Answers from Pulte / Del Webb to Questions Posed By the Sun City Anthem Homeowners Association Regarding Kitec

In an effort to provide written clarification to the questions discussed at the Sun City Anthem Association meeting on Sunday, Jan. 7, and in response to the written answers circulated by class-action lawyers, Pulte / Del Webb has prepared the following responses.  We understand and appreciate that some homeowners may disagree with Pulte / Del Webb's approach to resolving the Kitec plumbing issue. However, we find it very unfortunate that some people, especially class-action lawyers, have misinterpreted our statements, documents, and the law in an effort to stir up doubt, uncertainty and distrust. Pulte / Del Webb sincerely hopes that the answers in this written response provide a clear and full explanation of the remedy we are offering to homeowners, as well as highlight the potential consequences of various choices also under consideration.  We also hope that answers coming directly from Pulte / Del Webb will help dispel doubts and will eliminate the specter of distrust that has been created by some individuals to the detriment of homeowners.

1   How do you identify homes that are affected by Kitec plumbing?  

We obtained this information from our plumbing subcontractor and Pulte / Del Webb construction personnel.  Our information is that 3,000 homes constructed from the inception of Sun City Anthem in 1999 through mid-2003 were built using the Kitec plumbing system.

The class-action lawyers have incorrectly stated that as many as 7,000 homes in Sun City Anthem were built using Kitec plumbing.  At the Jan. 7 meeting, the class-action lawyers reduced the number to 3,500.  Both numbers are inaccurate.  Again, the number of homes in Sun City Anthem with Kitec is approximately 3,000.

Through the inspection process, we will verify that houses believed to have Kitec do, in fact, have Kitec.

2   What are the ramifications of opting out of the class-action suit? 

If you opt out, you will not be a member of the lawsuit and you will not be able to recover anything in connection with that lawsuit.

If you accept Pulte / Del Webb’s offer, you will be assigning to us your rights against the manufacturer and the plumbing contractor, who are the defendants in the class-action lawsuit.  You do not need to return any paperwork to the class-action lawyers in order to accept Pulte / Del Webb’s offer.

3   Does signing the waiver release Pulte / Del Webb from future responsibility on all home warranties?  

No.  The release will apply only to the Kitec plumbing system.  No other portions of the warranty will be affected.

Unfortunately, the class-action lawyers have attempted to confuse and frighten homeowners about the release by questioning both its scope and legality. 

In terms of its scope, as we have explained on several occasions, as well as during the community meeting held Jan. 7 at Hanneman Hall, the release is only intended to release claims related to the Kitec system. It is not intended to release Pulte / Del Webb from plumbing leaks and/or mold arising from a pre-existing Kitec system failure that occurred prior to repair of the system and are discovered during the repair process, so long as the homeowner has diligently pursued the repair process.  We do not believe that a court of law will interpret it as broadly as stated by the class-action lawyers.  Homeowners can rely upon this statement, including, if necessary, in a court of law should there be a future disagreement about the scope of the release.

In terms of its legality, we are aware of no precedent in the state of Nevada supporting the class-action lawyers’ interpretation of the Chapter 40 law.  No court has ruled that a homebuilder cannot require a signed release along with the acceptance of monetary compensation to address an alleged construction defect.

It is a common and accepted practice for a company to ask for an acknowledgement that a claim has been resolved and there is a release of liability when compensation is paid to resolve a claim.   

4   Will the $7,800 cover all affected homes regardless of home sizes?  

The cost is based primarily on the number of plumbing outlets in the homes, for example, faucets, toilets, etc., not the size of the homes.  Based on the estimates we have received, $7,800 is sufficient to cover the full replacement of the Kitec plumbing system in Sun City Anthem homes.  This is also based on the actual experiences of a few homeowners at Sun City Anthem who have had this same work completed recently at that same cost.

For those homes with casitas, the cost of removing and replacing the brass fittings is covered in this $7,800 estimate.  For those homes with island sinks, the cost of removing and replacing the brass fittings or running a new sleeved line through the existing Kitec line is covered in the $7,800 estimate.

