Kaplan Atlas Solar Vs Matza

Case 1:15-cv-03897-LDW-AYS Document 1 Filed 07/02/15 Page 1 of 27 PageID #: 1
UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK
YOSSEF KAHLON a/k/a JOSSEF KAHLON,

ATLAS SOLAR HOLDINGS, LLC
Plaintiffs, Case 2:15-CV-3897
v. COMPLAINT
CHARLES MATZA
Defendants.
PARITIES
1. Plaintiff Atlas Solar Holdings, LLC (Atlas) is a New York Limited Liability Company
doing business in the State of New Jersey with its primary Business office located in the
State of New Jersey.
2. Plaintiff Jossef Kahlon (Kahlon) is a New York State resident and the sole owner and
officer of Atlas Solar Holdings, LLC.
3. Defendant Charles Matza, ESQ is Florida State Resident and an officer and principal of
Sunray Solar a company doing business in the State of New Jersey and is a licensed
attorney admitted to practice Law in the State of New York.
JURSDICTION
This Court has jurisdiction over the claims herein under Title 28 U.S.C. § 1332. There is
a diversity of citizenship between Atlas and Kahlon and Defendants, and the amount in
controversy exceeds $75,000.

Venue is proper in the judicial district of New Jersey pursuant to Title 28 U.S.C. § 1391
in that all or a substantial part of the acts or omission giving rise to the claims occurred in the
State of New Jersey.
ALLEGATIONS COMMON TO ALL COUNTS
1. Charles Matza is an owner and officer of Sunray Solar Corporation, (Sunray) a
company doing business in the State of New Jersey with is primary business office
in New Jersey.
2. In the spring of 2011, Sunray Solar approached Plaintiff Kalhon with an offer to
invest in solar energy systems in the State of New Jersey (hereafter “Systems”).
3. Plaintiff Kahlon formed Atlas as the purchaser of the Systems.
4. The systems Atlas was investing in would be installed onto the homes of third
parties (“customers”) who would receive electricity at a discounted rate that would
be paid to Atlas annually. Based upon the electrical output for each system, Atlas
would also receive a set number of Solar Renewable Energy Certificates (SREC).
5. At that time, Atlas had no knowledge of or experience with anything related to the
solar industry and substantially relied upon Defendants’ professional expertise,
career experience and informed judgment to understand the potential risks and
rewards involved and assess their suitability for Atlas’s own investment objectives.
6. Defendant represented the offered investment opportunities as conservative income
strategies that could be relied upon to generate a modest but stable long-term
passive income stream for Plaintiff Atlas as best illustrated by Defendants’ highly
detailed 15 year revenue projections for each system, all of which were based on
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their calculations of a SREC pricing support expectation that would result in a
gradual, orderly and predictable decline in year-over-year solar energy system
revenues.
7. Sunray represented the offered investment opportunities as turnkey (passive
income) solutions to solar energy system ownership without the common
drawbacks of being an owner/operator (system maintenance, service calls,
collections, sale of SREC’s, etc.)
8. Plaintiff Atlas entered into nine contracts over the course of six months with
Defendant paying a total of $1,874,165.00 USD to Sunray in nine funding rounds in
order to purchase 26 specified solar energy systems, all of whose characteristics
were reviewed and agreed to in advance (thus determining the cost and projected
operating performance of each system). Plaintiff Atlas funded the cost of each
system up front in full, prior to installation, interconnection and
certification/approval. Only after installation, interconnection and
certification/approval were complete would title to the systems be transferred to
Plaintiff Atlas from Sunray.
9. Plaintiff Atlas later purchased another 9 systems which were assigned by Sunray to
Atlas on June 11, 2011. These systems like the 26 systems referenced above were not
what Sunray has represented them to be.
10. Sunray represented a benign market environment of stable SREC prices and
predicted a gentle, controlled year-over-year decline in long-term SREC prices upon
which the revenue projections Sunray provided to Plaintiff Atlas were based. On
