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DOCKET NO.: NNH-CV23-6133605-S SUPERIOR COURT
MARGARET PRICE, ET AL J.D. OF NEW HAVEN
Vv AT NEW HAVEN
CARVANT FINANCIAL LLC, ET AL JUNE 12, 2024
DEFENDANTS’ MOTION TO SET ASIDE
THE COURT’S ORDER TO ARBITRATE
A. OVERVIEW
On or about June 15, 2023, the Plaintiffs, Margaret Price and James Price, filed a
Complaint against the Defendants, Carvant Financial LLC and Choice Group LLC.
Based on the limited information regarding the full extent of the Plaintiffs’ claims and the
evidence to support the claims, neither of the Defendants contested the Plaintiffs’
alleged right to arbitrate based on the arbitration provision contained in the loan
documents.
After discovery, and prior to the start of evidence before the arbitrator, based on
Margaret Price’s claim that her signature was forged on the purchase agreement and
loan documents, the Defendants contested the right of the arbitrator to hear the matter.
The Defendants move to set aside the court’s August 14, 2023 order to arbitrate on the
The Law Offices of
SHEFFY,
DENIGRIS, GREY
& BEDARD, LLP.
166 North Main St.
Southington, CT
06489
860-620-9460
Juris. No. 413589
basis that this court must first decide if the forgery negates a binding contract between
the Defendants and Margaret Price.
B. ARGUMENT
The claim of forgery goes to the validity of the entire contract and must be
decided by the superior court before the arbitration can proceed.
In Connecticut it is well established that arbitration is a “creature of contract.” A.
Dubreuil & Sons, Inc. v. Lisbon, 215 Conn. 604, 608, 577 A.2d 709 (1990). Further, a
person cannot be compelled to arbitrate a dispute unless they contract to do so. /d. at
608. Because an arbitrator's jurisdiction is rooted in the agreement of the parties, a
party who contests the making of a contract containing an arbitration provision cannot
be compelled to arbitrate the threshold issue of the existence of an agreement. Only a
court can make that decision. Nussbaum vs. Kimberly Timbers, LTD, 271 Conn. 65
(2004). “The enforceability of an arbitration clause is a question for the court when one
party denies the existence of a contract with the other.” /d. at 72. The Connecticut
Appellate Court has held that “the general rule is that the court is responsible for
deciding whether a dispute is arbitrable.” Brownstone Exploration & Discovery Park,
LLC vs. Borodkin, 220 Conn.App. 806 (2023). Whether there is a valid agreement to
The Law Offices of
SHEFFY,
DENIGRIS, GREY
& BEDARD, LLLP.
166 North Main St.
Southington, CT
06489
860-620-9460
Juris. No. 413589
arbitrate is a threshold matter that impacts the jurisdiction of the arbitrator. MBNA
America Bank v. Bailey, 104 Conn.App. 457 (2007).
It has been held that an arbitration agreement can be void based on fraud or
misrepresentation. Dewart v. Northeastern Gas Transmission Co., 140 Conn. 446, 449
(1953). Forgery is a subcategory of fraud and also goes to the formation of a contract.
de Moura Castro by Hilario v. Loanpal, LLC, 2024 WL 510908, Docket No.: 3:21-CV-
1020 (CSH) (Haight, J., Feb. 8, 2024). In the well-reasoned superior court case of
Benvenuti Oil Co., Inc. v. Foss Consultants, Inc., the lower court addressed the issue of
forgery in relation to the formation of a contract. Benvenuti Oil Co., Inc. v. Foss
Consultants, Inc., 2006 WL 328678, Docket No. CV010485270S (Corradino, J., Jan. 25,
2006). The court acknowledged that allegations of forgery could undermine the validity
of a purported contract document, thereby affecting the formation of the contract. /d.
Specifically, the court held that the plaintiffs were prevented from pursuing their breach
of contract claim due to the alleged forgery, which was a subcategory of fraud. /d.
In the present matter, Ms. Price has alleged that her signature was forged. This calls
into question whether there was a valid agreement between the parties to arbitrate.
Whether the parties entered into a valid contract is a finding that must be made by the
The Law Offices of
SHEFFY,
DENIGRIS, GREY
& BEDARD, LLLP.
166 North Main St.
Southington, CT
06489
860-620-9460
Juris. No. 413589
court. Therefore, the Defendants move the court to set aside the August 14, 2023 order
to arbitrate so that the court may determine arbitrability.
DEFENDANTS,
By:_/s/ 309357
Anthony Alan Sheffy
Sheffy, DeNigris, Grey & Bedard, LLP
166 North Main Street
Southington, CT 06489
(860) 620-9460
The Law Offices of
SHEFFY,
DENIGRIS, GREY
& BEDARD, LLLP.
166 North Main St.
Southington, CT
06489
860-620-9460
Juris. No. 413589
CERTIFICATION
| hereby certify that a copy of the above was mailed or electronically delivered on
June 12, 2024, to all counsel and self-represented parties of record and that written
consent for electronic delivery was received from all counsel and self-represented
parties of record who were electronically served:
Daniel S. Blinn, Esq.
Consumer Law Group, LLC
35 Cold Spring Road, Suite 512
Rocky Hill, CT 06067
dblinn@consumerlawgroup.com
/s/309357
Anthony Alan Sheffy
The Law Offices of
SHEFFY,
DENIGRIS, GREY
& BEDARD, LLP.
166 North Main St.
Southington, CT
06489
860-620-9460
Juris. No. 413589
de Moura Castro by Hilario v. Loanpal, LLC, -~ F.Supp.3d —-- (2024)
Homeowners' motion to supplement the record granted; trial
ordered, to determine whether valid arbitration agreement
2024 WL 510908
exists.
Only the Westlaw citation is currently available.
United States District Court, D. Connecticut.
Procedural Posture(s): Motion to Supplement the Record.
Bridget DE MOURA CASTRO & Luiz de Moura
Castro, BY his next friend Helena HILARIO, Plaintiffs, West Headnotes (26)
v.
LOANPAL, LLC d/b/a Goodleap, Prime
Alternative Dispute Resolution <= Particular
Energy, LLC d/b/a Prime Energy Solar,
cases
and ist Light Energy Inc., Defendants.
For homeowners to fulfill their burden under
Civil Action No. 3:21 - CV - 1020 (CSH) summary judgment standard, which applied on
| defendants’ motion to stay court proceedings
Signed February 8, 2024 pending arbitration under Federal Arbitration
Act (FAA), so that homeowners could obtain
Synopsis trial on their assertion that valid arbitration
Background: Homeowners brought action against agreements did not exist under Connecticut law
companies that solicited their purported purchase of allegedly because defendants, who solicited homeowners'
ineffective solar panels and that installed panels as state- purported purchase of allegedly ineffective solar
licensed home improvement contractors, asserting federal panels and who installed panels, used fraud and
claims under Fair Credit Reporting Act (FCRA) and forgery to obtain purchase agreement and loan
Truth in Lending Act (TILA), and state-law claims under agreement that contained arbitration clauses,
Connecticut's Unfair Trade Practices Act (CUTPA) and homeowners were required to show genuine
elder exploitation statute and for common-law fraudulent factual issues regarding their allegations of
concealment, alleging that defendants represented that solar fraud and forgery, such that a jury could
panels would be free because homeowners were senior find no agreement to arbitrate homeowners’
citizens and that defendants forged homeowners' signatures federal claims under Fair Credit Reporting Act
on purchase agreement and loan agreement. Defendants filed (FCRA) and Truth in Lending Act (TILA),
motion to stay court proceedings pending arbitration under and state-law claims under Connecticut's
Federal Arbitration Act (FAA). Unfair Trade Practices Act (CUTPA) and
elder exploitation statute and for common-law
fraudulent concealment. 9 U.S.C.A. §§ 3, 45
Holdings: The District Court, Charles S. Haight, Senior Consumer Credit Protection Act § 602, 15
District Judge, held that: U.S.C.A. § 1681 et seq.; Truth in Lending Act §
102, 15 U.S.C.A. § 1601 et seq.; Conn, Gen. Stat.
