BANKER'S HILL LAW FIRM, A.P.C. SUPERIOR … ALLIANCE, SAE, SUNRUN, CALFIRST, and YGRENE, have outstanding financial contractual 8 obligations with SUNRUN that continue to be unpaid

1 Maxwell C. Agha (153625) [email protected]

2 Emily V. Ngo (315588) [email protected]

3 BANKER'S HILL LAW FIRM, A.P.C. 160 Thorn Street, Suite 200

4 San Diego, California 92103 Telephone: (619) 230-0330

5 Facsimile: (619) 230-1726

6 Attorneys for Plaintiffs

7 BASAM KAKO, SAM KAKO, MICHAEL KAKO, MICHELLE LOWEN, PONCIANO CAMPOS, NEVA CALDERON, NHU LAI, SHIRLEY RICHARDSON, and EMMA PERALTA

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF SAN DIEGO

BASAM KAKO, an individual SAM KAKO, 13 an individual, MICHAEL KAKO, an

14 individual, MICHELLE LOWEN, an individual, PONCIANO CAMPOS, an individual, NEV A CALDERON, an

15 individual, NHU LAI an individual,

16 SHIRLEY RICHARDSON, an individual, EMMA PERALTA, in individual.

17

18

19 vs.

Plaintiffs,

SOLAR ALLIANCE OF AMERICA, INC., a 20 California corporation, SOLAR ALLIANCE

ENERGY INC., a foreign corporation, 21 SUNRUN INC., a Delaware corporation,

ALEX TILLER, an individual, STEPHEN 22. ERIC KNUTZEN, an individual, JASON

BAK, an individual YGRENE ENERGY 23 FUND INC., a Delaware corporation, RENEW

FINANCIAL I LLC, a Delaware limited 24 liability company, and DOES 1 to 100,

25 inclusive,

Defendants.

Case No.

VERIFIED COMPLAINT FOR:

BREACH OF CONTRACT; BREACH OF FIDUCIARY DUTY; AIDING AND ABETTING BREACH OF FIDUCIARY DUTY; INTERFERENCEWITH CONTRACT;FRAUD;CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNJUST ENRICHMENT AND DECLARATORY RELIEF

26

27

28 COMES NOW PLAINTIFFS, BASAM KAKO ("BASAM"), SAM KAKO ("SK"), MICHAEL

KAKO ("MK"), MICHELLE LOWEN ("LOWEN"), PONCIANO CAMPOS ("CAMPOS"), NEV A CALDERON("CALDERON"), SHIRLEY RICHARDSON ("RICHARDSON"), EMMA

BHLF\710279.1

COMPLAINT FOR BREACH OF CONTRACT; BREACH OF FIDUCIARY DUTY; AIDING AND ABETTING BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; FRAUD: CONSTRUCTIVE FRAUD;

PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNWST ENRICHMENT AND DECLARATORY RELIEF

1 PERAL TA ("PERALTA") sometimes referred to individually, or collectively as ("PLAINTIFFS") allege against Defendants SOLAR ALLIANCE OF AMERICA, INC. ("SOLAR ALLIANCE"), SOLAR ALLIANCE ENERGY INC. ("SAE"), SUNRUN INC., ("SUNRUN"), JASON BAK 2

4

3 ("BAK"), ALEX TILLER ("TILLER"), STEPHEN ERIC KNUTZEN ("KNUTZEN"), YGRENE ENERGY FUND INC. ("YGRENE"), RENEW FINANCIAL I LLC ("CALFIRST"), collectively

and sometimes referred to individually, or as ("DEFENDANTS"), and DOES 1 through 100, inclusive, as follows:

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JURISDICTION AND VENUE

1. Venue is proper in the Superior Court of the State of California in and for the

County of San Diego because it is the county where the obligations and/or liability arises under

the subject contracts. Venue is further proper in this County because each defendant transacted

business in this district and a substantial part of the events or omissions giving rise to Plaintiffs

claims occurred and were directed in this County. Jurisdiction is proper in the Superior Court of

the State of California in and for the County of San Diego pursuant to Section 410.10 of the

California Code of Civil Procedure because it has general subject matter jurisdiction and no

statutory exceptions to jurisdiction exist. Each of the Defendants has conducted business in the

State of California and in San Diego County .

GENERAL ALLEGATIONS

1. This action arises out of the negligent, willful and systematic mismanagement of

PLAINTIFFS' loan payments, Property Assessed Clean Energy ("PACE") program payments,

cash or credit card payments, received by SOLAR ALLIANCE's management team from

homeowners, YGRENE or CALFIRST, to be used for the purpose of purchasing Solar Systems

through SOLAR ALLIANCE, SAE or SUNRUN, which monies instead were squandered and

continue to be squandered in amounts in excess of one million dollars ($1,000,000,) and SOLAR

ALLIANCE and DEFENDANTS' ensuing incompetence and misconduct toward its joint venture

partners at the expense of its customers and PLAINTIFFS, and the dissemination of deceptive and

inaccurate advice and unlawful legal advice continue to force PLAINTIFFS to incur significant

past and ongoing losses.

