Volume 13, Issue 6 - July/August 2012

What’s Legal

Pella, Saltzman Propose Settlement Agreement in Class-Action Suit

Pella has filed a motion for settlement in the case, Saltzman vs. Pella, a class-action lawsuit involving its ProLine casement, awning and transom windows made in 2006 and earlier. Pella and the plaintiff’s law firm filed the proposed settlement agreement in June in the federal district court in Chicago. According to court documents, “the case has been pending for six years, and the parties have fought vigorously to defend each of their respective positions.” Pending court approval, the proposed agreement will extend customer service support with a claims process for early products with service needs. The lawsuit does not involve any products currently sold by Pella.

According to the court documents, “in this settlement a mechanism for resolution of causation and damages is established for class members who expended funds to repair and replace … their windows in the past; class members whose windows are in current need of repair and replacement; and class members whose windows may in the future manifest the alleged defect and will need to repair and or replace those windows in the future. Given the nature of the court’s certification order, if the case does not settle and continues to move forward, and if the plaintiffs were to be successful at a liability trial, there would still be individual proceedings for the determination of causation and damages in later phases of the litigation for each class member. This two-phase trial structure would likely take several years for anyone to receive a benefit even if the plaintiffs were to be successful each step of the way.”

Likewise, the motion goes on to state that the settlement provides immediate benefits for class members, including both current owners and former owners who have paid out of pocket to repair damage to Pella ProLine casement windows, as well as those who experience damage in the future. “The court’s class certification severs causation and damage determinations, however the settlement provides a direct means by which settlement class members may be eligible to claim up to $750 per structure under the claims process, or up to $6,000 per structure under an expedited arbitration process,” reads the documents. “The settlement provides enhanced benefits beyond the warranty, free and expedited resolution of eligibility, causation and damage determinations, and provides significant benefits to the class beyond previous window defect class action settlements, and it compares favorably to other home products settlements for products such as shingles and heating hoses,” the documents state.

“We are pleased to have created a settlement framework that extends our existing customer support program with a claims process for older ProLine casement, awning and transom windows,” says Pat Meyer, president and CEO of Pella Corp. “In the overwhelming majority of cases, our Pella windows performed extremely well and as designed. We know that each home or building is unique and the settlement is designed to address the relatively small number that may have experienced a problem.”

Pending review by the court, customer notifications could begin as early as this fall, according to Pella.

According to court documents, Dr. Leonard Saltzman filed a lawsuit in 2006, alleging that the Pella ProLine windows he had purchased for his home in Lake Forest, Ill., had a design defect that allowed water to seep behind the aluminum cladding and cause wood rot. The documents allege that Saltzman contacted Pella and requested repair or replacement at Pella’s expense, but the company refused on the grounds that the windows were no longer under warranty.

U.S. District Court Judge James Zagel certified the suit as a class action, and a federal appellate court upheld the decision.

In 2011 the U.S. Supreme Court decided against hearing the company’s petition for review.

Ohio Attorney General Sues Regency Windows
Ohio Attorney General Mike DeWine announced a lawsuit against Regency Windows Corp. for violating Ohio’s Consumer Sales Practices Act by failing to deliver promised services. The Twinsburg-based window seller abruptly closed its doors in January, leaving many consumers with unfulfilled contracts.

“Our primary goal is to help consumers get their money back,” says DeWine. “Regency Windows knew it was in trouble financially, but it continued to enter into contracts just weeks and even days before it closed. Consumers lost a lot of money and are upset for good reason.”

Formerly located in Twinsburg, Ohio, Regency Windows offered replacement windows, siding, and door services to consumers in Summit County and other counties in Ohio. It also did business under the trade name, HomeEnergy MD, which it advertised as “A Division of Regency Windows Corp.” HomeEnergy offered home energy audits, assessments and related repairs and insulation services.

The attorney general’s lawsuit, filed in the Summit County Court of Common Pleas, charges Regency Windows Corp. and HomeEnergy MD with multiple violations of Ohio’s Consumer Sales Practices Act. Specific counts include failing to deliver promised goods and services and failing to provide refunds, and entering into contracts knowing that consumers would not receive a substantial benefit from the transaction. In the lawsuit, the attorney general seeks consumer restitution, permanent injunctive relief and civil penalties.

The plaintiff seeks to impose $25,000 for each separate and appropriate violation, according to the documents. Additionally, the plaintiff is seeking reimbursement of all court costs surrounding the transaction.

“Prior to their closing, defendants had knowingly made false or misleading statements of opinion on which consumers relied to their detriment,” according to court documents.

The documents also say that the defendant’s failure to provide the services “has resulted in harm to consumers and in some instances has required that consumers pay additional money to order new windows ….”

On or about January 13, 2012, Regency and HomeEnergy shut down without any advance notice to consumers. At the time of the closing, the business had more than 80 outstanding contracts for home energy insulation, window installation, and/or warranty work. Since January 13, the Ohio Attorney General’s Office reports it has received more than 200 complaints against the business.

Court documents also note, however, company owners knew the business was in financial trouble as early as December 1, 2011 but “defendants continued to advertise and enter into contracts with consumers.” In fact, Regency Windows entered into contracts with consumers as late as January 10, 2012—three days before defendants ceased operation.

In related news, earlier this year Window Nation purchased the remaining assets of Regency Window Co. According to the announcement, Window Nation says that since it did not perform any of Regency Windows’ installations or profit from any of those jobs, it isn’t able to offer warranty service on Regency purchases. However, the company has set up a new website, www.RegencyWindow.com, to help Regency buyers and offer guidance on resources.

The website explains to consumers that when they purchased their windows from Regency, they received two warranties: one for labor/service and one for the actual product. While the labor/service warranty has expired since Regency is out of business, the website offers a list of the known manufacturers Regency used, along with their contact information and the status of their respective warranties.


DWM

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