Woolford Kanfer recently won an arbitration award in a dispute involving a general contractor and a subcontractor in which the sub failed to perform its work in accordance with the requirements of the subcontract. The project involved a senior living facility in Hanover completed in 2005. In 2015, the general contractor discovered that the insulation subcontractor had failed to install insulation in some areas. The subcontractor responsible for installing felt paper also failed to install it in all areas and left gaps. There were numerous areas where no cavity wall insulation was installed at all and in other areas there were gaps. The same was true of the felt paper. This led to air infiltration and draftiness in the residential units. After numerous unsuccessful attempts to convince the subcontractors to repair the missing insulation and felt paper, the general contractor was forced to engage other subcontractors to install the missing insulation. The general contractor also incurred costs to remove the exterior sheathing so that the insulation could be accessed and repaired. The GC settled with the subcontractor responsible for installing the felt paper to recoup some of the repair costs. The insulation sub, however, refused to contribute to the repair costs, so the GC pursued legal action.

The subcontract required all disputes to be arbitrated, so the GC demanded arbitration against the insulation subcontractor, seeking the costs incurred to install the insulation and for attorneys’ fees. The sub responded that the claim was time-barred because the arbitration demand was made more than four years after the project was completed. The GC countered that it did not discover the breach until 2015 and the statute of limitations only began to run at that time. The sub also attacked the GC’s damages, alleging that the GC was unable to segregate the costs incurred to repair the insulation from the costs to install the missing felt paper. The arbitrator rejected the sub’s defenses and found in favor of Woolford Kanfer’s GC client. It awarded the general contractor the costs to correct the deficiencies, as well as attorneys’ fees and arbitration costs.