United States District Court, E.D. North Carolina, Western Division
C. DEVER III UNITED STATES DISTRICT JUDGE
April 11, 2016, JD Solar Solutions, LLC ("JD Solar"
or "plaintiff') filed a complaint against Trabant
Solar, Inc. ("Trabant") and Rovshan Sade a/k/a Ron
Sade ("Sade"; collectively, "defendants")
for breach of contract, piercing the corporate veil, and
violation of North Carolina's Unfair and Deceptive Trade
Practices Act ("UDTPA"), N.C. Gen. Stat. §
75-1 et seg, [D.E. 1]. On, June 3, 2016, defendants answered
and alleged counterclaims for breach of contract and a UDTPA
violation [D.E. 14]. On June 24, 2016, JD Solar answered
defendants' counterclaims [D.E. 16]. On March 23, 2017,
the court struck Trabant's answer and counterclaims
because Trabant, a corporation, failed to retain counsel
March 15, 2018, defendants answered the complaint [D.E. 36].
On February 4, 2019, JD Solar moved for summary judgment
[D.E. 46], filed a statement of material facts (D.E. 47], and
filed . a memorandum in support [D.E. 48]. On March 7, 2019,
defendants responded in opposition [D.E. 50-52]. On Aprill,
2019, JD Solarreplied[D.E.55]. On April 1, 2019, Sade
voluntarily dismissed his counterclaims with prejudice [D.E.
54]. As explained below, the court denies JD Solar's
motion for summary judgment.
Solar, a limited liability company formed under Connecticut
law, sells solar panel technologies for both residential and
commercial applications. See [D.E. 47] ¶ 1; Dean Decl.
[D.E. 48-1] ¶ 3. Sade resides in North Carolina. See
[D.E. 47] ¶ 2; [D.E. 52] ¶ 2. Trabant is a North
Carolina corporation. See [D.E. 47] ¶ 3; [D.E. 52]
¶ 3. Trabant develops and sells "solar
trackers," which enable solar panels to rotate in
response to or "track" the sun's movements to
maximize solar energy intake. See Sade Decl. [D.E. 50] ¶
2014, James Dean ("Dean"), a founding member of JD
Solar, inquired online about Trabant's solar tracker
products. See [D.E. 47] ¶ 5; Dean Decl. [D.E. 48-1]
¶¶ 1, 4. Sade responded . to Dean's inquiry.
See [D.E. 47] ¶ 6; Sade Decl. [D.E. 50] ¶¶
3-4. In July 2014, JD Solar alleges, but defendants deny,
that Sade sent a non-binding quotation to Dean to purchase 13
solar trackers. See [D.E. 47] ¶ 7; [D.E. 52]
¶ 7. JD Solar claims that it planned to use one tracker
for a residential; project in Connecticut and the remaining
twelve for a commercial project in Connecticut. See [D.E. 47]
¶7. On October 2, 2014, Sade sent a binding quotation
for 12 trackers at a price of $13, 000 per tracker and $950
for a gravel pan for each tracker. See [D.E. 47] ¶ 7;
[D.E. 52] ¶ 13. This price included shipping,
installation, and a warranty. See [D.E. 47] ¶ 8. JD
Solar alleges that Sade told Dean that he could deliver the
12 trackers within 12 weeks, which is a standard time-frame
in the industry. See Id. ¶ 9.
claims that Dean came to Fort Lauderdale, Florida, to view
some of Trabant's solar trackers installed on the campus
of Florida Atlantic University. See Sade Decl. [D.E. 50]
¶ 6. They j met at the rental car center, but because
Sade "had problems renting the car" with his debit
card, : Dean rented the car. See Id. Sade alleges
that Trabant's solar trackers impressed Dean, and Dean
spoke positively about Trabant's work to one of JD
Solar's clients. See Id. ¶ 7. Sade claims
that, at this initial meeting, he told Dean that Trabant, as
a small start-up, had limited funds and therefore would
require 100% payment up-front. See Id. ¶¶
8, 10-12. JD Solar alleges, instead, that Sade promised to
send a payment and delivery schedule and that JD Solar agreed
to make a down payment. See [D.E. 47] ¶ 10.
Solar made a series of payments between October 3, 2014, and
December 22, 2015. See id ¶ 11; [D.E. 52] ¶ 11. The
payments totaled $217, 170.00. See [D.E. 47] ¶ 11. JD
Solar claims that it sent the last three payments as loans.
See Id. ¶ 12; [D.E. 48-4]. Defendants claim
they "never agreed to any loans." [D.E. 52] ¶
11. Rather, defendants contend that JD Solar did not provide
sufficient funding for Sade to complete the commercial
project because JD Solar told Sade to divert funds from the
commercial project to the residential project. See
Id. ¶ 12.
parties dispute numerous facts concerning the initial
negotiations. First, Sade claims that JD Solar originally
requested a quote for 13 solar trackers to be used for the
commercial project. See Sade Decl. [D.E. 50] ¶ 16.
