Favel v. American Renovation and Const. Co.

Decision Date26 November 2002
Docket NumberNo. 01-514.,01-514.
Citation2002 MT 266,312 Mont. 285,59 P.3d 412
PartiesBill FAVEL, John Pitzer, Joe LaMere, Toby LaMere, and Alvin Belgarde, Plaintiffs/Appellants, v. AMERICAN RENOVATION AND CONSTRUCTION CO., a California corporation; John Does I and II, Defendants/Respondents.
CourtMontana Supreme Court

Lawrence A. Anderson (argued), Great Falls, Montana, For Appellants.

Marcia Davenport (argued), Crowley, Haughey, Hanson, Toole & Dietrich, Helena, Montana; Neil Westesen, Crowley, Haughey, Hanson, Toole & Dietrich, Bozeman, Montana, For Respondents.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 This case was brought by a group of construction workers (Workers) who performed labor under a federal contract (Contract) between the American Renovation and Construction Company (ARC) and the United States Air Force (USAF or Air Force) to construct military housing at Malmstrom Air Force Base (Malmstrom AFB) in Great Falls, Cascade County, Montana. The Workers sued for breach of contract, alleging that they were not paid prevailing wages under the federal Davis-Bacon Act as required by the Contract. The Eighth Judicial District Court of Cascade County dismissed the suit on June 12, 2001, ruling that the Davis-Bacon Act did not provide the Workers with a private right of action; therefore, it lacked jurisdiction to hear the Workers' claims. We reverse.


¶ 2 A restatement of the issue presented by the parties is whether the Montana District Court has subject matter jurisdiction to hear and determine Workers' common law claims for breach of a Contract under which they were guaranteed wages based upon wage standards established by the federal Davis-Bacon Act.


¶ 3 In March 1998, the USAF and ARC entered into a Contract under which ARC would construct military housing at Malmstrom Air Force Base in Great Falls, Cascade County, Montana. While the Contract was not provided for this Court's review, it is undisputed that the Contract required ARC to pay its laborers federal Davis-Bacon Act wages (hereinafter wages). Subsequently, ARC entered into subcontracts with Baer Construction and Four Winds Construction. Under ARC's Contract with the Air Force, ARC was required to include in any subcontracts the provision that all subcontractors working on the project would pay their laborers in accordance with the Davis-Bacon Act. The contracts between ARC and its subcontractors were not provided for our review, but it is undisputed that these contracts included the required Davis-Bacon wage provision.

¶ 4 Workers are former employees of Baer Construction (Baer) and/or Four Winds Construction (Four Winds)1 who worked on the Malmstrom AFB project as iron workers, carpenters, cement masons and other "skilled trades." Workers claim they were improperly paid unskilled laborer wages. Additionally, Workers maintain that when they complained to Baer that they were not being paid in accordance with the contract between Baer and ARC, Baer fired them. They then began working for Four Winds and claim that Four Winds likewise failed to pay them the skilled wages required under Four Winds' contract with ARC. (We note, however, that no precise allegations were made against Four Winds nor were any administrative decisions made pertaining to Four Winds.) In November 1998, the Workers complained to ARC that ARC's subcontractors were not paying them in accordance with the wage provisions of their contracts with ARC. Prior to this November meeting between Workers and ARC, and subsequent to it, ARC consistently represented to the USAF that it and its subcontractors were paying all laborers appropriate Davis-Bacon wages.

¶ 5 Workers complained to the USAF Contracting Officer (Contracting Officer) who agreed that the Workers should have been paid "skilled laborer" wages. The Contracting Officer notified ARC that it was ARC's responsibility to insure that subcontractors' employees were accurately paid in accordance with the contractually-prescribed Davis-Bacon job classifications and wage rates. There is no evidence in the record that the Contracting Officer notified the DOL of the complaint or consulted with the DOL regarding Workers' claims. ARC forwarded a copy of the Contracting Officer's letter to Baer and instructed Baer to resolve the matter as directed by the USAF. Baer refused to do so despite multiple requests by ARC. Subsequently, ARC withheld funds that it would have paid to Baer and dispersed these funds to the underpaid Workers. The total amount paid by ARC, however, was significantly less than the amounts the USAF and the Workers claimed were owed. The above facts provide a short factual summary but additional facts will be discussed as necessary in our analysis.


¶ 6 Workers filed a law suit in June 1999, in the United States District Court, Great Falls Division, against ARC, ARC's surety, St. Paul Fire and Marine Insurance Company, and ARC's subcontractors. Workers sought damages directly from ARC and its subcontractors under the Davis-Bacon Act and from ARC's surety under the Miller Act. The federal district court judge characterized Workers' claim as a claim for back wages under the Davis-Bacon Act. The court concluded that 40 U.S.C. § 276a of the Davis-Bacon Act did not give Workers a private right of action but that 40 U.S.C. § 276a-2(b) did, vis-à-vis a Miller Act claim. The federal court, therefore, stayed the Miller Act proceeding, holding that a yet-to-be-obtained DOL wage determination was a condition precedent to such a proceeding. Workers, having presented extensive USAF documentation of underpayment to the federal court to no avail, then dismissed their federal action without prejudice and sought relief in state court. The Workers thereafter pursued their state remedies and did not reinstitute their federal proceeding before the statute of limitations expired.2

¶ 7 Workers sued ARC and its subcontractors in the District Court of the Eighth Judicial District, Cascade County. They sought recovery on various common law grounds including, but not limited to, breach of contract, negligence, and wrongful discharge. ARC moved to dismiss the complaint on the grounds that it failed to state a claim for which relief may be granted. The state court dismissed the complaint without prejudice for lack of subject matter jurisdiction holding that the Davis-Bacon Act did not grant Workers a private right of action. The state court agreed with the federal court that Workers had failed to exhaust their administrative remedies. Workers filed a timely appeal.


