Special Report: Manville and Beazer agree to class action settlement of pehnolic foam claims with building owners, October 2002
A settlement has been reached in a nationwide class action lawsuit on behalf of
building owners against Johns Manville Corp. and Beazer East Inc. (formerly known
as Koppers Co.) as a result of their sales of phenolic foam roof insulation. The
class action settlement applies to all owners of buildings that had phenolic foam
roof insulation on metal roof decks as of June 30, 2000.
Beazer, when conducting business as Koppers Co., manufactured phenolic foam roof
insulation under the brand names Koppers Exeltherm Xtra and Rx, Genstar, Pittsburgh-Corning
and Loadmaster from 1980 through Jan.17, 1989, before selling the manufacturing
process and facilities to Manville. Manville manufactured phenolic foam roof insulation
from Jan. 18, 1989, through approximately March 31, 1992, under the brand names
UltraGard Premier, Insul-Base Premier and Fesco-Foam board.
The class action suit was filed in federal district court in Massachusetts in 1996
to recover damages on behalf of building owners who had phenolic foam roof insulation
installed on metal roof decks. Phenolic foam roof insulation can lead to corrosion
of steel roof decks because of an acidic reaction that takes place when the phenolic
foam roof insulation contacts moisture. For many years, Manville and Beazer have
been seeking to identify roof systems that had metal decks with their phenolic foam
roof insulation because of the corrosion potential.
There are separate settlements applicable to Manville and Beazer/Koppers.
Manville Settlement Terms
The settlement with Manville provides that owners whose buildings have either single-ply
membrane roof systems or shingled roof systems will be paid $100 per square (1 square
equals 100 square feet) of metal roof deck in direct or indirect contact (e.g.,
a vapor retarder is installed on top of the deck) with Manville phenolic foam roof
insulation. Building owners whose buildings have built-up roof systems will be paid
$45 per square of metal roof deck in direct or indirect contact with Manville phenolic
foam roof insulation. For example, if a building had 500 squares of metal roof deck
with phenolic foam roof insulation and a single-ply roof system, the owner would
recover $50,000. If a building had 500 squares of metal roof deck with phenolic
foam roof insulation and a built-up roof system, the owner would recover $22,500.
For purposes of the settlement with Manville, single-ply roof systems include roof
systems with a single ply of SBS- or APP-polymer-modified bitumen roof membrane
and built-up roof systems include roof systems with two or more plies of roofing
felt or modified bitumen roof membrane. No inspections are required to obtain compensation.
Eligible class members are to submit an executed claim form with proof of ownership
to be entitled to receive payment. Manville estimates that approximately 2,800 buildings
in the United States have or had phenolic foam roof insulation installed on top
of metal roof decks and Manville has identified approximately 2,200 of those buildings.
Approximately 1,500 of the identified roof systems have been inspected by Manville.
Building owners with Manville phenolic foam roof insulation on metal roof decks
who have not yet experienced problems are still eligible to participate in the settlement
in the same manner as owners of buildings where corrosion has been observed. The
settlement compensation is to be used to either inspect, maintain, repair or remediate
a roof system as may be required during the life of the roof system and at the time
of roof system replacement. If an owner does not remediate a roof deck or remove
phenolic foam roof insulation, the owner must advise any subsequent building purchaser
that the roof system has Manville phenolic foam roof insulation and the owner has
already received compensation and released claims as a result of the phenolic foam
Beazer/Koppers Settlement Terms
For building owners who have Beazer/Koppers phenolic foam roof insulation in direct
or indirect contact with metal roof decks, the settlement is more complex and based
upon expenses incurred by owners. Owners will be required to obtain three bids from
roofing contractors for the required remediation work; at least one of these contractors
must be among those listed on a list approved by Beazer. An owner will be compensated
for the actual costs of remediating a metal roof deck and a prorated portion of
the actual cost of removing and replacing the roof system. The costs will be prorated
to reflect the remaining useful life of the existing roof system based upon stipulated
life expectancies of different roof systems, which range from 14 to 20 years. The
settlement will also cover reimbursement of design fees of an architect or roof
consultant of up to $2,500 for roof systems up to 250 squares and up to $5,000 for
roof systems more than 250 squares. In addition, eligible claimants may recover
interior protection compensation of 25 cents per square foot of roof deck where
metal decks must be replaced. This compensation is not prorated and will not be
paid on properties that have interior ceilings or are vacant.
The prorating will apply to the replacement costs of a "Like Kind Roofing System"
to reflect the remaining useful life of an existing roof system. For ballasted and
mechanically attached EPDM roof membranes, depreciation or prorating would be based
upon a "standard useful life" of 14 years. Reimbursement to owners of fully adhered
EPDM membranes and three-ply built-up roof membranes would be prorated based upon
a standard useful life of 15 years, and four- and five-ply built-up roof membrane
roof systems would be prorated based upon standard lives of 18 and 20 years, respectively.
