Despite a notice and opportunity to repair (NOR) law and recent state Supreme Court rulings in Nevada that seek to curtail class-action lawsuits, such lawsuits are still popular among plaintiffs' lawyers in Las Vegas.
A high-profile lawsuit in which Las Vegas Valley homeowners sued over damage caused by allegedly faulty Kitec brass fittings, made by Canadian manufacturer Ipex, is adding to the stress of builders in the Las Vegas market, a region that has already been hard-hit by the ongoing downturn.
The original complaint, filed in February 2006, names Ipex and three local plumbing supply distributors. More recent lawsuits filed this past January name builders John Laing Homes, KB Home, and Woodside Homes. Up to 15 builders could be sued.
Randall Jones of Harrison Kemp Jones, the Las Vegas law firm that is handling the class-action lawsuit, says some 35,000 to 50,000 homes covering more than 260 subdivisions in the-Las Vegas area may have had the allegedly faulty Kitec fittings installed.
“The fittings have caused at least hundreds of thousands [of dollars] in damage from plumbing systems that broke,” says Jones.
Jones believes that the court will ultimately agree to consolidate all the lawsuits into a single case. The class-action suit calls for a jury trial and asks the court to require Ipex, the distributors, and the builders to fix the problem and pay damages as set by the court. Jones estimates that the cost to replace the allegedly faulty fittings ranges from $350 to $500 million, or roughly $10,000 per home.
At issue is a chemical reaction known as dezincification, which accelerates corrosion in brass fittings when they are exposed to oxygen and moisture. Brass is an alloy that is primarily composed of copper and zinc. When fittings experience dezincification, zinc leaches out of the brass fittings, leaving a blockage of zinc oxide that leads to leaks, restricted water flow, and breakage.
Jim Carraway, of Murchison & Cumming, the attorneys for Ipex, says the manufacturer's position is that there are no defects in the brass fittings. He says the products have not failed on such a large scale anywhere else in the country, they were pre-approved by the city of Las Vegas planning department, and that similar brass fittings from Ipex competitors that the manufacturer tested in the Las Vegas area are also having dezincification issues.
Carraway gives three reasons for the accelerated dezincification: a reaction from the chemicals the county uses to purify the local water; recirculation pumps used in many homes to improve hot water delivery, which sends water through a home's plumbing system more often; and the county's water softeners.
“We believe this is more of a county water problem,” Carraway explains. “There have been less than 100 actual failures,” he says, adding that Ipex believes that the builders who specified the Kitec fittings should be held liable for damages, since many of them have known for years that there was a local problem with brass fittings.
Before Jones filed lawsuits against the first three builders, he filed an NOR with at least 15 builders. The NOR law provides builders with an opportunity to make an offer to repair or make a monetary offer to fix a faulty product. The only builder that responded to the NOR was Pulte Del Webb.
Pulte spokesperson Caryn Klebba says her company made a monetary offer to 3,000 homeowners in Sun City Anthem of $7,800 per home to help repair the allegedly faulty fittings. She notes that roughly 2,500 homeowners accepted Pulte's offer.
After Pulte made the offer to the Sun City Anthem residents, Jones requested and was granted a hearing in February over the legality of Pulte's offer. Jones made the request largely because he felt the class-action attorneys should be involved in any settlement. The attorneys asked the judge to rule if the $7,800 offer was enough money to fix the problem, and if the 35-day period Pulte gave homeowners to accept its offer was ample time and in compliance with the state's new NOR law.
At press time, District Court Judge Timothy C. Williams had ruled against Pulte. The judge ruled that requiring the homeowners to sign a release to receive the $7,800 payment violates the NORlaw. Pulte maintains that its offer complies with the law. While the lawsuits against John Laing, KB, and Woodside are pending, the likelihood is the lawsuits against the builders and future complaints against home builders will be rolled into the general class-action lawsuit.