DR Horton Class Action Lawsuit, Construction Defects, Mortgage Fraud, Homeowner Lawsuits Across Multiple States
DR Horton, America’s largest homebuilder, faces multiple class action lawsuits alleging construction defects, fraudulent mortgage practices, and breach of warranty across at least eight states. Homeowners claim DR Horton built defective homes unsuited for local climates while DR Horton and its mortgage company DHI Mortgage allegedly suppressed property tax estimates to artificially lower monthly payment calculations.
Three major class actions are currently active: Louisiana homeowners battling humidity and mold defects, Hawaii residents suing over corroding foundation components, and a nationwide RICO lawsuit over deceptive mortgage practices.
What Is the DR Horton Class Action Lawsuit?
DR Horton faces three primary class actions: Louisiana homeowners allege defective HVAC design causing excessive moisture and mold growth unsuitable for humid climates; Hawaii homeowners claim corroding galvanized metal foundation components threaten structural integrity; and a December 2024 federal RICO lawsuit alleges DR Horton and DHI Mortgage concealed true property tax costs.
Louisiana Class Action (2022-Present) Case: Dixon v. D.R. Horton, 19th Judicial District Court, Louisiana Filed in March 2022 by Alicia and West Dixon of Youngsville, Louisiana, claiming their 2014-purchased home wasn’t built to withstand Louisiana’s heat and humidity, resulting in mold, humidity and HVAC issues. The lawsuit accuses DR Horton of constructing homes along the Interstate 10 corridor between Lake Charles and Slidell that aren’t properly built to withstand Louisiana’s summer heat.
Hawaii Class Action (2021-Present) Case: Nagano v. D.R. Horton, Civil No. 1CCV-21-0000867 KTM, First Circuit Court Judge Kevin T. Morikone certified the class action on January 22, 2024, with trial scheduled for July 13, 2026. The class includes all individuals and entities owning residential homes, condominiums, and townhomes in Hawaii sold by Horton that were built with galvanized metal foundation components.
Federal RICO Mortgage Lawsuit (December 2024) Case: Robinson v. D.R. Horton Inc., Case No. 2:25-cv-02394, U.S. District Court for the District of Nevada Filed December 3, 2024, in Nevada federal court, alleging DR Horton and DHI Mortgage engaged in a bait-and-switch scheme that concealed actual monthly payments by providing artificially low property tax estimates.
Construction Defects Alleged in Louisiana Lawsuit
Louisiana homeowners report excessive moisture and humidity levels leading to water intrusion, drywall issues, and rampant mold and mildew growth; structural defects including improperly installed windows and design flaws rendering homes unsuitable for Louisiana’s climate; and ineffective HVAC systems preventing homes from cooling during hot summer months.
According to the Dixons, insufficient attic space causes homes to act like vacuums, pulling heat in and creating moisture. Audio from a 2021 conversation between then DR Horton city manager Leslie Gulliksen and a homeowner revealed the company knew certain building envelopes weren’t suited for the Gulf Coast’s humid climate.
Expert testimony revealed some DR Horton HVAC systems are designed to circulate and return air properly, but when that process fails, pressure imbalances force outdoor humidity into homes while failing to properly ventilate moisture.
Health impacts reported:
- Mold and mildew causing property damage and health problems
- Respiratory issues from poor indoor air quality
- Health concerns requiring families to evacuate homes
- Financial burden from increased energy costs and repair expenses
Hawaii Foundation Defects: Corroding Metal Components
Hawaiian homeowners claim Simpson Titen anchors, shot pins, and steel sill tracks are corroding and have failed or will fail. The lawsuit claims Horton caused installation of defective galvanized metal foundation components in wind-resisting systems, and that these components are corroding or will corrode.
Christie Volkmer and her family have been drinking bottled water and showering in a makeshift camper shower for years after watching black slime coming out of the kitchen sink, showers, and toilet in their Kauai home purchased in 2018. Volkmer estimates half of her 144-home community faces identical problems.
Class Registration Deadline: September 5, 2025, is the deadline to register with Class Counsel to include homes in Contractor Repair Act inspections. Homeowners who miss this deadline will be dismissed from the class action without prejudice.
