Opinion
14643/05.
Decided August 15, 2008.
James E. Murphy, Esq., Barnes Iaccarino Virginia, Ambinder Shepherd PLLC, New York, NY, Attorney for Plaintiffs.
Ahmed A. Massoud, Esq., Massoud Pashkoff, LLP, New York, NY, Attorney for Defendants.
Plaintiffs Segundo Jara and Carlos Huerta bring this putative class action on behalf of themselves and similarly situated Strong Steel Door employees against Defendants Strong Steel Door, Inc. (SSD), its President, David Wei, Colonial Surety Co. (Colonial), First National Insurance Company of America (First National), and John Doe Bonding Companies 2 and 3, for the alleged underpayment of prevailing wages, supplemental benefit rates and overtime wages. Plaintiffs move for certification of two subclasses pursuant to CPLR 901 and 902 and Defendants cross-move pursuant to CPLR 3212 for summary judgment dismissing plaintiffs' first through eighteenth causes of action in plaintiffs' Fourth Amended Complaint.
This proposed class action arises from various public works contracts entered into by SSD with governmental agencies to perform construction work. Plaintiffs allege that they furnished labor to SSD, including carpentry, painting, and demolition, but that defendants failed to pay them prevailing wages and supplemental benefits as required by each contract. Since the commencement of the action on May 11, 2005, the complaint has been amended four times to add allegations, including that defendants failed to pay overtime rates for hours worked over forty per week on private projects and at SSD's workshop.
The four public works projects at issue are the Lincoln Medical and Mental Health Center LDR, Nursery, Postpartum Renovation project ("Lincoln Hospital"), the Richmond Early Learning Center, Interior Renovation ("Richmond Center"), the Staten Island Botanical Garden/Sailor's Snug Harbor Cultural Center, Reconstruction of Building P ("Snug Harbor"), all under the auspices of agencies of the City of New York, and the United States Merchant Marine Academy Vickery Building Renovation and Addition ("Merchant Marine Academy"). The Lincoln Hospital project was commissioned by New York City Health and Hospitals Corporation ("HHC"), with First National as surety. The New York City Administration for Children's Services ("ACS") commissioned Richmond Center, with Colonial as surety. The New York City Department of Parks and Recreation ("DPR") commissioned the Snug Harbor project, also with Colonial as surety.
Plaintiffs allege eighteen causes of action. The first cause of action alleges that the funds SSD received from the Lincoln Hospital project constituted assets of a trust under Lien Law Article 3-A and that, instead of using those funds to pay plaintiff Huerta prevailing wages and benefit rates, SSD and David Wei diverted those trust assets for their own use, thus violating Lien Law Article 3-A. Plaintiff claims that he is entitled to recover those unpaid wages as a trust beneficiary. Similarly, the second and third causes of action are trust diversion claims brought by plaintiff Huerta for unpaid wages on Snug Harbor and Richmond Center, respectively. The fourth and fifth causes of action are plaintiff Jara's trust diversion claims for Lincoln Hospital and Snug Harbor. Plaintiffs' twelfth cause of action is yet another Lien Law Article 3-A claim specifically alleging violations of Lien Law § 71(2)(d) for defendants' alleged breach of "fiduciary responsibilities."
The plaintiffs refer to this section as "71.2(d)" in the complaint (Complaint ¶ 186). This appears to be a typographical error since section "71.2(d)" does not exist in the Lien Law.
The sixth through eleventh causes of action all sound in breach of contract in which plaintiffs Jara and Huerta claim that they are third party beneficiaries of each of the four public works contracts. Plaintiffs claim that, by virtue of the statutorily-mandated contractual requirement that defendant SSD pay all laborers prevailing wages and benefit rates pursuant to Labor Law § 220, as third-party beneficiaries, they are entitled to recover for SSD's failure to pay such prevailing wages and benefits. The sixth, seventh, eighth and ninth causes of action are Huerta's breach of contract claims for Lincoln Hospital, Snug Harbor, Richmond Center and the Merchant Marine projects, respectively. In the tenth and eleventh causes of action, plaintiff Jara asserts his own breach of contract claim for Lincoln Hospital and Snug Harbor. Neither party has attached copies of the actual contracts to their motion papers and the complaint only recites the relevant provisions for Lincoln Hospital and Snug Harbor. Plaintiffs also plead alternative causes of action sounding in quantum meruit and unjust enrichment as their thirteenth and fourteenth causes of action.
The fifteenth cause of action is brought against the defendant sureties First National, Colonial and unidentified John Doe Bonding Companies 2 and 3. Plaintiffs claim that "each [surety] assumed joint and several liability with Defendant Strong Steel Door and its indemnitors to pay Plaintiffs any and all wages and supplemental benefits due and owing to them, in connection with the Contracts that it bonded, and which Defendant Strong Steel Door failed to pay" (Complaint ¶ 201).
The sixteenth cause of action is for SSD's alleged failure to pay wages in violation of Labor Law §§ 190, 191 and 198-c. The seventeenth cause of action alleges that SSD failed to pay plaintiff Huerta and members of the proposed class overtime for hours worked over forty per week in accordance with New York State Labor Law's overtime regulation, 12 NYCRR 142-2.2. Lastly, plaintiffs bring a Labor Law § 220-g claim against Colonial for SSD's failure to pay prevailing wages and supplement benefits upon SSD's nonpayment of the same.
The Instant Motions
Following discovery, plaintiffs have moved for certification of two distinct subclasses. Sub-Class I is proposed to include "all individuals including past or present employees of Strong Steel Doors, Inc. who performed construction work as carpenters, ironworkers, masons, laborers and in other trades incidental thereto on the following Public Works Projects: [Lincoln Hospital, Richmond Center, Snug Harbor, Merchant Marine Academy]. Sub-Class II is proposed to include "all individuals including past or present employees of Strong Steel Doors, Inc. who performed in excess of forty hours per week, but did not receive overtime wages at including but not limited to: work performed on private facilities not subject to the prevailing wage law, including [SSD's] metal fabrication shop located at Sackett Street, Brooklyn." (Ambinder Affirmation in Support of Motion for Class Certification ¶ 1).
In response, in addition to opposing the motion for class certification, defendants have cross-moved, pursuant to CPLR 3212, for summary judgment dismissing all eighteen causes of action claiming that, on the undisputed facts, they are entitled to judgment as a matter of law. Defendants have submitted documentary evidence which, they contend, establishes that plaintiffs were paid all prevailing wages and benefits due for Lincoln Hospital, at which, they concede, both plaintiffs were employed. Defendants also contend that documentary evidence and government records establish that neither plaintiff was ever employed at either Richmond Center or Snug Harbor and, therefore, plaintiffs have no standing to assert any claims related thereto. Defendants further assert that "documentary evidence conclusively establishes that the plaintiffs never worked more than forty (40) hours per week," notwithstanding the deposition testimony of both defendants to the contrary. Defendants insist that, because the Merchant Marine Academy was a federal project governed by the Davis-Bacon Act ( 40 USC §§ 3142[a], [b] [formerly 40 USC §§ 276a-276a-5, see Pub.L. 107-217, August 21, 2002, 116 Stat. 1062, revising the organization of the United States Code to improve its clarity without making substantive changes]), plaintiffs have no private right of action to enforce the prevailing wage rates mandated in the contract. Defendants further argue that the claims in quasi-contract for quantum meruit and unjust enrichment must be dismissed as precluded by written contracts upon which plaintiffs have brought suit as third party beneficiaries and that plaintiffs' Labor Law causes of action must be dismissed for failure to exhaust administrative remedies. Finally, defendants assert that the causes of action based upon Article 3-A of the Lien Law, which are derivative of the breach of contract claims, must also be dismissed.
