Henry County Water Co. v. McLucas
| Decision Date | 05 July 2000 |
| Citation | 21 S.W.3d 179 |
| Parties | (Mo.App. W.D. 2000) . Henry County Water Co., Appellant, v. Karla M. McLucas, Dir., LIRC, Respondent. Case Number: WD56938 Missouri Court of Appeals Western District Handdown Date: 0 |
| Court | Missouri Court of Appeals |
Appeal From: Circuit Court of Cole County, Hon. Byron L. Kinder
Counsel for Appellant: Robert L. Cox
Counsel for Respondent: David A. Meyer
Opinion Summary:
Henry County Water Company appeals a judgment determining that the prevailing wage law applies to public works projects undertaken by Henry County, specifically the construction of a water intake and treatment plant.
AFFIRMED.
Division holds: The trial court did not err in ruling that the prevailing wage law applies to the Water Company because the Water Company's project is a "public work" under section 290.220, RSMo 1994. The water intake and treatment plant in question is clearly intended for the benefit of the public. The project also utilizes workers "employed by or on behalf of any public body engaged in public works," as the City of Clinton stands to benefit directly from the construction by ultimately owning and using all of the assets of the Water Company, which now functions as an adjunct to the city in its public purposes.
Henry County Water Company appeals a judgment determining that the prevailing wage law applies to public works projects undertaken by Henry County Water Company. Henry County Water Company ("Water Company") contends that the trial court erred in its ruling because the Water Company is not a public body because it is not a political subdivision or a department of the State of Missouri and is not supported by public funds.
Prior to 1983, the Missouri Public Service Company, a privately owned utility company, provided water to residents of Clinton and other parts of Henry County. When Missouri Public Service Company offered its facilities for sale, the City of Clinton declined to purchase the facilities itself, apparently concluding that there would be advantages in methods of financing the acquisition if the water facilities were owned by a separate corporation. The Water Company was formed as a not-for-profit corporation in November, 1983. The articles of incorporation of the Water Company state that the object and purposes of the Water Company include, "[p]romotion of the common good and general welfare of the City of Clinton, in Henry County, Missouri, and its inhabitants and the inhabitants of Henry County by providing water in sufficient quantities for the use of the inhabitants . . . . " The Water Company's board of directors is directed to conduct company business "for the purpose of ultimately vesting in the City of Clinton, the ownership and operation of the water system supplying the water to the inhabitants of the City of Clinton and surrounding territory." Under the articles of incorporation, the city is allowed to cause the facilities of the Water Company to be transferred to the city, at any time, for no consideration, provided that there are funds collected and accumulated to pay and retire the indebtedness of the Water Company.
Since its formation, the Water Company has sold water to the citizens of the City of Clinton and to other residents of Henry County. The Water Company is operated by its own board and employs its revenues to retire its debt and to continue operations.
In 1996, the Water Company prepared to issue bonds to finance the construction of a water intake and treatment plant. In preparation for the project, the Water Company requested a letter from the Division of Labor Standards of the Missouri Department of Labor and Industrial Relations. The Division administers the prevailing wage law, sections 290.210 through 290.340, RSMo 1994. The Water Company requested a ruling from the Division that the prevailing wage law did not apply to the project contemplated by the Water Company. On November 20, 1997, the Division provided a letter signed by the director of the Division of Labor Standards indicating that the Division had determined that the prevailing wage law was not applicable to the project in question. Shortly thereafter, on January 7, 1998, the Division of Labor Standards issued another letter to the Water Company stating that it had received additional information regarding the nature of the Water Company's organization and that, based on that information, it had concluded that the prevailing wage law did apply to the construction of the water intake and treatment plant.
