Residential solar finance depends on a relationship that creates an unusual allocation of legal and operational risk. The lender may never meet the homeowner who ultimately becomes its borrower.
Instead, an installer or salesperson enters the home, sells the solar system, discusses projected savings and tax incentives, presents financing alternatives, and helps initiate the electronic process through which the system is financed.
That model has made residential solar available to homeowners unable or unwilling to pay the up-front cost of a system. But it also creates a fundamental question: When misconduct occurs at the point of sale, where does the solar dealer’s responsibility end and the lender’s begin?
On June 15, the U.S. Supreme Court denied certiorari in Migliore v. Sunlight Financial LLC, leaving intact the U.S. Court of Appeals for the Third Circuit’s precedential decision from October 2025 in Migliore v. Vision Solar LLC.
The decision is now final, and it meaningfully protects lenders from vicarious liability for misconduct by independent solar dealers. But it is not a safe harbor.
It highlights a continuing problem: Lenders need enough oversight to prevent dealer misconduct, even as the degree of that oversight can become relevant to whether an agency relationship exists.
The challenge, after Migliore, is how that oversight should be structured.
An Extraordinary Solar Transaction
The allegations in Migliore illustrate how badly a residential solar transaction can go wrong.
According to the complaint, a Vision Solar salesperson approached senior citizen Eva Migliore at her New Jersey home and offered her what she understood to be free rooftop panels.
Because the case reached the Third Circuit following dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the court accepted the well-pled allegations as true, and those allegations were remarkable. Migliore alleged she was never shown or asked to sign the relevant documents.
Months after installation, her son obtained documentation and discovered a sales agreement, a purported power of attorney and a 25-year loan agreement obligating her to pay Cross River Bank $99,749.82.
The documents were digitally signed and initialed in her name. Migliore alleged the salesperson created a false email address, sent the documents there and forged her signature.
The power of attorney is worth pausing on, because it complicates the theory Migliore ultimately advanced. That document purported to authorize Vision Solar to seek credit on her behalf, casting the dealer as the consumer’s representative, not the lender’s — an inconvenient fact for an argument that the salesperson was the lender’s agent.
She sued Vision Solar and its CEO, along with Sunlight Financial LLC and Cross River Bank, asserting claims under the New Jersey Consumer Fraud Act and the federal Fair Credit Reporting Act.
For the solar finance industry, the significant issue was whether the salesperson’s alleged misconduct could be attributed to the companies financing the transaction.
A Case That Turned on Agency
Migliore argued that the salesperson was acting as the lender’s agent, exposing them to vicarious liability.
The Third Circuit rejected that theory, first making an important procedural point: There is no relaxed pleading standard for agency. A plaintiff must plead facts making it plausible that the alleged wrongdoer actually was the defendant’s agent.
Under New Jersey law, an independent contractor can sometimes also be an agent, so the label does not resolve the issue. What matters is the question of control.
To answer this question, the Third Circuit applied the four-factor test from its 1994 decision in AT&T Co. v. Winback & Conserve Program Inc.
It considered whether the salesperson could conduct and conclude transactions for the principal, whether he could speak on the principal’s behalf, the degree of control over how the principal was represented to third parties, and whether the principal benefited financially from the resulting contracts.
Migliore plausibly alleged two of those four factors: marketing that generated business for the lenders, and some lender control over how their offerings were presented.
But a critical element was missing: The complaint did not plausibly allege that the salesperson could approve a loan, bind Sunlight or Cross River contractually, or otherwise conclude a financing transaction on their behalf.
That decision stayed with the lenders, and the distinction was central to the court’s conclusion. The court also found no fiduciary relationship, reasoning that fiduciary duties are not imposed in ordinary commercial transactions governed by contract.
Why Providing the Technology Was Not Enough
Sunlight provided a digital lending platform through which homeowners could apply for financing. Migliore argued, in substance, that Sunlight supplied the technological mechanism enabling the misconduct.
The Third Circuit found that insufficient. It said that providing the means through which misconduct occurs is different from possessing the right to control how an independent contractor uses those means.
