Builder urges buyers to remain in lawsuit

Grace Leong

Wednesday, Oct. 16, 2002 | 11:01 a.m.

Las Vegas home-building giant Del Webb Nevada Communities, the defendant in a Sun City Summerlin construction defect lawsuit, is in the unusual situation of asking its home buyers to press ahead with the litigation.

Four Sun City Summerlin homeowners filed a class action suit last July against Del Webb, alleging leaks in underground unsleeved hot-water copper plumbing caused by corrosion from the soil.

The class of 3,805 homeowners was certified in January and was identified as all owners of homes with unsleeved copper piping installed after July 17, 1991.

Del Webb spokeswoman Allison Copening said the company denied responsibility for the defects because the corrosion was a "naturally occurring phenomenon and not a construction defect situation."

"We weren't aware that this situation with corrosion could have happened. As such we're not at fault," she said. But the builder said that since 1996, it has voluntarily replaced copper pipes in 457 of the 3,805 homes with corrosion-resistant pipes and has been reimbursed by its insurance carriers.

Del Webb said it has no plans at this point to sue its subcontractors for indemnity.

Del Webb wrote an Oct. 4 letter to the homeowners, who had been given notice by their attorneys they had until Nov. 15 to either opt out or remain in the suit. Del Webb recommended they stay in the lawsuit to protect themselves.

Bruce Mayfield, the plaintiffs' attorney, said he was pleased with Del Webb's response to the lawsuit and will continue to work with the builder to get the problem resolved for Sun City Summerlin homeowners.

"To date, Del Webb has repaired every instance of (corrosion) brought to our attention at no cost to the homeowner," Del Webb said in the letter. "However, due to the certification of the class, Del Webb is now being forced to deal with this issue through the class-action process."

"Given that Del Webb purchased insurance to cover situations like (this) and class-action litigation, decisions must now be made in consultation with our insurance carriers," Del Webb said. "We had hoped to offer our homeowners an extended warranty on the underground hot-water plumbing in lieu of participating in this class-action. However, our insurance carriers would not agree to this arrangement."

"If you opt out of the lawsuit and your hot-water plumbing is damaged by (corrosion), we cannot voluntarily repair your home without risking the loss of our insurance coverage," the company said. "All the repairs to date have been covered by our insurers."

"But if the homeowners remained in the suit, there's a high likelihood there'll be funds within a settlement, when one is reached, to cover the repairs. We fear that some of our residents' loyalty to Del Webb may cause them to opt out of the suit, which would cost them an opportunity to be covered should they experience (corrosion) problems in future," Copening said.

Construction defect attorney Nancy Quon said homeowners may want to opt out of a class-action suit because they may have no corrosion problems at this point or they may not want to disclose any defects in a home they may be planning to sell.

"These homeowners may be thinking that disclosure of the defect will affect the value of the homes and make it more difficult to sell," Quon said. "But disclosure laws in Nevada are stringent and if you have a class-action lawsuit pending and you've opted out and don't report that, the new owner could sue you for non-disclosure if the problem crops up under his or her ownership."

Future owners of the home may not be adequately insured for damages should corrosion occur after a class settlement has been reached and the previous owner had opted out, she said.

Mayfield said the plaintiffs want repairs to be made to all plumbing systems that will fail due to the corrosion.

"We want a sum of money that will provide for repairs of all failures due to the corrosion. We believe all of the hot-water copper pipes will fail in the future," he said.

While Del Webb declined to disclose the potential total cost of repairing the homes or the cost of repairing each home, it disputed the plaintiffs' claims that hot water piping at all 3,805 homes will be affected by the corrosion.

"There's no guarantee that all those homes will be affected by the corrosion, so it's impossible to assess how much the total job cost is," Copening said. "If you have a cavity in your tooth, you're going to get a filling done for that tooth but you're not going to cap all your teeth because of the potential of cavities."