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1 STATE OF SOUTH CAROLINA COUNTY OF BEAUFORT IN THE COURT OF COMMON PLEAS FOURTEENTH JUDICIAL CIRCUIT CASE NUMBER: 2007-CP ANTHONY AND BARBARA GRAZIA, individually and on behalf of all other similarly situated Plaintiffs, Plaintiffs, vs. SOUTH CAROLINA STATE PLASTERING, LLC, Defendant. SOUTH CAROLINA STATE PLASTERING, LLC, Third-Party Plaintiff, vs. DEL WEBB COMMUNITIES, INC., PULTE HOMES, INC., and KEPHART ARCHITECTS, INC., Third-Party Defendants. 1 NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION AND NOTICE OF HEARING ON PROPOSED SETTLEMENT, PLAINTIFFS COUNSELS APPLICATION FOR AN AWARD OF ATTORNEYS FEES AND REIMBURSEMENT OF EXPENSES

2 TO: ALL MEMBERS OF THE SETTLEMENT CLASS: If you own/owned property in Sun City Hilton Head with a stucco-clad exterior between December 8, 2011 and October 30, 2018, you may qualify for benefits from a class action settlement. THIS NOTICE MAY AFFECT YOUR RIGHTS PLEASE READ IT CAREFULLY ***YOU ARE NOT BEING SUED*** ***THIS IS NOT A SOLICITATION FROM A LAWYER*** ***A SOUTH CAROLINA COURT AUTHORIZED THIS NOTICE*** The purpose of this notice is to inform you of a proposed settlement of a class action lawsuit against South Carolina State Plastering, LLC (hereinafter SCSP and claims against Kephart Architects, Inc., Del Webb Communities, Inc. and Pulte Homes, Inc. (these three entities and SCSP are hereinafter collectively Defendants alleging damages resulting from improperly designed and installed exterior stucco. Although a class was previously certified against SCSP only, this Class Settlement includes the payment of monies from and/or on behalf of SCSP, Kephart Architects, Inc. (hereinafter Kephart, Del Webb Communities, Inc. and Pulte Homes, Inc. (hereinafter together Del Webb. The Class Settlement also includes a release of all Defendants. The Settlement Website can be found at It contains a list of all houses whose current and past owners are eligible to receive settlement funds. This list includes stucco-clad homes in Sun City Hilton Head to which SCSP applied the exterior stucco in whole or in part before July 31, Further information on the stucco litigation and settlement, including the pleadings, motions, court orders, settlement agreement, and other information, is available upon request from the Claims Administrator, who may be contacted as follows: Total Class Solutions Sun City Hilton Head Stucco Settlement PO Box Plano, TX ( The Settlement Class includes all individuals, corporations, unincorporated associations, or other entities that currently own, or have owned since December 8, 2011, stucco-clad homes in Sun City Hilton Head listed on the Final Class List. If you own or have owned one of these houses, and if the settlement is approved by the Court and becomes final, your legal rights will be affected. Please read this notice carefully. A summary of the monetary relief for Class Members is set forth below. Please read section 11 for further details. In summary, the allocations of the Class Settlement Fund will be based on the exterior square footage of stucco applied to the dwelling as originally constructed. 2

3 YOU HAVE THE FOLLOWING RIGHTS AND OPTIONS IN THIS SETTLEMENT: SUBMIT A CLAIM FORM To receive your share of the Class Settlement Fund based on the listed square footage of exterior stucco on the dwelling as set forth on the Final Class List, you must (1 be a member of the Settlement Class and (2 timely submit a claim form with the required documentation. The exterior square footage of stucco is based on the estimated exterior square footage of the dwelling as originally constructed with no deduction for window, door, ventilation, or other similar openings except garage vehicle door openings. The estimated exterior square footage figures are based on records provided by Del Webb as to the model of home as originally constructed. YOU MUST SUBMIT A CLAIM FORM BY SEPTEMBER 6, SUBMIT A SQUARE FOOTAGE DISPUTE If you disagree with the amount of exterior stucco square footage of your dwelling as shown on the Final Class List, you may submit a challenge form as set forth below. YOU MUST SUBMIT A CHALLENGE FORM BY SEPTEMBER 6, If you submit a challenge form, you still MUST submit a claim form in order to recover money. EXCLUDE YOURSELF OBJECT TO THE CLASS SETTLEMENT Get no benefits from the Settlement Agreement. This is the only option that may allow you to start or continue your own individual lawsuit about the stucco on your dwelling against any of the listed Defendants. The deadline to exclude yourself is: February 25, Write to the Court about why you do not like the Settlement Agreement and/or request that the court not approve the settlement. The deadline to object is: February 25, Please note that you cannot both object to the settlement and exclude yourself from the settlement. 3

