Products Liability Law Daily Pella agrees to $35M settlement of water damage claims in leaky window suit
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Monday, February 12, 2018

Pella agrees to $35M settlement of water damage claims in leaky window suit

By John W. Scanlan, J.D.

Pella Corporation and Pella Windows and Doors, Inc. have agreed to pay over $34.75 million to resolve a class action suit against them brought by thousands of consumers who owned allegedly defective Pella ProLine® brand wood casement, awning, and/or transom windows that leaked and caused water damage. The proposed uncontested settlement, filed with the court by the consumers and given preliminary approval by the court, would create a $25.75 million fund to compensate eligible class members and provide up to $9 million in attorney fees, costs, and expenses, as awarded by the court (Eubank v. Pella Corp., February 8, 2018, Coleman, S.).

Current and former owners of the allegedly defective windows asserted that the windows suffered from water intrusion and rot, which also damaged the properties in which they were installed. The original class action complaint was filed in 2006, and two classes were certified in 2009. In 2014, an earlier proposed settlement agreement was accepted by the district court, but rejected by the U.S. Court of Appeals for the Seventh Circuit as "scandalous" due to lead counsel’s conflicts of interest as well as the inadequacy of the settlement terms, which the Seventh Circuit found to be "stacked against the class" and estimated that class members ultimately would receive less than $8.5 million [see Products Liability Law Daily’s June 3, 2014 analysis]. New class counsel were appointed, named plaintiffs were replaced, and discovery began again.

Terms of the proposed settlement. The settlement would apply to all United States current and former owners of "[s]tructures containing Pella ProLine® brand aluminum clad wood casement, awning, and/or transom windows (including 250 and 450 Series) manufactured by Pella Corporation between January 1, 1991 and December 31, 2009."

The settlement would create a fund (Fund A) that would provide $23.75 million to pay class members who file during the claims period, with the claims date to be set by the court, and a second fund (Fund B) to pay $2 million to class members who file claims during the extended claims period. Awards from Fund A would reimburse claimants for all or a portion of their costs of the product itself, installation of the product, finishing of the product, and repair of damage to other property. Class members who have experienced damage and have already made repairs and replacements would be eligible to make claims from Fund A. Claimants who repair or replace windows more than 15 years after the date of sale would receive 25 percent of these costs. Class members with pre-2007 windows that do not manifest eligible damage until after the claim deadline but within 15 years of sale could file claims to recover from Fund B; these claims would be administered directly by Pella.

The class settlement administration would be performed by Kurtzman Carson Consulting LLC. KCC would create a notice plan to provide individual notice to all known class members and place paid notices in "well-read and targeted consumer magazines" and a number of websites, with the expectation of reaching at least 80 percent of class members at least twice. Pella would pay for all class notice expenses.

Observing that the Seventh Circuit found the previous claim form to be long and confusing and the claims process to be complex, the consumers asserted in their memorandum supporting their motion asking for approval of the proposal that the new settlement provides for a claims process that is described as "efficient" and using claim forms that are simple and straightforward. The consumers also argue that the new settlement does not contain the deficiencies that caused the Seventh Circuit to reject the earlier proposal.

The case is No. 06 C 4481.

Attorneys: Hillard M. Sterling (Winget, Spadafora & Schwartzberg, LLP) for Kent Eubank. Douglas L. Prochnow (Faegre Baker Daniels, LLP) for Pella Corp. and Pella Windows and Doors, Inc.

Companies: Pella Corp.; Pella Windows and Doors, Inc.

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