The Iowa Supreme Court affirmed the lower court's denial of the policy holder's assignment to his contractor of claims under his homeowners policy. 33 Carpenters Construction, Inc v. Cincinnati Ins. Co.,2020 Iowa Sup. LEXIS 15 (Iowa Feb. 14, 2020).
The insured's home suffered damage from a hailstorm and windstorm. He entered an agreement with 33 Carpenters under which 33 Carpenters would repair the storm damage to the home in exchange for the insured's proceeds from the homeowners policy with Cincinnati. The assignment stated that the Assignor (homeowner) sold and transferred to the Assignee (33 Carpenters) any and all claims which the homeowner had against Cincinnati.
A representative from 33 Carpenters called Cincinnati to report the storm damage to the siding and roof of the home. The homeowner submitted his claim. Cincinnati investigated the home, prepared an estimate for the cost of repairs, and made payment to the homeowner.
Thereafter, 33 Carpenters contacted Cincinnati to dispute the insurer's estimate of the repair cost and requested a new estimate that would include the cost of replacing all of the home's siding and gutters. Cincinnati responded that it would address any differences directly with its insured rather than 33 Carpenters.
33 Carpenters then filed suit against Cincinnati, claiming it had breached the homeowner's policy by "failing to pay 33 Carpenters all benefits due and owing under the policy," that had been assigned to it. Cincinnati's answer denied the claims. Cincinnati also filed a counterclaim for declaratory judgment against Cincinnati arguing the assignment was invalid because it effectively allowed 33 Carpenters to act as an unlicensed pubic adjuster in violation of an Iowa statute. Cincinnati file a motion for summary judgment. 33 Carpenters argued that it had entered a valid post loss assignment with the policy holder. The lower granted the motion for summary judgment to Cincinnati.
On appeal, the court of appeals affirmed. 33 Carpenters was operating as an unlicensed pubic adjuster in violation of the statute.
The Iowa Supreme Court affirmed. An assignment contract entered into by a residential contractor acting as an unlicensed public adjuster was void under the statute.
