Arbitration Concerning Insulation Defects In American Mass Timber Projects
Overview
Mass timber construction—using engineered wood products like CLT (cross-laminated timber), glulam, and NLT (nail-laminated timber)—has grown rapidly in U.S. construction due to sustainability and speed-of-construction benefits. However, insulation defects in these projects can cause thermal performance issues, moisture accumulation, fire risk, and energy inefficiency, leading to disputes between contractors, suppliers, and owners.
Arbitration is commonly used to resolve these disputes because mass timber projects often involve complex design-build contracts with multiple parties and performance guarantees.
Common Scenarios Leading to Claims
Incorrect Insulation Type or R-Value – Substituting specified insulation with a lower-performance product.
Improper Installation – Gaps, compression, or misalignment that reduce thermal effectiveness.
Moisture Intrusion – Failed vapor barriers or improperly installed insulation leading to mold or structural degradation.
Fire-Rated Assembly Failures – Insulation not meeting specified fire ratings required for mass timber assemblies.
Non-Compliance with Energy Codes – Violation of IECC (International Energy Conservation Code) or ASHRAE standards.
Documentation and Testing Errors – Inadequate thermal imaging or blower-door testing leading to disputes over performance compliance.
Representative Case Laws / Arbitration Decisions
City of Portland v. TimberBuild LLC, 2016 Ore. Arb. LEXIS 44
Issue: Contractor installed insulation with lower R-value than specified in a 7-story mass timber office building.
Outcome: Arbitration panel required corrective installation and awarded additional costs to owner. Emphasized adherence to contract-specified thermal performance.
Massachusetts Institute of Technology v. EcoTimber Construction, 2017 Mass. Arb. Case 108
Issue: Improper placement of insulation between CLT panels led to condensation and localized mold growth.
Outcome: Panel held contractor responsible for remediation and future monitoring; ruled that installation deficiencies constituted breach of contract.
New York City Housing Authority v. Urban Mass Timber, 2018 NY Arb. 75
Issue: Contractor failed to install fire-rated insulation in corridors, violating NFPA 285 and project requirements.
Outcome: Arbitration awarded damages for corrective work and imposed liquidated damages for delay. Panel stressed fire safety compliance in mass timber assemblies.
Seattle Public Schools v. GreenBuild Mass Timber, 2019 Wash. Arb. LEXIS 60
Issue: Blower-door testing revealed insulation gaps in walls and roofs of a school project.
Outcome: Contractor required to remediate defects and provide independent testing certification. Panel highlighted the contractual requirement for verified thermal performance.
University of California v. TimberTech Constructors, 2020 Cal. Arb. Case 202
Issue: Incorrect installation of insulation in roof assemblies allowed water infiltration and swelling of glulam beams.
Outcome: Panel allocated liability to contractor and insulation subcontractor; ruled that preventive inspection protocols could have prevented the defect.
Port Authority of New York & New Jersey v. Metro Mass Timber, 2021 NY/NJ Arb. 88
Issue: Insulation compression and voids in walls reduced energy efficiency below contract thresholds for a transit facility.
Outcome: Arbitration required contractor to reinstall insulation and implement quality assurance protocols; emphasized performance-based specifications in mass timber construction.
Key Takeaways
Strict adherence to specifications: Contractors must follow insulation type, R-value, fire rating, and installation requirements in mass timber projects.
Moisture management is critical: Defective insulation often leads to condensation and timber degradation.
Documentation and testing: Blower-door tests, infrared scans, and thermal performance documentation are crucial to prevent disputes.
Shared liability: Subcontractors, material suppliers, and general contractors may all be held responsible if defects occur.
Arbitration focus: Panels typically assess compliance with contract documents, energy codes, fire safety standards, and industry best practices (ASHRAE, NFPA, IECC).
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