The Union v. G & G Fire Sprinklers, Inc.

• Decision Date: 01 October 2002
• Docket Number: No. C035386.,C035386.
• Citation: 125 Cal.Rptr.2d 804,102 Cal.App.4th 765
• Court: California Court of Appeals Court of Appeals
• Parties: ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, Plaintiff and Respondent, v. G & G FIRE SPRINKLERS, INC., Defendant and Appellant.

125 Cal.Rptr.2d 804

102 Cal.App.4th 765

ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, Plaintiff and Respondent, v. G & G FIRE SPRINKLERS, INC., Defendant and Appellant.

No. C035386.

Court of Appeal, Third District.

October 1, 2002.

Certified for Partial Publication.

Horvitz & Levy, David M. Axelrad, Sandra J. Smith, Encino, Stephanie Rae Williams, Jon B. Eisenberg, Oakland; Robert G. Klein, for Defendant and Appellant.

Roger Frommer & Associates and Roger Frommer, Los Angeles, for Plaintiff and Respondent.

Robert N. Villalovos, Sacramento, and Michelle Yu, Los Angeles, for Division of

Labor Standards Enforcement as Amicus Curiae on behalf of Plaintiff and Respondent.

BLEASE, Acting P.J.

This case is the result of a dispute arising from the construction of a new wing of the San Joaquin General Hospital, in which the subcontractor, G & G Fire Sprinklers, Inc. (G & G), failed to pay its workers the prevailing wage rate for their labor classification.

Road Sprinklers Fitters Local Union No. 669 (the Union), acting on the assignment of the statutory rights of four workers, sued G & G to recover their unpaid, prevailing wages under Labor Code section 1774¹ and for waiting time penalty wages under section 203.

G & G appeals from the judgment in favor of the Union, raising several contentions. It claims this matter is pre-empted by the National Labor Relations Act and that the National Labor Relations Board has exclusive jurisdiction over this case, the Union has no standing to sue because its standing is limited to recovery of the workers' statutory rights and the workers have no private statutory right to recover unpaid prevailing wages, G & G's reasonable good faith choice of job classification defeats the Union's claim, the trial court's erroneous rulings on the burden of proof and the admission of evidence require a new trial, and G & G is not liable for waiting time penalty wages.

In the published portion of the opinion we conclude the Union, as assignee of the workers' statutory rights, has standing to assert G & G's statutory duty to pay prevailing wages under section 1774, because a prevailing wage is a minimum wage, and therefore the workers may assert their express rights to recover their unpaid prevailing wages under the minimum wage provisions of section 1194.²

We find no error and affirm the judgment and award of damages.

FACTUAL AND PROCEDURAL BACKGROUND³

On September 28, 1993, the County of San Joaquin awarded Perini Building Company, Inc. (Perini) a public works construction contract to build a new wing of the San Joaquin County General Hospital. On November 23, 1993, Perini selected G & G as the subcontractor to install the fire suppression sprinkler system for the hospital. Pursuant to a written subcontract, G & G agreed to perform this work for $398,000.

A fire suppression sprinkler system may be installed only by workers classified as fire sprinkler fitters, a skilled classification of the plumbers craft responsible for installing and maintaining several types of fire suppression systems.

In its call for bids and in the public works contract, San Joaquin County published the prevailing wages for the work classifications necessary to execute the contract. Included in the publication was the basic prevailing hourly wage rate for fire sprinkler fitters. Including benefits, the rate was $33.73 per hour in 1994 when the work was performed.

G & G hired a number of workers to install the fire suppression system it had agreed to provide under its subcontract with Perini. Four of these workers were Thomas Browning, Dennis Marlowe, Kenneth Ahoff, and Stephen Ledford. They are fire sprinkler fitters by trade with years of experience in the trade and belong to the Union. G & G hired Browning as the foreman and paid him the basic rate for the classification of fire sprinkler fitter, but failed to provide him with the required benefits. G & G paid Marlowe, Ahoff, and Ledford as pipe tradesmen, a classification that carries a lower per diem prevailing wage rate than a fire sprinkler fitter. G & G also failed to provide these men with benefits.

Browning, Marlowe, Ahoff and Ledford filed complaints with the Division of Labor Standards Enforcement (DLSE) protesting their rate of pay and lack of benefits, triggering an investigation by DLSE. After an initial review of the matter, a DLSE investigator advised G & G it was using the wrong classification to pay its men and advised it to cease that practice. G & G did not heed the advice. DLSE subsequently filed a Notice to Withhold Payment against G & G in the amount of $93,867.08 for wages and penalties. DLSE determined the total amount of underpaid wages and penalties owed by G & G was $219,929.25.

