Texas Windstorm Insurance Association: Part 1

Texas state Rep. Todd Hunter accepted $25k donation from Hurricane Ike lawyer Steve Mostyn’s firm days after being chosen to mediate his case

February 16, 2011
By Steve Miller, Texas Watchdog

At 8:54 a.m. on May 11 last year, state Rep. Todd Hunter e-mailed attorneys who would represent homeowners in a massive lawsuit against the Texas Windstorm Insurance Association and lawyers for the association. Hunter was the newly named mediator in the case, and he wanted to set meeting times.
“To all who are involved,” Hunter wrote, “I have blocked May 20-21, 2010 for the TWIA mediation. I would like to do a short conference call some time this week to discuss the procedure and format.” The call was set for 3 p.m. the next day.

The e-mail was sent to six people, including Steve Mostyn, one of the state’s largest hurricane plaintiff’s lawyers and a Democratic mega-donor. Mostyn was named one of the most powerful political players in the state by Texas Monthly and together with his wife was the largest donor to state campaigns in 2010.

His Mostyn Law Firm donated $25,000 to Hunter’s campaign war chest, according to a campaign transaction recorded the same day of the e-mail setting up talks between TWIA and Mostyn and the other lawyers representing some 2,400 disgruntled claimants, who said they were shortchanged in payouts for Hurricane Ike losses. The records, released to Texas Watchdog under the state Public Information Act, reveal for the first time the close timing between Hunter’s selection as mediator and his acceptance of the five-figure donation.

While the exchange appears politically improbable, Hunter explained that he and Mostyn have been acquainted for “several years.”

“The contribution was at least committed to before May — I can tell you that,” Hunter, R-Corpus Christi, said in an interview this week. “The contribution had nothing to do with the mediation. I separate my law practice from my campaign practice.”

Hunter added that contributions do not sway his decisions.

People can make contributions, “but that’s not necessarily going to have any impact on me.”

Mostyn did not return a call for comment.

While Mostyn presides over the Texas Trial Lawyers Association, Hunter has been a darling of the tort reform movement, which seeks to limit damages awarded to the very clients Mostyn represents. In 2008, Hunter received more than $60,000 in campaign donations from Texans for Lawsuit Reform.

But did Mostyn see Hunter’s May 11 e-mail before the donation was recorded? On May 12 at 1:25 p.m., he e-mailed the group, saying, “Just saw this. Will call in at 3.”

Regardless, the Hunter donation was pocket change to the prosperous, successful Mostyn, a man respected in his field for his ability to butt heads with massive bureaucracies and intricate corporations — in other words, organizations like TWIA.

Mostyn’s home in the Memorial Park area is worth $1.8 million, according to property records, and he owns properties in Key West, Fla., including a historic building he purchased for $2 million in 2008.

Hunter’s appointment as mediator came quickly and with no resistance, according to the e-mails. On May 3, he received a message from TWIA general counsel David Weber asking about his availability at the end of May.

When Hunter said he would be in Austin May 25-26, Weber asked that he “pencil in May 20-21 for some TWIA stuff.” In the same e-mail conversation on May 5, Weber told Hunter, “By the way, I don’t know if the other side has approved you yet.”

At 9:07 a.m. the next day, Mostyn e-mailed into a chain that was trying to nail down Hunter as mediator.

“Ok with me,” Mostyn said.

At 9:45 a.m., Weber e-mailed Hunter: “You are in!”

Hunter would go on to earn $60,000 from the job, with TWIA paying $35,000 and the plaintiff’s attorneys paying $25,000, invoices show.

Some mediation meetings were held at the Houston law offices of Fulbright & Jaworski and at least once they were scheduled to gather at the Austin office Mostyn keeps during session.

On May 14, before the first mediation hearing, Hunter proposed a preparatory meeting at the state Capitol, but Weber advised against it.

“You sure you want to do (this) at Capitol?” Weber wrote. “I don’t want someone to accuse you of doing law business out of your state office.”

In the following weeks, in addition to tony law firm high-rises, the teams of lawyers sat in luxury hotels and high-end restaurants – e-mails show the litigants hung out at the Four Seasons in Austin and the San Luis Resort in Galveston and pondered dinners at Ruth’s Chris Steak House, III Forks and McCormick & Schmick’s.

The players met for drinks and dinner and hammered out details in a fashion meant for power.

“I have your legal pad you left in lobby,” Weber e-mailed Hunter on May 27. The e-mail was part of a chain inviting Hunter to dine with the TWIA representatives, including TWIA head Jim Oliver.

By Monday, June 7, the parties had put together a “framework” for the mediation, and Mostyn invited the TWIA people to get together.

“I am in Austin Tuesday and I would like to meet with Jim Oliver with yall if possible,” he e-mailed Weber. “We need to get this framework put to bed and I think we could do that over a drink. Let me know.”

Weber responded, “I know Todd has already talked to you about dinner on Wednesday night since we will be traveling to Houston Tuesday afternoon. We will have a framework to present to you when we meet on Wednesday morning; however, if that framework needs some fine tuning and you have some suggestions to that framework, then it would probably be helpful to discuss these items with you in a smaller group over dinner to refine them. We look forward to visiting with you over the next few days in Houston.”

In July, Mostyn’s law firm announced a $189 million settlement “negotiated by the Mostyn law firm.”

TWIA paid out $87 million to plaintiff’s attorneys and spent close to $39 million on its defense, records show.