Roland Browne & Jacob Law - Stonewater Roofing vs. Texas Department of Insurance - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of a live interview with Roland Browne and Jacob Law of Stonewater Roofing. You can read the interview below or listen to the podcast. 

Speaker 1:
Welcome to Roofing Road Trips with Heidi. Explore the roofing industry through the eyes of a long-term professional within the trade. Listen for insights, interviews, and exciting news in the roofing industry today.

Heidi Ellsworth:
Hello and welcome to another Roofing Road Trips from Roofers Coffee Shop. My name is Heidi Ellsworth, and I'm heading down south to Texas to visit with, I have to tell you, a very progressive and just leader in the roofing industry, Stonewater Roofing. And today, I have Roland Browne and Jacob Law, the owners of Stonewater Roofing, here to talk to us about their company and also some stuff, very important things that are happening in Texas right now. But before we get started into the meat of the podcast, I would want to say hello, Roland. Hello, Jacob. And welcome to the show.

Roland Browne:
Hello all. Thanks for having us.

Jacob Law:
Hey there, Heidi. Thank you.

Heidi Ellsworth:
Thank you. And so, well, let's start with some introductions. Roland, if you could, tell us a little bit about you and Stonewater.

Roland Browne:
Yeah, shoot, the story is a long one. I mean, we started in 2010, October 7th, and here we are 12 years later, fighting the good fight. It's been a long journey. The company has been growing exponentially since our inception. At some point, I brought on Jacob Law to help me with that growth and manage operations, and we both play well off each other. The company has grown to, I believe, 15 and 20 million annually, and our hopes and aspirations are to continue growing beyond that. However, we've got some roadblocks that we need to clear out of the way, not only for Stonewater but for everyone else. And I'll let Jacob dovetail in there a little bit and hit on that, and more importantly, his back-end story.

Heidi Ellsworth:
Perfect. So Jacob, before we dive into that, why don't you introduce yourself, talk a little bit about how you got involved with Stonewater and the company overall?

Jacob Law:
Yes, ma'am. Jacob Law, obviously, and Roland's number two. As he said, came on about 2016 and came out of the Air Force with doing some contracting work, and Roland needed some help. This thing was growing past a one-man operation, and he had taken this thing about as far as he could without a good team behind him. So that's what we've been doing since, just building a great team as the company continues to grow.

Jacob Law:
And, Heidi, Stonewater Roofing, one of the things I love about it that made me come back to Tyler, Texas, and go from government contracting into roofing is just the way Roland set it up, which was always doing things the right way, not just roofing and putting on shingles and roofs properly, but doing things the right way by the homeowner, but also the insurance company. I just read it the other day on our message platform with our salesmen and Roland reminding some of the new guys once again. We are the perfect roofing company for many, many people out there, but not for some. Those that are trying to not pay their deductible or essentially commit insurance fraud and make a good bit of money off a claim or something of that nature, we're just not their roofer. So we prided ourselves on doing things the right way, not only by the insured and our customer but also the insurance company, and keeping things on the up and up both sides.

Heidi Ellsworth:
I love hearing that because why can't it be a win, win, win, right? We should be able to take care of all sides of the thing, and I love hearing that. So talk a little bit about now, just so people know, Roland, mostly residential, commercial, combination of both.

Roland Browne:
I would say, in years past, we've been highly concentrated on the residential side. And I would say, over the course of the past four years, we have gradually chipped away at that concentration to be more, probably 60/40 in terms of residential to commercial split. Maybe even one could argue 50/50.

Heidi Ellsworth:
Wow!

Jacob Law:
By the end of the year, for sure.

Roland Browne:
Well, yeah.

Heidi Ellsworth:
Yeah, that's great. And I know being in Texas, that all includes insurance claims, and taking care of the storms you are all having down there is just incredible.

Roland Browne:
Yes, ma'am.

Heidi Ellsworth:
And yeah, so let's talk just a little bit about that. I mean, you have this growing company. You're a philosophy of taking care of the customers and working strong with insurance companies, but some stuff has happened that has really stymied that. So, Roland, go ahead and set the stage for us.

Roland Browne:
In short, we became involved in a lawsuit that really was quite hindering, to say the least. Before, I can also tell you I didn't know what UPPA stood for. And for those in the audience who don't know what that is, that's the Unlicensed Practice of Public Adjustment. As we dug in, the options were quite simple: fight or die. Or at least that's what it seemed like. So we took on the challenge, and there were many that thought we didn't have a chance in hell of winning.

Roland Browne:
Long story short, we've come a long way. We've recently gone from Austin, Texas, to the appellate court, got a win there, a major victory, I should say, whereby we established ... Jacob, correct me if I'm wrong with the terminology, but strict scrutiny. And I understand that bar is almost impossible to overcome moving forward. But be that as it may, our options were as a company that I've created from way back when ... this is how I take care of my family, and others do too. But long and short, we had to wage a battle.

Roland Browne:
In fact, a little bit more tell-tell on the story, there was another gentleman fighting the same battle at the same time, similar situation and a scenario. And he actually asked me if he could take a back seat and if we could take the helm because he didn't want to be in the blowback.

Heidi Ellsworth:
Oh, yeah.

Roland Browne:
Yeah. So everybody's afraid of the big, bad insurance company, the Texas Department of Insurance, but I'm a firm believer in doing what's right is right, what's wrong is wrong. And at current time, to set the stage as you requested, think about a pie. Right? And I would say 90% of that market share of that pie is serviced by roofers. Okay? And that is to say, any claims that are below 100,000, your typical public adjuster, your typical attorney, they don't want anything to do with that. Right? Now, the whistle gets, we, once it goes above 100,000 and so on. Obviously, the bigger the claim, the better for them.

Roland Browne:
But because, oftentimes, they're contingency, and they get paid based off of centiles of the claim. There's nothing wrong with that. They have a place. They just don't belong on every claim. I simply disagree with that. But if you dig into the current UPPA rules as they're written in Texas, I can't speak for the nation, they're quite inhibiting. In my opinion, they do more harm to the policyholder than good. Okay? And that's got to change. I do realize there's some bad actors out there on the public adjusting side and also the roofing side.

Jacob Law:
And that's in any industry. Right? Any industry has bad actors.

Roland Browne:
Right. But that being said, I mean, you can't over-generalize and say, "Hey, we got to make rules for your entire roofing industry because those guys are all bad." It's just not true. And, Jacob, go ahead and take it. I mean, I'm hitting a lot of points here and giving a broad over stroke.

Jacob Law:
No, I mean, that's perfect. And, Heidi, I assume you're not 100%. Many may not be with some of the laws out there that are statutes, if you will, in Texas. But you started this particular part off with taking care of the customers and working strong with insurance companies. That last statement you said alone, someone could pull that, and Stonewater could be in trouble because now we're admitting to being a public adjuster because you said we work strong with insurance companies. That's how silly it's gotten at this point.

Heidi Ellsworth:
Wow!

Jacob Law:
So it came down to a lawsuit for us with a commercial client. We're talking almost a million-dollar roofing job. And we had one word in our contract, and it said that the customer was going to allow us to negotiate with insurance. And on our website, it said that we would help them through the process. They had taken those things and essentially wanted to null and void the entire contract after the roof is done, not pay their balance, and now get damages. And believe it or not, Heidi, we're talking about, I think, a little over $800,000 job. And they sued us based on those statutes and based off the things I just told you, the word in the contract, and we'll help them through the whole process listed on the website, or that we call ourself insurance specialists in the roofing industry.

Jacob Law:
Took that and took us to court, and suing us for a little over $1.4 million. So they want their money back. They're not paying the rest, and they get to keep their roof, by the way. And that would be bad enough on its own if you were up against that lawsuit, but the way that it's written and the way that it has been ruled upon to date allows them to just railroad us through court without us having any say. Because that word was in your contract, because you said your insurance specialist, and because your website said you would walk them through the process, you have violated the law, and there's no other discussion to be had.

Jacob Law:
And on that particular claim, there was an assigned adjuster. There was a public adjuster, so we weren't doing that job. The client had hired a public adjuster to do that job. But that is how silly this has gotten. So as you can imagine, we're going through court, getting railroaded through here with summary judgments, meaning no trial to be had. Our attorneys don't even have the opportunity to defend us, just courts ruling on summary judgment. I would call those lawyers there the ambulance chasers. Right? They found a little niche, and now they're going to chase after that one word in a contract because they know, slam dunk, that they're going to win based off how the law is being interpreted and implied by other courts so far.

Jacob Law:
So we had no other option, Heidi. We had to take it to the next level. And I would be willing to say, me having insurance specialist on the side of my truck saying that I'll help my customer through a process that I'm probably more experienced in than anyone else in the roofing side of it, that should allow me to speak freely within my business. Right? And that's what we're going after at this point, is our first amendment right to speak as a company, that they have that have withheld our ability to speak. And the rules that they set in place are strictly centered around what we might say. So that's how we got to this larger lawsuit that, as Roland pointed out, is winning at the moment.

Heidi Ellsworth:
Yeah. Tell us where you're at with that because I did see some of the court proceedings.

Jacob Law:
Yes, ma'am. Initially, it was dismissed in the lower courts, completely dismissed. So, once again, without our ability to truly go in and explain what's going on, the court was willing to just dismiss it. Well, we took that to the appellate courts, the seventh district in Austin, and the three-judge panel ruled that it should not have been dismissed. And that not only should it have not been dismissed, that it does infringe. These statutes do infringe on our first amendment rights, and that the lower court should now review it and apply, as Roland said, strict scrutiny to the law.

Jacob Law:
So they need to come in and improve or figure out a way not to infringe on our rights. So it's essentially done. They're taking it to the Supreme court, of course. We'll go through that motion again as well. Not an issue. So that's where we're at right now, an appellate win. It has been kicked out back to the lower courts with strict scrutiny. And we were just informed recently that the state of Texas and Texas Department of Insurance does intend ... and I want to say within a couple of weeks, their brief is due to the Supreme court to take it to the last level that they can.

Heidi Ellsworth:
Wow! Wow! So how is that? I mean, you're running a roofing business, and you're dealing with all this. That's a lot. And I'm just going to clarify, you're talking about the Texas Supreme Court, right? Or are you talking about-

Jacob Law:
Yes, ma'am.

Heidi Ellsworth:
Okay.

Jacob Law:
Texas Supreme court.

Heidi Ellsworth:
Yeah, we want to make sure. How far are we going up?

Jacob Law:
We'll go all the way if necessary, but yes, ma'am, Texas Supreme court.

Heidi Ellsworth:
So in the-

Roland Browne:
Let me bring that home for you real quick.

Heidi Ellsworth:
Yeah.

Roland Browne:
I want to brush up some things for those who might still be looking and wincing their eyes. What am I watching? If you own a roofing company in Texas, the barrier of entry, as Chris Morris, one of our guys, has pointed out, is pretty low to entry. There's no licensing. And you should know that Jacob and I are advocates for licensing. In fact, it's part of-

Jacob Law:
Absolutely.

Roland Browne:
Yeah. We're part of the NRCA, the National Roofing Contractors Association, and I can keep on going. The point is we are strong advocates for that because we hate the bad roofers out there that are giving us black eyes every day just as much as everyone else does. We want them eradicated. We want to police our own tree. Right?

Roland Browne:
But you can't say we're the bad guys. All of you are the bad guys. We want you to be quiet. How so? We're the experts on the field. We've got intimate knowledge of the roofing system itself and how it's supposed to be put back together. And oftentimes, a guy like me speaking about what I know on a low slope or steep slope roof might invariably cost the insurance company more money because I'm telling you how it's supposed to be done per code and per manufacturer recommendations. They don't like it. Okay?

Roland Browne:
And they want to silence the guys with the know-how and wherewithal to get things done the right way. They would prefer you work with Joe Schmo, who lives in his mom's house and is driving around with wire in the back of the truck. Right? Let me bring it home again. How does this impact all roofers in Texas? Right? Well, they are culpable just like we are, and they're vulnerable, and they don't even know it.

Roland Browne:
It may be something that they say that they have in their contract. It may be anything. I mean, if an insurance company calls you ... I'm Allstate, hypothetically. I call you and say, "Hey, I need you to change a couple of line items on your estimate, then I'll accept." Well, the fact that you agree and change those items just to put it all behind you and just say, "You know what? Forget about it. I'm going to go ahead and waive those three items just so I can get the job done and keep things moving." You've effectively negotiated a claim and violated the UPPA. That ain't right.

Jacob Law:
You affected a claim. You affected a claim. That's part of the language in their statute right now that you cannot effect a claim. If I call and put my name on it as contractor, I've affected it. Much less, as Roland said, if I agreed to even send it in my estimate, whether they agree with it or disagree with it, if that affects a claim. So that's essentially grabbed every single roofer out there that may ever send an estimate to a customer and that customer send it to their insurance company. They have affected a claim. And should they want to, or have an excuse to, or the customer, in our case, be greedy and want to get it all back and then some, that line alone allows them to do. You don't even have to have the word negotiate or insurance, especially if it's on the side of your truck. You just have to effect a claim.

Roland Browne:
Yeah, it's gotten so crazy. We're talking about crazy time all the time. It's gotten so crazy. I actually watched a video by Steve Badger. He's the "insurance lawyer expertise" on that side. And they were talking about how roofers should be paid. Well, how do you lump sum how everyone should be paid? For example, some guys are just getting started. Roland 1.0, just getting started, and I didn't have the budget I have today, nor did I have the manpower behind me, nor did I have 65 employees. So my overhead was incredibly different back then versus what it is now. So how do you, Steve Badger, say, "You know what, these guys underpaid this. They'll be happy with it." I disagree. What you're trying to do is they're trying to corner a market and trying to create a monopoly. They're trying to tell you to take it or we'll go with somebody else cheaper.

Heidi Ellsworth:
Which is not going to be good in the long-term anyway. That's not how it works.

Roland Browne:
Right.

Jacob Law:
And, Heidi, to tell you a little more about Stonewater Roofing, we have no 1099 employees. I mean, there are literally hundreds of roofing companies within a 200-mile radius of us, to include DFW, Austin, and those areas, and there's very few that can say that. We have no 1099 employees. Our salesmen, our project management staff, obviously, our office staff, our marketing team are all W2 employees. They have full-on healthcare available to them through United Healthcare. I'm not talking about some cafeteria plan with Aflac. No ding on Aflac. Sorry. But it's not a cafeteria plan. It's full-on healthcare with United Healthcare. They have 401Ks where we match up to 4% at 100% of their paycheck. And we're partnered with New York Life, who we personally, as a company, supply $50,000 worth of life insurance to each employee, whether they sign up or not.

Jacob Law:
But in addition to that, they can get additional policies through New York Life. So we have tried to create ... I don't want to say legitimate because there's other legitimate roofing companies that maybe don't provide those things. But we want to have actual employees that have an actual job, not a team of 1099 folks bouncing from company to company and otherwise. We're trying to remain in the same way I started with my explanation. We're not only taking care of the customer. We're not only doing things the right way by the insurance company, but we intend to do everything right by our employees as well. So, as with any other company, to include State Farm, Allstate, Travelers, go down the list of insurance companies. They all offer their people the exact same thing. So why wouldn't Stonewater's price, with legitimate overhead and profit, be okay to take care of their employees as well.

Heidi Ellsworth:
And it's all about ... I mean, we talk about it all the time, roofing respect and the professionalism of the roofing industry. And that's really what you're talking about here is the professionalism of the industry. And you have brought that professionalism in. And now, some things have to, they just have to change. And so, I think the fact that you just had this appellate court win says a lot. I mean, that really says a lot, and it's going to be interesting. So timeline-wise, you said you're still in the lower courts, but it may be going up to the Supreme Court, most likely. What's that look like? What's the timeline?

Jacob Law:
As our lawyers would tell you, they don't know.

Heidi Ellsworth:
They don't know. Okay.

Jacob Law:
It is going to the Texas Supreme court, which means are lower court is not going to pick it back up yet. So Texas Supreme Court is going to have to rule. So I believe the opposing side is responsible for their briefs here in the next couple of weeks, which means our team will be required to respond within about 30 to 45 days of that. And then everything will start being reviewed. The interesting part about the Texas Supreme Court is they may or may not take the case, just like everyone's familiar with the US Supreme Court. You have the right to send them the request, but they don't take the case. They may say, "We're not taking it." They're not going to agree or disagree with the appellate court. They may say, "We're going to decline this and continue," which would mean we go back to the lower court for them to evaluate these statutes at a strict scrutiny.

Jacob Law:
And I mean, your roofers should be familiar, Heidi, but should all of them not be, one thing to consider is this exact thing happened with regards to medical and doctors where you had a company that were not doctors, did not have their license to practice medicine, but whatever they were saying was upsetting the doctors and not passing the statutes that Texas had in place. The simple solution that happened, and you probably dealt with it before, or you've at least seen it on a commercial on TV, is the solution was, all they had to say was, "We are not a licensed medical professional." And by saying that, they were then able to give their expertise on this particular subject, with the understanding that they were not a doctor.

Jacob Law:
That's not available to us. We can say all day long, "We're not a public adjuster. We're not a licensed adjuster. We're not an attorney." That's another thing you hear. We're not an attorney. Those are statutes that have that written into him that, yes, Jacob Law can speak about his knowledge of the law because he's been in court, but I'm not an attorney. And as long as I tell you that, then nothing I say should be taken as if I was. But that's not available to roofers between roofers and public adjusters. You can't say you're not a public adjuster and then proceed to give your knowledge. You just can't proceed to give your knowledge.

Heidi Ellsworth:
So you have precedence from other industries-

Jacob Law:
Yes.

Heidi Ellsworth:
... along this line too. Really interesting. Yes. Wow! I wanted to bring back to the forefront again that you mentioned you guys are active in RCAT, and you're active in the NRCA. Other contractors are going to be hearing this, whether it's ... because I don't think this is just Texas. Right? This is that bigger pictures of the-

Jacob Law:
It's not.

Heidi Ellsworth:
... of the US. What are some things some contractors can do to get more information on this and to even help if they want to?

Roland Browne:
So we have a website. We can encourage anyone to go there and gain more information. It's Stonewater Roofing/TDI, T like Texas, D like department, I like insurance. And that'll give you a glimpse of what's happening. And also, it's our landing page, and we're asking for other roofers to pitch in 50 bucks or 100, whatever they feel comfortable doing. Because I say it all the time, this is not our fight alone. This is everyone's fight. And if we're going to be at the spearhead of change, everyone should pitch in a little bit. I don't care if it's 20 bucks. You got 200,000 guys throwing in 20 bucks, that's something. But we've already spent a pretty penny to the tune of greater than half a million getting here, and we anticipate spending the same at the Supreme Court level.

Roland Browne:
So the costs keep coming. That's okay. We're in a fight. This is what it is. We're here. And regardless if they contribute or not, we're going to continue to fight because we have to. But I would say to any roofer listening to this, "Hey man, get with your attorneys and get with RCAT. Or, if you're in a different state, you should have something similar to the Roofing Contractors Association of Texas there. They oftentimes have lawyers in-house that, if you send them your contract, they will review your contract for free." Okay? That's the first thing I'd recommend.

Roland Browne:
Secondly, I mean, again, you need to understand the way Texas goes is the way the nation goes as it relates to insurance claims. This is the insurance claims hub of the world, Texas. Okay? Other parts of the United States, they look at us sometimes, and they go, "You guys only do hail?"

Heidi Ellsworth:
I know.

Jacob Law:
Sometimes tornadoes, but yeah.

Heidi Ellsworth:
Yeah, yeah.

Roland Browne:
Right, right, right. But they don't understand the concept of you get hit regularly with the hail to where you can only work insurance claims. Yeah, we do. We do a small fraction of retail jobs, a very small fraction, I would say 0.05%.

Heidi Ellsworth:
Wow!

Roland Browne:
But those guys over in Florida, I mean, in other parts of the world, they're over here working almost entirely off of a retail setup and mindset. So, in short, I mean, check your paperwork. Make sure you're on the up and up. And sometimes, even if you are like us on the up and up, you're still culpable here and there. There's some gray areas. And again, it's got to change.

Roland Browne:
So we're effectively trying to make that change for everyone, and I'm not even speaking to just Texas roofers. I'm speaking to all of you nationwide. If you're in Connecticut, feel free to pitch in. Because again, these are not my words. They are from the billionaire John Hotelling. He said, and I quote ... on a stage with myself, Steve Badger, when the storm event in Dallas, Texas, recently, he said, and I quote, "The way Texas goes is the way the nation goes." So what happens here is going to be pivotal in terms of what happens across the nation. Okay? So we encourage you, if you're in California, hey, feel free to pitch in. But again, I encourage you.

Jacob Law:
They've already used that. Yes, sir. They've already used this appellate court in Florida. We've seen it come up in another case. We're not the first roofer to go through this in Texas or otherwise. They've already begun using this case to defend themselves in other states as well.

Heidi Ellsworth:
Wow! Wow! And you know what I really appreciate is how you're getting people involved, but also you're giving information to them on how to protect themselves. So getting with RCAT, checking out your contracts. I mean, Jacob, what you said earlier, even what's written on the side of your truck, even how talking like this, these are the type of things that are changing. And people need to be aware of what's happening and help. Go ahead.

Jacob Law:
And stop committing in for insurance fraud and absorbing deductibles.

Heidi Ellsworth:
Yeah, exactly. Do it right. They do it right. Yes, 100%. Well, gentlemen, thank you. Thank you for sharing this story because a lot of times this gets way too ... in your own area or just in your own company, you're taking all this on, and no one in the industry knows what's going on. So I'm really happy that we can share this. And I would say to everyone out there, however you look at this, take the time to research it, to go to the website. Stonewater is on Roofer's Coffee Shop. They have a directory on there, and you can get information. You need to understand all the facts and what's going on behind this type of legal that's happening. Go ahead, Roland.

Jacob Law:
And, Heidi, before you get too many hate emails or anything like that, I want to make clear that Stonewater Roofing nor Heidi are promoting the abolishment of UPPA. We understand the law. We understand why adjusters need to be licensed. Hell, we would like roofers to have to be licensed as well and hold to higher standards. So, in no way, shape, or form are we simply trying to abolish the statutes that are there pertaining to UPPA. We just want to make sure that they are more in line with any other industry and that our first amendment rights are not being trampled on in the process as a company.

Roland Browne:
Yeah, it's got to be fair and equitable for all parties. Right? We're all working together for the greater common goal, which should be taking care of the policyholder. Well said, Jacob. But what I was going to say is, if you wouldn't mind, if somebody wants to take a deeper dive and have a better understanding of how we got here, feel free to go to YouTube. It's not too far away, Stonewater Roofing versus Texas Department of Insurance. I believe there's one. There's two videos, I believe. And if you watch that, there's some good moments in there where you might laugh a bit, but it's entertaining, to say the least, and also revealing. So we encourage people that we're not just here asking for money. We're asking for you to educate yourself and then, hey, make that decision if you want to chunk in 20 bucks or 30 bucks. We're here. We're just looking for support. But more importantly, we want to affect change.

Heidi Ellsworth:
And I appreciate ... yeah, no hater mail, please, because these are the type of topics, no matter where you stand, you need to be aware of, and we need to be talking about because there's too many extremes, and there's not enough good, solid in the middle, doing the right things. And so, with that in mind, I am glad to share this story. I'm glad for people to go find out more about it and to know that this is what sharing news and getting it out there is all about. And so, gentlemen, thank you. Thank you for bringing your story and sharing it. I appreciate it so much.

Roland Browne:
Absolutely. Hey, thank you for your time. I appreciate it.

Heidi Ellsworth:
Thank you. And you heard where you can get more information. You can also get it at the directory, Stonewater directory on Roofer's Coffee Shop. Also, be sure to not miss a single podcast. We have them under the read, listen, and watch on Roofer's Coffee Shop or on your favorite podcast channel. Be sure to subscribe and get those notifications. You don't want to miss this kind of breaking news. So we'll see you next time from Roofing Road Trips.

Speaker 1:
Make sure to subscribe to our channel and leave a review. Thanks for listening. This has been Roofing Road Trips with Heidi from the Roofer's Coffee Shop.com.