Builder to Pay For Damage

A wild, mushroom-like fungus is sprouting from the garage roof of Steve and Kristen Maday's four-year-old home in Vienna, but it isn't anything they planted, or planned.

It's an outgrowth of the moisture that now saturates their house after the builder, Toll Brothers Inc. of Philadelphia, coated the structure with "synthetic stucco" rather than real stucco, as promised.

A Fairfax County jury yesterday found that Toll Brothers had committed fraud against the Madays and ordered the renowned builder, which has built homes all over the region and the country, to pay the family nearly $1 million in damages. Almost two dozen homeowners in the Hunter Mill Estates development just outside Reston have filed similar suits against Toll, alleging they paid for genuine stucco and got nothing of the sort. The Madays' case was the first to go to trial.

Lawyers for Toll Brothers said that the builder did not defraud anyone, and that the evidence didn't support the verdict. Fairfax Circuit Court Judge Leslie M. Alden scheduled a hearing for Oct. 27 to hear Toll's motions to dismiss the evidence or the verdict.

The Madays moved into their $522,000 four-bedroom house in August 1996 and didn't notice a problem with water drainage. In November 1998, they and their neighbors received letters from Toll informing them that their house was built with a synthetic stucco exterior, which "may allow improper moisture penetration into the home."

Peter C. Grenier, the Madays' attorney, said actual stucco is typically a 3/4-inch to one-inch-thick mixture of cement and lime that allows water to drain away. He said the exterior of the Madays' house--a coating over fiberglass mesh placed on styrofoam board--was less than 1/8-inch thick. It trapped water inside the house that gradually saturated the wood beneath.

Synthetic stucco has spawned a raft of lawsuits across the country, including a class-action suit in North Carolina. Chicago aldermen are considering a measure to ban it. The National Association of Home Builders advises homeowners that the material, known formally as "exterior insulation finish system," "can develop moisture intrusion problems even when properly constructed."

Grenier said a consultant hired to inspect the Madays' home found "a 99.9 percent moisture reading. That translates into fully saturated wood." Grenier said that builders have known since the late 1980s that synthetic stucco caused such problems and that Toll stopped using it on houses built later in the same development.

Michael J. McManus, an attorney for Toll, said one of the Madays' own experts testified that "the vast majority of the house is dry." He said the expert also told the jury "he had no evidence that Toll intentionally put a bad product on this house."

Steve Maday disagreed, saying that an inspector found heavy wood saturation more than a year ago and that Toll repeatedly promised in brochures and sales pitches an authentic stucco finish. Kristen Maday said she is not sure whether the house can be repaired, or whether her family, including four children, can continue to live there.

After four days of testimony, the jury deliberated for about four hours before finding for the Madays. The jury ordered Toll to pay $522,000, the price of the house, for violating the Virginia Consumer Protection Act; $260,000 for willful violation of the act; and $200,000 in punitive damages. Toll also is liable for attorneys' fees, which could add $50,000.

Kevin Wilson of McLean, one of the jurors, said the panel originally discussed punitive damages between $4 million and $5 million, then scaled it down. "We said, essentially, we'd like them to buy the house back," Wilson said. He said Toll was "trying to save money and trying to cut corners. And they didn't necessarily do it in a legal fashion."