Real Estate News

Sun City Hilton Head stucco lawsuit settlement could total $43 million, court filings say

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

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 third-party 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.

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

The proposed settlement does not include the 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.

In 1993, when developers of Sun City Hilton Head were looking to develop a key piece of property that straddled Beaufort and Jasper counties, the land was filled with pines, hardwood trees and dirt roads. If you were leaving Hilton Head Island, US