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Faulty Furnaces Set Scores of Fires, Weren't Recalled

Safety: Thousands of homes in the state have such units. After years of delay, agency will issue a warning.


Defective attic furnaces manufactured by a now-bankrupt firm have caused scores of residential fires in California in the last decade, fire inspectors and federal investigators said.

Hundreds of thousands of unsuspecting homeowners may be at risk from these furnaces, made by Indiana-based Consolidated Industries and sold under various brand names in California from 1984 to 1992, these sources said.

The Consumer Product Safety Commission, the independent federal agency responsible for warning citizens about defective products, has known about the problem since the mid-1990s. It said Tuesday it will issue a warning today about the furnaces.

The commission's staff said it didn't issue a warning earlier because federal law prohibits it from doing so while it is in negotiations seeking a product recall. The agency said it had hoped to issue a recall, but was unable to do so when Consolidated--which would have been required to finance this action--went out of business.

The lack of a recall or warning to date had created a sense of foreboding among many fire-prevention officials.

"Every time we have a cold snap we have a furnace fire," said Michael Freige, a senior fire inspector for the Torrance Fire Department, who said Consolidated furnaces have caused seven residential fires there since 1994.

The issuance of a warning without a recall means that homeowners probably will have to foot the bill--averaging about $2,000--for inspecting and replacing the furnaces. Some homeowners' insurance policies may absorb the cost.

The case highlights problems the CPSC runs into when it must deal with financially insolvent companies. It also raises the question of whether laws that limit the agency's ability to issue product warnings during an investigation put consumers at unnecessary risk.

"The preference is for a recall," said Paul H. Rubin, a professor of economics and law at Emory University and a former economist for the CPSC. "Warnings are generally more generic, for example, 'Do not put things in front of electric heaters.' "

Consumer advocates say the commission's tight budget prevents it in many cases from pursuing companies like Consolidated that are unable to finance a recall.

"The commission is always bound by its limited budget," said Rachel Weintraub, a staff attorney for the California Public Interest Research Group. "It's always needing to balance what it can do to protect consumers and what it can afford to do."

To date, no deaths or injuries have been caused by the furnace fires. But residential damages range from a 1990 blaze in North Tustin that destroyed a Ferrari and evening gowns, to a $750,000 fire in Rancho Palos Verdes in 1995 that consumed a home's roof and contents, to a $300,000 blaze in Porter Ranch last year that led to months of counseling for a six-member family.

All three incidents sparked litigation. Two cases were settled and the Porter Ranch case is pending against the builder and Consolidated.

Manufacturer Denies Furnaces Hazardous

Consolidated said during discovery proceedings that it sold about 140,000 attic furnaces in California, said Rob MacDonald, an attorney at Richard G. White Inc. who represents California homeowners. But the CPSC said the company and its distributors sold at least 250,000. The units were sold under 30 brand names, including Amana, Coleman, Kenmore, Premier, Sears and Trane.

Trane Co. said it set out to investigate some of the 7,000 Consolidated furnaces it distributed in California as soon as it was informed of fires caused by the units.

"As soon as Trane learned about the problem with the furnaces it conducted an immediate investigation and virtually all the units it was called in to inspect had no problems," said Jeff Bleich, an attorney with Munger, Tolles & Olson, a law firm representing Trane.

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. Metal rods installed on top of the burner to absorb greater amounts of nitrogen oxide increase the temperature inside the furnace, warp the burner and surrounding parts and eventually allow the flame to escape.

Attorneys for the company dismiss the furnace fires as statistically insignificant.

"Furnaces only last 15 to 20 years," said Daniel Freeland, Consolidated's bankruptcy trustee. "If they were so defective, I think you would have thousands and thousands of fires."

The commission staff said it made the determination that the Consolidated attic furnaces cause fires. The CPSC said its findings supported California homeowners who filed a class-action lawsuit in 1994 against Consolidated and four of its distributors: Addison Products, Bard Manufacturing, American Standard/Trane Co. and Amana Appliances. A Santa Clara Superior Court is scheduled to hear a plaintiffs' motion to set a trial date next month.

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