David's Anthem Journal

Kitec Class-Action Attorneys Issue Letter to Class Members

In an e-mail dated September 21, 2007, class-action attorneys in the lawsuit against Del Webb/Pulte Homes over the Kitec issue sent an e-mail update to members of the class. The e-mail reports the results of a settlement conference held that morning.

Ron Johnson has published the text of the letter on his SCA View, and I urge all who are interested in the matter to click on this link to read the letter:

http://scaview.org/ClassCouselEmails.html

Report on Latest Kitec Court Hearing

SCA resident Ken Anderson attended the latest court hearing in the Kitec class-action case, held Thursday morning, July 26, at the District Court.

Ken was kind enough to send me a summary of the hearing for sharing with blog readers. His report follows.

---------------

I'm pleased to report some progress towards the resolution of the Kitec
defect problem. Judge Bell opened the discussions at 9:30 AM in a
relaxed setting without the normal court room formality. He stated his
desire to achieve an agreement between the parties in a relaxed
environment as opposed to having to go to trial.

Randall Jones presented a proposal to Judge Bell and Mr Carlson, lead
attorney for Pulte. He stated that many other prominent national
homebuilders have accepted the terms of that proposal to resolve their
constructional defects cases in the Las Vegas valley. There were several
Pulte exec's in the court room but they were not identified. Judge Bell
ask that the court room be cleared except for the attorneys and further
confidential discussions were conducted for about 15 minutes. The
Settlement Conference was continued until Thursday 08/02/07 to give
Pulte time to consider the terms of proposal.

Hopefully, Pulte will comprehend the wisdom of accepting the proposal
rather the forcing this conflict into trial. Overall we spent 9:00AM to
9:30AM in Judge Williams court room for a hearing covering one of the
named plumbing contractors arguing for relief based on the manufacturers
complicity. We were in Judge Bells court from 9:30Am to 11:00AM less
about 15 minutes for confidential discussions between the judge and the
attorneys.

More Repipe Specialists Seminars Scheduled

Due to popular demand, Repipe Specialists, which offers both an all-copper Kitec remediation and a less-expensive Wirsbo remediation, has scheduled two additional seminars. They will both be held at Buckman's Tavern in the Revere Clubhouse as follows:

Tuesday, July 31 at 3:30 p.m.

Tuesday, August 7 at 3:30 p.m.

Attendance is by reservation. Call 1-800-737-4746.

Those considering attending one of these seminars should keep in mind that it is not a sales presentation, although it should not surprise you that Repipe Specialists will be happy to offer you a home visit to price the job for you. More importantly, the seminars offer an opportunity to understand the exact nature of the Kitec problem and to become aware of the various remediation options, the proper type of materials to use, etc.

In the interest of full disclosure, I note that we have received an in-home estimate from this company but have not yet signed a contract.

Still More Repipe Specialists Seminars Scheduled

The hunger of our residents for information about remediation of their Kitec problems is being manifested by the strong demand to attend the seminars that have been conducted by Repipe Specialists.

For example, a third seminar was added to the two that had been scheduled for today, July 3.

The company has now scheduled four more seminars as follows, all to be held at Buckman's Tavern:

Tuesday, July 10: 3:30 and 6:30 p.m.

Monday, July 16: 3:30 and 6:30 p.m.

Attendance is by reservation only. You must call Repipe Specialists at 1-800-737-4746 if you wish to attend.

These seminars provide an obvious marketing opportunity for the company. But the real value to us as homeowners is the education attendees at the seminars receive in the absence of a commitment by our Board of Directors to provide some protection for the ad hoc group of highly qualified homeowners who have spent a great deal of time researching the issue and would like to share their results with the community. Augmented by a PowerPoint slide presentation and actual samples of defective products and the types of products used in the remediation process, Repipe Specialists representatives explain the nature of the problems and describe the factors to consider in making repairs via the Wirsbo method and the all-copper method. And they allow plenty of time for questions.

Reporter's disclosure: As of this writing, I have not had our Kitec remediation job priced, nor have I made any commitments as to which company we will hire to do our work. What I took away from the seminars we attended was a sense of having been well educated.