[1] fact issues existed as to fraud or forgery in obtaining Ann. §§ 17b-450, 17b-462, 42-110g et seq.
arbitration agreements;
[2] fact issues existed as to validity of homeowners’ clectronic 2] Alternative Dispute Resolution @ Particular
signatures on purchase agreement and loan agreement; and cases
Did defendants bear burden of proof?Yes
[3] homeowners would be allowed to supplement the case Defendants, who solicited homeowners!
record for purposes of later trial, to include opinion of expert purported purchase of allegedly ineffective solar
in information technology (IT), offered to show invalidity of panels and who installed panels, as movants
a homeowner's electronic signature. to stay court proceedings pending arbitration
under Federal Arbitration Act (FAA), had burden
of proving the existence of valid arbitration
WESTLAW
de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d --— (2024)
agreements with homeowners, in homeowncrs' Under Connecticut law, to create a contract, there
action asserting federal claims under Fair must be a mutual understanding of the terms that
Credit Reporting Act (FCRA) and Truth in are definite and certain between the parties.
Lending Act (TILA), and state-law claims
under Connecticut's Unfair Trade Practices Act
(CUTPA) and elder exploitation statute and [8] Contracts = Offer and acceptance in general
for common-law fraudulent concealment. 9 To constitute an offer and acceptance sufficient
US.C.A. § 3; Consumer Credit Protection Act § to create an enforceable contract under
602, 15 U.S.C.A.§ 1681 et seq.; Truth in Lending Connecticut law, each must be found to have
Act § 102, 15 US.C.A. § 1601 et seq.; Conn. been based on an identical understanding by the
Gen. Stat. Ann. §§ 17b-450, 17b-462, 42-110g et parties.
seq.
More cases on this issue
19] Alternative Dispute Resolution = Particular
cases
13] Contracts = Offer and acceptance in general
Genuine issues of material fact regarding fraud
Under Connecticut law, the essential elements of and forgery existed, as standard, on defendants'
contract formation are offer and acceptance. motion to stay court proceedings pending
arbitration under Federal Arbitration Act (FAA),
for plaintiff homeowners to obtain trial on their
[4] Contracts ® Qualified or conditional assertion that valid arbitration agreement did not
acceptance of offer exist under Connecticut law because defendants,
To create a contract under Connecticut law, there who solicited homeowners’ purported purchase
must be an unequivocal acceptance of an offer. of allegedly ineffective solar panels and who
installed panels, used fraud and forgery to obtain
purchase agreement and loan agreement that
Contracts = Acceptance of Offer and contained arbitration clauses, in homeowners’
[5]
Communication Thereof action asserting federal claims under Fair
Credit Reporting Act (FCRA) and Truth in
Contracts & Qualified or conditional
Lending Act (TILA), and state-law claims
acceptance of offer
under Connecticut's Unfair Trade Practices Act
Under Connecticut law, to create a contract, the
(CUTPA) and elder exploitation statute and
acceptance of the offer must be explicit, full, and for common-law fraudulent concealment. 9
unconditional. U.S.C.A. §§ 3, 4; Consumer Credit Protection
Act § 602, 15 U.S.C.A. § 1681 et seq.; Truth
in Lending Act § 102, 15 U.S.C.A. § 1601 et
[6] Contracts @= Certainty as to Subject-Matter seq.; Conn. Gen. Stat. Ann. §§ 17b-450, 17b-462,
Contracts # Necessity of assent 42-110g et seq.
To create a contract under Connecticut law, there
More cases on this issue
must be a bargain, manifesting mutual assent to
the exchange, between two or more parties, and
the identities of the contracting parties must be [10] Contracts + Signing in ignorance of contents
reasonably certain. in general
Contracts © Fraud and Misrepresentation
Under Connecticut law, there is a general rule
7) Contracts @= Certainty as to Subject-Matter that where a person of mature years, who can
Contracts “= Necessity of assent read and write, signs or accepts a formal written
contract affecting his pecuniary interests, it is his
WESTLAW
de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d ---- (2024)
duty to read it, and notice of its contents will be installed at their home, as standard, on
imputed to him ifhe negligently fails to do so, but defendants’ motion to stay court proceedings
there is an exception to that rule when something pending arbitration under Federal Arbitration
has been said or done to mislead the person or to Act (FAA), for homeowners to obtain trial on
put a person of reasonable business prudence off their assertion that valid arbitration agreement
his or her guard in the matter. did not exist under Connecticut law, in
homeowners’ action asserting federal claims
under Fair Credit Reporting Act (FCRA)
and Truth in Lending Act (TILA), and
(1) Summary Judgment ¢ Reply and surreply
state-law claims under Connecticut's Unfair
Arguments raised for the first time, on a motion
Trade Practices Act (CUTPA) and elder
for summary judgment, in a movant's reply are
exploitation. statute and for common-law
waived. Fed. R. Civ. P. 56.
fraudulent concealment. 9 U.S.C.A. §§ 3, 45
Consumer Credit Protection Act § 602, 15
US.C.A. § 1681 ct seq.; Truth in Lending Act §
[12] Federal Civil Procedure @= Failure to object:
102, 15 U.S.C.A. § 1601 et seq.; Conn. Gen. Stat.
waiver Ann. §§ 1-274(a, b), 17b-450, 17b-462, 42-110g
Summary Judgment = Defects, objections, et seq.
and waiver
When a party fails to make an objection to More cases on this issue
evidence that it thinks is inadmissible, including
in connection with summary judgment, the court {16] Contracts & Effect in general; enforcement
is free to consider that evidence. Fed. R. Evid. in general
103(a)(1)(A); Fed. R. Civ. P. 56. Under Connecticut law, an agreement that has
not been properly formed is not merely an
unenforceable contract; it is not a contract at all.
