BATON ROUGE, La. (Legal Newsline) - A Houston law firm accustomed to taking on insurance companies must now defend itself from a class action lawsuit that says it made illegitimate claims after hurricanes in 2020 and 2021.
Plaintiff Louis Carter III sued McClenny, Mosely & Associates on March 13 in Tangipahoa Parish District Court in Louisiana. Other defendants include Tort Network LLC (aka Velawcity), Apex Roofing and Restoration and William Huye, an attorney currently suspended from practicing law for 90 days Louisiana.
The defendants removed the case to Baton Rouge federal court on March 16. They are accused of a "vast scheme" that had MMA making claims to insurers on behalf of clients they didn't actually represent.
It started when an Apex representative approached Carter about roof damage suffered at his house following Hurricane Ida. The rep told him he could pay Apex a $500 deductible to fix the roof, then sign an Assignment of Benefits that permitted Apex to "get the ball rolling" on the insurer assessing the damage, the suit says.
Carter alleges this AOB contained no mention of MMA. The insurer, meanwhile, said the damage to the roof was nowhere as severe as Apex claimed.
"Eventually, Plaintiff was able to speak to the adjuster who inspected his property, who informed him off the record that his insurance company had been served with a letter of representation by MMA, who claimed that Plaintiff was their client, so the insurance company was no longer able to speak to Plaintiff directly," the suit says.
"This was the first time Plaintiff had ever heard of MMA or heard that it was claiming to represent him."
After weeks of trying to contact MMA, Carter finally told an attorney there that he did not want MMA representing him, the suit says. Carter preferred to handle the insurance claim himself.
Ultimately, MMA sent a "Notice of Withdrawal of Representation" to the insurer, the suit says. Carter said this was inappropriate, as he had never hired it in the first place.
"Plaintiff's experience dealing with MMA and Apex is similar to the experience of countless others across the State of Louisiana who had run-ins with Apex and MMA, and serves as one example of the schemes perpetrated by Defendants that have caused damage to the class of persons alleged in this petition," the suit says.
Velawcity is alleged to have signed marketing service agreements with MMA that had Velawcity reach out to potential clients with MMA's engagement letter. MMA paid Velawcity nearly $14 million for at least 4,628 clients, the suit says.
These communications were unsolicited and misrepresented that Velawcity was a law firm, the suit says. A federal magistrate judge has found at least nine insances in which MMA settled a claim for Apex and not the named insured, as well as 856 similar claims not currently in litigation, the suit says.
Huye is the managing attorney of MMA's Louisiana office. He was suspended from practicing law earlier this month.
“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,” Judge James 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.