2. PLAINTIFFS are individuals residing in San Diego County, California.

BHLF\710279.1 -2-COMPLAINT FOR BREACH OF CONTRACT; BREACH OF FIDUCIARY DUTY; AIDING AND ABETTING

BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNWST

ENRICHMENT AND : CONSPIRACY: CONVERSION: DECLARATORY RELIEF

1 3. The occurrence and events alleged herein took place in San Diego County,

2 California.

3 4. From approximately, as early as, September of 2015, SOLAR ALLIANCE entered

4 into certain agreements establishing a joint venture arrangement under which SUNRUN, in

5 approximately November 2015, YGRENE in approximately October 2015, and CALFIRST in

6 approximately April 2016, contributed its interest in the purchasing, financing, installation or sale

7 of solar materials and labor, such that a joint venture or consortium was comprised whereby each

8 owed PLAINTIFFS a fiduciary duty to ensure monies received from PLAINTIFFS were

9 distributed to the appropriate parties.

10 5. SOLAR ALLIANCE, SAE, SUN RUN, CALFIRST, YGRENE, TILLER,

11 KNUTZEN and BAK, had a contractual relationship with PLAINTIFFS that imposed a fiduciary

12 duty upon DEFENDANTS entrusting each with the management and handling of funds dispersed

13 and received on behalf of PLAINTIFFS.

6. SOLAR ALLIANCE, SAE, SUNRUN, CALFIRST, YGRENE, TILLER,

15 KNUTZEN and BAK, have breached their fiduciary duties to PLAINTIFFS, by knowingly and

16 improperly diverting, or allowing the diversion of, the payments received from PLAINTIFFS,

17 away from the subcontractors, equipment suppliers, solar system installers, and energy providers,

18 all of whom DEPENDENTS were required by law to pay in a timely fashion, and instead co-

19 mingled PLAINTIFFS' monies with its other unrelated business affairs and expenses, used to

20 benefit only SOLAR ALLIANCE'S other unrelated interests.

21 7. Defendant SOLAR ALLIANCE is a California corporation commercially known in

22 the California marketplace as "SOLAR ALLIANCE," a California corporation, and at all times

23 relevant herein has had principal offices located in San Diego, California. SOLAR ALLIANCE is

24 wholly owned by Defendant SAE, a Canadian corporation with widespread business activities

25 continuously and systematically conducted within the state of California with its contacts therein.

26 8. Defendant SUNRUN is a Delaware corporation, which, by and through SOLAR

27 ALLIANCE contracted to cause materials to be placed on Plaintiffs' property to effectuate the

28



ENRICHMENT AND: CONSPIRACY: CONVERSION: DECLARATORY RELIEF

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1 t=s of contracts entered into by PLAINTIFFS through SOLAR ALLIANCE, whose affarrs

2 were, or are, controlled by KNUTZEN, TILLER, and BAK, of SOLAR ALLIANCE or SAE.

3 9. Defendant CALFIRST, is a Delaware corporations registered to conduct business

4 in California, and conducting regular business operations in San Diego, California, by providing

5 financing to multiple PLAINTIFFS referenced herein, to facilitate the sale of solar systems or tbe

6 purchase of power from the solar systems referenced herein, and whose negligence, allowed

7 SOLAR ALLIANCE to conduct the alleged willful and systematic mismanagement of

8 PLAINTIFFS payments to SOLAR ALLIANCE.

9 10. Defendant YGRENE, is a Delaware corporations registered to conduct business in

IO California, and conducting regular business operations in San Diego, California, by providing

~ ~ 11 financing to multiple PLAINTIFFS referenced herein, to facilitate tbe sale of solar systems or tbe i>sm

< -~ 12 purchase of power from the solar systems referenced herein, and whose negligence, allowed :g"' ~ p,: il 13 SOLAR ALLIANCE to conduct tbe alleged willful and systematic mismanagement of ... . ... :;, ~ a 14 PLAINTIFFS payments to SOLAR ALLIANCE.

-< " ,..;, ,;; 15 11. Defendants TILLER, KNUTZEN and BAK are individuals, the Officers and ,-lg ,-l N .. ~ 16 Directors for SOLAR ALLIANCE, and agents of SAE, SUNRUN, YGRENE, and CALFIRST, = Ji '!' ;; 17 and created a fiduciary relationship with PLAINTIFFS by contracting witb and for DEFNDANTS ~b ~ e 18 regarding tbe financing, delivery and installation of photovoltaic solar energy system equipment. z _g ~ i 19 Each breached tbeir fiduciary duties individually and as Directors, Officers and Agents by

20 mismanaging payments received and directing or allowing such payments to go to others.

21 12. PLAINTIFFS acknowledge tbat tbey may be ignorant of the true names and

22 capacities of tbose Defendants named herein as DOES I through I 00, inclusive. Plaintiffs allege

23 that each oftbese Defendants named herein as DOES 1 through 100, inclusive, are responsible in

24 whole or in part for tbe actions and/or omissions alleged herein. Plaintiffs will amend this

25 Complaint to list tbe true names and capacities of tbose named herein as DOES I through 100

26 when the same have been ascertained.

27 13. Some PLAINTIFFS, are homeowners who paid SOLAR ALLIANCE in fall, each

28 own or control real properties tbat are now encumbered by current liens, or past liens, from




1 subcontractors, because those subcontractors were not paid for either the installation of solar

2 systems or the materials supplied by contractor in accordance with contractual obligations and

3 business dealings with SOLAR ALLIANCE, SAE, SUNRUN, CALFIRST, and YGRENE.

