March 15, 2001
The Orange County Register

By: TERI SFORZA

The fire-prone furnaces that homeowners were warned about have caused at least five blazes since January in Southern California - and may have sparked four more, officials said.

"These furnaces still pose a very real and present life and safety hazard," said Mike Freige, senior fire inspector in Torrance, who has led the charge to educate people about the danger.

"They're igniting wooden attics or admitting deadly carbon monoxide, which is colorless and odorless. People often don't know they've been affected until it's too late."

Still, many homeowners are loathe to spend $2,000 or so to replace the furnaces. Some choose to run them and take their chances, while others get creative.

"One family rigged up the clothes dryer so the hose goes into the house and heats the place," said Paul Hunter, spokesman for the Orange County Fire Authority.

Since New Year's Day, there have been at least five furnace fires in the region:

On Jan. 7, a furnace blaze destroyed the attic of a Plaza del Amo condominium in Torrance. Damage: $35,000.

On Jan. 16, a Lomita family was sleeping when their attic caught fire. Damage: $8,000.

On Jan. 18, smoke poured from a home in a Rolling Hills Estates home in Los Angeles. Significant smoke damage.

On Feb. 7, a Glendale homeowner raised his thermostat to 72 degrees; fire followed. Damage: $25,000.

On Feb. 8, at 3 a.m., a Downey family awoke to the stench of smoke. Damage: $15,000.

Freige is confirming that four more fires - in Whittier, Camarillo, Pismo Beach and Rancho Cucamonga - were also caused by the furnaces.

These furnaces - altered to meet California air-quality standards - have steel rods installed above the burners to reduce nitrogen oxide emissions. But the "nox rods" heat up, crack the furnace casing and let flames escape, posing a substantial fire risk.

In September, the U.S. Consumer Product Safety Commission issued a warning about the furnaces, which bear myriad brand names but were all made by one manufacturer: Consolidated Industries (formerly Premier). They were installed in about 190,000 homes between 1983 and 1994. Dozens of fires have been linked to the furnaces, but no injuries or deaths.

No furnace-linked fires have been reported in Orange County yet this year, but the furnaces are everywhere. More than 184,000 homes, condominiums and apartments were built here during the 12 years the furnaces were on the market.

In the wake of the warning, The Gas Co. has shut off 2,900 suspect ; 1,300 of them were in Orange County.

One belonged to Melissa Oglevee of Irvine, and she was not happy about it. "It's insane," she said.

Oglevee had called The Gas Co. to have her furnace serviced. When a worker saw she had one of the suspect models, it was "red-tagged" and turned off. That was wrong, she said: Her furnace was just 40,000 BTUs (a measure of the heater's power), while the warning applied to furnaces over 60,000 BTUs.

"I told them that's the same as if there was a recall of the Taurus, and they refused to service an Explorer," Oglevee said. "They agreed, but wouldn't turn it back on."

She had a copy of a letter from the CPSC to The Gas Co. - saying that The Gas Co. may be shutting down furnaces unnecessarily - but it didn't seem to matter.

"We're taking the safety high road," said Denise King, Gas Co. spokeswoman. "The CPSC does say that the safety alert is for furnaces rated 60,000 or higher, but there's no clear data concerning the smaller ones. They aren't saying there isn't a problem with the smaller ones; they're saying they haven't tested them. Better to err on the side of safety."

Studies on the smaller furnaces are under way. But the CPSC letter says that even furnaces on the suspect list can be used in the short term, so long as they're thoroughly inspected, there's no evidence of failure and safety improvements are made.

Since Oglevee couldn't persuade The Gas Co. to turn her furnace back on, she hired a heating contractor. He inspected the unit, declared it safe and turned it back on. That cost her $55.

Similar restarts have occurred in the Tustin complex that Robert Marrujo lives in - except with the bigger units targeted by the warning. That makes Marrujo nervous.

"A lot of people don't understand the gravity of the situation," said Marrujo, who lives in a complex of 35 town houses called Sevilla Homes, built by Fieldstone. "They're concerned with, 'Who's going to pay for my furnace?' I'm concerned about that, too - but I'm more concerned about fire and making sure people don't use them."