Federal RICO Lawsuit: Mortgage Payment Suppression Scheme
The lawsuit alleges DR Horton and DHI Mortgage deliberately included only a fraction of required property taxes in initial mortgage payment calculations, resulting in monthly payment estimates significantly lower than what buyers would eventually pay.
How the Alleged Scheme Worked: DHI Mortgage creates a “suppressed” escrow estimate based on lower property tax assessments for unimproved land before the home is built, rather than the post-construction assessed value.
The true cost of monthly payments was only revealed after closing when a new mortgage servicer conducted an escrow analysis including full property taxes.
Real Homeowner Impact: Plaintiff Frankie Santiago was promised a monthly payment of $2,164.68 for his Lake County, Florida home, but less than a year after closing, his payment skyrocketed by nearly $1,000 to $3,136.33 when the new servicer included all property taxes and back taxes.
The lawsuit suggests tens of thousands of likely class members nationwide, with DR Horton closing over 89,000 homes in fiscal year 2025, including 46% with FHA loans.
Who Is Included in the Class Actions?
Louisiana Lawsuit: The couple’s lawyers contend more than 6,000 homeowners across Louisiana fell prey to deceptive sales tactics and now own homes with “defective design and construction”. Homes built by DR Horton after 2012 in Lafayette Parish and along Louisiana’s Gulf Coast experiencing mold, mildew, humidity, or HVAC problems may qualify.
Hawaii Lawsuit: All Hawaii homeowners who purchased DR Horton residential homes, condominiums, or townhomes built with galvanized metal foundation components (galvanized metal sill tracks, embedded shot pins, or anchors in contact with foundations).
Federal Mortgage Lawsuit: Plaintiffs seek to represent a class of homebuyers who purchased DR Horton homes with mortgages originated by DHI Mortgage that included suppressed estimated taxes in monthly payments. The class potentially includes buyers from multiple states, including Florida, Nevada, and South Carolina.
Legal Claims Against DR Horton
Louisiana Lawsuit Claims:
- Breach of Louisiana New Home Warranty Act
- Fraud and misrepresentation about construction quality
- Racketeering and civil conspiracy allegations claiming defendants engaged in racketeering activities to profit from selling homes and HVAC services
- Negligence in design and construction
- Breach of warranty regarding quality of materials and workmanship
Hawaii Lawsuit Claims:
- Installation of defective galvanized metal foundation components
- Failure to use materials suitable for Hawaii’s climate and building requirements
- Breach of warranty
- Violation of Hawaii’s Contractor Repair Act
Federal RICO Mortgage Lawsuit Claims:
- Violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), Nevada Deceptive Trade Practices Act, negligence and unjust enrichment
- Fraudulent concealment of true monthly mortgage costs
- Deceptive business practices targeting first-time homebuyers
Under RICO, homeowners may be entitled to three times their out-of-pocket losses.
Current Status of DR Horton Lawsuits
Louisiana Lawsuit: A district court judge recently denied DR Horton’s attempt to dismiss the case for lack of evidence and rejected the company’s effort to move the dispute to binding arbitration. However, in February 2023, U.S. District Judge Brian Jackson suspended proceedings and referred the case to arbitration as required by the Federal Arbitration Act.
The plaintiffs’ attorneys filed a motion for reconsideration, and litigation continues over arbitration enforcement.
Hawaii Lawsuit: Class certified. Mediation cutoff is December 31, 2025, with trial scheduled for July 13, 2026. Homeowners must register by September 5, 2025, to remain in the class.
Federal Mortgage Lawsuit: Early litigation stage. Filed December 2024. DR Horton spokesperson stated the companies strongly disagree with the claims and intend to vigorously defend against them.
Alabama “Gold Fortified” Lawsuit: 88 Baldwin County homeowners filed a class action claiming DR Horton built houses between 2015 and 2021 that don’t meet “Gold Fortified” standards required to withstand Category 3 hurricanes. Homeowners allege violations of the Alabama Deceptive Trade Practices Act.