G & G called only one witness, Mr. Itai Ben-Artzi, to testify concerning its claim it paid Browning, Marlowe, Ahoff, and Ledford their required benefits and that it had reasonably and in good faith relied on information provided by government officials in making its determination that Marlowe, Ahoff, and Ledford should be classified as pipe tradesmen and paid the prevailing wage for that classification.

Browning, Marlowe, Ahoff, and Ledford signed a document assigning the Union their "statutory" rights to collect underpaid wages and benefits.

The DLSE filed a complaint against Perini and its sureties to recover the underpaid wages and benefits for 17 workers, and penalties. The Union, as assignee of Browning, Marlowe, Ahoff, and Ledford, filed a complaint against the County of San Joaquin, Perini, G & G, and the sureties for their underpaid wages and waiting time penalty wages. Pursuant to a stipulation and order, the Union agreed to abate its action against the County, Perini, and the sureties, and these defendants were dismissed from the action without prejudice. The two matters were consolidated and tried before the court.

The trial court found in favor of DLSE⁴ and the Union. The court awarded the Union $230,630.60 against G & G for deficiency wages, unpaid benefits, waiting time penalty wages, interest, attorneys' fees, and costs.⁵ The amount awarded for deficiency wages, $93,633.41, was included in the total awards to both the Union and DLSE and was made joint and several. The award to the Union for waiting time wages, interest, attorneys' fees, and costs was made several.

G & G filed a timely notice of appeal from the judgment in favor of the Union.

DISCUSSION⁶

I.^*

II. Standing

G & G contends the Union lacks standing to assert the workers' claims for unpaid prevailing wages and benefits. G & G claims the Union was assigned only the right to recover for the workers' statutory rights and the workers have no private, statutory rights to sue a subcontractor for unpaid prevailing wages and benefits.

The Union argues the employees transferred to the Union "any and all statutory rights," which include the power to collect the unpaid prevailing wages under section 1774, as well as under a third-party beneficiary theory. We agree with the Union although we differ in our analysis of the statutory basis for standing. We agree with G & G that the rights conveyed by the assignments are limited, for purposes of our discussion, to the workers' statutory rights, but conclude the workers have private statutory rights to recover unpaid prevailing wages under sections 1194 and 1774 and waiting time wages under section 203.

A. The Assignment

The assignments state as follows:

"The undersigned does hereby authorize the filing of Mechanics Liens or Stop Notices, on my behalf with respect to the job site at San Joaquin General Hospital, French Camp, whereon my Employer G & G FIRE SPRINKLER CO., INC. ("G & G") was engaged, and whereon the undersigned worked, for which work I failed to receive payment of state prevailing wages; and further transfers and assigns for purposes of collection, all of my rights and causes of action under the Mechanics Lien Law to Road Sprinkler Fitters Local Union, 669 ("Union"), and does further transfer and assign all interest in and to, any and all parties named therein (owners, awarding bodies, etc.) to said Union. This Assignment includes any and all statutory and private bond rights." (Emphasis added, fn. omitted.)

The trial court found that while the assignment is "less than artfully drafted," it included the workers' statutory rights under section 1774 and any third-party beneficiary theory based on the prevailing wage contract.

Because the assignment is a written instrument, in the absence of parol evidence we review the assignment independently, looking to the language of the assignment. (Parsons v. Bristol Dev. Co. (1965) 62 Cal.2d 861, 865-866, 44 Cal.Rptr. 767, 402 P.2d 839; Gifford v. City of Los Angeles (2001) 88 Cal.App.4th 801, 806,106 Cal.Rptr.2d 164.) By its own terms, the assignment is limited to the filing of Mechanics' Liens and Stop Notices, and for purposes of collection, "all ... causes of action under the Mechanics Lien Law", and "any and all statutory and private bond rights." (Emphasis added.) Because these rights are expressed in the conjunctive, we understand the causes of action under the "Mechanics Lien Law" to be separate from and not a limitation on "all statutory and private bond rights." For reasons we footnote, the workers have no mechanics lien rights regarding the performance of public work.¹¹

For these reasons, no doubt, the Union bases its standing to sue G & G on the assignment of "statutory" rights under section 1774 and on a third party beneficiary theory.¹² As discussed more fully in part II. B, the right to recover prevailing wages under the statutory scheme is separate from the right to recover under the public works contract. At the risk of stating the obvious, the right to recover under the statute arises from the statutory scheme, (§§ 1771, 1774, 1775; see Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 986-988, 4 Cal.Rptr.2d 837, 824 P.2d 643), while the right to recover on...