Repipe Seminars Sold Out; New Seminars Added

The phones started ringing at the offices of Repipe Specialists first thing Monday morning, after readers saw the blog post about the Kitec seminars being held on June 27, and before long both seminars were fully booked.

As a result, the company has scheduled two additional seminars.

Date: Tuesday, July 3.

Place: Buckman's Tavern

Times: 3:30 p.m. and 6:30 p.m.

Attendance by reservation only. The number to call during weekday business hours is 1-800-737-4746.

The room that will be used on July 3 does not hold as many people as the room being used for the first seminars. So call early if you are interested in attending.

Repipe Specialists Holding Kitec Seminars

(click on photo for larger image)

As many of you may know, an unofficial group of highly qualified residents has been examining the Kitec plumbing issue with an eye toward eventually informing affected homeowners of their best options for remediating their problems. The group has been reluctant to release its findings to the general public because of concerns that include issues of liability. But it is hoped that some sort of official Association approval will soon be obtained for that propose.

Some of you may already have done business with a California-based company called Repipe Specialists, which specializes in copper piping systems that come with a lifetime guarantee. With the encouragement of the ad hoc residents' group, Repipe Specialists obtained a Nevada business license earlier this month, has become involved with some homeowners here, and is now going to present informational seminars at Sun City Anthem.

The seminars will be held as follows:

Date: Wednesday, June 27

Place: Buckman's Tavern

Times: 3:30 p.m. and 6:30 p.m.

I'm told the room holds only about 40 people, so reservations are required if you want to attend. They will probably schedule additional seminars if they are over-subscribed.

Make your reservation by calling 1-800-737-4746.

To browse the Repipe Specialists website: www.1-800-repiping.com.

Kitec Repair - Price Going Up?

One of the things I found troubling about the take-it-or-leave-it offer of a check for $7,800 from the developer in lieu of Pulte's simply handling our Kitec repairs itself is this: There was no guarantee that the prices offered by various contractors to do the job would not increase by the time a homeowners' work was performed.

A report I've received from blog subscriber John Simons tends to confirm this apprehension.

Noting that a flier from Las Vegas Drywall & Stucco stated that the company would do the post-replumb repair for $2,000, John says he recently learned that they are now apparently charging $2,500 to do the work.

"I called them and told them about the flier they mailed to me," John reports, "and (a representative) said, 'I can raise my price anytime I want.' When I mentioned the flier, he said that did not matter, that they would not honor the flier."

Pulte Clarifies Kitec Reimbursement Policy

In order to clarify Pulte's plans and policy regarding the issuing of checks related to Kitec remediation, the company's local public affairs representative has asked me to share the following message with our readers, published verbatim:

-----------------

Hi David,

I read your recent blog posting with the updated Kitec information…thank you very much for sharing it with residents. I did want to clarify one point for you and your blog readers. The letter states: "...in light of the court’s ruling, Pulte/Del Webb cannot continue to perform inspections. For those homeowners who have returned releases but have not had inspections, we will not be able to issue checks at this time." I believe that you and others may have interpreted this to mean that if you haven't had an inspection yet, you are out of luck at the present time. This is, fortunately, not the case.

The letter goes on to state: "For those homeowners who have returned a properly executed release, but have not had an inspection performed by a Pulte/Del Webb consultant, you can still qualify to receive the $7,800 by providing written certification from your own inspector or plumber that your home contains a Kitec plumbing system." In short, an independent plumber or inspector (whom can be one in the same) can take the place of a Del Webb inspection, as long as the existence of Kitec plumbing is certified in writing by that plumber/inspector and the homeowner.

Lastly, the letter concludes with: "For homeowners who returned a properly executed release and had work done before an inspection was performed, you may submit a copy of the plumber’s invoice in lieu of a written certification from the plumber." Again, if a plumber and homeowner certify that a home had Kitec, the homeowner must only submit this proof to Pulte Homes in order to qualify for their check.

In short, one's own plumber/inspector can take the place of a Pulte inspection at any time. Homeowners wishing to move forward with repairing their systems and receiving the $7,800 check should schedule a plumber to come and verify the presence of Kitec in their home, and then mail proof of this to Pulte Homes. We've hopefully addressed all of the possible circumstances and in doing so, can get homeowners their repair checks. The release form must also be sent to Pulte in all circumstances listed above.

