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Deal nearer on faulty furnaces Tentative settlement is a good sign for thousands of O.C. homeowners. November 19, 2001 By TERI SFORZA
Some relief is in sight for homeowners stuck with fire-prone furnaces, including thousands in Orange County. A tentative settlement has been reached in a class-action lawsuit against Consolidated Industries, which manufactured 190,000 faulty furnaces installed in California homes between 1983 and 1994. The settlement isn't expected to cover the total cost of a home's furnace replacement - about $1,600 to $2,000 in Orange County -- but similar settlements netted homeowners hundreds of dollars. "Settlement negotiations are going on right now, and I think there's a possibility it could be resolved in the next month," said Rob MacDonald, the Santa Clara attorney handling the suit. The problem: Steel rods were installed above the burners in the gas furnaces to reduce nitrogen-oxide emissions, an alteration made to meet California air-quality standards. But these "Nox rods'' can heat up to the point of cracking the furnace casing and letting flames escape. All the furnaces were made by Consolidated but were sold under dozens of brand names, including Trane, Kenmore and Amana. The U.S. Consumer Product Safety Commission knew since the mid-1990s that the furnaces had sparked fires but didn't issue a warning until September 2000. The commission has defended its inaction by saying it was negotiating with Consolidated to repair or replace the furnaces. But the negotiations dragged on for years, and before any agreement could be reached, Consolidated filed for bankruptcy and liquidated its assets, leaving homeowners holding the bag. MacDonald's firm pursued Consolidated's insurance company to cover some replacement costs. |