New York State Court of Claims

New York State Court of Claims

SKY v. STATE OF NEW YORK, #2006-018-545, Claim No. 111322, Motion No. M-70927


Synopsis


There is no private right of action under Labor Law § 220-d. The claim is dismissed.

Case Information

UID:
2006-018-545
Claimant(s):
SKY COMMUNICATIONS, INC.
1 1.The Court has amended the caption sua sponte to reflect the State of New York as the only proper Defendant.
Claimant short name:
SKY
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK
Footnote (defendant name) :
The Court has amended the caption sua sponte to reflect the State of New York as the only proper Defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
111322
Motion number(s):
M-70927
Cross-motion number(s):

Judge:
DIANE L. FITZPATRICK
Claimant’s attorney:
MACKENZIE HUGHES, LLPBy: Christian P. Jones, Esquire
Defendant’s attorney:
ELIOT SPITZER
Attorney General of the State of New York
By: Arthur Patane, EsquireAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
December 8, 2006
City:
Syracuse
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)


Decision

Defendant brings a motion to dismiss the claim for failure to state a cause of action upon

which relief can be granted. Claimant opposes the motion.

The claim, filed on September 2, 2005, seeks $169,941.07, pursuant to Labor Law

§ 220(3), for work Claimant’s employees performed in pulling cable at the State University of New York Upstate Medical Center (hereinafter University Hospital). The New York State Department of Labor assessed Claimant owed its employees $102,994.59 for failing to pay the prevailing wage and supplements, plus $32,958.27 in interest and $33,988.21 in penalties. Claimant argues that it is entitled to implied indemnification from the State for $169,941.07, because University Hospital failed to advise Claimant in the bid package that cable pulling was prevailing wage work, and failed to provide the prevailing wage rate for that work with the bid advertising specifications.

Defendant argues that the contract Claimant entered into with the State specifically refers to the obligation to pay the prevailing wage rate. Defendant refers to Exhibit B of the claim, Schedule A (Exhibit A), which provides “Standard Contract Clauses” “State University of New York” dated October 24, 2000, paragraph 6 providing:
Wage and Hours Provisions.
If this is a public work contract covered by Article 8 of the Labor Law or a building service contract covered by Article 9 thereof, neither Contractor’s employees nor the...[2]permitted to work more than the number of hours or days stated in said statutes, except as otherwise provided in the Labor Law and as set forth in prevailing wage and supplement schedules issued by the State Labor Department. Furthermore, Contractor and its subcontractors must pay at least the prevailing wage rate and pay or provide the prevailing supplements, including the premium rates for overtime pay, as determined by the State Labor Department in accordance with the Labor Law.


Defendant argues that although Claimant has been assessed $169,941.07 by the Department of Labor, this is not a final determination as the right to appeal exists, and there is no indication that Claimant has paid out any monies. Defendant also relies upon Hoxie’s Painting Co. v Cato-Meridian Cent. School Dist., 76 NY2d 207, to argue that there is no private cause of action for the failure of the State to advise prospective bidders of the obligation to pay the prevailing wage or to attach the prevailing wage rate to its solicitations for work bids.

Claimant, in response to Defendant’s motion, argues that it seeks damages not based upon the State’s failure to provide notice of the prevailing wage obligation or rate, but because the State, through its employees, misled Claimant by advising that this work was specifically not subject to the prevailing wage requirements. Claimant, by its President, Jay Meyer, and his father called the contact person for the bid solicitations, Christine Mieczkowski, as identified in the bid requirement documents (Affidavit of Jay Meyer, Exhibit B, Phone Records) on not one, but three separate occasions before the bid was submitted. During each telephone conversation, Mr. Meyer states he, or his father, was repeatedly advised that because this bid was specifically drafted so as to seek only “cable pulling” work, it was not subject to the prevailing wage requirements. Ms. Mieczkowski, according to Mr. Meyer, advised that she had spoken with someone from the Department of Labor who indicated that if the job required only the pulling of cable without any termination of cable, cable splicing, or jacking, then it was not work covered by the prevailing wage laws. Claimant argues, that based upon the State’s conduct, it has stated a cause of action for implied indemnification.