DR Horton’s Defense and Arbitration Strategy
DR Horton attorneys argue the arbitration clause is a binding agreement stipulating any legal disputes would be settled in arbitration rather than court.
DR Horton attorneys contend plaintiffs undisputedly signed the contract and initialed the arbitration clause on two separate occasions. However, the Dixons testified they were never told about the arbitration clause and believed they were only signing a purchase agreement to secure their home.
DR Horton denies all liability. Company attorneys stated: “While DR Horton vigorously denies plaintiffs’ claims, the agreement between the parties contains a binding arbitration clause governing the precise subject matter of this lawsuit”.
What Damages Are Homeowners Seeking?
Louisiana:
- Repair costs for mold remediation, HVAC replacement, and structural fixes
- Compensation for diminished property values
- Reimbursement for increased energy costs
- Damages for health issues caused by mold exposure
- Loss of use and enjoyment of homes
- Punitive damages for fraud and racketeering
Hawaii: Money damages or other remedies for alleged defects caused by galvanized metal foundation components. Repair or replacement of corroded foundation elements.
Federal Mortgage Lawsuit: Plaintiffs seek damages, disgorgement of profits, and injunctive relief to prevent DR Horton and DHI Mortgage from continuing the alleged scheme. Under RICO, successful plaintiffs could receive triple damages.
Major DR Horton Settlements and Verdicts
In 2024, DR Horton, along with subcontractors and suppliers, agreed to a $16.1 million settlement in a class action lawsuit involving more than 200 homes in Easley, South Carolina, with homeowners alleging various construction defects including issues with roofs, I-joists, flashing, siding, and weather-resistant barriers.
The South Carolina settlement averaged over $75,000 per home and covered:
- Roof problems causing leaks and premature failure
- Structural issues with defective I-joists compromising integrity
- Water intrusion from failed flashing and weather barriers
- Siding defects causing moisture problems
In 2016, a Florida jury ordered DR Horton to pay $9.6 million to repair defects in a Jacksonville condominium development, where residents dealt with cracked stucco, leaking roofs, and faulty windows and sliding glass doors.
How DR Horton Lawsuits Affect Homebuilder Accountability
These lawsuits highlight critical issues in homebuilder liability:
Climate-Specific Construction Standards: DR Horton city manager Leslie Gulliksen admitted in 2021 that building codes designed for dryer climates create issues along the humid Gulf Coast, stating “we are building them to the way the federal government says to”. This raises questions about whether builders should exceed minimum code requirements in challenging climates.
Arbitration vs. Court Access: The Dixons’ case surviving arbitration challenges represents a significant victory for homeowners because DR Horton tried to force them into arbitration—a private process typically favoring companies.
Warranty Enforcement: Homeowners report DR Horton and Bell Mechanical provided inadequate and delayed responses to warranty claims, employing quick fixes that temporarily masked underlying design defects.
Pattern of Defects: A South Carolina law firm reported an eight-month waitlist for new clients after winning the $16.1 million settlement, with approximately 500 homeowners contacting them with complaints and 125 cases under active investigation. Nearly half of 198 complaints filed against DR Horton in South Carolina county courts over the past decade were filed in just the last two years.
Remedies Available to Affected Homeowners
Immediate Steps:
- Document all defects with photographs and detailed descriptions
- File warranty claims in writing with DR Horton
- Keep records of all communications, repair attempts, and costs
- Obtain independent inspections from licensed professionals
- Preserve evidence of mold, water damage, or structural issues
Legal Options:
- Join existing class actions if you purchased a DR Horton home in Louisiana, Hawaii, Alabama, or used DHI Mortgage financing
- Challenge arbitration clauses with help from construction defect attorneys
- File individual lawsuits if arbitration is unavoidable or class actions don’t apply
- Seek compensation under RICO if mortgage fraud allegations apply (triple damages possible)
Check for Class Action Notices: Homeowners receive legal notice if a court certifies a class including them based on location, purchase date, and defect type. Monitor mail and contact attorneys handling DR Horton cases in your state.