Although there is merit to some of defendants' arguments as will be discussed, the basic premise of their motion, that there are no disputed issues of fact, is seriously flawed. As the outcome of the dismissal motion will have significant consequences for plaintiffs' certification motion, the cross-motion will be addressed first.
I. The Cross-Motion to Dismiss
On a motion for summary judgment the burden of proof is on the movant to establish, by evidentiary proof in the form of affidavits or other evidence, such as deposition testimony, that no issues of material fact exist and judgment, as a matter of law, should be granted in its favor (CPLR 3212(b); Zuckerman v City of New York, 49 NY2d 557, 560). If the movant meets its burden, the burden shifts to the nonmovant to establish, also with evidentiary support, the existence of a factual issue requiring trial of the action ( St. Claire v Empire General Contracting and Painting Corp., 33 AD3d 611 [2d Dept 2006]; Vermette v Kenworth, 68 NY2d 714, 717). The parties' competing contentions are viewed in a light most favorable to the nonmovant ( Marine Midland Bank, N.A. v Dino Artie's Automatic Transmissions Co., 168 AD2d 610 [2d Dept 1990]).
Plaintiffs allege that they are intended beneficiaries of the public works contracts for each of the projects at issue, entitled to sue as third party beneficiaries. Labor Law § 220(3) provides that workers on public works contracts shall be paid not less than the prevailing rate of wages as defined by the locality within the state where the public work is performed and requires all contracts for public works to contain a provision stating that each laborer is entitled to such prevailing wages and defining what those wages are. Where such a provision is incorporated into a public works contract and a plaintiff alleges the specific provision of the contract requiring payment of prevailing wages and supplemental benefits, the worker becomes entitled to sue for those wages as a third-party beneficiary of the contract ( Cox v NAP Construction Co. Inc., — NY3d — [2008], 2008 WL 2276160 [June 5, 2008]; Maldonado v Olympia Mechanical Piping Heating Corp. , 8 AD3d 348 , 350 [2d Dept 2004]; Fata v S.A. Healy Co., 289 NY 401).
The prevailing rate of wages in New York City is determined by the Comptroller of the City of New York. ( See Labor Law §§ 220[3], 220[5][e]; see also Fata v S.A. Healy Co., 289 NY 401, 405 [1943]).
Lincoln Hospital
In their complaint both plaintiffs claim to have worked on the Lincoln Hospital project from "approximately December 2004 to April 2005" and that SSD breached its contract with HHC for that project because SSD failed to pay plaintiffs prevailing wages for the work performed there. Both plaintiffs contend that they were paid only $80 per day rather than the prevailing hourly rate. In support of this claim plaintiffs set forth in the Complaint the specific provision from the Lincoln Hospital contract, which states:
The wages to be paid for a legal day's work to laborers, workmen and/or mechanics employed upon the work contemplated by this Contract or upon any materials to be used thereon shall not be less than the "prevailing rate of wages" as defined in Section 220 of the Labor Law, and as fixed by the Comptroller in the attached schedule "B" Wage Rates and in updated schedules thereof. The prevailing wage rates and supplemental benefits to be paid are those in effect at the time the work is being performed (Complaint ¶ 131).
It is undisputed that Carlos Huerta worked for SSD from December 27, 2004 through March 30, 2005. Indeed, his name first appears on the certified payroll documents for December 27, 2004. SSD claims that Segundo Jara performed carpentry work at Lincoln Hospital from March 7, 2005 through April 15, 2005. Although Jara agrees that he was employed by SSD until April of 2005, he claims that he actually started work at SSD in January of 2005. ( See Plaintiffs' Rule 19-a Statement ¶ 1). However, the payroll reports, which list the names of each worker on a daily basis, indicate that Jara was first employed at Lincoln Hospital on March 7, 2005 and was last employed at that site on April 15, 2005.
In its motion for summary judgment, SSD argues that Huerta's sixth cause of action must be dismissed because documentation, including Huerta's W-2 form for 2005, proves that he was paid prevailing wages and supplemental benefits. Specifically, SSD argues that, during the relevant time period, the prevailing wage rate per hour for a carpenter was $39.25 with the supplemental benefit rate set as $28.44, for a combined hourly rate of $67.69. The W-2 form produced by Huerta indicates that his gross wages were $32,423.52. Defendants allege that this amount corresponds to the number of payroll report hours listed for Huerta (479) multiplied by the hourly rate ($67.69). SSD's New York State quarterly tax filing also indicates that Huerta was paid $32,423.52 in 2005. Finally, the certified payroll reports for the Lincoln Hospital project from July 19, 2004 through June 30, 2006, submitted by defendants, indicate that plaintiff Huerta was paid this prevailing hourly wage and benefit rate for all hours worked at Lincoln Hospital from December 27, 2004 through March 30, 2005.
The Court notes that $67.69 multiplied by 479 equals $32,423.51, an amount one cent less than what is indicated on Huerta's W-2
Defendants also argue for dismissal of the tenth cause of action relating to Jara's work at Lincoln Hospital, relying on similar documentation. SSD explains that plaintiff Jara was initially classified as an apprentice carpenter entitled to a prevailing wage rate of $15.70 per hour and a benefit rate of $17.16 per hour for a total of $32.86 per hour. However, upon audit of the Lincoln Hospital project, it was discovered that Jara was not enrolled in an apprentice training program and, therefore, had not been correctly compensated. On November 9, 2005, SSD mailed to Jara a check for $5010.40, representing the difference between the apprentice rate paid to Jara and the correct rate as a journeyman carpenter, which was never cashed. The check was subsequently replaced by a second check dated April 10, 2006, which was also not negotiated. SSD proffers Jara's W-2 showing payment of wages for 2005 of $15,750.30, inclusive of the adjustment to the carpenter's rate of pay, that SSD claims proves payment of the proper prevailing wages and benefit rates for Jara's work on Lincoln Hospital.
It is not disputed that Huerta worked at Lincoln Hospital and was paid in cash. Huerta claims in his affidavit that he was paid no more than $80 per day. SSD has not produced any internal payroll ledgers or records showing actual hours of employment other than the HHC payroll reports for Lincoln Hospital. Although defendant Wei claims he provided workers with an envelope breaking down rates of pay and wage deductions when he paid them in cash, none of these envelopes have ever been produced (Exhibit 13 to the Murphy Affirmation in Opposition to the Motion for Summary Judgment and in Further Support of Plaintiffs' Motion for Class Certification, Wei Deposition of December 5, 2007 at 119). Nor have any receipts for such cash wages or internal payroll ledgers been furnished by SSD.
