RIO HONDO – Believing Rio Hondo ISD suffered the same inadequate insurance adjustment as a neighboring district following Hurricane Dolly, Gilberto Hinojosa, on behalf of Mostyn Law, “approached” school officials and “brought” to their attention the notion of filing a lawsuit, according to an audio recording.
Hinojosa, the current chair of the Texas Democratic Party, works closely with Mostyn Law, founded by Houston attorney Steve Mostyn, on storm litigation brought in the Southeast Texas region.
Hinojosa
On Jan. 13, 2014, the Rio Hondo ISD Board of Trustees met in a regular session to discuss, among other things, filing a potential lawsuit against the Texas Windstorm Insurance Agency for allegedly failing to adequately compensate the district for damages caused by Dolly six years prior.
The Record obtained an audio recording of the meeting.
On the tape, Superintendent Ismael Garcia can clearly be heard saying, “We were approached by this law firm” while introducing Hinojosa.
Minutes later, Hinojosa says “I am here on behalf of Mostyn Law,” then proceeds to boast that the law firm is “number one” in the country for insurance claims and has “recovered probably billions.”
Barratry, the act of soliciting plaintiffs for profit, is illegal.
Garcia declined to comment on the matter, sending the Record a letter stating the news outlet’s requests for comment fall under the Freedom of Information Act and the district, as a governmental entity, is not required to respond.
At the time of the meeting, Hinojosa and Mostyn were representing Brownsville ISD, which is approximately 30 miles from Rio Hondo ISD, in a Dolly suit against TWIA – a multi-million dollar case Hinojosa referenced extensively during the meeting.
“Based upon the history we discovered at Brownsville ISD, we believe that the same lack of a complete investigation and adjustment of your claim probably and likely occurred here in Rio Hondo,” Hinojosa said.
“That’s when we brought that to the attention of Mr. Garcia and some of his staff. We believe based upon what we have seen, (Rio Hondo ISD) … more than likely (has) a significant claim against TWIA.”
A month after the meeting, the district filed suit against TWIA, seeking more than $1 million in damages. The case settled in August.
In response to the Record’s Aug. 30 article on the issue, which was based on the minutes from the meeting, Hinojosa hired Austin attorney Jason Panzer, who sent a letter to the Record demanding all “defamatory impressions” of barratry be removed from the article.
It’s noteworthy to mention Panzer, of Herring & Panzer, was also of counsel for Mostyn back in May when a federal judge in McAllen ordered Mostyn to appear for a hearing to explain why he shouldn’t be sanctioned for bringing factually unsupported hail lawsuits against insurers.
No ruling by the judge is on file as of Oct. 3, court records show.
Gonzales did not responded to repeated requests for comment on whether she first approached Hinojosa or Hinojosa approached her.
It’s worth pointing out the letter fails to specifically state who approached who first. Neither Panzer nor Hinojosa have responded to requests for comment on the matter.
However, Hinojosa, right after referencing the likelihood of Rio Hondo ISD having a “significant claim against TWIA,” clearly says: “And that’s why we brought that to the attention of Mr. Garcia – I have mentioned it to Miss Gonzales as well.”
Before concluding his presentation to the board, Hinojosa boasted that Mostyn Law settles around 98 percent of its claims and is “very effective” at maximizing claims.
Mostyn, who made his fortune suing TWIA and insurers in the wake of Hurricanes Rita and Ike, advertises heavily in search of clients after every storm strike in the Lone Star State.
The rush to sign up victims has caused a "barratry epidemic in Texas," according to Steve Badger, a Zelle LLP attorney who follows the development of such issues on behalf of the insurance industry.
While he cannot speak to the facts of the Rio Hondo matter, Badger says thousands of storm damage lawsuits are being filed each year against Texas insurance companies.
"Every day, contractors, public adjusters, and other non-lawyer case runners are approaching Texas homeowners about filing lawsuits and passing out lawyer retention agreements," Badger said. "They approach people at flea markets, in grocery stores, and walking door to door.
"It's a literal feeding frenzy to sign up homeowners and then refer them to lawyers."