Builder agrees to $16 million settlement

A five-year legal saga took another small step Tuesday toward its conclusion.

Clark County District Court Judge Timothy Williams granted preliminary approval to the second of three potential settlements involving Richmond American Homes and a massive construction-defect case.

Richmond American agreed to pay more than $16 million to repair faulty Kitec plumbing fittings in more than 2,400 local homes, said Randall Jones, a partner in the local law firm of Kemp, Jones & Coulthard and co-lead counsel on the class action case.

The settlement is scheduled for final court approval June 22 as long as homeowners like the agreement.

The deal comes about a year after Richmond American agreed to pay more than $11 million to fix fittings in about 1,200 homes. About 1,000 of those homes have been repaired.

Plaintiffs' attorneys and Richmond American are discussing a third settlement, as both sides attempt to pinpoint how many homes might be party to a new deal, Jones said.

Richmond American and other builders have made multiple settlements, mostly because of insurance issues, Jones said. Different builders used different liability insurers from year to year, and some builders bought primary and excess insurance from varying companies. As settlements emerge and coverage tops out, secondary insurers enter the mix. And some insurers have been more willing to negotiate than others, Jones said.

Representatives of Richmond American and a local attorney for Kitec's maker, Canadian company IPEX, didn't return phone calls and e-mails seeking comment.

The class action lawsuit, which involves 32,000 area homes and more than two dozen builders, alleges that Kitec brass plumbing fittings corrode when builders pair them with plastic pipes.

Builders that used the fittings included Pulte Homes, Del Webb Communities, Signature Homes, KB Home and Woodside Homes. Plumbing companies named as defendants in the case include Sharp Plumbing, Classic Plumbing and Cox & Sons.

In January, Williams approved a joint motion for a $90 million partial settlement in the case, after plaintiffs' attorneys asked for $150 million and IPEX countered with a $15 million offer.

A May 18 trial is scheduled for defendants who don't settle. Jones said about five builders of the 25 builders in the lawsuit might go to trial.

The lawsuit against KB Home is scheduled for trial in June 2010 so the builder has more than a year to decide whether it will settle, Jones said.

Most homeowners in the case won't receive cash. Rather, they'll receive free repairs of their Kitec fittings. The only exceptions: Homeowners who paid for their own repairs after their Kitec pipe fittings leaked. About 1,000 of the 32,000 homes in the lawsuit leaked before repairs could be made, Jones said.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.