In contrast to Huerta, who states he was paid only in cash, Jara testified at his deposition that he was paid exclusively by check. In opposition to the motion for summary judgment, plaintiff Jara submits four cancelled checks dated March 18, 2005, March 23, 2005, March 30, 2005, and April 6, 2005. The memo portion of the check dated March 18, 2005 has "3/7 — 3/11" written on the bottom and is in the amount of $400.00. Assuming that the "3/7-3/11" notation means that the check was for payment of his wages for five days of work, this evidence indicates that Jara was paid exactly $80 for each day. The same math applies to the checks dated March 23, 2005, March 30, 2005, and April 6, 2005. SSD contends that Jara was paid partially in cash and partially by check but submits no evidence of actual payments other than these cancelled checks. Similarly, defendants fail to adduce any evidence documenting cash payments to Huerta.
Defendants have produced two checks totaling $7,581.29 made payable to Huerta, one dated January 31, 2005, deposited April 18, 2005, and the other dated February 15, 2005, deposited April 21, 2005. Both checks are endorsed in the name of Carlos Huerta. Plaintiffs' counsel insists that the endorsements do not match the signature of Carlos Huerta on his affidavit, however, Mr. Huerta has not himself denied receipt and negotiation of these checks.
In opposition to defendants' motion, both plaintiffs claim that they were paid no more than $80.00 per day, that SSD falsified the HHC payrolls, W-2 and the quarterly tax filings and argue that the Court should disregard the evidence proffered by defendants because "[i]t is common for contractors to falsify certified payroll reports in an effort to avoid paying lawful wages to their workers, and contractors are routinely barred from working on government contracts or prosecuted for filing falsified payroll records" (Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment and In Further Support of Plaintiffs' Motion for Class Certification at 1). In support of this contention, plaintiffs submit documents unrelated to defendants herein, listing contractors barred from working for the City because of falsified payroll reports. Plaintiffs further submit press releases from various state and city agencies announcing indictments or convictions of contractors for falsifying certified payroll reports. SSD is not mentioned in those press releases.
Finally, plaintiffs cite to an affidavit from Thomas Nodell, the former Chief of the Labor Law Division of the New York City Comptroller's Office, sworn December 11, 2007, in which Mr. Nodell claims that it is common practice for contractors seeking to avoid payment of prevailing wages to falsify payroll records. This affidavit, though cited in plaintiffs' Memorandum of Law in opposition to defendants' motion, was not supplied by plaintiffs but was annexed to defendants' Opposition Affirmation of Attorney Massoud. Nodell states in his affidavit that he was retained by the "New York City District Council of Carpenters" to review documentation submitted to HHC in relation to the Lincoln Hospital project and that he also reviewed Huerta's W-2 and SSD's quarterly tax filing. He concludes that, by virtue of his experience in the labor field, and upon his review of the documents submitted by defendants, "it is entirely feasible that Mr. Huerta did not actually receive the money reflected in the W2 forms and the certified payroll reports" (Exhibit 8 to the Massoud Affirmation in Opposition to Motion for Class Certification, Nodell Affidavit ¶ 14). In response, defendants provide letters dated March 1, 2007 and December 27, 2007 from the Office of the Comptroller of the City of New York advising that a "prevailing wage investigation of [SSD]" had been closed because the review did not disclose "any problems" (Exhibits 9 and 10 to the Massoud Reply Affirmation).
Mr. Nodell states that he was asked by the New York City District Council of Carpenters to review the HHC payroll reports. However, according to defendants, neither plaintiff was affiliated with that organization during their employment with SSD. The plaintiffs do not explain why the District Council of Carpenters hired Mr. Nodell.
Based upon the sworn depositions of plaintiffs that they were paid no more than $80 per day, which the checks to Jara seem to corroborate, and SSD's failure to adduce documentary proof of actual payments of cash to either plaintiff, an issue of fact exists as to whether either plaintiff was paid prevailing wages for his work at Lincoln Hospital. The motion to dismiss is therefore denied as to the sixth and tenth causes of action relating to Lincoln Hospital.
It is noted that Huerta claims to have also worked at Lincoln Hospital in 2003. Defendant David Wei conceded in his deposition that there was a separate Lincoln Hospital project in 2003 but argues that Huerta did not work there (Wei Deposition of December 5, 2007 at 61). In any event, no breach of contract claims are made for that project.
Snug Harbor
The seventh cause of action is Huerta's claim for breach of the Snug Harbor contract. Defendants contend that this cause of action fails because Huerta could not have worked at Snug Harbor since his employment ceased in March of 2005. In support of this claim, defendants submit the Snug Harbor payroll report which does not list Huerta as a laborer on that project at any time. Defendants also argue that documentary evidence from Lincoln Hospital establishes that plaintiffs could not have worked at Snug Harbor because they were working at Lincoln Hospital. They submit the Contractor's Daily Reports which were prepared by an HHC agency representative, independent of SSD, that list Huerta and Jara as laborers on the Lincoln Hospital project throughout March and April, the same time period they allege to have worked at Snug Harbor. (Exhibit 4 to the Massoud Reply Affirmation). Significantly, plaintiffs never dispute the authenticity or veracity of the Lincoln Hospital Contractor's Daily Reports. In fact, they rely on similar independent agency reports related to Snug Harbor in support of their motion for class certification. ( See Exhibit Ito the Ambinder Affirmation in Support of Motion for Class Certification).
The Contractor's Daily Reports for Lincoln Hospital cover the following dates: March 1, 2005 through March 10, 2005; March 14, 2005 through March 18, 2005; March 21, 2005 through March 25, 2005; March 28, 2005 through April 1, 2005; April 4, 2005; April 6, 2005 through April 8, 2005; and April 11, 2005 through April 15, 2005.
Although Huerta alleges in the Fourth Amended Complaint that he worked at Snug Harbor in May of 2005, his deposition testimony contradicts the complaint in that he states that he worked at Snug Harbor for two weeks at the "end of March . . . 2005" (Exhibit 11 to the Murphy Affirmation in Opposition to the Motion for Summary Judgment and in Further Support of Plaintiffs' Motion for Class Certification, Huerta Deposition of November 29, 2007 at 33, emphasis added). This claim is repeated in plaintiffs' Commercial Division Rule 19-a Statement. However, Huerta, in support of his Lincoln Hospital cause of action, has already alleged that he worked on that project in March. In fact, Huerta's name appears on the Lincoln Hospital payroll report every single weekday from March 8, 2005 through March 30, 2005 with the exception of Monday March 28, 2005. Moreover, the Contractor's Daily Report for Lincoln Hospital (independently prepared by an HHC representative) indicates that Huerta worked an eight hour shift from 8 am to 5 pm every single weekday from March 1, 2005 through March 22, 2005. (For March 22, 2005 the agency representative only listed the start time for all employees as 8 am but omitted their end time). From March 23, 2005 through March 25, 2005, the Contractor's Daily Reports lists Huerta as having worked a full day. On the March 28, 2005 report, an X' is marked next to his name and his start time, end time and hours worked are blank. However, this omission corresponds to the omission of his name on that date in the Lincoln Hospital payroll report. Huerta is listed for a full work day on March 29 and 30. Finally, it is undisputed that he was actually terminated from SSD on March 31, 2005 and, therefore, he is not listed on the report for that day.
