Opinion
No. CV 98-0580861
August 24, 2007
MEMORANDUM OF DECISION RE MOTION TO STRIKE (#160)
Procedural History
On November 7, 2005, the plaintiff, the Commissioner of Labor, pursuant to statutory authority granted by Conn. Gen. Stat. § 31-72, filed an eleven-count third amended complaint against the defendants C.J.M. Services, Inc. (CJM), The Insurance Company of the State of Pennsylvania (ICSP), and Big Bell Development Corp. (Big Bell). In counts one, three, four, five, and eleven of the complaint, the plaintiff alleges that Big Bell failed to pay many of its employees the prevailing wages on a school improvement project. The plaintiff contends that CJM, as the general contractor of the school improvement project and the bond principle, and ICSP, as CJM's surety, are also liable for these unpaid wages. In counts six, seven, eight, and nine of the complaint, the plaintiff seeks damages against CJM for failing to pay prevailing wages on a pair of unrelated elementary school renovation projects. In count ten, the plaintiff seeks payment of civil penalties it has assessed against CJM. The plaintiff has voluntarily withdrawn count two of its complaint.
General Statutes § 31-72 states in pertinent part: "Civil action to collect wage claim, fringe benefit claim or arbitration award. When any employer fails to pay an employee wages in accordance with the provisions of Sections 31-71a to 31-71i, inclusive . . . such employee . . . may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court, and any agreement between him and his employer for payment of wages other than as specified in said sections shall be no defense to such action. The Labor Commissioner may collect the full amount of any such unpaid wages, payments due to an employee welfare fund or such arbitration award, as well as interest calculated in accordance with the provisions of Section 31-265 from the date the wages or payment should have been received, had payment been made in a timely manner. In addition, the Labor Commissioner may bring any legal action necessary to recover twice the full amount of unpaid wages, payments due to an employee welfare fund or arbitration award, and the employer shall be required to pay the costs and such reasonable attorneys fees as may be allowed by the court. The commissioner shall distribute any wages, arbitration awards or payments due to an employee welfare fund collected pursuant to this section to the appropriate person."
By way of background, this case commenced on June 15, 1998. Its history is set forth in the Supreme Court case, Commissioner of Labor v. C.J.M. Services, Inc., 268 Conn. 283, 842 A.2d 1124 (2004).
The defendants, CJM and ICSP, filed an answer and six special defenses. Before the court is the plaintiff's motion to strike the defendants' first, third, fifth, and sixth special defenses and the defendants' opposition thereto.
"Whenever any party wishes to contest . . . the legal sufficiency of any . . . special defense . . . that party may do so by filing a motion to strike . . ." (Internal quotation marks omitted.) Rizzuto v. Davidson Ladders, Inc., 280 Conn. 225, 256 n. 20, 905 A.2d 1165 (2006). "The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any [pleading] . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "In . . . ruling on [a] . . . motion to strike [a special defense], the trial court recognize[s] its obligation to take the facts to be those alleged in the special [defense] and to construe the [defense] in the manner most favorable to sustaining [its] legal sufficiency." Connecticut National Bank v. Douglas, 221 Conn. 530, 536, 606 A.2d 684 (1992). Furthermore, "all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). Thus, "if facts provable in the [pleading] would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Greco v. United Technologies Corp., supra, 347.
Special Defense One
The defendants' first special defense is based on Conn. Gen. Stat. § 31-53(f)(2)(F) that states in pertinent part: "This subsection shall not be construed to prohibit a general contractor from relying on the certification of a lower tier subcontractor . . ." CJM argues that they are not liable for failing to pay the prevailing wages because as a general contractor it was entitled to rely on the accuracy of certified payrolls submitted by the subcontractor, Big Bell, pursuant to § 31-53(f)(2)(F).
"The wage statutes, as a whole, do not provide substantive rights regarding how a wage is earned; rather, they provide remedial protections for those cases in which the employer-employee wage agreement is violated." Mytych v. May Department Stores Co., 260 Conn. 152, 162, 793 A.2d 1068 (2002). "As remedial statutes, [the wage enforcement statutes] must be construed broadly in favor of employees whom the legislature intended to benefit." Commissioner of Labor v. C.J.M. Services, Inc., 73 Conn.App. 39, 47, 806 A.2d 1105 (2002), reversed in part, 268 Conn. 283, 842 A.2d 1124 (2004). Further, "[a]mbiguities in a remedial statute must be resolved in favor of the persons whom the statute is intended to protect." Id., 53. The statutory prevailing wage scheme, § 31-53, et seq., "created by our legislature was intended to ensure that employees of public works projects are paid the wages to which they are entitled." Id., 55.
