Wednesday, Dec. 3, 2008 | 10:06 a.m.
The developer of the Sun Cities in the Las Vegas Valley has reached a tentative settlement in a class action lawsuit over faulty plumbing.
Del Webb and its Coventry Homes of Nevada subsidiary agreed in principal on Nov. 6 to pay $27.2 million toward replumbing about 4,200 homes with Kitec plumbing fixtures, attorneys said Tuesday.
The total includes attorneys fees, administrator costs and a contingency fund for custom repairs along with the actual installment of new plumbing.
That works out to about $6,500 per house, or $1,300 less than Pulte Homes, Del Webb's parent company, offered Sun City Anthem owners in December 2006 to settle early.
Pulte offered residents in Sun City Anthem, a community in Henderson, $7,800 to replumb their homes and required them to sign a form releasing the company from any future plumbing problems. Residents who signed the form also assigned their rights in the class action suit to the company.
The money collected in the class action suit will compensate contractors who perform the replumbs. Homeowners won't receive the money directly, unlike those who took Pulte's early offer.
About 2,700 homeowners signed the form and replumbed their homes already at a cost of $21 million for Pulte, said company spokeswoman Jacque Petroulakis.
"Pulte was the first and only home builder to make an offer of compensation directly to its homeowners. As a result, the majority of affected homeowners in Sun City Anthem have already been able to make repairs to their homes," she said.
It's not known where each home is located, but the settlement potentially affects residents in all Del Webb communities in the valley including Sun City neighborhoods in Summerlin, Anthem, MacDonald Ranch and Aliante, Petroulakis said.
The class action suit seeks an average of $10,000 per home and includes a combined 28 home builders and plumbers who installed the Kitec fittings. Kitec manufacturer, IPEX, settled for $90 million.
Homes in Del Webb communities throughout the valley will receive $2,600 from IPEX and up to $6,500 from Del Webb for a total of about $9,100 per house.
That doesn't mean those who turned down the early offer will be shortchanged, said Randall Jones of Harrison, Kemp, Jones & Coulthard. The firm represents the class action plaintiffs and estimates about 35,000 homes in the valley have the defective Kitec plumbing.
The actual payout for each home in the class action suit will depend on the size of the house and how many sinks, showers and other fixtures it has, Jones said.
The homeowners who took the $7,800 offer from Pulte may still receive part of Del Webb's class action settlement funds and those who had repairs done completely out of pocket will be reimbursed their share, Jones said.
"The people that replumbed on their own, that didn't take the $7,800, they're going to get their pro rata share reimbursed to them," Jones said. "But the people that had their house replumbed, the biggest difference there is presumably, they didn't get the warranty that we're going to give the homeowners that waited."
The warranty for those in the class action suit is on parts and labor from 25 years to the life of the house, depending on which plumber does the repairs, and transfers to subsequent homeowners if the house is sold, Jones said.
The work in the class action suit includes laying new pipes under the roof that will bypass the existing plumbing system.
Jones' law firm will oversee the claims administrators who will monitor the contractors making the repairs. The homeowners will have to sign off on the completed work.
Water causes the brass Kitec fittings to corrode and zinc from the brass builds up in the pipes restricting flow and eventually causing the pipe to break.
IPEX issued a recall on all Kitec brass fittings in 2005. The company denies liability and has claimed in the lawsuit that Southern Nevada's hard water is to blame for failures.
A preliminary hearing on the Del Webb settlement is scheduled for Dec. 22 with District Court Judge Timothy Williams. A fairness hearing should be set at that time, which will formally resolve Del Webb's participation in the class action suit.
The settlement does not remove Pulte Homes' other communities from the lawsuit, Jones said.
Jeff Pope can be reached at 990-2688 or [email protected].