(13) Evidence = Hearsay issues in general
Admission of evidence under the hearsay
exception for business records, rather than its [7] Alternative Dispute Resolution ©= Particular
exclusion, is favored if it has any probative value cases
at all. Fed. R. Evid. 803(6). Homeowners would be allowed, after deadline
for post-hearing briefs relating to defendants’
motion to stay court proceedings pending
[14] Evidence @ Hearsay issues in general arbitration under Federal Arbitration Act (FAA),
For the hearsay exception for business to supplement the case record for purposes of
records, residual doubts on the question of later trial to establish whether valid arbitration
trustworthiness go to the weight of the evidence, agreement existed under Connecticut law, to
not its admissibility. Fed. R. Evid. 803(6). include opinion of expert in information
technology (IT) that, based on internet protocol
(IP) address for purported electronic signature
of one homeowner, offered by defendants under
[15] Alternative Dispute Resolution ¢= Particular
cases Connecticut Uniform Electronic Transactions
Act (CUETA), homeowner did not electronically
Genuine issues of material fact existed
sign purchase agreement and loan agreement
regarding validity under Connecticut Uniform
for solar panels for home, in action against
Electronic Transactions Act (CUETA), in light
defendants, who solicited purported purchase
of surrounding circumstances, of plaintiff
of panels and who installed panels, asserting
homeowners’ electronic signatures for purchase
federal claims under Fair Credit Reporting Act
agreement and loan agreement for solar panels
WESTLAW
de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d --- (2024)
(FCRA) and Truth in Lending Act (TILA),
(21) Alternative Dispute
and state-law claims under Connecticut's
Resolution = Arbitvability of dispute
Unfair Trade Practices Act (CUTPA) and
elder exploitation statute and for common-law Under the Federal Arbitration Act (FAA), the
fraudulent concealment; validity of arbitration issue of arbitrability may be referred to the
agreements remained disputed after hearing. 9 arbitrator if there is clear and unmistakable
U.S.C.A. §§ 3, 4; Consumer Credit Protection evidence from the arbitration agreement, as
Act § 602, 15 U.S.C.A. § 1681 ct seq.; Truth in construed by the relevant state law, that the
Lending Act § 102, 15 U.S.C.A. § 1601 et seq parties intended that the question of arbitrability
Conn. Gen. Stat. Ann. §§ 1-274(a, b), 17b-450, shall be decided by the arbitrator. 9 U.S.C.A. §
17-462, 42-110g et seq. 1 et seq.
More cases on this issue
[22] Alternative Dispute
[18] Summary Judgment @ Expert Evidence and Resolution <= Contractual or consensual basis
Affidavits Alternative Dispute Resolution ¢= Persons
Although unsworn statements may be viewed affected or bound
as inadmissible hearsay, subsequent verification Arbitration is essentially contractual, and parties
or teaffirmation of an unsworn expert's report, may not be forced into arbitration if that was not
either by affidavit or deposition, allows the court their true agreement.
to consider the unsworn expert's report on a
motion for summary judgment. Fed. R. Civ. P.
56; Fed. R. Evid. 702, 802.
[23] Alternative Dispute
Resolution = Contractual or consensual basis
Although federal policy generally favors
{19} Alternative Dispute Resolution € Persons arbitration, arbitration is a matter of contract and
affected or bound aparty cannot be required to submit to arbitration
Under Connecticut law, where a non-signatory any dispute which he has not agreed so to submit.
has invoked, taken advantage of, or asserted
rights under a contract with an arbitration clause,
traditional principles of law and equity bind
[24] Alternative Dispute Resolution © In
the non-signatory to that contract's arbitration general, formation of agreement
provisions as well, and this prevents a party who
The making of an arbitration agreement is in
knowingly exploits an agreement from taking
issue, for purposes of the Federal Arbitration
advantage of the benefits of the contract while
Act (FAA), only when there are material factual
simultaneously disavowing its burdens.
disputes regarding the elements of contract
formation under the applicable state law. 9
US.C.A. § Let seq.
(20) Alternative Dispute Resolution © Persons
affected or bound
Under Connecticut law, whether an issue
[25] Alternative Dispute Resolution = Remedies
involving a non-signatory is referable to and Proceedings for Enforcement in General
arbitration is decided by reference to the
A motion to compel arbitration under the Federal
written arbitration agreement executed by the
Arbitration Act (FAA) may be granted when the
signatories, which is claimed to cover the
pleadings, the discovery and disclosure materials
dispute.
on file, and any affidavits show that there is no
genuine issue as to any material fact and that
WESTLAW
de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d ~--- (2024)
movant is entitled to judgment as a matter of law.
9US.CA. § 1 et seq. Defendants Loanpal, LLC (“Loanpal”), Prime Energy, LLC
(“Prime Energy”), and 1°' Light Energy, Inc. (“1 St Light”)
engage in the business of soliciting consumers “for the
Alternative Dispute Resolution &e Suing or purchase of solar panels and/or [the] install[ation] [of]
[26]
participating in suit solar panels on consumers’ homes.” ? Id. 4 3. In soliciting
Parties may engage in discovery limited to the consumers to enter “25-year loans and other contracts,”
issue of arbitration without waiving the right to Defendants’ sales agents employ electronic tablets such as
arbitrate. iPads. Jd. Defendant Loanpal offers consumers loans to
purchase the solar panels, id. 4] 14-15; and Defendants
Prime Energy and Ist Light install the panels as licensed
home improvement contractors in Connecticut, Sid. q9 16-19.
Plaintiffs allege that “Defendants carry on a symbiotic
Attorneys and Law Firms
business relationship” in which “Prime solicits customers
at their homes on behalf of and for the benefit of Ist
Jeffrey S. Gentes, Yale Law School or Connecticut Fair
Light and Loanpal, Ist Light sells and installs the solar
Housing Center, New Haven, CT, Sarah White, Connecticut
panels, and Loanpal finances the transactions.” Jd. {] 20-21.
Fair Housing Center, Hartford, CT, Andrew M. Milz, Cary
Consequently, “[aJll Defendants rely and depend on each
L. Flitter, Jody Thomas Lopez-Jacobs, Flitter Milz, P.C.,
other to carry out this course of business.” Id. J 21.
Narberth, PA, for Plaintiffs.
Christopher D. Barraza, Phillips Lytle LLP, New York, NY, Plaintiffs allege that in August of 2020, Bridget de Moura
for Defendant Loanpal, LLC. Castro was solicited in her Avon home by Mark Murphy, a
salesman and agent acting on behalf of Defendants. ‘Td. "
Jeffrey O. McDonald, Hassett & George, PC, Simsbury, CT,
22-23. Murphy allegedly informed Bridget that senior citizens
for Defendant 1st Light Energy, Inc.
“are given government benefits for ‘free’ solar panels”
installed on their homes. Jd. § 24; Doc. 24-1 (“Certification
of Bridget de Moura Castro”), § 2. Based on this alleged
ORDER RE: EFEN) ANTS’ MOTIONS “promise of free solar panels and significant savings,” Bridget
STAY PROCEEDINGS AND RULING ON agreed to have the solar panels installed on her Avon home.
LAINTIFFS’ MOTION TO SUPPLEMENT RECORD Doc. 1, {fj 13, 40-41. Bridget further alleges that Murphy
never mentioned or requested authorization to provide a
HAIGHT, Senior District Judge:
loan or perform a credit check on the de Moura Castros.
Id, | 25-28. Nonetheless, Defendants “surreptitiously
I. INTRODUCTION and intentionally obtained and used Plaintiffs’ consumer
reports from the consumer reporting agencies” to create a
*1 In its prior “Memorandum and Order Scheduling
“Loan Contract” for the purchase of solar panels. Id. 9
Preliminary Hearing” [Doc.41], the Court provided a detailed 30-31. Furthermore, Defendants allegedly never provided
summary of the alleged facts in the case.'! Although the Plaintiffs with an opportunity to review paperwork or
familiarity with that Order is presumed, the Court briefly documents regarding purchase of the solar panels in either
recounts the following facts, as set forth in the Complaint. “paper or electronic” form. Id. ff] 29, 46; Doc. 24-1, 4 3.
