Siding Problems -- Replacement, Class-Action Suits Follow Failed Hardboard And Stucco-Like Products

Wayne Thevenot calls himself a "victim of bad judgment," all because he and his wife, Laura, decided to use Masonite hardboard siding on the exterior of their new addition when they remodeled seven years ago.

The Thevenots thought the siding, designed to resemble wood, would go best with their 80-year-old frame house in Northwest Washington, D.C. Masonite was recommended by their architect. "It was a well-known material made by a well-known company," Thevenot said.

However, two years after the addition was completed, the Thevenots started to notice that the siding's edges were beginning to rot. Some of the pieces became so swollen with water they started to split. Today, there are holes big enough to stick one or two fingers through.

"The damage is all over the place; everything will have to be taken off," said Thevenot, who worries that he'll discover even more harm in the framing and infrastructure underneath.

The Thevenots estimate it will cost about $6,000 to replace the siding and make the necessary repairs. But they are cautiously hopeful that some of that cost will be borne by Masonite.

The company agreed earlier this year to settle a national class-action lawsuit, filed in Mobile, Ala., involving its hardboard siding. The settlement must be approved by a Mobile County Circuit Court judge before it can be implemented, perhaps as soon as the end of this year.

The lawsuit is one of four recent class-action suits charging

manufacturers of exterior residential cladding systems with making defective products.

Two other suits also involve hardboard siding similar to Masonite. Settlement in one of those suits, against Louisiana Pacific for its Inner-Seal oriented-strand-board siding, was approved in April 1996. To date, more than 9,000 payments to homeowners have been made, with most payments ranging from $6,000 to $8,000.

Georgia Pacific suit

Another suit, against Georgia Pacific's hardboard siding, less widely used than Masonite or Inner-Seal, is pending, also in the Mobile court. Lawyers for the homeowners said a settlement agreement is expected soon.

Meanwhile, the home-building industry is closely watching a class-action suit filed last year in North Carolina against a dozen manufacturers of synthetic stucco, an increasingly popular exterior being used on many new homes and condominiums, including those being built in the Seattle area.

The product, officially called Exterior Insulation and Finish Systems (EIFS) in the industry, is sold under a number of names including Dryvit, Parex, Synergy and Sto.

An attempt to reach a settlement in the synthetic stucco case broke down; a trial now is scheduled for early next year.

In all four class-action cases, lawyers representing the homeowners have charged that the products are defective because they all fail, in one way or another, to withstand moisture.

The suits involving hardboard siding charge that the siding - made of wood chips or wood strands and pressed together with resin and wax - tends to absorb water, rot and then fall apart. In some cases, the wood became so moist that mushrooms began to grow, the lawsuits say.

In the case of synthetic stucco, the problem stems from the fact that it's an insulation material that is water resistant. The product doesn't absorb water, but if water does manage to seep into the walls - particularly where the roof, windows and doors intersect with EIFS - it is unable to escape.

That has happened hundreds of times in North Carolina, the lawsuit claims. And once inside the wall, the trapped water can cause the wood sheathing and studs to rot or lose strength, the lawsuit alleged.

Peter Saladino, project manager with Seattle-based Charter Construction, says he's heard of numerous problems with EIFS in this area, "and I'm sure there will be more. Sometimes you can actually drive by a building and see cracking where it shouldn't be, or stucco slipping - and some of these buildings aren't that old."

To Saladino's way of thinking, EIFS problems happen because "you've got to get everything right: the installation correct, the design correct, and the correct product. If one of those is a failure, you're going to have a water problem, and then you're going to have decay. You have to go in and fix it, or you're going to have long-term problems with the building."

Synthetic stucco is a relatively new product for homes. EIFS, which is polystyrene-based, is considered more flexible and easier to care for than conventional stucco, which often cracks, especially in climates where the temperature varies sharply, with extremely cold winters and very hot summers.

EIFS came from Europe shortly after World War II but, until relatively recently, it was mostly used on commercial buildings. Its use on homes began about 10 years ago, and today builders report it is one of the most popular exteriors on new homes, particularly the more expensive homes.