Plaintiffs' eleventh cause of action is on behalf of Jara for breach of the Snug Harbor contract. Like Huerta, Jara's name does not appear anywhere on the payroll report for Snug Harbor which begins on March 21, 2005 and ends on November 19, 2006. Yet, in the Fourth Amended Complaint, Jara alleges that he worked at Snug Harbor "for approximately two weeks around May of the year 2005 . . . from approximately 6:30 am to 5:00 pm with a ½ hour lunch break, five days a week" (Complaint ¶¶ 178, 179). Defendants claim that Jara could not have done so as he was terminated a month earlier in April 2005. Interestingly, despite four opportunities to amend the complaint and clarify his allegations, Jara now claims, in his Commercial Division Rule 19-a Statement, that he actually worked at Snug Harbor "at the beginning of April2005" (Plaintiffs' Commercial Division Rule 19-a Statement ¶ 7) and not two weeks in May. Jara also claims that he simultaneously worked at Lincoln Hospital through April 2005. However, the independently created Contractor's Daily Reports from 2005 for the Lincoln Hospital project list Jara as having worked an eight hour work day on April 1, 4, 11, 12, 13, and 14, a six hour work day on April 6 and a seven hour work day on April 15, 2005.
This Court is mindful that credibility should not be determined on a summary judgment motion ( Kelly v Licciardi , 21 AD3d 452 [2 Dept 2005]). It is also mindful that, if an issue claimed to exist is not a genuine issue of fact but rather a feigned conclusory assertion, it will not suffice to defeat a motion for summary judgment ( Barclays Bank of New York, N.A. v Sokol, 128 AD2d 492, 493 [2d Dept 1987]; see also Glick v Dolleck, Inc. v Tri-Pac Export Corp., 22 NY2d 439, 441["The court may not weigh the credibility of the affiants on a motion for summary judgment unless it clearly appears that the issues are not genuine, but feigned"]). However, the parties' competing contentions must be resolved in the nonmovant's favor ( See Marine Midland Bank, N.A., 168 AD2d at 610).
It has been established through compelling documentary evidence that it is highly unlikely that Huerta worked at Snug Harbor "for two weeks at the end of March 2005" because, according to his own allegations and the uncontested independent documentary evidence in the form of the Contractor's Daily Reports, he was working at Lincoln Hospital every weekday throughout March of 2005. Moreover, his allegations in the complaint that he worked at Snug Harbor in May no longer appear to be viable since, as discussed earlier, defendants have shown that he ceased working for SSD at the end of March 2005. However, Huerta insists, in sworn deposition testimony and affidavits, that he worked at Snug Harbor. Therefore, for the purposes of the summary judgment motion, the parties competing contentions must be resolved in his favor ( see Marine Midland Bank, N.A., 168 AD2d at 610). As a result, the Court is constrained to find that such inconsistences give rise to an issue of fact. ( See 6243 Jericho Realty Corp. v AutoZone, Inc. , 27 AD3d 447 , 449 [2d Dept 2006]). Despite compelling documentary evidence suggesting the impossibility of Huerta's claims, summary judgment on plaintiffs' seventh cause of action is denied.
The documentary evidence tending to show that Jara could not have worked at Snug Harbor is less compelling because the Lincoln Hospital Contractor's Daily Reports do not cover the entire time period that Jara alleges to have worked at Snug Harbor. Therefore, they do not definitively prove that Jara could not have been working at both Snug Harbor and Lincoln Hospital during the same period of time. An issue of fact therefore exists as to when and where Jara worked in April and May of 2005. The motion for summary judgment dismissing the eleventh cause of actionis denied.
Richmond Center and Merchant Marine Academy
Plaintiffs do not allege the specific contractual provisions for the Richmond Center and Merchant Marine Academy projects despite the fact that New York City contracts are generally accessible through a Freedom of Information request under Public Officers Law § 89 and despite this Court's prior decision, dated September 12, 2007, directing plaintiffs to specify, in their forthcoming Fourth Amended Complaint, the actual contracts and terms which were allegedly breached ( Jara v Strong Steel Doors, Inc., 16 Misc 3d 1139[A] [Kings Co. Sup. Ct. 2007]). Therefore, insofar as Huerta's eighth and ninth causes of action allege a breach of the Richmond Center and Merchant Marine contracts without specifying the provisions or terms of the contracts breached, summary judgment dismissing those causes of action is granted as a matter of law due to plaintiff's failure to provide the court and the parties with notice of the specific "transactions, occurrences, or series of transactions or occurrences, intended to be proved." ( Winsch v Esposito Building Specialty, Inc. , 48 AD3d 558 , 559 [2d Dept 2008][affirming lower court's grant of summary judgment on prevailing wage breach of contract causes of action because the complaint failed to specifically identify the provisions of the contract breached]).
At the time of submission of defendants' motion, case law held that no state private right of action existed to enforce contracts requiring payment of prevailing wages pursuant to the Davis-Bacon Act ( Gawez v Inter-Connection Electric, Inc. , 44 AD3d 898 , 900 [2d Dept 2007]). Therefore, defendants also argued that summary judgment should be granted on plaintiffs' Ninth Cause of Action for Breach of Contract on the Merchant Marine project because it was federally funded and controlled by the Davis-Bacon Act. However, the Court of Appeals has recently held that a private right of action for breach of contract under state law can exist on federally funded projects ( Cox v NAP Construction Co. Inc., — NY3d —, 2008 WL 2276160 [June 5, 2008]). The Court of Appeals held that where a New York City agency (in that case the New York City Housing Authority) commissions a public housing project funded by the federal government under the Housing Act ( 42 USC § 1437), which provides for payment of prevailing wage rates controlled by the Davis-Bacon Act, workers are permitted, under state common law, to bring a private action to recover prevailing wages as third party beneficiaries of the public works contract. In Cox, the Court of Appeals suggested that a contract controlled by Davis-Bacon where labor is commissioned directly through a federal agency with no state participation, as here, might be treated differently. However, because plaintiffs have failed to adequately plead the contractual language at issue, there is no need to address the speculation contained in the dicta from Cox.
Morever, even if Huerta had properly pleaded his breach of contract claims for Richmond Center, defendants have proffered compelling evidence showing that Huerta could not have worked there. Huerta alleges in the Fourth Amended Complaint that he worked at Richmond Center for "approximately 7 hours on a weekend around March 2005," (Complaint ¶ 63). Huerta later contradicts the complaint and states, in his deposition, that he worked on the Richmond Early Learning Center for three hours in 2003 (Huerta Deposition of November 29, 2007 at 37, Ln. 18-20). He also states in his Rule 19-a Statement that "Defendants have, in the course of this litigation misrepresented the start dates of projects they performed work on" (Plaintiffs' Rule 19-a Statement ¶ 3). However, defendants provide the court with a letter from ACS, the independent agency which commissioned the Richmond Center project, changing the "Period of Performance" for Richmond Center from "04/01/05-03/31/06" to "07/18/05-07/17/06" (Exhibit 4 to the Wei Affidavit in Support of Cross-Motion for Summary Judgment). This letter is substantiated by an official New York City Financial Management System, Advice of Award document, proffered by defendants, which states that the original start date for the Richmond Center project was April 1, 2005 (Exhibit 4 to Wei Affidavit in Support of Cross-Motion for Summary Judgment). Based upon the independent nature of these documents, the Court concludes that even if plaintiffs had properly pleaded the Richmond Center breach of contract cause of action, defendants would have met their burden by showing that the Richmond Center project commenced no earlier than April 1, 2005, after Mr. Huerta's employment had terminated. Insofar as there is no opposition or evidence offered by plaintiffs impeaching the authenticity of these official and independent New York City agency documents, the court finds that it is impossible for Huerta to have worked at Richmond Center, as plaintiff alleges in his complaint, in "March 2005", since defendants have demonstrated that the project did not commence until April 2005, after Huerta's agreed period of employment. As the complaint does not contain any claims pertaining to 2003, whether Huerta worked "for 3 hours in 2003" at Richmond Center is irrelevant. The eighth and ninth causes of action are dismissed.
