Burgess v. ELC Elec., Inc.

• Decision Date: 22 March 2005
• Docket Number: No. 49A02-0406-CV-504.,49A02-0406-CV-504.
• Citation: 825 N.E.2d 1
• Parties: Matthew E. BURGESS, William M. Burgess, Ronald R. Clark, Yves Dambreville, Michael Escue, Brett M. Flynn, Ronald L. Hamilton, Sr., James L. Loussaint, Christine M. Patterson, Rahman Sharief and Troy M. Whittaker, Appellants-Plaintiffs, v. E.L.C. ELECTRIC, INC., Appellee-Defendant.
• Court: Indiana Appellate Court

825 N.E.2d 1

Matthew E. BURGESS, William M. Burgess, Ronald R. Clark, Yves Dambreville, Michael Escue, Brett M. Flynn, Ronald L. Hamilton, Sr., James L. Loussaint, Christine M. Patterson, Rahman Sharief and Troy M. Whittaker, Appellants-Plaintiffs, v. E.L.C. ELECTRIC, INC., Appellee-Defendant.

No. 49A02-0406-CV-504.

Court of Appeals of Indiana.

March 22, 2005.

Robert S. Rifkin, Clinton E. Blanck, Maurer Rifkin & Hill, P.C., Carmel, IN, Attorneys for Appellants.

Michael L. Einterz, Indianapolis, IN, Attorney for Appellee.

Neil E. Gath, Geoffrey S. Lohman, Fillenwarth Dennerline Groth & Towe, Indianapolis, IN, Attorneys for Amicus Curiae Indiana State Building & Construction Trades Council.

Todd A. Richardson, Lewis & Kappes, Indianapolis, IN, Attorney for Amicus Curiae National Electrical Contractors Association, Central Indiana Chapter.

Steve Carter, Attorney General of Indiana, Frances Barrow, Deputy Attorney General, Indianapolis, IN, Attorneys for Amicus Curiae Indiana Department of Labor.

OPINION

SULLIVAN, Judge.

Appellants-Plaintiffs, Matthew Burgess, William Burgess, Ronald Clark, Yves Dambreville, Michael Escue, Brett Flynn, Ronald Hamilton, Sr., James Loussaint, Christine Patterson, Rahman Sharief, and Troy Whittaker (collectively "the Employees"), challenge the trial court's grant of summary judgment in favor of Appellee-Defendant, E.L.C. Electric, Inc. ("E.L.C."). Upon appeal, the Employees claim that the trial court erred in determining that their claims under the Indiana Common Construction Wage Act ("CCWA") are preempted by the federal Employee Retirement Income Security Act ("ERISA").

We reverse and remand.

The record reveals that defendant E.L.C. is an electrical contracting firm based in Indiana. The Employees all worked for E.L.C. at the time relevant to this appeal. E.L.C. performed work on public construction projects in Indiana. Because of this, E.L.C. falls within the ambit of Indiana Code §§ 5-16-7-1 through 5-16-7-5 (Burns Code Ed. Repl. 2001), known as the Indiana Common Construction Wage Act. See Union Township School Corp. v. State ex rel. Joyce, 706 N.E.2d 183, 190 (Ind.Ct.App.1998),

trans. denied. Section 1(a) of the CCWA provides that any firm, individual, partnership, limited liability company, or corporation which is awarded a contract by the state, a political subdivision, or a municipal corporation for the construction of a public work, and any subcontractor of the construction, shall pay for each class of work described in subsection (c)(1) on the project a scale of wages that may not be less than the common construction wage. Before advertising such a contract, the "common construction wage" is determined by a committee¹ established by the awarding governmental agency in the county wherein the public works project is located. Id. at § 1(b). This committee meets in the county to determine a classification of the labor to be used on the project, divided into three groups: skilled, semiskilled, and unskilled labor. Id. at § 1(c). The committee must also determine the wage per hour to be paid to each of the classes. Id. For each of the three classes of wages, the wages set shall not be less than the "common construction wage[s]" that are currently being paid in the county where the project is located. Id. at § 1(d). The common wage determinations are not based upon the "average" wage paid but the most commonly paid wage in the community, or, in mathematical terms, the "mode." See Union Township, 706 N.E.2d at 192, 192 n. 7. Although not explicitly defined in the text of the CCWA, it has been held that the term "wage" includes fringe benefits. Id. at 191.

It must be a condition of a contract awarded that the successful bidder and all subcontractors shall comply strictly with the determination of wages made under Section 1. I.C. § 5-16-7-1(h). The CCWA is applicable to projects either owned entirely or leased with an option to purchase by the state or political subdivision. Id. at § 1(j). However, the CCWA is generally not applicable to projects paid for in whole or in part with federal funds, nor to projects whose actual construction costs are less than $150,000. Id. at § 1(i), (k).