4 GO TO A HEARING Ask to speak in Court about the fairness of the Settlement Agreement. The Final Approval Hearing is: April 18, 2019 at 10:00 a.m. in Courtroom #1 of the Beaufort County Courthouse,102 Ribaut Rd., Beaufort, SC If you fail to submit a written objection to the settlement to the Court by February 25, 2019, you will NOT be allowed to speak in Court at the hearing regarding your objection. These rights and options and the deadlines to exercise them are explained in this notice. QUESTIONS? CALL OR VISIT 1. Why is this notice being provided? BASIC INFORMATION A Court authorized this notice to inform you of the proposed Settlement Agreement before the Court decides whether to give it final approval. This Notice explains the Action, the Class Settlement, your legal rights, what benefits are available, who may be eligible for those benefits, and how to get them. Judge Edgar W. Dickson of the Beaufort County Court of Common Pleas is overseeing the Action and the Class Settlement. The persons who brought this action are called Named Plaintiffs. Named Plaintiffs and Defendants are referred to together as the Parties. 2. What is this lawsuit about? Named Plaintiffs allege that the stucco-clad homes in Sun City to which SCSP applied the exterior stucco in whole or in part prior to July 31, 2007, are damaged due to: (1 the lack of head flashing above doors and windows; (2 the failure to install stucco control joints; and/or (3 the presence of moisture encapsulation by the failure to leave a gap between the stucco exterior and the structure slab. The Action asserts claims against SCSP for negligence, breach of implied warranty of good and workmanlike services, and unfair trade practices. SCSP has brought claims against Del Webb and Kephart for equitable indemnity, breach of implied warranty and negligence. This Action seeks monetary damages (money resulting from allegations of improperly designed and installed exterior stucco. Defendants deny these allegations of wrongdoing and assert numerous defenses to the claims. 3. Why is this a class action? In a class action, a person and/or people (in this case, the Named Plaintiffs bring claims on behalf of both themselves and other people who have similar claims so that the Court can resolve the issues for all of them. 4

5 4. Why is there a settlement? Both sides have agreed to the Settlement to avoid the risks and costs of further litigation, a process that could have taken several more years. The Parties engaged in extensive settlement negotiations with the assistance of a mediator. Defendants deny all of the claims in this case and do not admit any liability. Named Plaintiffs and Class Counsel think the proposed Settlement Agreement is best for all Settlement Class Members because it gives them a way to get a monetary payment without the delays, risks, and expenses of a trial, appeal and efforts to recover on a judgment (if any. SCSP is out of business and possesses no assets. Its only assets are insurance policies. Those insurers have repeatedly urged defenses to their insurance policies, and have either denied coverage to South Carolina State Plastering, or have reserved the right to deny coverage. In spite of the above, this Settlement represents payment of not only substantially all of the insurance coverage possibly available to SCSP, but also a significant settlement contribution by Del Webb and its insurers. A trial in this matter would most likely lead to an uncertain result, and if favorable to the Class, would result in additional lengthy appeals and Declaratory Judgment actions by insurers seeking to avoid payment. Class Counsel are of the opinion that this Settlement is in the best interests of the Class. The settlement will not actually take effect until a Final Order approving the settlement has been entered by the Court and the terms of the Settlement Agreement have been fulfilled. WHO IS INCLUDED IN THIS SETTLEMENT CLASS To see if you will be affected by the Settlement or if you can get a payment from it, you first have to determine if you are a Settlement Class Member. 5. How do I know if I am part of the Settlement? The Settlement Class is comprised of all persons or entities that, at any time between the date of the Preliminary Certification (December 8, 2011 and October 30, 2018 owned a home on the Final Class List. The Final Class List may be found at 6. Are there exceptions to being included? This Settlement Class does not include: (1 Persons who have previously settled and released their claims against Defendants or had their claims dismissed in court (including any present owner of a listed home who accepted a Right to Cure Settlement; (2 employees of Defendants or any of their subsidiaries or affiliates; (3 the Judge and court personnel overseeing the Action; (4 all governmental entities; and (5 all Persons who request to be excluded from this Settlement Class in accordance with the terms of the Settlement Agreement. 5

