The Louisiana Department of Insurance has issued a cease-and-desist order against a Houston law firm that the department says has engaged in a campaign of fraud against hundreds of Louisiana policyholders and insurance companies.
In a Feb. 17 emergency action, Insurance Commissioner Jim Donelon issued the order against the Houston firm McClenny, Moseley & Associates (MMA), its founding partners and Louisiana administrator. A department investigation showed the law firm was involved in an insurance fraud scheme and unfair trade practices involving Apex Roofing and Restoration, which is based in Alabama.
MMA falsely said to multiple insurers operating in Louisiana that the law firm had been retained by policyholders in the state to resolve hurricane-related property insurance claims, according to the department. The law firm has filed more than 1,500 hurricane claims lawsuits in the state over a three-month time frame, the department reported.
“The size and scope of McClenny, Moseley & Associates’ illegal insurance scheme is like nothing I’ve seen before,” Donelon said in a prepared statement. “It’s rare for the department to issue regulatory actions against entities we don’t regulate, but in this case, the order is necessary to protect policyholders from the firm’s fraudulent insurance activity.”
An attorney who has represented an insurance company against MMA claims welcomed the department’s actions.
“It's very important that the insurance commissioner, Jim Donelon, took such a leadership role here,” attorney Matthew Monson of the Monson Law Firm in Mandeville told the Louisiana Record. “The actions of McLenny, Moseley & Associates have been well documented, and this is the first substantive action that has been taken against the firm. Hopefully, this will pave the way for further appropriate actions to be taken by other bodies.”
MMA has acknowledged that it made more than 850 inaccurate statements about the firm’s relationship to Louisiana insurance companies, Donelon’s department said.
This week, Judge James Cain Jr. of the Western District of Louisiana instructed MMA not to mass-mediate or settle any of the 1,429 cases it filed on Oct. 21 of last year, according to a memorandum order.
“The court’s offices have received numerous complaints from parties represented by MMA who are reporting a lack of communication with MMA,” Cain said in the memorandum. “Over half of this court’s 7,000 Hurricane Laura, Delta and Ida cases have been resolved without similar complaints to the court against any other law firm.”
MMA did not respond to a request for comment.