Plaintiffs' First through Fifth Causes of Action for Trust Diversion
Article 3-A of New York State Lien Law provides that "funds . . . received by a contractor [or subcontractor] under or in connection with a contract for . . . a public improvement . . . and any right of action for any such funds due or earned or to become due or earned, shall constitute assets of a trust" (Lien Law § 70; RLI Insurance Co. v New York State Department of Labor, 97 NY2d 256, 261). Lien Law § 71(2)(a) provides that trust assets shall be held and applied for the payment of claims of laborers. Furthermore, Lien Law § 71(2)(d) provides that trust assets shall be held and applied for "payment of any benefits or wage supplements, or the amounts necessary to provide such benefits or furnish such supplements, to the extent that the trustee, as employer, is obligated to pay or provide such benefits or furnish such supplements by any agreement to which he is a party."
"Trust claims" are defined as "claims arising at any time for payments for which the trustee is authorized to use trust funds as provided for in [Lien Law § 71(2)]" (Lien Law § 71[b]). Beneficiaries are those persons having claims for payments for which the trustee is authorized to use trust assets. (Lien Law § 72). Lien Law § 77 allows any holder of a trust claim to bring an action to enforce a trust (Lien Law § 77).
It is not disputed that the projects for which plaintiffs assert their trust claims, Lincoln Hospital, Snug Harbor and Richmond Center, are projects for public improvement. ( See Lien Law § 2[7][defining public improvement as improvement of any real property belonging to the state or a public corporation]). Plaintiffs claim that they are entitled to unpaid wages and benefits, thereby establishing a trust claim under Lien Law § 71(2), and entitling them to bring a cause of action under Lien Law § 77 based upon the surviving breach of contract claims.
Under Lien Law § 75, the Article 3-A trustee is required to keep elaborate books and records detailing the trust assets receivable (Lien Law § 75[A]), the trust accounts payable (Lien Law 75 § [3][B]), the trust funds received (Lien Law § 75[C]) and the payments made with trust assets (Lien Law § 75[D]). The record of payments made with trust assets must specify the name and address of each payee (Lien Law § 75[D][1]), the date and place where each payment was made (Lien Law § 75[D][2]), the amount of each payment (Lien Law § 75[D][3]) and the nature of the trust claim being paid, i.e., whether payments were made for labor (Lien Law § 75[D][4]). Failure to keep these records is presumptive evidence that trust funds were diverted (Lien Law § 75; see also Lien Law § 79-a).
The first and fourth causes of action in the complaint are Huerta's and Jara's trust diversion claims for Lincoln Hospital. The second and fifth are their causes of action for Snug Harbor. The trust diversion claims are brought against SSD and against David Wei personally as the principal officer of the defendant, SSD. SSD has not submitted any records meeting the Lien Law § 75 requirements. Therefore, in light of the presumption that trust funds have been diverted if no records are maintained, SSD may be liable as trustee under Article 3A of the Lien Law if plaintiffs' claims of failure to pay wages are ultimately proved. ( See generally, J. Petrocelli Const., Inc. v Realm Elec. Contractors, Inc. , 15 AD3d 444 , 447 [2d Dept 2005][finding that genuine issues of fact existed over whether trust funds were diverted]).
However, the statutory presumption for failure to keep books and records generally does not apply to a corporation's officers and directors ( In re Kofsky, 351 BR 123, 127 [SDNY 2006]; Forest Electric Corp. v Karco-Davis, Inc., 259 AD2d 303 [1st Dept 1999]). Therefore, although David Wei is SSD's sole officer and presumably has ultimate control over SSD's finances, plaintiffs would have to establish that Wei knowingly diverted assets that were the subject of a trust for him to be held personally liable for trust diversion. ( See Fleck v Perla, 40 AD2d 1069, 1070 [4th Dept 1972]). Wei made many statements in his depositions suggesting that he may not have had knowledge of all the day to day accounting operations of SSD. ( See, e.g., Wei Deposition of December 5, 2007 at 119). An issue of fact is thus presented as to the personal liability of David Wei for diversion of trust assets. ( See Fleck, 40 AD2d at 1070; see also, Forest Electric, 259 AD2d at 303; Ace Hardwood Flooring Co., Inc. v Glazer, 74 AD2d 912 [2d Dept 1980]). Defendants' motion for summary judgment dismissing the first, second, fourth and fifth causes of action relating to Lincoln Hospital and Snug Harbor is therefore denied.
Finally, the third cause of action is Huerta's trust diversion claim for the Richmond Center project. As it has been established that Huerta did not work on the Richmond Center project, this cause of action must be dismissed.
Twelfth Cause of Action: Lien Law § 71(2)(d) Breach of Fiduciary Responsibility
Plaintiffs allege an independent twelfth cause of action for "Breach of Fiduciary Responsibility" predicated upon the duty set forth in Lien Law § 71(2)(d). This claim is completely redundant of the trust diversion claims set forth in plaintiffs' first through fifth causes of action and must be dismissed.
Plaintiffs' Quantum Meruit and Unjust Enrichment Claims
It is well-settled that when a valid and enforceable written contract governs a given subject matter, recovery in quasi-contract is precluded ( Goldman v Metropolitan Life Ins. Co. , 5 NY3d 561 ; Clark-Fitzpatrick, Inc. v Long Island Rail Road Co., 70 NY2d 382, 288 [1987]). In this case it is undisputed that contracts existed for all four public works projects. Therefore, plaintiffs' quasi-contract claims, the thirteenth cause of action for quantum meruit and the fourteenth cause of action for unjust enrichment, must be dismissed ( Cox v NAP Construction Co. Inc., — NY3d —, 2008 WL 2276160; De La Cruz v Caddell Dry Dock Repair Co., Inc. , 22 AD3d 404 , 405 [2d Dept 2005]).
Plaintiffs' Fifteenth Cause of Action against Defendant Sureties
Plaintiffs allege that by issuing bonds to SSD, defendants Colonial, First National and John Doe Bonding Companies 2 and 3 are liable for unpaid prevailing wages and supplemental benefits due and owing to plaintiffs. At this point, issues of fact exist as to whether Huerta and Jara were paid prevailing wages on the Lincoln Hospital project which was bonded by First National. There are also factual issues as to Huerta and Jara's receipt of all wages due for work performed at Snug Harbor which was bonded by defendant Colonial. Accordingly, plaintiffs' fifteenth cause of action must survive summary judgment. ( See generally, Brandy v Canea Mare Contracting, Inc., 34 AD2d 512, 514 [2d Dept 2006][holding that the Supreme Court properly denied summary judgment as to bonding companies for plaintiffs' underpayment of wage claims]).
