Texas Law Firm Faces Over $10 Million Judgment for Hurricane Claim Fraud

In a significant legal development, McClenny, Moseley & Associates (MMA), a Texas-based law firm, has been ordered to pay more than $10 million following a default judgment in a lawsuit filed by PCG Claims (PCG Consulting). This judgment by a Harris County district court stems from MMA’s failure to respond to allegations of fraudulent acts concerning hurricane insurance claims.

The substantial sum includes $9.795 million in damages requested by PCG, along with attorneys’ fees and post-judgment collection costs. Additionally, the judgment accrues interest at 8.5%, which, as of the judgment date, amounted to over $347,000 in accumulated interest. This legal outcome is a significant blow to MMA, which has faced accusations of insurance fraud in multiple instances.

In a prior incident, MMA was fined $2 million by the then-Louisiana Insurance Commissioner Jim Donelon for fraudulent activities involving over 850 Louisiana homeowners and policyholders. The law firm admitted to falsely claiming representation of these policyholders in insurance claim settlements, leading to unauthorized negotiations and diversion of claim proceeds. The Louisiana Department of Insurance (LDI) highlighted the predatory nature of MMA’s professional service fees and their unauthorized involvement in policyholder settlements.

This judgment is not only a crucial development in the ongoing legal challenges faced by MMA but also underscores the broader issue of fraudulent practices in the insurance industry. The case highlights the importance of ethical conduct and the severe consequences of fraudulent activities in insurance claim handling.