Plaintiff homeowners, Bridget de Moura Castro and Luiz de *2 According to Plaintiffs, “Defendants eventually caused
Moura Castro, are a married couple who were each 80 years solar panels to be installed on Plaintiffs’ home, even though
old at the commencement of this action. In their Complaint, no contract was provided to Plaintiffs or signed by Plaintiffs.”
they allege that in August of 2020, Defendants participated Doc. 1, { 46. Thereafter, in January 2021, Defendants sent
jointly in a fraudulent and unconscionable scheme to solicit, Plaintiffs a letter, addressed to Luiz, stating that he had taken
sell, and install solar panels on the roof of their home in Avon, out a 25-year loan and “[w]e've tried calling a few times to
Connecticut. Doc. 1, ff 1-10, 13. review your terms and was [sic] unsuccessful.”Id. 4 47.
WESTLAW
de Moura Castro by Hilario v. Loanpal, LLC, -- F.Supp.3d --- (2024)
Bridget believed the letter was “a scam” and gave it to her
daughter Cema Siegel to investigate. Jd. {J 48-49. Siegel had
I. PENDING MOTIONS TO STAY PROCEEDINGS
been acting as her parents’ power of attorney for financial
matters. /d. ] 49. On February 18, 2021, Siegel received a Defendants Loanpal and 1‘ Light have each filed a motion
copy of the Loan Contract and Purchase Contract for the to stay this litigation to allow arbitration to proceed under the
first time. Jd. | 51. Plaintiffs have asserted that all of their Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”). See Doc.
signatures and initials on the contracts were “forgeries.” Id. 19 & 23. Under that statute, in any action “brought in any
4 54. Furthermore, the de Moura Castros’ email address and of the courts of the United States upon any issue referable to
phone number on the contracts were “incorrect.” Id. {| 55-57.
arbitration under an agreement in writing for such arbitration,
the court ..., upon being satisfied that the issue involved in
As a result of Defendants’ alleged fraudulent conduct,
such suit or proceeding is referable to arbitration under such
Plaintiffs’ home is “burdened with ineffective solar panels”
an agreement, shall on application of one of the parties stay
— installed on a roof that is “completely shaded by trees”
the trial of the action until such arbitration has been had in
and thus “unfit for solar.” Id. § 65. In addition, Plaintiffs
accordance with the terms of the agreement ....” 9 U.S.C. § 3.
have “suffered mental and emotional distress, worry, and
aggravation” due to being “duped into contracts” for the
Loanpal asserts that Plaintiffs agreed to arbitrate pursuant
ineffective panels and “subjected to wrongful demands for to an arbitration provision contained in the “Loan
payment pursuant to [the] forgeries” of their names, initials, Contract” [Doc. 1-1]. Doc. 19, at 1. Loanpal alleges it
and contact information. Id. { 66. entered that contract with Plaintiffs “to permit [the solar
panel] improvements to be made on their residence.” Id. at
Plaintiffs commenced this action in July of 2021, In 2. The alleged loan agreement, filed at Doc. 1-1 with the
their Complaint, as self-described “elderly consumers,” Court, contains the following “comprehensive” arbitration
Plaintiffs seek “damages and other relief” arising out of
provision:
the allegedly fraudulent transaction in August 2020 with
Defendants for the sale and installation of solar panels,
along with an accompanying loan agreement. Id. {{ 1-6,
*3 All claims and disputes arising
40-41. In particular, Plaintiffs bring federal claims against
out of or related to this Agreement
all Defendants pursuant to the Fair Credit Reporting Act
(hereafter, “Dispute(s)”) shall be
(“FCRA”), 15 U.S.C. § 1681, et seg., and the Truth in Lending
resolved by binding arbitration on an
Act (“TILA”), 15 U.S.C. § 1601, e¢ seg. In addition, invoking
individual basis. The arbitrator shall
the Court to exercise supplemental jurisdiction under 28
also decide any issues relating to
U.S.C. § 1367(a), Plaintiffs bring state law claims pursuant to
the making, validity, enforcement or
Connecticut's Unfair Trade Practices Act (“CUTPA”), Conn.
scope of this arbitration agreement,
Gen, Stat. § 42-110g, et seq., Connecticut's elder exploitation
arbitrability, defenses to arbitration
statute, Conn. Gen. Stat. § 17b-462, -450, and Connecticut's
including unconscionability, or the
common law regarding “fraudulent concealment” as to
validity of the jury trial, class
the solar panel transaction (i.e., failure to disclose, and/
action or representative action waivers
or prevention of discovery of, facts regarding the hidden
(collectively, “arbitrability issues”) ....
agreements with Plaintiffs’ forged signatures).
The Federal Arbitration Act (9 U.S.C.
§§ 1-16) (the “FAA”) shall govern
In their prayer for relief, Plaintiffs seek, inter alia,
this agreement to arbitrate including
compensatory (“actual and statutory”) damages; punitive
all arbitrability issues.
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. 1-1, 15. See also Doc. 19, at 2.
Doc. 1, at 20 (“Prayer for Relief”).
Similarly, st Light moves to “stay [this Court's] proceedings
to allow for arbitration” under the FAA. Doe. 23, at 1. Ist
WESTLAW
de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d ---- (2024)
Light asserts that Plaintiffs have brought “various claims Plaintiffs to arbitrate.” /d. In such circumstance, “[t]he
related to the installation of a solar energy system on a standard the Court ‘must apply when reviewing a motion
residential property” and those claims “arise out of a written to compel arbitration is essentially the same standard that
contract,” the Purchase Contract, entitled “Contract for PV the Court applies when it reviews a motion for summary
Solar Power System” from 1°‘ Light Energy, Inc., and judgment.’ ” /d. (quoting D'Antuono v. Serv. Rd. Corp., 789
“attach[ed] to Plaintiffs’ Complaint as ExhibitB” [Doc. 1-2]. F. Supp. 2d 308, 319 (D. Conn, 2011)).
Doc. 23, at 1. Defendant 1‘ Light bases its motion on
With these principles in mind, the Court noted that it must
the following “Arbitration” provision, as set forth in that
consider: “(1) whether the parties entered into a contractually
document:
valid arbitration agreement, and (2) whether the dispute falls
within the scope of the arbitration agreement.”/c. (citing
Murphy y. Glencore Ltd., No. 3:18-CV-01027 (CSH), 2019
Other than breach due to the WL 549139, at *2 (D. Conn. Feb. 11, 2019)). Moreover,
Customer's interference with the the issue of the arbitration contract's validity is covered by
Rebate or default of payment by Connecticut law, “the state law principles of contraction
the Customer ..., any other dispute formation.” Jd. (citing Murphy, 2019 WL 549139, at *2).
between the parties shall be decided
in accordance with the latest rules
Defendants Loanpal and 1 *t Light point to Plaintiffs’ alleged
and procedures as set forth by
initials on the written loan and purchase contracts containing
the American Arbitration Association.
arbitration clauses as prima facie evidence of the parties’
Parties hereby agree that any dispute
agreements to arbitrate. Doc. 1-1, 1-2. On the other hand,
or differences arising out of or in
Plaintiffs deny that a mutually binding arbitration agreement
connection with this Agreement shall
exists between the parties. They assert that no valid agreement
be determined by the appointment of a
was formed due to Defendants’ fraud and/or forgery with
single arbitrator to be agreed between
respect to the contracts at issue. Doc. 24, at 6.
the parties. Parties further agree that
the decision made by the appointed
*4 Specifically, in objecting to Defendants’ motions to
arbitrator shall be final and binding,
stay, Bridget de Moura Castro has certified that she and her
and each party shall be responsible for
husband “neither signed nor even saw any contract, let alone
its own cost and expenses related to
an arbitration provision,” Doc. 24, at 2; and the “signatures
arbitration.
and initials” appearing on the contracts were “forgeries.”
