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This past Friday’s fairness hearing before Judge Tim Willimas was sought by the Class attorney’s for the purpose of 1) considering the fairness and legality of Pulte’s Offer (and accompanying General Release form) and 2) whether sanctions against Pulte are appropriate.

Clearly, the Class attorneys had other objectives in mind, such as making it clear to the judge that Pulte was a party to their class action, whether or not Pulte was a named defendant in the case. This jurisdictional issue, while highly technical, was argued at some length since the Class attorneys recognize that there is no legal precedent for their position in involving Pulte in the Class action, meaning that the matter of the court’s jurisdiction over Pulte represents unsettled law. Since the law is unsettled, that means there are potentially good grounds for an appeal to the Supreme Court should the judge rule in a materail way against Pulte.

One gets the impression that the Class attorneys are attempting to ensnarl Pulte in a web that ties them to their class action case, as opposed to the case being brought before a different judge under a different statue, such as the construction defect provisions of NRS Chapter 40. Pulte has and continues to argue that what they have done and are doing is not only correct but that their actions are mandated pursuant to the statutory requirements under NRS Chapter 40. Since this is not a hearing under Chapter 40, but, instead a hearing under a class action case to which Pulte is not a party, Pulte would argue that they have no business before this court since this court currently has no jurisdiction over the Chapter 40 matter.

Another objective in bringing Pulte before the court was to allow the Class attorneys to recover costs that have been already incurred or those that might be incurred in the future.

The courtroom gallery was filled with attorneys representing other parties in the class suit, such as IPEX, etc., as well as about a dozen residents from Sun City, including me. While no decisions were rendered by Judge Tim Williams, the judge appeared to be expressly concerned about the welfare of Sun City’s homeowners. After about 90 minutes and argument on both sides was concluded, I was surprised when Judge Williams asked whether there were any Sun City residents in the audience.

Judge Williams then proceeded to invite any homeowner who wished to speak to please do so. He said he wanted to hear from the homeowners, as if they were the real parties at issue in this hearing. The judge’s demeanor and what he said at the conclusion of the hearing led me and others to conclude, correctly I believe, that his court was going to take jurisdiction over Pulte and issues of the fairness of Pulte’s Offer. As to how that might translate into a court decision was unclear. However, Judge Williams made the following declaration. He said that he wanted to see that the homeowners were “protected” and that they were properly “informed.” We’ll known what the judge meant by his statement in about 2 weeks, if not sooner.

For the most part, those residents who rose to speak addressed three issues: 1) the need for a general release of all claims when the only issue was the Kittec plumbing system; 2) the need to make an informed decision about an inspection for a repair when it was not clear what Pulte was offering; and 3) the undue pressure on many homeowners to make some decision on initiating a request for an inspection in a few remaining days before the 35-day time limit expired since until that January meeting there was no information available on the issues and questions involved.

In his presentation, Robert Carlson, Pulte’s legal counsel, made the point that Sun City’s homeowners apparently not only knew what to do but were happy with Pulte’s Offer, noting that about 3,000 homeowners requested an inspection and almost 2,400 homeowners agreed with Pulte by accepting their monetary offer. As an interesting aside, Mr. Carlson said that 75 homeowners have filed their own Chapter 40 claims against Pulte, thereby taking themselves out of Pulte's offer as well as the class action to deal with Pulte on their own.

Mr. Carlson said that in the end, it all comes down to money and nothing the court does is going to change that fact. Either Pulte can be allowed to proceed under Chapter 40 and pay homeowners now a given amount to have their plumbing system repaired, or the homeowners can wait for several years for an uncertain resolution and an uncertain amount that may or may not be sufficient to effect a repair. In response, Randall Jones representing the class attorneys said that they do not wish in any way to interfere with Pulte’s plans to pay the homeowners but to be a part of those plans to assure that what was being offered the homeowner was fair and reasonable.

Pulte’s attorney glossed over a critical issue in his oral presentation. In doing so, I believe he misrepresented to the court the nature of what Pulte was attempting to accomplish in making their Offer. Mr. Carlson reiterated Pulte's position from day one, namely that Pulte was not making “an election to repair,” but, instead, was only making an offer “for monetary compensation” under NRS 40.6472(2)(b) so that the homeowner might make the repair on their own.

Randall Jones countered by reminding the court that Pulte has misread the statute [NRS 40.6472(2), reproduced below] by ignoring the plain meaning of the statute at (2)(a), which states that the contractor (Pulte) “must” state whether they have “elected to repair the defect or cause the defect to be repaired.” Pulte, according to Mr. Jones, cannot merely chose to ignore their statutory and mandatory obligations under (2)(a) and jump to (2)(b) since (2)(b) is clearly not an available option to (2)(a) as had been claimed by Mr. Carlson. While this argument is somewhat complex and tedious, it is critical to the class attorney's case. If Mr. Jones should prevail before the court on this point, it will have significant implications for Pulte and unknown consequences for the homeowners.

Mr. Carlson told the judge that Pulte’s Offer was essentially quite simple and straight forward. The repair (as determined by the homeowner) would merely replace the Kitec plumbing system with a new plumbing system, which if Pulte’s recommended contractor was used, would be the Wirsbo Plumbing System by Uponor. That homeowner-directed repair would correct the construction defect.

