Title: Strong v. CIR, INC.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

184 Wis. 2d 619 (1994)
516 N.W.2d 719
Robert STRONG and Richard Neisius, Plaintiffs-Respondents,
v.
C.I.R., INC., Defendant,
GEORGE W. OLSEN CONSTRUCTION Co., INC. and Transamerica Insurance Company, Defendants-Appellants-Petitioners.
No. 92-2901.

Supreme Court of Wisconsin.
Oral argument May 24, 1944.
Decided June 15, 1994.
*621 For the defendants-appellants-petitioners there were briefs by Catherine R. Quiggle and Rodli, Beskar & Boles, S.C., River Falls and oral argument by Catherine R. Quiggle.
*622 For the plaintiffs-respondents there was a brief by William J. Radosevich, Hudson and oral argument by William J. Radosevich.
HEFFERNAN, CHIEF JUSTICE.
This is a review of a published decision[1] of the court of appeals which affirmed a summary judgment of the circuit court for St. Croix county, C.A. Richards, Judge, awarding double the wage deficiency, court costs, and attorneys fees to Robert Strong, Richard Neisius, and other employes of Subcontractor C.I.R. against the prime contractor, George W. Olsen Construction Company (G.W.O.), and its surety, Transamerica Insurance Company.
We reverse that portion of the decision which affirmed the circuit court award of double wages and attorney fees and costs. We let stand the decision in respect to the award to Strong and Neisius and to all other employes who later consented to be named in the action for the difference between the prevailing wage specified in the contract and the lesser amount paid to each worker by the subcontractor, C.I.R.
Section 66.293, Stats.,[2] requires Wisconsin municipalities' construction contracts to provide that all workers be paid at least the prevailing wage in the area for their particular skills. Section 779.14, Stats.,[3] requires that all municipal contracts in excess of $500 "contain a provision for payment by the prime contractor of all claims for labor performed ... in making the public improvement or performing the public work." *623 Section 779.14(1m)(a). It further provides that the prime contractor supply a bond issued by a surety licensed to do business in Wisconsin conditioned on the "faithful performance of the contract" (sec. 779.14(1m)(b)2.a.) and "[t]he payment to every person, including every subcontractor or supplier, of all claims that are entitled to payment for labor performed" (sec. 779.14(1m)(b)2.b.).
G.W.O. was awarded the contract with the City of River Falls for the construction of a public works building. It gave bond for the contract performance issued by Transamerica Insurance Co. G.W.O. subcontracted with C.I.R. for plumbing and heating work.
The construction contract was completed on July 28, 1990. On April 15, 1991, Strong and Neisius, employes of the subcontractor, C.I.R., filed an action in their names and "on behalf of all other ... employes who are similarly situated" against C.I.R., G.W.O., and G.W.O.'s surety. It was alleged, and is not disputed, that all C.I.R. employes were underpaid. The employes claimed they were entitled to double the deficiency in their pay measured by the prevailing wage and reasonable attorney fees and costs as provided in sec. 66.293(3)(a):
The employes, plaintiffs, also relied upon sec. 779.14, Stats., the bond statute, particularly on the portion of sec. 779.14(2)(a), which provides that any "party in interest," including a "subcontractor or supplier," which by definition in sec. 779.14(1)(a) means those on the project who contract for the performance of labor, may maintain an action against the prime contractor and its surety upon the bond for "any damages" sustained (sec. 779.14(2)(a)).
It is clear and undisputed that, under sec. 779.14 and the contract itself, G.W.O. and its surety are the guarantors of the payment of the prevailing wage to all workers at the site of the project whether employed by a subcontractor or the prime contractor. G.W.O. and Transamerica acknowledge that they are liable to workers for the difference between the wage actually paid and the prevailing wage. They deny, however, that the Wisconsin statute subjects them to any of the penalties claimed by the plaintiffsthe doubling of the wage deficiency and the payment of the plaintiffs', if reasonable, attorney fees and costs.