5   How will Kitec plumbing in affected casitas built by the developer be addressed and is the cost covered in the $7,800? 

For those homes with casitas, the cost of removing and replacing the brass fittings is covered in this $7,800 estimate.  Our records indicate 216 of the 3,000 homes have casitas built by Pulte / Del Webb.  The Company is not responsible for the plumbing systems in casitas that were built by homeowners after they closed escrow with Pulte / Del Webb.

6   What solution is available for kitchen island sinks and does the offer cover this solution?  

There are two options.  The plumbing contractor can remove and replace the brass fittings.  Or, the plumbing contractor can run a new Wirsbo plumbing line through the existing Kitec line beneath the slab.

For those homes with island sinks, the cost of removing and replacing the brass fittings or running a new sleeved line through the existing Kitec line is covered in the $7,800 estimate.

7   Based on your experience on class-action and construction defect lawsuits, how much money do you except plaintiffs to receive above and beyond the cost to do the re-plumbing of their homes? 

It is rare that homeowners involved in lawsuits of this type recover more than the estimated cost to repair the alleged defect.  Any other money that results from the class action would go to the class-action lawyers and the experts they hire to help them with the lawsuit.  The Notice of Class Action discloses the terms of the contingency fee agreement the class-action lawyers have with the class representatives.  Under that agreement, the class-action lawyers could take as much as 50 percent of any recovery the class representatives receive.

Before deciding whether or not to accept Pulte / Del Webb’s offer, homeowners should consider the following in connection with the class-action lawsuit:

First, the only award is monetary relief.  The court will not order Pulte / Del Webb or any other party to repair your home.

Second, there is no guaranteed recovery of any money at all in the class-action lawsuit.  The class members may recover an amount less than $7,800 or nothing at all.

Then, if the class action results in a monetary award to you, there is no guarantee as to when you will receive an award.  Again, the court cannot require any homebuilder to perform the repairs as part of a verdict.  Class-action lawsuits such as this one, which involve multiple defendants, can take many years to resolve.  The class action was filed in April 2006.  If the case is not settled beforehand, the court will need to schedule and conduct a trial.  As of today’s date, the court has not even scheduled a trial date.  After trial, the parties may file appeals, which could lead to re-trials and further delays.

The class-action lawyers have questioned how long it will take for those homeowners who accept Pulte / Del Webb’s offer to have their home repaired.  Because of the number of homes affected, Pulte / Del Webb acknowledges it will take a significant amount of time.

However, those homeowners who accept Pulte / Del Webb’s offer will have the money to pay for the repairs much sooner than those who, by declining the offer, choose to remain in the class action.  You should also keep in mind that the class-action lawyers have stated that there are as many as 50,000 homes in Clark County that were built with Kitec plumbing systems.  If you choose the class action, should you receive any award you will be competing with tens of thousands of other homeowners also waiting to schedule replacement of their Kitec systems.

8   In some cases, access to Kitec fittings is limited by tub tops, cultured marble surrounds, cabinet, mirrors, etc.  Is the removal and/or replacement included in the $7,800 figure?  

We believe that the amount offered is fair and reasonable, and will allow you to fix your home.

The alternative to accepting our offer is to wait and see what settlement you may get with the class-action lawsuit.  There is no guarantee that the amount of money, if any, you receive as a result of the class action will be sufficient to cover items that are not common to all members of the class.

9   Will Pulte / Del Webb be able to inspect affected homes for Kitec fittings and if so when will those inspections be completed?

We have already inspected approximately 450 homes. The inspection process was halted because of the uncertainty created by the gag order issued by Judge Williams in the class-action case on December 22, 2006.

Now that the class-action lawyers have withdrawn their objection to Pulte / Del Webb’s inspection process, the inspections can resume.  Inspections have been scheduled to commence on January 11.  We estimate that the inspectors can complete approximately 36 houses per day.  Because the class-action lawyers have demanded they be allowed to attend every inspection, it may not be possible to complete the inspection process as quickly as we anticipated.

