Bonney v. Environmental Engineering, Inc.

• Decision Date: 29 March 2007
• Docket Number: No. 27306.,27306.
• Citation: 224 S.W.3d 109
• Parties: Arthur H. BONNEY, et al., Plaintiffs-Appellants, v. ENVIRONMENTAL ENGINEERING, INC., Fru-Con Construction Corporation, and Travelers Casualty and Surety Company of America, Defendants-Respondents.
• Court: Missouri Court of Appeals

224 S.W.3d 109

Arthur H. BONNEY, et al., Plaintiffs-Appellants, v. ENVIRONMENTAL ENGINEERING, INC., Fru-Con Construction Corporation, and Travelers Casualty and Surety Company of America, Defendants-Respondents.

No. 27306.

Missouri Court of Appeals, Southern District, Division Two.

March 29, 2007.

Motion for Rehearing or Transfer Denied May 4, 2007.

Application for Transfer Denied June 26, 2007.

Donald R. Aubry, Jolley Walsh Hurley Raisher & Aubry, P.C., Kansas City, for plaintiffs-appellants.

Scott R. Pool, Kara Linnemeyer, Gibbs Pool and Turner, P.C., Jefferson City, for defendants-respondents.

PHILLIP R. GARRISON, Judge.

This appeal arises from an action filed by forty laborers (collectively referred to as "Plaintiffs") for unpaid wages due under the Missouri Prevailing Wage Act ("PWA"), Sections 290.210 to 290.340,¹ as a result of work performed on the construction of a prison. Plaintiffs contend the trial court erred in adopting the calculations of the Missouri Division of Labor Standards ("DLS"); in rejecting their calculations for damages; in failing to award prejudgment interest and attorneys fees; in giving deference to an investigative report conducted by the DLS; in denying their motion to amend the pleadings; in not addressing the claims of certain Plaintiffs who were mischaracterized as apprentices; and failing to award Plaintiffs statutory doubling pursuant to Section 290.300. For the reasons stated we affirm in part, reverse in part, and remand.

FACTS AND PROCEDURAL HISTORY

Fru-Con Construction Company ("Fru-Con") was the general contractor for the construction of a new State prison ("prison project") in Licking, Missouri. The prison project was a "public works project," because it was being constructed for "public use and benefit" by, or on behalf of, a "public body." Section 290.210(6)-(7). Therefore, the prison project was subject to the PWA. Section 290.230.

Environmental Engineering, Inc. ("Environmental Engineering") subcontracted with Fru-Con to perform insulation work on the project. Environmental Engineering subcontracted the insulation and asbestos work to Rex Snider, d/b/a Insulation Specialties ("Insulation Specialties"). Because the prison project was subject to the PWA, all contractors and subcontractors were required to comply with Annual Wage Order No. 4 ("Wage Order"), which was the DLS's determination of the prevailing hourly rate of wages for building construction for Texas County. Sections 290.230 and 290.250. The Wage Order established building construction wage and fringe benefit rates for asbestos workers on the project, totaling $23.29 per hour, consisting of a $17.52 hourly wage, and a fringe benefit payment of $5.77 per hour for each hour worked.

Fru-Con, as required by Sections 290.250 and 107.170.2, procured a Performance and Payment Bond in the amount of $58,375,545 with Travelers Casualty and Surety Company of America ("Travelers"), guaranteeing, among other things, the payment of wage and fringe benefit payments, as required by the PWA, to the workers on the project.

Insulation Specialties had a "Trade Agreement" with the International Association of Heat and Frost and Asbestos Workers, Local 63 ("Local 63"). Insulation Specialties, which obtained its work force on this project through Local 63 and a company called Express Personnel, worked on the project from approximately March 1999 through July 2000. Plaintiffs were employed by Insulation Specialties as asbestos workers for the purpose of performing asbestos work at various times on the project.

At the conclusion of the project, the DLS conducted an investigation following their receipt of a complaint that Insulation Specialties withheld certain amounts for each hour worked from the employees' after-tax wages and failed to remit them to the proper fringe benefit fund. This complaint also alleged that some of the checks written to the fringe benefit fund on behalf of the workers did not clear the bank due to insufficient funds.