4 14. Some PLAINTIFFS, who did not purchase their solar systems outright, but instead

5 paid SOLAR ALLIANCE in full for "pre-paid power," contracted with SUNRUN for power in

6 accordance with contractual obligations of a "Power Purchase Agreement" ("PP A") with SOLAR

7 ALLIANCE, SAE, SUNRUN, CALFIRST, and YGRENE, have outstanding financial contractual

8 obligations with SUNRUN that continue to be unpaid by SOLAR ALLIANCE.

9 15. SOLAR ALLIANCE AND SUNRUN'S receipt of customer cash payments, credit

1 O card payments, check payments, and loan payments occurred from approximately September of

11 2016 through May of 2017, from contracts entered into for the purchase of solar power

12 photovoltaic systems for their homes. DEFENDANTS' negligent, willful and systematic failure

13 to pay the subcontractors who installed the solar systems, the companies who provided the

14 materials for the solar systems, the roofers who provided roof work for the solar systems, and

15 SUNRUN, occurred from approximately October, 2016 through September, 2017.

16. Since the inception of DEFENDANTS' joint-venture scheme or conspiracy,

17 DEFENDANTS collectively have achieved significant revenue under the their arrangement, either

18 directly from homeowners cash payments, credit card payments, check payments, or financing

19 payments, or directly or indirectly from SUNRUN, CALFIRST, or YGRENE.

20 17. Additionally, after SOLAR ALLIANCE received payment either directly from

21 PLAINTIFFS, or via loans from YGRENE or CALFIRST on behalf of PLAINTIFFS, and

22 DEFENDANTS were unjustly enriched under the joint venture arrangement by retaining the

23 benefit of all of the payments and distributions from the joint venture, including those that were

24 obligated to be distributed to each PLAINTIFFS' subcontractors.

25 18. During the periods outlined in the complaint herein, SAE and SOLAR

26 ALLIANCE'S CEO BAK, neglected to monitor and ensure that SOLAR ALLIANCE, together

27 with KNUTZEN, TILLER and BAK himself, management of SOLAR ALLIANCE, were abiding

28 by the contractor laws in the state of California, and adhering to contractual obligations entered


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNJUST


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1 into, to ensure that PLAINTIFF'S best interests were being considered and acted upon, and as a

2 result, have lost or mismanaged nearly all of the monies received by PLAINTIFFS.

3 19. Throughout the Fall of2016 and continuing currently in 2017, SOLAR

4 ALLIANCE experienced and continues to experience cash woes, and continues to avoid payments

5 toward PLAINTIFFS' obligations, including a defaulted payment agreement with PLAINTIFFS'

6 installation company Solar West Electric, Inc., "(SOLAR WEST") for unpaid installation charges

7 in excess of $442,000, along with unpaid balances to Consolidated Electrical Distributor ("CED"),

8 which have now resulted in mechanics liens for the debt obligations, liens and legal fees being

9 imposed upon PLAINTIFFS.

10 20. In 2016 and continuing into 2017, SOLAR ALLIANCE continued to sell solar

c-i ~ 11 systems to new customers while failing to pay its contractual obligations to PLAINTIFFS' i:-..~

< ·§ 12 subcontractors, thus creating a perilous situation for PLAINTIFFS receiving liens and payment • 0

~ ~ 13 demand letters from subcontractors that SOLAR ALLIANCE was contractually obligated to pay ""' ' ""'g:, ~ i5 14 on behalf of PLAINTIFFS whose monies SOLAR ALLIANCE had already received in full.

<" ..i ;; 15 Hence, resulting in significant damages to PLAINTIFFS' including damage to PLAINTIFFS ... g ...1 "' .._ 2 16 credit history. =a '!1 i 17 21. Beginning in approximately December of2016 and continuing through April of ~_g ~ e 18 2017, SOLAR ALLIANCE, and its agents and representatives, KNUTZEN, TILLER, and BAK, z _g : i 19 entered into a scheme to deceive PLAINTIFFS by coordinating efforts to deter PLAINTIFFS from

20 seeking legal counsel for the lawsuits filed against PLAINTIFFS, by calling PLAINTIFFS and

21 mailing letters to PLAINTIFFS ensuring them that they "need not worry" about preliminary lien

22 notices, actual lien notices, and lawsuit notifications by third parties, as either SOLAR

23 ALLIANCE, SUNRUN, OR SAE would be rectifying the unpaid subcontractor condition that

24 arose out of the joint venture scheme by or through SOLAR ALLIANCE, SAE, SUNRUN,

25 YGRENE and CALFIRST. Furthermore, the SOLAR ALLIANCE campaign to coerce

26 PLAINTIFFS against seeking legal Counsel, has resulted in missed court hearings by

27 PLAINTIFFS, additional liens being filed against PLAINTIFFS and increased damages to

28 PLAINTIFFS.


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INTIJNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNJUST


1 22. The actions by DEFENDANTS SOLAR ALLIANCE, SAE, SUNRUN, TILLER,

2 KNUTZEN, BAK, YGRENE, and CALFIRST, are thus the subject of the claims below.

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FIRST CAUSE OF ACTION (Breach of Contract Against DEFENDANTS SOLAR ALLIANCE, SAE, SUNRUN,

YGRENE, CALFIRST and Does 1 Through 100)

23. PLAINTIFFS incorporate by reference the preceding paragraphs as though set forth

7 in full.

