Court Affirms Contractor Acted as Unlicensed Public Adjuster

The Supreme Court of Iowa in three opinions¹ this week affirmed various rulings which held that 33 Carpenters’ contractual assignment was unenforceable, as it was operating as an unlicensed public adjuster. I wrote about the lower appellate court decision in, Contractor Acted as an Unlicensed Public Adjuster, Notwithstanding Assignment of Claim and Benefits.

In 33 Carpenters Construction, Inc. v. State Farm Life and Casualty Company,² the Iowa supreme court affirmed the district court’s grant of summary judgment on the grounds that the assignment of benefits was unenforceable, as 33 Carpenters was acting as an unlicensed public adjuster. Specifically, 33 Carpenters filed an appeal asserting that the underlying court had erred in applying Iowa Code 522C.4 to invalidate the assignment because the Iowa Insurance Commissioner has the sole authority to enforce the statute. The Supreme Court of Iowa rejected this argument, finding that the district court had the power to adjudicate the validity of the contractual assignment.

The supreme court further declared that the district court had not erred in concluding that 33 Carpenters was acting as an unlicensed public adjuster. Iowa Code 103A.71(5) declares void contracts entered into by residential contractors who perform public adjuster services without the proper license. Iowa Code section 522C.2(7)(a) states that a person is a public adjuster when “[a]cting for or aiding an insured in negotiating for or effecting the settlement of a first-party claim for loss or damage to real or personal property of the insured.”

In concluding that 33 Carpenters acted as an unlicensed public adjuster, the supreme court looked at both 33 Carpenters’ conduct during the claim, as well as its representations on its website. The court found that 33 Carpenters activities demonstrated that it was acting for and aiding the insureds in effecting a settlement of their claim with the insurer, without having a licensed public adjuster employed. Such conduct was consistent with its representations on its website which provided that it would “meet personally with your insurance adjuster, as an ADVOCATE on YOUR behalf, and discuss the work that needs to be completed to repair your home to its original beauty and value.” Accordingly, the Iowa supreme court held that the assignment contract was unenforceable.

Applying the same reasoning, the supreme court similarly held that the assignment contracts entered into between 33 Carpenters and the insureds were also unenforceable under Iowa Code 103A.71(5).
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¹ 33 Carpenters Construction, Inc. v. State Farm Life and Casualty Co., 2020 WL 739074 (Iowa Feb. 14, 2020); 33 Carpenters Construction, Inc. v. Cincinnati Ins. Co., 2020 WL 739076 (Iowa Feb. 14, 2020); 33 Carpenters Construction, Inc. v. IMT Ins. Co., 2020 WL 739088 (Iowa Feb. 14, 2020).
² 33 Carpenters Construction, 2020 WL 739074 (Iowa Feb. 14, 2020).