G.W.O. and Transamerica also assert that, while an action was timely brought under the provision of sec. 779.14(2)(a) which allows a "party in interest," concededly a wage earner, to "maintain an action in that party's name against the prime contractor and the sureties," only Strong and Neisius were named parties. G.W.O. and Transamerica contend that the action brought on behalf of all C.I.R. employes "similarly situated" were not parties until some time after the express one-year period of limitations set forth in sec. 779.14(2)(a) had run. Hence, it is asserted that these *625 later identified employes are barred from maintaining the action.
G.W.O. and its surety also look to sec. 669.293(3)(a), Stats., which, without stating a period of limitation, permits an action by one or more employes for and on "behalf of that employe ... and other employes similarly situated" for unpaid "minimum" wages, overtime compensation, and an "additional equal amount as liquidated damages." That same statute, however, also provides that no employe shall be a party plaintiff unless that employe consents in writing to be a party plaintiff and files that consent in the court where the action is brought.
G.W.O. and Transamerica point out that, although it is admitted that consents were filed by 19 workers, "similarly situated," all those consents were filed more than one year after the completion of the contract. The defendants, "harmonizing" the provisions of the prevailing wage statute (sec. 693.293) with the contract and bond statute (sec. 779.14), argue that the one-year period of limitations of sec. 779.14 applies and that consequently all of the employes who filed consents more than one year after the completion of the basic contract are barred from the action.[4]
The action was decided by the trial court on the basis of reciprocal motions for summary judgment under the provisions of sec. 802.08, Stats. The material and undisputed facts relied upon by the parties are those set forth in the discussion above. While some *626 peripheral questions of fact have been raised, they are not relevant to the determination of the legal issues posed on this review.
The circuit court granted the motion for summary judgment of plaintiffs, Robert Strong, Richard Neisius, and other C.I.R. employes, against C.I.R., G.W.O., and Transamerica in the amount double the difference between the wages paid by C.I.R. and the mandatory prevailing wage plus attorney fees and costs.[5]
In so holding it also determined that the action had been commenced timely by all of the plaintiffs, those named initially and those "similarly situated" who were named by filing consents before trial but more than one year after the completion of the contract.
Upon appeal the judgment of the circuit court was affirmed. Petition for review of the decision was accepted in respect to both aspects of the court of appeals decision.
On this review, consistent with their position throughout this litigation, G.W.O. and Transamerica recognize their statutory and contractual responsibility to pay the deficiency in the wages paid to Strong and Neisius, who asserted their claim by bringing an action within one year after the completion of the contract. They acquiesce to the judgment for payment of the deficiency and interest on the deficiency to those named plaintiffs.
The following questions remain for this court to decide as a matter of law:
*627 Are the prime contractor, G.W.O., and Transamerica, its surety, liable for the doubled amount of the deficiency as liquidated damages and for reasonable attorney fees and costs? To this we answer, "No."
Are the employes "similarly situated" who were not initially named in the complaint but filed a consent before trial but more than one year following the completion of the contract entitled to recover in the same manner as the named plaintiffs, Strong and Neisius? To this we answer, "Yes."
We discuss these issues in turn.
The liability for double wage deficiency as liquidated damages, attorney fees and costs, if such liability there be, is imposed by sec. 66.293(3)(a), Stats. We conclude that the opening sentence of this subsection defines which of the contracting parties may be subject to such liability. Under that clearly stated statutory condition of liability, only the direct employer, in this case C.I.R., is subject to the penal aspects of the prevailing wage law. That threshold sentence recites that "[a]ny contractor, subcontractor or agent thereof, who fails to pay the prevailing rate of wages ... shall be liable to the employes" for their unpaid wages and for "an additional equal amount as liquidated damages." (Emphasis supplied.)
[1]
We look to the plain meaning of a statute if it is unambiguous. National Amusement Co. v. Department of Revenue, 41 Wis. 2d 261, 163 N.W.2d 625 (1969); Honeywell, Inc. v. Aetna Casualty & Surety Co., 52 Wis. 2d 425, 190 N.W.2d 499 (1971). We conclude that this initial sentence is free of ambiguity.