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the basis of these representations, Plaintiff Atlas made investment decisions,
executed subsequent contracts with Sunray and closed multiple subsequent funding
rounds, all before even one of the first round of systems were complete and ready
for delivery. Sunray and Defendant Matza knew that the NJ SREC market was
undergoing an oversupply-driven price decline caused by the unsustainably high
rate of new solar energy installations in NJ and the expectation of the eventual
surplus of SRECs they would generate. (This was greatly in excess of the multi-year
foreseeable demand for them. Regulators set an annual number of SREC credits that
utilities must then purchase for that year.) Sunray and Defendant Matza never
made any of these critically material disclosures to Plaintiff Atlas.
11. The projected revenue promised to Altas by Sunray and Defendant Matza were
based on SREC prices not falling to below $400.00 per unit. However, after the
market price dropped below $120.00 Sunray and Defendant Matza never disclosed
this drop to Atlas and continued to sell systems to Plaintiff Atlas when they were
aware that Plaintiff could not recover it’s investment.
12. Sunray and Defendant, by misrepresenting the market dynamics that determine real
solar energy system returns, misled Plaintiff Atlas as to the potential risks and
rewards of the investment and their suitability for Plaintiff Atlas.
13. Plaintiff Atlas entered into multiple contracts with Sunray and was repeatedly and
consistently misled regarding the market dynamics, risk and potential returns of
those investments. Throughout these 9 fundings over the course of a half year, even
at the time that Plaintiff Atlas was making the last of its solar energy system
4
investments, Sunray and Defendant never demonstrated any regard for Plaintiff
Atlas’ interests or eventual outcomes, steadfastly misleading Plaintiff Atlas that
SREC prices were going to recover in the short urging that additional funding
rounds be pursued. Defendant and Sunray acted solely in the pursuit of their own
profit.
14. At the time that Plaintiff Atlas had closed out the fifth and sixth funding round,
Plaintiff Atlas had begun to feel that the NJ solar energy system market might not be
exactly as it was consistently presented by Sunray and Defendant and that some
caution might be warranted. Defendant Atlas’ interactions with Plaintiffs began to
take on a different dimension. Plaintiff Atlas felt pressured to continue funding the
newest investments in the pipeline in order that Sunray and Defendant would
continue their ongoing work on the many works-in-progress, all of which were up
in the air and seemed to depend upon Plaintiff Atlas continuing to fund new
systems. Plaintiff Atlas was placed in a situation where it felt forced to continue
funding projects it had no desire to invest in, out of concern that, if it refused,
plaintiffs might abandon all of Plaintiff Atlas’ incomplete projects and walk away.
15. When entering into agreements with customers for the systems, Sunray and
Defendant would collect deposits from the customers to pay for their first year’s
worth of electrical costs. At the time that Defendant and Sunray were supposed to
have transferred the systems to Plaintiff Atlas they were also supposed to pay these
deposits to Plaintiff Atlas. However, Sunray and Defendant collected deposits from
customers in excess of the first year’s projected electrical costs and retained the
5
difference between the first year’s costs and the actual deposits. This defrauded
Plaintiff Atlas and/or the customers out of the additional deposits Sunray and
Defendant had collected.
16. Plaintiff Atlas was promised very specific systems built to specific specifications
prior to investing with the Sunray and Defendant. The Sunray and Defendant failed
to properly install the systems and many times did not deliver the system promised.
Sunray and Defendant intentionally misrepresented what Atlas was investing in,
they pulled a classic bait and switch. For example; Plaintiff Atlas invested in a
system which was installed on a property located at 162 Beachview Ave,
Manahawkin, NJ. The system was represented by Sunray and Defendant to be 51
panels, each panel being 190w for a total system size of 9.690 kw. The actual size of
this system is 51 panels, each panel being 185w for a total system size 9.435kw. The