Labor Law Article 6 Failure to Pay
Citing Labor Law §§ 190, 191 and 198-c, plaintiffs allege in their sixteenth cause of action that defendants failed to pay "agreed-upon wage and overtime compensation rates" (Complaint ¶ 206). This claim is redundant of the causes of action for breach of contract and the seventeenth cause of action for overtime and is therefore dismissed.
Moreover, as previously held, Labor Law § 190 is not a substantive provision pursuant to which a claim may be made, but rather, defines the terms used throughout Labor Law Article 6, and Labor Law § 198-c is a penal statute which does not provide a predicate for plaintiffs' claims. ( See Jara, 16 Misc 3d 1139(A) at 11).
Labor Labor Law § 191, titled "Frequency of payments," directs that manual workers shall be paid on a weekly basis or, with the approval of the Commissioner of Labor, "in accordance with the agreed terms of employment, but not less frequently than semi-monthly" (Labor Law § 191[a]; see also Ikea U.S. Inc. v Industrial Board of Appeals, 241 AD2d 454 [2d Dept 1997]). However, plaintiffs' sixteenth cause of action does not allege a frequency of payment violation, but that SSD "failed to pay Plaintiff and the punitive class agreed-upon wage and overtime compensation rates for work Plaintiff and the punitive class members performed during the period in which such wages were due" (Complaint ¶ 206). It is not disputed that plaintiffs were timely paid on a regular basis; the gravamen of plaintiffs' complaint is that the sums paid were not equal to what plaintiffs claim they were entitled to receive. To the extent that prevailing wages are sought to be recovered, Labor Law § 191 is an inappropriate vehicle for such recovery. ( See Wysocki v. Kel-Tech Construction, Inc., Sup. Ct, NY Co., Index No. 603591/03, April 8, 2005, Solomon, J., aff'd on other grounds, 33 AD3d 375 [1st Dept 2006][dismissing a claim under Labor Law § 191 for an alleged failure to timely pay wages noting that the dispute was over the amount to be paid and not whether it was paid periodically]). Rather, Labor Law § 220 is the appropriate statutory provision applicable to plaintiffs' claims regarding prevailing wages. However, plaintiff does not bring a cause of action pursuant to Labor Law § 220, presumably because such claims would be precluded in the first instance due to plaintiffs' failure to exhaust their administrative remedies as required under Labor Law § 220. ( See Brandy, 34 AD3d at 514; Marren v Ludlam , 14 AD3d 667 , 669 [2d Dept 2005]). It is noted, moreover, that Labor Law § 196 contained within Article 6, sets forth a structure for administrative review of claims brought under that Article analogous to that contained in Labor Law § 220, suggesting that exhaustion of administrative remedies would also be a prerequisite to suit under Labor Law § 191. The motion to dismiss is granted to the sixteenth cause of action.
Plaintiffs' Seventeenth Cause of Action for Overtime
Labor Law § 663 authorizes a civil action for overtime wages in accordance with Labor Law regulation 12 NYCRR 142-2.2 (Labor Law § 663; 12 NYCRR 142-2.2; see also Ballard v Community Home Care Referral Serv., Inc., 264 AD2d 747 [2d Dept 1999]). Plaintiffs make various allegations that, as SSD employees, they performed work on private projects outside the identified public works projects and at the SSD workshop in excess of an eight hour daily shift for which they were not paid overtime wages. Defendants admitted at oral argument that issues of fact exist as to these overtime compensation claims. Therefore, plaintiffs' seventeenth cause of action must survive defendants' motion to dismiss.
Plaintiffs' Eighteenth Cause of Action against Colonial under Labor Law 220-g
The eighteenth cause of action seeks recovery of prevailing wages under Article 8 of the Labor Law. The law is well settled that "[t]he determination of a prevailing wage claim is, in the first instance, the exclusive province of the fiscal officer and must be initially subjected to an administrative proceeding'" ( Brandy, 34 AD3d at 514, quoting P T Iron Works v Talisman Constr. Co. Inc. , 18 AD3d 527, 529 [2d Dept 2005]). It is undisputed that plaintiffs did not exhaust their administrative remedies prior to bringing this action as required by the Labor Law and therefore the eighteenth cause of action is dismissed.
As noted earlier, defendant has provided a letter dated March 1, 2007 from the Office of the Comptroller of the City of New York, which is the fiscal officer responsible to oversee the City projects at issue, stating that "effective February 28, 2007, our prevailing wage investigation of your firm was closed." However, the details of this investigation have not been revealed.
II. The Motion for Class Certification
The plaintiffs move to certify two classes for this action: Sub-Class I consists of all past and present employees of SSD that worked on each of the four projects at issue in this case; Sub-class II consists of past and present employees of SSD who worked in excess of forty hours per week on private facilities not subject to prevailing wage laws, including at SSD's metal fabrication shop. With respect to proposed Sub-Class I, only plaintiffs' claims for Lincoln Hospital and Snug Harbor have survived the motion to dismiss; any proposed sub-class must therefore be limited to past and present employees that worked on Lincoln Hospital and Snug Harbor.
CPLR 901(a) sets forth the following prerequisites to certification of a class action: (1) the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable; (2) there are questions of law or fact common to the class which predominate over any questions affecting only individual members; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; (4) the representative parties will fairly and adequately protect the interests of the class; (5) a class action is superior to other available methods for the fair and efficient adjudication of the controversy. These requirements are to be liberally construed and the decision to certify a class rests in the sound discretion of the trial court ( Beller v William Penn Life Insurance Company of New York, 37 AD3d 747, 748 [2d Dept 2007]). Plaintiffs have the burden of proving the requirements for class certification. General or conclusory allegations in the pleadings or affidavits are insufficient to meet the burden ( Rallis v City of New York , 3 AD3d 525 , 526 [2d Dept 2004]).
In this case, the CPLR 901(a)(2) predominance requirement is met for both subclasses. Issues of law and fact common to all members of the proposed class predominate over individual issues because the ultimate question in this litigation is whether or not SSD paid its workers prevailing wages, supplemental benefit rates and overtime compensation or engaged in a course of conduct of underpaying its employees. ( See Labor Law § 220; see also Labor Law § 663; see also 12 NYCRR 142-2.2). The only individual peculiarities among class members relate to the amount of damages recoverable depending on the number of hours worked and the prevailing wage rates applicable to each worker's trade. Such peculiarities are not an impediment to class certification. ( See Friar v Vanguard Holding Corp., 78 AD2d 83, 96 [2d Dept 1980]; see also Mimnorm Realty Corp. v Sunrise Federal Savings and Loan Assoc., 83 AD2d 836 [2d Dept 1981])
Plaintiffs also establish the CPLR 901(a)(3) typicality requirement. To meet the typicality requirement the claims of the plaintiffs need not be identical to the claims of all other prospective class members ( Pruitt v Rockefeller Center Properties, Inc., 167 AD2d 14, 22 [1st Dept 1991]). The typicality requirement "is satisfied even if the class representative cannot personally assert all the claims made on behalf of the class" ( Id.). While there may be issues of fact as to the hours each potential class member worked, the claims of the plaintiffs are typical of the claims of all potential class members in that such claims rely upon the assertion that SSD did not pay prevailing or overtime wages as required by law and contract.
