Union group part of lawsuit over home prices

By Steve Green

Saturday, May 9, 2009 | 12:45 p.m.

A union trying to organize construction workers helped put together a lawsuit accusing KB Home and Countrywide Financial of inflating home values and appraisals in Nevada and Arizona, a union spokeswoman said Saturday.

The plaintiffs in the suit, which was filed in Arizona, are members of the Alliance for Home Buyer Justice, a group that has been agitating against KB Home, Pulte Homes, Lennar Homes and D.R. Horton -- all builders active in Las Vegas. The alliance was created by the Laborers’ International Union of North America.

Laborers’ Union spokeswoman Dawn Page said the union and the alliance did the research for the lawsuit and that the law firm handling the case is doing so on a contingency fee basis, meaning the union, the alliance and the homeowner plaintiffs didn’t pay the law firm up front for its work.

A news release issued Thursday by the plaintiffs’ law firm didn’t disclose the participation of the union or the Alliance for Home Buyer Justice. The law firm, Hagens Berman Sobol Shapiro LLP, has offices in Phoenix and Seattle.

Page said the union and the alliance have been working with homebuyers in Southern California and Phoenix who were hurt by subprime loans and may also work with similar buyers in Las Vegas as well.

She said the lawsuit was not part of a union organizing campaign, but that in the future as the economy improves the union would like to represent workers who build houses.

On Tuesday, the Laborers’ union and the alliance plan an event at the Builder 100 Conference in Chicago to protest Pulte Chief Executive Officer Richard Dugas being awarded homebuilder “Executive of the Year.”

"The corporation’s customers might think differently, according to a group of Pulte homeowners who allege that the company relied on deceptive practices to push buyers into subprime loans and other risky mortgages. They also allege serious defects in homes built by Pulte," the union said.

Pulte and its Del Webb subsidiary in the Las Vegas area have previously denied union organizers’ allegations of defects in its homes.

Pulte is buying Centex Homes, another builder active in Las Vegas.

The Laborers’ union’s campaign targeting homebuilders says on its Web site:

"Nearly 1 million working men and women labor each day building America’s houses. At the hands of corporate homebuilders, they face unsafe working conditions, substandard pay and exploitation.

"Denied the most basic dignity and rights, LIUNA is helping residential construction workers unite for better lives. Working with homebuyers and community, civic and faith groups, those who build America’s houses will win living wages, safer job sites and quality construction skills – and homebuyers will know they are making a life investment in a home, not just a house that denies the American Dream to others.

"The historic effort has begun among thousands of hard-working men and women in metro Los Angeles, Phoenix and Las Vegas."

Pulte Homes was targeted in Southern Nevada by a different group of union organizers in March. The Building Justice campaign -- a partnership of the International Union of Painters and the Sheet Metal Workers International Association, with the support of the AFL-CIO -- organized a protest against Pulte during a Nevada State Contractors Board meeting in Henderson in March.

In the Countrywide and KB Home case, the law firm said Thursday it filed the suit in U.S. District Court in Arizona seeking class-action status against KB Home, Countrywide Financial and LandSafe Appraisal Services, claiming the three conspired to illegally rig home appraisals in KB developments in an effort to boost home values and sales prices.

The suit claims KB and the other defendants inflated home prices by as much as $280 million in Arizona and Nevada alone during a three-year period beginning in 2005.

KB Home and Bank of America, which now owns Countrywide, have denied the allegations.