cost of each system is based upon the kw system size. Therefore, a smaller system
costs less and produces less electricity. This also means less revenue from the
customers and less SRECs to sell on the open market. Plaintiff Atlas relied on the
false representations made by Sunray and Defendant and may have sold SRECs it
didn’t earn because Plaintiff Atlas was told that it purchased a larger system.
17. Plaintiff Atlas entered into a service agreement with Sunray and Defendant whereby
Sunray and Defendant would service the systems and in exchange would receive
7.5% of the revenue generated by the systems. Sunray and Defendant breached this
contract in or about August of 2012 and refused to maintain the systems demanding
a 7.5% payment.
6
18. However, due to Sunray and Defendants’ collection of excess deposits from
customers, Plaintiff Atlas had not collected any revenue from customers as of
August of 2012. In addition, Plaintiff Atlas had not sold any SRECs as of August of
2012 so Atlas had no revenue to share with Sunray and Defendant when the contract
was breached.
19. At the time that Sunray and Defendant installed the systems many customers had
property damages caused by Sunray and Defendant’s installers. In addition some of
the systems were not installed to the specification agreed upon by the customers.
Sunray and Defendant made several unwritten and unfulfilled promises to
customers to remedy customer complaints just long enough to allegedly transfer the
systems to Plaintiff Atlas. Sunray and Defendant then abandoned all of its customers
and broke all of its promises to the customers. This left Plaintiff Atlas with unhappy
and nonpaying customers. Sunray and Defendants’ failure to properly service its
contracts with customers has left Plaintiff Atlas with systems that are not working
properly and customers who refuse to pay for their usage because of the problems
they experienced with Defendant.
20. Due to Sunray and Defendant’s negligence the many of the systems where
improperly installed by the Sunray and Defendant resulting in the systems being
unable to produce at there full capacity, and or requiring modifications and or
causing damages to the properties that the systems where installed on.
7
21. Due to Sunray and Defendant’s negligence the systems installed by Sunray and
Defendant were smaller than the sized contracts paid for by Plaintiff Atlas, thus
resulting in damages to Plaintiff Atlas.
22. Sunray and Defendant negligently failed to conduct credit checks of customers thus
exposing Plaintiff Atlas to loss due to customers inability or unwillingness to pay for
energy and or pay their home mortgages resulting in foreclosure actions on the
properties holding the systems. Which results in a loss to Plaintiff Atlas. Sunray
and Defendant also negligently failed to have the customers execute all the
appropriate contracts and agreements as represented to Plaintiff Atlas.
23. Sunray and Defendant in order to induce Plaintiff Atlas to make the last investment,
represented to Plaintiff Atlas that it would be purchasing three (3) systems at a price
of $3.50 per kw. Instead, Sunray and Defendant built two different systems at a
price of $5.00 per kw.
24. At the time that Plaintiff Atlas was to receive ownership of each system Sunray and
Defendant was to assign ownership of each and every system to Plaintiff Atlas and
notify the customers of the assignment. Sunray and Defendant failed to properly
assign all of the 26 systems, and failed to notify the customers of the assignments.
25. The investments into the systems by Plaintiff Atlas are considered a security under
New Jersey Securities Law and Federal Securities Law.
26. Sunray and Defendant failed to provide evidence or acknowledgement of the
agreement between Customers and Sunray at the same time a full and accurate copy
of the document was presented for signature for the sale of electrical energy and the
8
installation of the systems as required under N.J.S.A. 56:8-2.22. The Power
Purchase Agreement provided to Customers by Sunray and Defendant did not
comply in for or substance with the required disclosures as required under 56:8-2.22.
These systems where then sold and assigned to Plaintiff Atlas who then assumed all
liability of Sunray as part of the assignment of the systems.
DEFENDANTS’ MATERIAL MISREPRESENTATION AND

