[Federal Register Volume 60, Number 217 (Thursday, November 9, 1995)]
[Notices]
[Pages 56642-56645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27518]
[[Page 56641]]
_______________________________________________________________________
Part II
Department of Housing and Urban Development
_______________________________________________________________________
Manufactured Home Construction and Safety Standards; Notice of
Settlement
Federal Register / Vol. 60, No. 217 / Thursday, November 9, 1995 /
Notices
[[Page 56642]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
[Docket No. FR-3969-N-01]
Manufactured Home Construction and Safety Standards; Notice of
Settlement
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner (HUD).
ACTION: Notice of Settlement.
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SUMMARY: Pursuant to a Stipulation and Order of Settlement and
Dismissal issued by the United States District Court for the Southern
District of New York on September 7, 1995, HUD is providing notice of a
settlement of the case entitled and numbered Thinking Vents, Inc. v.
Henry Cisneros, Secretary of Housing and Urban Development, 94 Civ.
8488 (AGS).
DATES: November 9, 1995.
FOR FURTHER INFORMATION CONTACT: Philip W. Schulte, Acting Director,
Manufactured Housing and Construction Standards Division, Department of
Housing and Urban Development, 451 Seventh Street, SW., Room B-133,
Washington, DC 20410-8000. Telephone: (voice) (202) 755-7420; (TDD)
(202) 708-4594. (These are not toll-free numbers.)
SUPPLEMENTARY INFORMATION: Accordingly, the following attachment is the
Stipulation and Order of Settlement and Dismissal issued by the United
States District Court for the Southern District of New York on
September 7, 1995 in the case entitled and numbered Thinking Vents,
Inc. v. Henry Cisneros, Secretary of Housing and Urban Development, 94
Civ. 8488 (AGS).
Dated: October 6, 1995.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
Attachment--United States District Court Southern District of New
York
94 Civ. 8488 (AGS).
Thinking Vents, Inc., Plaintiff, v. Henry Cisneros, Secretary of
Housing and Urban Development, in his official capacity, Defendant.
Stipulation and Order of Settlement and Dismissal
Whereas, plaintiff THINKING VENTS, Inc. (``TVI'') commenced this
action in the United States District Court for the Southern District of
New York, seeking injunctive and monetary relief from defendant HENRY
CISNEROS, SECRETARY OF HOUSING AND URBAN DEVELOPMENT (``HUD''); and
Whereas, the parties to this Stipulation and Order of Settlement
and Dismissal (``Stipulation and Order'') seek to resolve this action
without resort to further litigation;
It is hereby stipulated and agreed, by and between plaintiff TVI,
and defendant HUD, as follows:
1. Plaintiff hereby dismisses this action with prejudice and
without costs, disbursements, or attorneys' fees.
2. Upon this Stipulation being So Ordered by the Court, HUD shall
issue a letter in the form annexed hereto as Exhibit A. Said letter
shall be effective as of the date the Court signs this Stipulation and
Order, and HUD shall forward the letter to all Design Approval
Inspection Agencies and publish it, along with this Stipulation and
Order, in the Federal Register as soon as practicable.
3. HUD shall, it its own cost, conduct field inspections of 100
homes that, subsequent to the Court's signing of this Stipulation and
Order, have been fitted with the Thinking Cap Ventilation System
(``TCVS'') and sold. Such field inspections shall be conducted in the
manner provided by the testing protocol annexed hereto as Exhibit B,
provided, however, that a home shall not be eligible for a field test
unless: (a) all clothes dryers are vented directly to the outside and
not vented under the home; (b) no open flame heaters are used in the
home unless vented directly outside; (c) the ground under the home does
not have standing water; (d) skirting or underpinning has a minimum of
one foot of ventilation for every 150 square feet of ground area; and
(e) the ground beneath the home has a vapor barrier if the applicable
home owner's manual so requires. The homes inspected shall be selected
by a method of random selection set forth in paragraph 4, with 50 of
the homes located in thermal Zone 3 (the ``North Zone'') and 50 of the
homes located in thermal Zones 2 and 1 (the ``South Zone''). HUD shall
make every effort to complete the inspections within 18 months of the
date this Stipulation and Order has been signed by the Court. However,
in no event shall the inspection period exceed 30 months (``the testing
period'').
4. The homes shall be selected for inspection pursuant to a two-
step process. (a) First, HUD will randomly select on a quarterly basis
two pools of homes in which the TCVS has been installed subsequent to
the Court's signing of this Stipulation and Order from lists of homes
sold in each of the North and South Zones in the previous three months.
