The Pennsylvania Office of Attorney General filed a civil suit Thursday against the Cutler Group, alleging that the Plymouth Meeting-based home builder made misrepresentations to its customers by failing to provide weather-resistant new homes.

The suit was filed in Montgomery County Court in Norristown by Chief Deputy Attorney General Sarah A. E. Frasch, director of the office's Bureau of Consumer Protection, as a result of an investigation by her department.

In an interview, Frasch said the suit alleges that the Cutler Group failed to comply with manufacturers' recommendations, building codes, and accepted industry practices involving the installation of stucco, weather barriers, and flashings, resulting in water infiltration and significant damage to their homes.

"Some of these homeowners have damage costing $100,000 to correct," she said. "If you have just bought a new home, how can you also afford this amount of cost for repairs?"

The suit seeks a wide range of relief against the Cutler Group, as authorized by the Pennsylvania Unfair Trade Practices and Consumer Protection Law, Frasch said, including restitution for consumers, civil penalties, and a permanent injunction to stop the alleged violations.

"The main point of the suit is not that damages occurred over time," Frasch said. "It is that the houses were built improperly, and there was misrepresentation that they had been built to industry standards."

"We are seeking an injunction so that this does not happen in the future," she said.

In addition to restitution for the builder's customers, the suit seeks civil penalties of $1,000 for every violation of the Consumer Protection Law and $3,000 for every violation involving a person 60 years old or older, Frasch said.

In an email Thursday, David Cutler, the company's chief executive officer, said: "Our attorneys will respond to the complaint."

"The Cutler Group stopped building stucco homes nine years ago, every one of these complaints are for homes that are that old or more," he said.

"All homes had plans reviewed by the municipalities; building permits were issued; rigorous township inspections took place;  and certificates of occupancy were issued with the words `code compliant' on every CO," Cutler said.

Although Frasch could not disclose when the bureau's investigation began, she said that since 2011 "we have received a number of consumer complaints that indicated a pattern of practice that we needed to look into."

The complaints were not limited to just one part of the region, she said, "but came from all over Southeastern Pennsylvania."

Another factor prompting the investigation was the number of lawsuits filed against the Cutler Group by individual home buyers, she said.

One 2013 lawsuit in Bucks County Court, for example, resulted in an award of $151,325 to a Jamison homeowner, even though he was not the home's original buyer, according to court records. The Pennsylvania Supreme Court overturned the award on appeal, ruling that the state's implied warranty of habitability, which protects buyers of new residential construction, does not apply to subsequent buyers.

The state's statute of repose limits bringing civil action against builders within 12 years after completion of the construction, even though, as Frasch said, problems resulting from water intrusion may not be evident for many years. Cutler Group has built thousands of homes in the region.

Frasch said the complaints the bureau investigated were of three types. The first was that "I tried to reach out to David Cutler, but he's not responding to me," she said. Another was that Cutler had responded and had made repairs but they had not solved the problem. The third was simply that the house had a water problem.

Newly constructed homes, primarily in more-humid Southern states and specifically coastal North Carolina, began having problems with moisture intrusion and mold by the late 1990s because of failure to follow manufacturers' instructions for installing a building system known as Exterior Insulation and Finish System, or EIFS, Philadelphia-area builders said at the time. The product, which itself was not the problem, had been used in commercial applications since the 1950s but in residential construction only starting about 1993.
Frasch said a different stucco system was used in the Cutler Group homes.
She noted, however, that while stucco works well in hotter and drier climates, changing seasons and variations in moisture that come with them may compromise the material in other locales.
"If you don't build it properly, you have issues," she said, adding that these problems may go "far beyond a single builder."