OMISSIONS IN VIOLATION OF SECURITIES
AND EXCHANGE ACT
27. At no time did Sunray and Defendant ever provide Plaintiff Atlas with any
disclosures informing Plaintiff Atlas of the inherent risks associated with the
valuation and/or sale of SRECs in the market place. Sunray and Defendant
presented information to Plaintiff Atlas prior to investing in the systems that
showed that the income stream generated by the sale of SRECs would be steady and
low risk.
28. After the SREC market started to drop Sunray and Defendant was still presenting
information to Plaintiff Atlas showing higher prices than actual market, giving
Plaintiff Atlas an impression that the income was going to be more than the SREC
market could produce.
29. Sunray and Defendant pressed Plaintiff Atlas to continue investments implying that
Sunray and Defendant would be unable to complete the prior projects if the new
projects were not funded.
9
30. Sunray and Defendant failed to disclose the actual size of the systems being installed
and represented that some of the systems were larger then they actually were.
31. Sunray and Defendant represented that all systems would be properly installed to
the specifications agreed upon by the customers.
32. For the last funding Sunray and Defendant represented to Plaintiff Atlas that he
would be purchasing three systems and paying a price of $3.50 per kw, when in fact
Sunray and Defendant built two separate systems at a price of $5.00 per kw.
33. Plaintiff Atlas relied upon the representations made by Sunray and Defendant that
they would service all the systems.
THE TRUTH EMERGES
34. It has come to light that the SREC market is a volatile and unpredictable market
which resulted in the price of SREC dropping by close to 80%.
35. Sunray and Defendant did not properly install the systems, resulting in remediated
damages to customers as a result of Sunray and Defendant’ or their agents’ actions.
36. Sunray and Defendant defrauded Plaintiff Atlas by misrepresenting the size of the
systems being installed and charging Plaintiff Atlas for larger systems.
37. Sunray and Defendant entered into an agreement to install three systems at a price of
$3.50 per kw and instead used the money to install two different systems at a price
of $5.00 per kw.
38. Sunray and Defendant breached its contract with Plaintiff Atlas by refusing to service
the systems resulting in great financial loss to Plaintiff Atlas and a devaluation of the
systems.
10
SCIENTER
39. Sunray and Defendant was fully aware of the nature of the SREC market and had a
duty to disclose this risk when soliciting investors, and failed to make any
disclosures.
40. Sunray and Defendant were in full control of the installation of all the systems. As
such, Sunray and Defendant were the only ones that could know what size systems
were being installed and how they were being installed. Plaintiff Atlas was investing
in these systems prior to their construction and therefore could not inspect them to
confirm that they were properly built and/or the correct size. Plaintiff Atlas was
substantially vested in the majority of the projects before the first one was complete
and could not have predicted nor discovered Sunray and Defendants’
misrepresentations prior to investing.
RELIANCE AND ECONOMIC LOSS
41. Plaintiff Atlas relied upon the representations made by Sunray and Defendant and
invested a total of $1,847,165.00. In addition, the systems have required additional
maintenance and upgrades at great cost to Plaintiff Atlas. In addition, Plaintiff Atlas
has to remedy the complaints of the customers regarding the systems. The value of
the SRECs have dropped, thus decreasing the value of all the systems substantially.
42. Plaintiff Atlas has sustained all these losses due to the misrepresentations made by
Sunray and Defendant.
THE STATUTORY SAFE HARBOR DOES NOT APPLY
11
43. The statutory safe harbor provided for forward-looking statements under certain
circumstances does not apply to any of the allegations concerning the material
information that Sunray and Defendant had an affirmative duty to disclose. The
information Sunray and Defendant had a duty to disclose was not forward-looking,
rather it concerns existing facts and events.
FIRST COUNT
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5

