Set­tle­ment in stucco suit could hit $43M

The Island Packet - - Front Page - BY WADE LIV­INGSTON wliv­ingston@is­land­packet.com

Sun City Hil­ton Head res­i­dents re­ceived an email Wed­nes­day say­ing “the end­point has been reached” in the years-long, class-ac­tion stucco law­suit in the form of set­tle­ment – which court doc­u­ments say could be worth tens of mil­lions of dol­lars.

Four­teenth Ju­di­cial Cir­cuit Judge Edgar W. Dick­son granted pre­lim­i­nary ap­proval of a pro­posed set­tle­ment “pre­sented by Plain­tiffs and signed by the Par­ties” val­ued at $43,034,922.39 af­ter an Oct. 30 hear­ing, ac­cord­ing to Beau­fort County court records.

But the plain­tiffs’ lead at­tor­ney, Michael Seek­ings, said Thurs­day af­ter­noon that the to­tal set­tle­ment is ac­tu­ally $46 mil­lion when pre­vi­ously paid in­di­vid­ual set­tle­ments are fac­tored into the mix.

While var­i­ous par­ties have pre­vi­ously spec­u­lated a set­tle­ment in the case – born af­ter hun­dreds of res­i­dents al­leged faulty stucco work dam­aged their homes – would be sub­stan­tial, this is the first time a hard num­ber has sur­faced.

And while the end ap­pears to be in sight, fi­nal ap­proval of the set­tle­ment is still months out, ac­cord­ing to court records.

In late spring, the class-ac­tion suit – An­thony Grazia v. South Carolina State Plas­ter­ing et al. – looked like it was head­ing to trial, but news of a set­tle­ment ar­rived in June.

Sun City res­i­dents An­thony and Bar­bara Grazia filed their suit in May 2007, and it be­came a class-ac­tion case in 2012.

But the ef­fort re­ally be­gan in 2005, Seek­ings said, when he be­gan rep­re­sent­ing the Oros fam­ily in Sun City, who also filed a suit.

They and oth­ers al­leged their homes were dam­aged by im­prop­erly ap­plied stucco, which can cause mold, ac­cord­ing to pre­vi­ous re­port­ing by The Is­land

Packet. Some houses had mi­nor dam­age, while oth­ers needed par­tial re­place­ment of walls.

South Carolina State Plas­ter­ing LLC (SCSP), the lead de­fen­dant – now out of busi­ness, ac­cord­ing to court records – ap­plied stucco to about 4,500 Sun City homes from 1998 to 2007, ac­cord­ing to pre­vi­ous re­port­ing by The Packet.

Del Webb Com­mu­ni­ties Inc. (which op­er­ates Sun City), Pulte Homes Inc. and Kephart Ar­chi­tects Inc. are named as third­party de­fen­dants in the suit, ac­cord­ing to court doc­u­ments, which are pub­licly avail­able on­line through the Beau­fort County Four­teenth Ju­di­cial Cir­cuit Pub­lic In­dex.

If num­bers in the $43 mil­lion pro­posed set­tle­ment hold:

Kephart would owe $300,000.

Pulte would be on the hook for over

$17 mil­lion, paid through its in­sur­ers, ac­cord­ing to court doc­u­ments, plus an­other $7.45 mil­lion. South Carolina State Plas­ter­ing would owe more than $17 mil­lion through its re­main­ing in­sur­ance as­sets, sup­ple­mented by “a sig­nif­i­cant set­tle­ment con­tri­bu­tion by Del Webb and its in­sur­ers,” ac­cord­ing to court doc­u­ments.

Court records in­di­cate that a third of the $43 mil­lion would go to three law firms rep­re­sent­ing the plain­tiff class.

That would leave roughly $28 mil­lion to be paid out to own­ers of some 4,300 Sun City home­own­ers who are mem­bers of the class, ac­cord­ing to Seek­ings.

Even­tual pay­outs would be based on the “the ex­te­rior square footage of the stucco on the house,” mea­sure­ments to be pro­vided by Del Webb and which will vary ac­cord­ing to the size and style of the home, ac­cord­ing to Dick­son’s pre­lim­i­nary ap­proval or­der.

Res­i­dents would have an op­por­tu­nity to chal­lenge those mea­sure­ments and ob­tain some of their own.

The pro­posed set­tle­ment does not in­clude some $2.6 mil­lion SCSP has al­ready paid out to more than 180 peo­ple who took in­di­vid­ual set­tle­ments rang­ing from $1,500 to $50,000, ac­cord­ing to court doc­u­ments.

Rep­re­sen­ta­tives with Pulte de­clined to com­ment since the set­tle­ment has not been fi­nal­ized.

“It’s been a 13-year case in which we fought as hard as we could to get this re­sult,” Seek­ings said, call­ing the ef­fort “a la­bor of love.”

Ac­cord­ing to an email sent to Sun City res­i­dents and for­warded to the news­pa­pers, two meet­ings for par­tic­i­pants in the class-ac­tion suit will be held in the gated com­mu­nity next week, pre­sum­ably to dis­cuss the set­tle­ment more in-depth.

Ac­cord­ing to Dick­son’s pre­lim­i­nary ap­proval or­der, a “fi­nal ap­proval hear­ing” for the set­tle­ment is sched­uled for 10 a.m. March 21, 2019, in Beau­fort.

Is­land Packet file photo

In March 2010, this house on Cres­cent Creek Drive in Sun City Hil­ton Head had its stucco re­moved be­cause of mold prob­lems.

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