8 24. Within the two years, SOLAR ALLIANCE, SAE, SUNRUN, YGRENE,

9 CALIFIRST and PLAINTIFFS have entered into certain written contracts with the PLAINTIFFS.

1 o The agreements provide that the PLAINTIFFS receive installed solar systems on their homes by

either purchasing the solar

12 system outright, purchasing the power provided by the solar system, or through financing in

13 consideration of direct or financed payments through PACE programs, to SOLAR ALLIANCE,

SUNRUN or its affiliates, agents or representatives.

25. PLAINTIFFS are informed and believe that during the course of the relationship,

16 SOLAR ALLIANCE has entered into a willful and systematic process of violating the conditions

17 of such agreements through planned diversions and mismanagement of payments, made by or on

18 behalfofPLAINTIFFS.

26. PLAINTIFFS are informed and believe that during the course of the relationship,

20 SOLAR ALLIANCE negligently or intentionally did not pay subcontractors, equipment suppliers,

21 installers, and the power supplier, and did so in a negligent, reckless and malicious preplanned

22 manner and instead used the monies received from PLAINTIFFS to support other activities in

23 furtherance of SOLAR ALLIANCE's interest or other unrelated expenses and activities.

24 27. As a proximate result of the foregoing activities, PLAINTIFFS have been damaged

25 in manners and amounts to be determined according to proof at trial.

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BHLF\710279.1 _ 7-COMPLAINT FOR BREACH OF CONTRACT; BREACH OF FIDUCIARY DUTY; AIDING AND ABETTING

BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNITTST


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SECOND CAUSE OF ACTION 1

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(Breach of Fiduciary Duty Against DEFENDANTS SOLAR ALLIANCE, SAE, KNUTZEN, TILLER, and BAK and DOES 1 through 100)

5 in full.

6

28.

29.

PLAINTIFFS incorporate by reference the preceding paragraphs as though set forth .

Defendants SOLAR ALLIANCE, SAE, KNUTZEN, TILLER, and BAK, are

7 fiduciaries trusted to manage PLAINTIFFS' funds received directly or through PACE program

8 payments. These DEFENDANTS as board members or officers of SOLAR ALLIANCE, were

9 provided specified discretion, including how to distribute received monies from PLAINTIFFS

10 within the parameters of the Parties' agreements. As such, SOLAR ALLIANCE, KNUTZEN,

l l TILLER, and BAK took on a fiduciary obligation to PLAINTIFFS to manage PLAINTIFFS'

12 interest per the agreements.

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14 their fiduciary duties to PLAINTIFFS by undertaking and then exploiting for its personal benefit,

15 funds re~eived by, or on behalf of PLAINTIFFS, for PLAINTIFFS' known liabilities, and

16 withholding and diverting those funds from payment to subcontractors, equipment providers,

17 installation companies, and the power provider, and instead using said funds for personal benefits,

18 and by forcing PLAINTIFFS to bear overhead of SOLAR ALLIANCE. "'w

:.:: 8 z _g 31. Defendants SOLAR ALLIANCE, KNUTZEN, TILLER, and BAK were fully ~ i 19

20 aware that they were systematically conducting a pattern of diversion of PLAINTIFFS' funds and

21 continued to engage in such activity even when PLAINTIFFS notified them of preliminary lien

22 notices, and notices of court hearings filed for failure to pay subcontractors and equipment

23 suppliers.


25 in marmers and amounts to be determined according to proof at trial.

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1

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4 in full.

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THIRD CAUSE OF ACTION (Aiding and Abetting Breach of Fiduciary Duty- Against ALL DEFENDANTS)

33. PLAINTIFFS incorporate by reference the preceding paragraphs as though set forth

34. Defendants YGRENE and CALFIRST, entered into agreements with SOLAR

6 ALLIANCE which outlined rules, regulations, and procedures for the disbursement of money

7 received by SOLAR ALLIANCE on behalf of homeowners using their services for funding the

8 purchase of residential solar systems, or the power provided by residential solar systems.

9 YGRENE and CALFIRST also entered into agreements with homeowners to provide financing for

IO solar systems acquired by homeowners for which the money received by homeowners would be

~ ~ I I used by SOLAR ALLIANCE to pay for the plans, permits, fees, materials, installation and labor. .. ":_ ·~ 12 PLAINTIFFS are informed and believe that YGRENE and CALFIRST had a fiduciary duty to ~ ~ ,,., U 13 =: . regularly monitor how the funds are disbursed and received by SOLAR ALLIANCE were being I",, g, ~ a 14 applied towards payment~ to subcontractors, material providers, installation companies, and the < " ~ ~ 15 ...:i g power provider, but instead ignored their fiduciary duties, thereby through negligent behavior ...:i N

SJ j 16 which created an environment which allowed SOLAR ALLIANCE, KNUTZEN, TILLER, and

: l 17 BAK to divert funds received by, or on behalf of customers, away from the subcontractors they

~ j 18 were obligated to pay.