One pool shall be for the North Zone and one pool for the South Zone.
Such random selection shall be based on the serial numbers of the homes
on the lists. HUD shall randomly select 10% of the homes on the South
Zone list for the South Zone pool, and 25% of the homes on the North
Zone List for the North Zone pool. In the event that, at the time of a
particular selection, there are fewer than 250 homes sold using the
TCVS, the percentages will be increased to 20% in the South Zone and
40% in the North Zone. TVI shall have the right to be present at such
random selection. (b) Second, from the North and South Zone pools of
homes, HUD will select the homes to be inspected until a sufficient
number of homes that meet the testing conditions set forth in paragraph
3 above have been selected. HUD will select homes based on
considerations of obtaining a representative geographic sampling and
limiting the costs of such inspections. If, however, there is any state
that is not represented by either pool but contains homes in which the
TCVS has been installed, HUD may randomly select up to two homes in
that state for inspection. HUD will give TVI notice of any selections
made.
5. At its option, TVI shall have the right, at its own cost, to
conduct field inspections of the same 100 homes described in paragraphs
3 and 4, above. Such field inspections shall be conducted in the manner
provided by the testing protocol annexed hereto as Exhibit C. If TVI
chooses to conduct its inspection of a particular home on a different
date or time than that designated by HUD, TVI shall give HUD 5 days
notice of the date, time and location of the inspection, and HUD shall
be entitled to attend any such inspection.
6. HUD shall give 5 days notice to TVI of the date, time and
location for each of the field inspections described in paragraph 3,
above, in order to enable TVI to exercise its right to be present at
such inspections. No such inspections shall take place on a Friday,
Saturday or Jewish Holiday. Such Jewish holidays will include those
listed on the schedule annexed hereto as Exhibit D. For subsequent
years, TVI will supply such list to HUD not later than January 31 of
that year.
7. In the event that a home passes TVI's field inspection but fails
HUD's field inspection, TVI may petition the Court to appoint an
arbiter (the ``arbiter'') to determine whether such home passes or
fails the field inspection. At the arbiter's discretion, said arbiter
may visit the subject home(s) to assist the arbiter in reaching
[[Page 56643]]
a determination. The costs associated with the arbiter's work will be
agreed upon by the arbiter with the parties prior to the arbiter
performing any work, and will be borne by the party against which the
arbiter finds.
8. TVI and HUD hereby stipulate and agree that the arbiter, and any
persons duly designated to act on the arbiter's behalf, shall be immune
from personal liability for any conduct undertaken pursuant to this
Stipulation and Order in any action brought by TVI or HUD or by anyone
acting on their behalf, at their behest, or in their interest. TVI and
HUD hereby agree that they will not sue the arbiter, or any persons
duly designated to act on the arbiter's behalf, on account of any
action taken pursuant to the Stipulation and Order.
9. The Court may appoint an arbiter jointly recommended by the
parties. To assist in such appointment, within 15 days of the date the
Court signs this Stipulation and Order, the parties will each nominate
five candidates to be recommended as arbiter, and the parties will use
best efforts to agree upon and jointly recommend such arbiter from such
candidates to the Court.
10. In the event that 94 or more of the homes inspected pass HUD's
field inspection or the determination by the arbiter, then the TCVS
shall be deemed to have passed the test and the letter in the form
annexed hereto as Exhibit A shall remain in effect.
11. In the event that 7 or more of the homes inspected fail HUD's
field inspection and, if such determination is sought, the arbiter's
determination, then the TCVS shall be deemed to have failed the test,
the letter in the form annexed hereto as Exhibit A may be revoked, and
HUD's obligation under paragraph 3 of this Stipulation and Order to
test homes shall terminate. Revocation pursuant to this paragraph and
paragraph 14 below are the only circumstances under which the letter in
the form annexed as Exhibit A may be revoked.
12. In the event that the TCVS fails the test, HUD shall provide
notice to all owners of homes in which the TCVS has been installed that
the TCVS has failed the test; that their homes do not comply with the
applicable Federal Manufactured Home Construction and Safety Standards;
that if there is any moisture damage, TVI will, during the two-year
period following the date of failure of the test, repair, without cost
to the owner, the home and replace the TCVS with a system that meets
the standards; that the TCVS is under a ten year warranty from TVI for
the operation of the TCVS; and that if there are any questions about
the ventilation systems or the notice, the owners can call HUD or the
applicable State Administrative Agency. If, during the testing period
or within two years from the date of the failure of the test as
described in paragraph 11, a notified homeowner's home shows evidence
of damage caused by the TCVS or the homeowner requests that the home be
retrofitted, the home shall be retrofitted, at TVI's cost, with a
ventilation system that brings the home into compliance with the
applicable Federal Manufactured Home Construction and Safety Standards
relating to ventilation, and TVI shall repair, without cost to the
homeowner, any and all damage to the home caused by the installation
and use of the TCVS.