"Three-quarters of our homes we build today have EIFS," said Wayne Foley, president of Foley Construction Co. near Washington, D.C., which builds six to 10 custom homes a year. "Ten years ago, it was literally zero. . . . We love the product. You can do unlimited shapes with it, and it comes in a huge selection of colors."

Synthetic stucco doing OK

Coronado Synthetic Stucco Systems, the largest synthetic stucco installer in the Washington area, said it applied EIFS on 300 homes last year. So far this year, the company has already applied it to 200 homes. To date, Coronado's president, Bernard Franks, said he has seen no widespread problem. The handful of problems he has seen have occurred when customers have added decks or exterior lighting or other objects to the exterior without applying proper caulking or flashing to keep the stucco watertight.

Synthetic stucco manufacturers also say the problems encountered in North Carolina stem from improper installation, especially inadequate caulking or flashing around doors and windows.

Kenneth Nota, general counsel for Dryvit Systems Inc., the largest synthetic stucco manufacturer, said, "I'm unaware of any case where there was any moisture intrusion where EIFS was installed properly, according to manufacturers' specifications."

That opinion, is not shared by all building industry officials. Tom Kenney, director of laboratory services at the National Association of Home Builders' Research Park in Upper Marlboro, Md., has studied the problem for several years.

"Early on, the problem was first cast as a problem of lousy construction by North Carolina builders; that simply is not the case," Kenney said. "We've seen proper installation in accordance with manufacturers' specifications and the houses are still having problems."

That's also the view held by Maryland Commercial Insurance Group, the nation's largest insurer of small residential builders. Since last November, the company has refused to issue insurance to builders for homes they are building with EIFS. "We've done an extensive amount of research and have concluded that EIFS-related problems are usually not the result of poor workmanship and are not limited to certain geographic areas," said company spokeswoman Sarah Adams.

Drainage system added

In response to a proposed ban of EIFS by North Carolina building code officials, EIFS manufacturers have recently redesigned their product so that it now includes a drainage system. "We still have confidence in our original system when it's installed properly, but because of the publicity and proposed changes in the building code, we think this will become the system of choice," Dryvit's Nolte said.

Daryle Brown, a supervisor with Tatley-Grund Construction Repair Specialists, is currently overseeing replacement of EIFS on a large downtown Seattle apartment building. While this building suffered significant water damage, Brown considers EIFS "not a bad system. It just got so popular that some applicators weren't well versed" in installing it.

In addition, Brown says, building codes don't really address siding systems. That's a point Tom Kinsman, principal engineer for the Seattle Department of Construction and Land Use, says is under review.

He says the DCLU doesn't inspect to see if siding systems are waterproof or installed correctly because "we've taken a position that it's not directly life or safety related. We don't get into that secondary level of concern that relates to weather protection and moisture barriers.

"But these recent EIFS problems," Kinsman says, "have caused us to wonder if we should at least require they (the owner or builder) have a special inspector for that."

In fact the Northwest Wall and Ceiling Bureau, a construction trade association, has already taken up part of that call, according to executive director Bob Drury.

Working with building standards and code people, the bureau recently instituted a program to train Northwest building professionals to inspect synthetic stucco installations. Those who pass the training course become certified EIFS inspectors and can register with the bureau, which then gives their names to architects and homeowners.

Masonite has no plan to redesign its hardboard siding as a result of the class action settlement. Russ Adams, Masonite's manager of strategic planning, said the hardboard "is still a very good product. . . . The settlement should in no way be taken as a lack of confidence in the product." The settlement, Adams said, was made solely for economic reasons.

Masonite, a subsidiary of International Paper Co., has the largest share of the hardboard siding market, accounting for about 45 percent of its use, according to attorneys who filed the class-action suit for homeowners. The hardboard siding in question - made since 1980 and often called X-90 - has been used in more than 3 million U.S. homes.

Masonite said complaints made to the company under its warranty program have been small - "less than 1 percent of sales," Adams said. "Compare that to any other consumer product and it's a very good record."