But there was a problem with Mr. Carlson's explanation. That explanation gave the court the unmistaken and false impression that the new plumbing system that would replace the Kitec Plumbing System would constitute “a repair” of the construction defect. That simply was not true. I rose to tell the court that Mr. Carlson had mislead the court and that the repair being proposed was not designed to correct the problem that the homeowner needed. What the homeowner needed was to find an acceptable substitute for the brass fittings that were breaking down due to dezincification. Pulte’s proposal, on the other hand, was not designed to address that need, although their proposal had the appearance of attempting to do so.

Following my comments, Randall Jones rose to address the court on what I had just said, reiterating the same point and advising the judge, paraphrasing Mr. Jones, “that is why we feel we need to be a part of the decision making process.”

I share the view of many that the involvement of the Class attorneys can pose some unwelcome consequences. However, I found Randall Jones’ argument that followed my comments to be persuasive, namely that the court might be in a position to help us resolve some of these unsettled issues. As individual consumers who are divided, we have absolutely no influence over the actions of Pulte in addressing our plumbing concerns. Pulte has sought to bring about a repair without telling us what that repair is or, more significantly, that the repair they have proposed will actually address the needs of the homeowner. In virtually all instances, Pulte's Offer fails to address the issue of the "bad" fittings, except for those in the attic.

As a matter of fact, Pulte has successfully evaded the dezincification issue by sending naïve and uninformed homeowners in search of plumbers who have a variety of “solutions” which invariably fail to address the issue of bad, dezincified fittings. I suggest that the replacement of up to 40 Kitec brass fittings with 40 brand new equally "bad" brass fittings, which is exactly what is happening in Sun City today, regardless of manufacturer, does not constitute a bona fide repair under the statute. A temporary band-aid fix is no repair at all—we are being sold on accepting what looks like a repair but in reality is only a mirage. Pulte has refused to deal with the dezincification issue that brought us to where we are today—the only real plumbing issue at stake insofar as the construction defect is concerned. A finger in the dike will last only so long.

So why did Pulte not deal with the real plumbing issue? One reason I can think of is that had Pulte assumed responsibility for the repair, they would be required to deal with the dezincification issue, as well as any potential future claims in the event of subsequent failure. If that were done, the cost of correcting the problem would likely be greater than what they had originally agreed to pay, especailly is future fitting failure was a likelihood from their proposed resolution.

As I see it, Pulte had two equally unacceptable options: 1) obtain by whatever means possible access to an acceptable DZR fitting that could be used to accomplish a meaningful repair, a task that would be far easier for a billion dollar corporation than any individual homeowner; or 2) eliminate all brass fittings in any re-plumbing effort by insisting that all transitions connections to the copper stub outs be made by using copper sweat connections. That second option would be more costly because it is more labor intensive and time consuming and would require greater skill along with improved or greater access to some areas of the home that are difficult to reach to make a proper sweat connection. In a sweat connection, the joint is heated using a torch and solder is melted into the connection. As a rule, soldered connections do not leak.

If you feel you must proceed and not wait for a better solution and are contemplating a Pex solution, one step you might wish to consider is to ask your contractor to substitute copper sweat connections in lieu of brass fittings in transitioning from Pex to the copper stub outs. This option is currently available.

For those who believe they can wait, I am advised there is a group of highly qualified technical professionals doing a thorough investigation into all aspects of our plumbing problems. Patience will be rewarded.

Given that the 45-day period for the promised payment to homeowners has past for some, we are happy to report, from third parties, that homeowners have begun receiving payment from Pulte.

NRS 40.6472 Response to notice of defect: Time for sending; content; effect of election to repair or not to repair.
      1. Except as otherwise provided in NRS 40.670 and 40.672 and NRS 40.6452, a written response must be sent by certified mail, return receipt requested, to a claimant who gives notice of a constructional defect pursuant to NRS 40.645:
      (a) By the contractor not later than 90 days after the contractor receives the notice; and
      (b) If notice was sent to a subcontractor, supplier or design professional, by the subcontractor, supplier or design professional not later than 90 days after the date that the subcontractor, supplier or design professional receives the notice.
      2. The written response sent pursuant to subsection 1 must respond to each constructional defect in the notice and:
      (a) Must state whether the contractor, subcontractor, supplier or design professional has elected to repair the defect or cause the defect to be repaired. If an election to repair is included in the response and the repair will cause the claimant to move from his home during the repair, the election must also include monetary compensation in an amount reasonably necessary for temporary housing or for storage of household items, or for both, if necessary.
      (b) May include a proposal for monetary compensation, which may include contribution from a subcontractor, supplier or design professional.
      (c) May disclaim liability for the constructional defect and state the reasons for such a disclaimer.
      3. If the claimant is a homeowners’ association, the association shall send a copy of the response to each member of the association not later than 30 days after receiving the response.
      4. If the contractor, subcontractor, supplier or design professional has elected not to repair the constructional defect, the claimant or contractor may bring a cause of action for the constructional defect or amend a complaint to add a cause of action for the constructional defect.
      5. If the contractor, subcontractor, supplier or design professional has elected to repair the constructional defect, the claimant must provide the contractor, subcontractor, supplier or design professional with a reasonable opportunity to repair the constructional defect.