The top funder of Democrats in the state of Texas was also the political figure behind “virtually” all the opposition to a bill aimed at curbing the surging trend of mass lawsuits filed after a hailstorm strike, says one tort reform group.
For the past decade, Houston trial lawyer Steve Mostyn has reaped hundreds of millions of dollars suing the Texas Windstorm Insurance Association and other insurers following major hurricanes and hailstorm strikes.
And when Senate Bill 1628 was on the table, groups supported by trial lawyers fought against the measure – an opposition movement that was being orchestrated by Mostyn, a storm-chasing trial lawyer who would continue to make millions of dollars in fees if he could defeat the bill, warned Sherry Sylvester, spokesperson for Texans for Lawsuit Reform.
“Steve Mostyn has filed more hail lawsuits than any other attorney in Texas,” said Sylvester in a May 21 statement. “He models hailstorm lawsuits after the lawsuits he brought against TWIA that reaped him an estimated half-billion dollars in attorney fees while wrecking TWIA’s financial position.”
Sen. Larry Taylor, R-Friendswood, introduced SB 1628 in March. Before passing on a 21-10 vote on April 30, the bill was amended a dozen times in an attempt to pacify all interested parties, including trial lawyers.
The bill sought to put in place a two-year statute on claims; stop plaintiffs from naming adjusters in their suit; and require plaintiffs to give notice of their storm damages when filing suit.
SB 1628 was designed to hinder trial lawyers from drumming up mass litigation following a storm, such as the hailstorm that stuck McAllen in Hidalgo County in March of 2012.
The storm caused $250 million in damages. The subsequent lawsuits that followed in the storm’s wake drove the cost up to $600 million, according to the Insurance Council of Texas.
On average, 2 percent of insurance claims become lawsuits. But in the McAllen storm, the number jumped to 22 percent.
Sylvester said Mostyn has turned his mass-tort model for hurricane claims to hail claims, causing an explosion in weather-related lawsuits across the state – over 20,000 lawsuits in 81 Texas counties, a figure she says is increasing daily.
“As a result, property owners are seeing higher insurance deductibles, higher premiums, and reduced coverage,” she added. “Over 10,000 people in the Rio Grande Valley have already lost their homeowners’ insurance coverage.”
To combat the bill, the Texas Association of Consumer Lawyers, a group founded by Mostyn, launched Save Texas Business – a website dedicated to turning Texans against the hailstorm lawsuit bill.
“SB 1628 is bad for businesses and homeowners,” the site states. “The bill protects insurance companies, agents and adjusters from liability for bad conduct – including unfair claims handling and denial or delay of paying valid claims; while exposing insurance policyholders and businesses to possible criminal charges.”
Some of the claims made by savetexasbusiness.com include:
- The bill provides immunity for insurance agents and adjusters – no matter how outrageous the misconduct;
- The bill will lead to backlogged federal court forum-shopping for foreign insurance companies at the expense of Texas businesses and consumers;
- The bill would eliminate the penalties for unfair claim denials, leaving Texas businesses and families without protection from bad actors;
- By deleting language to place public adjusters under the barratry statute, the bill actually weakened solutions to the actual problem; and
- The bill shifts the insurer’s work onto the home or businesses owner, with the possibility of a Class A misdemeanor if they make a mistake.
Sylvester said Mostyn has invested millions to try to impact the political process in Texas, backing candidates who will support his agenda to protect lawsuit loopholes in Texas statutes and expand opportunities to sue.
In recent years, the Houston trial lawyer has spent more than $23 million against Republican candidates, according to campaign finance reports on file with the Texas Ethics Commission.
Mostyn, who has refused to comment on any Record articles, keeps an office in Austin so he can keep watch over his investments, said Sen. Taylor in a past interview.