After Tesla increased the price of a Solar Roof project by more than $30,000, homeowners explain why they have filed a lawsuit alleging breach of contract
Pennsylvanialawsuit said Teslawas in breach of its contract after raising a Solar Roofprice.
- The suit, filed by Philip Dahlin and Mary Arndtsen, said it would seek federal class-action status.
- The increase "was a significant disappointment," Dahlin told Insider.
More than half a year after Philip Dahlin and Mary Arndtsen signed a contract with Tesla to install a
The lawsuit was filed amid a growing chorus of customers speaking up about Tesla unilaterally increasing their prices - some by as much as 70% - after they'd signed contracts for Solar Roofs and energy-storage batteries called Powerwalls.An article in the Uniform Commercial Code allows buyers and sellers to modify agreements after they're signed, said D. A. Jeremy Telman, a contracts professor at Oklahoma City University School of
"However, both parties must consent to the changes. That seems here not to have been the case," Telman said.Tesla was issued a summons on May 3, according to the Pennsylvania court. The company had not filed a response as of Saturday afternoon. An email from Insider wasn't returned. Elon Musk, chief executive, addressed customer concerns during the company's Q1 earnings call in late April, saying, "We did find that we basically made some significant mistakes in assessment of difficulty of certain roofs."
The lawsuit seeks class-action status
The Pennsylvania couple's complaint said it would seek class-action status.
Their attorney, Peter Muhic, of LeVan Muhic Stapleton, said he'd heard from "numerous" homeowners in situations similar to Dahlin and Arndtsen. He declined to give a specific number."They advertise a very unique product that they claim is much better than other competing products," Muhic told Insider on Thursday. "And we believe that they need to honor their contracts, and they have to perform as they had promised and agreed."
Muhic would have to file a motion to have the case formally certified as a class action. The complaint said there are more than 100 potential class members who had signed contracts totalling more than $5 million.
A copy of a Tesla Solar Roof contact filed alongside the complaint included an arbitration agreement between the parties. That clause could be a roadblock for the case to gain class-action status, said Gregory Klass, associate dean and professor at Georgetown University Law Center."Tesla's arbitration clause almost certainly forestalls this class action under current Supreme Court precedent," he said on Friday, citing a 2011 case, AT&T v. Concepcion.
Connecticut homeowners say Tesla also raised their price
In Weston, Connecticut, Jay and Robin Fortin signed a contract in January to install a Solar Roof on their 1955 colonial home. They agreed on a price of about $62,000 in their contract, Jay Fortin told Insider on Friday. His wife signed the contract.When a tech came to study their home, the price jumped up about $6,600, because Tesla would have to change the type of wood beneath their shingles, he said. Then, in April, the couple received a message from Tesla, letting them know the price had gone up to about $91,000.
"I'm not going to pay the new price," Fortin said on Friday. "We can't. The whole thing made sense for us because we needed a new roof anyway, and we wanted backup power."He later added: "I wish we hadn't gotten involved with the whole thing, tell you the truth." Fortin said he reached out to Muhic after learning of the complaint. Fortin hasn't taken legal action, but said he'd consider joining a class-action lawsuit.
In Pennsylvania, Dahlin signed the contract with Tesla for a total price of $46,919.20 on September 17, 2020, according to a copy filed with the court. The couple paid a $100 deposit. After subtracting the deposit and an energy rebate, they would owe $46,084.80 after the installation, according to the contract.
The couple refinanced their home, where they've lived since 2006, to pay for the project. The contract said the roof would be installed within 180 days."We were pretty excited about the prospects," said Dahlin, who works in sustainability. "Also, just generating our own energy to charge the Tesla we already had, the car."
During the following 180 days, the couple heard little from Tesla.
On March 24, the couple received an email from Tesla, saying: "We have increased the price of Solar Roof and have added adjustments for individual roof complexity."On April 23, they learned that the price had been increased to $78,352.66, according to their complaint.
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