DEL RIO – From producing fraudulent documents to “hijacking the litigation process for its own benefit,” a federal judge has found the Voss Law Firm “engaged in intentional litigation misconduct” by bringing a hail lawsuit on behalf of clients that never actually signed a contingency fee agreement.
In January, U.S. District Judge Alia Moses granted a State Farm Lloyds motion for summary judgment, freeing the insurer from a suit brought on behalf of Gregorio and Maria Hernandez after finding it timely paid an appraisal award.
State Farm had also moved for sanctions, asserting Voss Law:
Voss
- Failed to tell their clients about an indemnity payment made to them;
- Failed to disclose two settlement offers made by State Farm;
- Filed a claim with State Farm on behalf of the plaintiffs without consulting them; and
- Served State Farm with fraudulent interrogatories, which were purportedly signed and verified by the plaintiffs.
Following two show of cause hearings, Judge Moses, on Aug. 17, found evidence supporting State Farm’s assertions and levied sanctions against Voss Law, concluding it was “clear” that the firm “intentionally practices law in a manner that puts their best interests before their clients and, at a minimum constitutes malpractice, if not outright fraud.”
“By keeping their clients uninformed and making decisions on their behalf, the Voss Law Firm blithely fail to uphold their ethical obligations and applied pressure to insurance companies to obtain more money for themselves,” Judge Moses wrote in the order.
“Lawyering is a service profession. The Voss Law Firm has shown the opposite practice here, hijacking the litigation process for its own benefit rather than serving as an advocate for its clients.”
The court ordered Voss Law to pay State Farm’s attorneys fees and the plaintiffs’ travel expenses for a hearing, in addition to finding it appropriate that an objective body review the actions of the Voss Law Firm attorneys Chris Schlieffer, Scott Hunziker and Bill Voss for possible additional sanctions.
While he could not speak to the specific issues in the case, Steve Badger, an insurance litigator with Zelle LLP, says the conduct Judge Moses found so disturbing has sadly become commonplace in Texas hail lawsuits.
“Nothing in the court’s order comes as a surprise to me,” Badger said. “We see this all the time. And not just from the Voss law firm – other Texas hail lawyers are even worse.
“The court was spot-on in raising a concern about lawyers hijacking the lawsuit process for their own benefit. And it’s not just the lawyers. Also involved in the process are the case solicitors, public adjusters, appraisers, and estimators. They all want a piece of the pie.”
In the case of Gregorio and Maria Hernandez v. State Farm Lloyds, Judge Moses found the Voss Law Firm “engaged in intentional litigation misconduct” by serving fraudulent interrogatory verifications that were notarized in the Montgomery County, the county where the Voss Law Firm is headquartered and a county that neither plaintiff has ever visited.
The judge also found Voss Law attorneys failed to regularly communicate with their clients and keep them abreast of material developments, essentially “robbing” them of the power to make substantive decisions, which includes failing to inform them of two separate settlement offers made by State Farm.
“More importantly, the Voss Law Firm did not even have a contract with (Gregorio Hernandez) to represent him in any litigation,” the order states.
“And when questioned about the lack of an agreement, Bill Voss (the firm’s founder) tried to explain that the reason there was no agreement with Mr. Hernandez was because the Hernandezes are married and Mrs. Hemandez was in charge. That is insufficient under the ethics rules, and the Voss Law Firm knows it.
“The Court finds that the response by Mr. Voss is utterly ridiculous and offensive.”
Judge Moses further found Voss Law had up to 23 cases before the court in the Western District of Texas, Del Rio Division, all of which were insurance lawsuits.
The suits were 10-pages long and identical, littered with conclusory language not tied to the facts of the particular case.
“It’s so bad that the ‘minor abuses’ we see are things like boilerplate petitions entirely devoid of specific factual allegations, unverified interrogatory responses, plaintiffs not showing up for depositions, and the inability to produce any documents in support of their claimed damages,” Badger said.
“Some plaintiff’s lawyers even argue that the power of attorney in their fee agreement gives them the right to verify interrogatories for their clients. That was not what was intended by the Texas Rules of Civil Procedure.
