Village Homes settles soil lawsuit: Builder to cover most repair costs for houses built on shifting clay

By Shelley Gonzales
Rocky Mountain News Staff Writer

DOUGLAS COUNTY- Village Homes has agreed to cover most of the cost of repairs to up to 394 Highlands Ranch homes damaged by swelling soils.

It is the fifth major Colorado builder to settle a class-action lawsuit over cracked basements, jammed windows and other damage caused by shifting clay soils.

The agreement, filed Monday afternoon in Douglas County District Court, sets up a repair program for Village Homes houses that have concrete slab basements. It applies to homes generally in the central and eastern portions of Highlands Ranch and excludes the Village Glenn and Westridge subdivisions.

Under the agreements, affected homeowners will pay 15 percent of the cost to repair a cracked basement or have it replaced with another.

Homeowners who choose to replace the slab with a pricey wood structural floor that is resistant to heaving damage will be liable for 20 percent of the cost.

Village Homes’ contribution to the 10-year repair program is capped at $3,056,681 . It also has agreed to pay $700,000 in legal fees.

It is the latest of several big victories for lawyer Scott Sullan , who specializes in suits involving damage caused by bentonite-laden soils.

When wet, bentonite expands like a sponge and contracts as it dries - wreaking havoc to the structures built atop it. Bentonite is found throughout Colorado and in high concentrations along the Front Range, especially in Douglas County.

Village Homes, which builds about 500 homes a year in Colorado, admits no wrongdoing.

“I think it was a reasonable approach to our differences with the plaintiffs,” Village Homes president John Osborne said on Monday.

Sullan, who has become a national authority on the issue called the settlement “fair, reasonable and adequate.”

Highlands Ranch builders Falcon and Ryland reached a similar settlement before class action suits went to trial.

Earlier this year, Highlands Ranch developer Mission Viejo settled a suit brought on by 957 homeowners, also represented by Sullan’s firm.

The terms of that settlement were identical to an agreement reached last year with that state’s largest builder, Richmond Homes, in a landmark case involving 12,000 houses.

Class-action lawsuits are pending against three other Colorado builders: US Home, Merit and Centex, said Ron San dgrund, Sullan’s partner.

Only the Philip Morris-owned Mission Viejo took its case to a jury, maintaining it took the proper precautions against the swelling soils and downplaying the extent of damages.

A Douglas County District Court jury found it was negligent and had violated state consumer protection and disclosure laws.

Mission Viejo later reached a settlement before the second phase of the trial, at which the company’s liability was to be determined.

Village Homes’ lawyer Dave Higgins said the negligence finding by the jury in the Mission Viejo case had no influence on his client’s decision to settle.

“We looked at this as a separate case and evaluated it on its own merits,” he said.

Village Homes homeowners will be notified of the settlement, which still must be reviewed by Douglas County District Judge Thomas Curry.