6 7. What if I am not sure whether I am included? If you are not sure whether you are in this Settlement Class, or if you have any other questions about the Settlement Agreement, visit the settlement website at or call the toll free number, ( You may also write with questions to the Claims Administrator at P.O. Box , Plano, TX Who is eligible to receive benefits under the Settlement Agreement? Settlement Class Members who meet the following criteria are eligible for monetary benefits: Anyone that owned a stucco-clad home in Sun City Hilton Head that is on the Final Class List between December 8, 2011 and October 30, 2018, is considered a Settlement Class Member. The allocations of the Class Settlement Fund among those who owned a home listed on the Final Class List on October 30, 2018, will be based on the exterior square footage of stucco applied to the dwelling as listed on the Final Class List. The estimated exterior square footage of stucco applied to the dwelling was formulated by estimating the total exterior square footage of elevations (sides of the homes that have stucco, with no deduction for window, door, ventilation, or other similar openings, except garage vehicle door openings. The estimates are based on Del Webb s records concerning the model of home as it was originally constructed. Any Settlement Class Member who did not own the home on October 30, 2018 is entitled to a payment of $50, which is to be deducted from the allotment of funds to be paid to the owner of the home as of October 30, BENEFITS TO THIS SETTLEMENT CLASS--WHAT YOU GET IF YOU QUALIFY 9. What are the benefits to the Settlement Class Members? The Settlement Agreement provides a variety of benefits depending on whether you are a current or former owner of the home. The proposed monetary settlement amount is $43,076, This amount does not include $2,653, previously paid out as part of the Right to Cure process in this Class Action. The Settlement Funds will be distributed on an estimated per-square-foot of exterior stucco basis to each homeowner who is a member of this Settlement Class and who submits the required proof of ownership. The monetary amount per-square-foot is subject to change throughout the settlement process due to potential claim dispute adjudications that may result in a different determination of total exterior square footage of stucco for the entire class that is different than that which is shown on the Final Class List. Notwithstanding the variations expected as part of the settlement process, the Final Class List sets forth the estimated total square footage of exterior stucco. An estimate, subject to the potential changes 6

7 detailed above, is a payout of $2.50 per-square-foot. It is important to note that the actual total square footage for the entire settlement class over which the total settlement fund is divided (and thus the amount payable per square foot is expected to change slightly during the settlement process due to potential claim dispute adjudications that may result in a different determination than shown on the Final Class List. These changes will result in a different calculation of the payout amount. A Claims Administrator has been named and given the authority to process claims. Claims will be paid per the amount of stucco Exterior Square Footage as listed on the Final Class List and as may be modified by the claim dispute adjudication process. The costs of Claims Administration will be paid out of the settlement funds. If, for any reason, there remains any unclaimed class funds, they will be paid to the South Carolina Bar Foundation in accord with Rule 23(e of the South Carolina Rules of Civil Procedure. HOW TO RECEIVE A SHARE OF THE SETTLEMENT FUND 10. How do I receive my share of the Settlement Fund? Submit a Claim Form. You will receive your share of the Class Settlement Fund if you are a member of the Settlement Class and you submit a claim form and include proof of ownership of a house listed on the Final Class List. Please see the Claim Form attached hereto. Strict compliance with the instructions on the Claims Form is required to receive payment. A separate claim form is required for each house owned by a Settlement Class member. YOU MUST SUBMIT YOUR CLAIM FORM BY SEPTEMBER 6, If a co-owner of a property requests exclusion from the class, then the other co-owner will not be entitled to receive settlement funds. The Final Class List sets forth the addresses of stucco-clad homes included in this settlement. The Final Class List also sets forth the approximate Exterior Square Footage of stucco on each dwelling. 11. How will the Claims Administrator process Settlement Claims? The Claims Administrator will disburse the Class Settlement Fund to the people who are the owners of the dwellings as set forth on the Final Class List. Settlement checks will be made out to the owner(s who submit a Claim Form in the manner stated in the Beaufort County Property records. For example, if the property records state that the home is owned by Dick Smith and Jane Smith, the check will be made out to Dick Smith and Jane Smith. For prior owners, the settlement check will be made out in the manner reflected in the Beaufort County property records at the time of their ownership of the house. Should any class member disagree with the exterior square footage of stucco on their dwelling as shown on the Final Class List, the class member shall have the right to file a claims dispute with the Claims Administrator. A copy of the Challenge Form is attached hereto. Strict compliance with the 7

