New York State Court of Claims

New York State Court of Claims

LANTRY v. THE STATE OF NEW YORK, #2001-001-027, Claim Nos. 102258, 102455, Motion Nos. M-62951, CM-63167


Synopsis



Case Information

UID:
2001-001-027
Claimant(s):
MARKE LANTRY d/b/a THOROUGHJOB ARCHITECTURAL CONSTRUCTION SYSTEMS
Claimant short name:
LANTRY
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
102258, 102455
Motion number(s):
M-62951
Cross-motion number(s):
CM-63167
Judge:
Susan Phillips Read
Claimant's attorney:
Cotter and Cotter, P.C.By: David B. Cotter, Esq., Of Counsel
Defendant's attorney:
Hon. Eliot Spitzer, NYS Attorney GeneralBy: C. Michael Reger, Esq., Assistant Attorney General, Of Counsel
Third-party defendant's attorney:

Signature date:
June 28, 2001
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

The following papers were read and considered on claimant's motion for summary judgment and defendant's cross motion for summary judgment pursuant to CPLR 3212: Notice of Motion, dated January 12 and filed January 16, 2001; Affirmation of David B. Cotter, Esq., dated January 12 and filed January 16, 2001, with annexed Exhibits A-F; Affidavit of Marke Lantry, sworn to October 27, 2000 and filed January 16, 2001; Notice of Cross Motion, dated February 26 and filed March 2, 2001; Affidavit of C. Michael Reger, Esq., AAG, sworn to February 26 and filed March 2, 2001, with annexed Exhibits A-D; Memorandum of Law in Opposition to Motions by Claimant for Summary Judgment and in Support of the Cross Motions by the State of New York for Summary Judgment, dated February 27 and received March 2, 2001; Affidavit of Joan A. Connell, Esq., sworn to February 26 and filed March 2, 2001, with annexed Exhibits E-I; Affidavit of John E. Loughlin, Esq., sworn to February 26 and filed March 2, 2001, with annexed Exhibits J-R; Affirmation in Reply and Further Support of David B. Cotter, Esq., dated March 9 and filed March 12, 2001, with annexed Exhibits A-D; Reply Affidavit of Joan A. Connell, Esq., sworn to March 14 and filed March 15, 2001, with annexed Exhibits R-T; Reply Memorandum of Law of State of New York, dated and received March 14, 2001; Claim No. 102258, sworn to March 29 and filed April 10, 2000; Claim No.102455, sworn to May 9 and filed May 11, 2000; Verified Answer (102258), dated and filed May 17, 2000; Verified Answer (102455), dated and filed June 23, 2000; Amended Claims Nos. 102258 and 102455, and Amended Answers filed August 7, 2000.[1]

Claimant Marke Lantry ("claimant") owns Thoroughjob Architectural Construction Systems, a business that performs glazing work (Affirmation of David B. Cotter, Esq., dated January 12 and filed January 16, 2001, with annexed Exhibits A-F ["Cotter Aff."], ¶ 2). In 1997 claimant performed preglazed window and door replacement work as a subcontractor on a public works project at the Ichabod Crane Central School District in Columbia County (Cotter Aff., ¶ 7, Exh. A [Amended Claim 102258], ¶ 5). Claimant was also hired as a subcontractor to do similar preglazed window installation work on a public works project at the State University of New York ("SUNY") at Oswego campus in 1997 (Cotter Aff., ¶ 8, Exh. A [Amended Claim 102455], ¶ 5).[2]

During this time period, the New York State Department of Labor ("the DOL"), operating through its Bureau of Public Works, initiated investigations into claimant's two preglazed

window installation projects and concluded that he was not paying his employees the correct prevailing wages and supplements (Affidavit of John E. Loughlin, Esq., sworn to February 26 and filed March 2, 2001, with annexed Exhibits J-R ["Loughlin Aff."], ¶ 2). Although investigations of this type are generally commenced upon a complaint filed by an "interested person" (i.e., a worker) who alleges underpayment of the prevailing wage rate (Labor Law § 220-b [2] [a] [1]), these particular investigations were commenced by the Commissioner of Labor on his own initiative pursuant to Labor Law §§ 220 (7) and 220-b (2) (a) (1) as part of a strike force project to conduct random inspections of public works projects (Loughlin Aff., ¶¶ 2, 4).

As a result of the DOL's determination, Notices of Labor Law Inspection Findings were issued to claimant and Notices of Withholding were issued to the owners of the projects (Loughlin Aff., ¶ 2, Exhs. J-K). The sum of $15,599.68, representing wages, supplements,[3] interest and penalties, was withheld for the Ichabod Crane School District project (Claim No. 102258; Loughlin Aff., ¶4, Exh. J). The sum of $26,259, representing the same categories, was withheld for the SUNY Oswego project (Claim No. 102455; Loughlin Aff., ¶ 4, Exh. K).

