An investigation into hailstorm claims fraud by the Texas Department of Insurance (TDI) Fraud Unit led to a Tarrant County grand jury indictment of Richard Kent Livesay, a lawyer who allegedly solicited business following major hailstorm events that occurred in the Dallas area in 2014.
Livesay was indicted on first degree counts of felony engaging in organized criminal activity, felony insurance fraud, felony false statement to obtain property or credit, and thirteen counts of third degree felony barratry.
During his initial appearance today, Livesay posted a $20,000 bond and was ordered to surrender his passport. He faces a minimum sentence of 15 years if convicted on all counts.
A solo practitioner, Livesay’s license to practice law in Texas was suspended effective January 1, 2017, according to the Texas Bar Association. According to the Texas Bar Journal, Vol. 80 No. 1, Livesay accepted a one year active suspension on Nov. 8, 2016. A Hildalgo district court found that Livesay violated several rules and was ordered to pay $2292 in attorneys’ fees.
On Nov 22, 2016, David Yates of the SE Texas Record reported that the suspension resulted from an allegation by an insurer that he had filed a claim on behalf of a client he didn’t represent. A disciplinary petition was filed by the Commission for Lawyer Discipline, a part of the State Bar of Texas.
He was previously suspended for one year back in 2005 for failing to return a client file upon termination of a case.
Steve Badger, a partner with Zelle LLP’s Dallas office and a vocal advocate for hail litigation reform, said he was pleased to see prosecution of a barratry matter, since it remains rampant in hail litigation across the state.
“Hopefully this prosecution of a well-known hail lawyer will send a message to other hail lawyers that the crime of barratry will be identified and, when appropriate, prosecuted,” he said.
Badger brought attention to the issue of mounting hail claims in a 2015 article published by Claims Journal, “The Emerging Hail Risk: What the Hail is Going On?”
According to Badger, the Texas Department of Insurance is actively investigating cases of fraudulent hail claims and litigation.
“I often hear complaints that the TDI is not doing anything to address illegal conduct in hail claims and litigation. That is simply not true,” said Badger. “I speak to the TDI Enforcement and Fraud units weekly about matters they are pursuing and provide requested information pertinent to their investigations. The TDI recognizes there is a problem and is taking action. They should be commended for their efforts.”
A bill to end hail lawsuit abuse was recently signed by the governor and becomes effective September 1, 2017.
With increased enforcement and a new law in place, Badger hopes there will be a halt to fraudulent hail claims litigation.
“Hopefully, the combination of strong law enforcement and the hail litigation reform bill recently passed by the Texas Legislature will stem the tide of abusive lawsuits arising from Texas hail claims.”
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