8 instruction of the Challenge Form is required for the Claims Administrator to reevaluate the exterior square footage of a home. Only the class member who owned the home on October 30, 2018 is entitled to submit a Challenge Form. The class member s square footage claims dispute submittal to the claims administrator must be accompanied by (1 a certified statement of the exterior square footage signed by a South Carolina licensed architect or engineer, (2 pictures of each elevation of the dwelling with the dimensions and square footage attributable to that elevation written on the picture and certified by the certifying architect or engineer, (3 a declaration under penalty of perjury from the homeowner certifying that, to the best of the homeowner s knowledge and belief, the certifying architect/engineer has only included in his/her certification stucco that was part of the original construction of the house (e.g., the certification does not include stucco on any post-construction additions. The claims administrator can either accept or reject the square footage submitted by the class member or request additional documentation as they deem necessary within their sole discretion and notify the class member in writing mailed to the class address of such determination. Should the class member disagree with the claims administrators stucco square footage determination, then the class member may submit the issue to the court for a final decision. IF YOU WISH TO CHALLENGE THE ESTIMATE OF EXTERIOR SQUARE FOOTAGE, YOU MUST SUBMIT A CHALLENGE FORM BY SEPTEMBER 6, What am I giving up to get Settlement Benefits? If the Settlement Agreement becomes final, Settlement Class Members who did not request exclusion from this Settlement Class will be releasing Defendants from all claims related to the design and installation of the stucco, related flashings, and related damage on their home. This means you will no longer be able to sue Defendants regarding any and all claims whether past, present or future and/or whether now known or unknown related in any way to the design and installation of the stucco system. The exact language of the release is available upon request to the Claims Administrator. EXCLUDING YOURSELF FROM THE SETTLEMENT If you do not want to participate in this Settlement and you want to keep the right to sue South Carolina State Plastering, LLC, Kephart Architects, Inc., Del Webb Communities, Inc., Pulte Homes, Inc., Peter Conley, and/or any of their affiliated companies (subject to any and all defense they may have regarding stucco or the issues raised (or which could have been raised in this Action, then you must take steps to get out of the Settlement Class. This is called asking to be excluded from, or sometimes called opting out of, this Settlement Class. 13. If I exclude myself, can I get anything from this settlement? NO. If you exclude yourself, you may not apply for any benefits under the Settlement Agreement and you cannot object to the proposed Settlement Agreement. If you ask to be excluded, however, you may be able to sue South Carolina State Plastering, LLC, Kephart Architects, Inc., Del Webb Communities, Inc., Pulte Homes, Inc. and Peter Conley in the future, subject to any defenses that the various Defendants may raise. 8

9 14. If I do not exclude myself, can I sue any of these Defendants later? Unless you exclude yourself, you give up the right to sue South Carolina State Plastering, LLC Kephart Architects, Inc., Del Webb Communities, Inc., Pulte Homes, Inc., Peter Conley, and any of their affiliated companies for any of the claims that the proposed Settlement Agreement resolves. You must exclude yourself from this Settlement Class if you want to attempt to start or continue your own lawsuit relating to the claims in this case. 15. How do I get out of the Settlement? To exclude yourself from the Settlement and Settlement Class, you must send the Claims Administrator a Request for Exclusion Form (attached hereto. Extra copies of the Request for Exclusion Form are available from the Claims Administrator or the Settlement Website. Your request for exclusion must be POSTMARKED by February 25, 2019: Total Class Solutions Sun City Hilton Head Stucco Settlement P.O. Box Plano, TX If you do not comply with these procedures and the deadline for requests for exclusion, you will remain a Settlement Class Member and lose any opportunity to exclude yourself from the Settlement Class, and your rights will be determined in this lawsuit by the Settlement Agreement if it receives final judicial approval. You cannot ask to be excluded on the phone, by , or at the website. THE LAWYERS REPRESENTING YOU 16. Do I have a lawyer in the case? The Court designated the following lawyers for the Class: W. Jefferson Leath, Jr. and Michael S. Seekings of Law Office of Michael Seekings, John T. Chakeris of The Chakeris Law Firm, and Phillip W. Segui, Jr. of Segui Law Firm PC (collectively referred to as Class Counsel. You will not be charged anything in addition to the 1/3 contingency fee and reimbursement of actual costs of the litigation and settlement administration that Class Counsel have already petitioned the Court to approve. If you want to be represented by your own lawyer in this case, you may hire one at your own expense. If you do not exclude yourself from the Settlement Class in the manner described above in Paragraph 15, you will be deemed by the Court to be a Settlement Class Member. As a Settlement Class Member you will be represented by Class Counsel, but will not be charged for the services of Class Counsel beyond that set forth above. If you wish to remain a Settlement Class Member, but you do not wish to be represented by Class Counsel, you may hire your own attorney to represent you. If you do 9

