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Golden nuggets from the sky – rush for hailstorm riches may lead to insurers pulling up stakes, says attorney

SOUTHEAST TEXAS RECORD

Saturday, December 21, 2024

Golden nuggets from the sky – rush for hailstorm riches may lead to insurers pulling up stakes, says attorney

Badger

Badger

Everything is bigger in Texas, including the litigation following every hailstorm strike in the state – a “rush to riches” that may soon provoke insurers into limiting coverage, says one attorney.

After every major storm in the Lone Star state, insurance litigators, such as Steve Mostyn and Bill Voss, advertise heavily in the area -- a model originally developed by Mostyn in the wakes of Hurricanes Rita and Ike.

Attorneys, like Voss, now employ the model immediately following disastrous storms nationwide, scrambling to sign up as many clients as possible in as many states as possible.

“We are seeing the Texas lawsuit model being used in numerous states where hail is common,” said Steven Badger, a commercial insurance attorney and partner at Zelle LLP in Dallas.

“Colorado, Minnesota, Oklahoma and other states have recently seen a significant increase in hail related litigation. And, not surprisingly, lawyers from Texas are commonly involved in these lawsuits.”

And as a seemingly consequence of the overextension, numerous Voss clients, especially those hit by Hurricane Sandy, have had their storm lawsuits tossed due to apparent neglect, court filings show.

“Lawyers are trying to apply the mass tort model to property insurance lawsuits,” Badger said. “The problem with doing that is these matters are not consolidated into multidistrict litigation, which means that every single lawsuit must be individually pursued on its own merits.

“It’s easy to sign up lots of clients. But it’s really hard to get all of the work done. As a result, the clients suffer.”

Some law firms, like the Mostyn Law Firm in Houston, have the experience and attorneys to handle large volumes of cases while others do not, says Badger.

“Unfortunately, some law firms overextended themselves in the rush to riches. We have seen that already with the dismissed Hurricane Sandy lawsuits,” Badger said. “It is hard to believe that lawsuits are getting dismissed because lawyers are simply not paying attention to their clients.

“I certainly hope that the reputable trial lawyer organizations and the State Bar of Texas are paying attention to what is going on in these matters.”

Badger says the rush to sign up clients often leads to improper tactics, including the use of case runners.

“That’s the dirty little secret that is finally starting to come to light,” he added. “I expect we will see illegal barratry actions brought against certain Texas lawyers in the months ahead.”

Ultimately, Badger believes the short-term rush to riches by a few lawyers has long-term implications for all building owners.

“Like all other attacks on the insurance industry, this crisis will also come to an end,” Badger said. “If the legislature doesn’t step in and fix it, then the insurance industry will by limiting hail damage coverage. The industry has no choice.

“And as a result, the honest homeowner who just wants his roof damage fixed will suffer.”

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