Tesla offered $5,000 to a homeowner whose $110K Solar Roof never produced power. A judge has deemed it liable for fraud

Conroy estimates fixing the damage to his roof would cost more than $2.5 million. Tesla [NASDAQ: TSLA], at one point, reportedly made a counter offer of $5,000, according to a lawsuit over the construction failure.

The Musk connection

Tesla solar roofs were first introduced in 2016. CEO Elon Musk, at the time, presented them as an option that costs less than conventional roofing and solar panels, and spent $2.6 billion to acquire solar panel installer SolarCity. Within 10 years, however, Tesla discontinued the product.

Conroy’s case presented internal communications about his experience as evidence, with several high-ranking officials on the chain. One message his legal team submitted as an exhibit, for example, showed Bobby Yang, Tesla’s director of model engineering, discussing the project with others and using the term “experimenting” in regard to Conroy’s house. The message also indicated daily progress reports were being sent to Musk.

Tesla, last month, accepted liability for three of the five claims in Conroy’s suit as the company stipulated to breach of warranty, breach of contract and negligence. However, it continued to fight claims of fraud and negligent misrepresentation.

Judge Cynthia Freeland, who is overseeing the case, had sanctioned the company twice already, with penalties totaling just under $29,000, for failing to produce documents. With both of those financial sanctions, she warned that issue sanctions, which essentially declare that disputed facts in the case are taken as established, could follow.

On Sept. 11, she followed through on that, saying Tesla was liable for fraud and negligent misrepresentation, and future hearings would be focused on compensatory and punitive damages.

Tesla has asked the judge to reconsider that ruling, but she has reportedly refused. The case is still ongoing, and Tesla has asked the California Court of Appeal to reverse the order, saying it is “unduly punitive” and violates due process.