Maryland Court of Special Appeals slashes synthetic stucco award

Daily Record, The (Baltimore), May 25, 2007 by Barbara Grzincic

Pulte Home Corp.'s $1.4 million verdict against the manufacturer of synthetic stucco used in some of its luxury houses has been slashed nearly in half.

The Court of Special Appeals found that Pulte's damages against Parex Inc. were capped by a deal Pulte had negotiated with suppliers, distributors and installers.

The agreement called for a consent judgment of $5.2 million against the settling defendants, payment by their insurers of $725,000, and an assignment of their rights against Parex. In exchange, Pulte agreed not to execute on the judgment.

"Under the circumstances of this case, Pulte's damages must be limited to the recovery that [the suppliers, distributors and installers] could recover - that is, the amount they paid to settle the claims against them," Judge Arrie Davis wrote Thursday in a 94- page opinion.

Pulte sued in Montgomery County Circuit Court in 2001 after problems with rotting wood surfaced in dozens of luxury homes it had built in the Washington suburbs between 1994 and 1998.

The case was just one of many filed in more than a dozen states arising out of the use of barrier exterior insulation and finish systems on wood-framed homes. The suits allege that barrier EIFS traps moisture within the frame, causing wood to rot.

Parex claimed the problem was not with its product, but with the way it was installed or maintained.

Both sides appealed aspects of the verdict.

Brian A. Coleman, of Washington, represented Pulte on appeal. Robert L. Ferguson Jr. represented Parex.