of the Securities and Exchange Commission)
44. Plaintiff Atlas repeats the allegations contained in paragraphs 1 through 43.
45. The promises made and information provided to Plaintiff Atlas by Sunray and
Defendant prior to its investments on nine separate occasions were materially false
and misleading because Sunray and Defendant knew or recklessly disregarded the
facts set forth therein to falsely continue to entice Plaintiff Atlas into thinking that
the investments in these systems would generate a safe steady income and that
Sunray and Defendant would maintain them.
46. Sunray and Defendant employed devices, schemes, and artifices to defraud and
engaged in acts, practices, and a course of conduct in an effort to raise capital
investments for the purchase of these systems in violation of Section 10(b) of the
Exchange Act and SEC Rule 10b-5.
47. As a result of the dissemination of the aforesaid false and misleading information
the price for the systems paid by Plaintiff Atlas was higher than it would have been
12
had the true facts concerning the systems and the SREC market and the intended use
of the funds all been known by Plaintiff Atlas.
48. In ignorance of the artificially high-priced systems, Plaintiff Atlas acquired these
systems at artificially inflated prices and was damaged thereby.
49. Had Plaintiff Atlas known of the truth which was falsely represented by Sunray and
Defendant, Plaintiff Atlas would not have purchased or otherwise acquired the
systems. Hence, Defendant Atlas was damaged by Sunray and Defendant s’ violations
of Section 10(b) and Rule 10b-5.
WHEREFORE, Plaintiff Atlas demands judgment against Defendant as follows:
(a) Awarding Plaintiff Atlas damages in an amount of $1,874,165.00 or the amount
proven at trial, together with prejudgment interest thereon;
(b) Declaring and determining that Defendant violated the federal securities
laws by reason of their conduct as alleged herein;
(c) Awarding monetary damages against Defendant in favor of Plaintiff Atlas
for all losses and damages suffered as a result of the acts and transactions complained of
herein, including punitive damages where appropriate, together with prejudgment
interest from the date of the wrongs to the date of the judgment herein;
(d) Awarding Plaintiff Atlas the costs, expenses, and disbursements incurred in
this action, including reasonable attorney and expert fees;
(e) Awarding Plaintiff Atlas such other and further relief as the Court may
deem just and proper in light of all the circumstances of this case.
SECOND COUNT
13
(Violation of Section 20(a) of the Securities Exchange Act)
50. Plaintiff Atlas repeats the allegations contained in paragraphs 1 through 50 and the
First Count.
51. Defendant Matza, by virtue of his office or offices at, and/or directorship of Sunray
and his specific acts, was a controlling person of Sunray within the meaning of Section
20(a) of the Exchange Act.
52. Defendant Matza’s positions made him privy to, and provided him with actual
knowledge of, the material facts that the Company misrepresented and concealed from
Plaintiff Atlas.
53. Defendant Matza had the power and influence, and exercised the same, to cause
Sunray to engage in the unlawful conduct and practices complained of herein by
causing Sunray to disseminate the false and misleading information referred to above.
54. By virtue of the foregoing, Defendant has violated Section 20(a) of the Exchange Act.
55. By virtue of the conduct alleged above, Defendant Matza is liable to Plaintiff Atlas for
the substantial damages that they suffered in connection with their purchase of the
systems.
(b) Awarding monetary damages against Defendant in favor of Plaintiff Atlas
14
(c) Awarding Plaintiff Atlas the costs, expenses, and disbursements incurred in
(d) Awarding Plaintiff Atlas such other and further relief as the Court may
THIRD COUNT
(Misappropriation and Conversion)
56. Defendant Atlas repeats the allegations contained in paragraphs 1 through 55 and the
First and Second Counts.
57. Defendants’ actions constitute misappropriation and conversion of Plaintiff Atlas’
funds, to the detriment of Defendant Atlas.
15
FOURTH COUNT
(Duty Of Good Faith And Fair Dealing)
58. Defendant Atlas repeats the allegations contained in paragraphs 1 through 57 and the
First, Second and Third Counts.
59. By virtue of the foregoing, Defendants breached the implied covenant of good faith
and fair dealing with Plaintiff Atlas, which included the duty to deal honestly in-fact
with Plaintiff Atlas.
60. On numerous occasions from the onset of Plaintiff Atlas’s business relationship with
Sunray and Defendant until the present, Defendant breached his duty to deal
