The Amarillo Court of Appeals issued an opinion on February 2, 2022, that is important as it relates to cases involving hail and wind damages to roofs of structures. This opinion has a bit less to do with insurance and more to do with the roofing contractor business as it is regulated by the Texas Department of Insurance. The opinion is styled, Stonewater Roofing, Ltd. Co. v. Texas Department of Insurance et al.
Here is some background.
In 2005, the Texas Legislature enacted provisions under the insurance code
regulating “public insurance adjusting.” Public insurance adjusters are frequently hired by an insured to help resolve and settle insurance claims. The enacted provisions, Texas Insurance Code, Sections 4102.051, provide that a public insurance adjuster must be licensed in order to adjust insurance claims on an insured’s behalf. Under these provisions, pursuant to Code Section, 4102.163, any person or entity defined as a contractor is prohibited from adjusting insurance claims for properties at which the contractor is, or will be, providing contracting services. Likewise, licensed public insurance adjusters are prohibited from providing any contracting services on property at which they are, or will be, providing public insurance adjusting services. In other words, acting as a public insurance adjuster and a contractor on the same claim is a statutorily
defined conflict of interest according to Section 4102.158(a)(1).
Stonewater is a professional roofing company that repairs and replaces commercial and residential roofs in Texas. Stonewater is not licensed as a public
insurance adjuster. However, Stonewater’s website purportedly includes statements such as it is “ highly experienced with the insurance claims process,” that it has “done thousands of roof restorations due to insurance claims over the years,” and it “understand[s] the supplement process required.” Stonewater’s website has also allegedly referenced the company as a “Trusted Roofing and Insurance Specialist” and “The Leader In Insurance Claim Approval,” having “developed a system which helps our customers settle their insurance claims as quickly, painlessly and comprehensively as possible.” Some of Stonewater’s prior form agreements ostensibly contained language that “authorized” Stonewater “to negotiate on [the customer’s] behalf with [the] insurance company and upon insurance approval to do the work specified.” One of Stonewater’s customers sued it, arguing these statements violated the prohibitions set forth in chapter 4102 of the Insurance Code.
Stonewater filed suit against TDI, challenging the prohibitions as impermissible regulations of commercial speech and alleging the provisions were unconstitutionally vague. Stonewater requested a declaration that the prohibitions are invalid on their face and as applied under the First and Fourteenth Amendments to the United State Constitution and “corresponding provisions” of the Texas Constitution. TDI filed a general denial and a Rule 91a motion to dismiss. TDI argued that Stonewater’s constitutional challenges were subject to dismissal because they had no basis in law. The trial court held a hearing on the motion and without explanation as to the basis for its ruling, granted TDI’s motion to dismiss.
The above are the “facts” of the case. This Court then discussed the merits of the case and ultimately reversed the trial court’s ruling and allowed the lawsuit to go forward. For an attorney handling roofing claims, the opinion is a must read.