: i l9 35. Defendants YGRENE WORKS and CALIFORNIA FIRST FINANCIAL, aided

20 and abetted SOLAR ALLIANCE's breach of fiduciary duty, by and through, its own breach of

21 fiduciary duty, as such, PLAINTIFFS have been damaged.

22 36. Defendants YGRENE WORKS and CALIFORNIA FIRST FINANCIAL, are

23 considered, by their own admissions, to be experts in the industry of home improvement

24 financing, and are keenly aware of scams, improper contractor activities, and other deceptive

25 practices known in their industry, and thus had fiduciary obligations to protect homeowners

26 signing contracts with them, prior to, during, and after disbursing the PLAINTIFFS' fund, hence,

27 they avoided their fiduciary duties by lacking oversight of SOLAR ALLIANCE, at the

28 PLAINTIFFS' expense.


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INITJNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNWST


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2 in manners and amounts to be determined according to proof at trial.

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FOURTH CAUSE OF ACTION (Interference With Contracts - Against SOLAR ALLIANCE, SAE and DOES 1 through

100)

38. PLAINTIFFS refer to and incorporate the preceding allegations as though set forth

in full.

39. DEFENDANTS and their employees, and entities, were aware ofSUNRUN's

obligation to PLAINTIFFS under the contracts and interfered with SUNRUN's obligations.

40. In an unprivileged manner, and with an object of personal gain, said Defendants

interfered with PLAINTIFFS' rights under the contracts, by asserting to PLAINTIFFS that

diligent efforts were being undertaken to resolve liens, thereby interfering with PLAINTIFFS'

rights to engage SUNRUN to take action to unencumber PLAINTIFF'S property as was its duty

within the SUNRUN contract, paragraph 23, in relevant part:

"Sunrun will NOT put a mechanic's lien on your home and will indemnify, defend and hold you harmless for any mechanic's lien that is placed on your home by Sunrun or any of its contractors as a result of your entering into this Agreement." (italicized for emphasis).

41. As a proximate result of the foregoing activities, PLAINTIFFS have been damaged

in manners and amounts to be determined according to proof at trial.

FIFTH CAUSE OF ACTION (Fraud Against SOLAR ALLIANCE, &AE, KNUTZEN, TILLER, and BAK and DOES 1

through 100)


23 in full.

24 43. DEFENDANTS SOLAR ALLIANCE, SAE, KNUTZEN, TILLER and BAK

25 knowingly made, or directed its employees to make, false representations of fact that

26 PLAINTIFFS' funds received were transferred to PLAINTIFFS' creditors that resulted and arose

27 from DEFENDANTS' contractual engagement with PLAINTIFFS, in violation of Civ. C. §

28 1710(1).

BHLF\710279.1 -1 Q-COMPLAINT FOR BREACH OF CONTRACT; BREACH OF FIDUCIARY DUTY; AIDING AND ABETTING

BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INTTJNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNJUST


1 44. DEFENDANTS SOLAR ALLIANCE, SAE, KNUTZEN, TILLER and BAK had a

2 duty to disclose to PLAINTIFFS, distributions of monies received imposed by DEFENDANTS'

3 contractual engagement with PLAINTIFFS, and these DEFENDANTS thereafter concealed from

4 PLAINTIFFS DEFENDANTS' true allocations of PLAINTIFFS' monies received, in violation of

5 Civ. C. § 1710(3).

6 45. DEFENDANTS SOLAR ALLIANCE, SAE, KNUTZEN, TILLER and BAK

7 promised, within their contractual engagement, to PLAINTIFFS that monies received would be

8 distributed to the appropriate creditor which resulted from the contracts PLAINTIFFS engaged in

9 through DEFENDANTS, when instead, DEFENDANTS never intended to perform when they

10 withheld the monies and allocated PLAINTIFFS' monies received to non-contractual obligations,

11 in violation of Civ. C. § 1710(4).

SIXTH CAUSE OF ACTION (Constructive Fraud Against SOLAR ALLIANCE, SAE, KNUTZEN, TILLER, and BAK

and DOES 1 through 100)


16 in full.

47. DEFENDANTS SOLAR ALLIANCE, SAE, KNUTZEN, TILLER, and BAK were

18 provided specified discretion in the distribution of monies received from PLAINTIFFS, arising out

19 of contracts entered into through SOLAR ALLIANCE. As such, DEFENDANTS took on a

20 fiduciary obligation to PLAINTIFFS to manage PLAINTIFFS' interests.

21 48. SOLAR ALLIANCE, SAE, KNUTZEN, TILLER, and BAK have violated their

22 duties to PLAINTIFFS and have committed Fraud by undertaking a willful and systematic pattern

23 of receiving PLAINTIFF'S payments and then exploiting the monies received by not paying

24 subcontractors, material providers, installers, and the power provider. Furthermore, Defendants

25 instructed homeowners to write checks or make credit card payments directly to SOLAR

26 ALLIANCE rather than SUNRUN, despite the fact that it is clearly stated within PLAINTIFFS'

27 SUNRUN contracts that the customer owes the money to SUNRUN. DEFENDANTS

28 fraudulently reassured PLAINTIFFS that payments should be made directly to SOLAR

ALLIANCE who would then make the proper required payments on their behalf. DEFENDANTS

BHLA710279.1 -11-COMPLAINT FOR BREACH OF CONTRACT; BREACH OF FIDUCIARY DUTY; AIDING AND ABETTING



1 did not make payments on PLAINTIFFS' behalf and instead squandered PLAINTIFFS' funds in a

2 systematic and fraudulent manner.

