Crabtree v. Lewis

• Decision Date: 24 December 1975
• Docket Number: No. 43766,43766
• Citation: 86 Wn.2d 282,544 P.2d 10
• Court: Washington Supreme Court
• Parties: James CRABTREE et al., Petitioners, A. H. Cox & Company, d/b/a Rental Machinery Company, and Northwest Malsbary Sales & Services, Inc., a Washington corporation, Intervenors, v. LaNay LEWIS et al., Respondents, John Doe Bonding Company et al., Defendants, Andrews Machinery of Washington, Inc., a corporation, d/b/a Contractors Rentals, Intervenor.

Page 282

86 Wn.2d 282

544 P.2d 10

James CRABTREE et al., Petitioners A. H. Cox & Company, d/b/a Rental Machinery Company, and Northwest Malsbary Sales & Services, Inc., a Washington corporation, Intervenors, v. LaNay LEWIS et al., Respondents John Doe Bonding Company et al., Defendants Andrews Machinery of Washington, Inc., a corporation, d/b/a Contractors Rentals, Intervenor.

No. 43766.

Supreme Court of Washington, En Banc.

Dec. 24, 1975.

John Ranquet, Seattle, for petitioners.

MacBride, Sax & MacIver, D. Gordon Willhite, Seattle, for respondents.

ROSELLINI, Associate Justice.

This action was brought by the trustees of three employee benefit funds to recover contributions alleged to be due the trusts from a painting subcontractor, LaNay Lewis; his prime contractor, Adhesive Engineering Company; its surety, Insurance Company of North America, and the City of Seattle's retained percentage of the contract payments owed.

The City of Seattle paid the retainage into court and certified to the court that it had contracted with Adhesive Engineering Company to clean and repair two bridges and that the trustees of the painters' trust had filed their claim with the City. It took no further part in the action.

Lewis, the subcontractor, defaulted.

The other parties made cross motions for summary judgment, with supporting affdavits. The trial court granted judgment in favor of the trustees against Lewis for the contributions claimed to be due but dismissed the other defendants, ordering the retainage paid over to the contractor. The trustees appealed to the Court of Appeals, which sustained the dismissal upon the ground that the trustees' supporting affidavits were not competent evidence and did not establish the amount of contributions owed by the defendant.

We granted the trustees' petition for review.

The issues presented are: (1) Do the trustees have standing to bring this action? (2) Are the retainage and the contractor's surety subject to claims for contributions to fringe benefit funds required by the union contract to be made on behalf of the subcontractor's employees, which were not paid by the subcontractor? (3) Was the Court of Appeals correct in sustaining the dismissal of the action upon the ground that the plaintiffs' affidavits did not show facts necessary to maintain their claim, including the names of the employees, and the amount of damage?

As the Court of Appeals stated in its unpublished opinion, the pleadings and admissible affidavits considered by the trial court at the hearing on the motions for summary judgment, established the following uncontroverted facts: The City of Seattle contracted with Adhesive Engineering Company to paint the Fremont and Ballard bridges. Adhesive, as prime contractor, subcontracted with Lewis to do the work. Insurance Company of North America furnished the bond required by RCW 39.08.010. The City withheld the sum of $10,378.37 from payments due Adhesive, to insure payment of laborers, materialmen and subcontractors, as required by RCW 60.28.010.

Prior to the foregoing events, the Seattle-King County Chapter of the Painting and Decorating Contractors of America, which was the bargaining agent for Lewis, entered into a collective bargaining agreement with the painters' union. This agreement obligated the employers to pay a certain amount for each employee into three trusts, which were established to provide fringe benefits for painter employees. Lewis reported and paid into those trusts from July 21 to September 29, 1972. The trustees claim that he owes contributions for the period between October 1, 1972 and January 1, 1973, during which time he was engaged in painting the bridges.