Marrujo has taken it upon himself to mail warnings to his neighbors and invite them to an informational meeting with four heating contractors. Replacement costs ranged from about $1,650 to $1,925.

Who'll get stuck paying? In Sevilla, and throughout Southern California, many homes are freshly past their 10-year warranty period. One of Fieldstone's homebuilding competitors, Shapell Industries, is covering the cost of replacing defective furnaces, even on homes that are out of warranty. But 396 Investment Co., Fieldstone's parent, has decided homeowners whose warranties have expired are on their own. The company is surveying homes still under warranty and will replace damaged furnaces.

Marrujo doesn't think that's fair, since problems with the heaters surfaced as early as 1994, when the homes were still under warranty. "It would be nice if they could at least split the cost with us, or use their buying power to get us a good deal, or something," Marrujo said. "This is a very serious problem."

Indeed, said fire inspector Freige. He fears that, as the weather warms, people will shut off their furnaces and forget about the problems until next fall. "Then the cold weather will be here again and they'll be lulled into a false sense of security, thinking 'It was OK last year, maybe we can get another year out of it.'

Sunday, January 28, 2001
Home Edition
Section: Real Estate
Page: K-1

By: Jennifer Oldham
TIMES STAFF WRITER

Despite a warning, homeowners balk at replacing the units while they try to pin down who's liable for the cost.

Faulty Consolidated attic furnaces, cited by firefighters as the cause of several home fires this month, continue to bedevil hundreds of Southern California homeowners.

Residents from Lancaster to Laguna Hills are choosing to keep furnaces they know are defective, living without heat or taking other stopgap measures to protect their homes against a potential fire hazard. Many are finding that their builder, their insurer or their home warranty company won't finance a new unit or pay to have it installed.

For some Southland residents, discovering a faulty furnace in their home shattered their peace of mind.

Torrance resident Jim Gicas said that even after he paid $2,900 last month to replace his Consolidated furnace, he continued to climb into his attic on a 6-foot ladder to watch his new furnace operate.

"It's got a big psychological aspect," Gicas said. "With a new furnace it probably goes away, but for a period of time it doesn't."

For others, it shook their faith in their neighbors. Consolidated attic furnaces were often installed by builders in whole subdivisions and condominium complexes, forcing entire neighborhoods to come to terms with the problem.

"I've been dealing with some condo complexes in which the homeowners associations are requiring mandatory inspections," said Dan Armstrong, owner of California Air Concepts, an Orange-based heating and air-conditioning contractor. "The homeowners have not been very cooperative. They think the association or the builder should pay for the inspections."

And many homeowners still don't know about the problem furnaces. A Consolidated attic furnace sparked an early-morning blaze this month in Lomita, rousting homeowners out of bed and causing about $8,000 in damage, according to Los Angeles County Fire Department reports.

In a separate blaze, a Consolidated furnace filled a Rolling Hills Estates home with smoke and caused minimal damage, firefighters said. Firefighters say the units also caused recent fires in Torrance and Rancho Palos Verdes.

The Consumer Product Safety Commission issued a warning about the attic furnaces in the fall on the same day a Times investigation revealed that hundreds of thousands of California consumers owned the faulty units--alleged to have caused scores of fires in the state in the last decade. For more information on furnace brands and model numbers, visit the Torrance Fire Department's Web site at http://www.tfd.torrnet.com and click on the "Notice of Fire Hazard" link.

Consolidated Industries, which went bankrupt last year, distributed the attic furnaces under at least 30 brand names in air-quality management districts in Northern and Southern California from 1984 to 1992.

Reports by federal safety engineers who tested the furnaces show that they cause fires because of alterations Consolidated made to comply with California's regional smog-control rules.

Since the Times story ran, hundreds of homeowners have found themselves facing winter knowing they had a faulty attic furnace. Many balked at the $2,000 to $3,000 required to replace their units. Some chose to use their furnace "sparingly," with disastrous consequences, fire investigators say.

A Torrance resident knew his furnace presented a fire danger because his neighbor's furnace had caught their condominium complex on fire in 1996, said Michael Freige, a senior fire inspector for the Torrance Fire Department. But the owner didn't call the gas company or a heating and air-conditioning contractor to inspect the unit, Freige said.

