Consumer May Challenge Authenticity of Electronic Signatures

Posted by Golden & Cardona-Loya, LLPMar 19, 20200 Comments

Authority: Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062

Consumers who have been victims of fraud in transactions related to solar power can seek redress in court.

In an era of electronic convenience, consumers are able to contract without physically signing documents. Electronic signatures are becoming more and more prevalent in various aspects of life. In California, an electronic signature is as valid as a physically signed one.

The California Court of Appeal in Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1067 noted that “the burden of authenticating an electronic signature is not great.” (Quoting Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 844; Civ. Code, § 1633.9, subd. (a) [an electronic signature is attributable to a person if it is the act of the person]; Evid. Code, § 1400, subd. (a); and People v. Skiles (2011) 51 Cal.4th 1178, 1187.)

However, Fabian presented a challenge to the validity of the electronic signature. “Because Fabian declared that she did not sign the contract, however, Renovate then had ‘the burden of proving by a preponderance of the evidence that the electronic signature was authentic.'” (Fabian, supra, at 1067.)

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The plaintiff in Fabian alleged that (1) Renovate America placed her into an alleged financing agreement for solar panels that were previously installed at her home by another company; (2) Fabian and Renovate discussed financing over the phone in Spanish (3) Renovate did not present Fabian with any documents to sign; and (4) that Fabian later discovered an alleged written assessment contract, in English, containing her forged signature. Fabian filed suit seeking to rescind the forged contract. Renovate petitioned to compel arbitration based on an arbitration provision found in the forged contract. The trial court denied Renovate's petition after providing the parties an opportunity to perform discovery on whether Fabian signed the subject contract. The Court of Appeal affirmed.

The Court of Appeal decided the presence of electronic initials and a signature were now sufficient to compel arbitration as a matter of law. (Fabian, supra, at 1068.) “Renovate offered no evidence about the process used to verify Fabian's electronic signature via DocuSign, including who sent Fabian the Contract, how the Contract was sent to her, how Fabian's electronic signature was placed on the Contract, who received the signed the Contract, how the signed Contract was returned to Renovate, and how Fabian's identification was verified as the person who actually signed the Contract.” (Id. at 1069.)

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The ruling is important in that fraud related to solar power and the installation of solar panels is becoming more and more common. Attempts to defraud consumers with home improvement contracts are also prevalent. In California, there are a number of consumer protection statutes that a consumer can file a lawsuit to recover damages. This ruling is important because if a consumer has not agreed to arbitration they can still pursue their case in court.