TWIA information on Ike settlement shows $44M to Southeast Texas lawyers

By Marilyn Tennissen | Jan 11, 2011

Beach houses reduced to pilings and slabs by Hurricane Ike.

Sixty-four attorneys from Southeast Texas received an estimated $44 million from settlement agreements with the Texas Windstorm Insurance Association, according to recent documents from TWIA.

After months of delays, court orders and legal decisions, the Southeast Texas Record has obtained requested information from TWIA about more than 1,300 settlements reached this summer with policyholders whose homes were destroyed down to the slab by Hurricane Ike.

The "slab settlements" totaled $114,603,667; of which $70,124,956 went to the policyholders. The amount of attorneys' fees calculated for the settlement offer comes to $44,478,710. However, TWIA notes that attorneys' fees were subject to fee agreements in each case.

In addition to the settlement with the slab plaintiffs, TWIA also settled a class action in Judge Susan Criss' Galveston County District Court, Hubert W. Wilson vs Texas Windstorm Insurance Association, Case No. 09-cv-0421.

The class action involved 1,255 plaintiffs. One hundred and eighty one of those plaintiffs were represented by 24 different attorneys or firms, but 1,074 had no counsel.

In the Aug. 27 settlement it was agreed all class counsel would receive $11.5 million, which is held in trust by the Beaumont firm Weller, Green, Toups & Terrell.

Criss had appointed the following lawyers as Lead Class Counsel:

  • Mitchell A. Toups of Weller, Green, Toups & Terrell in Beaumont;
  • John Steven Mostyn of the Mostyn Law Firm in Houston;
  • A. Craig Eiland of the Law Offices of Craig Eiland in Galveston;
  • Anthony Buzbee of The Buzbee Law Firm in Houston;
  • Richard Coffman of The Coffman Law Firm in Beaumont;
  • Robert Binstock of Reich & Binstock in Houston; and
  • Riley L. Burnett Jr. of Clark, Burnett, Love & Lee GP in Houston.

    TWIA states that as of Sept. 29, it had spent $5,239,833 defending the slab claims.

    State Rep. Larry Taylor (R-Friendswood) has been fighting since September to learn how much money "Ike Recovery" lawyers received in the settlements and other information such as the amounts claimed for property damage, non-economic losses and living expenses.

    Several other entities, including the Southeast Texas Record and Texans for Lawsuit Reform, also submitted requests for the information from TWIA.

    But at the request of Steve Mostyn, the attorney representing the Plaintiffs Steering Committee, Judge Criss granted a motion to stop TWIA from releasing the documents.

    The Texas Attorney General's office was asked to weigh-in on the matter and it determined that TWIA was subject to the Public Information Act.

    After the OAG's decision, Criss asked Mostyn and attorneys for TWIA and Rep. Taylor to come up with an agreement detailing the specific information to be released. Criss said she would dissolve the injunction when the parties reached an agreement. 

    Criss signed the release order on Dec. 16.

    TLR President Richard J. Trabulsi Jr. said in an email to the Record that his organization requested the information regarding the TWIA settlements "because transparency and accountability in lawsuit settlements by a quasi-governmental body such as TWIA are essential to achieving that goal."

    "Improving public trust in our civil justice system has always been a primary goal for TLR," he said.

    Trabulsi said the extraordinary efforts since September of the plaintiff lawyers involved in TWIA settlements to block the release of public information increases the public's skepticism of the civil justice system. TLR is currently reviewing the documents regarding the settlements that have so far been released by TWIA, he said.

    Joe Nixon, a former Republican lawmaker who represented Taylor, said the congressman was not seeking the information as an attempt to make plaintiffs' lawyers look bad.

    "The request was for information on how to make TWIA operate more effectively and efficiently for policyholders and the State of Texas," Nixon said in an email to the Record.

    Nixon said the large fees to attorneys get passed on to policyholders in the long run.

    "The attorney's fees combined for the plaintiff and defense attorneys equal almost the total amount paid in the settlement," he wrote. "That cost is borne by policyholders and the state of Texas. Adjusting claims promptly and fairly could eliminate that expense. If the claims were adjusted promptly and fairly initially, then there is another problem."

    Nixon added that not all information is known right now to determine what reforms are needed.

    "This is just the first step in the information gathering process," he wrote.

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