A few weeks after he put the unit up for sale, a carpet cleaner inadvertently turned on the furnace to dry the carpets. The furnace ignited a fire in the attic on Jan. 7, causing $50,000 in damage, Freige said. The homeowner and his real estate agent would not comment for this story.

Freige, who has been leading the charge to inform Southland residents of the faulty appliances, said he has received calls from residents asking him "just how dangerous" it is to use their Consolidated furnaces--even after they've been red-tagged by the gas company.

Gas company inspectors do not take apart furnaces and inspect them, but rather turn them off, attach a red tag and suggest homeowners hire a heating contractor to take the unit apart and look for any sign of damage.

Some residents who chose to keep the faulty furnaces didn't disclose that fact to people who eventually purchased their homes.

"I'm pretty sure the owner knew about this but they're in Hong Kong, so I couldn't serve papers because I wanted to go to Small Claims Court," said Gicas, who didn't know his home had a Consolidated furnace when he moved in last July. "I think the real estate agent knew too."

Some homeowners have had help from builders such as KB Home, who ripped out Consolidated attic furnaces and installed new units in hundreds of its homes. But other builders haven't been so forthcoming.

About 94 residents living in a Murrieta subdivision with 150 homes found out that they had Consolidated attic furnaces and are trying to get the builder, Pardee Construction Company, to replace the units.

The residents, who filed a separate case against Pardee three years ago alleging construction defects, say the builder is replacing furnaces only for residents not included in this case.

"Pardee will replace the furnaces for the people in the tract who aren't in the lawsuit," said Albert Quintrall, a San Diego attorney representing the homeowners.

Pardee isn't allowed to contact residents involved in the lawsuit, said Chris Hallman, an attorney representing the builder, adding that because of this the company has been unable to determine how many residents in the subdivision own Consolidated furnaces.

Other builders are only replacing damaged Consolidated furnaces, leaving homeowners' associations to wade through warranty documents to determine if they have some recourse.

"We have 55 units here, and I believe in testing they have replaced the roughly 10% that have failed," said Brad Crosley, president of the Hillview Serrano Homeowners Assn. in Lake Forest.

Crosley said the development's builder, Warmington Homes, hasn't decided if it will reimburse homeowners who chose to replace furnaces on their own, adding "they're ducking the issue." Warmington wasn't available to comment for this story.

Crosley's condominium complex is one of many that owns furnaces with 50,000 BTUs or less. BTUs, or British thermal units, are a measure of energy, or the amount of heat required to raise the temperature of 1 pound of water 1 degree Fahrenheit.

The CPSC's warning focused on Consolidated attic furnaces with a rating of 60,000 to 100,000 BTUs. The agency has said that it doesn't have "any data that indicate that such smaller units present a risk of fire similar to that associated with the larger units."

But many Southern Californians who own furnaces with fewer BTUs are still unsure if it's safe to operate their units. Some consumers with these units took the CPSC's advice to raise the furnace and install a noncombustible material underneath it.

Some Consolidated furnace owners decided to use alternate heating methods this winter so they can save money to buy a new furnace.

"I've been using a wood-burning fireplace, as does my neighbor," said Oak Hills resident Thomas Nation Trujillo. "I plan to replace my furnace as soon as economically possible."

Even homeowners whose furnaces have been given a clean bill of health, such as Torrance resident Fred Virrazzi, installed smoke detectors in their attics just in case.

"I had my unit inspected and they found no damage," Virrazzi said. "But I will replace it since I believe it will eventually fail."

Virrazzi said he turns off his furnace whenever he leaves the house.

Thursday, January 11, 2001
Home Edition
Section: Business
Page: C-2
SOUTHLAND FOCUS

By: Jennifer Oldham

Two recent house fires in Southern California were caused by faulty attic furnaces manufactured by now-bankrupt Consolidated Industries, firefighters say. The blazes raise the concern that many of the 140,000 Californians who own Consolidated furnaces are still unaware of the danger they pose. The furnaces were sold under at least 30 brand names in the state from 1984 to 1992. The U.S. Consumer Product Safety Commission issued a warning about the furnaces last fall, on the same day The Times published the results of a months-long investigation into the faulty appliances. The attic furnaces fail because of an alteration Consolidated made to comply with regional air quality regulations. Fire investigators believe the units have caused at least 100 fires in California in the last decade. The most recent fire occurred Sunday in the attic of a vacant two-story condominium in Torrance and caused $50,000 in damage, said Michael Freige of the Torrance Fire Department. A second fire caused by a Consolidated attic furnace did $25,000 in damage to a Rancho Palos Verdes home Nov. 11, he said.

