Mostyn Law sued by hail attorney, claims firm failed to pay up for Hidalgo County suits

By: David Yates

A law firm that was once king when it came to Texas storm litigation has been sued by a Hidalgo County attorney claiming he is owed money from the wave of lawsuits that were brought after hailstorms devastated the Rio Grande Valley six years ago.

Seeking more than $1 million in damages, J. Michael Moore, a McAllen attorney, filed a breach of contract suit against the Mostyn Law Firm on Oct. 24 in Hidalgo County District Court.

Beginning in the spring of 2012, a series of severe hailstorms swept through Hidalgo County (arguably the birthplace of mass hail litigation), causing damage to thousands of area residents and businesses.

According to the lawsuit, Moore and Mostyn Law, along with a third firm, entered into a “Joint Case Handling Agreement” for hail litigation against insurance companies.

Moore claims he “substantially performed” under the agreement, while Mostyn Law “did not.”

“Plaintiff has made written demand for compliance with the Agreement, but Defendant has failed and refused, and continues to fail and refuse, to honor the Agreement,” the suit states.

Steven Badger, a Zelle LLP attorney who represents the insurance industry in hail and wind related litigation, says he’s not surprised by the lawsuit.

“We have seen a number of other lawsuits brought by lawyers, public adjusters, estimators and others fighting with one another over referral fees, commissions, and estimate charges in these matters,” said Badger. “It illustrates that as much as anything else the underlying lawsuits giving rise to these disputes are about lining the pockets of those who have found a way to inject themselves into the insurance claims process.”

Badger has been an outspoken critic of fraud and abuse.

And while the Dallas attorney says he’s not familiar with the underlying dispute between Moore and Mostyn Law, he believes one of the general problems in mass storm litigation is that homeowners are signed up for lawsuits at booths set-up outside grocery stores, flea markets, and church events.

“No lawyers are present at these booths, only marketing employees, Badger said. “Homeowners are essentially promised ‘free money’ from their insurance companies, without regard to whether their insurance claims were wrongly denied or underpaid. The homeowners are then flipped from the flea market attorney to the litigation attorney.

“Then boilerplate lawsuits are drafted by non-lawyer staff and filed. No investigation of the underlying merit of the dispute is ever conducted by a real lawyer. Not surprisingly, a significant number of these lawsuits are entirely without merit and are either dismissed or settled for nuisance value.”

Badger says in the end, everyone loses, including the homeowner.

“The insurance companies spend enormous amounts of money responding to these baseless matters,” he added. “If Texans want to know why their insurance premiums keep going up, this is one of the primary reasons.”

Moore’s attorneys, Ray Thomas and David Sanchez, did not respond to requests for comment.

Moore is seeking actual and special damages, plus court costs and attorney’s fees.