How to Determine If You’re Affected
You may have grounds to join a lawsuit if you:
- Purchased a DR Horton home in Louisiana (especially post-2012 in Lafayette Parish or along I-10 corridor)
- Own a DR Horton property in Hawaii with galvanized foundation components
- Used DHI Mortgage financing and experienced unexpected monthly payment increases due to property tax adjustments
- Bought a DR Horton home in Alabama between 2015-2021 marketed as “Gold Fortified”
- Experience persistent mold, humidity, HVAC failures, foundation problems, or water intrusion
- Filed warranty claims that DR Horton failed to properly address
- Live in South Carolina, Florida, Texas, or other states with widespread DR Horton construction
Statute of Limitations: Construction defect claims have strict time limits varying by state. Most states allow 2-4 years from defect discovery. In Colorado, the statute of limitations for construction defect claims is typically two years from the date the defect is discovered or should have been discovered. Act promptly to preserve legal rights.
What This Means for Homebuilder Accountability
The DR Horton class actions establish important precedents:
Corporate Accountability: DR Horton faces ongoing litigation resulting in significant legal expenses, class action settlements including the notable $16.1 million South Carolina settlement, and reputational damage, with increased regulatory scrutiny and public criticism.
Consumer Protection: The federal RICO lawsuit signals prosecutors are scrutinizing integrated builder-lender business models. Plaintiffs’ attorneys noted: “No other mortgage lender in the United States engages in the practice of partially escrowing property taxes by deliberately including only a small portion of a homebuyer’s property taxes in their monthly payment”.
Industry Impact: Major homebuilders face growing liability for climate-inappropriate designs. The American Society of Heating, Refrigerating and Air-conditioning Engineers recommends maintaining indoor humidity below 65% to prevent mold growth, yet expert testimony revealed some DR Horton homes exceed this threshold.
Frequently Asked Questions
Is there currently a class action lawsuit against DR Horton?
Yes. DR Horton faces active class actions in Louisiana (humidity/mold defects), Hawaii (corroding foundation components), and a December 2024 federal RICO lawsuit over mortgage payment suppression affecting homeowners nationwide.
How much was the DR Horton settlement?
The 2024 South Carolina settlement was $16.1 million for 200+ homes, averaging over $75,000 per home. Individual settlements vary based on damage extent and repair costs.
What are the most common defects in DR Horton homes?
The most commonly reported defects include foundation cracks and settling, water intrusion and drainage problems, roof leaks, structural framing issues, plumbing failures, electrical code violations, HVAC problems, and defective siding and exterior work.
Can I join a DR Horton class action lawsuit?
If you purchased a DR Horton home in an affected area and experienced covered defects, you may qualify. Hawaii homeowners must register by September 5, 2025. Check your mail for legal notices or contact construction defect attorneys in your state.
Does DR Horton warranty cover construction defects?
Homeowners report DR Horton failed to honor warranties adequately, providing inadequate and delayed responses to warranty claims and employing quick fixes rather than addressing underlying defects. Many homeowners pursue legal action after warranty disputes.
What is the deadline to file a claim against DR Horton?
Statutes of limitations vary by state, typically 2-4 years from defect discovery. Hawaii class members must register by September 5, 2025. Consult a construction defect attorney immediately to preserve your rights.
How do I avoid arbitration with DR Horton?
Some homeowners have successfully challenged arbitration clauses in court by arguing they were not properly disclosed or that fraud allegations make arbitration inappropriate. Legal representation is essential for challenging arbitration provisions.
Need Legal Help?
Contact construction defect attorneys specializing in homebuilder liability. Louisiana homeowners can reach Class Counsel at Lance Unglesby’s firm. Hawaii homeowners should contact LippSmith LLP (808-376-2052) or Kasdan Turner Thomson Booth LLLC (808-369-8393). For mortgage fraud claims, consult attorneys handling the federal RICO lawsuit in Nevada.
DR Horton sets aside over $400 million annually for construction defect litigation. These class actions represent homeowners fighting for accountability, proper repairs, and compensation for defective construction. If you purchased a DR Horton home experiencing serious defects, document everything and seek legal guidance immediately.
This article provides legal information only and does not constitute legal advice. Consult a qualified construction defect attorney for advice about your specific situation.
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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