That distinction has significance beyond residential solar. Point-of-sale lending increasingly runs through digital platforms connecting independent sellers with financing providers, and a solar salesperson at a kitchen table may initiate tens of thousands of dollars in long-term debt.
The Migliore court held that supplying that infrastructure does not, alone, make the salesperson the lender’s agent. But this does not eliminate the risk technology creates.
Even when a lender is not vicariously liable, what controls should prevent a salesperson from misusing the lender’s platform in the first place? That is where the legal analysis in Migliore meets operational risk management.
The Difference Between Compliance Oversight and Agency Control
Migliore pointed to significant oversight: The lenders allegedly required sales representatives to complete training on sales, marketing and compliance; required use of Sunlight’s technology; reviewed products and presentation methods; and retained rights over third-party sales organizations.
The Third Circuit still found this insufficient, recognizing that authority to train, evaluate and discipline independent contractors, without more, does not establish the control required for vicarious liability.
The wrong lesson would be that solar lenders should reduce dealer oversight to minimize agency risk. The better lesson is to distinguish compliance oversight from authority to act on the lender’s behalf.
A lender may legitimately prohibit deceptive sales representations, require compliance training, monitor complaints, audit transactions and terminate dealers whose conduct creates unacceptable risk.
But none of this requires giving a dealer authority to approve credit, bind the lender, speak for the lender or independently conclude a financing transaction.
The Deciding Factor: Function, Not Labels
The financing agreement in Migliore expressly disclaimed an agency relationship, but the Third Circuit did not treat that provision as dispositive. Calling a dealer an independent contractor does not make it one for every legal purpose.
Courts examine actual conduct and authority exercised in practice. As the court puts it, what matters most is the course of the relationship. What actually decided the case was the financing program agreement’s operational terms.
That agreement specified that Sunlight and Cross River, not Vision Solar, set the borrowing criteria, accepted applications through their own platform, decided whether to approve credit, communicated those decisions and delivered documentation to the applicant for execution.
The agreement also required Vision Solar to market under its own name. The court held that Migliore’s conclusory allegations that the salesperson could transact for the lenders “cannot surmount the [Federal Power Act]’s direct specifications to the contrary.”
That is the sharper lesson for counsel structuring dealer relationships: An agency disclaimer is close to worthless on its own.
A clause specifying who sets credit criteria, who receives applications, who decides and whose name appears in the marketing is what a court actually reads. And here, that clause resolved the case on a motion to dismiss, before any discovery.
If a dealer cannot speak for or bind the lender, training materials and consumer communications should not imply otherwise, and financing documents should be executed in a process the consumer, not the salesperson, controls.
How Acevedo Helps Define the Boundary
The Third Circuit’s treatment of Acevedo v. Sunnova Energy Corp., decided by the U.S. District Court for the Central District of California in 2024, shows why Migliore is not categorical protection for solar finance companies.
There, the plaintiff alleged that Sunnova required sales representatives to register with California as its employees, and that they could submit financing applications on consumers’ behalf. The Third Circuit distinguished those facts from Migliore.
The relevant question is whether the relationship between a lender and a dealer gives the salesperson authority characteristic of someone acting for the lender, rather than merely selling a product the lender independently finances.
The distinction is fact-specific, but offers useful guidance for companies designing dealer programs.
No Lowering of the Pleading Bar
The Third Circuit rejected the idea that agency allegations should ordinarily survive dismissal simply so a plaintiff can obtain discovery into the relationship. Agency must satisfy the same plausibility standard as any other element, and a plaintiff cannot merely label a seller the lender’s agent and rely on discovery to prove it.
The court reinforced this through its discussion of Lopez v. New Jersey Sun Tech LLC, another Sunlight Financial case, decided by the U.S. District Court for the Middle District of Pennsylvania in 2025.
The Lopez district court had let agency claims proceed by applying Jurimex Kommerz Transit GmbH v. Case Corp., a nonprecedential 2003 decision from the Third Circuit. But the Third Circuit called this approach a mistake.
For defendants facing agency-based claims generally, that holding may prove as important as Migliore’s solar-specific facts.
What Migliore Does Not Resolve
The lender’s victory should not be read as a broader vindication of the dealer channel, for two reasons.
