Ryland Homes OKs settlement: Builder to cover damages in another suit over soil

By Shelley Gonzales
Rock Mountain News Staff Writer

DOUGLAS COUNTY- As the state’s largest class-action suit over swelling soils was winding down this week, a Highlands Ranch builder was agreeing to a $2.6 million settlement in a similar suit.

Ryland Homes agreed to put up $2.1 million in an extended warranty to cover damage caused by expanding clay soils, and it agreed to pay $500,000 in attorney fees. As many as 250 homeowners will be covered under the warranty.

The settlement was filed in Douglas County District Court on Monday, but it was sealed to prevent prejudicing the jury in the class-action suit brought against Mission Viejo Co. by 957 Highlands Ranch homeowners.

That jury on Thursday found in favor of the homeowners, saying Mission Viejo was negligent, breached an implied contract and violated state consumer protection and soils disclosure laws when it built hundreds of homes using concrete slab basements.

The Mission case now goes into its second phase, in which damages will be decided.

The Ryland settlement heads off a July trial.

“This is my idea of how a responsible builder acts,” said attorney Scott Sullan , who represents both Ryland and Mission Viejo homeowners. “Ryland has stepped up to the plate and elected to stand by its product.”

Anne Madison, Ryland’s vice president of communications, said, “We’re very happy to come to a beneficial agreement for all sides.”

Ryland, which builds about 500 homes a year in Colorado, will establish the warranty program for homeowners whose basement damage meets certain criteria.

The criteria concern the levelness of the basement floor and the amount of heaving and cracking.

Those eligible to make claims must own a concrete slab basement home in Highlands Ranch built by Ryland on soils with 1% or greater swell potential. The extended warranty will cover 10 years, and there are provisions for covering potential damage in the future, Sullan said.

Ryland attorney Tim Geckle said the “general evolution” of Colorado building industry has moved toward the use of woodfloor basements, which are not susceptible to soil movement.