Pulte Letter States Company's Plans Following Recent Court Decision

On March 19 I sent an e-mail message to Sasha Jackowich, Pulte public affairs officer, asking her if the company planned to issue a statement to our residents to indicate what actions it would be taking as the result of the recent court decision by Judge Timothy Williams.

At the Tall Mesa Men's Group's candidate forum on March 20, I asked Board candidate Jeremy Fritz, a Pulte executive, about this and he replied that he was aware of my message and knew it was being circulated among company management for a response.

Pulte has now issued the following open letter to residents, which is reprinted below in its entirety. I interpret this letter to mean that if you had the proper Kitec inspection to determine the presence of Kitec in your home, you will soon be receiving your check -if it hasn't already arrived- regardless of whether the work has already been performed or has not yet been performed. But if you haven't had the inspection yet, Pulte will not schedule inspections at this time, and you will have to wait for further developments.

--------------------

March 20, 2007

Dear Sun City Anthem homeowners:

On March 14, District Court Judge Timothy C. Williams, the judge presiding in the Kitec/Ipex class action lawsuit, issued a ruling invalidating portions of the monetary offer Pulte Homes made to residents of Sun City Anthem regarding their Kitec plumbing systems.

We disagree with the judge's ruling and are in the process of reviewing this issue with our legal counsel to determine our options.

Pulte/Del Webb is not, and never has been, a party in the class action lawsuit against Ipex. We believe our compensation offer of $7,800 to homeowners complied in all respects with Nevada’s Notice of Repair statute (N.O.R.) NRS Chapter 40. In addition, we believe that our offer is entirely independent of the class action lawsuit.

The N.O.R. statute is designed to provide a process for homeowners and builders to resolve construction disputes without the need for lawyers, their fees and the expense and delay of litigation. We followed the procedures in the statute in order to provide a prompt resolution of the Kitec issue for our homeowners.

We do not agree with the class action lawyers who filed this lawsuit that any offer made by Pulte/Del Webb under NRS Chapter 40 to homeowners who they claim are members of the class must be approved by the judge in their case.

In the meantime, we intend to continue issuing checks to Sun City Anthem homeowners who have signed and returned properly executed releases, and where an inspection has confirmed the presence of Kitec. Due to the large number of homeowners involved and uncertainty caused by pending court decisions, some delays have occurred with inspections and distribution of checks.

We have already issued checks to a number of homeowners. We plan to distribute checks to all remaining qualifying homeowners, approximately 2,000, within the next two weeks. If you have returned a properly executed release and have had your home inspected by a Pulte/Del Webb consultant, there is nothing further you need to do.

However, in light of the court’s ruling, we cannot continue to perform inspections. For those homeowners who have returned releases but have not had inspections, we will not be able to issue checks at this time. Again, we strongly disagree with the court’s ruling and sincerely apologize to those homeowners for the inconvenience created by the class action lawyers.

For those homeowners who have returned a properly executed release, but have not had an inspection performed by a Pulte/Del Webb consultant, you may still qualify to receive the $7,800 by providing written certification from your own inspector or plumber that your home contains a Kitec plumbing system. . You must also certify by signing the statement from the inspector or plumber that your home contains Kitec. A copy of an invoice can be used as certification, but is not required. Upon receipt of the certification, we will issue a check to you within two weeks.

For homeowners who returned a properly executed release and had work done before an inspection was performed, you may submit a copy of the plumber’s invoice in lieu of a written certification from the plumber. In that case, you will also need to sign the invoice to certify that your home had a Kitec plumbing system.

Sincerely,
Patrick Aulds, Division President
Pulte Homes

Breaking News: Court Rules Broadly Against Pulte in Kitec Case

In a ruling expected to take about 10 days to deliver but which actually took nearly a full month, Clark County District Court Judge Timothy Williams ruled broadly against Del Webb/Pulte Homes March 14 in the Evidentiary Fairness Hearing involving Pulte's plan for addressing the Kitec plumbing problem in Sun City Anthem. The hearing was sought by the attorneys pursuing the class-action case involving Kitec.

