Clayton Homes Settlement

The people who sued are called “Plaintiffs”, and the companies they sued, Clayton Homes, Inc., and CMH Homes, Inc. (“Clayton”), are called the “Defendant.”In a class action, one or more people, called Class Representatives, sue on behalf of people who have similar claims. The court decides whether it is appropriate for these representatives to sue on behalf of people with these claims.  Once a class is certified, all these people are a Class or Class Members. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class.

The lawsuit claimed that in every sale of a new manufactured home Clayton’s corporate policies require Clayton sales personnel to have the consumer execute a Retailer Closing Agreement (“RCA”); the RCA states the number of wheels and axles that were used to transport the manufactured home, and has two boxes that can be checked:

1. wheels and axles “were not Purchased by Buyer but belong to Retailer,” or
   
2. the wheels and axles “were purchased by Buyer and shall remain with the home”.

Plaintiffs have alleged that in all cases when the box “were not Purchased by Buyer but belong to Retailer” is checked, and in some instances where neither box is checked, the wheels and axles are retained by Defendants after delivery of the manufactured home, and are resold to recyclers. Plaintiffs allege that Defendants’ statement “were not Purchased by Buyer but belong to Retailer” is a false representation made by Defendants to Plaintiffs, and that Defendants’ accounting practices, among other things, establish that Plaintiffs did purchase the wheels and axles.

Plaintiffs further allege that, based on the alleged false representation, Defendants retained the consumer’s wheels and axles following delivery and then resold the wheels and axles to a recycler for additional income.  Plaintiffs further allege that as a result of the foregoing conduct Defendants ended up selling the same wheels and axles twice, once to the consumer and then again to the recycler.

Clayton believes that this Lawsuit is without merit and expressly denies any wrongdoing, liability, actual or potential fault in connection with any of the allegations made by Plaintiffs in the Lawsuit, and further believes that this case would not satisfy the requirements for a class action if litigated to trial. However, Clayton has concluded that resolving these claims under the terms of the Settlement Agreement is desirable to reduce the time, risk and expense of defending the Lawsuit and to resolve finally and completely all of the Released Claims. Plaintiffs and Clayton, after analyzing the relevant facts and applicable law, and recognizing the burdens, risks, uncertainties, time and expense of litigation, as well as the advantages of terms and procedures for a fair and efficient resolution of Class Members’ (defined below) claims under the Settlement Agreement, have concluded that the Agreement is a fair, equitable and just resolution of the Released Claims.

The Court defined the settlement class as any and all persons who, from January 1, 2001 to October 15, 2008, purchased a new manufactured home from CMH Homes, Inc. or CMH of KY, Inc. by and through a company-owned store.

Excluded from the Class are:

1. Persons who purchased a new manufactured home from CMH Homes, Inc. through a mortgage insured by the FHA;
   
2. Persons who signed a Retail Closing Agreement where the box “were purchased and will be retained by Buyer” was checked;
   
3. Any and all unnamed Class Members who have previously filed suit and/or asserted a claim of any type against Released Parties (as that term is defined in paragraph 1.26 of the Settlement Agreement) and signed, prior to Final Approval, a full and final general release and settlement of all claims;
   
4. Any and all federal, state, and/or local governments, including, but not limited to, their departments, agencies, divisions, bureaus, boards, sections, groups, counsels and/or subdivisions;
   
5. Any currently sitting Arkansas state court judge and/or the justice in the current style and/or any persons within the third degree of consanguinity to such judge and/or justice.

As consideration for the Release and other mutual promises contained in the Agreement, Clayton will provide a choice of three settlement benefits to Class Members. Each Class Member shall be entitled, at his, her or its election, to only one of the three settlement benefits offered. The settlement benefits are not assignable or transferable (except as specifically permitted), cannot be aggregated, and may not be redeemed from Clayton for cash. Class Members are required to submit, within 75 days of the Effective Date of the settlement, a claim form specifying the one settlement benefit they elect. The claim form will be mailed to you separately if you do not exclude yourself from the settlement and if the agreement receives final approval from the Court. You will not be mailed a claim form until 10 business days after the Court's final approval of the settlement takes full legal effect.