An administrative hearing pursuant to Labor Law § 220-b on the Ichabod Crane School District project was initially scheduled for November 8, 1999 (Loughlin Aff., Exh. O), but was adjourned at the request of claimant's former counsel (see, letter annexed to Claim No. 102258 of Michael D. Haith, Hearing Officer, to David B. Cotter, Esq.). A hearing on the SUNY Oswego project was initially scheduled for December 14, 1999 (Loughlin Aff., Exh. O); however, the DOL requested adjournments of both hearings without date because of its reevaluation of the precise basis for the determination of underpayment (Cotter Aff., ¶¶ 13-15, Exh. B).[4] Claimant has made several unsuccessful demands of the DOL either to hold the hearings or to return the withheld funds (Cotter Aff., ¶ 16, Exh. C).[5]

When claimant brought these claims in April and May 2000, he alleged that on account of the DOL's erroneous determination that ironworkers' rather than glazers' wage rates applied, defendant State of New York ("defendant" or "the State")'s withholding of funds constituted a taking of his property without due process (Claim No. 102258, sworn to March 29 and filed April 10, 2000; Claim No. 102455, sworn to May 9 and filed May 11, 2000 [collectively referred to as "claims"], ¶ 18). Claimant also alleged constitutional tort because the withholding unconstitutionally interfered with his contractual obligations (claims, ¶¶ 19-20). The amended claims (see, n 1, supra) added four causes of action, which allege that (1) the State has breached its contractual or quasi-contractual obligation to claimant (amended claims, ¶ 23); (2) the State has tortiously interfered with claimant's contract with the project owners and prime contractors (amended claims, ¶ 24); (3) the State has taken claimant's money without a legal basis based upon a flawed legal theory and has refused to return it (amended claims, ¶ 25); and (4) the State has converted claimant's money (amended claims, ¶ 26). The State has answered with general denials and has asserted, among other defenses, that the Court of Claims lacks subject matter jurisdiction to hear this claim and that the State enjoys sovereign immunity for the alleged acts or omissions of the DOL in enforcing Article 8 of the Labor Law (Amended Answers filed August 7, 2000, ¶¶ 7, 10).

Claimant now moves for summary judgment because the "fundamental reasons for the claims against the State [are] that the State has taken [claimant's] money, and, refuses both to give it back or [to] provide the forum within which his cases can be adjudicated" (Cotter Aff., ¶ 3). He argues that since the claims seek to recover "money damages for the State's wrongful conduct, conversion, breach of contract, etc." (Cotter Aff., ¶ 29) as well as for constitutional tort (see, Brown v State of New York, 89 NY2d 172), the Court of Claims has subject matter jurisdiction (Cotter Aff., ¶¶ 27-31; Affirmation in Reply and Further Support of David B. Cotter, Esq., dated March 9 and filed March 12, 2001, with annexed Exhibits A-D ["Cotter Reply Aff."], ¶ 21). Claimant further contends that summary judgment is proper because claimant admittedly performed all the as yet to be paid for work called for by the contracts, and the State cannot justify withholding funds for this work under Labor Law § 220 (Cotter Aff., ¶ 43).

The State cross-moves for summary judgment, arguing that the Court does not have jurisdiction because these claims involve enforcement of Article 8 of the Labor Law for which claimant must seek redress in a CPLR article 78 proceeding; and that the DOL's decisions regarding its application of Article 8 of the Labor Law are quasi-judicial/discretionary determinations afforded absolute immunity (see, Affidavit of C. Michael Reger, Esq., AAG, sworn to February 26 and filed March 2, 2001, with annexed Exhibits A-D ["Reger Aff."], ¶¶ 3-4; Memorandum of Law in Opposition to Motions by Claimant for Summary Judgment and in Support of the Cross Motions by the State of New York for Summary Judgment, dated February 27 and received March 2, 2001, pp 6-14; Reply Memorandum of Law of State of New York, dated and received March 14, 2001).

By way of background, Article 8 of the Labor Law requires any contractor, or subcontractor, working on a public works project to pay employees "not less than the prevailing rate of wages" (Labor Law § 220 [3]; see, NY Const art I, § 17). "Prevailing rate of wage" is defined, for purposes of Article 8, as "the rate of wage paid in the locality, as hereinafter defined, by virtue of collective bargaining agreements between bona fide labor organizations and employers of the private sector, performing public or private work provided that said employers employ at least thirty per centum of workers, laborers or mechanics in the same trade or occupation in the locality where the work is being performed" (Labor Law § 220 [5] [a]). "Locality" is fixed as "such areas of the state described and defined for a trade or occupation in the current collective bargaining agreements between bona fide labor organizations and employers of the private sector, performing public and private work" (Labor Law § 220 [5] [d]; see also, L 1983, c 447, § 1).