honestly in-fact with Plaintiff Atlas by misrepresenting and making false statements
about the systems Plaintiff Atlas was investing in, the SREC market, and the services
Defendant would provide after the systems were purchased.
61. Plaintiff Atlas suffered harm and damages as a result of Defendant Matza’s breach of
his duties of good faith and fair dealing.
16
FIFTH COUNT
(Unjust Enrichment)
First, Second, Third and Fourth Counts.
63. Defendant Matza have been unjustly enriched at Plaintiff Atlas’s expense due to the
actions described in more detail in the facts common to all counts.
17
SIXTH COUNT
(Breach Of Contract)
First, Second, Third, Fourth and Fifth, Counts.
65. Sunray and Defendant entered into several contracts with Plaintiff Atlas.
66. This included nine contracts for the investment into systems which Sunray and
Defendant breached by failing to deliver the systems that were described in the
contracts.
67. Sunray and Defendant breached the contract by collecting deposits from customers
and failing to transfer to Plaintiff Atlas the full deposits.
68. Defendant and Sunray breached these contracts by failing to properly install the
systems.
69. Defendant and Sunray breached these contracts by installing systems that were
smaller than what was paid for.
70. Defendant and Sunray breached these contracts by overcharging for the systems and
delivering fewer systems than was contracted for.
71. Defendant and Sunray breached its service contract with Plaintiff Atlas for the
systems.
72. Plaintiff Atlas entered into these contracts with Sunray and Defendant relying upon
the representations made by the Defendant.
18
73. In reliance upon the representations made by Defendant, Plaintiff Atlas acted to its
detriment by paying Defendant and Sunray valuable consideration.
74. By the actions described above, Defendant breached his contracts with Plaintiff Atlas,
causing damages to Plaintiff Atlas.
SEVENTH COUNT
(Common Law Fraud)
First, Second, Third, Fourth, Fifth, Sixth, and Seventh.
76. Defendant and Sunray told Plaintiff Atlas that it was going to build three systems at a
price of $3.50 per kw. In reliance upon this representation, Plaintiff Atlas paid a
19
substantial amount of money to the Sunray and Defendant. Defendant Sunray then
built only two systems at a price of $5.00 kw.
77. Defendant made the additional false representations stated in more detail above.
78. Defendant made these representations of fact either knowing them to be false or
with a reckless disregard as to whether they were true or false. At the time these
representations were made, Defendant knew them to be false and made these
representations for the purpose of inducing Plaintiff Atlas to rely thereon to its
detriment.
79. Plaintiff Atlas justifiably relied upon these misrepresentations of fact to its detriment.
80. The aforesaid conduct of Defendant constitutes common law fraud.
EIGHTH COUNT
20
(Negligent Misrepresentation)
First, Second, Third, Fourth, Fifth, Sixth and Seventh.
82. Defendant made the representations of fact described above either knowing them to
be false or with a reckless disregard as to whether they were true or false.
83. At the time these representations were made, Defendant knew them to be false and
made these representations for the purpose of inducing Plaintiff Atlas to rely thereon
to its detriment by investing in systems allowing Defendant to pilfer monies.
84. Plaintiff Atlas believed and justifiably relied upon these misrepresentations of fact to
its detriment and suffered damages.
85. The aforesaid conduct of Defendant constitutes negligent misrepresentation.
21
NINTH COUNT
(Negligence )
First, Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth Counts.
87. Defendant were negligent in the manner in which he installed the systems resulting
in a loss to the Plaintiff Atlas.
TENTH COUNT
(NEW JERSEY CONSUMER FRAUD ACT AS TO CUSTOMERS )
(N.J.S.A. 56:8-1, ET SEQ.)
First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth and Ninth Counts.
22
89. Sunray and Defendant engaged in business in the State of New Jersey in which they
are selling power through installing systems on Customers homes. These
Customers are Consumers as defined under the New Jersey Consumer Fraud Act.
90. Defendant and Sunray obligated to comply with the Consumer fraud Act when
dealing with New Jersey Consumers.
91. Sunray and Defendant failed to comply with N.J.C.A. 23:45A-16.1 by:
a. Failing to have a written contract signed by all parties and containing a
description of the work to be done and the principal products and
materials to be used.
b. Failing so set frothy the legal name and business address of the sales
