Most residential solar contractors offer good contracts. Like banks and auto dealers, their model contracts are drafted by attorney specialists. That’s good because most residential solar jobs have a complication — commercial financing. That’s part of the sales pitch. Savings on the customer’s electric bill might cover most of the monthly finance charge. For PV (photo voltaic) contractors, the primary sales tool is a detailed summary of expected electrical output and monthly savings. Projections like these are developed by highly-qualified electrical engineers. So what could go wrong?
Plenty, it turns out, at least for one New York PV contractor. The case is Policastri v. Sunco Capital (Sunco Solar), decided last month. Details:
Leonard Policastri and Rhonda Policastri own a home at 133 Monahan Avenue, Staten Island, New York. Leonard agreed to have Sunco install a solar grid inter-tied PV system on his roof. Leonard signed the contract. Rhonda didn’t. That was Sunco’s first mistake. The second: The job site was listed as 131 Monahan Avenue. That’s the address of Leonard’s neighbor. Oops. The third mistake: Leonard’s contract required binding arbitration (rather than a law suit) if necessary to settle a dispute. Again, Leonard signed. Rhonda didn’t.
None of this would have mattered if Leonard had been pleased with his PV job. He wasn’t.
According to Leonard, he was told the new solar panels would power his 1500 sq. ft home, heat his swimming pool and charge his electric car, if he ever bought one. Leonard claimed Sunco’s salesman projected “a significant reduction” in Leonard’s Con Edison bill once the new system was fully operational.
All this was in spite of what Leonard told the Sunco salesman. Another solar company advised Leonard that his roof was too small for a PV system adequate to power his home. Sunco’s salesman had an answer for that. He claimed Sunco’s panels were the most up to date, efficient solar panels. They would power his entire home, heat his pool, and charge his (future) electric car.
Once installed, Leonard claimed the PV system didn’t produce enough energy to power his home, let alone heat the pool and charge an electric vehicle. Worse, Leonard saw no change in his Con Edison bill.
Leonard filed suit against Sunco, alleging breach of contract, fraudulent conduct, and unjust enrichment. Sunco petitioned the court to halt Leonard’s legal action and compel arbitration. As in every serious dispute, the signed contract now took center stage. But there were three problems.
- Rhonda never signed the PV installation contract.
- Rhonda never signed the loan agreement.
- Rhonda never agreed to arbitrate.
The Court’s Decision
Leonard could be compelled to arbitrate. But he was only a co-owner. Rhonda didn’t have to arbitrate. Any decision in arbitration would affect only Leonard’s interest in their home, not Rhonda’s interest. Sunco was left with two disputes, one in arbitration and one in Richmond County Supreme Court. Claims against Sunco for breach of contract, fraud and unjust enrichment could play out in a court of law, no matter what the arbitrator decided.
A good contract can head off most construction disputes. Not in this case. No doubt, Sunco had a good contract, drafted by legal experts. But sometimes a good contract isn’t enough. No contract can survive faulty execution. And sales staff has to avoid promises about performance. That’s especially important on solar jobs.
Construction Contract Writer doesn’t estimate savings or write warranties for PV systems. But if you need a home improvement contract that complies with the law at your job site, have a look at the free trial version.