The plaintiff argues that the § 31-53 savings provision protects general contractors from criminal prosecution for wage miscalculation, but not from civil wage enforcement actions. The plaintiff further posits that if the legislature wanted to immunize general contractors from civil suits it would have added language and a savings clause into § 31-72, the civil wage collection statute. In opposition to the motion to strike, CJM argues that the savings clause applies to the entire subsection and not only to the criminal provisions of § 31-53(f)(2)(F).
Conn. Gen. Stat. § 31-53(f)(2)(F) relates to criminal liability pursuant to § 53a-157a. Conn. Gen. Stat. § 31-53(f)(2) requires employers to submit a certified payroll accompanied by a signed statement. Subsets (A-F) are the elements that must be included in the signed statement. The first sentence of § 31-53(f)(2)(F) requires that the signed statement indicate that "pursuant to the provisions of Section 53a-157a, the employer is aware that filing a certified payroll which the employer knows to be false is a class D felony . . ." CJM relies on the second sentence of Conn. Gen. Stat. § 31-53(f)(2)(F) that reads: "This subsection shall not be construed to prohibit a general contractor from relying on the certification of a lower tier subcontractor, provided the general contractor shall not be exempted from the provisions of section 53a-157a if the general contractor knowingly relies upon a subcontractor's false certification." The subject matter of the § 31-53(f) is criminal liability under § 53a-157a.
Section 53-157a reads: "A person is guilty of false statement in the first degree when he intentionally makes a false written statement on a certified payroll submitted pursuant to section 31-53 which he does not believe to be true and which statement is intended to mislead a contracting authority or the labor commissioner in the exercise of his authority or the fulfillment of his duties under chapter 557."
The court finds the statutory provision in question to be ambiguous. Although a review of the legislative history does not clarify § 31-53(f)(2)(F), the legislative discussion makes clear that the requirement of certified payrolls and the related criminal penalties in § 31-53(f) were added to make the prevailing wage statute more enforceable. "First of all, all of the records we are discussing now are already required to be kept. The only change we are recommending is that someone has to certify that this is accurate and be willing to stand behind these records and be subject to criminal penalties if they intentionally sign a false, a certified payroll that in fact is false and if the purpose of their certification is to deceive the appropriate law enforcement agencies." 36 Conn. H.R. Proc., Pt. 26, 1993 Sess. 9318-9, remarks of Rep. Lawlor. CJM's argument that the § 31-53(f)(2)(F) savings provision insulates it from liability under a § 31-72 civil wage enforcement action requires the court to construe the provision in favor of the employer and against the employees, the very class whom the legislature intended to benefit. To the contrary, the court must resolve the ambiguity in § 31-53(f)(2)(F) in favor of the persons whom the statute is intended to protect. See Commissioner of Labor v. C.J.M. Services, Inc., supra, 73 Conn.App. 53.
The court does not agree with CJM's interpretation of § 31-53(f)(2)(F). If general contractors were permitted to defend against § 31-72 wage enforcement actions by invoking § 31-53(f)(2)(F) the efforts of the commissioner of labor would be impeded. Moreover, such an interpretation would not be consistent with legislative intent of ensuring that employees of public works projects are paid the wages to which they are entitled. Therefore, the court finds that § 31-53(f)(2)(F) protects a general contractor who relies on a subcontractor's certification from criminal liability, but not civil liability. Accordingly, the motion to strike special defense one is granted.
Special Defense Three
The defendants' third special defense is that because the plaintiff was not a party to the contract, it has no authority by statute or otherwise to enforce the provisions of the contract. This issue was addressed by the Supreme Court in Commissioner of Labor v. C.J.M. Services, Inc., 268 Conn. 283, 842 A.2d 1124 (2004). The court stated that the "defendants also argue that this claim is insufficient because the commissioner lacks authority to bring a contract action on behalf of the subcontractor's employees. This argument merely restates the defendants' arguments with respect to the commissioner's authority under § 31-72 and is equally unavailing." Id., 294. The court recognized that the commissioner of labor's cause of action was entirely statutory and did not require the plaintiff to be a party to the contract between employees and employers.
