Allstate Texas Lloyds recently filed suit against R. Kent Livesay, accusing the Edinburg attorney of fraudulently representing several storm victims and demanding payment on their behalf.
The lawsuit, filed Dec. 29 in Tarrant County, comes seven months after an El Paso couple sued Livesay for barratry, alleging he used a case runner to drum up business following a car wreck.
“The darkest hour in any man’s life is when he sits down to scheme and plan how to get money without lawfully earning it,” states the suit, brought by Raymond and Melanie Miller. “The conduct complained of herein demands a jury’s wrath.”
The mounting litigation against Livesay may suggest a pattern of illegal client solicitation, which is quickly becoming a “disturbing trend” in the Lone Star State, says one expert.
In the Allstate case, Steven Badger, a commercial insurance attorney for the Dallas law firm Zelle Hofmann, believes it’s possible the storm victims may have been signed up for legal representation without their knowledge.
“While I am not familiar with the specific facts of this action, the allegations are typical of what we are seeing with disturbing frequency across the state,” Badger said.
“Homeowners believe they are signing agreements with either a roofing contractor or public adjuster, but unbeknownst to them they are also signing attorney representation agreements.
“A lawsuit is then filed in the homeowner’s name without the homeowner ever meeting or even talking to the lawyer. They have no idea they are a party to a lawsuit.”
Allstate contends Livesay made false misrepresentations concerning his “supposed legal representation” of its insureds, knowing they were false.
“Livesay intended Allstate to act upon these misrepresentations and pay sums in regard to the claims, of which he would receive all or a portion of the proceeds,” the suit states.
“Allstate actually and justifiably relied on the misrepresentations and as a result suffered injury when it retained defense counsel … and incurred legal costs.”
Accusations of attorneys using case runners to unknowingly sign up victims and then demand settlements from insurers have begun to surface all over the state.
“We have seen a half dozen cases in our office alone over the past few months where we learned during litigation that the building owners had no idea they were parties to lawsuits,” Badger said.
“In fact, we recently had one where the lawyer showed up at mediation trying to settle the case, at which time we advised him that we were aware that the lawyer’s supposed client had no idea he had sued us.
“The lawyer dropped the lawsuit that day.”
The Texas Penal Code prohibits barratry, making it a criminal act to use a third-party non-lawyer to sign up clients on an attorney's behalf.
To prevent future incidents, Badger says a couple of the lawyers engaged in barratry need to be exposed and prosecuted by the State Bar of Texas.
“Perhaps then all of the others engaged in the same conduct will fear (the loss of) their law licenses and stop,” he added.
The amount of actual damages being sought by Allstate isn’t exactly a staggering sum, a little less than $1,100 for fees paid to defense firms.
However, the insurance company also seeks a permanent injunction enjoining Livesay from falsely representing homeowners insured by Allstate and an award of exemplary damages.
“Allstate should be commended for taking this action, not for its own benefit, but for the benefit of its insureds who are unwittingly parties to lawsuits they want no part of,” Badger said. “They are the real victims here.
“All of these lawsuits are driving up insurance rates, increasing deductibles, and reducing available coverage for all Texans. A few lawyers are getting rich and all Texans are suffering.”
Allstate’s petition centers on three policyholders who made respective claims following “weather events.”
In all, Livesay demanded more than $100,000 from Allstate on behalf of the policyholders, plus treble damages.
Allstate is represented by David Kassabian and Bret Weatherford, attorneys for the Kassabian, Doyle & Weatherford law firm in Arlington.
Tarrant County case No. 2015-007379-2
The complaint filed in El Paso County also names the following Livesay “doing business as” companies as defendants, ACDT Advocate Center, El Paso Injury Center, Accident Injury Medical & Legal Center, Injury Claims Center for El Paso and El Paso Help.com.
Individuals Carlos Brito-Porras and Michael Andre Veloz are also named as defendants.
The Millers, the plaintiffs in the suit, accuse the defendants of being involved in an intricate criminal and civil conspiracy to commit barratry, calling them “cheats, hucksters and ambulance chasers.”
Dallas attorney Tom Carse represents them.
El Paso County case No. 2015DCV1669