The statute imposes liability only on those in the contractual hierarchy who have failed to pay the prevailing rate of pay. On the basis of the undisputed *628 facts, it was not G.W.O. nor Transamerica who failed to pay the prevailing wage to the employes when those payments were due. It was C.I.R. True, the principal contractor is not free of liability, for sec. 779.14(1m) imposes responsibility on the contractor for labor performed "in making the public improvement or performing the public work," and the bond executed as required provides for the same payment. However, sec. 779.14(1m)(a) is silent in respect to any penalties to be imposed on any parties other than those who fail to pay the prevailing rate. Penalties imposed for past failed performance are set forth only in sec. 66.293(3)(a). The plaintiffs here, however, argue that sec. 779.14(1m)(a) provides for recovery of "damages" by reason of the contractor's failure and for the failure of a subcontractor of the prime contractor or of the subcontractor of the prime contractor "for the performance of labor." Plaintiffs also point out sec. 66.293 refers to liquidated "damages." Thus in an attempt to harmonize the two statutes plaintiffs leap to the conclusion that the responsibility for "damages" in sec. 66.293 is to be equated with the term, "damages," as used in referring to sec. 779.14(2)(a). We see no such equivalency, for, on the face of the statute, responsibility for damages as mentioned in sec. 66.293(3)(a) is personal to the person or entity in the contractual hierarchy who in fact fails to pay the prevailing wage. That person was not G.W.O. nor its surety.
[2]
Although we believe it to be clear from the face of the statute that G.W.O. is not the offending party, were we to resort to canons of construction, any ambiguity in respect to a penal statute must be resolved against imposing penalty provisions. Unless the legislature *629 has made it absolutely clear against whom penalties lie, penal provisions should not be applied.
[3]
We conclude that the statute imposes liability for damages, i.e., doubling the deficiency, and attorney fees and costs only upon C.I.R. and not upon G.W.O., who, under the facts here, is responsible only for payment, plus interest, of the difference between what the employes received from C.I.R. and what they should have received.[6]
The question remaining is whether the employes "similarly situated" who were unnamed until consents required in sec. 66.293, were filed with the court prior to trial but more than one year after completion of the contract can recover in the same manner as the named plaintiffs, Strong and Neisius.
Although we have concluded herein that plaintiffs could recover liquidated damages, attorney fees and costs only against C.I.R., the employer who failed to pay, the question nevertheless is whether those persons who were not initially identified as party plaintiffs upon being name and identified, could recover in the same manner as Strong and Neisius.
[4]
We conclude that the relationship between secs. 66.293, 779.14, and the rules of civil procedure permit *630 the later identified plaintiffs to recover exactly as Strong and Neisius.
Section 66.293(3)(a), Stats., provides that there can be an action to recover for the amount of the unpaid minimum wage "by any one or more employes for and in behalf of that employe or those employes and other employes similarly situated." (Emphasis supplied.)
Section 779.14(2)(a), Stats., provides, not later than one year after the completion of work under the contract any party in interest, (see 779.14(1)(a)) may maintain an action in that party's name against the prime contractor for failure of a subcontractor to pay the prevailing wage (sec. 779.14(2)(a) 1 and 2).
Thus, it is reasonable to conclude, as did the court of appeals, that, when secs. 66.293(3)(a) and 779.14(2)(a) are considered together, an action may be brought by an employe in his or her own behalf and also in a representative capacity for other employes. Considering the close relationship of the subject matterthe performance of public works contracts under sec. 779.14 and the payment of prevailing wages in public works contracts under sec. 66.293it is reasonable for the court of appeals to conclude that the period of limitations, under these statutes, is one year.[7]
The principal action was brought by Strong and Neisius within that period, and by express pleading the action was stated to be on behalf of other C.I.R. employes similarly situated, all of whom Strong and Neisius alleged were paid at less than the prevailing wage.