"When any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71i inclusive . . . [t]he Labor Commissioner may collect the full amount of any such unpaid wages . . . In addition, the Labor Commissioner may bring any legal action necessary to recover twice the full amount of unpaid wages . . ." (Emphasis added.) Conn. Gen. Stat. § 31-72. In the instant case, the defendants' interpretation of § 31-72 is too narrow because it argues that the commissioner of labor would be able to collect back wages only in those contracts to which it is a party. Instead, § 31-72 gives the commissioner of labor the authority to bring an action to collect unpaid wages when it is a party to the contract and when, as here, it is not a party to the contract. Accordingly, the motion to strike special defense three is granted.
Special Defense Five
The defendants' fifth special defense is that its obligations under the bond are void because CJM has paid the subcontractor, Big Bell, in full for all labor that Big Bell furnished on the relevant public works projects. "Generally speaking, facts must be pleaded as a special defense when they are consistent with the allegations of the complaint but demonstrate, nonetheless, that the plaintiff has no cause of action." (Emphasis added.) Almada v. Wausau Business Ins. Co., 274 Conn. 449, 456, 876 A.2d 535 (2005). The defendant wants the court to declare that a payment made by CJM, one jointly liable defendant, to Big Bell, another jointly liable defendant, extinguishes the plaintiff's statutory cause of action against the paying defendant, CJM. Payment would be a proper special defense if CJM had paid the aggrieved employees in full. The defense that CJM paid Big Bell, however, is not a proper special defense because it does not extinguish the plaintiff's cause of action. To rule that a liable party can extinguish the commissioner of labor's unpaid wage claim by asserting a defense of payment to a co-defendant subcontractor would thwart the commissioner's efforts to collect back wages. Given the remedial purpose of the statute, the court finds that the legislature intended to allow the plaintiff's claim to proceed against all liable defendants. Accordingly, the motion to strike count five is granted.
Practice Book § 10-50 governs the pleading of special defenses and provides in relevant part: "No facts may be proved under either a general or special denial except such as show that the plaintiff's statements of fact are untrue. Facts which are consistent with such statements but show, notwithstanding, that the plaintiff has no cause of action, must be specially alleged. Thus payment . . . must be specially pleaded . . ."
Special Defense Six
The defendants' sixth special defense is that the payment surety bond does not provide for the award of attorneys fees or double damages pursuant to § 31-72. The liability of the general contractor, CJM, and the surety, ICSP, depends on the existence of the payment bond statutes § 49-41 and § 49-42. See Commissioner of Labor v. C.J.M. Services, Inc., supra, 73 Conn.App. 59 ("[as] with the liability of ICSP, the general contractor's liability as principal on the bond is established by the language of the public works statute and the bond enforcement statute"). The defendants are correct that the payment bond statutes do not provide for the provision of attorneys fees or double damages. Whether the plaintiff is entitled to attorneys fees and double damages, however, does not depend on the language of the payment bond or the payment bond statutes. Section 31-72, the source of the plaintiff's statutory power to seek back wages on behalf of employees, specifically provides that in all actions against a covered employer for unpaid wages, "the Labor Commissioner may bring any legal action necessary to recover twice the full amount of unpaid wages . . . and the employer shall be required to pay the costs and such reasonable attorneys fees as may be allowed by the court." (Emphasis added.) "General Statutes § 31-72 provides for the discretionary award of double damages and attorneys fees in unpaid wage cases. Our case law has established that such an award is appropriate where there is evidence of bad faith, arbitrariness or unreasonableness." Commissioner of Labor v. Wall, 69 Conn.App. 450, 461, 794 A.2d 1084, cert. denied, 260 Conn. 938, 802 A.2d 90 (2002), citing Butler v. Hartford Technical Institute, Inc., 243 Conn. 454, 470, 704 A.2d 222 (1997). In the present case, even though the payment bond does not provide for double damages or attorneys fees, § 31-72, the statute under which the commissioner of labor is bringing the action, does provide for such recovery. Accordingly, the motion to strike special defense six is granted.
Conclusion
The plaintiff's motion to strike special defenses one, three, five, and six is granted.