This January 7, 2001 condominium fire in Torrance was caused by a Consolidated Industries/Bard 60,000 Btu furnace. Damage is estimated at $35,000.

On September 27, 2000, the Los Angeles Times published an in depth article detailing the fire and life safety hazards posed by particular horizontal forced air furnaces manufactured by Consolidated Industries. On this same day, the United States Consumer Product Safety Commission (CPSC) issued a warning that certain furnaces manufactured by Consolidated Industries presented a "substantial risk of fire". Unfortunately, fires continue to be caused by these furnaces in the homes of owners who have not heard of, or choose to ignore, this most serious fire and life safety hazard.

Since the September 27, 2000 Times article and the CPSC’s warning, four more fires have been caused by these furnaces in the South Bay area of Los Angeles County. This brings to 29 the number of fires known to have been caused in this area alone since 1990. Many more are known to have occurred throughout the State of California and an untold additional number suspected.

Initial concerns for the fire and life safety hazards posed by these furnaces focused on the units that were in the 75,000 to 120,000 Btu range. But, fire loss experience now has proven that the 60,000 Btu units are also susceptible to failure which result in fire.

Of current debate is whether units in the 50,000 Btu and smaller range also pose the same fire and life safety risk. Efforts are being made by the CPSC to answer this question at the current time. Time alone may also answer this question if the Fire Service begins documenting fires caused by these smaller units.

Homeowners with these furnaces are having a variety of experiences while trying to decide what actions to take. Homeowners have found that most Gas Companies will "red tag" and shut down their furnace if it is found to be one of the Consolidated units identified as hazardous. The Gas Company will not service one of these units, and will refer the owner to a licensed heating contractor. Next comes the decision of what contractor to call.

Some homeowners have simply replaced their units being happy for the years of service they enjoyed and feel thankful for not having had a fire. Others have found contractors who have been willing to remove the offending "Nox" rods with the goal of eliciting a few more years of hopefully trouble free use. The Air Quality Management District (AQMD) has not commented on this practice to date. There is also no published documentation stating that removing Nox rods from one of these furnaces is guaranteed to render it as safe as a new unit.

By JAN HICKENBOTTOM, Special to The Times

Question: I live in a condominium association with less than 20 units. The furnace in each of the units is in the attic. The Consumer Product Safety Commission has identified potentially hazardous defects in the furnaces.

The board of directors is concerned about using reserve funds for this purpose. Can you provide any insight? Can you refer us to any sources of information that might assist us?

Answer: Because the owners are responsible for their own furnaces, it is beyond the scope of the association to handle this matter. As a precaution, the association board should communicate with all of the owners in writing to ensure that everyone knows about the problem. If your condominium units are attached, your safety could depend upon the actions of your neighbors. Therein lies the dilemma for the association.

I referred your problem to Jon Epsten, an attorney with the law firm of Epsten, Grinnell & Howell in San Diego. The firm's Web site, http://www.epsten.com, provides information about the CPSC warning.

Epsten advises: "The issue of addressing defective attic furnaces by a homeowners association where the furnaces are the individual owners' responsibility is problematic. The board of directors' obligation is to its association members as a whole. Since they are aware of the problem, I would suggest that the board immediately notify the owners of the defective units to stop using them. The utility company or a licensed mechanical engineer should inspect the units.

"If the board decides that it is in the best interests of the owners to make the association responsible for the furnace replacements, I would suggest the following:

1) Send a letter to all of the owners explaining the problem and highlighting the safety issues.

2) Propose an amendment to the CC&R that would change the responsibility to the association on a one-time basis only. The amendment should exclude any further involvement by the association including repairs, maintenance and warranty claims.

