Thursday, November 07, 2002
Copyright © Las Vegas Review-Journal

Lawyers lay foundation in class-action lawsuit against Beazer

Homeowners seeking nearly $25 million because of expansive soils in NLV

About 200 homeowners in the Village at Craig Ranch, a development by Beazer Homes in North Las Vegas, are seeking nearly $25 million in repairs for damage caused by expansive soils.

The class action lawsuit against Beazer started its first day of jury trial Wednesday in the new Complex Litigation Courtroom at 333 S. Sixth Street. It is being heard by Judge Allan Earl.

"It's not fun living there," said one homeowner who spoke on the condition of anonymity. "You're doing more work on the house than anything else."

Expansive soil swells up like a sponge when it gets wet and then shrinks back down when it dries up and hardens, leading to shifts in the ground and creating upward pressure that can lift foundations and crack walls and driveways.

Robert Maddox, attorney for the homeowners, said 52 of the homes are heavily damaged and would require new foundation slabs at a cost of $130,000 to $160,000 for each house and that homeowners would have to move out for a while.

The first homes at Craig Ranch were sold in 1995, priced from $140,000.

Maddox said Beazer was made aware of the soil problems by its own geotechnical firm, Geo Soils, which performed testing on the soil in 1994.

The firm reported high to critical ground swelling at nine feet deep, high swelling at three feet and medium swelling at ground level.

"They were put on notice that they were dealing with critically expansive soil," Maddox said.

Homestead Landscaping recommended that nothing be planted within 10 feet of the homes' foundations without subsurface drainage, but Beazer ignored those recommendations because it would cost too much, the lawyer told the jury.

"Beazer focused on the bottom line," Maddox said. "They knew lush landscaping would help sell the homes. Beazer chose not to disclose information about expansive soil to the buyers."

He said the focus of Beazer's business plan is on productivity, not quality, and that Beazer executives received a bonus equal to 100 percent of their salary if they met the plan.

Beazer was the No. 10 home builder in Las Vegas last year with 647 new home sales, according to Home Builders Research.

While Beazer recognizes that there are problems with some of the homes at Craig Ranch, the damage is not as extensive as the lawsuit implies, said Robert Carlson, attorney for the home builder.

He said Beazer estimates the total cost of repairs to be about $2.9 million, and that while some of the homes need releveling, none of them need completely new slabs and nobody needs to move out of their home.

While some of the homes need substantial repairs, others can be fixed for as little as $200, Carlson said, eliciting a gasp from the dozen homeowners watching the trial.

"We've gone through and estimated costs on each house that we were allowed to look at," he said. "Our cost of repairs isn't a free house."

Maddox claimed that Beazer ignored building code requirements and Department of Housing and Urban Development codes, which required a 2 percent slope away from the house where expansive soil is present.

He said Beazer told HUD there was no expansive soil, and used the same type of soil around retaining walls when it was recommended that nonexpansive soil be used.

Carlson noted that Beazer is a defendant in the class action lawsuit, but also the plaintiff in another lawsuit against some of its subcontractors, engineers and designers.

"In a couple of instances, they failed to follow the code and violated the contracts with Beazer," he said.

The trial is scheduled to resume Friday.