Ohio Valley Associated Builders v. Kuempel

• Decision Date: 18 February 2011
• Docket Number: No. 24138.,24138.
• Citation: 949 N.E.2d 582,192 Ohio App.3d 504
• Parties: OHIO VALLEY ASSOCIATED BUILDERS AND CONTRACTORS, Appellant and Cross–Appellee,v.KUEMPEL, Appellee and Cross–Appellant.
• Court: Ohio Court of Appeals

192 Ohio App.3d 504

949 N.E.2d 582

2011 -Ohio- 756

OHIO VALLEY ASSOCIATED BUILDERS AND CONTRACTORS, Appellant and Cross–Appellee,

v.KUEMPEL, Appellee and Cross–Appellant.

No. 24138.

Court of Appeals of Ohio, Second District, Montgomery County.

Decided Feb. 18, 2011.

Jill A. May, Bradley C. Smith, Dayton, and Brock A. Schoenlein, for appellant and cross-appellee.Luther L. Liggett Jr., and Matthew T. Anderson, Columbus, for appellee and cross-appellant.FROELICH, Judge.

[Ohio App.3d 506] {¶ 1} Ohio Valley Associated Builders and Contractors (“OVABC”) appeals from the trial court's entry of summary judgment against it due to a lack of standing. In a cross-appeal, DeBra–Kuempel (“DeBra”) contends that the trial court erred in denying its motion for attorney fees under R.C. 4115.16 and Civ.R. 11.

{¶ 2} The record reflects that OVABC is an association of builders and contractors. In October 2009, it filed an administrative complaint against DeBra with the Ohio Department of Commerce, alleging that DeBra had violated Ohio's prevailing-wage law. The complaint involved an HVAC contract that DeBra had been awarded as part of a public-improvement project for Wright State University. The project is identified by the parties as the “Wright State University LAR/Cage Wash/Surgery Project.” After 60 days passed without a final determination by the Ohio Department of Commerce, OVABC filed the present action in the trial court. DeBra later moved for summary judgment, arguing that OVABC lacked standing because (1) none of OVABC's members had bid against DeBra for the HVAC contract, and (2) neither OVABC nor any of its members had suffered any damages. DeBra also moved for attorney fees.

[Ohio App.3d 507] {¶ 3} In June 2010, the trial court filed a decision, order, and entry finding that OVABC was not an “interested party” with standing to sue because none of its members had bid against DeBra for the HVAC contract. Although two OVABC members had bid on contracts related to other portions of the public-improvement project, the trial court held that this fact did not give OVABC standing to pursue a prevailing-wage action against DeBra. In light of that determination, the trial court declined to decide whether OVABC also lacked standing because allegedly neither it nor any of its members had suffered any damages as a result of any alleged violations by DeBra. Finally, the trial court held that DeBra was not entitled to attorney fees under R.C. 4115.16 and Civ.R. 11. This timely appeal and cross-appeal followed.

{¶ 4} In its sole assignment of error, OVABC contends that the trial court erred in finding that it lacked standing as an “interested party” to file a statutory prevailing-wage action against DeBra. The issue presented by OVABC's appeal is whether it must have a member who had bid directly against DeBra on the same contract to have standing to pursue its prevailing-wage action. OVABC contends that standing exists because two of its members, Ohio Electrical Services and C & N Industrial, bid on other contracts, namely the electrical and lead contracts, within the project, even though they did not bid against DeBra for the HVAC contract. Resolution of this issue turns on R.C. 4115.16 and R.C. 4115.03(F).

{¶ 5} R.C. 4115.16 gives an “interested party” the ability to file an administrative complaint with the Ohio Department of Commerce. If no ruling is made within 60 days, the statute authorizes the interested party to file suit in common pleas court. The phrase “interested party” is defined in R.C. 4115.03(F) as follows:

{¶ 6} “(F) ‘Interested party,’ with respect to a particular public improvement, means:

{¶ 7} “(1) Any person who submits a bid for the purpose of securing the award of a contract for construction of the public improvement;

{¶ 8} “(2) Any person acting as a subcontractor of a person mentioned in division (F)(1) of this section;

{¶ 9} “(3) Any bona fide organization of labor which has as members or is authorized to represent employees of a person mentioned in division (F)(1) or (2) of this section and which exists, in whole or in part, for the purpose of negotiating with employers concerning the wages, hours, or terms and conditions of employment of employees;

{¶ 10} “(4) Any association having as members any of the persons mentioned in division (F)(1) or (2) of this section.”

