The Louisiana Department of Insurance has taken the extraordinary step of filing an administrative action against a Texas-based law firm. I have worked in the first party insurance industry for over forty years. I’ve never seen anything like it.
Law firms and attorneys are usually governed and prosecuted by the state bar associations when allegations of misconduct arise. Lawyers, like all citizens, can also be prosecuted by state and federal prosecutors for violations of criminal laws. This usually leads to suspension or disbarment from the practice of law if the offenses are serious. I can̵7;t recall an insurance agent ever suing attorneys in an administrative action. The allegations in this matter are very serious.
LDI has evidence that McClenny Moseley & Associates, PLLC, and its principals, managers and/or partners William Huye Ill, John Moseley and James McClenny (collectively referred to herein as “MMA”) participated in a fraudulent scheme involving fraudulent insurance deeds.
According to information and evidence now in LDI’s possession, MMA, in connection with an agreement between MMA and APEX, fraudulently represented to several Louisiana insurance companies that MMA had been retained by Louisiana policyholders as their attorney and/or legal representative. to the settlement of hurricane-related insurance claims without the knowledge of the insureds MMA purported to represent.
According to a transcript of the trial held on February 1, 2023 by the United States District Court for the Eastern District of Louisiana, with the Honorable Michael B. North presiding, MMA admitted to sending letters of representation to insurance companies for billing. of the insureds, while MMA did not represent these insureds, but rather represented APEX. During the proceedings, when the judge was questioned, MMA admitted to having filed suit and settled eleven (11) claims on behalf of the insureds without the knowledge and consent of the insureds.
Following the conclusion of the February 1, 2023, federal court hearing described above, the Honorable Michael B. North ordered MMA, through its attorney of record, William Huye Ill, to produce extensive lists related to specific cases where MMA provided legal representation to Louisiana insureds and also specific cases where MMA falsely represented to Louisiana insurers that they represented the insured when in fact they represented APEX and not the insured.
On February 13, 2023, by written responses to orders issued by the Honorable Michael B. North, MMA admitted 856 misrepresentations to Louisiana insurance companies that MMA was retained by the insureds/homeowners, when in fact MMA did not represent the insureds/homeowners’ relative for claims on payment and benefits under these policies.
In one of the 856 cases, in which MMA admitted to misrepresenting itself as having been retained by insureds Michael and Holly Caffarel, in connection with a claim for benefits following Hurricane Laura, LDI has learned through a complaint filed by a attorney retained by the Caffarels that the Caffarels learned of the fraudulent claim representation only when Chase Bank, the mortgagee and the listed payee on the insurance settlement check, endorsed the check for damages sustained from Hurricane Laura and mailed the check to the Caffarels.
In a separate acknowledgment in response to the order issued by Judge North following the hearing on February 1, 2023, MMA admitted to the court that it had settled nine (9) claims while MMA did not represent the insureds associated with those claims.
Transcripts obtained by LDI from a court proceeding held on December 13, 2022, in the United States District Court for the Western District of Louisiana, with The Honorable James D. Cain, Jr. as chairman, disclosed that MMA received and deposited a check dated August 24, 2022 from ‘Allstate’ representing proceeds from an insurance settlement. The settlement GileGk was paid to MMA, Mel Addison and Adriana L. Addison (the insured/homeowners) and Accord Services, Inc. Accord Services, Inc. is listed as the mortgagee on the property for which the insurance benefits were claimed and paid. According to the undisputed testimony of Kermith Sonnier, the owner of Accord Services, Inc., MMA was never authorized to sign the name of Accord Services, Inc. to the subject settlement check. Mr. Sonnier further testified that he had never spoken to MMA about the check…
The Louisiana Department of Insurance issued a cease and desist order to the law firm. The law firm faces significant administrative penalties and has 20 days to file a response to the allegations. As always, just because allegations have been made does not mean the allegations are true or that laws have been broken.
What is so different about this matter is that the facts are largely drawn from legal proceedings involving the law firm. The Louisiana Department of Insurance was not required to conduct a separate investigation. It simply reads court documents and transcripts of hearings.
Lawyers cannot say they represent someone when they do not. Attorneys cannot sign checks for unauthorized persons. Lawyers cannot settle insurance claims for non-clients. These are serious allegations of unethical conduct that must be investigated by the Louisiana and Texas State Bars.
The vast majority of all lawyers I come across are hard working and ethical. The notion that all lawyers make a fortune is simply not true. No need for lawyer jokes.
The vast majority of all the lawyers I talk to and those I call colleagues care about people and take great pride in the ethics of the profession. They worry about our reputation and expect others to act ethically. I received many emails and calls from lawyers about this on Friday and Saturday, most of them in disbelief. Many expressed outrage.
We’ll see what comes next. People have a right to a presumption of innocence. But this story seems like it’s just the beginning, and there’s a lot more that could become public since this is all playing out in very public forums.
Looking is half the fun: life is much more manageable when viewed as a scavenger hunt as opposed to a surprise party.