA’s actions to the Scot Strems case in Florida. In that situation, the Florida Supreme Court disbarred attorney Strems, pointing to instances of his law firm having inadequate staffing to oversee scores of litigated property insurance claims, as well as client neglect and situations that slowed down the court system’s processing of litigated claims.

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