3 49. Defendants, KNUTZEN and TILLER, on behalf of themselves and SOLAR

4 ALLIANCE, gave misleading legal advice and/or intentionally misinformed PLAINTIFFS by

5 phone or letter, and instructed staff members to do the same, which discouraged PLAINTIFFS

6 from obtaining legal counsel to handle their impending legal matters, which resulted in some

7 PLAINTIFFS becoming the recipients oflegal actions.

8 50. As a proximate result of SOLAR ALLIANCE'S activities above, which constitute

9 Constructive Fraud under California Civil Code section 1573. As such, PLAINTIFFS have been

10 damaged in manners and amounts to be proven at the time of trial.

51.

SEVENTH CAUSE OF ACTION (Declaratory Relief -Against ALL DEFENDANTS)

. PLAINTIFFS refer to and incorporate the preceding allegations as though set forth

14 in full.

52. In a desperate gambit to convince PLAINTIFFS to cover SOLAR ALLIANCE's

16 hemorrhaging overhead, SOLAR ALLIANCE claimed that its expenses were devoted to "third

17 party" expenses of the Contracts when they were never distributed appropriately in accordance

18 with the PLAINTIFFS' Contracts.

53. SOLAR ALLIANCE's position then and now in that regard is ~ong. SOLAR

20 ALLIANCE was provided discretion to distribute monies received but only as appropriate to

21 effectuate the terms of the Contracts.

22 54. As such, there is an actual and justiciable controversy between the parties with

23 respect to liability for SOLAR ALLIANCE's distribution of monies received. Without the Court's

24 declaration of the parties' rights, responsibilities and duties with respect to SOLAR ALLIANCE's

25 duties, the parties will continue to disagree and cannot function under the Contracts in a manner in

26 which their obligations can be determined and funds allocated.

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1 55. Therefore, PLAINTIFFS requests the Court's determination and declaration of the

2 rights and responsibilities of the parties with respect to SOLAR ALLIANCE's distribution of

3 monies received by Plaintiffs.

4 EIGHTH CAUSE OF ACTION (For an Accounting-Against all Defendants)

5

6 56. PLAINTIFFS refer to and incorporate the preceding allegations as though set forth

7 in full.

8 57. As a result of SOLAR ALLIANCE's improper co-mingling of monies received

9 from PLAINTIFFS and the distribution of that money to unknown parties, an accounting is

10 necessary to assess how much, if any, of PLAINTIFFS' funds remain with SOLAR ALLIANCE,

~ ~ 11 or its parent company SAE, as paid by PLAINTIFFS, or paid on the behalf of PLAINTIFFS, that ll-<~

< ·§ 12 may be used to satisfy still unpaid accounts of subcontractors, material providers, installers, and - 0 :;;: ::::

.i:: 8 13 the power providers who were not paid by SOLAR ALLIANCE at the time it received the funds ..... ~ 11 ~ i5 14 from the PLAINTIFFS. < C

~ ;: 15 58. Additionally, PLAINTIFFS are entitled to an accounting of expenses paid to third ~g ~N $ j 16 parties, in order to determine which of those payments were paid for properly incurred expenses,

~ t 17 and which of those payments were paid for expenses not related to the contractual obligations i:.i 00

~ c 18 entered into by PLAINTIFFS, as well as a breakdown of which funds pai,d by PLAINTIFFS that z _g ~ § 19 may have been transferred electronically outside of the United States, which may or may not

20 constitute international wire fraud, as well as a breakdown of PLAINTIFFS' payments that were

21 used for salaries or monies transferred to DEFENDANTS referenced within this complaint for

22 expenses not incurred by the contracts entered into by the PLAINTIFFS.

23 59. As a result of the foregoing, PLAINTIFFS are entitled to an accounting of the

24 foregoing matters.

25

26

27 60.

NINTH CAUSE OF ACTION (Unjust Enrichment-Against DOE Defendants)

PLAINTIFFS refer to and incorporate the preceding allegations as though set forth

28 in full.


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INTIJNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNJUST


1 61. Defendant DOES 26-35 are business entities, form unknown, who have received

2 benefits by engaging with SOLAR ALLIANCE.

3 62. Defendant DOES 26-35 knew or should have known that some or all funds derived

4 from monies receive by Plaintiffs for expenses to third parties was achieved by virtue of SOLAR

5 ALLIANCE's simultaneous negotiation with those third parties, and that the revenue derived was

6 improperly diverted away from going to third parties and remained in SOLAR ALLIANCE's

7 possession or control.

8 63. As a proximate result of the foregoing, Defendant DOES 26-35 have been unjustly

9 enriched in an amount to be determined at trial, and hold such improper distribution of revenue as

10 a constructive trustee for the benefit of PLAINTIFFS.

64.

SEVENTH CAUSE OF ACTION (Injunctive Relief-Against all Defendants)


14 in full.

65. The Contracts specify or implies criteria by which SOLAR ALLIANCE may

16 distribute monies received. The Contracts does not authorize SOLAR ALLIANCE or SAE to

17 compromise the consideration received. Except in specified circumstances, which have not been

18 present, the Contracts provide that SOLAR ALLIANCE has a fiduciary duty to manage monies

' 19 received in accordance to the terms of the Contracts.

