Unity Bank & Trust Co. v. U.S., 84-1573

Decision Date12 March 1985
Docket NumberNo. 84-1573,84-1573
Citation756 F.2d 870
Parties27 Wage & Hour Cas. (BN 128, 103 Lab.Cas. P 34,704 UNITY BANK & TRUST COMPANY, Appellant, v. The UNITED STATES, Appellee. Appeal
CourtU.S. Court of Appeals — Federal Circuit

Frances Talcove, Field & Schultz, Boston, Mass., argued, for appellant.

Lynn J. Bush, Commercial Litigation Branch, Dept. of Justice, of Washington, D.C., argued, for appellee. With her on brief were Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director and Thomas W. Petersen, Washington, D.C.

Gerald F. Krizan, Dept. of Labor, Washington, D.C., of counsel.

Before FRIEDMAN, BALDWIN, and MILLER, Circuit Judges.

FRIEDMAN, Circuit Judge.

This is an appeal from an order of the United States Claims Court granting the United States' motion for summary judgment and dismissing the petition. The appellant Unity Bank & Trust Company (Unity Bank) contends primarily that the Davis-Bacon Act, 40 U.S.C. Sec. 276a et seq. (1976), required the Department of Labor to investigate Unity Bank's assignor's wage reports to ascertain whether the assignor was paying the statutorily mandated wages, and that the government's failure to do so caused the bank's claimed losses. We affirm on the ground that under the Davis-Bacon Act the United States was not obligated to conduct such an investigation.

I

On March 16, 1978, P & R Professional Painting (P & R) entered into a contract with the Small Business Administration to paint buildings at Hanscom Air Force Base for $23,984. P & R obtained a loan from Unity Bank to finance the project. As security for the loan, P & R assigned to Unity Bank its right to payment under the contract, in accordance with the Assignment of Claims Act, 41 U.S.C. Sec. 15 (1976). The contract price was subsequently increased to $55,984 to cover additional painting services. Unity Bank made total loans to P & R of $55,110.

The contract was subject to the prevailing wage requirements of the Davis-Bacon Act. Section 276a of that Act requires the contractor to pay laborers and mechanics no less than the minimum prevailing wage as determined by the Secretary of Labor. 40 U.S.C. Sec. 276a (1976). The Secretary set an hourly rate of $10.92 for the job of painter involved in this contract.

As work under the contract progressed, the United States made two disbursements to Unity Bank totalling $23,984. On October 26, 1978, several of P & R's employees filed a complaint with the contracting officer alleging that they had not been paid the prevailing wage. The contracting officer immediately stopped further disbursements. An investigation by the Department of Labor revealed that P & R had underpaid 14 employees a total of $24,434.78. The Department of Labor requested the Air Force to withhold final payment on the contract, which the Air Force did. The contract was satisfactorily completed on May 24, 1979.

P & R entered into a settlement agreement with the Department of Labor whereby the Air Force transferred the $24,434.78 to the General Accounting Office for distribution to the 14 employees.

On May 3, 1982, Unity Bank filed this suit to recover the entire amount of withheld funds. The Claims Court granted the United States' motion for summary judgment and dismissed the suit. In a comprehensive opinion it held that the government withholding of funds was the proper remedy for P & R's Davis-Bacon Act violation and that the assignee bank had no greater right to the funds than its assignor. 5 Cl.Ct. 380 (1984).

II

On appeal to this court, Unity Bank contends that the Davis-Bacon Act required the United States to check the weekly wage reports of its contractors to assure compliance with the prevailing wage requirements of the Act and that the government's failure to make an adequate investigation was a breach of the duty it owed to Unity Bank. Unity Bank also argues that it is entitled to a greater degree of protection as an assignee under the Assignment of Claims Act than under the general law of assignment, and that the United States was estopped from withholding funds pursuant to the Davis-Bacon Act because (1) it should have known that the Act had been violated, and (2) it made two progress payments to Unity Bank which induced the bank to continue financing of the project.

The Claims Court properly rejected Unity Bank's argument based on the Assignment of Claims Act. 5 Cl.Ct. at 384. The Claims Court also correctly held that the United States did not have actual or constructive notice of any Davis-Bacon Act violations and was not estopped from withholding the funds. Id. at 386. The court's opinion thoroughly discussed those points, and we rely upon it as a basis for affirming its ruling on those issues. We discuss here only Unity Bank's contention that the United States had a duty under the Davis-Bacon Act to investigate the weekly wage filings of its contractors--an argument that Unity Bank either did not stress or made somewhat differently in the Claims Court.

The Davis-Bacon Act requires that government contracts it covers authorize withholding, from payments to the contractor, of amounts the contracting officer considers necessary to pay to employees the difference between the wages they have received and the prevailing wage set by the Secretary. 40 U.S.C. Sec. 276a(a)...

To continue reading

Request your trial
8 cases
  • Reconsideration of Applicability of the Davis-Bacon Act to the Veterans Administration's Lease of Medical Facilities, 94-14
    • United States
    • Opinions of the Office of Legal Counsel of the Department of Justice
    • May 23, 1994
    ... ... Co., 347 U.S. 171, 177 (1954) (same), Unity Bank ... & Trust Co. v. United States, 756 F.2d 870, 873 ... The Federal Government must, under the law, award us ... contracts to the lowest responsible bidder This has ... ...
  • Superior Asphalt & Concrete Co. v. L&I
    • United States
    • Washington Court of Appeals
    • June 21, 2002
    ...and to preserve local wage standards.'" Everett Concrete, 109 Wash.2d at 823, 748 P.2d 1112 (quoting Unity Bank & Trust Co. v. United States, 756 F.2d 870, 873 (Fed.Cir. 1985)). The Prevailing Wage Act, chapter 39.12 RCW, is remedial in nature and should be construed liberally to carry into......
  • Everett Concrete Products, Inc. v. Department of Labor & Industries
    • United States
    • Washington Supreme Court
    • January 21, 1988
    ...wage standards ... The employees, not the contractor or its assignee, are the beneficiaries of the Act." Unity Bank & Trust Co. v. United States, 756 F.2d 870, 873 (Fed.Cir.1985). As stated in Building Trades Coun., 90 Wash.2d at 45, 586 P.2d 486: a purpose of the Davis-Bacon Act was to pro......
  • International Broth. of Elec. Workers Local Union No. 5 v. U.S. Dept. of Housing and Urban Development
    • United States
    • U.S. Court of Appeals — Third Circuit
    • July 20, 1988
    ...and when to conduct an investigation of a contractor's compliance with the prevailing wage provisions." Unity Bank & Trust Co. v. United States, 756 F.2d 870 (Fed.Cir.1985). This fact provides further support for the proposition that investigations by the Union could serve a useful deterren......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT