De Moura Castro v. Loanpal, LLC
| Decision Date | 28 June 2022 |
| Docket Number | Civil Action 3:21-CV-1020 (CSH) |
| Court | U.S. District Court — District of Connecticut |
| Parties | BRIDGET DE MOURA CASTRO & LUIZ DE MOURA CASTRO, by his next friend Helena Hilario, Plaintiffs, v. LOANPAL, LLC d/b/a GOODLEAP, PRIME ENERGY, LLC d/b/a PRIME ENERGY SOLAR, 1ST LIGHT ENERGY, INC., Defendants. |
BRIDGET DE MOURA CASTRO & LUIZ DE MOURA CASTRO, by his next friend Helena Hilario, Plaintiffs,
v.
LOANPAL, LLC d/b/a GOODLEAP, PRIME ENERGY, LLC d/b/a PRIME ENERGY SOLAR, 1ST LIGHT ENERGY, INC., Defendants.
Civil Action No. 3:21-CV-1020 (CSH)
United States District Court, D. Connecticut
June 28, 2022
MEMORANDUM AND ORDER SCHEDULING PRELIMINARY HEARING ON DEFENDANTS' MOTIONS TO STAY PROCEEDINGS [DOC. 19, 23]
CHARLES S. HAIGHT, JR. Senior United States District Judge.
I. INTRODUCTION
In this federal action brought by Plaintiff homeowners under the Consumer Credit Protection Act, 15 U.S.C. §§ 1640(e) and 1681p, which also asserts supplemental jurisdiction over state law claims, Defendants move to stay the proceedings to allow arbitration of Plaintiffs' claims. Plaintiffs resist that motion and wish to press on with litigation. This Ruling addresses Defendants' motions.
A. Background: Plaintiffs' Allegations
In this action, Plaintiffs Luiz and Bridget de Moura Castro, self-described "elderly consumers," seek "damages and other relief" from Defendants for their allegedly fraudulent and unconscionable solicitation, sale, and installation of solar panels on Plaintiffs' home in Avon,
Connecticut. Doc. 1, ¶¶ 1-10, 13. Plaintiffs are each 80 years old and are a married couple.[1] Id. ¶¶ 2, 13. They allege that in August of 2020 they became victims of the Defendants' fraudulent scheme to sell them solar panels for installation on the roof of their home. Id. ¶¶ 1-6, 40-41.
Defendants are engaged in the business of soliciting consumers "for the purchase of solar panels and/or [the] install[ation] [of] solar panels on consumers' homes." Id. ¶ 3. Defendants' sales agents use electronic tablets, such as iPads, to solicit consumers to enter "25-year loans and other contracts." Id. In particular, Defendant Loanpal, LLC (d/b/a Goodleap) (herein "Loanpal") is in the business of offering consumers loans to purchase residential solar panels. Id. ¶¶ 14-15. Defendants Prime Energy, LLC (d/b/a Prime Energy Solar)("Prime") and 1st Light Energy, Inc. ("1st Light") are licensed home improvement contractors in Connecticut. Id. ¶¶ 16-19. Plaintiffs allege that "Defendants carry on a symbiotic business relationship" in which "Prime solicits customers at their homes on behalf of and for the benefit of 1st Light and Loanpal, 1st Light sells and installs the solar panels, and Loanpal finances the transactions." Id. ¶¶ 20- 21. Consequently, "[a]ll Defendants rely and depend on each other to carry out this course of business." Id. ¶ 21.
According to the Complaint, in August of 2020, Bridget de Moura Castro was solicited in her home in Avon, Connecticut, by Mark Murphy, a salesman and agent acting on behalf of Defendants.[2] Id. ¶¶ 22-23. Murphy allegedly told Plaintiffs that senior citizens "are given government
benefits for 'free' solar panels" installed on their homes. Id. ¶ 24; Doc. 24-1 ("Certification of Bridget de Moura Castro"), ¶ 2. Based on this "promise of free solar panels and significant savings," Mrs. de Moura Castro agreed to have the solar panels installed on Plaintiffs' Avon home. Doc. 1, ¶¶ 13, 40-41. Despite neither mentioning nor requesting authorization to provide a loan or perform a credit check on the de Moura Castros, Defendants "surreptitiously and intentionally obtained and used Plaintiffs' consumer reports from the consumer reporting agencies" to create a "Loan Contract" for the purchase of solar panels. Id. ¶¶ 25-31. Moreover, Defendants allegedly never gave Plaintiffs the opportunity to review any paperwork or documents regarding purchase of the solar panels in either "paper or electronic" form. Id. ¶ 29, Doc. 24-1, ¶ 3.
Bridget de Moura Castro alleges that shortly after she was unable to open a document emailed from Loanpal regarding the alleged sale, agent Murphy of Prime Energy arrived at her Avon home with an electronic tablet to allow the solar panel project to go forward. Doc. 1, ¶ 44. He tapped the device's screen and then asked her to also tap it. Id. Bridget alleges that she could not see what she was tapping and received no explanation from Murphy at the time. Id. Additionally, Plaintiffs allege that Defendants did not provide them with any copies of contracts, other paperwork, or notice of the right to cancel any solar panel transaction. Id. ¶ 46. Nonetheless, Defendants allegedly forged Plaintiffs' signatures and initials on contract documents, including a 25-year "Loan Contract."[3] Id. ¶ 5. They then proceeded to install the solar panels on Plaintiffs' home. Id. ¶ 46.