Preview
DOCKET NO.: NNH-CV23-6133605-S SUPERIOR COURT MARGARET PRICE, ET AL J.D. OF NEW HAVEN Vv AT NEW HAVEN CARVANT FINANCIAL LLC, ET AL JUNE 12, 2024 DEFENDANTS’ MOTION TO SET ASIDE THE COURT’S ORDER TO ARBITRATE A. OVERVIEW On or about June 15, 2023, the Plaintiffs, Margaret Price and James Price, filed a Complaint against the Defendants, Carvant Financial LLC and Choice Group LLC. Based on the limited information regarding the full extent of the Plaintiffs’ claims and the evidence to support the claims, neither of the Defendants contested the Plaintiffs’ alleged right to arbitrate based on the arbitration provision contained in the loan documents. After discovery, and prior to the start of evidence before the arbitrator, based on Margaret Price’s claim that her signature was forged on the purchase agreement and loan documents, the Defendants contested the right of the arbitrator to hear the matter. The Defendants move to set aside the court’s August 14, 2023 order to arbitrate on the The Law Offices of SHEFFY, DENIGRIS, GREY & BEDARD, LLP. 166 North Main St. Southington, CT 06489 860-620-9460 Juris. No. 413589 basis that this court must first decide if the forgery negates a binding contract between the Defendants and Margaret Price. B. ARGUMENT The claim of forgery goes to the validity of the entire contract and must be decided by the superior court before the arbitration can proceed. In Connecticut it is well established that arbitration is a “creature of contract.” A. Dubreuil & Sons, Inc. v. Lisbon, 215 Conn. 604, 608, 577 A.2d 709 (1990). Further, a person cannot be compelled to arbitrate a dispute unless they contract to do so. /d. at 608. Because an arbitrator's jurisdiction is rooted in the agreement of the parties, a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement. Only a court can make that decision. Nussbaum vs. Kimberly Timbers, LTD, 271 Conn. 65 (2004). “The enforceability of an arbitration clause is a question for the court when one party denies the existence of a contract with the other.” /d. at 72. The Connecticut Appellate Court has held that “the general rule is that the court is responsible for deciding whether a dispute is arbitrable.” Brownstone Exploration & Discovery Park, LLC vs. Borodkin, 220 Conn.App. 806 (2023). Whether there is a valid agreement to The Law Offices of SHEFFY, DENIGRIS, GREY & BEDARD, LLLP. 166 North Main St. Southington, CT 06489 860-620-9460 Juris. No. 413589 arbitrate is a threshold matter that impacts the jurisdiction of the arbitrator. MBNA America Bank v. Bailey, 104 Conn.App. 457 (2007). It has been held that an arbitration agreement can be void based on fraud or misrepresentation. Dewart v. Northeastern Gas Transmission Co., 140 Conn. 446, 449 (1953). Forgery is a subcategory of fraud and also goes to the formation of a contract. de Moura Castro by Hilario v. Loanpal, LLC, 2024 WL 510908, Docket No.: 3:21-CV- 1020 (CSH) (Haight, J., Feb. 8, 2024). In the well-reasoned superior court case of Benvenuti Oil Co., Inc. v. Foss Consultants, Inc., the lower court addressed the issue of forgery in relation to the formation of a contract. Benvenuti Oil Co., Inc. v. Foss Consultants, Inc., 2006 WL 328678, Docket No. CV010485270S (Corradino, J., Jan. 25, 2006). The court acknowledged that allegations of forgery could undermine the validity of a purported contract document, thereby affecting the formation of the contract. /d. Specifically, the court held that the plaintiffs were prevented from pursuing their breach of contract claim due to the alleged forgery, which was a subcategory of fraud. /d. In the present matter, Ms. Price has alleged that her signature was forged. This calls into question whether there was a valid agreement between the parties to arbitrate. Whether the parties entered into a valid contract is a finding that must be made by the The Law Offices of SHEFFY, DENIGRIS, GREY & BEDARD, LLLP. 166 North Main St. Southington, CT 06489 860-620-9460 Juris. No. 413589 court. Therefore, the Defendants move the court to set aside the August 14, 2023 order to arbitrate so that the court may determine arbitrability. DEFENDANTS, By:_/s/ 309357 Anthony Alan Sheffy Sheffy, DeNigris, Grey & Bedard, LLP 166 North Main Street Southington, CT 06489 (860) 620-9460 The Law Offices of SHEFFY, DENIGRIS, GREY & BEDARD, LLLP. 166 North Main St. Southington, CT 06489 860-620-9460 Juris. No. 413589 CERTIFICATION | hereby certify that a copy of the above was mailed or electronically delivered on June 12, 2024, to all counsel and self-represented parties of record and that written consent for electronic delivery was received from all counsel and self-represented parties of record who were electronically served: Daniel S. Blinn, Esq. Consumer Law Group, LLC 35 Cold Spring Road, Suite 512 Rocky Hill, CT 06067 dblinn@consumerlawgroup.com /s/309357 Anthony Alan Sheffy The Law Offices of SHEFFY, DENIGRIS, GREY & BEDARD, LLP. 166 North Main St. Southington, CT 06489 860-620-9460 Juris. No. 413589 de Moura Castro by Hilario v. Loanpal, LLC, -~ F.Supp.3d —-- (2024) Homeowners' motion to supplement the record granted; trial ordered, to determine whether valid arbitration agreement 2024 WL 510908 exists. Only the Westlaw citation is currently available. United States District Court, D. Connecticut. Procedural Posture(s): Motion to Supplement the Record. Bridget DE MOURA CASTRO & Luiz de Moura Castro, BY his next friend Helena HILARIO, Plaintiffs, West Headnotes (26) v. LOANPAL, LLC d/b/a Goodleap, Prime Alternative Dispute Resolution <= Particular Energy, LLC d/b/a Prime Energy Solar, cases and ist Light Energy Inc., Defendants. For homeowners to fulfill their burden under Civil Action No. 3:21 - CV - 1020 (CSH) summary judgment standard, which applied on | defendants’ motion to stay court proceedings Signed February 8, 2024 pending arbitration under Federal Arbitration Act (FAA), so that homeowners could obtain Synopsis trial on their assertion that valid arbitration Background: Homeowners brought action against agreements did not exist under Connecticut law companies that solicited their purported purchase of allegedly because defendants, who solicited homeowners' ineffective solar panels and that installed panels as state- purported purchase of allegedly ineffective solar licensed home improvement contractors, asserting federal panels and who installed panels, used fraud and claims under Fair Credit Reporting Act (FCRA) and forgery to obtain purchase agreement and loan Truth in Lending Act (TILA), and state-law claims under agreement that contained arbitration clauses, Connecticut's Unfair Trade Practices Act (CUTPA) and homeowners were required to show genuine elder exploitation statute and for common-law fraudulent factual issues regarding their allegations of concealment, alleging that defendants represented that solar fraud and forgery, such that a jury could panels would be free because homeowners were senior find no agreement to arbitrate homeowners’ citizens and that defendants forged homeowners' signatures federal claims under Fair Credit Reporting Act on purchase agreement and loan agreement. Defendants filed (FCRA) and Truth in Lending Act (TILA), motion to stay court proceedings pending arbitration under and state-law claims under Connecticut's Federal Arbitration Act (FAA). Unfair Trade Practices Act (CUTPA) and elder exploitation statute and for common-law fraudulent concealment. 