The Commissioner of the DOL is charged with enforcing these provisions (Labor Law

§ 220 [7] and the Bureau of Public Works, the Commissioner's designee (see, Matter of Sierra Telcom Servs. v Hartnett, 174 AD2d 279, 284, lv dismissed 79 NY2d 1039, lv denied 80 NY2d 757, cert denied 507 US 927), conducts investigations into these matters prompted either by an employee complaint or, as was done here, on its own initiative (Labor Law §§ 220 [7]; 220-b [2] [a] [1]). If warranted by the findings of its investigation, the DOL may issue a notice to withhold from any payment due a contractor or subcontractor sums sufficient to satisfy the unpaid wages and supplements, including interest and any civil penalty pending a "final determination" of the matter (Labor Law § 220-b [2] [a] [1]). Money withheld in accordance with this procedure is deemed held "for the sole and exclusive benefit of the workers" employed on the public works project(s) and may not be used for any other purpose without a court order (Labor Law § 220-b [b]).

A party whose funds have been withheld pursuant to Labor Law § 220-b is entitled to an administrative hearing to be held "expeditiously" (Labor Law §§ 220 [8]; 220-b [c]; see also, State Administrative Procedure Act § 301 [1] [within a reasonable time]; Matter of Passucci Gen. Constr. Co. v Hudacs, 221 AD2d 987, lv denied 87 NY2d 811 [three-year delay of DOL in conducting hearing did not violate due process of petitioner; however, petitioner not required to pay interest on entire period because three years was not "expeditious"]). A contractor or subcontractor aggrieved by the administrative determination may next seek review by way of a CPLR article 78 proceeding to be commenced in the Appellate Division (see, Labor Law §§ 220 [8]; 220-b [e]). Because determinations of the proper classification of trades and occupations and the concomitant determination of the correct prevailing wage rate "is a matter within the expertise of the [DOL]" ( Matter of Sierra Telcom Servs. v Hartnett, supra, at 283), the Appellate Division's review is limited to whether substantial evidence supports the DOL's determination (see, id.; Matter of TPK Constr. Co. v Hudacs, 205 AD2d 894).

The central thrust of claimant's actions against the State is that the DOL has withheld funds owed to him for his subcontracting work on the two public works projects because of an erroneous determination that he had not paid his employees the correct prevailing wage rate; and further that the DOL's failure either to release the funds or provide him with his administrative hearings has violated his due process rights. As alluded to by defendant, however, the threshold question presented by these motions is whether the Court of Claims has subject matter jurisdiction over these claims.

"[T]his Court has consistently held that where statutes provide a method for review of adjudications by administrative agencies, they must be followed. A collateral review may not be brought under the guise of a claim for money damages" (Lublin v State of New York, 135 Misc 2d 419, 420, affd 135 AD2d 1155, lv denied 71NY2d 802; accord, Sidoti v State of New York, 115 AD2d 202; Young v State of New York, 179 Misc 2d 879, 882). Here, counsel for claimant argues that the Court possesses jurisdiction because he seeks monetary damages based on contract and violations of his due process rights, and because there is no other forum in which he may be made whole (Cotter Reply Aff., ¶¶ 21, 31). The amended claims identify the relief sought as the amounts withheld together with interest and attorneys' fees (amended claims, ¶¶ 27-28). Moreover, claimant's affidavit specifies "reimbursement" of the money withheld as the primary relief sought (Affidavit of Marke Lantry, sworn to October 27, 2000 and filed January 16, 2001, ¶¶ 10, 12 [annexed to Notice of Motion]).

Claimant in his amended claims couches his causes of action in terms of breach of contract/quasi contract, conversion and constitutional violations; however, conclusions regarding whether the Court of Claims has subject matter jurisdiction to entertain a particular claim do not hinge upon how a claimant characterizes the action in the pleadings. Rather, this determination must be made on "the actual issues presented" (Sidoti v State of New York, supra, at 203; see, Matter of Gross v Perales, 72 NY2d 231, 236 ["whether the essential nature of the claim is to recover money, or whether monetary relief is incidental to the primary claim, is dependent upon the facts and issues presented in a particular case"]). Here, the "actual issues" unquestionably turn upon the administrative determinations made by the DOL in making its initial decision that claimant had not utilized the correct prevailing wage rate and, later, the hearing officer's decision to adjourn claimant's administrative hearings.

