In 2008, two devastating hurricanes swept through Texas, damaging thousands of homes, churches and businesses in their paths. As Texans attempted to rebuild, they turned to the Texas Windstorm Insurance Association (TWIA), the state’s insurer of last resort for 14 coastal counties, to assess the damage they had sustained and resolve the claims they filed.
Unfortunately, TWIA failed to meet policyholders’ expectations. Trial lawyer Steve Mostyn, a long time supporter of consumer rights and a founder of the law firm Mostyn Law, stepped in and sued TWIA on behalf of the homeowners who had suffered damage in both hurricanes.
After Hurricane Dolly hit south Texas in July 2008, the Brownsville Independent School District (BISD) did not think that TWIA had fully paid the school system for storm destruction. BISD hired Mostyn Law and filed suit.
One of the shocking revelations to come to light from BISD’s Hurricane Dolly suit was the lengths politicians who support tort reform are willing to go, putting their own self interest ahead of the public good. In BISD’s lawsuit, Mostyn Law took the deposition of Jim Oliver, TWIA’s former department head. Oliver testified about conversations he had with Republican State Senator Larry Taylor – who happens to be an insurance agent. Taylor had complained to Oliver that Steve Mostyn was contributing the money he made representing insureds to candidates and campaigns that pledged to fight for consumer rights. In that deposition, Oliver said that Taylor urged him to fight more cases in court instead of reaching amicable (and deserved) settlements. An argument could be made that Taylor, a sitting senator, was placing inappropriate political pressure on the head of public body that was supposed to act independently.
Mostyn filed a motion to compel the senator to testify about the nature of his communications with Oliver. The judge ruled in favor of Mostyn, stating in a court order that Taylor “engaged in political efforts to privately and personally influence the conduct of TWIA.”
Ultimately, Mostyn Law prevailed in court, and TWIA agreed to pay the Brownsville School District an additional $7.9 million for its damage claims.
Mostyn Law also went toe-to-toe with TWIA on Hurricane Ike cases. In September of 2008, Hurricane Ike hit southeast Texas causing billions of dollars of damage. Mostyn Law filed lawsuits for individual homeowners and represented homeowners in a separate class action. The Texas Tribune perfectly described these individual suits filed on behalf of over 1,200 homeowners: these suits stem from “allegations that the agency botched claims for damage caused by Hurricane Ike, failed to reimburse property owners in a timely manner, and denied or underpaid legitimate claims.” The class action lawsuit was for homeowners whose homes had been completely destroyed by Hurricane Ike. This lawsuit became known as the “slab” case because only the concrete slab of the home remained after the storm.
Mostyn Law exposed the great lengths to which TWIA went in the name of cutting costs. Through diligent and time intensive legal work, Mostyn Law discovered internal TWIA emails detailing TWIA’s wrongdoing. In 2009, the Houston Chronicle reported that those internal emails showed evidence that the insurance company offered below-market rates for repairs and made it purposely difficult for homeowners to reopen claims. All of this happened even though internal emails showed that TWIA knew its adjustors were making serious mistakes adjusting claims.
In 2010, Steve Mostyn led settlement negotiations to resolve the “slab” cases. After days of formal negotiation, a settlement was reached. TWIA agreed to pay homeowners who had lost everything a total of $189 million.
With the slab cases resolved, Mostyn Law was able to focus solely on the remaining suits where homeowners had been denied or underpaid for damage. In May 2013, Mostyn Law was pleased to announce that a final settlement for approximately $135 million was reached between TWIA and those who had suffered damage during Hurricane Ike. Homeowners were finally awarded what was rightfully theirs – a big step towards helping Texas rebuild.