Ethics
Law firm accused of 856 insurer misrepresentations is suspended from practice in federal district court
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Houston-based law firm McClenny, Moseley & Associates has been suspended from practice in a Louisiana federal court because of a judge’s concerns about its purported representation of clients with claims related to Hurricanes Laura, Delta and Ida.
In a March 4 order, U.S. District Judge James D. Cain Jr. of the Western District of Louisiana suspended McClenny, Moseley & Associates for 90 days.
Law360 has the story.
Cain cited evidence that the firm, known as MMA, had filed “numerous suits” against insurers that never issued policies to the plaintiffs and had filed lawsuits for plaintiffs who had already settled their insurance claims. He also cited an alleged instance in which MMA improperly signed a settlement check.
The Louisiana Department of Insurance had also targeted MMA with a cease-and-desist letter Feb. 17. The letter said MMA misrepresented that it had been retained by hurricane victims to several insurance companies in connection with MMA’s contractual arrangement with Apex Roofing and Restoration. The letter cited evidence from hearings by Cain and a different district judge in the Eastern District of Louisiana.
According to the cease-and-desist letter, MMA had “admitted to 856 misrepresentations to Louisiana insurers that MMA was retained by the insureds/homeowners, when in fact MMA did not represent those insureds/homeowners relative to claims for payments and benefits under those insurance policies.”
The firm also admitting settling nine cases in which it did not represent the plaintiffs.
James J. Donelon, the Louisiana commissioner of insurance, announced the cease-desist-order in a Feb. 17 news release.
“The size and scope of McClenny, Moseley & Associates’ illegal insurance scheme is like nothing I’ve seen before,” Donelon said. “It’s rare for the department to issue regulatory actions against entities we don’t regulate, but in this case, the order is necessary to protect policyholders from the firm’s fraudulent insurance activity.”
Cain will refer the case to all the judges on his court for the possibility of further discipline, including a permanent suspension, at the end of 90 days.
A firm representative told Cain in a hearing that the firm was trying to help people who would have lost out on their rights absent representation.
Law360 was unable to reach MMA’s two founding partners, John “Zachary” Moseley and James McClenny, and its Louisiana managing partner, R. William Huye III.
The three lawyers did not immediately respond to the ABA Journal’s request for comment sent by email. Two of them did not immediately respond to voicemails, and the third, Moseley, did not list a contact number on the firm’s website. Calls to the MMA’s general number were cut off.
One lawyer who worked at the firm told Law360 that he resigned Saturday, and he had nothing to do with the policies and the procedures that led to the suspension.
