Sparks & Wiewel Const. Co. v. Martin

• Decision Date: 09 September 1993
• Docket Number: Nos. 4-92-0235,4-92-0236,s. 4-92-0235
• Citation: 189 Ill.Dec. 565,620 N.E.2d 533,250 Ill.App.3d 955
• Parties: , 189 Ill.Dec. 565 SPARKS & WIEWEL CONSTRUCTION CO., an Illinois corporation, Adams Stone and Material, Inc., an Illinois corporation, and Richard Reichert, d/b/a R.W. Reichert Trucking, a sole proprietorship, Plaintiffs-Appellees, v. Gwen MARTIN, as Director of the Department of Labor, State of Illinois, and as substituted as party defendant, Shinae Chun, Director of the Department of Labor, Defendant-Appellant and (Dale Conaway, individually, Defendant).
• Court: United States Appellate Court of Illinois

Page 533

620 N.E.2d 533

250 Ill.App.3d 955, 189 Ill.Dec. 565

SPARKS & WIEWEL CONSTRUCTION CO., an Illinois corporation Adams Stone and Material, Inc., an Illinois corporation, and Richard Reichert, d/b/a R.W. Reichert Trucking, a sole proprietorship, Plaintiffs-Appellees, v. Gwen MARTIN, as Director of the Department of Labor, State of Illinois, and as substituted as party defendant, Shinae Chun, Director of the Department of Labor Defendant-Appellant and (Dale Conaway, individually, Defendant).

Nos. 4-92-0235, 4-92-0236.

Appellate Court of Illinois,

Fourth District.

Argued May 19, 1993.

Decided Sept. 9, 1993.

Roland W. Burris, Atty. Gen. State of Ill., Chicago, Thomas R. Dodegge, Deputy Atty. Gen., argued and Rosalyn B. Kaplan, Sol. Gen., for defendant-appellant.

Stanley E. Niew, argued Niew & Associates, P.C., Hinsdale and Almon A. Manson, Jr., Brown, Hay & Stephens, Springfield, for plaintiffs-appellees.

Michael O'Hara, Cavanagh & O'Hara, Springfield, for Operating Engineers' Local # 965 amicus curiae.

Michael W. Duffe, Katten, Muchin & Zavis, Chicago, for Associated Gen. Contractors of Illinois amicus curiae.

Justice KNECHT delivered the opinion of the court:

Plaintiffs brought this action in the circuit court of Sangamon County seeking declaratory and injunctive relief against the Director of the Department of Labor (Department) with respect to the Department's interpretation and enforcement of the Prevailing Wage Act (Wage Act) (Ill.Rev.Stat.1991, ch. 48, par. 39s-1 et seq.), i.e., its determination certain employees of Richard Reichert, d/b/a R.W. Reichert Trucking (Reichert), were entitled to prevailing wages under the Wage Act. Both plaintiffs and defendant filed motions for summary judgment. The trial court granted plaintiffs' motion, finding they were exempt from the provisions of the Wage Act and the Department's interpretation to the contrary constituted improper rulemaking. Plaintiffs then filed for attorney fees under section 14.1(b) of the Administrative Procedure Act (Procedure Act) (Ill.Rev.Stat.1991, ch. 127, par. 1014.1(b)), which the court granted. Defendant appeals, arguing the trial court erred in (1) granting plaintiffs' motion for summary judgment, and (2) finding the Department engaged in improper rulemaking and awarding attorney fees. We affirm in part and reverse in part.

I. BACKGROUND

The facts of the case are not in dispute. The Department of Transportation (DOT) awarded Sparks & Wiewel Construction Company (Sparks), a general contractor engaged in the construction of public works, a contract for the construction of a portion of Route 408 near Quincy, Illinois (the project). The construction work consisted of building an interchange and 2 1/2 miles of four-lane highway. As part of the project, Sparks contracted with Adams Stone and Material, Inc. (Adams), which operates a rock quarry, to supply dirt and stone to the project. Adams, in turn, entered into an oral agreement with Reichert to transport the quarried material to the project.

Reichert employed truck drivers to haul the dirt and rock from the quarry to the project, using trucks owned by him. The truck drivers would drive the trucks to the quarry, where employees of Adams would load the trucks with dirt and rock. The drivers would then drive to the project, approximately six to eight miles away. Once at the project, a "spotter," an employee of Sparks, would direct the driver where to dump the load. Generally, they unloaded the trucks on the project itself in the location where the access and exit ramps were being built. After the trucks were unloaded, Sparks had a bulldozer spread the dirt where it had been unloaded to make the access and exit ramps a certain grade and compaction. It was estimated the bulldozer would spread the dirt anywhere between 15 seconds and 15 minutes after the material was unloaded or as soon as the truck got out of the way. The bulldozer usually was 30 to 40 feet behind the truck while it was dumping. After dumping their loads, the truck drivers would return to the quarry and repeat the process. It took approximately 35 to 40 minutes to complete the process and empty the truck. The drivers were paid $5.50 a load for hauling dirt and a percentage of the volume of material delivered for hauling rock.

