Consumers File U.S. Suit Over Solar Heating
Almost three years after state investigators uncovered massive fraud in the sale of solar heating devices, a group of California homeowners is trying a new legal tactic to win compensation.
Lawyers for a dozen Southern California residents are seeking to prove that now-defunct retailers conspired with major finance companies to defraud homeowners, in violation of federal law.
And while three lawsuits are pending in state courts, the Public Interest Legal Clinic is pursuing what it believes to be stronger claims--that the sales pitch that state officials believe victimized hundreds of thousands amounted to mail and wire fraud.
The homeowners claim that they were persuaded to buy expensive solar devices because of tax incentives, but found that the devices often did not work as promised, did not work at all or, in some cases, actually damaged their homes.
Clinic Director Joe B. Morgan said Tuesday that he believes the federal lawsuit will be handled more rapidly, promising relief for clients who have waited three to seven years for help.
The prime target of the new lawsuit in Los Angeles federal court is Chrysler First Financial Services Corp. of California, which maintains more than 20 offices in the state.
“We are denying all of the allegations, and are vigorously defending ourselves,” said Bruce Hansen, senior vice president of the firm, which is an arm of the giant auto maker.
The first wave of litigation began two years ago, when consumers discovered that they had no recourse against retailers. Some refused to pay monthly installments, and a number of finance firms moved to foreclose on their homes, pledged against loans for solar equipment.
Judges in each of the three older lawsuits, based mostly on state laws against fraud, turned down requests for court orders to halt foreclosures. But the attorney general’s office worked out separate agreements in which most of the lenders promised not to foreclose until the cases were decided. No more than a fraction of all cases have to date resulted in foreclosure, state officials said.
Herschel T. Elkins, the attorney general’s top consumer advocate, expects the main lawsuit, pending in Stockton against Chrysler First and others, to reach trial in January. The prime difficulty has been in proving that finance companies should be responsible for fraudulent sales tactics of the solar retailers.
In Los Angeles on Tuesday, David Harp of Glendora appeared at a press conference supporting the clinic’s lawsuit.
“The (1985) presentation was great,” said Harp, who claims to have lost $9,800 on the deal. “They installed it quicker than you can blink your eye. They promised lots of savings, but we didn’t find any.”
