Woolley v. Ygrene Energy Fund, Inc.

Background

This putative class action concerns property-assessed clean-energy (PACE) financing for home improvements. PACE financing is secured by a special assessment lien on the property, and the owner repays the obligation through property taxes. The opinion states that the PACE obligation has priority over mortgages and that a property owner who sells or refinances may have to repay the assessment.

The plaintiffs alleged that Ygrene Energy Fund, Inc. and Ygrene Energy Fund Florida, LLC falsely represented that PACE obligations would transfer to new owners when a property was sold. They also alleged that Ygrene failed to disclose that homeowners might have to prepay the obligation and incur fees when selling or refinancing.

Tammy and George Woolley used a PACE loan to finance a hurricane roof on their Florida home. Before signing the financing agreement, they received a solicitation, viewed a Ygrene video stating that the assessment transferred to new owners, and received a similar statement from a Ygrene representative. They had the financing agreement for five days before signing it.

The claims identified as relevant to the Florida class were violations of the Florida Deceptive and Unfair Trade Practices Act, fraudulent inducement, negligent misrepresentation, unjust enrichment, and negligence. The court had previously denied the plaintiffs’ motion to certify California and Florida classes.

Motion and Standard

Ygrene moved for summary judgment. Summary judgment is a decision without a trial when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment as a matter of law.

Ygrene argued that its written disclosures adequately explained the possibility of prepayment. The court stated that it had to view reasonable inferences from the evidence in the light most favorable to the plaintiffs, but that the plaintiffs still had to produce admissible evidence showing a genuine factual dispute.

Court’s Analysis

The financing agreement disclosed that lenders might want to preserve the ability to sell loans to government-sponsored entities regulated by the Federal Housing Finance Agency. It stated that the agency appeared to have instructed those entities not to purchase home loans with a superior lien for qualifying improvements. It further stated that a homeowner might need to remove the assessment lien by prepaying the obligation in full, should consider the likelihood and timing of a sale or refinancing and the costs of prepayment, and could be charged a prepayment premium.

The Notice of Rights likewise disclosed that the PACE lien was senior to private liens, including existing mortgages; that lenders could require prepayment of a senior obligation; and that the assessment might need to be paid before a refinancing or a purchaser’s property-secured loan could proceed.

The plaintiffs argued that the words “appears” and “may” made the disclosures equivocal and misleading because the Federal Housing Finance Agency allegedly required payment of PACE loans for real-estate transfers. The court rejected that argument, relying on its prior ruling and concluding that the language did not make the disclosures ambiguous, misleading, or negligent.

The plaintiffs also argued that the financing agreement did not expressly contradict the earlier video and customer-service statement that the loans were transferable. The court said those precontract statements were not demonstrably false or fraudulent. It further held that the financing agreement was not ambiguous or misleading and clearly stated the contract’s terms. Under Florida law, the court said, the written contract governed, so the plaintiffs could not rely on different statements in the video or by the representative.

Disposition

The court granted Ygrene’s motion for summary judgment. It concluded that there were no triable issues of material fact about whether Ygrene’s disclosures were deceptive. The order states that this disposition resolved ECF No. 267.