The managing partner of the Louisiana office of a law firm accused of mishandling hundreds of Hurricane Ida property insurance claims has been suspended from practicing law in the state for 90 days by the Louisiana Supreme Court.
Richard William Huye III of the Houston-based McClenny, Moseley & Associates law firm was suspended “on an interim basis” on March 3 pending future rulings from the high court, according to a state Supreme Court order.
In the wake of that action, the U.S. District Court for the Western District of Louisiana issued a similar order. In an action on March 4, Judge James D. Cain Jr. ordered that all attorneys affiliated with MMA were suspended from practice in the federal district for 90 days.
“At the conclusion of that period the matter will be referred to a full panel of the Article III judges of this court for consideration of further discipline, which could include permanent suspension from practice in the district,” Cain’s order states.
Cain’s review of the MMA’s mass filing of hurricane damage claims in Louisiana found that serious problems occurred with duplicate filings, the filing of cases against insurance companies that had no business relationships with the plaintiffs and the filing of cases on behalf of alleged clients who had already settled their claims with their insurers.
“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,” Cain said. “A suspension is therefore necessary to protect the interest of its current clients in this district.”
The Louisiana Department of Insurance, which issued a cease-and-desist order against MMA last month, expressed support for the Western District’s action.
“We welcome news of the court’s decision and look forward to cooperating with Judge Cain and Judge (Michael) North (of the Eastern District of Louisiana) in our efforts to address this abusive arrangement involving McClenny, Moseley and Associates,” John Ford, the department’s spokesman, told the Louisiana Record in an email.
The state’s Office of Disciplinary Counsel, which petitioned the state Supreme Court for Huye’s suspension, said MMA was guilty of multiple violations of state ethics rules. These included lack of diligence, lack of client communication, conflict of interest, failure to disburse funds owed to clients, commission of criminal acts, such as insurance fraud, and engaging in “dishonesty, fraud, deceit or misrepresentation.”
The office also cited questionable assignment-of-insurance-benefit schemes that the law firm engaged in.
“This scheme would allow them to take a percentage of funds, up to 40% of the recovery,” Deputy Disciplinary Counsel Paul Pendley said in his petition to the state Supreme Court. “Whatever funds are left have not always been disbursed to the homeowner, at least in a timely fashion. The amount of the benefits left over is typically inadequate to complete repairs on the homes in question. …”