The Indiana Department of Labor ("IDOL") is charged by statute with the enforcement of Indiana's labor laws, including the CCWA. See Union Township, 706 N.E.2d at 188

(citing Ind.Code § 22-1-1-16 (Burns Code Ed. Repl.1997)). In 2001, E.L.C. was audited by IDOL to check its compliance with the CCWA. At the end of this audit, IDOL sent written notice to the Employees informing them that, pursuant to the CCWA, they had been underpaid for work they had performed while employed by E.L.C. on three specific public works projects. In conducting the audit, IDOL determined the amount of compensation to be paid by looking at the total compensation paid to the Employees and was not concerned with the breakdown of compensation into actual cash wages or fringe benefits. In the present case, the relevant wage committees which established the common wages did divide the prevailing wage into separate cash wage and fringe benefit components. IDOL's auditors combined the cash wage and fringe benefit components into one sum that each of the Employees should have received. IDOL counted both ERISA plans and non-ERISA plans in calculating fringe benefits. IDOL then combined the cash wages and fringe benefits actually received by the Employees into an amount it referred to as the "Total Paid" by E.L.C. According to IDOL's audit, the total paid did not match the amount the Employees should have received, and the notices sent to the Employees listed the amount that IDOL had determined was owed to each respectively.

In response to the notice letters received from IDOL, the Employees, on October 31, 2001, filed suit against E.L.C. seeking unpaid wages, "liquidated damages," and attorney fees. On February 7, 2003, E.L.C. filed a motion for declaratory judgment asking the trial court to declare the CCWA unconstitutional. Following a hearing held on July 25, 2003, the trial court denied E.L.C.'s motion on October 3, 2003, concluding that the CCWA was not unconstitutional and that E.L.C. had not been deprived of procedural due process. E.L.C. sought permission from the trial court to file an interlocutory appeal from the decision, but the trial court denied its motion.²

On December 15, 2003, E.L.C. filed a combined motion to dismiss and motion for summary judgment. In this motion, E.L.C. claimed for the first time that the Employees' claims were preempted by ERISA. The Employees responded on January 12, 2004, arguing that their claims did not relate to any ERISA-based fringe benefit plans. There is no indication in the record that a hearing was held on E.L.C.'s combined motion. But on May 5, 2004, the trial court entered findings of fact and conclusions of law granting E.L.C.'s motion for summary judgment. The Employees filed a notice of appeal on May 26, 2004.

Summary judgment is appropriate only if the designated evidentiary material demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Byrd v. Am. Fed. of State, County, & Municipal Employees, Council 62, 781 N.E.2d 713, 718 (Ind.Ct.App.2003). Genuine issues of material fact exist where facts are in dispute concerning an issue which would dispose of the litigation. Id. Upon appeal, we apply the same standard as the trial court and resolve disputed facts or inferences in favor of the non-moving party. Id. This court and the trial court are bound to consider only those matters which were designated to the trial court. Id. The moving party bears the burden of establishing, prima facie, that no genuine issues of material fact exist and that he or she is entitled to judgment as a matter of law. Id. at 718-19. Once the moving party has met this burden, the burden falls upon the non-moving party to set forth specific facts demonstrating a genuine issue for trial. Id. at 719.

The non-moving party may not rest upon the pleadings but must set forth specific facts, using supporting materials contemplated under the rule, which show the existence of a genuine issue for trial. Id. Although the party appealing a grant of summary judgment bears the burden of persuading us that the trial court erred, we must carefully scrutinize an entry of summary judgment in order to ensure that the non-prevailing party is not denied his day in court. See id.; Jones v. W. Reserve Group/Lightning Rod Mut. Ins. Co., 699 N.E.2d 711, 713 (Ind.Ct.App.1998),

trans. denied. Here, the trial court entered specific findings and conclusions, but this does not alter our standard of review. See Jones, 699 N.E.2d at 714. While such findings and conclusions offer insight into the rationale for the trial court's judgment and facilitate appellate review, they are not binding upon this court. Id.

ERISA

As observed by the Indiana Supreme Court:

"The stated purpose of ERISA is to `protect . . . participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to Federal courts.' [] 29 U.S.C. § 1001(b) (1998). ERISA creates a federal statutory claim for recovery of `benefits due to [the beneficiary] under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan[.]' [] 29 U.S.C. § 1132(a)(1)(B) (1994 & Supp.1997). Suits under § 1132(a)(1)(B) may be brought in either federal or state court. Id. § 1132(e)(1)." Midwest Sec. Life Ins. Co. v. Stroup, 730 N.E.2d 163, 166 (Ind.2000) (emphasis supplied).

However, ERISA does not mandate...