However, despite meeting the predominance and typicality requirements, plaintiffs' motion for class certification fails because they cannot establish the numerosity, adequacy of representation and superiority requirements of CPLR 901, as well as some of the CPLR 902 factors, as discussed below.
Numerosity
"There is no mechanical test' to determine whether the numerosity requirement has been met" ( Friar, 78 AD2d at 96). However, it has been held that "the threshold for impracticability of joinder seems to be around forty" ( Dornberger v Metropolitan Life Ins. Co., 182 FRD 72, 77 [SDNY 1998]). In determining whether a sufficient number of individuals would meet the definition of the class, the court is to consider the particular circumstances of each case and the reasonable inferences to be drawn from them. ( See Friar, 78 AD2d at 96).
Sub-Class I
Plaintiffs primarily rely on the Lincoln Hospital payroll reports to establish the numerosity requirement on their motion for certification. (The very same documents they contend, in their opposition to defendants' motion for summary judgment, were falsified.) Although there are no fewer than 37 workers listed on the Lincoln Hospital payroll report, and plaintiffs' attorneys claim that this number is a low estimate because SSD allegedly under-reported one to three workers each day, Huerta's own affidavit contradicts this number. In his affidavit, he names only eleven "permanent" workers across all four projects and claims that 10 people worked on a "short term" basis. ( See Exhibit B to the Ambinder Affirmation in Support of the Motion for Class Certification, Huerta Affidavit ¶ 5). Furthermore, in his deposition he says that he worked with only twelve people at Lincoln Hospital (Huerta Deposition of November 29, 2007 at 50).
One of the people plaintiff Huerta claims was not paid prevailing wages is Silvio Huerta, plaintiff's cousin. Surprisingly, Silvio Huerta did not join his cousin in this litigation or even submit a supporting affidavit.
Plaintiff Jara claims in his affidavit that he worked with a combined total of 20 people on Lincoln Hospital and Snug Harbor, but can only name seven people that he worked with at Lincoln Hospital, including co-plaintiff Carlos Huerta ( See Exhibit B to the Ambinder Affirmation in Support of the Motion for Class Certification, Jara Affidavit ¶ 5; see also Exhibit 12 to the Murphy Affirmation in Opposition to the Motion for Summary Judgment and in Further Support of Plaintiffs' Motion for Class Certification, Jara Deposition of November 30, 2007 at 33 [naming only four people that he worked with at Lincoln Hospital]). Furthermore, plaintiffs Huerta and Jara can only name a total of five people between them that allegedly told them they were underpaid (Huerta Deposition of November 29, 2007 at 35-36; Jara Deposition of November 30, 2007 at 33-36). Moreover, plaintiffs' assertions are sharply contradicted by over twenty affidavits of SSD employees stating that they were paid prevailing wages and do not wish to be part of the class in the event it is certified. ( See Exhibit 13to the Massoud Affidavit in Opposition to Motion for Class Certification). Defendants also submit seven additional affidavits from workers on Lincoln Hospital, sworn while the project was ongoing and allegedly submitted to HHC, in which the workers affirm that they were paid prevailing wages. ( See Exhibit 14to the Massoud Affidavit in Opposition to Motion for Class Certification). Defendants submit an additional five affidavits from workers on Snug Harbor, sworn while the project was ongoing and allegedly submitted to DPR for the project, in which the workers detail the date, time, method and amounts they were paid for their work on Snug Harbor.( See Exhibit 15 to the Massoud Affidavit in Opposition to Motion for Class Certification).The names of the affiants on all affidavits coincide with names of the workers listed on the Lincoln Hospital and Snug Harbor payroll reports.
On a motion for class certification the court must use its discretion and draw the necessary inferences from the evidence presented ( Friar, 78 AD2d at 96). In doing so, based upon the testimony and documents submitted, this Court finds that, if it were to certify this class, plaintiffs may well be the only two individuals in the class. Inasmuch as plaintiffs themselves can identify fewer than twenty people that were allegedly underpaid, the Court finds that plaintiffs have not supplied sufficient evidence tending to show that joinder is impracticable and the numerosity requirement has not been met for Sub-Class I.
Sub-Class II
In support of the motion for certification of Sub-Class II, plaintiff Huerta claims that he worked at SSD's shop located in Brooklyn, New York from 6 pm to 10 pm, five days a week and on weekends from 8 am to 6 pm. Huerta claims that he worked these alleged overtime hours with seven other individuals at the shop. Plaintiff Jara claims that he sometimes arrived at the SSD shop at 6 am to load tools into the work van before going to a project site. However, plaintiffs do not identify any other individuals that worked overtime. Therefore, they fail to establish that there are so many individuals aggrieved by SSD's failure to pay overtime wages that joinder would be impracticable and the numerosity requirement for Sub-Class II has not been met.
Adequacy of Representation
It is incumbent on the class representatives to protect the interests of the class (CPLR 901[a][4]), especially in light of the binding effect a judgment in a class action has on the class as a whole. ( Tanzer v. Turbodyne Corp., 64 AD2d 614, 620 [1st Dept 1979]). Therefore, there are a number of factors a court must evaluate when determining whether class representatives are adequate. Specifically, the court must look at the representatives' "background and personal character, as well as [their] familiarity with the lawsuit, to determine [their] ability to assist counsel in its prosecution and, if necessary to act as a check on the attorneys'" ( Pruitt, 167 AD2d at 24, quoting Tanzer v Turbodyne, 68 AD2d at 620). The court must further ensure that class representatives are independent from their attorneys and do not simply act as their alter egos ( Tanzer, 68 AD2d at 620). An ulterior motive, unique to the proposed class representatives, would render such individuals inappropriate spokesmen for the class as such individuals would be likely to place their own interests ahead of those of other class members.
In challenging plaintiffs' motion for class certification, and specifically, their appropriateness as representatives of the proposed class, defendants raise significant issues about plaintiffs' purpose in bringing this lawsuit. Defendants allege that this action has been brought in retaliation for a dispute between SSD and the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America (the "Union") regarding representation. This allegation is buttressed by the fact that the first complaint in this action was filed only three weeks after the Union conducted a picket of SSD at the Lincoln Hospital project for SSD's alleged refusal to enter into a collective bargaining agreement with the Union and SSD's choice to enter into an agreement with a competing union, Local 580 of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers ("Local 580"). In addition, the complaint in this action was filed just one day after the Union filed a complaint with the National Labor Relations Board alleging that SSD was preventing Jara from engaging in union activities. (The complaint was settled in September of 2005.) The Court further notes that plaintiffs' expert, Thomas Nodell, was asked by the Union to investigate SSD's payment practices on the Lincoln Hospital project despite the fact that neither plaintiff was a member of the Union. Furthermore, plaintiffs Huerta and Jara admit it was a representative of the Union that introduced them to their attorneys after SSD terminated their employment (Huerta Deposition of November 29, 2007 at 60-61; Jara Deposition of November 30, 2007 at 16-19).
