Settlements adding up in Kitec class action lawsuit

Friday, May 15, 2009 | 2 a.m.

Kitec repairs

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Some plumbing companies that installed pipe fittings that allegedly led to clogged pipes have approved settlements with attorneys representing thousands of Las Vegas Valley homeowners.

This means pipes in at least 10,000 of an estimated 33,000 Las Vegas Valley homes linked to the class action lawsuit could soon be repaired, because their homebuilders and the manufacturer of the pipe fittings also contributed a share of the repair cost.

The District Court trial, seeking damages for homeowners whose plumbing has not been fixed, is scheduled to start June 2.

Starting more than a decade ago, thousands of valley homes were fitted with Kitec brass pipe fittings that, it turned out, are prone to deterioration when exposed regularly to the Las Vegas Valley’s famously hard water. This prompted a flurry of lawsuits earlier this decade.

The homeowners’ contention may seem simple enough — water funneling through the fittings allegedly corrodes the metal, leaching zinc particles that can clog pipes, sometimes causing decreased water pressure, leaks and bursts — but as is common with class-action lawsuits, the dispute is anything but straightforward.

Initially, homeowners’ attorneys targeted the manufacturer of the product, the homebuilders that approved its use and the plumbing companies that installed it.

The objective of law firm Kemp Jones & Coulthard: Persuade the manufacturer, homebuilders and plumbing companies to pony up their share of the cost to replumb each home with these fittings. The settlement money would be held by attorneys for the homeowners, who would commission the replumbing. So, most homeowners would get new pipe fittings, not cash. (Such replumbing typically costs $6,000 to $8,000.)

Over the past year and a half, representatives of Kemp Jones & Coulthard reached settlements with the Canadian manufacturer of the fittings, Ipex, and about one-third of homebuilders that used the fittings.

Ipex agreed to a $90 million settlement, which — if the 33,000-home estimate is correct — works out to about $2,000 per home, according to the homeowners’ attorney, Randall Jones.

Among the homebuilders that reached settlements are Pulte Homes, D.R. Horton, Wexford Homes, Astoria Homes, American Premiere Homes, Elegant Homes and William Lyon Homes. The companies that settled deny liability.

Plumbing contractors thus far agreed to pay an average of $2,000 per home, and homebuilders approved average settlements of about $4,500 per home. (The $8,500 per home average total includes attorneys fees, Jones said).

The builders of about 25,000 homes linked to the class-action suit reached settlements, Jones said. Plumbing companies that worked on about 16,000 homes have approved or tentatively approved settlements. Not all of these homes overlap, which is why fewer than 23,000 have not been — or are not planned to be — replumbed. Repairs take about two days.

One problem emerged once Jones’ firm began pushing for settlements: Some homebuilders that used Kitec filed for bankruptcy. But Jones believes the Kitec matter will still be resolved with these builders, pointing to a near-settlement with one of them.

Separate from this lawsuit, builders have repaired Kitec houses in Sun City Anthem. Richmond American, as part of the lawsuit, repaired pipes in some of their communities. And some homeowners, not waiting for litigation to play out, have repaired their pipes at their own cost. (Most hope to be reimbursed as part of the court proceedings.)

Plumbers say the fittings were last used widely here in 2006.

The trial is scheduled for four to six months, but Jones is optimistic it will be completed within three. Jury selection alone will be arduous: About 750 potential jurors must fill out a 70- to 80-page questionnaire.

Discussion: 1 comment so far…

By CynicalObserver

5/15/09 at 7:04 p.m.

Suggest removal

While the law firm of Kemp Jones & Coulthard may be doing a good job for itself racking up settlements of Kitec litigation, and thereby astronomical attorneys fees for the firm's partners, Kemp Jones & Coulthard are doing a terrible job communicating with the class members they purport to represent, let alone responding to contacts THEY INVITED when certain homebuilders settled.

When the local newspapers announced that Kemp Jones & Coulthard had settled with Pulte Homes, we contacted the firm, pursuant to their instructions, to register our home for repair. In Southern Highlands, and elsewhere in Nevada, Pulte built under the subsidiary name PN II, e.g. Pulte Nevada II.

When we contacted Kemp Jones & Coulthard to tell them we wanted a piece of the settlement on the Pulte claim, we gave them the proper information, that Pulte had built our home under the name PN II. Months and months later, we still have not heard ANYTHING from the law firm, even though their settlement announcement said Pulte homeowners would be contacted, in response to registration, to arrange for inspection and repair.

So the practical questions: (1) Did Kemp Jones & Coulthard malpractice by not including homes built by PN II in their settlement? or (2) Are Kemp Jones & Coulthard just grossly incompetent in managing plumbing repairs for the plaintiff class, including us? or (3) Does Kemp Jones & Coulthard really intend to eat up all of the settlement money in attorneys fees and costs, giving the actual members of the class nothing for their claims?

In real courts, like the Federal Courts and the courts outside of Nevada, plaintiffs counsel for class actions are ordered by the judge to follow a well documented procedure to communicate with class members and to implement "the settlement" if it is something other than cash. In this case Kemp Jones & Coulthard appears to be "winging it", asking its client class to contact the firm, but then never communicating with the class members as to "how to get their plumbing fixed."