These were among the findings of fact the Court made:

Pulte's October 20, 2006, notice to residents of Sun City Anthem whose homes contained Kitec, set and performed inspections, and offered to settle Class Member Claims, was unauthorized by the Court.

On January 8, 2007, Pulte sent letters to affected homeowners offering them $7,800 to settle Kitec claims. Although Pulte frames the offers simply as proposals for monetary compensation, the Court says, "Pulte's claim is illusory and contrary to its own actions."

The Pulte offer was not a "simple or pure" offer of monetary compensation resulting from repair-cost estimates submitted by Anthem homeowners. "Instead, Pulte secured the repair bids and based the $7,800 proposal on its own repair estimate."

The offers of money made by Pulte, coupled with repair estimates, the securing of bids and arrangement of repairs by contractors, etc., is "much more than a simple proposal of monetary compensation. Because of the way Pulte is controlling the repair and replumbing of the Anthem homes, the Court said, "the Pulte offer is not merely monetary compensation but the exercise of the right to repair."

The Court said the general release demanded as a condition of receiving payment from Pulte "is in violation of NRS 40.648.4."

The 35-day deadline for homeowners to respond to the Pulte offer was not valid because the statute was not complied with in terms of the offer containing a "clear and understandable statement notifying the claimant of the consequences of his failure to respond or otherwise accept or reject the offer of settlement." The Court added that a number of material issues were never disclosed to homeowners in the offer. The Court added: "Because of Pulte's failure to inform Anthem homeowners of these material issues, it was improbable for Anthem homeowners to make an informed decision. Thus, any non-acceptance of the offer within 35 days will not be considered a rejection."

These were among the Conclusions of Law made by the Court:

The Court has jurisdiction over Pulte's Offer and Release.

Pulte's offer in the amount of $7,800 coupled with soliciting bids, arranging repairs by the contractor, etc., constitutes an election to repair under Chapter 40.

Pulte's Release is in violation of statute and is an attempt to circumvent the oversight of the Class claims by the Court.

Pulte's offer did not adequately and fairly address and inform Anthem homeowners of the consequences of acceptance, assignment and/or rejection.

The Court made these orders:

Pulte has voluntarily appeared and injected itself under the general jurisdiction of the Court for the purposes of offers and settlements with Anthem Class members.

Pulte's release document is in violation of Nevada law.

Pulte's offer constitutes an offer to repair under Chapter 40.

Homeowners' failure to accept Pulte's offer within 35 days shall not be considered a rejection as contemplated by law.

"IT IS FURTHER ORDERED that Class counsel, upon motion and hearing, shall consider the award of reasonable attorney's fees and costs for all motions related to ex-parte communications with Class counsel and reasonable attorney's fees and any costs regarding communication with Class members related to this matter."

What does all this mean? Well, the Court ruling says Pulte acted illegally in making its offer and allowing a 35-day period to accept it based on a letter that was found to be legally inadequate. The Court found, in effect, that Pulte was interfering with the prosecution of the class action, and  its finding seems to suggest that responsibility for the repairs rested with Pulte.

This obviously leaves many unanswered questions, such as: How does the class action proceed from here? What should affected homeowners who haven't yet had their repairs do now?

My friend Ken, who sent me a copy of the Court decision on Thursday, raises the following questions, which have been put to the class-action attorneys, hopefully to produce answers that will benefit our homeowners:

If the Pulte release is a violation of statute, what is the status of the releases that were executed and sent in?

For those who sent in releases but have not yet had the work done, is the release now voidable by homeowners?

Can the homeowners expect Pulte, who the Court deemed as "causing the repair," to allow the replumbing contractors to perform their work and reimburse them accordingly?

This will obviously raise many more questions than it answers. We now need to see what Pulte's response is and how the class-Acton attorneys interpret and react to the ruling.

My personal feeling is that this ruling may be an important step in the process of having Pulte do what I've previously stated it should have done in the first place: Confirm the existence of the problem in a home and then get it fixed, withoiut requiring homeowners to arrange their own repairs.

Ron Johnson has produced his usual thorough analysis on his SCA View-Journal site, including a link to the actual Court ruling, which I recommend you read if you are affected by the Kitec problem.