Via Overlawyered*, I saw a new article in an Austin, Texas paper titled, “Texas trial lawyer eyes New York storm cases”:
[Trial lawyer Steve] Mostyn sees potential riches on the horizon. The lure of New York, and all those insurance claims spawned by the destructive wrath of Superstorm Sandy, is irresistible for an ambitious litigator with political connections, piles of money and a fearsome reputation.
Mostyn — 41 years old with a shaved head, steely blue eyes and linebacker physique — plans to move much of his Houston-based Mostyn Law Firm to New York City soon, with dreams of landing about 10,000 cases worth more than $1 billion in insurance claims from the storm that pummeled the Northeast last October.
You can imagine where the rest of the article goes from there, and it’s worth a read just to see Professor Anthony Sebok’s understated response to Mostyn’s claim that he wants to take on $1 billion in disputed Hurricane Sandy insurance claims. I haven’t a clue who Mostyn is; he could be the best insurance bad faith lawyer in Texas for all I know. I want to focus on two critical pieces of the article that tell a lot about the sorry state of insurance policyholder’s rights in New York and New Jersey.
But Mostyn already has fans, like Carleanne Fierro, 51, a swim club owner from Pound Ridge, N.Y., whose house was damaged and is glad to know the hulking Texas lawyer is coming. Fierro, who lives in a town about 13 miles from Long Island Sound and 40 miles from Manhattan, said she quickly became frustrated seeking help with her claims from New York lawyers. “They don’t know how to handle this,” she said. “I think you need an expert. I think you need someone who is familiar with wind damage.” When she found Mostyn’s firm, she signed a contract quickly. “It is worth the 40 percent just for someone to listen to my story and be kind to me,” she said.
Back in Austin, a political foe of Mostyn, state Sen. Larry Taylor, R-Friendswood, shook his head when he heard about Mostyn’s plan to enter New York. “It’s the new thing,” Taylor said. “It’s the new cash cow.”
Let’s stop and think about that for a second: how is a lawyer from Texas able to walk into New York and start charging a 40% contingent fee on a “cash cow” claim? Why did Ms. Fierro have trouble finding someone to handle her insurance claim? It’s not like there’s a shortage of trial lawyers in the Mid-Atlantic States.
Certainly, Hurricane Sandy wrecked havoc on the East Coast, and as someone who regularly deals with insurance companies (and who grew up on Hurricane Alley down in the South), I have no doubt the insurers have taken a hard line on the claims to avoid shelling out billions of dollars to homeowners and businesses. That’s how, despite the fact that an extraordinarily devastating storm hit one of the most populous and wealthy areas in a country in 2012, the reinsurance industry still turned a healthy profit.
It has been widely reported that 93% of New Jersey homeowner’s claims have been “closed,” but that doesn’t mean the homeowner agrees with the result — if an adjuster said a house with the roof blown off and some water in the basement was destroyed entirely by a “flood,” then that counts as a “closed” claim. The State of New Jersey has already taken some grief in the press for how it keeps insurance data under wraps. There’s every reason to believe insurers up here are doing the same things insurers do in the South after a hurricane: offer the policyholder half of what they deserve, then claim the damage was “flooding” or “fraud” if the insured doesn’t take it.
But, back to our original question — why don’t you see New York City lawyers falling over themselves to get Hurricane Sandy insurance claims in the NYC, on Long Island, and down the Shore the same way, for example, they fall over themselves to get construction injury claims?
Continue Reading Why Aren’t More NY and NJ Lawyers Looking For Hurricane Sandy Insurance Claims?