10   Why isn’t Pulte / Del Webb named in the class-action suit? 

Under Nevada’s Chapter 40 law, a homeowner may not file a lawsuit against a homebuilder unless he or she first gives the homebuilder written notice of the defect and allows them an opportunity to inspect and offer a resolution.  

Initially, the class-action lawyers chose to sue only the manufacturer of the Kitec systems and the plumbing contractors who installed them.  They filed that suit in April 2006.  They did not serve a Chapter 40 notice on Pulte / Del Webb, however, until the end of August.  It is not clear why the class-action lawyers waited four months to serve a Chapter 40 notice on Pulte / Del Webb.  If they intend to include all homebuilders who built homes that contain Kitec plumbing, they will need to serve Chapter 40 notices on those other homebuilders before they can add those homebuilders to the class action.  This will further delay the resolution of the class-action lawsuit.

11   How long will the parts and labor be warranted?  

American Leak Detection (ALD) states that as long as Wirsbo plumbing is installed by a certified Wirsbo technician, the plumbing pipes have a warranty of 25 years and the fittings are warranted for 10 years.  The Wirsbo warranty is for parts only; the labor is not included.  ALD says its workmanship is covered for one year.

K&R Drywall and Paint (K&R) states that its work is covered by a one-year warranty.

If you have questions about the warranties provided by ALD and K&R, you should address your questions to those contractors.

If you accept Pulte / Del Webb’s offer, you will be free to choose contractors other than ALD and K&R.  Other contractors may provide different warranties.  

Any warranty covering these repairs, whether they are paid for by Pulte / Del Webb’s offer, any award from the class-action lawsuit, or out of your own pocket, will be the responsibility of whichever contractor you choose to do the work.

12   What are the ramifications if a homeowner accepts the class action and rejects the $7,800 offer? 

If you reject Pulte / Del Webb’s offer and remain in the class action, you will not receive any compensation until the class-action lawsuit is resolved, which may take years.  

Moreover, as the class-action lawyers have acknowledged in the Notice of Class Action, it is possible that the defendants in the class action may be successful in defending the claims asserted against them.  (See section V, page 5… Notice of Class Action.)  It is possible that the homeowners in the class action may receive nothing.  

13  Why is American Leak Detection under the “gag order?”  American Leak said they can’t talk to or make an appointment because they are under the “gag order.” 

Unfortunately, the order is so ambiguous that American Leak Detection was concerned they may have inadvertently violated the court’s order by communicating directly with residents.  Now that the class-action lawyers have agreed that ALD is not affected by the gag order, that company will be able to communicate directly with homeowners.

14   Why has Pulte / Del Webb chosen to pay $7,800 rather than repair the problem?  

We reviewed a number of options.  We believe offering you these funds now will allow you to take care of this problem sooner, rather than later, and put it behind you.  

By accepting our offer, you will have funds that will allow you to choose whether to replace the fittings, re-route or do whatever you deem appropriate.  If you accept the offer your check will be sent to you within approximately 45 days after receipt of the release or the inspection to confirm Kitec, whichever is later.

Also, bear in mind, this gives you the ability to make a decision on your own now.  If you remain a member of the class-action lawsuit, lawyers, representatives of the class, and even the judge will make all decisions for you for the next several years.

If you reject Pulte / Del Webb’s offer and remain in the class action, and if an award is given, you would receive it at some unknown point in the future.  Remember that the class-action lawyers cannot guarantee the amount or the timing of such compensation.  Also, if you receive anything as a result of the class action, it would be some amount of money and not a repair.  It will still be up to you to arrange for contractors to perform the repairs to your home and you will then need to compete with as many as 50,000 other class members to schedule these services.

15   What are the two recommended repair methods and what are the advantages and disadvantages of each?  

There are two ways this can be handled.  You can either choose to replace the fittings or abandon the line.   

16  If I have a re-plumb done without your inspection and I save the Kitec parts, will you reimburse me the $7,800?  

Yes.  If the contractors performing the repairs certify in writing and the homeowner certifies in writing that the house contained a Kitec plumbing system, we would pay the $7,800.  Under this scenario, however, a homeowner will still need to return the signed release form within the 35-day deadline established in the original offer to the homeowner.  