10 not exclude yourself from this Settlement Class, you will continue to be a Settlement Class Member, even if you are represented by your own attorney. You will be responsible for any fees and costs charged by your own attorney. 17. How will the administrative costs and attorneys fees be paid? As with the prior Right to Cure settlements, which the Court previously approved, Class Counsel are asking the Court to approve their fees in an amount of a one-third (1/3 contingency fee of the recovery. In addition, they are seeking a reimbursement of case costs in the amount of $468, and the cost of the claims administration which they are asking the Court to approve. OBJECTING TO THE SETTLEMENT 18. How do I tell the Court if I do not like the Settlement? If you do not exclude yourself from the Settlement, you may, if you wish, object to the certification of this Settlement Class, to the terms of the proposed Settlement Agreement, or to Class Counsel s application for an award of attorneys fees and expenses and an award of a service fee to the Named Plaintiffs. To do so, you or your own attorney must file with the Court, and send to Class Counsel and to Counsel for South Carolina State Plastering, LLC, Kephart Architects, Inc., Del Webb Communities, Inc., Pulte Homes, Inc, a written Notice of Objection on the form attached hereto. Extra copies of the Notice of Objection form are available from the Claims Administrator or the Settlement Website. Objections must be filed with the Court, and separate copies served on Class Counsel and Defendants counsel by first-class United States Mail at the addresses below, no later than February 25, If you do not comply with these procedures and the deadline for objections, you will lose any opportunity to have your objection considered at the Final Approval Hearing, to otherwise contest the approval of the Settlement or to appeal from any order or judgment entered by the Court in connection with the Settlement. 19. What is the difference between objecting and asking to be excluded? Objecting is simply telling the Court that you do not like something about the Settlement. You can object only if you stay in this Settlement Class. Excluding yourself is telling the Court that you do not want to be part of this Settlement Class. If you exclude yourself, you cannot object to the Settlement and you will not be eligible to apply for any benefits under the Settlement because the case no longer affects you. In order to object, you must provide a detailed statement of the specific legal and factual bases for your objection as stated above. THE FINAL APPROVAL HEARING 10

11 20. When and where will the Court decide whether to approve the Settlement? On April 18, 2019 at 10:00 a.m., the Court will hold a public hearing in Courtroom #1 of the Beaufort County Court of Common Pleas, located at 102 Ribaut Rd., Beaufort, SC 29902, to determine whether this Settlement Class should be certified and whether the Settlement is fair, adequate, and reasonable and should be finally approved, with judgment entered accordingly. The Court also will consider Class Counsel s application for an award of attorneys fees and expense reimbursement and any opposition thereto. This hearing may be continued or rescheduled by the Court without further notice to this Settlement Class, so you should check the Settlement website for updates. Settlement Class Members who support the Settlement do not need to appear at the hearing or take any other action to indicate their approval of the Settlement. Class Members who object to the Settlement are not required to attend the Fairness Hearing. If you want to be heard orally in opposition to the Settlement, either personally or through your own separate counsel, you must state in your written objection your intention to appear at the Fairness Hearing as set forth above in Paragraph 20. IF YOU DO NOT OBJECT TO THE SETTLEMENT, OR ARE IN FAVOR OF IT, YOU ARE NOT REQUIRED TO DO ANYTHING, OR ATTEND THE HEARING. 21. Do I have to come to the hearing? NO. If you agree with this Settlement, there is no need or obligation for you to attend. However, you are welcome to attend the hearing at your own expense. If you send in a written objection, you do not have to come to the Final Approval Hearing to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend the Fairness Hearing, but their attendance is not necessary. IF YOU DO NOT OBJECT TO THE SETTLEMENT, OR ARE IN FAVOR OF IT, YOU ARE NOT REQUIRED TO DO ANYTHING, OR ATTEND THE HEARING. GETTING MORE INFORMATION 22. How do I get more information? This Notice summarizes the proposed Settlement. You may also write with questions to the Total Class Solutions, Sun City Hilton Head Stucco Settlement, PO Box , Plano, TX , or call them at If you wish to communicate directly with Class Counsel, you may contact them at ( You may also seek advice and guidance from your own private attorney at your own expense. PLEASE DO NOT WRITE OR TELEPHONE THE COURT, DEFENDANTS, OR ANY OF DEFENDANTS AGENTS FOR INFORMATION ABOUT THE SETTLEMENT OR THIS ACTION / v.1 11