Court Opinion

ID: 5487779
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:19:01.579159+00
Date Added: 2024-06-11T08:33:42.717907
License: Public Domain

OPINION OF THE COURT
Pigott, J.
In this CPLR article 78 proceeding, we are asked to determine whether the prevailing wage requirement of Labor Law § 220 is applicable to a construction contract entered into by the Bath Volunteer Fire Department (BVFD). We hold that because no public agency, as contemplated by the statute, is a party to the contract, the prevailing wage law does not apply.
The Bath Volunteer Fire Department is a not-for-profit fire corporation under Not-For-Profit Corporation Law § 1402. Historically, it operated from a building owned by the Village of Bath. Sometime prior to 2002, it determined that the facility was inadequate for its needs. After the Village declined to build it a new firehouse, BVFD commissioned a feasibility study and obtained its own financing for the construction of one. It acquired land and invited contractors to bid for the construction work. In September 2006, it hired petitioner R-J Taylor General Contractors, Inc. (Taylor) as the general contractor. Taylor subsequently hired a number of subcontractors to construct the various portions of the firehouse.
After an investigation, the Department of Labor (DOL) issued an opinion letter, concluding that the firehouse project was a public work subject to the prevailing wage law. Once the subcontractors learned of the DOL’s determination, work on the project halted. In December 2006, BVFD agreed to indemnify Taylor and its subcontractors against any liability resulting from their failure to pay the prevailing wages, and construction resumed and the project was completed.
*474In the meantime, an administrative hearing was held on the question of the applicability of the prevailing wage law to the firehouse project. The Hearing Officer determined that the project was subject to the prevailing wage law, concluding that the firehouse project satisfied both prongs of the so-called Erie County test for prevailing wage law applicability (see Matter of Erie County Indus. Dev. Agency v Roberts, 94 AD2d 532 [1983], affd for reasons stated below 63 NY2d 810 [1984]). Specifically, the Hearing Officer concluded that volunteer fire corporations, such as BVFD, are the “functional equivalent [s]” of municipal corporations and are therefore “covered entities” under Labor Law § 220. In the alternative, the Hearing Officer reasoned that even if a volunteer fire corporation did not generally satisfy the public entity test, the protection services agreement between BVFD and the Village of Bath satisfied the first prong of the test. Further, because the Village authorized and supported the firehouse project, and the object of the project entailed provision of fire protection services for the community, the project satisfied the “public works” requirement.
Petitioners commenced this article 78 proceeding for review of that determination. The Appellate Division confirmed the determination and dismissed the petition (86 AD3d 812 [3d Dept 2011]). This Court granted petitioners’ motion for leave to appeal (18 NY3d 806 [2012]) and we now reverse.
We begin by considering whether the first prong of the Erie County test—the public agency prong—has been met. The prevailing wage law covers contracts involving each of four specific public entities: the state, a public benefit corporation, a municipal corporation or a commission appointed pursuant to law (see Labor Law § 220 [2]). It is undisputed that BVFD is a fire corporation as defined by the Not-For-Profit Corporation Law, and it is not one of the public entities named in the statute. Nevertheless, the Commissioner determined that BVFD could be deemed “the functional equivalent” of a “municipal department” within the meaning of the Labor Law. In doing so, the Commissioner considered, among other things, that volunteer fire corporations receive immunity for negligence in extinguishing fires just like district and municipal fire corporations; members of volunteer fire corporations enjoy many of the same benefits as public service employees, including immunity from liability in performance of their duties; and volunteer fire corporations are statutorily under the supervision of the municipality they service.
*475The “functional equivalent” test, however, was rejected by this Court in Matter of New York Charter School Assn. v Smith (15 NY3d 403 [2010]). There, the DOL deemed charter schools “public benefit corporations” because the schools serve a valuable public purpose and their existence is the result of a charter issued by a state or local municipal entity. Given those factors, the DOL determined that charter schools met the requirements established by the courts of this State for public work projects. We rejected that argument because while charter schools, like volunteer fire corporations, may be “quasi-public” in nature, they are not a specified public entity and thus, do not fit within the ambit of the statute {id. at 410).
Had the legislature intended to include volunteer fire corporations under the statute, it could easily have done so. Notably, in 2007, the legislature expanded the statute’s coverage to include contracts involving other types of entities, but only when it can be shown they were acting on behalf of the public entity (Labor Law § 220 [2]; see Charter School Assn., 15 NY3d at.410). Indeed, certain volunteer fire department contracts may fall under the prevailing wage law based on the amendment language. At the time of this contract, however, the 2007 amendment of the prevailing wage law did not exist.
The Commissioner argues alternatively that the service agreements entered into with the Village trigger the prevailing wage requirement. However, these contracts are for emergency services pursuant to Village Law § 4-412 (9). That provision empowers a village to contract with the local fire corporation for the “furnishing of fire protection within the village” {id.). The service agreements do not include any provision contemplating the work involved here: the construction of a new firehouse (see Charter School Assn., 15 NY3d at 409). Thus, the service agreements are not a contract for public work within the meaning of the prevailing wage law.
Because of our determination, we need not reach the issue of whether the construction project meets the criteria of a “public work” under the second prong of the prevailing wage law test.
Accordingly, the judgment of the Appellate Division should be reversed, with costs, the petition should be granted and respondent’s determination should be annulled.