Because JD Solar's plan allegedly "failed to take
into account the installation matrix requested by" JD
Solar's client (i.e., the physical arrangement of the
trackers in ', three or four equal rows),
defendants claim that JD Solar eventually "gave up"
on the 13 -tracker plan and changed the order for the
commercial project to 12 trackers. Id. ¶¶
18-19. Sade claims that the binding quotation did not include
any provision for trackers at the residential project and
only included 12 trackers for the commercial installation and
that delivery would occur a few months after payment See
Id. ¶¶ 21, 23. Second, defendants contend
that if Trabant had known that JD Solar would not agree to
purchase solar panels and inverters, the per unit price of
the trackers would have been higher than $13, 000. See
Id. ¶ 22. Sade also claims that JD Solar
changed the physical arrangement of the trackers for the
commercial project in a manner that increased the
project's costs beyond the original price. See
id. ¶ 36.
JD Solar began to pressure defendants to explain the delays
in delivering the trackers for the commercial project. See
[D.E. 47] ¶ 13. In June 2015, Sade sent two trackers for
the residential project that JD Solar characterizes as
"smaller, used[, ] and mismatched." Id.
Defendants claim that JD Solar instructed them to provide the
two trackers for the residential project and to divert funds
from the commercial project to the residential project. See
[D.E. 52] ¶ 13. In contrast, Dean claims that he
"discussed one tracker to be used" for the
residential project, but that the "main project"
was the commercial project. Dean Aff. [D.E. 48-1] ¶ 7.
Defendants claim that the goods and services provided for the
residential project totaled $150, 533.15 in value. See [D.E.
52] ¶ 12. Defendants also claim that these two trackers
were functional and that JD Solar accepted them. See
Id. ¶ 13. Defendants never delivered the 12
trackers for the commercial project. See [D.E. 47] ¶ 13;
cf [D.E. 52] ¶ 13.
Solar claims that Sade attempted to charge more money for
items that were originally included in the unit price. See
Dean Aff. [D.E. 48-1] ¶ 10. Defendants respond that the
unit price would have been higher if additional items had
been included. See [D.E. 52] ¶ 13. Defendants also claim
that, as for the residential project, JD Solar increased the
costs for the delivery and installation of the two trackers
by turning the trackers in different directions and using
A/C, and not D/C, power. See id.
Solar asserts that defendants' bank records from Wells
Fargo show that defendants did not pay for the manufacture of
the solar trackers ordered by JD Solar. See [D.E. 47] ¶
14. JD Solar contends that the bank records show that, after
each progress payment from JD Solar, Sade withdrew funds that
he then used for personal expenses unrelated to JD Solar or
Trabant's business. See Id. ¶¶ 14-16,
19. Defendants dispute whether Sade used funds wired from JD
Solar's accounts for his personal expenses. See [D.E. 52]
¶ 14. Instead, defendants assert that Sade used the
money withdrawn to pay Trabant's general operating
expenses, including expenses for JD Solar's orders of
solar trackers for the commercial and residential projects.
See Id. ¶¶ 14, 19. Defendants claim that,
although they had "some copies" of cashier's
checks used to pay Trabant business expenses, they "no
longer have copies of others and Wells Fargo was unable to
provide copies" to either party. 14119.
parties also dispute the events leading to defendants'
use of a Polish manufacturer. Defendants claim that Trabant
initially arranged for a fabricator in Trinity, Texas, to
make the 12 trackers that JD Solar ordered for the commercial
project. See[D.E. 50]¶43. Defendants claim that the
fabricator required advance payment of $ 120, 000 to
manufacture the trackers within two or three months. See
Id. Because JD Solar did not pay in full up front,
defendants were unable to make this advance payment. See
Id. ¶ 44. Although Sade "tried every
imaginable route to identify another fabricator who would be
willing to make the [t]rackers at [a] price and time frame
suitable" to complete the commercial project, his
efforts proved unsuccessful. Id. ¶ 45.
Consequently, Sade arranged for a Polish manufacturer,
Telemond Holdings ("Telemond"), to make the
trackers. See Id. ¶¶ 48-49. According to
defendants, JD Solar refused to tender an additional $60, 000
needed to manufacture the trackers and contacted Telemond
directly to cut out Trabant entirely. See Id.
contrast, JD Solar claims that Sade emphasized that the
manufacturer was domestic in the initial negotiations. See
Dean Decl. [D.E. 48-1] ¶ 13. Dean claims that, when he
pressured Sade to: allow him to go to the Texas manufacturer,
Sade said that the "welds were bad" and that he had
to use Telemond instead. See id, JD Solar claims that when
Dean visited Telemond in early 2016, "it was obvious
that the trackers had not been manufactured" and that
the meeting was merely introductory. Dean Aff. [D.E. 55-1]
7-8; see Dean Decl. [D.E. 48-1] ¶ 16. In support, JD
Solar cites contemporaneous e-mails in which Sade told
Telemond employees not to "provide details" to JD
Solar's representatives about progress on the
manufacturing order for the trackers. See [D.E. 48-3] 2; see
Dean Decl. [D.E. 48-1] ¶ 17. JD Solar claims ...