In order to grant the requested relief, this Court would inevitably have to examine and find fault with the DOL's administrative actions; however, the Court of Claims' jurisdiction is limited to awarding damages in tort or contract and does not extend to the review of agencies' discretionary decisions (Bertoldi v State of New York, 164 Misc 2d 581, 587). "If the award of a money judgment must be preceded by overturning and annulling a determination of an administrative agency then the primary relief sought is not money damages" (Ouziel v State of New York, 174 Misc 2d 900, 905). If claimant were to persuade the Appellate Division to annul an unfavorable determination by the DOL, the statutory basis for the withholdings would cease to exist and he would be entitled to his withheld funds.[6] Thus, the relief claimant seeks is more accurately identified as incidental and, as spelled out in Labor Law §§ 220 and 220-b, is attainable solely by way of a CPLR article 78 proceeding commenced in the Appellate Division of the Supreme Court (see, Matter of Gross v Perales, supra; Harvard Fin. Servs. v State of New York, 266 AD2d 685).

Finally, whatever financial difficulties claimant may have faced because of the less than "expeditious" (Labor Law §§ 220 [8]; 220-b [c]) manner in which the DOL has acted, the Hearing Officer's decision to grant the adjournments (Cotter Aff., ¶¶ 13-14, Exh. B) constituted quasi-judicial acts (see, Labor Law §§ 220 [8]; 220-b [c]). As such, they are cloaked with absolute immunity (see generally, Tarter v State of New York, 68 NY2d 511, 518 [noting that judicial immunity is logically extended to "neutrally positioned government officials, regardless of title, who are delegated judicial or quasi-judicial functions"]; Board of Educ. of City of N.Y. v State of New York, 88 AD2d 1057, affd 60 NY2d 716; Abruzzo v State of New York, 84 AD2d 876, 877). Claimant's sole remedy for the DOL's delay was by way of a CPLR article 78 proceeding to compel the hearings (see, e.g., Matter of Nalews, Inc. v New York State Environmental Facilities Corp., 79 AD2d 829, 831; Matter of Pav-Lak Contr. v McGowan, 184 Misc 2d 386, 389-390; Palmer Constr. v Hines, 154 Misc 2d 248). Moreover, the availability of this remedy precludes any cause of action for constitutional tort in the Court of Claims (see, Moates v State of New York, Ct Cl, Fitzpatrick, J., UID # 2000-018-044; Cook v State of New York, Ct Cl, unreported decision filed Jan. 20, 2000, Nadel, J., Claim No. 96062).

Based on the foregoing, the Court denies claimant's motion for summary judgment; grants the State's cross motion for summary judgment. Claim Numbers 102258 and 102455 are hereby dismissed.


June 28, 2001
Albany, New York

HON. SUSAN PHILLIPS READ
Judge of the Court of Claims




[1] Claimant filed motions to amend his claims (M-61936, M-61937), which he withdrew because his time to amend as of right had not yet expired. These withdrawn motion papers included proposed amended claims never actually filed with the Court. The proposed amended claims did not allege any different facts, but added four more causes of action. For purposes of these motions, the amended claims will be deemed "filed".
[2] Claimant's counsel states that the SUNY Oswego work was performed in 1996; the claim states that it occurred in 1997.

[3] "Supplements" are defined as including such benefits as health, welfare, non- occupational disability, retirement, vacation, holiday pay and life insurance (see, Labor Law

§ 220 [5] [b]).

[4] Vastly simplified, at issue is whether preglazed window installers (the work performed by claimant) should be paid the wages of a glazer or the prevailing wages for an ironworker (see, Affidavit of Joan Connell, Esq., sworn to February 26 and filed March 2, 2001 ["Connell Aff."], ¶¶ 2-3, 6-11, Exhs. E, H; see also, Matter of International Assoc. of Bridge, Structural and Ornamental Ironworkers, Local Union No. 6, AFL-CIO v State of New York, ___ AD2d ___, 719 NYS2d 773).
[5] DOL may have chosen to proceed with a hearing on the Ichabod Crane School District project on May 16, 2001 (Loughlin Aff., ¶ 8, Exh. R). Because exactly the same legal and factual issues are presented in both claims (Cotter Aff., ¶ 8), any determination rendered in that hearing would appear to determine the outcome for the SUNY Oswego project as well.
[6] Although limited to fees and expenses incurred after claimant seeks judicial review of the DOL's determinations, including any remand back to the DOL (i.e., not for the administrative hearings preceding judicial review) (see, Matter of Greer v Wing, 95 NY2d 676), Article 86 of the CPLR provides claimant with a means to recover fees and expenses for a successful proceeding. The "New York State Equal Access to Justice Act" (CPLR 8600) allows a prevailing petitioner to recover fees and expenses provided that the court does not find that the position of the DOL was "substantially justified" or that "special circumstances make an award unjust" (see, CPLR 8601; 8602). Thus, it appears that claimant's contention that no other forum would make him whole is not entirely accurate.