Sanctions Continue to Pile Up for McClenny Moseley & Associates

By | May 19, 2023

During an April 26 hearing, Magistrate Judge Kathleen Kay with the US District Court for Western Louisiana in Lake Charles recommended an order that MMA’s former New Orleans managing partner, William R. Huye III, pay $14,000 in sanctions and reimburse an insurance defense law firm about $3,000 in fees. Huye admitted that he had filed lawsuits on behalf of property owners he did not represent, sometimes against the wrong insurance company.

On April 14, Huye’s former boss John Zachary Moseley was suspended from practicing law for 90 days in the Eastern District of Texas, which is where the law firm’s Houston headquarters is located. The disciplinary order was imposed to match an identical order by a Western District of Louisiana judge after MMA’s mass filings came to light last October.

Comments by Judge Kay during last month’s hearing in Lake Charles demonstrates how far out of favor the McClenny Moseley law firm has fallen in the federal court system. Kay asked attorney Gwyneth A. O’Neill, who was representing both Huye and MMA at the hearing, in what capacity her law firm was representing the law firm. O’Neill said, in a roundabout way, that she doesn’t have “personal knowledge” of the relationship.

“You went to the same school of obfuscation as every attorney at MMA,” Kay said. “Anytime we ask a simple question, we get an answer that has many, many words in it that really gives me no answer at all.”

After the hearing involving Huye ended, Kay brought Moseley before her because of reports that MMA was continuing to communicate with claimants despite its attorneys being suspended from the practice of law.

After hearing from Moseley, Kay issued instructions that one might expect from a school teacher to a school boy: She ordered Moseley to read the transcript of an Oct. 20 hearing before Judge James D. Cain Jr., where the law firm’s mass filings were first discussed, and then submit a certification verifying that he had read it.

Moseley filed the certification as directed. On May 4, Kay ordered Moseley and his law firm to cease communicating with former clients or face further sanctions.

Personal injury attorney Austin Marks, with the Morris Bart law firm in New Orleans, told Kay that he personally witnessed a courier for MMA going door to door in an attempt to persuade former clients to sign paperwork giving the law firm permission to deposit settlement checks from insurers.

In a telephone interview with the Claims Journal, Marks said he is aware of the solicitation because a courier company called one of his clients seeking a signature. He advised the client to make an appointment at her house so he could be there in person when the courier showed up.

Marks said the courier, who worked for a company called Legal Wings, wanted his client to sign a document that would allow MMA to take its 33% fee out a settlement check of approximately $25,000. He said the courier showed him a list of 35 client names from whom he was to obtain signatures on similar permission forms.

Marks is not a disinterested party. His law firm filed a lawsuit against MMA seeking an order that it surrender any claim to fees from its former clients. The firm has run advertisements on New Orleans television stations in an effort to persuade MMA’s former clients to sign on with Morris Bart.

Marks said the Legal Wings solicitations show that MMA is continuing to attempt to settle hurricane claims even though all of its attorneys have been suspended from practicing law.

“They have lied, cheated and stolen and they think they are entitled to a fee?” Marks said. “Not a chance.”

Kay had called Huye into her courtroom to determine whether he should be sanctioned for filing lawsuits against the wrong insurers. A 219-page transcript of that hearing revealed new details that show how MMA, over the course of several days, was able to file 1,641 lawsuits against insurers in the Western District of Louisiana alone.

MMA’s records showed an electronic signature on a May 6, 2022 client retention agreement with homeowner Michael Thomas. Five days later, MMA sent State Farm notice that it was representing Thomas for a potential claim.

MMA’s case notes show that Thomas informed the law firm that he was not insured by State Farm. But MMA filed a lawsuit against the insurer anyway without getting Thomas’ permission. In fact, Thomas told MMA in September 2022 that he no longer wanted the firm to represent him.

Huye told Kay that he had informed Thomas in August that he would file a lawsuit against State Farm unless he was instructed otherwise and never heard a response.

“Silence is not permission,” Kay said. “Failure to respond is not permission.”

Later during the hearing, Kay said she has come across similar stories “multiple times.”

“You think that’s appropriate?” she said. “If I don’t hear from you within a certain period of time, I’m going to go ahead and sue on your behalf whether you want me to or not? You think that’s the right way to handle that?

The judge clearly did not think so. She recommended that Huye be sanctioned $1,000 each for filing 12 lawsuits against the wrong insurer. In one other case, Kay recommended a $2,000 sanction because MMA filed the suit after the client said they did not want to take legal action.

A District Court judge must approve the sanctions.

New Orleans insurance defense attorney Matthew Monson, whose personal investigation instigated the judicial inquiry into MMA’s mass filings, said more sanctions may be coming.

“I think this is a step to support further discipline against William Huye, possibly including full disbarment from the Western District,” he said.

Topics Louisiana

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