9 U.S.C.A. §§ 3, 45 Holdings: The District Court, Charles S. Haight, Senior Consumer Credit Protection Act § 602, 15 District Judge, held that: U.S.C.A. § 1681 et seq.; Truth in Lending Act § 102, 15 U.S.C.A. § 1601 et seq.; Conn, Gen. Stat. [1] fact issues existed as to fraud or forgery in obtaining Ann. §§ 17b-450, 17b-462, 42-110g et seq. arbitration agreements; [2] fact issues existed as to validity of homeowners’ clectronic 2] Alternative Dispute Resolution @ Particular signatures on purchase agreement and loan agreement; and cases Did defendants bear burden of proof?Yes [3] homeowners would be allowed to supplement the case Defendants, who solicited homeowners! record for purposes of later trial, to include opinion of expert purported purchase of allegedly ineffective solar in information technology (IT), offered to show invalidity of panels and who installed panels, as movants a homeowner's electronic signature. to stay court proceedings pending arbitration under Federal Arbitration Act (FAA), had burden of proving the existence of valid arbitration WESTLAW de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d --— (2024) agreements with homeowners, in homeowncrs' Under Connecticut law, to create a contract, there action asserting federal claims under Fair must be a mutual understanding of the terms that Credit Reporting Act (FCRA) and Truth in are definite and certain between the parties. Lending Act (TILA), and state-law claims under Connecticut's Unfair Trade Practices Act (CUTPA) and elder exploitation statute and [8] Contracts = Offer and acceptance in general for common-law fraudulent concealment. 9 To constitute an offer and acceptance sufficient US.C.A. § 3; Consumer Credit Protection Act § to create an enforceable contract under 602, 15 U.S.C.A.§ 1681 et seq.; Truth in Lending Connecticut law, each must be found to have Act § 102, 15 US.C.A. § 1601 et seq.; Conn. been based on an identical understanding by the Gen. Stat. Ann. §§ 17b-450, 17b-462, 42-110g et parties. seq. More cases on this issue 19] Alternative Dispute Resolution = Particular cases 13] Contracts = Offer and acceptance in general Genuine issues of material fact regarding fraud Under Connecticut law, the essential elements of and forgery existed, as standard, on defendants' contract formation are offer and acceptance. motion to stay court proceedings pending arbitration under Federal Arbitration Act (FAA), for plaintiff homeowners to obtain trial on their [4] Contracts ® Qualified or conditional assertion that valid arbitration agreement did not acceptance of offer exist under Connecticut law because defendants, To create a contract under Connecticut law, there who solicited homeowners’ purported purchase must be an unequivocal acceptance of an offer. of allegedly ineffective solar panels and who installed panels, used fraud and forgery to obtain purchase agreement and loan agreement that Contracts = Acceptance of Offer and contained arbitration clauses, in homeowners’ [5] Communication Thereof action asserting federal claims under Fair Credit Reporting Act (FCRA) and Truth in Contracts & Qualified or conditional Lending Act (TILA), and state-law claims acceptance of offer under Connecticut's Unfair Trade Practices Act Under Connecticut law, to create a contract, the (CUTPA) and elder exploitation statute and acceptance of the offer must be explicit, full, and for common-law fraudulent concealment. 9 unconditional. U.S.C.A. §§ 3, 4; Consumer Credit Protection Act § 602, 15 U.S.C.A. § 1681 et seq.; Truth in Lending Act § 102, 15 U.S.C.A. § 1601 et [6] Contracts @= Certainty as to Subject-Matter seq.; Conn. Gen. Stat. Ann. §§ 17b-450, 17b-462, Contracts # Necessity of assent 42-110g et seq. To create a contract under Connecticut law, there More cases on this issue must be a bargain, manifesting mutual assent to the exchange, between two or more parties, and the identities of the contracting parties must be [10] Contracts + Signing in ignorance of contents reasonably certain. in general Contracts © Fraud and Misrepresentation Under Connecticut law, there is a general rule 7) Contracts @= Certainty as to Subject-Matter that where a person of mature years, who can Contracts “= Necessity of assent read and write, signs or accepts a formal written contract affecting his pecuniary interests, it is his WESTLAW de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d ---- (2024) duty to read it, and notice of its contents will be installed at their home, as standard, on imputed to him ifhe negligently fails to do so, but defendants’ motion to stay court proceedings there is an exception to that rule when something pending arbitration under Federal Arbitration has been said or done to mislead the person or to Act (FAA), for homeowners to obtain trial on put a person of reasonable business prudence off their assertion that valid arbitration agreement his or her guard in the matter. did not exist under Connecticut law, in homeowners’ action asserting federal claims under Fair Credit Reporting Act (FCRA) and Truth in Lending Act (TILA), and (1) Summary Judgment ¢ Reply and surreply state-law claims under Connecticut's Unfair Arguments raised for the first time, on a motion Trade Practices Act (CUTPA) and elder for summary judgment, in a movant's reply are exploitation. statute and for common-law waived. Fed. R. Civ. P. 56. fraudulent concealment. 9 U.S.C.A. §§ 3, 45 Consumer Credit Protection Act § 602, 15 US.C.A. § 1681 ct seq.; Truth in Lending Act § [12] Federal Civil Procedure @= Failure to object: 102, 15 U.S.C.A. § 1601 et seq.; Conn. Gen. Stat. waiver Ann. §§ 1-274(a, b), 17b-450, 17b-462, 42-110g Summary Judgment = Defects, objections, et seq. and waiver When a party fails to make an objection to More cases on this issue evidence that it thinks is inadmissible, including in connection with summary judgment, the court {16] Contracts & Effect in general; enforcement is free to consider that evidence. Fed. R. Evid. in general 103(a)(1)(A); Fed. R. Civ. P. 56. Under Connecticut law, an agreement that has not been properly formed is not merely an unenforceable contract; it is not a contract at all. (13) Evidence = Hearsay issues in general Admission of evidence under the hearsay exception for business records, rather than its [7] Alternative Dispute Resolution ©= Particular exclusion, is favored if it has any probative value cases at all. Fed. R. Evid. 803(6). Homeowners would be allowed, after deadline for post-hearing briefs relating to defendants’ motion to stay court proceedings pending [14] Evidence @ Hearsay issues in general arbitration under Federal Arbitration Act (FAA), For the hearsay exception for business to supplement the case record for purposes of records, residual doubts on the question of later trial to establish whether valid arbitration trustworthiness go to the weight of the evidence, agreement existed under Connecticut law, to not its admissibility. Fed. R. Evid. 803(6). include opinion of expert in information technology (IT) that, based on internet protocol (IP) address for purported electronic signature of one homeowner, offered by defendants under [15] Alternative Dispute Resolution ¢= Particular cases Connecticut Uniform Electronic Transactions Act (CUETA), homeowner did not electronically Genuine issues of material fact existed sign purchase agreement and loan agreement regarding validity under Connecticut Uniform for solar panels for home, in action against Electronic Transactions Act (CUETA), in light defendants, who solicited purported purchase of surrounding circumstances, of plaintiff of panels and who installed panels, asserting homeowners’ electronic signatures for purchase federal claims under Fair Credit Reporting Act agreement and loan agreement for solar panels WESTLAW de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d --- (2024) (FCRA) and Truth in Lending Act (TILA), (21) Alternative Dispute and state-law claims under Connecticut's Resolution = Arbitvability of dispute Unfair Trade Practices Act (CUTPA) and elder exploitation statute and for common-law Under the Federal Arbitration Act (FAA), the fraudulent concealment; validity of arbitration issue of arbitrability may be referred to the agreements remained disputed after hearing. 