Thousands of Texas homeowners victimized by severe weather may also be victims of a wide-ranging conspiracy involving door-to-door solicitors, public insurance adjusters and attorneys, according to a class-action lawsuit filed in Dallas.
The lawsuit claims that individuals, companies and law firms purportedly representing residents with property damage insurance claims are actually operating a pyramid scheme to collect unlawful and fraudulent fees that can make completing the repairs almost impossible.
According to court documents, the scheme typically begins when a door-to-door solicitor working on behalf of a roofing contractor claims that his company can get the homeowner’s insurance company to pay for property damage, such as a new roof. After the initial insurance payment arrives, the solicitor keeps the funds and brings in a so-called “public adjuster” to inspect the home and seek additional payment from the insurance company, charging a fee of 10 percent of the total claim plus other expenses.
The solicitor also tells the homeowner that a lawyer must be hired to get still more payments from the insurance company, adding a 25 percent to 40 percent fee for any recovery. Having never met or even spoken with the homeowner, the attorney then files a lawsuit against the insurer without the homeowner’s knowledge, agrees to a mediation, and settles the matter without the approval of or consultation with the homeowner. When a settlement check finally arrives, the payment often is not enough to pay for roof repairs because of deductions to cover the fees and expenses of the attorney, public adjuster and solicitor.
“This is a very real and deceitful scheme that is carried out in this state every day by those who are supposed to be helping homeowners, not ripping them off,” said attorney Mark Ticer, who represents Dallas resident Juan Guerra in the lawsuit.
Guerra was approached in 2014 by a representative of Arlington-based roofing contractor Lambcorp, who said the company could handle his insurance claim for a new roof. Guerra turned over the payment from his insurer to Lambcorp, which demanded that he hire Arlington-based National Claims Negotiators LLC, a public adjusting firm, and the San Antonio law firm of Speights & Worrich to obtain additional payments from his insurer.
Guerra still has not received the new roof he was initially promised by the solicitor, nor have the insurance proceeds taken by Lambcorp been returned to him.
“This lawsuit is bringing to light an elaborate web of conspirators and con artists who are lining their pockets at the expense of innocent and unsuspecting homeowners, with a goal of bringing accountability, honesty and integrity back into the system,” said attorney Van Shaw of the Law Offices of Van Shaw in Dallas, co-counsel for Guerra and the proposed class.
Dallas attorney Steven Badger of Zelle LLP has been vocal on behalf of the insurance industry in responding to the dramatic increase in hail damage lawsuits. In addition to his work defending insurance companies, Badger represents a group of homeowners in a class action lawsuit against North Texas roofing contractor Lambcorp alleging the unauthorized practice of public adjusting and other improper conduct. The Guerra class action was filed as an intervention into Badger’s lawsuit, as it also named Lambcorp as a defendant.
Ticer and Shaw say the lawsuit also exposes a troubling increase in Texas of an illegal practice called barratry, which includes the improper solicitation of potential cases by individuals not associated with the lawyer handling the matter.
“Such conduct is unfortunately becoming increasingly common, but Texas law provides victims of barratry a private right of action against the violating lawyers,” said Ticer.
“The allegations of solicitation and barratry set forth in Guerra’s lawsuit are typical of what those of us involved in defending these lawsuits believe is going on all across Texas,” Badger said.
Badger expects to see additional barratry lawsuits filed in the months ahead. “Each and every week I am contacted with concerns about Texas attorneys and their door-to-door canvassers following the same model described in the Guerra lawsuit.”
Badger said he is encouraged to see well-known plaintiffs’ attorneys like Mark Ticer and Van Shaw taking steps to address apparent illegal conduct by other attorneys. “Mark and Van should be commended for their willingness to take on this important issue.”
The case is Guerra v. Jorge Garcia, Vivian Armas, et al., No. DC-15-03338, in the 134th District Court in Dallas.
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