¶ 8 The State District Court dismissed this case for lack of subject matter jurisdiction. "Motions to dismiss should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Winslow v. Montana Rail Link, Inc., 2000 MT 292, ¶ 13, 302 Mont. 289, ¶ 13, 16 P.3d 992, ¶ 13 (citing Hilands Golf Club v. Ashmore (1996), 277 Mont. 324, 328, 922 P.2d 469, 471-72). "In considering such motions, the complaint is construed in the light most favorable to the plaintiff and all allegations of fact contained therein are taken as true. The District Court's determination that it did not have jurisdiction over this case is a conclusion of law." Winslow, ¶ 13 (citing Pike v. Burlington N.R.R. Co. (1995), 273 Mont. 390, 392-93, 903 P.2d 1352, 1353). "We review a district court's conclusions of law to determine whether the court's interpretation of the law is correct." Winslow, ¶ 13 (citing Hilands Golf Club, 277 Mont. at 328, 922 P.2d at 472).


¶ 9 The primary question before this Court is whether the Montana District Court has subject matter jurisdiction to hear and determine Workers' common law claims for breach of a contract under which they were guaranteed wages based upon wage standards established by the federal Davis-Bacon Act.

¶ 10 ARC argues that because all of Workers' claims are based on failure to pay wages established by the Davis-Bacon Act, Workers are limited to Davis-Bacon-prescribed remedies. It maintains that the state district court correctly held that it did not have jurisdiction over Workers' claims because there is no "private right of action" under the Davis-Bacon Act. In other words, Workers may not sue a contractor or subcontractor in state or federal court, under the Davis-Bacon Act, for a violation of the Davis-Bacon Act. Rather, ARC maintained and the state court agreed, Workers must first obtain a DOL determination that a violation occurred, that Workers are owed money, and how much money each individual Worker is due. Upon an administrative determination that Workers had been underpaid, Workers would be paid from any funds that had been withheld in accordance with the regulations. If such withheld funds were insufficient to pay the full amount due, Workers could then sue ARC's surety under the Miller Act3.

¶ 11 Workers, on the other hand, claim that this is not a "private right of action" case but rather a "preemption" case. Workers seek to enforce a labor contract that incorporated the Davis-Bacon Act and included wages established under the Act. Therefore, they are seeking a state common law remedy for breach of contract. Thus, the question is not whether they have the right to bring a private action under the Davis-Bacon Act, but rather, is whether the Davis-Bacon Act expressly or impliedly preempts alternative or supplemental state remedies.

¶ 12 Additionally, Workers argue that, in this case, an administrative remedy is nonexistent, or, at best, inadequate. Workers claim that numerous relevant administrative decisions were made in their favor and that ARC and Baer accepted these decisions without challenge or a request for DOL review. Therefore, Workers argue, ARC and Baer are estopped from now claiming that additional...

To continue reading

Request your trial
15 cases
    • United States
    • Montana Supreme Court
    • December 10, 2002
    ...States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Favel v. American Renovation and Construction Co., 2002 MT 266, ¶ 39, 312 Mont. 285, ¶ 39, 59 P.3d 412, ¶ 39 (citing Sleath v. West Mont Home Health Services, 2000 MT 381, ¶ 23, ......
  • Frank Bros., Inc. v. Wisconsin Dept. of Transp.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • June 3, 2005
    ...regulation on the basis of a single administrative regulation promulgated by a federal agency. See Favel v. American Renovation and Constr. Co., 312 Mont. 285, 59 P.3d 412, 425 (2002) ("We conclude, as did the U.S. Supreme Court in Geier, 529 U.S. 861 at 908-09, 120 S.Ct. 1913, 146 L.Ed.2d ......
  • United States ex rel. Int'l Bhd. of Elec. Workers Local Union No. 98 v. Farfield Co.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • July 13, 2021
    ...whether the Government must withhold funds sufficient to make misclassified employees whole. See, e.g. , Favel v. Am. Renovation and Const. Co. , 312 Mont. 285, 59 P.3d 412, 420 (2002) ("Whether [withholding was] discretionary or mandatory, the USAF Contracting Officer had the unilateral au......
  • PPL MONTANA, LLC v. State
    • United States
    • Montana Supreme Court
    • March 30, 2010
    ...of Congress. Vitullo, ? 14 (citing Dukes v. Sirius Constr., Inc., 2003 MT 152, ? 20, 316 Mont. 226, 73 P.3d 781; Favel v. Am. Renovation and Constr. Co., 2002 MT 266, ? 40, 312 Mont. 285, 59 P.3d ? 13 The District Court concluded that express preemption did not apply because the FPA did not......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT