Preliminary settlement approved in class action over manufactured homes' wheels and axles

TEXARKANA, Ark. � Miller County Circuit Judge Jim Hudson has approved a preliminary settlement agreement in a class action against a seller of manufactured homes for allegedly reselling the homes' wheels and axles.

The Nov. 25 settlement provides for class members to receive a voucher to recover wheels and axles from the defendant, or a discount purchase voucher for a new manufactured home, or a credit for the purchase of an extended warranty and service contract.

On behalf of the potential class, Texarkana attorney Matt Keil of the Keil and Goodson law firm filed the original class complaint on Feb 17, 2005, against Clayton Homes Inc. and CMH Homes Inc.

The complaint accuses the defendants of charging for the manufactured homes' wheels and axles but never disclosing the charge to the purchaser.

The charge for the wheels and axles "appears no where on any of the documents the plaintiffs are asked to sign during the purchase of the home," the original complaint states.

The plaintiffs argue that the defendants represented to the purchaser that they were not buying the wheels and axles. Further, the defendants are accused of then taking the wheels and axles and reselling them to an outside company and retaining the profit of the sales.

The plaintiffs accuse the defendants of fraud, unjust enrichment and conversion.

Although agreeing to settlement, Clayton Homes and CMH believe the lawsuit is meritless and continue to deny any "wrongdoing, liability, actual, or potential fault in connection with any of the allegations made by plaintiffs in this lawsuit."

The proposed class includes all persons who from Jan. 1, 2001, to Nov. 25, 2008, who purchased a new manufactured home from the defendants.

Excluded from the settlement include those who purchased a home with a mortgage insured by FHA, those who signed a retail closing agreement where the box regarding axles and wheels "were purchased and will be retained by buyer" was checked, and any who has previously filed suit with this claim or similar claims against the defendants and signed a general and full release.

The settlement details the class benefit as providing for class member the ability to choose one of three options.

Class members may elect to receive a voucher allowing them to regain the wheels and axles alleged removed from the manufactured home purchased by the class member.

The voucher must be presented at a company �owned retail location and the class member is responsible for transporting the wheels and axles from the defendant's premises.

Class members may elect to receive a discount purchase voucher on the future purchase of a new Clayton Manufactured home from a company-owned retailer.

If the previously purchased home had one floor, the class member will receive a voucher for $750. If the previously purchased home had two or more floors, then the class member will receive a voucher for $1250. The vouchers are freely transferable.

Class members may elect to receive a $250 credit toward the purchase of a warranty and service contract. If determined to be ineligible, class members may select one of the previous two options.

The agreement awards class representatives, Chris McClure, Ronald Baird, Alex and Mayela Cruz an incentive of $5,000.

The agreement grants plaintiffs' class counsel $15 million in costs in attorney fees.

The defendants will pay for the cost of a direct mail notice to all class members, pay for a settlement website, and pay for the cost of a third-party administrator.

Class members may exclude themselves from the settlement with written requests within 30 days of the mailed notice. Class members seeking to object must file written notices of intent and may appear at the final settlement hearing.

A final settlement approval hearing is scheduled to be held 9 a.m. April 15, 2009, in the Miller County Courthouse, Texarkana, Ark.

Class counsel includes Michael Angelovich and Jeffrey Angelovich of the Nix, Patterson, and Roach LLP law firm; Richard Norman and Martin Weber Jr. of the Crowley Norman LLP law firm; Arkadelphia, Ark, attorney W.H. Dub Arnold; and Texarkana attorneys John Goodson and Matt Keil of the Keil and Goodson law firm.

Case No. cv-2005-72-2