Insurance Commissioner Jim Donelon issued $2 million in fines against a Texas law firm and three of its partners on Tuesday for what he labeled unfair trade practices and insurance fraud involving at least 850 Louisiana homeowners and policyholders.
The fines were levied against McClenny Moseley & Associates (MMA), the firm’s founding partners James McClenny and John Moseley, and former Louisiana managing partner William Huye. All were fined $500,000 each, the maximum allowed under current law. The firm signed up thousands of clients in Louisiana in insurance cases linked to recent hurricanes.
Donelon called the law firm’s conduct “one of the most egregious cases that has ever come through this department.” The fines, Donelon added, “should put all bad actors on notice that fraudulent behavior will not be tolerated in Louisiana.”
According to findings in an ongoing investigation by the Louisiana Department of Insurance and documents produced by the firm on orders by U.S. Magistrate Judge Michael North, MMA admitted to at least 856 cases in which it claimed to represent Louisiana policyholders, when it was actually retained by a roofing company.
In several cases, MMA then sent out demand letters to policyholders’ insurance companies, invoked appraisal on their behalf, and received and negotiated insurance settlement checks without authorization from the policyholder, according to the department.
In doing so, the law firm intentionally defrauded and deceived Louisiana policyholders and insurers for its own benefit and collected fees they weren’t entitled to, the department said in a press release.
The department previously issued a cease-and-desist order against the firm for the same conduct. Huye has been temporarily suspended from practice in Louisiana and all of the firm’s cases are currently on hold statewide until plaintiffs can find new counsel. The firm is facing a slew of malpractice, class action and other lawsuits related to its methods of obtaining and handling cases in Louisiana and Texas.
Leave a Reply