Thompkins v. Fuller, 82-396

• Decision Date: 21 July 1983
• Docket Number: No. 82-396,82-396
• Citation: 40 St.Rep. 1192,667 P.2d 944,205 Mont. 168
• Court: Montana Supreme Court
• Parties: , 26 Wage & Hour Cas. (BNA) 594, 116 Lab.Cas. P 56,352 S. Dennis THOMPKINS, d/b/a Pyramid Builders, Plaintiffs and Respondents, v. David FULLER, Commissioner of the Department of Labor and Industry, State of Montana, Defendant and Appellant.

Page 944

667 P.2d 944

205 Mont. 168, 26 Wage & Hour Cas. (BNA) 594,

116 Lab.Cas. P 56,352

S. Dennis THOMPKINS, d/b/a Pyramid Builders, Plaintiffs and Respondents, v. David FULLER, Commissioner of the Department of Labor and Industry, State of Montana, Defendant and Appellant.

No. 82-396.

Supreme Court of Montana.

Submitted April 21, 1983.

Decided July 21, 1983.

Paul J. Van Tricht, argued, Dept. of Labor, Helena, for defendant and appellant.

Thomas Hoover, argued, Big Fork, for plaintiffs and respondents.

Joseph W. Duffy, argued, Great Falls, for amicus curiae Montana State Bldg. Trades Council.

HARRISON, Justice.

The Department of Labor and Industry appeals a decision of the District Court of the Fourth Judicial District, County of Lake. This dispute deals with the amount of wages paid by a building contractor to his employees on a state-financed construction project. Essentially, this case involves interpretation of Montana's Little "Davis-Bacon Act," sections 18-2-401, et seq., MCA (1979), which requires contractors on public projects to pay their employees "the standard prevailing rate of wages ... applicable to the county or locality in which the work is being performed." Section 18-2-403(1), MCA, (1979). Initially, we note that the 1979 statutes are applicable to this case. We affirm the judgment with the exception of the attorney's fees.

In 1980 the University of Montana let contracts for the construction of a research laboratory at Yellow Bay on Flathead Lake. The respondent was accepted as the mechanical contractor. Prior to this time, respondent was primarily involved in residential construction. The laboratory was his first contract with a governmental entity. The respondent was not a signatory to any collective bargaining agreement, and all of his employees were nonunion.

The contract required the respondent to abide by the labor laws of the State of Montana; specifically, he was required to pay his employees the "standard prevailing rate" (SPR) applicable to the county or locality in which the work was being performed. The contract language was taken from various parts of Montana's Little Davis-Bacon Act. Concerning his responsibilities, he contacted a Kalispell attorney who reviewed the contract. Nothing was discussed concerning the SPR provision. Respondent also talked to the project architect and a contractor friend who had been coaching him. Through these discussions he believed himself to be in full compliance with Montana law.

Construction began and thereafter the State received a complaint that respondent was not paying his employees the SPR. The complaint was made by the business representative for the carpenters union of Northwest Montana. The union representative testified in part as follows:

"Q. Did you have a conversation with Thompkins on this project? A. Yes, I encouraged him to join the Union.

"Q. Did you encourage him to join the Union? A. I did.

"Q. What did you tell him when he wouldn't join the Union? A. I said I'd have to do my job and whatever was available to me to try and get him to join.

"Q. And what did you do? A. I reported it to the Department of Labor that I didn't think he was paying prevailing wage."

The State investigated and concluded that the complaint was legitimate. Below is a chart showing the wages that were actually paid by the respondent and the wages which the State claims should have been paid as the SPR.

                                            WAGES ACTUALLY  "STANDARD PREVAILING RATE"
                EMPLOYEE    JOB             PAID            AS DETERMINED BY THE STATE
                Marton      carpenter       $9.00/hour      Carpenters
                Becker      carpenter       $9.00/hour      12.05/hour--5/1/79-4/30/80
                Ryland      carpenter       $8.00/hour      13.02/hour--5/1/80-4/30/81
                Thompkins   carpenter       $11.00/hour
                Hale        laborer         $6.00/hour      Laborers
                Raudebaugh  carpenter/      salaried        10.55/hour--7/1/79-6/30/80
                            superintendent                  11.45/hour--7/1/80-6/30/81
                                                            Carpenter/Superintendent
                                                            12.55/hour--5/1/79-4/30/80
                                                            13.52/hour--5/1/80-4/30/81
                

The State claims that it considered three sources of information to determine the SPR: (1) wage rate information compiled by the Employment Security Division; (2) Davis-Bacon rates published by the United States Department of Labor; and (3) local collective bargaining agreements. However, the rates established by the State were taken verbatim from number three, collective bargaining agreements. According to the State, there was little variation between the three sources, and in such cases it has been the policy to adopt rates from the bargaining agreements.

