Court Opinion

ID: 5903758
Source: CourtListenerOpinion
Date Created: 2022-01-13 03:29:51.505291+00
Date Added: 2024-06-11T08:45:45.882571
License: Public Domain

Green, J.
(dissenting in part). We agree that the complaint fails to state a valid cause of action for breach of contract (see, Brang Co. v State Univ. Constr. Fund, 47 AD2d 178). We cannot subscribe, however, to the majority view that the first cause of action, when liberally and fairly construed (see, Guggenheimer v Ginzburg, 43 NY2d 268, 275), does not state a cause of action in negligence for the town’s failure to comply with section 220 (3-a) (a) of the Labor Law. That section required the town to determine the classification of workers that would be employed on the contract to repair the town’s highway garage. The town clearly violated the statute by failing to make the mandated determination.
The majority reasons in part IV that the plaintiff contractor has no cause of action for negligence for the town’s breach of its statutory duty because the "primary purpose of each enactment was to strengthen the position of union laborers and workers in the competitive bidding process and that any benefit to contractors was incidental and simply the procedural means of protecting labor.” The majority, citing Brang Co. v State Univ. Constr. Fund (supra) then concludes that *107"[a]ny protection afforded contractors was limited and was not designed to allow contractors to obtain reimbursement for additional labor costs”. In our view, the majority misinterprets the legislative intent of the statute and denies a contractor the only meaningful remedy it has for reimbursement of moneys it must pay by order of the Department of Labor.
A statute may have more than one purpose and must be construed as a whole so that all parts are harmonized with each other (see, McKinney’s Cons Laws of NY, Book 1, Statutes §§ 96-98). Indeed, in Brang Co. v State Univ. Constr. Fund (supra, at 179), a case frequently cited in the majority opinion, the court held that "[t]he statutory framework obviously contemplates more than one purpose” and that it "affords protection to a contractor by giving him some foreknowledge of potential labor costs when bidding on such [public works] projects.” A general purpose of article 8 of the Labor Law, of which section 220 is an integral part, is to implement the State constitutional requirement that all workers employed pursuant to public work contracts shall be paid the wage rate prevailing in the same trade or occupation in the locality where the work is performed (see, NY Const, art I, § 17). Another general purpose of the legislation is the protection of the public fisc by requiring competitive bidding and fostering honest competition (see, Associated Bldrs. & Contrs. v City of Rochester, 67 NY2d 854, 855). A specific purpose of section 220 (3) is to equalize minimum labor costs between union contractors and nonunion employees (see, Matter of Action Elec. Contrs. Co. v Goldin, 64 NY2d 213, 222).
Where, as here, a municipality violates the Labor Law by failing to determine the classification of workers that would be employed on the project and mistakenly accepts the plaintiff’s bid based upon less than the applicable prevailing wage rate, the plaintiff is subject to liability to the State Department of Labor for the difference between the contract wage and the prevailing wage. It does no violence to the intent or purpose of the statute to permit the plaintiff contractor here to seek reimbursement from the town if it can demonstrate that, but for the town’s violation of the statute, it would have paid the prevailing wage rate. Under these circumstances, the town’s unexcused failure to observe the statutory standard proximately caused plaintiff’s damages and constitutes negligence (see, Martin v Herzog, 228 NY 164; see also, 1 NY PJI2d 150-155; Prosser and Keeton, Torts § 36, at 220-234 [5th ed]).
The majority, by refusing to recognize a cause of action in *108negligence for violation of the statute, denies the contractor the only effective remedy it has to seek reimbursement for moneys the State has ordered it to pay. The majority justifies this harsh result by concluding that the two remedies provided in the statute (Labor Law § 220 [8]) were intended to be exclusive. One remedy, however, whereby a worker may commence an action against the contractor to recover the difference between the wages actually paid and the prevailing wage, is unavailable and, therefore, irrelevant to a contractor.
The other remedy, whereby any "other person affected” may commence a CPLR article 78 proceeding to review the Labor Commissioner’s determination concerning compliance with the statute, is meaningless in this case because there cannot be anything arbitrary or capricious about the Commissioner’s determination when based upon a conceded violation of the statute. The article 78 remedy provided by the statute was intended to resolve more particular objections to the Commissioner’s determinations concerning, for example, the specific classification of worker involved on a public work project, or the prevailing wage rate to be paid, or the definition of the locality where the work is to be performed, or whether a violation was willful (see, e.g., Matter of Dadson Plumbing Corp. v Goldin, 104 AD2d 346, mod 66 NY2d 713; Matter of Nalews, Inc. v Ross, 88 AD2d 1035). The article 78 remedy, however, is inappropriate where, as here, the town has completely failed to honor its statutory duty. In such a case the only appropriate and effective remedy for the contractor is to recover reimbursement for damages proximately caused by the town’s negligence (see, Restatement [Second] of Torts § 552 [3]).
The practical effect of the majority holding is to place full financial responsibility upon the contractor for the town’s breach of its statutory duty. A more equitable and sensible result, however, would flow from consideration of plaintiff’s claim as one for negligence. This would permit an apportionment of fault based upon plaintiff’s contributory negligence, if any, if defendant can establish that plaintiff knew, or should have known, of the statutory requirement (see, Van Gaasbeck v Webatuck Cent. School Dist., 21 NY2d 239, 243; cf., Pierce v International Harvester Co., 61 AD2d 255, 259-260). The majority’s refusal to recognize plaintiff’s cause of action for negligence forces the plaintiff to shoulder full financial responsibil*109ity for failure to pay the prevailing wage rate, even though defendant’s breach of the statute proximately caused plaintiffs damages. There is nothing in the legislative history of the statute which justifies that inequitable result.
Assuming that the complaint states a valid cause of action for negligence, plaintiff is not barred from asserting it for failure to comply with the notice of claim requirements of section 50-e of the General Municipal Law. The application of that statute was not raised by defendant in its answer, by motion at Special Term, or on appeal, and thus, any such issue has been waived.
We also disagree with the majority that plaintiffs second cause of action for unjust enrichment should be dismissed as a matter of law. Such an action is for restitution based on quasi contract and is not dependent upon a valid cause of action for breach of contract (see, Pink v Title Guar. & Trust Co., 274 NY 167). The doctrine of unjust enrichment is not contractual but rather is equitable in nature. Moreover, unjust enrichment is not necessarily unlawful or wrongful enrichment and proof of defendant’s wrongdoing is not required (see, 22 NY Jur 2d, Contracts, §§ 447, 448). The trier of fact could find that it is against equity and good conscience to permit the defendant to avoid reimbursing plaintiff for moneys plaintiff was required to pay by order of the Department of Labor as a result of defendant’s breach of its statutory duty.
Accordingly, the order should be modified by affirming the denial of defendant’s motion for summary judgment and granting, in part, plaintiffs cross motion for summary judgment as to liability in negligence for violation of section 220 (3) of the Labor Law and remitting the matter to Oswego County Supreme Court for further proceedings to determine plaintiff’s contributory negligence, if any, damages on its negligence claim and whether plaintiff is entitled to recover on its unjust enrichment cause of action (see, CPLR 3212 [c]; Lieberman v Larkin, 45 AD2d 965).
Dillon, P. J., and Denman, J., concur with Balio, J.; Green and Pine, JJ., dissent in part in an opinion by Green, J.
Order reversed on the law, without costs, and defendant’s motion for summary judgment granted.