The superior court, in granting summary judgment, said that there was a material issue of fact respecting the plaintiffs' motion and no material issue of fact respecting the defendants' motion, but it did not disclose the theory of its decision. So we must assume that it was based upon one or the other of the two theories in the answer and affidavits of the defendants, as developed and expounded in the defendants' brief in the Court of Appeals. One of these is that the trustees have no standing to bring this action on behalf of the employees who performed the work. It is suggested that the trustees cannot sue in a representative capacity unless they can produce written assignments of the claims of each employee. The one authority cited, City of Portland ex rel Nat'l Hosp. Ass'n, Inc. v. Heller, 139 Or. 179, 9 P.2d 115 (1932), held that a contractor's surety was not liable to a hospital association for the contractor's failure to pay an amount due under a contract for medical and hospital services to employees, because the amount was owed by the contractor and not by the employees; therefore the association did not stand in the position of assignee of the employees. The court also said that the services rendered by the association were not 'labor or material' furnished under the contractor's agreement with the city, for which the surety was bound.

The Oregon court did not consider the fact that the contract between the contractor and the association was entered into for the benefit of the employees and that the benefits contracted for were a part of the compensation paid for labor. It is not impressive authority for the proposition that a trustee of a fund established for the benefit of employees cannot sue to recover payments owed the fund.

This question came before the United States Supreme Court in United States v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957). That action involved the Miller Act, 40 U.S.C. § 270a, which required a contractor who had a contract with the United States for the construction of federal buildings to furnish a payment bond with a surety. The collective bargaining contract, under which the employees of the contractor were hired, obligated the contractor to pay them wages at specified rates and, in addition, to pay 7 1/2 cents per hour of their labor to the trustees of a health and welfare fund established for their benefit and that of other construction workers. When the contractor failed to pay in full the required contributions to the health and welfare fund, the trustees of the fund sued the surety to recover the balance due the fund, plus liquidated damages, attorney fees, court costs and expenses. The Supreme Court held that the trustees stood in the shoes of the employees and were entitled to enforce their rights, saying, at page 220, 77 S.Ct. at 798:

The trustees are claiming recovery for the sole benefit of the beneficiaries of the fund, and those beneficiaries are the very ones who have performed the labor. The contributions are the means by which the fund is maintained for the benefit of the employees and of other construction workers. For the purposes of the Miller Act, these contributions are in substance as much 'justly due' to the employees who have earned them as are the wages payable directly to them in cash.

The trustees in that case were in the same position as the trustees are in this case. We have a statute, RCW 39.08, which protects those who supply labor and materials on government contracts in much the same way as the Miller Act does. The federal court for the Eastern District of Washington has termed this statute Washington's 'Little Miller' Act. United States v. Sargent-Tyee Co., Inc., 376 F.Supp. 1375 (E.D.Wash.1974).

Further, in RCW 60.76.020, the legislature has expressly recognized the right of a trustee to sue on behalf of employees. RCW 60.76.010 gives the employee beneficiary of a contract whereby the employer is required to make payments to a benefit plan, a lien upon the employer's earnings and business property for any unpaid contributions and also for expenses incurred by him for benefits to which he would have been entitled under the plan. If the trustees are proper persons to represent the employees in enforcing a lien against property of their employer (here the subcontractor), they are also proper persons to enforce their claim against the retainage and the bond. The authority conferred upon them by the union members is the same, and the same fund will receive the benefits. That the union contract authorizes the trustees to collect the moneys due the fund is not contested. No assignment, further than that which is implicit in the union contract is necessary.

We are convinced that the trustees have standing to bring this action to recover contributions owed to the benefit fund. Our holding accords with the general rule. 48 Am.Jur.2d Labor and Labor Relations § 225 (1970); 51 C.J.S. Labor Relations § 122 (1967).

Upon the second question presented, the defendants here--that is, the prime contractor and its bondsman--maintain that they owe no duty to the trustees because they had no dealings with the employees or the union. This position ignores the express provisions of RCW 39.08.010. That section provides:

Whenever any . . . body acting for the . . . municipality . . . shall contract with any person or corporation to do any work for the . . .municipality, . . . such . . . body shall require the person or persons with whom such contract is made to make, execute and deliver to such . . . body a good and sufficient bond, with two or more sureties, or with a surety company as surety, conditioned that such person or persons shall faithfully perform all the provisions of such contract and pay all laborers, mechanics and subcontractors and materialmen, and all persons who shall supply such person or persons, or subcontractors, with provisions and supplies for the carrying on of such work, which bond shall be filed . . . and Any person or persons performing such services or furnishing material to any subcontractor shall have the same right under the provisions of such bond as if such work, services or material was furnished to the original subcontractor: . . .

(Italics ours.)

RCW 60.28.010...