*631 [5]
We conclude the provision in sec. 66.293(3)(a), Stats., that requires written consent filed in the court for any person, other than the named party plaintiff, to become a party plaintiff is irrelevant to the commencement of the action here. The provision is primarily for the protection of persons who may not wish to be identified as parties with the concomitant obligation to pay costs or face the consequences of a counterclaim. The provision should be interpreted as a shield to protect employes and not as a device to prevent employes who originally are identified only as "similarly situated" to be excluded from recovering the wages due on the ground that they are barred by a period of limitations.
We conclude the statute means what it says. They cannot be identified as "party plaintiffs" without a consent properly filed. It should be noted it is only required that the action be begun within a year. Clearly, that was done in this case. It is equally clear that consent was filed before the case went to trial. Additionally, the defendants knew from the allegations of the complaint that all C.I.R. employes were underpaid. When, prior to trial the consents were filed, defendants knew precisely who those employes were.
[6]
We conclude that, under the provisions of sec. 66.293, Stats., bringing the action by named employes on behalf of other employes similarly situated made the claimants in this case plaintiffs from the outset, although the ministerial function of self-identification by consent of those additional parties was a prerequisite to their ability to take judgment against the defendants and to be the beneficiaries of the action.
*632 [7]
We conclude that, under sec. 66.293(3)(a), Stats., where the statute provides the equivalent of a class action and the members of the class identify themselves prior to trial, there is no necessity to employ the doctrine of relation back to amend the pleadings or to join parties. We hold that, under the provisions of secs. 779.14 and 66.293, where an action is commenced by named parties and for and in behalf of other employes similarly situated prior to the running of limitations, those other employes under the particular statutes here may, with their consent, be named as party plaintiffs at any time prior to trial if it appears that to do so will not prejudice the defendants by failure to give notice of the nature of the claim and the approximate magnitude of the damages sought.
We do not fault the analysis of the court of appeals which, by reference to appropriate liberalizing provisions of the Wisconsin Code of Civil Procedure, justified the right of the additional employes to benefit from the judgment.
The court of appeals relied on:
*633 [8]
We conclude, however, that the right to add beneficiary plaintiffs under secs. 779.14(2)(a) and 66.293(3)(a), Stats., is made even more manifest than would be dictated by liberal construction of the pleading statutes. Sections 779.14(2)(a) and 66.293(3)(a) make it apparent that it is the intent of the legislature that the action is in the nature of a class action to which members of the class may be added at any time not likely to prejudice the adverse party. The procedure statutes relied upon by the court of appeals demonstrate that, to allow the plaintiffs who identify themselves by filing a consent to participate in the judgment, is consistent with the liberal construction to be accorded the rules of civil procedure.
The action was timely brought on behalf of the employes "similarly situated," and, when those employes were identified by their filed consent prior to trial, they were properly included in the judgment.
By the Court.Decision affirmed in part and reversed in part.
BABLITCH, J., took no part.
[1]  Strong and Neisius v. C.I.R., Inc., 179 Wis. 2d 440, 507 N.W.2d 159 (1993).
[2]  Appendix A sets forth sec. 66.293, Stats.
[3]  Appendix B sets forth sec. 779.14, Stats.
[4]  It should be noted that, under sec. 109.09, Stats., the provisions of sec. 66.293 may be administratively enforced by the Department of Industry, Labor and Human Relations if a wage claim is filed no later than two years after the wage is due. Section 893.44 establishes a general period of limitations for actions for compensation for personal services within two years.
[5]  During the circuit court proceedings an answer was filed on behalf of C.I.R. stating that it was defunct and had no assets. This asserted status is not questioned. Hence, it is acknowledged that, as a practical matter, C.I.R. cannot respond to the claims of the plaintiffs.
[6]  Peripherally, in oral argument it was asserted that perhaps G.W.O. did not act in good faith, e.g., the "affidavits" submitted by C.I.R. as evidence of compliance with the prevailing wage requirement were in fact not affidavits, for they were not executed under oath. However, a careful examination of the record on summary judgment reveals no objection to the affidavits on that basis. Under the circumstances here, where both parties have moved for summary judgment, we rely on the undisputed facts as recited by both parties.
[7]  See footnote 4, supra, re other periods of limitation for actions for wages and in respect to administrative relief by the Department of Industry, Labor and Human Relations.