13. During the testing period, TVI shall, on a monthly basis,
provide HUD with two lists, one for the North Zone and one for the
South Zone, of all consumers known to TVI who purchased homes
containing the TCVS during the testing period. Each list shall include
the consumer's address and telephone number, as well as the consumer's
home's serial and HUD label numbers and the dates the consumer's home
was produced and sold. The failure of TVI to provide all such
information for a given home on an occasional basis shall not be a
reason to exclude such home from the selection process if the
information provided is otherwise sufficient to include such home in
the selection process. If necessary to complete the testing within the
testing period, TVI shall provide the consumer lists described above on
a bi-weekly basis.
14. In the event that the random selection procedure described in
paragraph 4 above does not yield 100 homes overall that meet the
conditions for testing set forth in paragraph 3 above, then HUD will
randomly select additional homes for the pools using the procedures set
forth in paragraph 4 until 100 homes have been obtained. If, after
exhaustion of the pools and lists using the procedures set forth above,
there are still not 100 homes that meet the conditions for testing,
then TVI may waive all the conditions set forth in paragraph 3, and HUD
may select such homes to be tested based on considerations of obtaining
a representative geographic sampling and limiting the costs of such
inspections. In the event that TVI fails to grant such wavier, or, if
upon such waiver there are still not 100 homes available for testing,
the letter in the form annexed as Exhibit A may be revoked. In the
event that a minimum of 400 homes containing the TCVS are not sold
during the first 12 months of the testing period, or 200 homes are not
sold in each 6 month period thereafter, than the letter in the form
annexed as Exhibit A may be revoked.
15. TVI shall maintain a general liability insurance policy with
coverage of $2,000,000.00. No later than 60 days after the date this
Stipulation and Order is signed by the Court, TVI shall secure a
product recall policy with coverage of $500,000.00. Within one year of
the date this Stipulation and Order is signed by the Court, TVI shall
secure an umbrella coverage to increase the general liability coverage
to $5,000,000.00, and within two years of the date this Stipulation and
Order is signed by the Court, TVI shall increase the general liability
coverage to $10,000,000.00.
16. TVI shall, during the testing period, provide customers with a
ten year limited warranty as set forth in Exhibit E.
17. TVI shall, no later than 60 days after the date this
Stipulation and Order is signed by the Court, post a bond in the amount
of $50,000.00 to be used in the event that damage occurs or
retrofitting is need or requested that is not covered by the above-
described insurance policies. During the testing period, TVI shall
place 5% of its receipts derived from sales of the TCVs in an escrow
account with an independent financial institution, which sums shall be
available to augment the bond (the ``set aside sum''). A portion of the
set aside sum may be used to administer the escrow account. TVI will
provide HUD with a monthly accounting of the set aside sum.
18. In the event that the TCVs passes the test as set forth in
paragraph 10 above, the bond, and set aside sum, including accrued
interest, will be the property of TVI. TVI will continue to provide a
10-year limited warranty as set forth in Exhibit E for the operation of
the TCVSs it sells in the future. In the event that the TCVS fails the
test as set forth in paragraph 11, the insurance, bond and set aside
sum, and accrued interest, will remain in place for two years following
the determination that TVI has failed the test as set forth in
paragraph 11, and thereafter any sums remaining shall be in the
property of TVI.
19. This Stipulation and Order constitutes the entire understanding
and agreement between the parties with respect to the subject matter of
this Stipulation and Order. All prior or contemporaneous
understandings, discussions, agreements and/or representations with
respect to the said subject matter, whether oral or written, including
the Agreement dated October 22, 1987, and the Alternative Construction
letter issued to Horton
[[Page 56644]]
Homes, are expressly superseded by this Stipulation and Order.
20. This Stipulation and Order will be binding on and will inure to
the benefit of the parties and their respective agents, servants,
employees, successors, assigns, and related, affiliated and subsidiary
entities.
21. This Stipulation and Order will be interpreted and otherwise
governed under the laws of the United States.
