NEW ORLEANS (Legal Newsline) - An attorney for a Houston firm accused of sneaking into homeowners' lives to take a cut of insurance proceeds says their lawsuits against him are subject to arbitration clauses they signed with a roofing company.
William Huye, of the firm McClenny Moseley & Associates, filed a motion to dismiss a class action lawsuit against him and others on May 17 in New Orleans federal court. MMA is accused of scheming with Apex Roofing to sign up homeowners with hurricane-damaged roofs.
The allegations say Apex would obtain an Assignment of Benefits from the homeowner that allowed it to negotiate directly with the homeowner's insurer. That AOB, Huye says, contained an arbitration clause for all resulting disputes.
Plaintiffs probably will disagree with its application to disputes with Huye and MMA. The class action says Apex hired MMA for the insurance negotiation without the homeowners ever knowing.
When MMA took its cut from the insurance settlement, it was a shock to homeowners, the lawsuit says.
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. He's one of a handful of defendants in Louis Carter III's class action.
"Mr. Carter cannot base his claims against Mr. Huye on the AOB while avoiding the arbitration that the AOB requires, nor can litigation equitably proceed on Mr. Carter's claims against Mr. Huye while Mr. Carter's claims against Apex proceed in arbitration," Huye's lawyers at Stanley Reuter wrote.
Apex has already moved to send claims against it to arbitration. 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.
A firm called 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.