Court of Appeals Affirms Summary Judgment Against Unlicensed Public Adjuster

Posted on: March 29th, 2019

A hail and wind storm damaged Gregg Whigham’s home in March 2016. The home was insured by The Cincinnati Insurance Company (Cincinnati). After the storm, Gregg contracted 33 Carpenters Construction, Inc. (33 Carpenters) for the repair of his home. Per their agreement, 33 Carpenters would repair Gregg’s house and, in exchange, would receive the right to any proceeds paid by Cincinnati. On October 6, 2016, Gregg and 33 Carpenters reported the claim to Cincinnati, and informed Cincinnati that 33 Carpenters was contracted to repair the house. On October 10, 2016, Gregg and Tony McClanahan, a representative of 33 Carpenters, signed an “Assignment of Claim and Benefits” form (the Assignment) whereby Gregg agreed to sell and transfer his rights to any claims and causes of action against Cincinnati arising from the storm damage.


An adjuster of Cincinnati reviewed the claim and prepared an estimate for the repairs, and Cincinnati made payment relying on its adjuster’s estimate. In February 2017, 33 Carpenters contacted Cincinnati and requested an estimate for additional repairs. Cincinnati informed 33 Carpenters that it would only correspond with Gregg. 33 Carpenters corresponded with Gregg regarding the additional repairs and attempted many times to communicate directly with Cincinnati. However, Cincinnati only communicated with Gregg. In one of its correspondence to Gregg, 33 Carpenters stated it needed to find out “how Cincinnati intends to make you whole.” 33 Carpenters also gave Gregg suggestions on the repairs it believed were needed. After learning of Cincinnati’s intent to retain a construction consultant, 33 Carpenters filed suit against Cincinnati alleging breach of contract based upon Cincinnati’s failure to pay 33 Carpenters all benefits under the policy that covered Gregg’s home. 33 Carpenters claimed it was entitled to benefits because of the Assignment. Cincinnati filed for summary judgment asserting the Assignment was unenforceable because 33 Carpenters acted as a public adjuster without a license. The district court granted Cincinnati’s motion for summary judgment and 33 Carpenters appealed.


On February 6, 2019, the Court of Appeals affirmed the district court’s ruling in favor of Cincinnati. In support of its decision, the Court held that 33 Carpenters acted as an unlicensed public adjuster on Gregg’s behalf, a clear violation of Iowa law. Iowa law states that “[a] person shall not operate as or represent that the person is a public adjuster in this state unless the person is licensed by the commissioner in accordance with this chapter.” Iowa Code § 522C.4 (2017). As a result, the Assignment was unenforceable. The court rejected 33 Carpenters’ argument that it was acting on its own behalf, finding that 33 Carpenters was acting for and aiding Gregg while not licensed as a public adjuster.  Therefore, the Court held that Cincinnati was entitled to judgment as a matter of law.


33 Carpenters Constr., Inc. v. Cincinnati Ins. Co., No. 17-1979 (Iowa Ct. App. Feb. 6, 2019).

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