22. The Court shall retain jurisdiction over this matter and over
the parties for the purpose of enforcing the terms of the Stipulation
and Order and any Order entered by the Court thereupon. In the event
either party to this Stipulation and Order fails to fulfill is
obligations as set forth herein, the sole remedy will be an application
brought before this Court. Any controversies between the parties
regarding the terms of this Stipulation and Order shall be resolved by
the Court employing such procedures as the Court deems appropriate.
Dated: September 5, 1995, New York, New York.
Thinking Vents, Inc.
By:
Stanley Kolt,
President.
Dated: September 5, 1995, New York, New York.
Laufer & Farkash
Attorneys for Plaintiff
By:
Jacob Laufer (JL 2846)
101 East 52d Street, New York, NY 10022, (212) 308-8500.
Dated: September 5, 1995, Washington, DC.
United States Department of Housing and Urban Development.
By:
Nicholas Retsinas,
Assistant Secretary for Housing.
Dated: September 6, 1995, New York, New York.
Mary Jo White,
United States Attorney for the Southern District of New York Attorney
for Defendant.
By:
Beth E. Coldman (BG-6247),
Assisant United States Attorney, 100 Church Street--19th Floor, New
York, New York 10007, Tel. No.: (212) 385-6225.
So Ordered:
Allen G. Schwartz,
United States District Judge.
Exhibit A
Mr. Stanley Kolt, Chief Executive Officer
Thinking Vents, Inc.
P.O. Box 752
Mamaroneck, New York 10543-0752
Dear Mr. Kolt: Subject to the terms and conditions of the
Stipulation and Order dated September 1, 1995, entered in the case
captioned Thinking Vents, Inc. v. Henry Cisneros, 94 Civ. 8488
(AGS), in the Southern District of New York (the ``Stipulation''),
the U.S. Department of Housing and Urban Development
(``Department'') will take no action with regard to any possible
violations of the provisions of the Manufactured Home Construction
and Safety Standards (``Standard'') and Manufactured Home Procedural
and Enforcement Regulations (``Regulations'') listed below against
any manufactured home manufacturer that installs and utilizes the
Thinking Cap Ventilation System (``TCVS'') in any of its homes.
Accordingly, all Design Approval Primary Inspection Agencies
(``DAPIAs'') are authorized to approve designs utilizing the TCVS,
notwithstanding that said homes are not constructed to the precise
specifications of the following provisions of the Standards and
regulations:
1. 24 C.F.R. Sec. 3280.103(b)(4), ``Whole House Ventilation,''
insofar as interior air will be ventilated through the roof cavity.
2. 24 C.F.R. Sec. 3280.504(c)(1), ``Attic and Roof
Ventilation,'' insofar as neither the minimum free ventilation area
nor a mechanical ventilation system will be installed.
3. 24 C.F.R. Sec. 3280.504(c)(2), ``Attic and Roof
Ventilation,'' insofar as certain single section manufactured homes
that are excepted from attic ventilation required by 24 C.F.R.
Sec. 3280.504(c)(1), have air leakage paths to the attic space that
are not sealed.
4. 24 C.F.R. Sec. 3282.205(c), ``Certification Requirements,''
insofar as the label, in the form required by 24 C.F.R.
Secs. 3280.11 and 3280.362(c)(2), may be placed on each affected
home even though the home is not constructed to the precise
specifications of the Standards set forth above.
A copy of this letter will be forwarded to all DAPIAs. Upon
receipt of this letter, DAPIAs are authorized to approve designs
utilizing the TCVS under the conditions set forth herein. DAPIAs
shall provide the National Conference of States Building Codes and
Standards, Inc. (``NCSBCS'') with a set of approved plans for all
designs to be covered by this letter within 5 days of the date of
approval of such designs. The failure of any manufactured home
design to comply with the precise specifications of the Standards
and Regulations set forth above is not grounds for a DAPIA to deny
approval of any manufactured home design.
Sincerely,
David C. Nimmer,
Director, Office of Manufactured Housing and Regulatory Functions.
Exhibit B--Inspection Protocol Thinking Cap Ventilation System
Purpose of Inspection
To determine if the presence of moisture in the ceiling/roof cavity
is at a level which is known to affect material and structural
degradation.
Method of Inspection
The primary method of inspection is to visually examine the
interior of the ceiling/roof cavity for signs that the wood and wood
based products have reached fiber saturation and for signs of surface
moisture on metal surfaces and other materials of low permeability.