representative or agent who solicited or negotiated the contract for the
seller:
c. Were negligent in the manner in which they installed the systems
resulting in a loss to the Plaintiff Atlas.
92. The violation of said regulations renders the violator strictly liable for violating the
Consumer Fraud Act, N.J.S.A. 56:8-2 et seq.
93. Defendant and Sunray assigned the Systems and the contracts with Customers to
Plaintiff Atlas. Defendant Matza is liable for the fraud committed by Sunray as a
officer, principal, owner and legal counsel. This violation of the consumer fraud act
and it’s liability extends to the Plaintiff. All 26 systems sold by Sunray and
Defendant to Atlas violate the New Jersey Consumer Fraud Act and therefore cause
liability to Atlas and loss of the entire Atlas investment.
23
(a) Awarding Plaintiff Atlas treble damages in an amount to be proven at trial,
together with prejudgment interest thereon;
for all treble damages losses and damages suffered as a result of the acts and transactions
complained of herein, including punitive damages where appropriate, together with
prejudgment interest from the date of the wrongs to the date of the judgment herein;
ELEVENTH COUNT
(NEW JERSEY CONSUMER FRAUD ACT AS TO PLAINTIFF )
(N.J.S.A. 56:8-1, ET SEQ.)
94. Plaintiff Atlas repeats the allegations contained in paragraphs 1 through 93 and
the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth ,Ninth Counts AND
Tenth Counts.
95. Plaintiff bring this action pursuant to the New Jersey Consumer Fraud Act (the “CFA”),
N.J.S.A. 56:8-1, et seq., in that they contracted to purchase and goods in the form of
systems from the defendant and defendants engaged in affirmative misrepresentations in
violation of the CFA.
24
96. At all relevant times, Sunray and Defendant was a seller of goods within the meaning of
the CFA.
97. Unfair deceptive acts or practices are defined and declared unlawful in N.J.S.A. 56:8-1 et
seq.
98. Defendants committed unlawful deception as proscribed by the CFA, specifically
N.J.S.A. 56:8-2 et seq., having done the following:
99. Defendants engaged in fraudulent and deceptive conduct in entering the contract to
purchase the systems after the price of SREC collapsed tending to deceive or mislead
consumers, including Plaintiff;
100. Defendants made oral and written statements that had the capacity, tendency, or effect of
deceiving or misleading Plaintiff;
101. Defendants misrepresented as to ability to complete the systems, and services them as
well as the revenue that they would produce from SREC sales in order to cancel the
contract to deceive Plaintiff; and
102. Defendant never disclosed to Plaintiff that the consumers had inferior credit scores and
would not be able to pay for electricity sold.
103. Defendants engaged in deception, fraud, misrepresentation, knowing concealment,
suppression, and the omission of material facts, with the intent that Plaintiff would rely
on the same;
104. Defendants’ action constitutes knowing omission, suppression, or concealment of
material facts, made with the intent that Plaintiff will rely upon such concealment,
suppression, or omission, in connection with sale of real estate transaction in violation of
the CFA.
25
105. Defendants’ actions, as described above, evidence lack of good faith, honesty in fact,
and observance of fair dealing so as to constitute an unconscionable commercial practice,
in violation of the CFA.
106. Such unconscionable commercial practices make Defendants liable to Plaintiff under
N.J.S.A. 56:8-2.
107. As a direct and proximate result of Defendants’ conduct, Plaintiff has sustained injuries.
108. As a direct and proximate result of these violations of the CFA, Plaintiff has suffered
ascertainable loss including but not limited to emotional distress, medical bills, economic
damages for which Defendants, jointly and severally, are liable to Plaintiff for treble and
actual damages. N.J.S.A. 56:8-19.
109. As a direct and proximate result of these violations of the CFA, Plaintiff have suffered
ascertainable loss for which Defendants, jointly and severally, are liable to Plaintiff for
attorney’s fees. N.J.S.A. 56:8-19.
110. N.J.S.A. 56:8-19 provides Plaintiff with standing to commence this action.
(a) Awarding Plaintiff Atlas treble damages in an amount to be proven at trial,
together with prejudgment interest thereon;
for all treble damages losses and damages suffered as a result of the acts and transactions
complained of herein, including punitive damages where appropriate, together with
prejudgment interest from the date of the wrongs to the date of the judgment herein;
26
Executed on: July 2, 2015 /s/ Michael Botton mb8412