Materials were transported to the construction site by means of two different types of trucks, a "belly" dump truck and a straight dump truck with a "pup." A "belly" dump truck has a 25-ton capacity and has gates on the bottom of the truck, which when opened releases the material. The truck must continually move to unload, otherwise the material builds up underneath the truck. As it moves, the back axle and tires of the truck pass over the pile of material already released. By using this type of truck, a pile four to eight feet wide, 30 to 40 feet long and two to three feet high results.

A straight dump truck with a "pup" also has a 25-ton capacity but must remain stationary to unload. The pup, which is a trailer pulled behind the dump truck, is unloaded first. It is then "jackknife[d]" to the side or moved at an angle to the pile to unload the main bed of the truck. By using this type of truck, two piles are created with dimensions four to five feet high, tapered out over an area 10 to 12 feet in diameter.

A. Department Involvement

Based on their activities at the construction site, two of Reichert's truck drivers, George Adduci and Greg Elledge, filed a complaint with the Department alleging truck drivers employed by Reichert were not being paid prevailing wages in accordance with the Wage Act. The Department thereafter commenced an administrative investigation into the activities of Reichert on the project. As part of the investigation, Dale Conaway, a labor conciliator with the Department, investigated the complaint by visiting the jobsite and observing the unloading of Reichert's trucks. He observed the truckers haul dirt onto the construction site, where they would unload the dirt in front of a bulldozer which would then spread the dirt for the construction of access ramps. Based on his observations, he concluded the work performed by Reichert's truck drivers required the payment of prevailing wages because their work was "an integral part of [the] construction [process]" and they were engaged in actual construction work. By "integral part," he meant "[w]ithout placement of the dirt, the work wouldn't continue; couldn't continue. Had to be done before the rest of the construction could be done."

David Hayes, manager of the conciliation mediation division of the Department, also believed the work was covered under the Wage Act because the material unloaded was incorporated into the construction project by virtue of it being utilized where it was unloaded. He explained in his deposition if material was unloaded on a "neutral area" on the site, where it would be "stockpile[d]," this activity would not be covered under the Wage Act. He defined "stockpiling" as unloading material away from the actual point of construction, with it later being moved to the actual site of construction by another contractor on the site (whose employees were paid the prevailing wage rate). He knew "stockpiling" was not a covered activity based on an Attorney General (AG) opinion dealing with the transportation of material by suppliers and sellers. (See 1964 Ill. Att'y Gen. Op. 86.) In his opinion, any time a supplier otherwise dropped material onto a construction site, the activity would be covered. He further explained it was the Department's position Reichert was engaged in construction because he was dumping material directly onto the roadbed and placing materials on the site of the construction.

B. Circuit Court Proceedings

On January 30, 1991, plaintiffs filed a three-count complaint against the Director of the Department and Conaway. The first count of the complaint sought a declaratory judgment holding the Department's interpretation of "supplier" void, and its action in interpreting the Wage Act in such a manner contrary to the Wage Act and the Procedure Act. They also sought a declaration holding the actions of the Department in issuing oral and informal guidelines concerning the Wage Act and determining Reichert's employees were entitled to prevailing wages were void as without authority of the Wage Act and such interpretation was issued contrary to the Procedure Act and the Wage Act. Count II sought an injunction against the Department enjoining it from issuing and enforcing an interpretation of the Wage Act requiring suppliers or haulers for suppliers to pay their employees prevailing wages and from issuing and enforcing this rule or interpretation. Count III was directed solely at Conaway and was later voluntarily dismissed.

While Conaway had determined the activities of Reichert's truck drivers were covered under the Wage Act, at the time the suit was filed the Department had not completed an audit of Reichert's records to ascertain compliance with the Wage Act, calculated his liability, commenced any administrative or judicial action, or issued a notice of violation of the Wage Act or a stop-work order. The Department had issued a subpoena, requesting Reichert to provide various documents, including payroll records, with which he partially complied. Because the Department had commenced an investigation regarding his activities on the project, Reichert voluntarily "shut down" on November 13, 1990. At some point after the first of the year, Reichert commenced hauling again.

Both sides thereafter filed cross-motions for summary judgment. In support of plaintiffs' motion, they filed an affidavit from Richard Klusmeyer, county superintendent of highways of Adams County, Illinois, in which he stated in his 20 years of employment with Adams County, "a trucker such as Reichert [did] not pay prevailing wage to its truck drivers when delivering material for a material supplier such...