First, the win was narrower than it appeared. Vision Solar LLC filed for bankruptcy and was terminated from the case, and Migliore voluntarily dismissed her surviving claims against Vision Solar NJ LLC and its CEO after the district court let some of those claims proceed.
As the panel put it: “She might have had viable claims against the salesperson’s company and its CEO. But she abandoned them.” A better-pled complaint, or one keeping a solvent dealer defendant in the case, could look different.
Second, the market conditions behind disputes like this one have not gone away. The Consumer Financial Protection Bureau’s August 2024 issue spotlight on solar financing found that dealer fees typically run 10% to 30% of a project’s cash price, and can exceed 50%, often added to loan principal without clear disclosure.
Lenders and installers commonly display a reduced net system cost, after subtracting a presumed 30% tax credit, in large type, while the actual loan amount appears small, even though “lenders and installers seldom if ever know the consumer’s tax situation.”
Many loans also assume a prepayment of roughly 30% of principal by Month 19, after which payments jump.
Those concerns are distinct from the agency question Migliore decided, but they show how closely financing and sales become connected from the consumer’s perspective.
A homeowner may not understand that the seller, the financing platform and the lender are separate entities with separate responsibilities. And a lender can prevail on vicarious liability while still facing complaints, regulatory scrutiny and reputational harm from conduct in its dealer channel.
The backdrop has shifted since 2024, too. The CFPB has narrowed enforcement, but state attorneys general have stepped into that gap.
Migliore’s own claims arose under the New Jersey Consumer Fraud Act, which permits treble damages and fee-shifting. This is a reminder that as federal oversight recedes, state statutes against unfair, deceptive, or abusive acts or practices are increasingly where dealer-channel risk concentrates.
What a Post-Migliore Oversight System Might Look Like
The Migliore decision suggests lenders can maintain meaningful compliance controls without transforming dealers into their agents. Six controls deserve attention.
Independent Borrower Authentication
Material obligations should be independently confirmed by the borrower whenever practicable.
The salesperson should not control every channel through which identity, consent and signatures are verified — the control that speaks most directly to what went wrong here.
Separation of Functions
The dealer sells the system and presents financing, while the lender retains credit approval, loan terms and the funding decision.
That allocation should appear in the governing agreement in operational terms, not just as a label.
Dealer Due Diligence
Before granting platform access, lenders should review an installer’s licensing, litigation, regulatory history, complaint record and use of subcontracted sales organizations.
Transaction Monitoring
The lending platform can flag anomalies: unusual cancellation rates, pricing outliers, complaint concentrations and patterns tied to particular representatives.
Dealer Termination Standards
There should be objective criteria for suspending or terminating dealers, while preserving the line between enforcing compliance and authorizing dealers to act on the lender’s behalf.
Complaint Escalation and Board Reporting
Repeated similar complaints should read as signals of systemic dealer problems.
Significant trends, suspected unauthorized transactions and regulatory inquiries should reach the board as enterprise-risk indicators.
The Lesson for Solar Finance
Migliore places a meaningful limit on attempts to hold lenders vicariously responsible for independent solar sales organizations.
A lender does not become responsible for every act of a salesperson merely because it provides financing technology, imposes compliance requirements, reviews the dealer’s activities and benefits financially when a transaction closes.
But the decision is not a reason to exercise less oversight. Solar finance operates where independent salespeople can initiate long-term consumer debt, and digital platforms make those transactions faster while magnifying the consequences when controls fail.
The challenge after Migliore is not to minimize dealer oversight to avoid agency. It is to structure that oversight correctly.
Lenders should preserve independent credit decisions, prevent dealers from binding or speaking for the lender, write those boundaries into agreements in operational terms rather than disclaimers alone, independently authenticate borrowers, and actively monitor the dealers and salespeople permitted to use the lender’s systems.
Migliore — now final after the Supreme Court’s denial of certiorari — gives solar lenders an important limitation on vicarious liability. While it does not eliminate solar finance’s dealer-control problem, it does provide a framework for managing it.
Rand Manasse is the managing partner at Green Lane Partners.
This article was originally published in Law360. The opinions expressed are those of the author and are for general information purposes only and are not intended to be and should not be taken as legal advice.
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