La. Insurers Ordered to Still Communicate With MMA Policyholders

A day after the Louisiana Supreme Court announced that it is lifting a stay on hurricane-damage lawsuits filed by McClenny Moseley & Associates, Insurance Commissioner James Donelon in late July issued a directive warning insurers not to use a letter of representation from the law firm as an excuse not to communicate with claimants.

“It has been suggested to me that some insurers are refusing to communicate with policyholders solely because they have received a letter of representation from MMA,” Donelon said in Directive 221.

Owners of property damaged by Hurricane Ida have only a few weeks to file damage claims. The storm passed through Louisiana on Aug. 29, 2021 and the state has a two-year statute of limitations.

MMA admitted during court hearings that it mailed 856 letters of representation to insurers when it did not, in fact, represent the property owners. The law firm actually filed hurricane damage claims for those properties because it represented Apex Roofing and Restoration and other contractors.

That admission led to a series of court hearings that resulted, first, in district court judges barring the law firm from pursuing lawsuits in Louisiana federal courts and then an order on May 10 by the Louisiana Supreme Court barring MMA from prosecuting any storm-related lawsuits in the state system. William R Huye III, managing partner of MMA’s New Orleans office, had his law license suspended while the Office of Disciplinary Counsel investigates his actions.

The Louisiana Insurance Department fined MMA $2 million for “fraudulent behavior,” which also included presenting demands for payment and negotiating settlements with insurers without the authority of or even the knowledge of the policyholders.

The insurance commissioner’s directive tells insurers to contact Magistrate Judge Michael North with the Eastern District of Louisiana if they are trying to determine if their policyholder has obtained new counsel.