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Tips for stuccoing exterior walls

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Q: We have a ranch home in the San Francisco Bay Area and over the years we've replaced some of the exterior siding with plywood. When we did this work, waterproof paper was installed beneath the plywood. The exterior paint is about 8 years old now and the plywood siding is checking quite a bit. One area of the plywood has some dry rot as well. We are considering having stucco applied to the exterior. The contractor says he will remove the battens and put a waterproof membrane over the plywood siding then apply three coats of stucco on top of the wire. What should we be careful of to make sure there aren't issues with mold growing or other problems that may arise when applying stucco on exterior walls? Also, can we just treat the dry-rot area with boric product, or should we replace the dry rot before we have the stucco applied? A: Go for the stucco. The stucco process proposed by the plastering contractor has been the standard of the industry for decades. Wire lath is a...