HOUSTON – A law firm that has handled “tens of thousands” of lawsuits against insurance companies is suing a bank for its expenses and fees owed from a Superstorm Sandy claim.
Alleging fraud, Mostyn Law filed suit against TIAA Commercial Finance and Makala Marsh on Jan. 31 in Harris County District Court.
Mostyn Law, which built its reputation by suing insurers following major storms, represented numerous Sandy clients after the superstorm struck the Eastern Seaboard in 2012.
According to the suit, in 2015 Mostyn Law worked with FEMA’s deputy director and chief counsel to set up a specialized review process, allowing policyholders to have an additional review of their Sandy claims.
Because of the review process, one of Mostyn Law’s clients, Sheila Blumenstock, was able to obtain a recovery of $166,682.91.
The firm claims it is owed a total of $43,627.79 from the recovery. The check for recovery was made payable to Blumenstock and her mortgage holder, along with Mostyn Law.
In many such cases, the firm receives the check and will advise the mortgage holder, after consulting with the client, of the firm’s cut. The check is then sent to the mortgage holder who then in turn sends a check to the firm to cover fees and expenses.
“Mostyn Law has handled tens of thousands of insurance claims of this nature all across the country, and in nearly all of them, this is the procedure followed,” the suit states.
However, in the Blumenstock case, Mostyn Law apparently didn’t get a check back from the bank.
In July 2018, defendant Marsh in the Loss Draft Department at TIAA Bank advised Mostyn Law to send the check and in turn the bank would pay the firm, according to the lawsuit.
“Rather than honor its agreement and follow through on its representations, TIAA Bank kept the insurance proceeds and sent a letter to Mostyn Law that directly contradicted its earlier representations,” the suit states.
“Mostyn Law attempted to follow up on the matter but was continually given contradictory responses or was ignored altogether by TIAA Bank.”
The firm is accusing TIAA and Marsh of making false representations and is seeking to recover actual damages with interest and costs.
Mostyn Law attorney Gregory Cox represents the firm.
Case No. 2019-07626