Three years ago, State Farm defeated an attempt by the Mostyn Law Firm to inflate the claim of Hidalgo County homeowners already compensated for 2012 hail damage.
A couple of months later, State Farm triumphed over another Mostyn client trying to boost the compensation already received.
Around the same time, a former client sued firm founder Steve Mostyn (now deceased) for inflating a storm policy claim for Hurricane Ike damage, then quitting on him when the insurer balked and leaving him liable for the company's legal bills.
Soon, other disgruntled clients arose.
Now, McAllen attorney J. Michael Moore has filed a breach of contract suit against the Mostyn Firm in Hidalgo County District Court.
Moore claims he had a “Joint Case Handling Agreement” with Mostyn Law for hail litigation against insurance companies, that he “substantially performed” under the agreement (while Mostyn Law “did not”), and that Mostyn Law “has failed and refused, and continues to fail and refuse, to honor the Agreement.”
What’s happening to Mostyn Law?
“We have seen a number of other lawsuits brought by lawyers, public adjusters, estimators, and others fighting with one another over referral fees, commissions, and estimate charges in these matters,” says Steven Badger, a Zelle LLP attorney who represents the insurance industry in hail- and-wind related litigation. “[T]he underlying lawsuits giving rise to these disputes are about lining the pockets of those who have found a way to inject themselves into the insurance claims process.”
Badger points out that mass storm litigants are often signed up for lawsuits at booths set up outside grocery stores and flea markets.
“Then boilerplate lawsuits are drafted by non-lawyer staff and filed,” he continues. “No investigation of the underlying merit of the dispute is ever conducted by a real lawyer. Not surprisingly, a significant number of these lawsuits are entirely without merit and are either dismissed or settled for nuisance value.”
Badger says “this is one of the primary reasons” why insurance premiums keep going up in Texas.
Infighting among the opportunists should help put an end to this abuse.