Dekker v. Vivint Solar, Inc.

Background

The plaintiffs brought a proposed class action alleging that Vivint Solar, Inc., Vivint Solar Holdings, Inc., Vivint Solar Developer, LLC, and Vivint Solar Provider, LLC used unlawful liquidated-damages provisions and engaged in other unfair business practices involving residential solar power-purchase agreements. The complaint asserted claims under California’s Consumer Legal Remedies Act and Unfair Competition Law, as well as claims concerning unlawful liquidated damages. Juan Bautista also asserted a claim under the California Translation Act.

The complaint alleged, among other things, that customers were charged for all power generated by their systems, including during periods when systems were offline; that the agreements restricted home sales; and that Vivint demanded early-termination or buyout payments. It also alleged that Vivint’s sales practices targeted vulnerable consumers and that Bautista negotiated in Spanish but signed an English agreement without receiving a Spanish translation.

Vivint moved to compel arbitration for Hilliard, Hulsey, Bautista, Thompson, Barajas (Bryson), Chong, Piini, Rogers, and Runyon. Vivint separately moved to dismiss Dekker’s claims as untimely and moved to dismiss Bautista’s claims.

Arbitration ruling

The court concluded that the arbitration agreements clearly and unmistakably delegated questions about the agreements’ interpretation, validity, enforceability, scope, and applicability to the arbitrator. The court therefore did not decide Vivint’s argument that the agreements were enforceable despite California’s rule against waiving public injunctive relief. Instead, it held that the arbitrator must decide that arbitrability question.

The court distinguished between contract defenses and contract-formation defects. It held that defenses such as alleged misrepresentation, concealment, or unconscionability were delegated to the arbitrator. But the agreements did not clearly delegate contract formation to the arbitrator, because they did not expressly include formation among the delegated questions.

For Bautista, the court found that the sales discussion occurred entirely in Spanish, that Vivint presented him with an English document, and that Vivint did not provide a Spanish translation. The court held that Bautista’s signature was not an objective manifestation of assent to the English agreement’s terms. It therefore held that Bautista had not agreed to arbitrate and would not be compelled to do so. The court also stated that, on the limited record, it was unclear whether he had entered any agreement with Vivint.

Motions to dismiss

The court denied Vivint’s motion to dismiss Dekker’s claims as untimely. Dekker alleged that she discovered in 2017 that Vivint had billed her for an offline system for nearly two years and that she sued on December 3, 2019. The court held that the complaint did not show on its face that the claims were barred by California’s three- or four-year limitations periods. It also held that the complaint did not establish that the contractual one-year limitations period barred the claims, because the record did not make clear when Vivint rejected Dekker’s complaint, whether negotiations continued, or whether Vivint’s response affected the limitations period.

As to Bautista, Vivint did not challenge his California Translation Act claim. The court concluded that Bautista’s liquidated-damages and related unconscionability claims appeared inapplicable because he likely lacked an agreement with Vivint. The court dismissed Bautista’s first four claims for relief and invited him to seek permission to amend his complaint. The Translation Act claim could proceed.

Disposition

The court ordered Barajas, Bryson, Rogers, Thompson, Chong, Hulsey, Piini, Runyon, and Hilliard to arbitrate their claims against Vivint. Vivint’s motion to dismiss as to those plaintiffs was denied as moot, although the court retained jurisdiction if the arbitrator determined that any claim was not arbitrable. The court denied Vivint’s motion to dismiss Dekker and granted Vivint’s motion to dismiss Bautista. The opinion did not reach the merits of the claims of the plaintiffs compelled to arbitrate.