9 arbitrator if there is clear and unmistakable U.S.C.A. §§ 3, 4; Consumer Credit Protection evidence from the arbitration agreement, as Act § 602, 15 U.S.C.A. § 1681 ct seq.; Truth in construed by the relevant state law, that the Lending Act § 102, 15 U.S.C.A. § 1601 et seq parties intended that the question of arbitrability Conn. Gen. Stat. Ann. §§ 1-274(a, b), 17b-450, shall be decided by the arbitrator. 9 U.S.C.A. § 17-462, 42-110g et seq. 1 et seq. More cases on this issue [22] Alternative Dispute [18] Summary Judgment @ Expert Evidence and Resolution <= Contractual or consensual basis Affidavits Alternative Dispute Resolution ¢= Persons Although unsworn statements may be viewed affected or bound as inadmissible hearsay, subsequent verification Arbitration is essentially contractual, and parties or teaffirmation of an unsworn expert's report, may not be forced into arbitration if that was not either by affidavit or deposition, allows the court their true agreement. to consider the unsworn expert's report on a motion for summary judgment. Fed. R. Civ. P. 56; Fed. R. Evid. 702, 802. [23] Alternative Dispute Resolution = Contractual or consensual basis Although federal policy generally favors {19} Alternative Dispute Resolution € Persons arbitration, arbitration is a matter of contract and affected or bound aparty cannot be required to submit to arbitration Under Connecticut law, where a non-signatory any dispute which he has not agreed so to submit. has invoked, taken advantage of, or asserted rights under a contract with an arbitration clause, traditional principles of law and equity bind [24] Alternative Dispute Resolution © In the non-signatory to that contract's arbitration general, formation of agreement provisions as well, and this prevents a party who The making of an arbitration agreement is in knowingly exploits an agreement from taking issue, for purposes of the Federal Arbitration advantage of the benefits of the contract while Act (FAA), only when there are material factual simultaneously disavowing its burdens. disputes regarding the elements of contract formation under the applicable state law. 9 US.C.A. § Let seq. (20) Alternative Dispute Resolution © Persons affected or bound Under Connecticut law, whether an issue [25] Alternative Dispute Resolution = Remedies involving a non-signatory is referable to and Proceedings for Enforcement in General arbitration is decided by reference to the A motion to compel arbitration under the Federal written arbitration agreement executed by the Arbitration Act (FAA) may be granted when the signatories, which is claimed to cover the pleadings, the discovery and disclosure materials dispute. on file, and any affidavits show that there is no genuine issue as to any material fact and that WESTLAW de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d ~--- (2024) movant is entitled to judgment as a matter of law. 9US.CA. § 1 et seq. Defendants Loanpal, LLC (“Loanpal”), Prime Energy, LLC (“Prime Energy”), and 1°' Light Energy, Inc. (“1 St Light”) engage in the business of soliciting consumers “for the Alternative Dispute Resolution &e Suing or purchase of solar panels and/or [the] install[ation] [of] [26] participating in suit solar panels on consumers’ homes.” ? Id. 4 3. In soliciting Parties may engage in discovery limited to the consumers to enter “25-year loans and other contracts,” issue of arbitration without waiving the right to Defendants’ sales agents employ electronic tablets such as arbitrate. iPads. Jd. Defendant Loanpal offers consumers loans to purchase the solar panels, id. 4] 14-15; and Defendants Prime Energy and Ist Light install the panels as licensed home improvement contractors in Connecticut, Sid. q9 16-19. Plaintiffs allege that “Defendants carry on a symbiotic Attorneys and Law Firms business relationship” in which “Prime solicits customers at their homes on behalf of and for the benefit of Ist Jeffrey S. Gentes, Yale Law School or Connecticut Fair Light and Loanpal, Ist Light sells and installs the solar Housing Center, New Haven, CT, Sarah White, Connecticut panels, and Loanpal finances the transactions.” Jd. {] 20-21. Fair Housing Center, Hartford, CT, Andrew M. Milz, Cary Consequently, “[aJll Defendants rely and depend on each L. Flitter, Jody Thomas Lopez-Jacobs, Flitter Milz, P.C., other to carry out this course of business.” Id. J 21. Narberth, PA, for Plaintiffs. Christopher D. Barraza, Phillips Lytle LLP, New York, NY, Plaintiffs allege that in August of 2020, Bridget de Moura for Defendant Loanpal, LLC. Castro was solicited in her Avon home by Mark Murphy, a salesman and agent acting on behalf of Defendants. ‘Td. " Jeffrey O. McDonald, Hassett & George, PC, Simsbury, CT, 22-23. Murphy allegedly informed Bridget that senior citizens for Defendant 1st Light Energy, Inc. “are given government benefits for ‘free’ solar panels” installed on their homes. Jd. § 24; Doc. 24-1 (“Certification of Bridget de Moura Castro”), § 2. Based on this alleged ORDER RE: EFEN) ANTS’ MOTIONS “promise of free solar panels and significant savings,” Bridget STAY PROCEEDINGS AND RULING ON agreed to have the solar panels installed on her Avon home. LAINTIFFS’ MOTION TO SUPPLEMENT RECORD Doc. 1, {fj 13, 40-41. Bridget further alleges that Murphy never mentioned or requested authorization to provide a HAIGHT, Senior District Judge: loan or perform a credit check on the de Moura Castros. Id, | 25-28. Nonetheless, Defendants “surreptitiously I. INTRODUCTION and intentionally obtained and used Plaintiffs’ consumer reports from the consumer reporting agencies” to create a *1 In its prior “Memorandum and Order Scheduling “Loan Contract” for the purchase of solar panels. Id. 9 Preliminary Hearing” [Doc.41], the Court provided a detailed 30-31. Furthermore, Defendants allegedly never provided summary of the alleged facts in the case.'