Last July, a Fairfax County, Va., jury awarded over $1 million to plaintiff Brian Stafford for damage to his home caused by EIFS (Exterior Insulated Finish System), also known as synthetic stucco. The cost of repairs to the home totaled $321,289, but the jury awarded an additional $350,000 for consumer fraud and another $350,000 for punitive damages.
The sole defendant in the case was Vienna, Va.-based Country Developers, the builder of the home. Their lawyer, Francis J. Prior Jr., said the verdict was unjustified because the builder had no way of knowing the product had problems when they installed it. The manufacturer of the EIFS used, Parex, settled with Stafford before the trial. Country Developers is appealing the case.
The verdict was a blow to contractors in the legal fight over responsibility for the EIFS fiasco, which first came to light in North Carolina in the mid-'90s. Builders claim the product is inherently defective while manufacturers claim the product works if installed according to their published guidelines. Class action suits against the manufacturers continue, but thousands of individual suits against builders and manufacturers nationwide are expanding the legal fallout.
The NAHB published a "caution" to its members on EIFS in 1998 and stated that it "has been working with consumers, manufacturers, insurers, and other interested parties to try to negotiate a settlement so that most of the monies expended would be devoted to fixing houses ... rather than to paying legal fees."
Manufacturers have since redesigned the product with a drainage system to prevent the moisture damage, and the EIFS Industry Members Association (EIMA), in conjunction with the NAHB, developed a training program to certify EIFS installers.