In his deposition, Huerta testified that it was Jara who had recruited him for the instant suit (Huerta Deposition of November 29, 2007 at 61).
Clearly, these plaintiffs could not afford to finance the substantial costs of the instant litigation. It was revealed at depositions that plaintiffs' counsel are advancing all costs.
From the documentation proffered by defendants demonstrating the Union's campaign against SSD, it appears that plaintiffs' aim may be to punish defendants on behalf of the Union rather than to ensure a fair and efficient adjudication of the alleged controversy.
The propriety of appointing plaintiffs to represent the class is also questionable in light of the contradictions in their allegations and testimony and the conflicting documentary evidence tending to impeach their claims. For example, as discussed supra, the merits of plaintiffs' claims in relation to the Snug Harbor and Richmond Center projects appear dubious primarily because they have alleged that they worked on those projects at times when the documentary evidence suggests this could not be so. Plaintiffs have been permitted to amend the complaint four times, each time changing the dates, times and places they allegedly worked for SSD, thus raising a serious question regarding their credibility and competence to effectively litigate their claims. In the nearly four years since this litigation commenced, and through four amended complaints, no evidence has been adduced that plaintiffs have even bothered to submit a Freedom of Information request to support their causes of action with respect to Richmond Center and the Merchant Marine Academy. It is apparent to this Court that plaintiffs may lack the diligence and understanding necessary to effectively prosecute this action on behalf of the entire class.
Superiority
Finally, plaintiffs' motion fails because they cannot establish the superiority requirement. As mentioned throughout this decision, Labor Law § 220 governs the payment of prevailing wages and also provides a myriad of administrative remedies to investigate and determine whether employees have been paid prevailing wages ( See Labor Law § 220, [7-a], [8] ). A similar administrative vehicle is available to redress the failure to pay overtime. ( See Labor Law § 660). In fact, no private right of action exists under Labor Law § 220 until plaintiffs first exhaust their administrative remedies ( Marren, 14 AD3d at 669). Although plaintiffs do not directly bring a cause of action under Labor Law § 220, they are, through their breach of contract and trust diversion claims, seeking the same relief — payment of prevailing wages and supplemental benefits — available administratively. Considering the limited evidence adduced by plaintiffs to support their claims, an administrative investigation into the payment practices of SSD offers a means of providing relief to the members of the class superior to litigation, notwithstanding plaintiffs' right to maintain this action in their own behalf ( Cox, — NY3d —, 2008 WL 2276160). An investigation would promote the kind of evidence gathering and evaluation needed to determine whether SSD actually engaged in a practice of underpaying its employees. ( See Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C901:8, at 98, quoting Adolf Homberger, State Class Actions and the Federal Rule, 71 Colum. L.Rev. 609, 636 [1971]: "[I]f adequate relief is available through administrative agencies, a class action is unnecessary and, indeed, undesirable").
Plaintiffs rely on Pesantez v Boyle Environmental Services, Inc., 251 AD2d 11 (1st Dept 1998), to support their claim that the superiority requirement has been met. In that case, plaintiffs sought to certify a class of up to 300 employees seeking to recover prevailing wages and supplemental benefits. The court held that a class action was the best method of adjudicating the matter even though an administrative decision under Labor Law § 220 was pending. Unlike the instant case, the payroll reports in Pesantez listed over 100 workers and the plaintiffs themselves identified 80 workers. The potential class would have included up to 300 members. Given the modest potential claim of each individual and the size of the class, the court found the class action to be superior to numerous separate administrative hearings. Here, the payroll report for Lincoln Hospital lists only 37 workers and plaintiffs identify fewer than 20 workers. Moreover, plaintiffs in Pesantez had actually alleged a Labor Law § 220 claim and had commenced an administrative proceeding. Plaintiffs' reliance on Pesantez to establish the superiority requirement is unavailing.
The inadequacies of plaintiffs' demand for class certification are further highlighted when considering the CPLR 902 factors. It is clear that a judicial forum is not the most efficient venue for plaintiffs to pursue their claims. ( See CPLR 902). A trial of this action will consume an enormous amount of time and will significantly delay potential recovery. On the other hand, claimants could simply file a complaint individually or collectively with the Department of Labor pursuant to Labor Law § 220 for their prevailing wage claims and pursuant to Labor Law § 660 for other underpayment of wage claims. An administrative investigation would then be undertaken. If it were determined that plaintiffs had been underpaid, defendants could be ordered to pay those wages and that order would be subject to an administrative appeal and, if necessary, Article 78 review, a far more efficient process than the lengthy process of litigation in this Court. ( See Alix v Wal-Mart Stores, Inc. , 16 Misc 3d 844, 864 [Sup. Ct. Albany 2007][employing the same analysis on a motion for class certification of workers pursuing Labor Law Article 6 claims]). Therefore, this forum is not superior to other venues for the redress of plaintiffs' grievances. Moreover, several members of the putative class have already opted out, indicating their interest in individually controlling any legal process they may deem appropriate. In considering the requirements of CPLR 902, this Court finds the class should not be certified.
Trust Diversion claims and Class Certification
Plaintiffs claim that, even if they fail to establish the CPLR 901 requirements, the court must certify the class because plaintiffs also bring trust diversion claims and the Lien Law requires them to bring such action in a representative capacity. ( See Lien Law § 77). Although Lien Law § 77 does require trust beneficiaries to bring their claims in a representative capacity, but for the element of numerosity, any proposed representatives must still meet the requirements of CPLR Article 9 ( Yonkers Contracting Co., Inc. v Romano Enterprises of New York, Inc., 304 AD2d 657, 658 [2d Dept 2003]). In Yonkers Contracting Co., the court denied class certification under a Lien Law § 77 claim because the plaintiff did not satisfy its burden to demonstrate that it would adequately protect the interests of the class ( Yonkers Contracting Co., 304 AD2d at 659). The court held that class certification should not be granted if the motion is founded on mere conclusory allegations rather than an evidentiary basis, a primary concern of this Court in evaluating the adequacy of plaintiffs as representatives of the proposed class in light of the contradictory nature of plaintiffs' claims. ( See Matros Automated Elec. Const. Corp. v Libman , 37 AD3d 313 [1st Dept 2007]). Beyond the Lincoln Hospital payroll reports, plaintiffs submit no more than conclusory allegations and conjecture to support their motion.
Plaintiffs herein also appear to be in conflict with the interests of other workers who have joined Local 580 rather than the Union favored by plaintiffs. Therefore, though plaintiffs' trust diversion claims have not been dismissed, the court cannot certify a class in this action inasmuch as it has found that the requirements of CPLR Article 9 have not been met ( Yonkers Contracting Co., 304 AD2d at 659). Plaintiffs' motion for class certification is denied.
Conclusion
Defendants' motion for summary judgment is granted to the extent of dismissing plaintiffs' third, eighth, ninth, twelfth, thirteenth, fourteenth, sixteenth and eighteenth causes of action. Summary judgment is denied on the first, second, fourth, fifth, sixth, seventh, tenth, eleventh, fifteenth and seventeenth causes of action.
Plaintiffs' motion for class certification is denied.
The parties are directed to appear for a conference on October 9, 2008.
This constitutes the Decision and Order of the Court.