On March 15, 2016, a hailstorm struck Bettendorf and damaged the roof and siding of a home owned by Brant and Sarah Clausen. The Clausens initially were unaware of any storm damage to their property. Their home was insured through State Farm Fire and Casualty Company (State Farm). On June 29, Matt Shepherd, an employee of 33 Carpenters Construction, Inc. (33 Carpenters), approached the Clausens at their home and asked if he could inspect their roof for hail damage. The Clausens agreed to permit his inspection. Shepherd found hail damage to the roof and siding, which was news to the Clausens. Shepherd presented, and the parties signed, two documents, labeled “Agreement” and “Insurance Contingency,” whereby 33 Carpenters agreed to repair the storm damage in exchange for the Clausens’ insurance proceeds. The documents also purportedly authorized 33 Carpenters to act on behalf of the Clausens regarding the submission, adjustment, and payment of an insurance claim for the hail damage to their roof.
The Insurance Contingency authorized 33 Carpenters to “meet with and discuss hail and wind damage” of the Clausen property with their insurance company, State Farm, and it required the Clausens to acknowledge that “33 Carpenters Construction will act as their General Contractor to obtain appropriate property damage adjustments.”That same day, the Clausens made a property damage claim to State Farm. About two weeks later, State Farm representatives visited the Clausen home to inspect the storm damage. Shepherd attended the inspection without the Clausens. After this meeting, State Farm formulated an initial estimate calculating the replacement cost value, or total repair costs, of $30,607. After subtracting depreciation and the Clausens’ deductible, State Farm paid the Clausens $22,198. The Clausens transferred this payment to 33 Carpenters, and it began repairing the roof and siding.Subsequently, 33 Carpenters prepared *73 an undated2 “Supplement” to the insurance claim, claiming $15,087 in additional repair costs, $645 in tax, and $9137 in overhead and profit for a new claim of $24,869 above State Farm’s initial determination of the total repair cost, amounting to an increase of 81.3%. State Farm’s adjuster returned to the Clausen home to assess the new claims.On February 22, 2017, the Clausens signed another document that purportedly assigned their insurance claim with State Farm to 33 Carpenters.
This document further stated that “all future payments or settlements for the above referenced claim” should be made directly to 33 Carpenters.On March 10, 33 Carpenters filed this civil action against State Farm. 33 Carpenters alleged that it is the assignee of the Clausens’ rights and that State Farm had breached its insurance policy by failing to pay 33 Carpenters “all benefits due and owing under the policy.” State Farm filed an answer denying those allegations.Later that month, State Farm prepared a substituted estimate in response to the 33 Carpenters Supplement. The substituted estimate increased the replacement cost value to $40,953 to reflect the need to replace all of the siding on the Clausen home since the original siding became unavailable during the interim between the initial estimate and the repair work. In recognition of this increase, State Farm paid an additional $15,681 directly to 33 Carpenters and the Clausens’ mortgage company, and 33 Carpenters deposited the payment.Next, on August 21, after State Farm had made the second payment and after 33 Carpenters had completed the repairs, 33 Carpenters submitted yet another cost estimate, claiming $64,973 for the cost of repairs and $12,994 in overhead and profit, increasing the total claim to $77,968, a 90.4% increase from State Farm’s substituted estimate of the total replacement cost value. State Farm refused to pay the additional sums. Two months later, 33 Carpenters filed a motion to compel appraisal of the loss. The district court denied the motion. State Farm filed a motion for summary judgment on May 15, 2018, claiming that the contract between 33 Carpenters and the Clausens was unenforceable because 33 Carpenters was not a licensed public adjuster, as required under Iowa Code chapter 522C. State Farm supported its motion with the contractual documents and other evidence showing that 33 Carpenters acted as a public adjuster for the Clausens.
Iowa Code 103A.71(3) states that “[a] residential contractor shall not represent or negotiate on behalf of, or offer or advertise to represent or negotiate on *79 behalf of, an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of roof systems, or the performance of any other exterior repair, exterior replacement, or exterior reconstruction work on the residential real estate.”