The three settlement benefits provided are:

1. Wheels and Axles Return - By electing this option, Class Members will be entitled to receive a voucher for the presumed quantity of Wheels and Axles (3 axles and 6 wheels for a single-wide, and 6 axles and 12 wheels for a double-wide) removed from their manufactured home. If they think they are entitled to more than the quantity of wheels and axles noted above, they must submit a copy of their Retailer Closing Agreement that details the number of wheels and axles actually removed from the home.
   
   
2. Discount Purchase Voucher - By electing this option, Class Members will be entitled to a Discount Purchase Voucher which provides a discount on the future purchase of a new Clayton manufactured home from a Clayton company-owned retailer. The amount of the Discount Purchase Voucher will be $750 if the previously purchased home was a single-wide, and $1,250 if the previously purchased home was a double-wide or triple-wide.
   
   
3. Extended Service Contract (MHESC) or Manufactured Home Protection Plan/Home Buyer Protection Plan (MHPP/HBPP) - Class Members electing this option will be entitled, if otherwise eligible, to a $250 credit towards the purchase of a warranty or extended service contract provided by Assurant Specialty Property. The term of coverage is for one year and includes, subject to certain terms and conditions, coverage for the home’s appliances, systems, and structures. If Class Members have an existing warranty or extended service contract in place through Assurant Specialty Property, they may add a year to the term of the policy by noting the effective dates of the existing coverage on the application provided. The product available and the cost to Class Members is dependent upon their state of residence and the model year of their home. Please reference the tables at the bottom of the claim form to select the appropriate coverage depending on state of residence and the model year of the home then complete the appropriate application found on the Documents page. Return the claim form, the completed application, and the Claim Member's portion of the cost by check made payable to American Bankers Insurance Company of Florida.

Other than the settlement benefits specifically provided for in this section, the Defendants shall not be obliged to provide any benefits to any Class Member beyond the one of the three selected by the Class Member.

To qualify for a benefit, Class Members must send in a claim form. A claim form was mailed to Class Members on July 9, 2009. Click on the link to download a claim form. Claim Members should read the instructions carefully, fill out the form, include all the documents the form asks for, sign it, enclose a copy of their government-issued photo identification, and mail it to:

Clayton Homes Settlement Administrator
PO Box 3266
Portland, OR 97208-3266

Class Members who fail to submit a properly completed claim form before the deadline will forfeit their rights to any benefits under the settlement.

A claim form must be submitted in order to receive any benefit from this Class Action Settlement. It can be downloaded from the Documents page. Failure to complete all sections of the claim form may cause a claim to be rejected causing a loss of a settlement benefit.

Section 1
Claimants must include the following information:
Name of Home Purchaser;
City and State Where Home Was Purchased;
Approximate Month and Year When Home Was Purchased;
Size of Home Purchased (Single-Wide, Double-Wide or Other-Specify)

Section 2
Claimant must choose one of 3-Options listed on the claim form:

Option 1: Wheels and Axles Return

Option 2: Discount Purchase Voucher

Option 3: Extended Service Contract (MHESC) or Manufactured Home Protection Plan/Home Buyer Protection Plan (MHPP/HBPP).

If Claimants choose this option there is an additional application to be filled out. Please review the chart Option 3 Directions, located on Page 3 of the claim form and on the Documents page, to determine which application must be completed. The correct application depends on where the home is located and what year it was purchased. Claimants may also need to include a check for any additional charges if applicable. Please refer to Page 2 of the claim form for amount information.

Section 3
Application must be signed and dated by Claimant in order to be considered valid.

The deadline to file a claim form is September 12, 2009.

After you have completed the claim form, application, and check (if necessary), mail to:

Clayton Homes Settlement Administrator
P.O. Box 3266
Portland, OR 97208-3266

The Court appointed Michael A. Angelovich and Jeffrey J. Angelovich, Nix, Patterson & Roach, L.L.P.; Richard E. Norman and R. Martin Weber, Jr., Crowley Norman LLP; John Goodson and Matt Keil, Keil & Goodson; and W.H. “Dub” Arnold  to represent you in this case. Together, the lawyers are called Class Counsel. You will not be charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.