3) Concurrent with the amendment vote, the members should be presented with a vote on the special assessment for the replacement of the furnaces. If not all furnaces are affected, the amendment should be drafted to only apply to the affected owners.

4) The owners and the association should register with the class-action lawsuit, which is being handled by Rob D. MacDonald, attorney with the law firm of Richard G. White, 333 W. Santa Clara St., No. 910, San Jose, CA 95113, phone (408) 345-4000.

"The board must not undertake the replacement unless they have the responsibility via the amendment. The responsibility is derived from the governing documents. Absent that express authority, the board is stuck with encouraging owners to replace the units, as necessary, on their own accord, but demand that they stop using them in the interim," said Epsten.

MacDonald concurs with Epsten's advice and offers the following information: "Approximately 149,000 of these furnaces were installed. The fire danger from the defective furnaces can be reduced, but the original installation will eventually cause overheating of the wood underlayment, resulting in a fire. Prior to replacing the defective furnaces, owners should document to the fullest extent any and all information about the furnace, including the manufacturer, trade name, model and serial numbers. By registering with the class action, individual owners will be kept informed of the status of the suit as well as other information that might be helpful to them in the future."

Saturday, December 2, 2000
Home Edition
Section: Business
Page: C-1

Safety: In some cases, utilities have shut down units that show no signs of failure or pose no fire risk to homeowners, agency says.

By: JENNIFER OLDHAM TIMES STAFF WRITER

A federal government alert on unsafe residential furnaces this fall has created intense confusion as homeowners and gas companies try to sort out who is at risk.

The attic furnaces, manufactured by Consolidated Industries, are alleged to have caused scores of fires in California in the last decade.

"We've received hundreds of calls from consumers who have had the gas company come out and red-tag their furnace and turn off the gas," said Russ Radar, a spokesman for the Consumer Product Safety Commission. "Some of the utilities are doing this in an arbitrary fashion that doesn't necessarily relate to the safety issues involved."

A red tag notifies homeowners that a warning has been issued that their furnace is not safe.

The attic furnaces, sold under at least 30 brand names and installed in homes in the state from 1984 to 1992, fail and can catch fire because of alterations made to comply with air-quality restrictions, according to federal safety investigators. A class-action lawsuit filed by California homeowners who have the faulty furnaces is scheduled to go to trial next summer.

The CPSC issued a warning about the furnaces this fall on the same day The Times published the results of an investigation that found that hundreds of thousands of unsuspecting California homeowners may have the furnaces. The commission had known about the faulty furnaces since the mid-1990s but failed to warn consumers.

The Times has received dozens of calls and e-mails from homeowners from Pasadena to San Diego who are trying to determine whether they have a faulty Consolidated furnace. Many have turned for help to their local gas company.

But in some cases, the gas companies are shutting down Consolidated furnaces that aren't showing signs of failure or that were installed outside the boundaries of the Bay Area Air Quality Management District or the South Coast Air Quality Management District, Radar said. Most of the faulty furnaces are located in these areas--although Consolidated furnaces also were sold as replacement furnaces.

(Gas company technicians relight pilot lights on furnaces and make minor fixes but do not do major repair work that involves taking the unit apart. A licensed contractor must look at parts inside Consolidated furnaces to determine whether there is damage.)

The CPSC recently sent a letter to gas companies saying inspectors should red-tag only Consolidated furnaces with an "X" at or near the end of the furnace's model number. These furnaces have metal rods installed on the top of the burner that increase the temperature in the furnace. These rods, designed to decrease nitrogen oxide emitted by the furnace, can cause the burner to warp and eventually allow fire to escape, fire investigators say.

But federal safety investigators say the new CPSC caveat may cause inspectors to miss units whose model numbers were changed by Consolidated distributors to reflect their brand names.

"The only problem with this theory is that it works if the model numbers start with HAC or HCC, but several distributors changed the model numbers," said Gerald Zamiski, an engineer at Long Beach-based Vollmer-Gray Engineering Laboratories who tested hundreds of Consolidated's furnaces for a report commissioned by the CPSC.

For example, Trane, one of four distributors named in the class-action lawsuit against Consolidated, starts the model numbers on the Consolidated furnaces that bear its brand name with the designation THN.

