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Martha and Brian Stafford had been living in their four-bedroom Vienna, Va., dream house for almost four years when they found a flier stuck to their mailbox in May 1999. Distributed by a homeowners’ group, it warned that people whose homes were clad in synthetic stucco should get them checked for water damage. “We had never heard of synthetic stucco,” says Martha Stafford. “I went to a Web site and read about it and the next day my husband took the flier to the construction site supervisor of our subdivision and asked if we should get a checkup for water intrusion. The supervisor said yes.” The tests showed the beginning of a nightmare for the Staffords. The wood exterior walls under the thin layer of synthetic stucco were soaked with moisture where water had been trapped. When sections of the stucco were cut away, they found “disgusting, hideously rotted wood that crumbled like mulch,” Stafford recalled. “When we pulled one piece of stucco off, an earthworm crawled out of the wood. It was devastating to see that.” The Staffords tried for months to get the homebuilder to fix the damage, she says. When they got no help, they hired an attorney. A Fairfax County Circuit Court jury recently awarded the Staffords a $1.028 million verdict against the builder. Stafford v. Country Developers Inc., No. 181-455. The Stafford case is just one among thousands as national awareness grows about the problems that can be caused by synthetic stucco. Lawyers are seeing cases reported from New Jersey to California, and Illinois to Texas — almost anywhere that has a moist climate. And many of the cases in what has come to be known as “stucco law” are ending up in court, where manufacturers of synthetic stucco, the builders and contractors who put it on homes and insurers are blaming each other for the problems. “There has been an explosion of cases around the country,” says Dan Bryson, of Raleigh, N.C.’s Lewis & Roberts, who is involved in a class action stucco suit. “We put up an information Web site — www.syntheticstucco.com — and have been averaging close to 100,000 hits a month.” The plaintiffs’ attorney in the Stafford case, Jerry Phillips of Phillips, Beckwith, Hall and Chase of Fairfax, Va., says he feels the word still hasn’t gotten out to many homeowners who, like the Staffords, assumed they had real stucco on their house because that was the information given in sales brochures. Stafford, like many other stucco cases, alleged among other things, fraud, false advertising, violation of the state Consumer Protection Act and violation of warranty. It was not clear if the award would be appealed; the attorney for the builder, Francis J. Prior of Fairfax’s Siciliano, Ellis, Dyer & Boccarosse, did not return calls for comment. There have been a number of synthetic stucco products on the market, all falling under the broad heading of exterior insulation and finish systems, or EIFS. Consisting of extremely thin layers of Styrofoam-like material, it is attached to insulation material and affixed to exterior walls of homes. Water gets in around windows and doors and wall edges and is trapped inside, eventually causing wood to rot and leading to mold problems and infestation, lawyers and experts say. Major stucco-related mold problems were first seen in the Wilmington, N.C., area in the late 1980s and early ’90s, lawyers and experts say, because of the humid climate and a building boom that saw the use of new materials. More than 15,000 homes in North Carolina alone were built with the finishing systems when they became popular in the ’90s. Gary Mason of Washington, D.C.’s Cohen, Millstein, Hausfeld & Toll was one of the lead attorneys in a synthetic stucco class action in North Carolina against eight manufacturers. The case — Russ v. Dryvit, No. 96 CVS 0059, in New Hanover County Superior Court — ended with a settlement that allowed homeowners to collect an average of $6 per square foot for damage to the exterior of their homes. Even $6 per square foot will pay only about 50 percent of the cost to repair a typical 3,000-square-foot home with synthetic stucco damage, conceded Gary Shipman of Shipman & Associates in Wilmington, N.C., a co-counsel in the class action. Shipman says “the fact that we could demonstrate to manufacturers that their products were defective started momentum to resolve lots of stucco cases in other states.” The 1999 settlement gave North Carolina homeowners five years to file claims, and the number of claims is now above 1,000, he says. Several stucco class actions have been brought on the federal level but all the classes have been decertified, mostly over the question of finishing system manufacturers’ liability, since they do not contract directly with builders and contractors to apply their products on homes, according to Bryson. Synthetic stucco mold cases involving commercial structures also seem to be on the rise. Attorney Steve Epstein of Simpson & Williams in Raleigh is representing several dozen McDonald’s restaurants that allegedly have damage related to synthetic stucco. Epstein could not be reached for comment. Since the federal courts have decertified most stucco class actions, the cases have been brought individually, with some success. In September 2000, Peter Grenier of Bode & Grenier in Washington, D.C., won a $1.4 million jury verdict for one of a group of 22 Virginia homeowners in a stucco case against a builder. A confidential settlement was reached. James Maday v. Toll Brothers Inc., No. 184844, (Fairfax Co., Va., Cir. Ct.). The defense attorney, Michael McManus of the Washington, D.C., office of Philadelphia-based Drinker, Biddle and Reath, says that after learning of stucco problems, the builder notified homeowners in the Maday subdivision before suits were filed and offered to repair the homes for free. Hundreds accepted, he says. In most cases, he says, water damage was minor. Builders and contractors don’t get much respect when it comes to synthetic stucco cases, says attorney Julie Goodman of Dinsmore & Shohl in Lexington, Ky. She represents contractors all over the country who have been sued. Most are insured by one company, Zurich NA. “I have 500 lawsuits now” on synthetic stucco “and have settled that many,” she says. “Nine times out of 10, I represent good, licensed, high-end builders who go to the trade shows, use innovative products and do research on them.” Often, she notes, architects and homeowners have requested that exterior finishing systems be put on homes. “And all of a sudden they’re everybody’s scapegoat.” Calls to the Exterior Industry Members Association, which represents makers of synthetic stucco, were not returned.

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