Real Estate News

Massive stucco settlement looms in Sun City, but when will homeowners see any money?

While Sun City Hilton Head residents involved in a years-long, class-action stucco lawsuit recently received welcome news of an impending multimillion dollar settlement, there were collective groans Thursday when they learned they’ll have to wait months to see any of that money.

And there were more groans when they learned how much their households are likely to receive — for some, amounts that pale in comparison to thousands they’ve already spent to repair damaged homes.

Over 1,000 community members packed an auditorium and overflow location for two meetings Thursday morning to learn more about the proposed $43-million settlement with stucco-installer South Carolina State Plastering (SCSP), and third-party defendants Del Webb Communities Inc. (which operates Sun City), Pulte Homes Inc. and Kephart Architects Inc.

“My oldest child was in kindergarten when this started,” John Chakeris, an attorney representing residents, told attendees. “Now she’s a college freshman.”

Owners of around 4,300 homes involved in the suit — Anthony Grazia v. South Carolina State Plastering et al. — allege faulty stucco work by SCSP caused their homes to decay and rot from mold and water damage.

The case, which became a class-action suit in 2011 — and which was preceded by other stucco cases dating back to 2006 — dragged on until June, when talk of a settlement surfaced.

Last week, Sun City residents received an email announcing Thursday’s meetings and the proposed settlement, which Fourteenth Judicial Circuit Judge Edgar W. Dickson granted preliminary approval of during an Oct. 30 hearing, according to Beaufort County court records.

While the deal signals the end is near, upset residents such as Dale Susan Terwilliger wonder why home-builder Pulte isn’t on the hook for more money, and why some residents who earlier opted for individual settlements received more than she and husband Robert stand to get.

Robert and Dale Susan Terwilliger stand on the front porch with their dog Bailey, Thursday morning at their Sun City Hilton Head home. The couple may receive money from a class-action lawsuit after spending about $48,000 to repair themselves for stucco-related problems on their home. Wade Livingston

The Terwilligers moved from Westchester County, N.Y., to Sun City in 2007 — it was the first new home Dale Susan had ever lived in.

A couple of years later, they began hearing stories from neighbors whose homes were deteriorating. Around the same time, they discovered moisture collecting on the inside of their home’s windows, which soaked the towel they used to wipe them down.

More time went by. They noticed their exterior walls had a wavy look, and were beginning to crack.

In early 2018, an inspector closed a kitchen cabinet and noticed “black soot” — mold — had seeped through the walls and was falling onto the counter top.

They started looking behind the walls.

“It was just worse and worse and worse,” Dale Susan said Wednesday afternoon, “every time they opened up another wall.”

They found mold on the framing of their house, and in its insulation.

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Mold resulting from water damage due to improperly applied stucco stains a wall in February on Dale Terwilliger’s Sun City Hilton Head, S.C. Submitted Courtesy of Dale Terwilliger

They opted to replace all four exterior walls and install Hardieplank siding — spending more than $40,000 on repairs.

“My neighbor across the street got $25,000 — where did they get that (figure)?” Dale Susan asked, referring to previously paid-out individual settlements some in Sun City opted to take from SCSP in January. “They just pulled it out of the air.”

People who took individual settlements were removed from the class-action suit, according to Beaufort County court documents.

Dale Susan said SCSP offered her family $10,000, which she declined. Others received offers ranging from $1,500 to $50,000, according to court records.

According to current estimates of the proposed class-action settlement, she stands to receive around $6,900 — around $2.50 per square foot of exterior stucco.

Chakeris addressed last winter’s individual settlements — some $2.6 million spread among 187 families — Thursday, saying those values and offers were determined by SCSP, and that he and other attorneys representing class-action plaintiffs were not involved in the matter.

Chakeris also explained that previous class-action attempts filed in various jurisdictions against Pulte — as the primary defendant —were struck down by the courts.

As a third-party defendant in the proposed $43-million settlement, Pulte stands to owe more than $7 million.

Kephart will owe $300,000 if the settlement is approved.

And the bulk of the remaining money will be made up of now-shuttered SCSP’s remaining insurance assets.

Three Charleston-area law firms, Chakeris’ among them, will get a third of the settlement.

“I think the lawyers did the best that they could,” Dale Susan said Wednesday. “They spent a fortune, went all over the place — they deserve their money.”

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Dale Terwilliger had to replace all of the exterior walls on her home, pictured here, in February, after faulty stucco work caused mold infestations in the structure in Sun City Hilton Head, S.C. Submitted Courtesy of Dale Terwilliger

But she groaned Thursday when she learned more about the timeline that lays ahead.

Dickson still has to give final approval of the settlement, which is scheduled to occur at a 10 a.m. March 21 hearing in Beaufort.

Members of the class-action suit should start getting “class notices” — documents that let them know they’re part of the suit and inform them of their options — on Nov. 29, Chakeris said.

They have until Aug. 3, 2019, to submit claim forms.

A claims administration company will review and finalize the claims and the class, and send them to Dickson in early December 2019.

According to court documents, class members will receive roughly $2.50 per square foot of stucco, the size varying by model of home.

One man at the meeting noted what he perceived to be an error — some of the same models had different square footage totals in the document.

When asked after the meeting, Chakeris said there can be some variances in size even within same model types, because of floor-plan and other customization options.

He also said attorneys were aware of a couple of discrepancies, were reviewing the document for accuracy and would submit an updated version to the court.

Residents have the right to challenge the square-footage figures of their houses, he said.

“Anger,” Terwilliger said Wednesday, when asked to describe her community’s feelings toward SCSP and Pulte.

“An awful lot of anger,” she continued, saying she felt some closure, but no justice.

“They are mad as hell — they’re mad we got suckered into this.”

When asked last week by The Island Packet and The Beaufort Gazette for comment, Pulte representatives declined because the case has not been finalized.

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Wade Livingston covers the Lowcountry’s “DNA” — the people, places and vibes that make our home what it is — the military, stories of general interest and all things beautifully, humanly quirky. The New York Times, Esquire and Harvard’s Nieman Storyboard have cited his reporting and storytelling.