[Ohio App.3d 508] {¶ 11} OVABC claims that it qualifies as an interested party under R.C. 4115.03(F)(4) because it is an association that has members who fit within the scope of R.C. 4115.03(F)(1). In particular, it contends that two of its members bid for “a contract” that was part of “the public improvement” at Wright State University. In ruling otherwise, the trial court relied primarily on Ohio Valley Associated Builders & Contrs. v. York (Dec. 16, 2009), Butler C.P. No. CV2009–01–0303, a case directly on point. Adopting the language and reasoning of York, the trial court stated:

{¶ 12} “ ‘OVABC would have this court allow an association having a member that submits a bid on any aspect of a public construction contract to have standing to challenge any contract awarded to another entity for any other work, even if, as here, that other work is unrelated to what the member bid on. This court cannot countenance that interpretation of R.C. 4115.03(F). Such an interpretation is contrary to basic principles of standing.’ ”

{¶ 13} The trial court then agreed with York that the word “contract” in R.C. 4115.03(F)(1) means “the contract at issue” (i.e., the specific contract awarded to the defendant for HVAC from which the alleged prevailing-wage violation arose). The court in York also read the phrase “public improvement” in R.C. 4115.03(F) as meaning “the specific improvement encompassed by that contract.” York declined to read “public improvement” in “the broadest sense possible, i.e. the entire construction project, especially when doing so would contradict general principles of standing.”

{¶ 14} In its opening appellate brief, OVABC cites several cases that it believes undermine the trial court's analysis in both York and the present case. In response, DeBra argues that those cases are distinguishable and that York was decided correctly. After the opening round of briefing, however, two Ohio appellate districts filed opinions addressing the precise issue before us.

{¶ 15} In Ohio Valley Associated Builders & Contrs. v. Indus. Power Sys., Inc., 190 Ohio App.3d 273, 2010-Ohio-4930, 941 N.E.2d 849, the Sixth District Court of Appeals first rejected the proposition that traditional, common-law standing principles play any role in determining standing under R.C. 4115.03. The Sixth District reasoned that the statute conferred standing on any person or entity that met the definition of an “interested party,” without regard to whether such person or entity had a “personal stake” in the controversy under common-law principles. The Sixth District then rejected an argument that the phrase “a contract” in R.C. 4115.03(F)(1) was intended to limit “the definition of an interested party to a person who has submitted a bid on the particular contract from which the alleged prevailing-wage violation stems.” Finally, the Sixth District rejected the proposition that OVABC lacked standing because it was not a labor union. The appellate court found OVABC's nonunion status irrelevant, as [Ohio App.3d 509] it did not seek standing under R.C. 4115.03(F)(3), which pertains to labor unions. Instead, OVABC sought standing under R.C. 4115.03(F)(4), which grants interested-party standing to an association when its membership fits within R.C. 4115.03(F)(1).

{¶ 16} In the second case, Ohio Valley Associated Builders & Contrs. v. Rapier Elec., Inc., 192 Ohio App.3d 29, 2011-Ohio-160, 947 N.E.2d 1261, the Twelfth District Court of Appeals (which would be the appellate district to review York ) rejected an argument that the word “contract” in R.C. 4115.03(F)(1) means “the contract at issue” and that the phrase “the public improvement” means “the specific improvement encompassed by that contract.” The Twelfth District concluded that such a reading of the statute was inconsistent with precedent, contrary to the purpose of prevailing-wage law, and contrary to the statute's plain language. Like the Sixth District, the Twelfth District also determined that traditional, common-law standing principles play no role in determining whether statutory standing exists under R.C. 4115.03(F).

{¶ 17} Unlike the unanimous Sixth District decision, the Twelfth District's ruling included a dissent. As the Butler County Common Pleas Court had in York, the dissenting judge “reject[ed] an interpretation of R.C. 4115.03(F) that grants standing to any association having a member that bid on any part of a public improvement project to challenge an entirely different contract within that project.” The dissenting judge reasoned that “the General Assembly intended to afford ‘interested party’ standing under R.C. 4115.03(F) to a narrower class of litigants, namely, parties that bid on the same contract.”

{¶ 18} Having reviewed the cases cited by the parties, as well as the recent rulings by the Sixth and Twelfth Districts, we hold that OVABC qualifies as an interested party under R.C. 4115.03(F)(4) and, therefore, has standing. We reach this conclusion for at least five reasons. First, on its face, the language of R.C. 4115.03(F) supports it. As set forth above, the statute grants an association standing if it has any members who submit “a bid for the purpose of securing the award of a contract for construction of the public improvement.” (Emphasis added.) The phrase “public improvement” is defined in R.C. 4115.03(C) to include “all buildings, roads, streets, alleys, sewers, ditches, sewage disposal plants, water works, and all other structures or works constructed by a public authority of the state or any political subdivision thereof or by any person who, pursuant to a contract...