Local attorney Steve Mostyn, who flooded the Jefferson County District Clerk's Office with hundreds of Hurricane Rita lawsuits in recent months, is now spearheading a class-action suit against Allstate. Mostyn is claiming the insurance company disseminated misleading statements to the public regarding the statute of limitations for filing Rita cases.
In his suit, Mostyn points to a Sept. 30 Beaumont Enterprise article titled, "Has Cutoff Point on Rita Lawsuits Passed?" in which Allstate spokesman Joe McCormick is quoted as saying that Allstate's "polices intend the deadline to be interpreted as two years and a day from the cause of loss" and that it is "a reasonable amount of time for things to be settled."
Hurricane Rita made landfall near Sabine Pass as a Category 3 storm on Sept. 24, 2005.
The class-action suit, J.W. Samuel et al vs. Allstate Texas Lloyds, was originally filed in Jefferson County District Court (Case No. E180-472) to restrain Allstate from speaking about the statute of limitations. It was transferred to federal court in the Eastern District of Texas-Beaumont Division on Nov. 9.
For the last two years, the Mostyn Law Firm, which bills itself as Houston Insurance Litigation Lawyers, has saturated Southeast Texas with TV and newspaper ads, urging homeowners to contact his office if they are dissatisfied with their Rita insurance payments.
Full page ads offer an "absolutely free" guidebook for policy holders, "Homeowner Insurance Claims Exposed," just by calling the Mostyn Law Firm.
"Hundreds of Golden Triangle homeowners feel their insurer cheated them," the ad claims. "Many are mad, frustrated and feel victimized but simply do not know what to do next to get the money they deserve on their claim."
The guidebook reveals "step-by-step, how to discover just how badly you may have been cheated."
According to the Texas Department of Insurance, when the second anniversary of Rita on Sept. 24 elapsed, the statute of limitations ended for most property owners to file a lawsuit against their insurance carrier. However, some policyholders may have additional time as specified in their individual policies.
Now that the deadline is finally flat-lining, it appears Mostyn's class-action could possibly reopen a litigious window allowing local residents who were allegedly mislead by McCormick's comments to jump aboard the suit.
"Defendant has published, disseminated…and circulated public advertisements containing untrue…and deceptive assertions regarding the statute of limitation for Hurricane Rita cases to be brought in Southeast Texas," the suit said. "Defendant's conduct constitutes a violation of Texas Insurance Code, (Section) 541.060(a)."
However Mostyn's own ad spread emphasizes the time element.
"… there is a filing deadline for taking action and, sadly for some this deadline has already passed," the ad states. "But for many others the deadline is still a few days away."
His lawsuit says the "number of class members is unknown" at this time, but could come to encompass hundreds of residents.
Mostyn contends Allstate's alleged fraudulent and negligent representations have caused his clients' injury.
"It is impossible to accurately measure, in monetary terms, the damages caused by defendant's conduct," the suit said.
At press time, Allstate spokesperson Joe McCormick could not be reached. Other Allstate spokespersons did not return Record phone calls.
Allstate stopped writing windstorm coverage in Texas costal counties, such as Jefferson County, last year.
The case was assigned to U.S. District Judge Ron Clark and referred to Magistrate Earl Hines.
Case No. 1:07-cv-859-RHC-ESH