20 66. PLAINTIFFS are informed and believe that SOLAR ALLIANCE has been

21 reporting to third parties an amount of monies received outside of the parameters and in violation

22 of the parties' Contracts. SOLAR ALLIANCE engaged in improperly diverting monies received

23 and allocating the distribution of Plaintiffs funds for a purpose not consistent with the parties'

24 agreement.

25 67. Unless and until SOLAR ALLIANCE is enjoined by this Court from withholding

26 funds received, PLAINTIFFS suffers a great risk of irreparable harm that substantial damage will

27 be inflicted upon Plaintiffs.

28




1 68. As such, PLAINTIFFS are entitled to preliminary and permanent injunctions

2 enjoining SOLAR ALLIANCE from withholding funds to be distributed to third parties, and other

3 appropriate relief, without which PLAINTIFFS will suffer great and irreparable harm.

4 69. SOLAR ALLIANCE purports to exercise total control over the monies received to

5 be distributed to third parties, without regard to its fiduciary duties and the scope of its authority

6 under the Contracts and at law. As such, the balance of equities weighs heavily in PLAINTIFFS'

7 favor.

8

9

10 70.

ELEVENTH CAUSE OF ACTION (Negligence-Against all Defendants)


11 in full.

71. DEFENDANTS owed a duty of due care to not harm PLAINTIFFS by properly

13 distributing and managing monies received to the appropriate contractors and subcontractors.

72. DE~ENDANTS, each of them, and through their agents, negligently failed to

15 exercise the proper degree of care in the manner required to effectuate their duties.

17

20

21

73. As a proximate result of the foregoing activities, PLAINTIFFS have been damaged

in manners and amounts to be det=ined according to proof at trial.

74.

TWELFTH CUASE OF ACTION (Unfair Competition Law, Cal. Bus. & Prof. Code§ 17200, et seq.

- Against All Defendants)

PLAINTIFFS re-allege and incorporate by reference each and every allegation set

22 forth in full.

23 75. California Business and Professions Code§ 17200, et seq., defines unfair

24 competition to include "unlawful, unfair or fraudulent business practices and unfair, deceptive,

25 untrue or misleading advertising." By committing the acts alleged above, DEFENDANTS have

26 engaged in unlawful, unfair and fraudulent business practices within the meaning of Business and

27 Professions Code § 17200, et. seq.

28


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNTIJST


1 76. As a direct and proximate result of their unlawful, unfair and fraudulent business

2 practices, DEFENDANTS received and continue to hold ill-gotten gains belonging to

3 PLAINTIFFS. These gains obtained through DEFENDANTS' violations ofBusiness and

4 Professions Code § 17200, et seq. include, but are not limited to, funds improperly used in a

5 manner without obtaining PLAINTIFFS' consent or authority. DEFENDANTS made no attempt

6 to meet PLAINTIFFS, speak with PLAINTIFFS, or discuss any of these policies with

7 PLAINTIFFS. DEFENDANTS had a duty to inform and make disclosures to PLAINTIFFS,

8 which they failed to do. As a result, DEFENDANTS, unilaterally and without authority, used

9 monies unsuitable to PLAINTIFFS' behalf, knowing that· such allocations were unnecessary, and

10 had PLAINTIFFS been informed of such allocation of funds and the terms thereof, PLAINTIFFS

would not have agreed. 12

77. DEFENDANTS also had an affirmative duty to physically deliver receipts to

14 PLAINTIFFS, which they did not do. As such, PLAINTIFFS were never afforded the opportunity

15 provided under California law to cancel such contracts. PLAINTIFFS have lost more than $1

16 million dollars as a direct and proximate result of the DEFENDANTS' unlawful conduct.

17 DEFENDANTS also violated and aided and abetted the violation of the California Unfair

18 Competition Law (the "UCL") by engaging in one or more of the following unlawful business acts

19 and practices, among others:

20 a) Committing, and aiding and abetting the commission of, mail fraud

21 involving the deprivation of honest services, by using and causing the use of the United States

22 mails to execute the above described scheme to defraud PLAINTIFFS, in violation of Title 18,

23 United States Code, sections 1341 and 2.

24

25

26

27

28

b) Committing, and aiding and abetting the commission of, grand theft, by

obtaining possession of money belonging to PLAINTIFFS by fraud or deceit [theft by trick];

obtaining both possession and ownership of that money by false or fraudulent pretenses [ theft by

false pretenses]' and fraudulently converting funds entrusted to DEFENDANTS' care [theft by

embezzlement], in violation of California Penal Code sections 487 and 31.


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INTTJNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNWST


1 c) Receiving, and aiding and abetting the receipt of, stolen property, by

2 receiving PLAINTIFFS' funds, knowing that they have been obtained by theft, and by concealing,

3 withholding and aiding in the concealment and withholding of those funds from PLAINTIFFS, in

4 violation of California Penal Code sections 496(a) and 31.

5

6

7

8

9

10

11

12

78. During the relevant time period, DEFENDANTS violated and abetted the violation

of the UCL by engaging in one or more unfair business acts and practices.

79.

forth in full.

