A federal judge in Lafayette has sanctioned the Houston law firm that filed thousands of lawsuits claiming damages from the hurricanes that battered Louisiana in 2020 and 2021.
In an order filed Jan. 17, United States District Judge David C. Joseph ordered the law firm of McClenny, Moseley and Associates PLLC to pay attorneys’ fees and costs in the amount of $15,914 in a check made payable jointly to The Monson Law Firm LLC and the defendant Allied Trust Insurance Company (Monson’s client) for attorneys’ fees and costs incurred in one of the cases McClenny, Moseley erred in filing.
Joseph ordered monetary sanctions subsequent to a hearing held Dec. 28 after McClenny, Moseley failed to appear at a Dec. 21 hearing to explain why monetary sanctions should not be imposed.
The issue arose after McClenny, Moseley filed a lawsuit in August 2022 naming Allied Trust as a defendant and alleging that Allied Trust failed to pay the claim of a Shreveport homeowner whose home sustained damage from Hurricane Ida on Aug. 29, 2021.
During the hearing, Joseph expressed skepticism that the Shreveport property was damaged by Hurricane Ida. “It seems suspicious to me,” Joseph said, and more likely that the home was damaged by either Laura or Delta.
Nonetheless, the major flaw in the plaintiff’s case, Bobby Dyer versus Allied Trust, is that Allied Trust is not Dyer’s insurer.
Matthew Monson of The Monson Law Firm filed a pleading Dec. 27, asking the court to take action against McClenny, Moseley and its attorneys, including suspension and/or disbarment.
The resulting sanctions add to the legal troubles for McClenny, Moseley, which is accused of making errors in dozens of hurricane lawsuits filed in the U.S. District Court for the Western District of Louisiana. During a Dec. 13 hearing, Judge James D. Cain Jr., sitting in Lake Charles, told representatives of McClenny, Moseley that they must personally appear before him if they want to settle any of the approximately 1,600 lawsuits that the law firm filed in the Western District.
In his order, Joseph wrote that he ordered sanctions because “plaintiff’s counsel failed to properly investigate” the issue prior to filing the lawsuit; did not “timely comply” with the Oct. 20, 2022, order by Cain to investigate the claims at issue, and failed to appear at the scheduled Dec. 21 hearing. Joseph gave McClenny, Moseley 14 days to pay the attorneys’ fees and costs.
At the Dec. 28 hearing, attorney R. William Huye III, managing partner of McClenny Moseley’s New Orleans office, offered to Joseph an explanation for missing the Dec. 21 hearing. Huye said the law firm “miscalendared” the hearing and consequently “missed it.”
During the Dec. 28 hearing, Joseph engaged in dialogue with Dyer, who was present via telephone and had trouble remembering who he had talked to at the McClenny, Moseley law firm and said that Allied Trust was not his insurer, according to court documents.
Also, at the Dec. 28 hearing, Joseph explained to Huye that by presenting a court pleading, the attorney certifies that an inquiry has been conducted. Joseph said, “This case might be a good place to do it, if your client is “not sure if he has an insurance policy or who it might be with, as it’s clear Mr. Dyer doesn’t from talking to him today,” according to a transcript of the hearing.
“By signing your complaint,” Joseph said, “you are saying there’s factual support for your claims,” but the insurance company told McClenny, Moseley twice that the company did not issue a policy to Dyer. “So what facts did you have to sue them before you signed the document?”
Huye told Joseph that the law firm “paid for an estimator to go out to the property,” and that the inspector “found more than $75,000 worth of damage.”
Trouble is the house is an 803 square foot dwelling at 1715 Malcolm St. in Shreveport with a 2021 assessed value of $24,946, according to real estate websites. The house sits in a neighborhood where most homes lack maintenance and several are boarded up and unoccupied. From the street, the house appears to be in better shape than many of its neighbors, and the roof appears to be intact.
Huye told Joseph that McClenny, Moseley had “multiple, multiple, multiple conversations” with Dyer and that Dyer did not grant the law firm permission to dismiss Allied Trust from the lawsuit until Dec. 27. Huye said that McClenny, Moseley sent more than five letters to Dyer and had a court runner “drive up from New Orleans to Shreveport and knock on his door.”
According to court documents, Dyer does not live in the Shreveport house, but in an apartment on Texas Street in Bossier City.
During the Dec. 28 hearing, Monson told Joseph that the intake survey references “Krause and Kinsman, which is an out-of-state law firm that’s partnered with McClenny, Moseley to engage in marketing.” Also on the intake survey is Velawcity ID, which is a marketing company that McClenny, Moseley pays to acquire clients, Monson told Joseph. That’s why McClenny, Moseley has 15,000 claims.
Velawcity describes itself as “The Legal Advertising Network,” according to its website, and says that it offers “Qualified Leads For Law Firms” and provides “case acquisition and contract services.” Velawcity says it owns and operates multiple intake call centers in the United States. Velawcity is soliciting claims for several class action lawsuits on its website.
In his Dec. 27 pleading, Monson says he has found 25 lawsuits filed by McClenny, Moseley against carriers that did not insure the subject property; a few are against carriers that did no business in Louisiana.
In the pleading, Monson points out that the statute of limitations for Laura damage claims passed on Aug. 28 and for claims related to Delta on Oct. 10. That means the homeowners with Laura and Delta damage cannot file new lawsuits against the proper insurers, if there were, in fact, policies in effect at the time.
In each of the 25 lawsuits that McClenny, Moseley allegedly filed in federal court against the wrong insurers, the plaintiff claims damages of at least $75,000. Monson said in his pleading that this means the loss to Louisiana property owners may amount to more than $1,875,000.