! Although the Plaintiffs with an opportunity to review paperwork or familiarity with that Order is presumed, the Court briefly documents regarding purchase of the solar panels in either recounts the following facts, as set forth in the Complaint. “paper or electronic” form. Id. ff] 29, 46; Doc. 24-1, 4 3. Plaintiff homeowners, Bridget de Moura Castro and Luiz de *2 According to Plaintiffs, “Defendants eventually caused Moura Castro, are a married couple who were each 80 years solar panels to be installed on Plaintiffs’ home, even though old at the commencement of this action. In their Complaint, no contract was provided to Plaintiffs or signed by Plaintiffs.” they allege that in August of 2020, Defendants participated Doc. 1, { 46. Thereafter, in January 2021, Defendants sent jointly in a fraudulent and unconscionable scheme to solicit, Plaintiffs a letter, addressed to Luiz, stating that he had taken sell, and install solar panels on the roof of their home in Avon, out a 25-year loan and “[w]e've tried calling a few times to Connecticut. Doc. 1, ff 1-10, 13. review your terms and was [sic] unsuccessful.”Id. 4 47. WESTLAW de Moura Castro by Hilario v. Loanpal, LLC, -- F.Supp.3d --- (2024) Bridget believed the letter was “a scam” and gave it to her daughter Cema Siegel to investigate. Jd. {J 48-49. Siegel had I. PENDING MOTIONS TO STAY PROCEEDINGS been acting as her parents’ power of attorney for financial matters. /d. ] 49. On February 18, 2021, Siegel received a Defendants Loanpal and 1‘ Light have each filed a motion copy of the Loan Contract and Purchase Contract for the to stay this litigation to allow arbitration to proceed under the first time. Jd. | 51. Plaintiffs have asserted that all of their Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”). See Doc. signatures and initials on the contracts were “forgeries.” Id. 19 & 23. Under that statute, in any action “brought in any 4 54. Furthermore, the de Moura Castros’ email address and of the courts of the United States upon any issue referable to phone number on the contracts were “incorrect.” Id. {| 55-57. arbitration under an agreement in writing for such arbitration, the court ..., upon being satisfied that the issue involved in As a result of Defendants’ alleged fraudulent conduct, such suit or proceeding is referable to arbitration under such Plaintiffs’ home is “burdened with ineffective solar panels” an agreement, shall on application of one of the parties stay — installed on a roof that is “completely shaded by trees” the trial of the action until such arbitration has been had in and thus “unfit for solar.” Id. § 65. In addition, Plaintiffs accordance with the terms of the agreement ....” 9 U.S.C. § 3. have “suffered mental and emotional distress, worry, and aggravation” due to being “duped into contracts” for the Loanpal asserts that Plaintiffs agreed to arbitrate pursuant ineffective panels and “subjected to wrongful demands for to an arbitration provision contained in the “Loan payment pursuant to [the] forgeries” of their names, initials, Contract” [Doc. 1-1]. Doc. 19, at 1. Loanpal alleges it and contact information. Id. { 66. entered that contract with Plaintiffs “to permit [the solar panel] improvements to be made on their residence.” Id. at Plaintiffs commenced this action in July of 2021, In 2. The alleged loan agreement, filed at Doc. 1-1 with the their Complaint, as self-described “elderly consumers,” Court, contains the following “comprehensive” arbitration Plaintiffs seek “damages and other relief” arising out of provision: the allegedly fraudulent transaction in August 2020 with Defendants for the sale and installation of solar panels, along with an accompanying loan agreement. Id. {{ 1-6, *3 All claims and disputes arising 40-41. In particular, Plaintiffs bring federal claims against out of or related to this Agreement all Defendants pursuant to the Fair Credit Reporting Act (hereafter, “Dispute(s)”) shall be (“FCRA”), 15 U.S.C. § 1681, et seg., and the Truth in Lending resolved by binding arbitration on an Act (“TILA”), 15 U.S.C. § 1601, e¢ seg. In addition, invoking individual basis. The arbitrator shall the Court to exercise supplemental jurisdiction under 28 also decide any issues relating to U.S.C. § 1367(a), Plaintiffs bring state law claims pursuant to the making, validity, enforcement or Connecticut's Unfair Trade Practices Act (“CUTPA”), Conn. scope of this arbitration agreement, Gen, Stat. § 42-110g, et seq., Connecticut's elder exploitation arbitrability, defenses to arbitration statute, Conn. Gen. Stat. § 17b-462, -450, and Connecticut's including unconscionability, or the common law regarding “fraudulent concealment” as to validity of the jury trial, class the solar panel transaction (i.e., failure to disclose, and/ action or representative action waivers or prevention of discovery of, facts regarding the hidden (collectively, “arbitrability issues”) .... agreements with Plaintiffs’ forged signatures). The Federal Arbitration Act (9 U.S.C. §§ 1-16) (the “FAA”) shall govern In their prayer for relief, Plaintiffs seek, inter alia, this agreement to arbitrate including compensatory (“actual and statutory”) damages; punitive all arbitrability issues. 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. 1-1, 15. See also Doc. 19, at 2. Doc. 1, at 20 (“Prayer for Relief”). Similarly, st Light moves to “stay [this Court's] proceedings to allow for arbitration” under the FAA. Doe. 23, at 1. Ist WESTLAW de Moura Castro by Hilario v. Loanpal, LLC, --- F.Supp.3d ---- (2024) Light asserts that Plaintiffs have brought “various claims Plaintiffs to arbitrate.” /d. In such circumstance, “[t]he related to the installation of a solar energy system on a standard the Court ‘must apply when reviewing a motion residential property” and those claims “arise out of a written to compel arbitration is essentially the same standard that contract,” the Purchase Contract, entitled “Contract for PV the Court applies when it reviews a motion for summary Solar Power System” from 1°‘ Light Energy, Inc., and judgment.’ ” /d. (quoting D'Antuono v. Serv. Rd. Corp., 789 “attach[ed] to Plaintiffs’ Complaint as ExhibitB” [Doc. 1-2]. F. Supp. 2d 308, 319 (D. Conn, 2011)). Doc. 23, at 1. Defendant 1‘ Light bases its motion on With these principles in mind, the Court noted that it must the following “Arbitration” provision, as set forth in that consider: “(1) whether the parties entered into a contractually document: valid arbitration agreement, and (2) whether the dispute falls within the scope of the arbitration agreement.”/c. (citing Murphy y. Glencore Ltd., No. 3:18-CV-01027 (CSH), 2019 Other than breach due to the WL 549139, at *2 (D. Conn. Feb. 11, 2019)). Moreover, Customer's interference with the the issue of the arbitration contract's validity is covered by Rebate or default of payment by Connecticut law, “the state law principles of contraction the Customer ..., any other dispute formation.” Jd. (citing Murphy, 2019 WL 549139, at *2). between the parties shall be decided in accordance with the latest rules Defendants Loanpal and 1 *t Light point to Plaintiffs’ alleged and procedures as set forth by initials on the written loan and purchase contracts containing the American Arbitration Association. arbitration clauses as prima facie evidence of the parties’ Parties hereby agree that any dispute agreements to arbitrate. Doc. 1-1, 1-2. On the other hand, or differences arising out of or in Plaintiffs deny that a mutually binding arbitration agreement connection with this Agreement shall exists between the parties. They assert that no valid agreement be determined by the appointment of a was formed due to Defendants’ fraud and/or forgery with single arbitrator to be agreed between respect to the contracts at issue. Doc. 24, at 6. the parties. Parties further agree that the decision made by the appointed *4 Specifically, in objecting to Defendants’ motions to arbitrator shall be final and binding, stay, Bridget de Moura Castro has certified that she and her and each party shall be responsible for husband “neither signed nor even saw any contract, let alone its own cost and expenses related to an arbitration provision,” Doc. 24, at 2; and the “signatures arbitration. and initials” appearing on the contracts were “forgeries.”