The Water Company filed an application with the Labor and Industrial Relations Commission on January 27, 1998, seeking review of the Division's determination. The Commission decided that it did not have jurisdiction. The Water Company then filed a petition for declaratory judgment in circuit court, joining as a defendant Carla M. McLucas, the Director of the Department of Labor and Industrial Relations. Ms. McLucas (hereafter, "the Department") filed an answer and a motion for summary judgment with suggestions in support, requesting a ruling that the prevailing wage law does apply to the Water Company
On February 9, 1999, the circuit court granted the motion and issued findings of fact and conclusions of law, ruling that the prevailing wage law applies to "public work aspects of project undertaken by the Henry County Water Company," and to the "Henry County Water Company's water intake and treatment plant project." The Water Company appeals.
The Missouri prevailing wage law, sections 290.210 through 290.340, applies to public works projects developed by workers employed by or on behalf of a public body. Section 290.220, RSMo 1994, provides:
It is hereby declared to be the policy of the state of Missouri that a wage of no less than the prevailing hourly rate of wages for work of a similar character in the locality in which the work is performed shall be paid to all workmen employed by or on behalf of any public body engaged in public works exclusive of maintenance work.
"Public works" are defined by statute as "all fixed works constructed for public use or benefit or paid for wholly or in part out of public funds." Section 290.210(7), RSMo 1994. A public body is defined as "the state of Missouri or any officer, official, authority, board or commission of the state, or other political subdivision thereof, or any institution supported in whole or in part by public funds." Section 290.210(6), RSMo 1994.
Section 290.230.1, RSMo 1994, provides in pertinent part:
Not less than the prevailing hourly rate of wages for work of a similar character in the locality in which the work is performed . . . shall be paid to all workmen employed by or on behalf of any public body engaged in the construction of public works, exclusive of maintenance work.
The Missouri courts have not specifically discussed the purpose behind the prevailing wage law, which was adopted in 1957. However, the law appears to be based on, and have a similar purpose to, the federal Davis-Bacon Act, 40 USCA section 276(a) et seq. Davis-Bacon was originally enacted in 1931 as a "minimum wage law designed for the benefit of construction workers" which "protect[s] . . . employees from substandard earnings by fixing a floor under wages" on projects of the federal government. United States v. Binghamton Constr. Co., Inc., 347 U.S. 171, 177-178 (1954). The Act is designed to insure that workers on public projects be paid reasonable wages. The Act was passed during the depression era in order to "insure that workers on federal construction projects would be paid the wages prevailing in the area of construction." Building and Const. Trades' Dep't, AFL-CIO v. Donovan, 712 F.2d 611, 613 (D.C. Cir. 1983). It was also aimed at preventing rival companies from competing for contracts by transporting from distant areas workers who would work for substandard wages. Vulcan Arbor Hill Corp. v. Reich, 81 F.3d 1110, 1111 (D.C. Cir. 1996).
In its sole point, the Water Company argues that the trial court erred in ruling that the prevailing wage law applies to the Water Company because it is not a public body performing public works. The Water Company points out that it is not a political subdivision or department of the state or the city, and it is not supported by public funds. The Water Company also asserts that the city has no involvement with the project. The Water Company argues that the mere fact that the city can request transfer of the assets after all of the Water Company's debts are retired does not convert the Water Company into a public entity or mean that the Water Company is acting on behalf of the city.
The Department contends, in response, that the Water Company's project is a public work under the prevailing wage law. It points out that the Water Company's articles of incorporation provide that the corporation is organized to promote the common good and the general welfare of the City of Clinton. The Department also argues that the arrangement for the Water Company to own the water facilities for the city is a public benefit. The prevailing wage law applies not only to projects developed by public bodies, the Department points out, but also to projects developed "on behalf of any public body." The Department also argues that the prevailing wage law is a remedial law designed to protect workers and reflects the public policy of the state. The Department argues that therefore the statute should be construed liberally and broadly.
We will affirm the judgment of the trial court in this court-tried case unless the trial court misapplied the law, or unless there is no substantial evidence to support the judgment, or unless the judgment is against the weight of...
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