17  With the ban on communications between Pulte / Del Webb and the homeowner, how can we identify whether or not our home has Kitec plumbing and proceed with the acceptance of the Del Webb offer?  

If you wish to accept Pulte / Del Webb’s offer, all you need to do is sign the release and return it to Pulte / Del Webb within the 35-day deadline.  After we receive the signed release, you will be contacted to schedule an inspection to confirm the presence of the Kitec plumbing system in your home.

18   If I decide to accept the offer and have my plumbing repaired by American Leak Detection or if I decide to remain in the class-action suit and a leak develops in my house, will Del Webb be responsible for repairing and replacing or will I?  

First, if you accept our offer and have the repair made, if a leak develops later you would need to address that issue with the contractor that performed the work.

If you reject our offer and remain in the class-action lawsuit and a leak develops, you can try contacting the class-action lawyers and ask for assistance.  Pulte / Del Webb will not be able to respond to any leaks or other problems related to your Kitec plumbing system.

19   If I did not opt out of the class action suit, will I be eligible for the Pulte / Del Webb offer? 

Yes.  If you accept our offer within the 35-day deadline, you will not need to worry about opting out of the class-action lawsuit.  The signed release, when returned to Pulte / Del Webb within the 35-day deadline, will assign your rights against the manufacturer and the plumbing subcontractor to Pulte / Del Webb, so that we may seek reimbursement from those responsible for the alleged defect.  Thus, you will not be part of the class-action lawsuit.  However, you will not need to send any paperwork to the class-action lawyers or to the court.

20   Pulte / Del Webb sent letters with a 35-day time limit.  Will that time limit be extended due to the gag order? 

No.  Nevada’s Chapter 40 statute requires the 35-day time limit.  If we were to extend that time limit, we may be in violation of Chapter 40 and may be precluded from seeking recovery from the manufacturer of the fittings or any other responsible party.

The class-action lawyers’ insistence that we extend the 35-day deadline may not be acceptable to the court for a variety of reasons.  

First and foremost, unless you formally hire the class-action lawyers to represent you, it is our belief that they do not currently represent Sun City Anthem homeowners in the Chapter 40 process and have no authority to advocate on your behalf.  Second, in the Chapter 40 process even if a homeowner has individually hired the class-action lawyers, we do not believe that state law permits such an extension.  

21   Some residents may or may not have received one or the other letters mailed out by Pulte / Del Webb.  Will these letters be sent in the future and if so, when?  Because of the delay will the homeowner be penalized?  

In October 2006, we mailed letters to the 3,000 Sun City Anthem homeowners with homes believed to have been built with Kitec brass plumbing fittings.  We made this determination based on information from the plumbing contractor that installed the fittings and from our construction personnel.  

Approximately 2,500 homeowners returned a request for an inspection.  We then sent letters with the $7,800 offer to all but approximately 500 of them.  (Offer letters to those 500 homeowners were delayed due to questions surrounding the court’s gag order, issued Dec. 22, 2006.  Letters were eventually mailed to these homeowners on Monday, Jan. 8, 2007.)  As of January 11, 375 homeowners have accepted our offer.  

If you received the October notice from us, but did not return a request for inspection, you may still request an inspection.  If your house is found to have Kitec, we can make you the $7,800 offer.  To request an inspection, please mail a letter to the following address: 

Pulte Homes
Attn. Special Operations Dept.
8345 West Sunset Road
Las Vegas, NV 89113

22   If I have received an offer from Pulte / Del Webb for $7,800 to repair Kitec plumbing problem and I elect to accept that offer regardless of the completion of the Pulte / Del Webb inspection, should I opt out of the class-action suit?  

By accepting Pulte / Del Webb’s offer, you assign to us your rights against the defendants in the class-action lawsuit.  There will be no need for you to formally “opt out” of the lawsuit.  You do not need to send any papers to the class-action lawyers or to the court in order to accept Pulte / Del Webb’s offer. 

23   What happens when they open the wall to do the repairs, and find mold and/or mildew in the walls? 

In the handful of cases we are aware of where homeowners had this work done at Sun City Anthem, there have been no leaks of any Kitec fittings.  If during the replacement of your system a leak is detected, we would ask you to contact us so that we can inspect and document the leak.

