After winning a series of key rulings earlier this month, a Louisiana family is preparing to expand its class-action lawsuit against one of the nation’s largest homebuilders.
Hundreds more homeowners across the state whose houses were built by Texas-based construction firm D.R. Horton could join the fray, according to documents recently filed in the state 19th Judicial District Court in Baton Rouge.
But attorneys for D.R. Horton say that means the case is now under federal jurisdiction and have taken steps to move it to federal court.
Youngsville couple Alicia and West Dixon filed suit in March over a Lafayette Parish house they purchased from D.R. Horton in 2014. Their complaint alleges the home wasn’t built to stand up to Louisiana’s sweltering heat and consequently has mold, humidity and HVAC issues.
Bell Mechanical Services, one of the subcontractors that helped D.R. Horton build the house, is named in the Dixons’ lawsuit.
The couple’s lawyers contend they are among thousands of homeowners across the country that have fallen prey to D.R. Horton’s deceptive sales tactics.
In a Dec. 7 filing, the Dixons' attorneys amended their lawsuit to expand the proposed putative class, setting the stage for a class-action claim that could include as many as 1,000 plaintiffs. The Dixons would become class representatives, suing on behalf of themselves and “all other individuals similarly situated” who bought a D.R. Horton-built home after Jan. 1, 2007.
The amended complaint indicates hundreds of Louisiana homeowners whose residences were built with “defective design and construction” could possibly join the class-action suit as plaintiffs.
“D.R. Horton is again trying to delay and conceal the truth about what it is telling prospective homeowners to try and sell houses,” Lance Unglesby, the Dixons' lead attorney, said in a statement Friday. “D.R. Horton has a history of failing to disclose material information to prospective buyers and using unethical sales tactics. Our clients have told us that D.R. Horton never warned them about humidity issues in their home designs, even after D.R. Horton received complaints.”
Attorneys representing D.R. Horton say the Dixons' amended suit triggered the Class Action Fairness Act, a congressional bill enacted in 2005 that expanded federal jurisdiction for large class-action lawsuits.
“We did that subject to our position that all claims in the case should be referred to arbitration, as agreed in the contract between the parties,” New Orleans attorney James Alcee Brown said Wednesday, noting that he plans to argue D.R. Horton arbitration rights in federal court. “It very much remains our position that our arbitration is the legally preferred and best forum for a prompt and fair resolution of the plaintiffs’ claims, as opposed to court proceedings, which typically go on for years.”
The recent developments come on the heels of several orders regarding how many internal documents D.R. Horton will have to turn over to the Dixons. Chief Judge Donald Johnson, who presided over the case in the 19th JDC, settled a legal battle over discovery in a Dec. 2 ruling that swung heavily in the plaintiffs' favor.
The Dixons' attorneys plan to use business and training documents to prove D.R. Horton has a pattern of employing deceptive and coercive sales tactics to pressure customers into buying homes.
D.R. Horton’s attorneys wanted to limit the discovery just to documents from the Dixons' 2014 home purchase. But Johnson determined all the company’s “corporate, divisional and local” sales-related documents and training manuals can be used by the plaintiffs.
He also enacted a 16-page list of protocols to govern how electronically stored files are handled and to streamline the transfer process so it’s speedy and efficient.
In doing so, the judge denied a protective order sought by D.R. Horton’s lawyers to shield the company from what they termed “burdensome” transfer procedures.
Johnson, in ruling for the protocols, noted that D.R. Horton’s legal team did not know about or have a copy of a second sales contract that the Dixons signed on their home in June 2014. He also emphasized the fact that a corporate representative testified during a deposition that D.R. Horton doesn’t “maintain any hard documents, everything is electronic.”
“In this age of electronic documents where so many responsive documents are contained in electronic format, such as emails and documents created using word processing software, a refusal to negotiate a workable search protocol is unreasonable,” the judge wrote in his order.
Unglesby said Johnson’s rulings are a pivotal turning point in the case as the two sides continue their battle over whether the legal dispute should be settled in court or through arbitration.
“It’s going to have an extraordinary impact on our ability to prove that D.R. Horton manipulated potential homebuyers,” Unglesby said during a phone interview. “It’s going to have a huge impact on the arbitration litigation. And it’s going to even the playing field for these aggrieved homeowners, who are all in dire straits and frustrated with D.R. Horton.”