In November 2000, before the DLS completed its investigation, Plaintiffs filed a petition in the instant action, pursuant to Section 290.300, in Greene County Circuit Court against Insulation Specialties, Environmental Engineering, Fru-Con, and Travelers for double the difference between the wages and fringe benefits paid for their work on the prison project and the wages and fringe benefits required by the PWA.² Environmental Engineering and Fru-Con are both liable for any payments made by Insulation Specialties that are less than the prevailing wage because the PWA "statutes clearly place the onus for compliance with prevailing wage laws . . . on the contractor . . . and provide the contractor with remedies against a subcontractor for whose violations the contractor is liable." Board v. Eurostyle, Inc., 998 S.W.2d 810, 813 (Mo. App. S.D.1999). As a surety, Travelers' liability is coextensive with that of Fru-Con.³ See City of Kansas City ex rel. Jennings v. Integon Indem. Corp., 857 S.W.2d 233, 236 (Mo.App. W.D.1993).

During the course of its investigation, the DLS obtained information and documents from Insulation Specialties and others to determine if there was an underpayment of wages and/or fringe benefits. In December 2000, the DLS filed a "Prevailing Wage Inspection Report" ("report") finding that fifty-three workers were due wages and penalties. The report stated that the "[v]iolation found resulted from underpayment of wages and fringe benefits due to overtime hours being paid at straight time and apprenticeship violation [because] workers listed [as apprentices] were not enrolled in [an authorized apprenticeship] program." The DLS calculated the amount of underpaid wages and fringe benefits for the fifty-five workers to be $65,308.58 and assessed a penalty of $15,220. It recommended that this matter be referred to the office of the Attorney General for review of the penalty amount found due.

The State of Missouri filed an interpleader action in St. Louis County Circuit Court stating that certain employees of the various contractors who worked on the project, including employees working for Insulation Specialties, were entitled to back wages. Defendants entered into a settlement agreement in March 2001 with the State of Missouri whereby they paid forty-seven underpaid employees of Insulation Specialties the $58,743.49 that the DLS determined was owed.⁴ Defendants also paid a penalty to the State of Missouri for their failure to pay the prevailing wage.

In the instant action, a bench trial was held on May 10 and 11, 2005, to determine the difference between what Plaintiffs received and the "rates provided by the contract." Section 290.300. The terms of the settlement agreement in the interpleader action provided that the trial court was to credit the amount Defendants had paid Plaintiffs pursuant to the settlement agreement toward any amount it determined was owed Plaintiffs. During the course of the trial, Plaintiffs presented evidence concerning workers who were not listed as parties on the original petition. Defendants moved to strike this evidence, which the trial court sustained. Plaintiffs then brought a motion to amend their pleading to add additional parties.

On September 9, 2005, the trial court issued its "Memorandum and Judgment" stating that: (1) Plaintiffs' motion to amend to add additional parties well beyond the expiration of the statute of limitations is overruled; (2) the calculations to determine underpayments and resulting penalties by the DLS is adopted; (3) Plaintiffs' position that fringe benefits should be doubled like wages pursuant to Section 290.300 is without authority; and, (4) Defendants have paid in full pursuant to the DLS's calculations. The judgment was entered for Defendants at the cost of Plaintiffs. Plaintiffs appeal this judgment.⁵

For ease in analysis, we choose not to address the points in the order presented.

Point V

In their fifth point, Plaintiffs claim the trial court erred in denying their motion to amend their pleadings to add as plaintiffs twelve individuals (collectively, "omitted individuals"), who were not named in the original pleadings. They argue that, contrary to the trial court's finding, the statute of limitations did not bar the claims of these omitted individuals.

During trial, the Plaintiffs presented evidence concerning the amount of damages they believed was due. This evidence included testimony by James G. Walsh, Jr. ("Walsh"), an attorney with the firm representing Plaintiffs. During direct examination, Walsh testified as to what he believed the total damages were, and the Plaintiffs offered, and the court admitted without objection, Exhibits 30 and 31, which were summaries of Walsh's calculations. Exhibits 30 and 31 included calculations of proposed damages for the omitted individuals. During cross-examination, Defendants moved to strike all of Walsh's testimony "regarding total damage calculations because based on [his] testimony, these entire damage calculations have been based in substantial part on individuals who are not parties to this action," and strike "portions of Exhibits 30 and 31 that deal with nonparties." Plaintiffs acknowledged that the omitted individuals were not named as plaintiffs in the original petition and moved to amend the pleadings.

The trial court sustained Defendants' motion to strike the testimony as to total damages and portions of the exhibits dealing with the omitted individuals. It then took Plaintiffs' motion to amend their petition under advisement and allowed the parties time to file post-trial briefs on the motion. When issuing its judgment the trial court denied Plaintiffs' motion to amend stating:

Plaintiff seeks to add 12 Plaintiffs not previously included in the petition. While Courts freely grant leave to amend to change parties or to amend the claims on facts alleged, here plaintiff seeks to add parties well beyond the expiration of the statute of...