A Texas law firm accused of fraudulent acts related to hurricane claims has been hit with a default judgment of more than $10 million, including interest.
The law firm – McClenny, Moseley & Associates (MMA) – had been sued by PCG Claims (doing business as PCG Consulting), a firm that investigates and manages large-loss insurance claims. A district court in Harris County, Texas, awarded PCG a default judgment when MMA did not file a response to the lawsuit.
The judgment includes PCG’s requested damages of $9.795,003.46, plus attorneys’ fees of $24.956.21 through judgment and $3,000 for post-judgment collection, according to a LinkedIn post by Matthew Monson, founder and manager of The Monson Law Firm. That amount is also subject to 8.5% interest, according to the ruling by Judge Cheryl Elliot Thornton.
“Take out your calculators for this one – 8.5% interest from the date the Petition was filed under the day before this judgment plus post-judgment interest of 8.5% from the date the Judgment is signed until it is paid,” Monson wrote in the post. “So interest has been accruing at $2,287.54 per day for 152 days so far for total accumulated interest since the suit was filed of $347,705.86. Thus the current value of the judgment is $10,170,665.53.”
The judgment is the latest chapter in the ongoing saga of MMA’s alleged misdeeds. In May of last year, then-Louisiana Insurance Commissioner Jim Donelon fined the law firm and associated partners $2 million for hurricane-related insurance fraud involving more than 850 Louisiana homeowners and policyholders.
MMA admitted that it falsely claimed to have been retained by at least 856 Louisiana policyholders to settle claims, when it did not, in fact, represent those people. The law firm’s fraudulent behavior included presenting payment demands, invoking policy appraisal provisions, and receiving and negotiating settlement checks without the authorization of the policyholders, according to the Louisiana Department of Insurance (LDI).
The intent of the fraud was to divert insurance claim proceeds to the law firm and collect “predatory professional service fees” to which the firm was not entitled, the LDI said.
“The size and scope of McClenny, Mosely & Associates’ illegal insurance scheme is like nothing I’ve seen before,” Donelon said after the LDI issued a cease-and-desist order against MMA in February of last year. “It’s rare for the department to issue regulatory actions against entities we don’t regulate, but in this case, the order is necessary to protect policyholders from the firm’s fraudulent insurance activity.”
In November, the Louisiana State Police announced a criminal probe into MMA’s actions.
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