In January 2021, Defendants sent a letter, dated January 22, 2021, addressed to Luiz de Moura Castro, stating that he had taken out a 25-year loan and "[w]e've tried calling a few times to review your terms and was [sic] unsuccessful." Doc. 1, ¶ 47. Bridget de Moura Castro believed the letter was a scam because she did not recall taking out a loan and did not recognize the name "Loanpal." Id. ¶ 48. She thus gave the letter to her daughter, Cema Siegel, who "had been acting as Plaintiffs' power of attorney for financial matters." Id. ¶ 49. Upon Ms. Siegel's investigation, and after speaking with agent Murphy about the loan, Murphy agreed to send Ms. Siegel copies of any written agreements regarding the solar panels. Id. ¶ 50. On February 18, 2021, Ms. Siegel received copies of the 25-year Loan Contract and a "Contract for PV Solar System" (or "Purchase Contract") for the first time. Id. ¶ 51.
Upon inspection of the Loan Contract [Doc. 1, Ex. A] and Purchase Contract [Doc. 1, Ex. B], Plaintiffs discovered that the documents bore their names, forged signatures, and forged initials. Id. ¶ 54. Also, the email address and phone number on the documents were allegedly incorrect, insuring that Plaintiffs could not receive copies of the contract documents at the time of forgery.[4]
Id. ¶¶ 55-57. Upon Plaintiffs' information and belief, Defendants also backdated the transaction date on the contracts so that the cancellation period had allegedly expired by the time the contracts were forged.[5] Id. ¶ 58.
Plaintiffs state that the cost of the solar panel system in the Purchase Contract was $54,880.88, which is allegedly more than three times the average cost to purchase such a system in Hartford County, where they reside.[6] Id. ¶ 60. With financing, the total cost of the solar panel system was allegedly $73,816. Id.; see also Doc. 1-1, at 4 ("Truth in Lending Disclosure Statement," "Total of Payments").
Shortly after receiving the contract documents on February 18, 2021, Plaintiffs sent Defendants a notice of cancellation of both contracts. Doc. 1, ¶ 61. Although Defendants received
this notice, they did not cancel the contracts and instead demanded payment under the payment terms. Id. ¶¶ 62-63.
Plaintiffs have characterized the installation of solar panels on their "shaded, tree-covered roof" as "unconscionable" because said panels have been "ineffective." Doc. 1, ¶¶ 6, 65. Due to "significant tree cover," the panels are completely shaded by trees. Id.; see also photographs of installed panels following ¶¶ 6, 65.[7]
In sum, Plaintiffs allege that they were "duped into contracts they never saw, burdened with solar panels under terms they never agreed to, and subjected to wrongful demands for payment pursuant to these forgeries." Id. ¶ 66. Due to "Defendants' willful, wanton, reckless, and/or negligent conduct," Plaintiffs assert that they have "suffered mental and emotional distress, worry, and aggravation." Id.
Under these alleged circumstances, Plaintiffs bring the following claims against all Defendants in the Complaint: (1) violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681; violation of the Truth in Lending Act, 15 U.S.C. § 1638; (2) unfair or deceptive practices in violation of the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen. Stat. § 42-110b (which also encompasses violations of the Home Solicitation Sales Act ("HSSA"), Conn. Gen. Stat. § 42-141(b); the Home Improvement Act, Conn. Gen. Stat. § 20-418, et seq.; and Connecticut's elder exploitation statute, Conn. Gen. Stat. § 17b-450, et seq.)); (3) intentional or reckless unfair or deceptive practices in violation of CUTPA; (4) elder exploitation under Conn. Gen. Stat. § 17b-450; and (5) common
law fraudulent concealment of the solar panel transaction (for failure to disclose and/or for prevention of discovery of facts regarding the hidden agreements with Plaintiffs' forged signatures).
In their prayer for relief, Plaintiffs seek, inter alia, compensatory ("actual and statutory") damages; punitive damages; declaratory judgment that the contract documents are void; return or destruction of Plaintiffs' confidential consumer report; removal of the solar panels and repair for damage to Plaintiffs' property; and attorney's fees and costs. Doc. 1, at 20 ("Prayer for Relief").
B. Pending Motions to Stay Proceedings
1. Loanpal's Motion [Doc. 19] - Alleged Arbitration Agreement in "Loan Contract"
In response to Plaintiffs' Complaint, Defendants Loanpal and 1st Energy have filed motions for a stay to allow arbitration to proceed. Doc. 19, 23. Loanpal has filed its motion pursuant to an arbitration provision in the "Loan Contract" [Doc. 1-1, Ex. A]; and 1st Energy has moved pursuant to an arbitration provision in the "Purchase Contract" [Doc. 1-2, Ex. B]. Doc. 19 at 1; Doc. 23 at 1.
The Federal Arbitration Act, 9 U.S.C. §§ 1-16 ("FAA"), mandates that in any action "brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court . . ., upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the...
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