“The most serious abuses are when we find out that homeowners aren’t even aware they have an attorney or are parties to lawsuits.”
And while Badger hopes recently enacted hail litigation reform legislation will help address some of the abuses, he suspects that alone will not bring an end to the bad conduct.
“There is too much money to be made,” Badger said. “What is needed the most is for the State Bar of Texas to recognize the problem and take action against lawyers engaged in the unethical and illegal conduct occurring in these matters.”
Although the possibility of disbarment was not discussed during the show cause hearings, Judge Moses referred the issue to the Western District of Texas Disciplinary Committee to address whether further sanctions are appropriate.
“Among possible additional sanctions, the Court requests that the Committee consider whether disbarment from the Western District of Texas is proper,” the order states.
“This Court also requests that the Committee consider whether forwarding this Order and the Committee's findings to the State Bar of Texas and any other state and federal licensing authority is appropriate.”
Voss Law has not returned a request for comment.
Case History
In April of 2014, a hailstorm moved through Eagle Pass, Texas damaging the home of plaintiffs Gregorio and Maria Hernandez.
On Sept. 8, 2014, State Farm received a claim. Four days later, an adjuster visited their residence and was told by Gregorio that he had not reported a claim, court records show.
Four months later, State Farm received a letter of representation and a demand letter from the Voss Law Firm, both dated Jan. 22, 2015, accusing State Farm of failing to investigate and evaluate the Hernandezes' claim.
State Farm responded Feb. 4, 2015, explaining that it had closed the Hernandezes' claim at Gregorio’s request. State Farm's letter further requested that the Voss Law Firm cooperate in scheduling an inspection of the residence, if the couple wished to pursue a claim, court records states.
State Farm also received an estimate from Insight Appraisals and Estimate Services dated Oct. 10, 2014, which estimated a total loss of $50,977.67.
And although the appraisal was dated Oct. 10, 2014, State Farm states that it did not receive this letter until Feb. 2, 2015, and nor did it receive any communications from the Hernandezes or Voss Law between the visit in September 2014 and the letters in January 2015.
On Feb. 11, 2015, State Farm sent a letter requesting to inspect the property within thirty days. After thirty days had passed with no response from the firm, State Farm sent a follow up letter again requesting to inspect the property, court records state.
On April 23, 2015, State Farm was able to get a hold of the firm by phone, but it was not given an inspection date. The insurer followed up in May 2015 and again on June 2, 2015.
Finally, on June 10, 2015, almost six months since the first inspection request, State Farm scheduled an inspection for July 1, 2015, court records state.
State Farm inspected the property on July 1, 2015 and nine days later issued an indemnity payment in the amount of $2,733.94 to the couple through Voss Law.
“Interestingly, the Voss Law Firm filed suit in state court on June 29, 2015, before State Farm had even inspected the property, and served process on State Farm on August 3, 2015,” the order states.
State Farm then removed the case to federal court and made a settlement offer for $6,500 on Aug. 21, 2015 and another offer of $7,300 on Sept. 22, 2015, to which the plaintiffs did not respond.
On Dec. 10, 2015, Voss Law, without the both clients’ consent, invoked the contractual appraisal process naming Ray Choate as their appraiser. State Farm named Bryan Scanlan as its appraiser, court records show.
On May 31, 2016, the appraisers jointly set the amount of loss at $10,742.08, on a replacement cost value basis, and $8,940.56, on an actual cash value basis.
State Farm tendered payment of the appraisal award to the Voss Law Firm in the amount of $5,206.62.
The plaintiffs sought up to $200,000 in damages and accused State Farm of breach of contract, violations of the Texas Insurance Code, and common law fraud.
The plaintiffs’ extra contractual claims failed, due to the judge granting State Farm summary judgment and dismissing the breach of contract claim.
The Voss Law Firm is located in the Woodlands.
Filed in the U.S. District Court for the Western District of Texas, case No. 2:15-cv-00092-AM-CW