Addison Product Co., Bard Manufacturing, American Standard/Trane Co. and Amana Home Appliances are named in the class-action suit, which is scheduled to go to trial July 2 in Santa Clara Superior Court. About 150,000 homeowners are included in the class.

Southern California Gas Co. red-tagged about 1,400 Consolidated furnaces but now is sending letters to residents outside the South Coast Air Quality Management District offering to reinspect their furnaces, said Denise King, a gas company spokeswoman.

San Diego Gas & Electric inspectors have red-tagged about 840 furnaces since the original warning was issued, said Ed Van Herik, a utility spokesman. When it received the CPSC's letter, the utility sent a follow-up letter to 740 of these residents saying it would reinspect their furnace, he said.

"Originally any [Consolidated] furnaces we found we just tagged," Van Herik said. "Now we just tag those with the 'X.' "

Even if they determine they have a Consolidated furnace, homeowners are having a tough time getting insurers to pay for a replacement. Most have had to pay at least $2,000 to have a new furnace installed. Some have had contractors refuse to come to their home if they think they have a Consolidated unit.

Meanwhile, Zamiski said he's been hired by two dozen builders in the state to inspect furnaces in their communities. Southern California's fourth-largest builder, Shea Homes, said it sent about 9,000 notices to residents in its suburbs and received 600 or so replies. It plans to send out 5,000 additional notices, said Max Johnson, vice president and general counsel at J.F. Shea Co.

The CPSC is still in talks with companies that distributed Consolidated furnaces to try to get them to fund a recall, Radar said.

The agency said it didn't issue a warning earlier about the furnaces because it was trying to negotiate a recall with Indiana-based Consolidated Industries. But it was unable to do so when the company filed for Chapter 7 bankruptcy and liquidated its assets last summer.

NEWS from CPSC U.S. Consumer Product Safety Commission Office of Information and Public Affairs Washington, DC 20207

FOR IMMEDIATE RELEASE CONTACT: CPSC Hotline: (800) 638-2772
September 27, 2000 CPSC Contact: Ken Giles
Release # 00-190 (301) 504-0580 Ext. 1184

WASHINGTON, D.C. - The U.S. Consumer Product Safety Commission (CPSC) is warning consumers in California that certain gas-fired horizontal forced-air furnaces manufactured by Consolidated Industries (formerly Premier Furnace Company) present a substantial risk of fire. There have been about 30 reports of fires and damage to homes associated with these furnaces, as well as failures of burners and heat exchangers that can lead to fires. The furnaces were installed exclusively in California.

Consolidated manufactured approximately 190,000 of these furnaces from 1983 through 1994 under many different brand names. Most of the furnaces were manufactured under the Premier/Consolidated labels. All of the furnaces can be identified by the fact that they are equipped with steel control rods installed above the burners. These steel rods were required to satisfy California air quality regulations for nitrous oxide emissions.

Many of these furnaces are still in use. Normally, the furnaces are installed in attics, although some may be installed in crawl spaces. The Commission is warning consumers to have their gas-fired furnaces inspected by a licensed heating contractor to determine whether the furnaces are subject to this safety alert. The contractor also should determine whether the burners and/or heat exchangers of units are damaged, or whether wood under or near the furnaces shows signs of damage, such as charring or blackening. If this is the case, the furnace should be replaced immediately or repaired.

Because Consolidated is currently in bankruptcy liquidation, the availability of repair parts is at this time unresolved. However, there is on-going private litigation which could enable consumers to recover at least some of their out-of-pocket expenses for replacement or repair of the furnaces.

Suggestions for improving the fire safety of all horizontal forced-air furnaces in attics are:

Protect the wood deck or rafters on which the furnace is mounted by covering it with a non-combustible material such as cement board that extends a minimum of 12 inches past the side of the furnace.

Provide an air space beneath the furnace. A licensed contractor can perform this work and can offer the homeowner several ways to accomplish this.

Make sure the furnace is installed correctly and serviced at least annually. The inspection should include a safety inspection of the burner assembly and heat exchanger.

Install an ionization-type smoke detector inside the attic to provide an early warning of smoke or fire. For additional information, consumers should contact CPSC's toll- free hotline at (800) 638-2772.