NEW ORLEANS (Legal Newsline) - The roofing company accused of participating in a vast scheme to help lawyers take a chunk out of insurance proceeds meant for homeowners who suffered hurricane damage wants the case out of open court.
Apex Roofing on March 17 asked the New Orleans federal court to dismiss a proposed class action by an unhappy customer or send the case to arbitration. The alleged scheme had Apex receiving an Assignment of Benefits from homeowners that allowed them to pursue recovery from insurance agencies.
Allegedly not included in the AOB was the fact Apex would hire Houston firm McClenny, Mosely & Associates to pursue the insurance claims, resulting in a percentage of the recovery being paid to that firm.
Plaintiff Louis Carter III said he had no idea MMA was representing it as a law firm he had hired for his insurance claim and sued in March. The alleged scheme has brought trouble for the firm, particularly William Huye, the managing attorney of its Louisiana office.
Huye was temporarily suspended from practicing law in March, with Judge James Cain citing "ongoing misconduct" and a failure to properly document expenses for settlement approval.
Apex says its AOB contract included an arbitration clause. Carter's lawyers say it can't be invoked because the lawsuit doesn't concern Apex's work in repairing roofs.
"The illegal scheme in which Apex participated was not described, disclosed, alluded to or in any way revealed in Apex's discussions with, or documents signed by, unsuspecting property owners at their most vulnerable," Carter's response to the motion says.
"Indeed, Apex appears to continue to conceal and cloak the scheme. Again, this case is not about roofing work, or anything else 'arising under' a roofing contract with apex roofing."
Carter says an Apex representative approached him 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 instances 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.