Failure Level of Moisture
The failure level of moisture content shall be fiber saturation
point of the material being evaluated.
The failure level of surface moisture will be when wetting occurs
and/or evidence of moisture accumulation exist.
Indicators That Fiber Saturation is Exceeded For Wood and Wood-Based
Products
Warping, bowing, buckling, delamination, swelling, visible mold,
smell of mold, water marks, wet-to-touch, moisture droplets, ice and
frost build-up, wood rotting or other signs of material decomposition.
Indicators of Excessive Accumulating Surface of Moisture
Ice and frost build-up, puddling of water on vapor retarder, wet
insulation frost and ice on insulation, under surfaces, wet-to-touch,
mold smell, visible mold, water marks on ceiling. Deterioration of
ceiling. Evidence of moisture dripping into walls.
Pass/Fail Criteria
A failure would occur if any of the following conditions are
present:
I. Fiber saturation levels are exceeded as shown by any of the
indicators identified above.
II. Moisture is Accumulating in the Ceiling/Roof cavity as shown by
any of the indicators identified above.
Other Conditions
1. The homes will be set-up in accordance with the Manufactured
Housing Construction and Safety Standards and comply in all relevant
respects with the standards.
2. The Thinking Cap will be inspected to note if the system is open
or closed and the attic and outdoor temperature at the time of the
inspection should be noted on the inspection report.
3. The moisture content of wood framing members may be tested in
accordance in ASTM D4444-94, Standard Test Methods for Use and
Calibration of Hand-Held Moisture Meters.
Exhibit C--Testing Protocol for Thinking Cap Ventilation System
The testing shall consist of an on-site investigation of each of
100 manufactured homes that are equipped with the Thinking Cap
Ventilation System (``the subject homes'').
Stanley Kolt or his representative shall conduct a test to
determine the
[[Page 56645]]
level of moisture in the home. Such test shall be conducted by exposing
the wood members of the attic by removing a single ceiling vent and
determining the quantity of water in the wood. Said quantity shall be
determined by the use of a wood moisture detector. A wood moisture
detector reading of 19 percent or less shall be an acceptable level of
moisture in the wood members of the attic. Should the wood moisture
detector reading be 19 percent or less then the subject home shall be
deemed to have passed the investigation. Should the wood moisture
detector reading be greater than 19 percent, then the subject home
shall be deemed to have failed the investigation.
Exhibit D--Jewish Holidays 1995-96
1995: September 24, 25, 26, 27; October 3, 4, 5, 8, 9, 10, 11, 15, 16,
17, 18.
1996: March 3, 4, 5; April 2, 3, 4, 9, 10, 11; May 23, 24; July 25;
September 15, 16, 22, 23, 24, 30.
Exhibit E--Thinking Vents, Inc.
The ``Thinking Cap'' is a fully automatic natural passive total
home ventilation system. It operates continually without using
electricity. This system improves the ventilation of the occupied space
of the home and attic. To maintain the optimum utilization of the
system with respect to ventilation and therma efficiency, do not block
or impair the automatic operation of the ceiling vents of your home or
the roof. ``Thinking Caps''.
Limited Warranty
Thinking Vents, Inc. warrants each ``Thinking Cap'' ventilation
system against defects in materials and factory workmanship for a
period of ten (10) years from the date of manufacture. If under normal
use and service the ``Thinking Cap'' discloses such defect within the
warranty period, the homeowner may ship the entire unit or any
defective part or parts to the manufacturer, freight prepaid by the
purchaser and the manufacturer shall repair or replace such defective
part or parts as may, in its judgment, be required to return the unit
to full and proper working order.
Consumer Information and Comment Card
1. Owner's: Name-------------------------------------------------------
Address----------------------------------------------------------------
City, State & Zip------------------------------------------------------
Telephone No-----------------------------------------------------------
2. Manufacturer's Name____________ Date Purchased____________
3. Home Model____________ Serial No.____________
4. Date of Manufacture____________ HUD No.____________
5. SQ FT of Home______ Single____ Double____ Triple____Wide
6. How many in household____ Shingle Roof____ Metal Roof____
7. What is your heating system type______________
8. Do you have central air conditioning______________
9. Is this the first ``thinking Cap'' system in any home you have
owned or occupied________
10. Comments-----------------------------------------------------------
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Please return card so we can best service your ten year
warranty.
[FR Doc. 95-27518 Filed 11-9-95; 8:45 am]
BILLING CODE 4210-27-M