Implied indemnification sounds in principle of equity. It is a means to place the obligation where it belongs: to prevent unjust enrichment; thus, “[a] person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity” (McDermott v City of New York, 50 NY2d 211, 217 quoting Restatement, Restitution, § 76). The accrual of any indemnity claim arises when payment is made by the party seeking indemnification (McDermott, 50 NY2d at 216).

In reviewing the submissions, there is no indication that Claimant has actually paid the sum assessed by the Labor Department or that the State has withheld that amount from the payment due to Claimant under the contract. There is no indication that Claimant has actually been damaged, as opposed to its potential liability, for the sum assessed.

Even if Claimant has paid the $169,941.07, the claim must be dismissed. Accepting Claimant’s allegations as true, as the Court must do on a motion to dismiss, Claimant was given incorrect information, on more than one occasion, regarding the applicability of the prevailing wage requirements of the Labor Law to the cable pulling bid. Yet, despite the obligation of the State, pursuant to Labor Law § 220-d, to advertise the minimum hourly wage rate and the minimum supplement that must be provided, responsibility is on the contractor to insure its compliance with the statute. “[T]he unmistakable aim of the entire enforcement scheme [is] to place all liability for violating the prevailing wage requirements upon the noncomplying contractor” (Hoxie’s Painting Co., 76 NY2d at 213). The Court of Appeals in Hoxie’s unequivocally determined that there was no implied private cause of action for the public entity’s failure to provide the requisite notice of the prevailing wage rate and applicability in accordance with Labor Law § 220-d.

Although, here, the State affirmatively misrepresented the prevailing wage applicability, it is this Court’s view that it is restrained from equitably imposing an obligation in contravention of the purpose of the legislative directive which places the obligation on the contractor to insure compliance with the statute (see also Williamson Roofing and Sheet Metal Co., Inc. v Town of Parish, 139 AD2d 97, 103-105). Despite the compelling facts, and Claimant’s effort to distinguish this case from Hoxie’s Painting Co., and Four Silver Star v State of New York, Ct Cl, Lebous, J., signed October 29, 2003, Cl. No. 105736, UID # 2003-019-566, what Claimant really seeks is the same relief: an implied cause of action to recoup from the State the amount assessed by the Labor Department for its failure to comply with the prevailing wage rate in compiling its bid. Like the contractor in Four Silver Star, Claimant relied upon incorrect information provided by the State to prepare its bid. In Four Silver Star, the State prepared project bidding documents and included prevailing wage rates for laborers. The contractor, in that case, used those rates in preparing his bid, reflecting that he would be paying some employees on the job as laborers and not as painters. The Labor Department later assessed the contractor for failing to pay all of its employees on the job at the prevailing wage for painters. That contractor sought to recoup the amount the Labor Department assessed from the State, arguing that the State misled him into using the wrong wage rate by including the wage rate for laborers. It was argued that the State knew that he was using the wrong wage rate, but failed to advise him of his error which was evident from his bid. Judge Lebous granted summary judgment dismissing the claim finding that under Hoxie’s there is no private cause of action under Labor Law § 220-d. For the same reason, this claim must be dismissed as well.

Defendant’s motion is granted and the claim is hereby DISMISSED.





December 8, 2006
Syracuse, New York

HON. DIANE L. FITZPATRICK
Judge of the Court of Claims


The Court has considered the following documents in deciding this motion:


Notice of Motion..................................................................................................1


Affidavit of Arthur Patane, Esquire, Assistant Attorney General, in support

sworn to November 10, 2005....................................................................2


Memorandum of Law with exhibits attached thereto dated November 10,

2005, in support..........................................................................................3


Affidavit of Jay Meyer, President of Sky Communications, Inc., in opposition,

sworn to February 16, 2006, with exhibits attached thereto.......................4


Affidavit of Christian P. Jones, Esquire, in opposition, sworn to

February 17, 2006.......................................................................................5


Memorandum of Law, in opposition, dated February 16, 2006..............................6


[2].The last line of Exhibit B, Schedule A, paragraph 6, Wage and Hours Provisions was not included in the photocopy attached to the claim.