Belmar, NJ 1314 Main Street,
Lake Como, NJ 07719
Telephone: (732) 894-3686
Facsimile: (732) 894-3688
Email: michaelbottonesq@gmail.com
Attorney for Plaintiffs Jossef Kahlon
& Atlas Solar Holdings, LLC
CERTIFICATION PURSUANT TO LOCAL CIVIL RULE 11.2
Pursuant to Local Civil Rule 11.2, I hereby certify that the within action is not the
subject of any other action pending in any Court, or of any pending arbitration or
administrative proceeding other than Troy Lambe et al v. Yossef Kahlon et al US District
Court Eastern District of New York 13-cv-3126(LDW)(GRB).
Executed on: July 2, 2015 /s/ Michael Botton mb8412

Belmar , NJ 1314 Main Street,
Lake Como, NJ 07719
Telephone: (732) 894-3686
Facsimile: (732) 894-3688
Email: michaelbottonesq@gmail.com
Attorney for Plaintiffs Jossef Kahlon
& Atlas Solar Holdings, LLC
27

Kaplan Atlas Solar Vs Matza

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Kaplan Atlas Solar Vs Matza

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Case 1:15-cv-03897-LDW-AYS Document 1 Filed 07/02/15 Page 1 of 27 PageID #: 1

UNITED STATES DISTRICT COURT

YOSSEF KAHLON a/k/a JOSSEF KAHLON,

State of New Jersey.

officer of Atlas Solar Holdings, LLC.

attorney admitted to practice Law in the State of New York.

controversy exceeds $75,000.

State of New Jersey.

ALLEGATIONS COMMON TO ALL COUNTS

1. Charles Matza is an owner and officer of Sunray Solar Corporation, (Sunray) a

3. Plaintiff Kahlon formed Atlas as the purchaser of the Systems.

solar industry and substantially relied upon Defendants’ professional expertise,

6. Defendant represented the offered investment opportunities as conservative income

their calculations of a SREC pricing support expectation that would result in a

gradual, orderly and predictable decline in year-over-year solar energy system

7. Sunray represented the offered investment opportunities as turnkey (passive

income) solutions to solar energy system ownership without the common

drawbacks of being an owner/operator (system maintenance, service calls,

collections, sale of SREC’s, etc.)

Defendant paying a total of $1,874,165.00 USD to Sunray in nine funding rounds in

order to purchase 26 specified solar energy systems, all of whose characteristics

system up front in full, prior to installation, interconnection and

certification/approval. Only after installation, interconnection and

certification/approval were complete would title to the systems be transferred to

Plaintiff Atlas from Sunray.

what Sunray has represented them to be.

predicted a gentle, controlled year-over-year decline in long-term SREC prices upon

the basis of these representations, Plaintiff Atlas made investment decisions,

undergoing an oversupply-driven price decline caused by the unsustainably high

made any of these critically material disclosures to Plaintiff Atlas.

aware that Plaintiff could not recover it’s investment.

rewards of the investment and their suitability for Plaintiff Atlas.

Atlas’ interests or eventual outcomes, steadfastly misleading Plaintiff Atlas that

caution might be warranted. Defendant Atlas’ interactions with Plaintiffs began to

Defendant had collected.

system which was installed on a property located at 162 Beachview Ave,

Manahawkin, NJ. The system was represented by Sunray and Defendant to be 51

property damages caused by Sunray and Defendant’s installers. In addition some of

Sunray and Defendant made several unwritten and unfulfilled promises to

they experienced with Defendant.

unable to produce at there full capacity, and or requiring modifications and or

resulting in damages to Plaintiff Atlas.

appropriate contracts and agreements as represented to Plaintiff Atlas.

price of $5.00 per kw.

New Jersey Securities Law and Federal Securities Law.

26. Sunray and Defendant failed to provide evidence or acknowledgement of the

installation of the systems as required under N.J.S.A. 56:8-2.22. The Power

Purchase Agreement provided to Customers by Sunray and Defendant did not

liability of Sunray as part of the assignment of the systems.

DEFENDANTS’ MATERIAL MISREPRESENTATION AND

presented information to Plaintiff Atlas prior to investing in the systems that

market could produce.

projects were not funded.

the specifications agreed upon by the customers.

they would service all the systems.

THE TRUTH EMERGES

which resulted in the price of SREC dropping by close to 80%.

damages to customers as a result of Sunray and Defendant’ or their agents’ actions.

of $5.00 per kw.

misrepresentations prior to investing.

RELIANCE AND ECONOMIC LOSS

invested a total of $1,847,165.00. In addition, the systems have required additional