THIRTEENTH CAUSE OF ACTION (Conversion - Against All Defendants)


80. 13

DEFENDANTS unlawfully, intentionally, and without authority assumed dominion

14 and control over PLAINTIFFS' property, including without limitation specific sums of

15 PLAINTIFFS' monies, in exclusion and violation of the rights of PLAINTIFFS, the rightful

16 owners of said property. DEFENDANTS' conduct was without justification. DEFENDANTS

17 have refused to return the property.

81. DEFENDANTS' unlawful conduct directly and proximately caused harm to

19 PLAINTIFFS in manner and amounts according to prbof at trial.

20 82. DEFENDANTS' conversion and theft of PLAINTIFFS' property was malicious,

21 entitling PLAINTIFFS to actual, consequential, incidental, special and exemplary damages in

22 excess of the minimum jurisdictional limits of this Court.

23

24

25 83.

FOURTEENTH CAUSE OF ACTION (Conspiracy- Against All Defendants)


26 forth in full.

27

28 84. As more fully described above, DEFENDANTS acted together to commit fraud

and other torts upon PLAINTIFFS. They had a meeting of the minds to commit fraud, breach of


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INTTJNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNJUST


~

1 fiduciary duty, and conversion, and that course of action was ultimately furthered by the acts

2 and/or omissions by them.

3 85. DEFENDANTS' wrongful acts proximately caused injury to PLAINTIFFS. As a

4 result of such acts, PLAINTIFFS have suffered monetary damages.

5

6

7

8

FIFTRTEENTH CAUSE OF ACTION (Breach of the Duty of Good Faith and Fair Dealing - Against Defendant SOLAR

ALLIANCE)

86. PLAINTIFFS re-allege and incorporate by reference each and every allegation set

9 forth in full.

10 87. In acting as alleged above, DEFENDANTS breached the duty of good faith and fair

u o: 11 .N dealing implicit in the sale of solar products and services, whereby each party to a contract,

ri..~

< ·@ 12 implied, oral or otherwise, covenants not to deprive the other of the benefits of its rights under • 0

:::J :2 13 .,:I cl ,... . ... g, ~ i5 14

such agreements.

88. DEFENDANTS, as a seller of solar products and servict?s, had a special < " ... ,;: ... g ... N ,... 2

15 relationship with and owed a fiduciary duty to PLAINTIFFS, and by its actions, as set forth above,

16 =a '!1 ;f 17 ~~ ~ 00

18 ~ 6 z _g < E-<. 19 ~~

20

21

22

23

DEFENDANTS breached these duties of good faith and fair dealing.

89. As a direct, proximate and foreseeable result of DEFENDANTS' wrongful

breaches, PLAINTIFFS suffered monetary losses in an amount exceeding $1 million, exclusive of '

past and future interest thereon, the actual amount of damages to be determined at trial.

SIXTEENTH CAUSE OF ACTION (Violation of Penal Code Section 496( c) - Against All Defendants)

90. PLAINTIFFS re-allege and incorporate by reference each and every allegation set

24 forth in full.

25 91. As described above, DEFENDANTS received, and aided and abetted each other in

26 the receipt of, stolen property in violation of California Penal Code sections 496(a) and 31, by

27 receiving PLAINTIFFS' funds knowing that they had been obtained by theft, and by concealing,

28 withholding, and aiding in the concealment and withholding of the funds from PLAINTIFFS.


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTNE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNJUST


1 92. As a direct and proximate result of DEFENDANTS' violations, PLAINTIFFS have

2 been injured in an amount to be determined at trial.

3 93. California Penal Code section 496( c) establishes a civil cause of action for

4 violations of California Penal Code section 496(a), pursuant to which PLAINTIFFS are entitled to

5 recover treble damages, costs of suits and reasonable attorneys' fees.

6

7

8

9

10

13

14

15

16

17

18

20

21

22

23

24

25

26

27

28

WHEREFORE, PLAINTIFFS prays as follows:

I.

2.

For compensatory and punitive damages according to proof at trial;

For preliminary and permanent injunctions preventing SOLAR ALLIANCE from

(1) withholding funds to be distributed to PLAINTIFFS' obligors;

3.

4.

Contracts;

5.

6.

7.

8.

For an accounting including of all expenses charged to PLAINTIFFS;

For a declaration of the parties' rights and responsibilities with respect to the

For costs of suit herein;

For interest due as permitted by law;

For attorneys' fees if and to the extent permitted by law; and

For such other and further relief as the Court deems just and proper.

DATED: September 26, 2017 LAW FIRM, A.P.C.

By: Max I C.Agha Emi yV.Ngo Attorneys for Plaintiffs


BREACH OF FIDUCIARY DUTY; INTERFERENCE WITH CONTRACT; CONSTRUCTIVE FRAUD; PRELIMINARY AND PERMANENT INJUNCTIONS; AN ACCOUNTING; UNFAIR CONPETITION; UNIDST


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21

22

23

24

25

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27

28

EXHIBIT 1 PLAINTIFF VERIFICATIONS




Documents

BANKER'S HILL LAW FIRM, A.P.C. SUPERIOR … ALLIANCE, SAE, SUNRUN, CALFIRST, and YGRENE, have outstanding financial contractual 8 obligations with SUNRUN that continue to be unpaid