If you accept our offer and diligently pursue repair of the Kitec plumbing system, here is what we will do:

a) if a leak in the system is discovered while the plumbing contractor is making the repair, and if a pre-existing leak has caused damage to your home, we will repair the damage.  

b) if a leak in the system is discovered while the plumbing contractor is making the repair, and if it is determined that a pre-existing leak has caused mold, we will send a certified remediation contractor, at Pulte / Del Webb’s expense, to your home to remediate the mold.

If either of these situations arise, you should call Pulte / Del Webb’s Customer Service department immediately.

Pulte/Del Webb understands that it will take time to schedule and have the Kitec repair completed by contractors selected by the homeowner. What is meant by "diligently pursue repair" is that the homeowner contacts contractors of their choosing within 60 days after receipt of the $7,800 check, selects and engages contractors within those 60 days to perform the Kitec repair, and then the contractors pursue those repairs to completion.  The contractors do not need to complete the repairs within those same 60 days, so long as an agreement has been reached between the homeowner and the contractors during that 60-day period to complete the work as promptly as possible.  We do understand that the contractors may be busy given the volume of work they may have at the time that the homeowner engages them.  But, by following these guidelines, the homeowner will be deemed to be diligently pursuing the repair even though the completion of the work may take additional time due the contractors’ busy schedules.  

If you do not accept Pulte / Del Webb’s offer and you remain in the class-action lawsuit and a leak in the Kitec plumbing system is discovered, Pulte / Del Webb will not be able to assist you. 

If you do not accept Pulte / Del Webb’s offer and you opt out of the class-action lawsuit and a leak in the Kitec plumbing system is discovered, we would consider assisting you after being given the opportunity to inspect the damage. 

24   If mold or mildew is discovered, what action should the homeowner take?  

(See answers to Question 23, above.)

25  Can we have a step-by-step list of directions for the residents to follow if they wish to accept the re-plumbing offer? This means both the process that the resident follows as well as the process that ALD/K&R follows in completion of the work.   

If you wish to accept the $7,800 offer, you need to return your signed release by the 35-day deadline stated in the offer letter.  If your home has already been inspected by Pulte / Del Webb’s inspector and is confirmed to have Kitec, we will process your check for $7,800 within 45 days after we receive the properly executed release assignment.

If you wish you to accept the $7,800 offer but your home has not been inspected by Pulte / Del Webb, we will schedule an inspection of your home in order to confirm the presence of Kitec after we receive the properly executed release.  If Kitec is confirmed, your compensation check will then be processed within 45 days and mailed to you.

Even if your home has not been inspected, you still need to sign and submit your release within the 35-day deadline in order to accept the $7,800 offer.

You will need to contact the contractors you plan to hire for the repair work directly in order to learn more about their process for conducting the work.

26   Will the water lines that are to be installed in the attic be insulated?  

Yes.  It’s required by building code.  

27   If you have a plumbing-related problem that is not related to Kitec will Del Webb repair it?  

Any plumbing problem not related to the Kitec system in your home is not a part of this process.  

Any plumbing problem not related to Kitec will be addressed in accordance with the Pulte / Del Webb warranty.

28   Will those who have hot water re-circulating pumps in both house and casita still have that function after repairs are completed? 

Yes.

29   If we have not received the letter, how do we tell if our house is affected by the Kitec plumbing problem and add our house to inspection?  

We believe we have identified all homes that were built with the Kitec plumbing system and have sent letters to all of those homeowners.

You can determine if you have Kitec plumbing in your home by accessing your attic.  If you see multiple plumbing lines in your attic, you do not have Kitec.  You will need a ladder to gain access to your attic.  Please be careful.

Also note, just because you see a Kitec sticker in your electric box, that does not necessarily mean you have Kitec.  

If you did not receive a letter and believe one should have been sent to you, send us a letter notifying us that you believe your home contains Kitec.  Please send your letter to:

Pulte Homes
Attn. Special Operations Dept.
8345 West Sunset Road
Las Vegas, NV 89113

Include your name, original close of escrow date, address of the home, and the mailing address where we can send future communications to you regarding this issue.   Once we receive your letter we will add you to the list of homes scheduled for inspection.

Again, our records indicate the Kitec plumbing system was only used in homes built at Sun City Anthem between 1999 and mid-2003.   

30   Where do the Kitec plumbing fittings begin? 

In the wall in the garage.

31   I own a new home in Sun City Anthem, do I need to be concerned about the Kitec plumbing issue?  

We are confident that no homes built after the middle of 2003 contain the Kitec plumbing system.

32   Does diminished pressure in our water systems mean we have a problem with the Kitec plumbing system?  

Reduced water flow is a symptom associated with corrosion in Kitec fittings.  But, there are a variety of other factors that may affect water pressure in your home.

33   Del Webb has recommended two contractors that will do the needed repairs.  Can Del Webb identify a general contractor to handle all aspects of the repairs?  

We do not know of any general contractors who perform both types of work. 

We are aware that these two contractors we have identified have experience in making these same repairs.  They have already completed re-plumbing jobs in several homes in this community.  They are interested in working with Sun City Anthem residents to help resolve this problem.  Ultimately, it is up to you to select the contractors that will conduct the repair work.

34   How long will it take to complete the Kitec re-plumbing if all 3000 homeowners decide to accept offer and contract with American Leak Detection?  

American Leak Detection (ALD) has stated it can do 12 to 15 homes per week.  K&R Drywall & Paint (K&R) has stated it can do 12 homes per week.

At that rate, it could take four (4) to five (5) years to completely re-plumb all 3,000 Sun City Anthem homes.  However, there are other licensed plumbing and drywall contractors in the Las Vegas area who may choose to compete with ALD and K&R to perform this work.

By accepting Pulte / Del Webb’s offer, you can receive funds now so that you can take care of this problem much sooner than if you participate in the class-action lawsuit.

35   Are both hot and cold water lines affected by de-zincification?  

Although the corrosion process appears to move more quickly in the fittings used for hot water lines, we believe that it may also affect fittings for the cold water lines.

36   How long will the average re-plumbing job take and will the house be left clean?  

American Leak Detection (ALD) has stated it is, typically, a two-day process to complete the plumbing work.  ALD has further stated that the house will be left clean.

37   Will the work be scheduled in such a manner that the older homes will be scheduled first?  

Pulte / Del Webb will re-start its inspection process on January 11 and will make every effort to inspect the older homes first.  We should be able to complete 36 inspections per day, so long as the class-action lawyers, who have demanded that they be allowed to come into all of your homes and watch these inspections, do not slow the process.

After that, scheduling of the actual repair work is up to you and the repair contractors that you choose.

38   Are there any health concerns from the affected fittings?  

We are not aware of any health concerns associated with Kitec fittings.

39   How will this issue impact those who want to sell their homes?

Nevada law may require a home seller to disclose alleged construction defects.  Anyone selling his or her home should seek advice from a licensed real estate professional to obtain information about disclosure requirements.  Also, you should ask your real estate professional what impact remaining in the class-action lawsuit may have on your ability to sell your home. 

If you accept our offer, you will have funds now in order to address this issue sooner rather than later.  

40   I want to accept the offer, but do not like the wording of the release.  What can I do? 

As we have explained before, the release is only intended to release claims related to the Kitec system. It is not intended to release Pulte / Del Webb from plumbing leaks and/or mold arising from a pre-existing Kitec system failure that occurred prior to repair of the system.  

It’s unfortunate that the class-action lawyers have attempted to confuse and frighten homeowners about the release.

 41   What is the tax liability of the offer? 

You will need to check with a qualified tax professional about the tax liability, if any, associated with accepting our offer or any possible monetary recovery in the class-action lawsuit.

 42   If I need independent advice who do I go to? 

If you believe it is necessary to obtain advice from a third-party, make sure you show them the contents of our offer letter as well as the Notice of Class Action, so that you can be assured that both options are fully reviewed.


Patrick Aulds
Division President