The respondent commenced this action by seeking a declaratory judgment in the District Court. The State filed an answer and counterclaim praying for an order requiring Thompkins to pay past due wages and penalties and attorney fees. Thompkins sought summary judgment but his motion was denied. A nonjury trial was held after which the District Court entered judgment in favor of the plaintiff/contractor. The Commissioner of Labor and Industry then appealed.

The appellant has raised the following issues: (1) whether the District Court erred by not adopting the commissioner's determination of the standard prevailing rate; (2) whether the District Court erred in its interpretation of the statutory phrase "work of a similar character;" (3) whether the admission of hearsay evidence was reversible error; and (4) whether the award of attorney fees to respondent was proper. We address these issues in turn.

Appellant's first issue is raised in response to the following comment by the District Court:

"Defendant [appellant] argues that only the Commissioner of the Department of Labor and Industry has the authority to determine the prevailing rate of wages in a given area. Defendant ignores the plain meaning of the statute: 'The Montana Commissioner may determine ...' M.C.A. § 18-2-402 (1979) ... Because the power to determine the prevailing rate of wages is not exclusively that of the Commissioner, that power, at the time the parties entered into the contract in question, rested also with the plaintiff, subject to the standards set out in the applicable laws. The issue, then, on which plaintiff's request for declaratory judgment turns, is whether plaintiff rather than the defendant has made the proper determination of what their contract term 'standard prevailing rate of wages' as defined in M.C.A. § 18-2-401(a) (1979) means. The issue, contrary to defendant's position, is not whether and under what standards this Court may review a decision or determination of an administrative agency.

"Plaintiff's request for a declaratory judgment would be a request for a review of a decision or determination of an administrative agency if in fact the commissioner of labor had determined the standard prevailing rate of wages for the job classifications in question. But the commissioner did not make the determination he was authorized to make under M.C.A. § 18-2-402(1) (1979)."

The District Court obviously viewed the problem as one of contract interpretation. Here, the contract required the respondent to pay his employees the SPR yet there were no specific hourly rates contained in the contract. The court focused on whether respondent, as a contracting party, properly interpreted the contract term "standard prevailing rate."

The appellant argues that: (1) it did make a determination of the SPR and its determination should have been granted deference by the court, and (2) the respondent did not have the statutory power to determine the rate. That power rests exclusively with the appellant.

We agree with appellant's second point; the respondent was not empowered by section 18-2-402(1), MCA, (1979), to determine the standard prevailing rate of wages. The statute in question stated: "[t]he Montana commissioner of labor may determine the standard prevailing rate of wages in the county or locality in which the contract is to be performed." Section 18-2-402(1), MCA, (1979). The District Court incorrectly concluded that since the power is permissive in that the "commissioner ... may determine the ... rate," it must also be nonexclusive.

A judge's task in construing statutes is "simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted ..." Section 1-2-101, MCA. The court clearly violated this principle. The statute says nothing about being nonexclusive. On the contrary, the history of this legislation would indicate otherwise.

The original version of Montana's Little Davis-Bacon Act was enacted in 1931. Since then it has been amended several times. Montana's Act is analogous to the Federal Davis-Bacon Act which was also enacted in 1931. This kind of legislation has as one of its purposes the protection of local labor markets. The act prevents contractors from importing cheap labor to the detriment of local workers. This purpose is achieved by requiring contractors to pay the rate of wages prevailing in the locality. To allow potentially self-serving contractors to determine the rate would defeat the legislative purpose. As the United States Supreme Court noted in a case construing the Federal Davis-Bacon Act:

"[t]he language of the Act and its legislative history plainly show that it was not to benefit contractors, but rather to protect their employees from substandard earnings by fixing a floor under wages on government projects. Congress sought to accomplish this result by directing the Secretary of Labor to determine, on the basis of prevailing rates in the locality, the appropriate minimum wages for each project." United States v. Binghamton Construction Co. (1954), 347 U.S. 171, 176-77. 74 S.Ct. 438, 441-42, 98 L.Ed. 594.

We hold that the authority to determine the SPR...