But attorneys who represented homeowners in the Masonite suit tell a different story - saying they received 2,000 calls a week when the class-action suit was publicized in newspapers a year ago.

According to the lawsuit, homeowners charge that Masonite made a change in its production process in 1980 that has caused the defects.

"In the late '70s, when oil and gas prices started going through the roof, they stopped making it correctly," said Jonathan Selbin, a San Francisco attorney for the homeowners. (There are five law firms nationwide, including Washington, D.C.'s Cohen, Milstein, Hausfeld & Toll, representing homeowners in the Masonite case).

"Our contention is that beginning in 1980, the company used less and less energy and failed to apply enough heat and pressure to make sure the product bonded together correctly," Selbin said.

Masonite's Adams said the company has "strenuously objected to that characterization." Masonite agreed to the settlement as "a business decision to remove ourselves from a risky venue" in the Mobile court, Adams said.

Masonite found liable

Last September, in the first phase of the trial, a Mobile County jury found Masonite liable for creation of a defective product. The trial lasted a month; jury deliberations took four hours. The settlement was announced just before the second phase of the trial that would have set damages was set to start.

"The court system in Alabama has a reputation for very large settlements," Adams said. "We made an economic decision on what it would cost us to continue to appeal and the number of years and what we would settle for."

Under the settlement, an independent inspector will determine the amount of damage to a house and, according to a formula, set the costs for replacement, including materials and labor. Some depreciation will be made for any Masonite that's more than five years old.

There is no limit on the amount of money Masonite will pay. Adams said the company is confident the payout will not be more than the $150 million in legal reserves that International Paper has set aside for all its pending legal actions. However, Selbin predicted the costs would be "at least four to five times $150 million over the life of the settlement."

Whatever the final price tag, the settlement comes as a relief to the Thevenots, who have held off repairing their home until they could file a claim.

"We hope this will end soon," said Wayne Thevenot. Once the home is repaired, "I'll feel whole again."

Seattle Times staff reporter Elizabeth Rhodes contributed to this report. ----------------------------------------------------------------- Where to call if you have problems with siding

If you have had problems with any of the house siding products involved in the class-action lawsuits, here is some key information:

Inner-seal siding. To file claims or get more information on Inner-Seal siding, made by Louisiana-Pacific, call 800-574-1815. Claims are being accepted and processed.

Masonite. To receive more information on Masonite hardboard siding or sign up for the mailing list to get settlement information or claim forms, call 800-330-2722.

Georgia-Pacific hardboard siding. Because there has been no settlement in this class-action lawsuit, there is no toll-free number to call and make claims. Homeowners may call Georgia Pacific for information: 404-652-6999.

Synthetic stucco. For now there is no hotline for homeowners who have synthetic stucco problems.

Attorneys for homeowners and industry officials urge concerned homeowners with Exterior Insulation and Finish Systems - synthetic stucco - to first check their homes, by examining any places where water may have possibly seeped in - around windows, roof edges, electrical boxes, hose bibs and decks. Add caulking or flashing to any areas that look insufficiently covered.

A sign of moisture seepage may be bubbling or discoloration.

If there are any doubts or concerns, homeowners are advised to call their builders, who may use a moisture meter to detect water seepage. Qualified home inspectors may also have moisture detectors.

In the Puget Sound area, the Northwest Wall and Ceiling Bureau, at 206-524-4243, has a list of building professionals who've been trained and certified to inspect synthetic stucco systems.

Building officials caution consumers not to panic. Tom Kenney, director of laboratory services at the National Association of Home Builders Research Center in Upper Marlboro, Md., said that most of the damage in the North Carolina homes has been localized and can be easily repaired.

The Maryland Commercial Insurance Group, which has stopped issuing policies to builders for the homes they build with synthetic stucco, also said the damage is usually limited. "Structural integrity is seldom an issue," said spokeswoman Sarah Adams. Most of the problems "are fixable."

-- Washington Post and Times staff