Reimbursement to owners with phenolic foam roof insulation on shingled roof systems
would also be based upon an 18-year standard useful life. The stipulated standard
useful life may be reduced or increased depending upon job-specific conditions.
Claim forms for owners with Beazer/Koppers phenolic foam roof insulation should
be sent to:
Beazer PFRI Claim Program
Mr. Jack D. Gallie
One Oxford Centre
Pittsburgh, PA 15219
For both manufacturers, there will be no dollar limits or caps on the money available
to pay eligible building owners. Every eligible class member is to be paid for each
building with phenolic foam roof insulation on a metal roof deck. An owner must
own the building or be obligated to maintain the roof system as of June 30, 2000.
A former owner can receive compensation only if the former owner holds a written
assignment of the right to seek damages against Manville or Beazer from the current
building owners. Claims are expected be paid within a few months of submission of
the proper documentation to the class action settlement administrator.
Exclusions From the Class Action Settlement
The following parties are not eligible class members and cannot recover any money
from the settlement:
any person or entity whose roof deck is not metal
any person or entity whose roof system is entirely a standing-seam metal roof system
any person or entity whose roof deck has already been fully remediated by Manville
or Beazer, or who has already settled a claim with Manville or Beazer for damage
to his or its roof deck
class action members who file a Request for Exclusion
Building owners who are eligible to be members of the class but choose not to be
can exclude themselves, or opt out. Any member of the class who has opted out may
pursue their own claims against Manville or Beazer at their own risk and must pay
their own attorneys' fees. Building owners who desire to be excluded from the class
to be able to pursue their own claims must notify the claims administrator, Standish
Legal Processing, and complete a Request for Exclusion form that must be postmarked
on or before Nov. 22, 2000.
The settlement applies to all class members who choose not to exclude themselves
from the settlement. A class member is defined as any person or corporation who
owns (or has owned and retains the right to seek damages) a structure (commercial
building, school, condominium, house, garage, etc.) in the United States that contains
phenolic foam roof insulation. manufactured by Manville or Beazer. The phenolic
foam roof insulation must be installed, in whole or in part, in direct or indirect
contact with a metal roof deck.
For the past several months, efforts have been made to notify eligible class members
through newspapers, magazines, trade journals and television, as well as direct
mailings to building owners. A final approval hearing in the U. S. District Court
for the District of Massachusetts is scheduled for Dec. 13, 2000. At this hearing,
the court will determine whether the proposed settlement is fair, reasonable, adequate
and in the best interests of the class members. Any class member may appear at the
hearing in person or through an attorney to show cause why the proposed settlement
is not fair, reasonable or adequate. Any class member who wishes to appear at the
hearing should file a written notice of objection with the court. Supporting documentation
must include the name and address of the class member, the address of the property
subject to the settlement, evidence of membership in the class (i.e., proof that
the property has a metal roof deck with Manville or Beazer phenolic foam roof insulation),
and any memoranda and other documentation setting forth the basis for the objection.
Any documents filed with the court must also be served to Manville and Beazer's
If the settlement is approved by the court, which is expected, Manville and Beazer
will deposit money into a settlement fund, and an Independent Claims Administrator
will be appointed. This administrator will process claims, issue payments out of
the fund and adjudicate disputes regarding the claims process. To participate in
the settlement, claim forms must be filed no later than Dec. 14, 2001, for
the Manville settlement and no later than Dec. 14, 2001, for the Beazer settlement.
Class members who do not opt out will be bound by the final court-approved settlement.
This means that the compensation from the settlement will be the full amount they
can recover from Manville or Beazer for damage caused by Manville or Beazer/Koppers
phenolic foam roof insulation. They will have given up any right to sue Manville
or Beazer for any damages to their buildings resulting from phenolic foam roof insulation.
Building owners who opt out of the class action settlement do not participate in
the settlement and are not limited by its terms. They may pursue their own claims
and seek their own recoveries; in these situations, Manville and Beazer will be
able to assert any defenses they may have to the claim, including expiration of
the applicable statutes of limitation. Prior to deciding to exclude themselves from
the class, building owners should examine their roof systems and consult their attorneys.
Individuals or companies who believe they are eligible to participate in the phenolic
foam roof insulation class action settlement or need additional information can
contact the claims administrator or the attorneys for the class:
Standish Legal Processing
Stonehill Corporate Center
Saugus, MA 01906
1 (877) 917-PFRI www.pfriclaims.com
Attorneys for the class:
Kenneth G. Gilman, Esq.
Douglas M. Brooks, Esq.
Gilman & Pastor, LLP
Saugus, MA 01906