$13.6 mil award in lawsuit vs. homebuilder

An arbitration panel has awarded $13.6 million to the owners of 460 Sun City Grand homes in one of the largest construction-defect cases in Arizona history.

The case against developer Del Webb Communities Inc., a subsidiary of PulteGroup Inc., began in 2008 with about 1,100 households. With close to 10,000 homes in the Surprise retirement community, the plaintiffs list, which includes Surprise Mayor Sharon Wolcott, makes up about 10 percent of the population.

Attorney Stephen Weber said that 413 of the households could not join the arbitration for legal reasons and are awaiting a trial date in Maricopa County Superior Court. That case is expected to go to court later this year or early in 2013.

After four years, some plaintiffs dropped out, some sold their houses and some died waiting for the legal system to run its course. That left 873 households.

"That was definitely a problem, taking four years when you have a senior community," said Weber, who is with the Phoenix firm Kasdan Simonds Weber & Vaughan.

The final arbitration awards released on Thursday ranged from several thousand dollars to close to $100,000 each for homeowners who moved into the affluent retirement community, only to find cracks forming in walls, floors and ceilings.

The $13.6 million award includes $7.9 million in damages and $5.7 million in legal fees and costs. The homeowners had asked for close to $50 million. Pulte attorneys had argued that the home repairs should total about $2 million.

James Zeumer, a vice president of PulteGroup, insisted that Del Webb had acknowledged that many homes involved in the case did need to be fixed. He said the company had been willing to make appropriate repairs but could not once the suit was filed.

"We plan to challenge this award in state court, as we believe several items are unacceptable, including the decision to award attorneys and experts nearly as much as the homeowners," he added.

Weber said that any challenge would be a "frivolous" suit since arbitration awards can be appealed only for a narrow set of criteria that focuses on corruption and bias.

Del Webb, which merged with Pulte Homes in 2001, began constructing Sun City Grand homes in the 1990s. Homeowners who spotted construction problems did not bring in attorneys until 2006. Given legal limitations, that meant that some homes already were too old for the case. Weber said the group filed under an implied eight-year warranty on new homes.

Del Webb/Pulte Homes sent out letters when the case started in 2008, warning homeowners that "greed too often is the motive" for construction-defect attorneys with "unhappy homeowners too often the result."

Weber said that the company had time to repair the homes before the case moved forward, but they failed to do so.

by Lesley Wright - Mar. 5, 2012 06:55 PM The Republic | azcentral.com



$13.6 mil award in lawsuit vs. homebuilder