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Wrobel v. Shaw Environmental & Infrastructure Engineering of New York, P.C.

Supreme Court, New York County

May 9, 2017

Piotr Wrobel and TOMASZ STANKIEWICZ, individually and on behalf of all other persons similarly situated who were employed by PMJ ELECTRICAL CORP., with respect to certain Public Works Projects Awarded by the NEW YORK CITY DEPARTMENT OF EDUCATION and/or performed work pursuant to the NEW YORK CITY RAPID REPAIR PROGRAM, Plaintiffs,
v.
Shaw Environmental & Infrastructure Engineering of New York, P.C., BILTMORE GENERAL CONTRACTORS, INC., PMJ ELECTRICAL CORP., and SLSCO, L.P. d/b/a SULLIVAN LAND SERVICES, LTD., Defendants.

          Attorneys for Plaintiffs: Jack L. Newhouse and Michele A. Moreno of Virigina & Ambinder, LLP

          Attorneys for Defendant SLSCO, L.P. d/b/a Sullivan Land Services, Ltd.: Victor Rivera, Jr. of Rich Intelisano & Katz, LLP

          Saliann Scarpulla, J.

         Defendant SLSCO, L.P. d/b/a Sullivan Land Services, Ltd. ("SLSCO") moves, pursuant to CPLR 3211 (a) (1) and (7), to dismiss the first amended complaint of proposed class representative plaintiffs Piotr Wrobel ("Wrobel") and Tomasz Stankiewicz ("Stankiewicz") (collectively "Plaintiffs"), based on documentary evidence and for failure to state a cause of action.

         Background

         SLSCO is construction company based in Houston, Texas. On December 24, 2012, SLSCO entered into a contract (the "Prime Contract") with the New York City Department of Environmental Protection ("DEP") to provide home repairs as part of the New York City Rapid Repair Program (the "RRP"). Pursuant to the Prime Contract, SLSCO was to provide "labor, supervision, materials, and other associated equipment and costs required to safely restore heat, hot water, and power to and to make temporary exterior and internal repairs necessary to allow residents to inhabit [p]roperties assigned to [SLSCO]." Prime Contract, art. 3 [A]. SLSCO engaged various subcontractors to perform various parts of the Prime Contract, including defendant PMJ Electrical Corp. ("PMJ").

         Under the Prime Contract, SLSCO agreed to comply with "all applicable Federal, State and local Laws, including but not limited to the payment of wages compliant with all requirements of... [Labor Law § 220]." Prime Contract, art. 31 [A]. Thus, in the Prime Contract the parties agreed that "all persons employed by Contractor and any Subcontractor in the manufacture or furnishing of the supplies, materials, or equipment, or the furnishing of work, labor, or services, used in the performance of this Contract shall be paid, without subsequent deduction or rebate unless expressly authorized by Law, not less than the sum mandated by Law. The Prime Contract also provided that it "shall not be deemed to create any new right of action in favor of third parties against [SLSCO] or [New York City]." Prime Contract, art. 50.

         Wrobel and Stankiewicz, along with the other members of the proposed class, were employed by PMJ, a subcontractor to SLSCO, as well as by defendant Biltmore General Contractors, Inc. ("Biltmore"), on unrelated construction projects. Plaintiffs allege that, while working on the RRP projects, PMJ paid them "less than the prevailing rates of wages and supplements to which [p]laintiffs and the other members of the putative class were entitled." Am. Compl. ¶ 23. Plaintiffs also allege, upon information and belief, that the prevailing wage provisions of the Prime Contract were "incorporated by reference into the [p]ublic [w]orks [s]ubcontracts between [SLSCO] and PMJ." Am. Compl. ¶ 25.

         Plaintiffs originally commenced this action against Biltmore, PMJ, and former defendant Shaw Environmental & Infrastructure Engineering of New York, P.C. ("Shaw"). I subsequently granted Plaintiffs' motion to add SLSCO as a defendant and serve an amended complaint. Plaintiffs then filed an amended complaint alleging breach of the Prime Contract and/or subcontracts against PMJ (first cause of action), breach of the Prime Contract against SLSCO and Biltmore (second cause of action), and a suretyship and Labor Law § 220-g claim against 20 John Doe bonding companies (third cause of action).

         SLSCO moves to dismiss the second cause of action for breach of contract, the sole cause of action asserted against it in the amended complaint, in which Plaintiffs allege that SLSCO breached the Prime Contract by failing to ensure that PMJ paid Plaintiffs a prevailing wage.

         SLSCO argues that Plaintiffs' claim must be dismissed because the Prime Contract expressly precludes recovery by third party beneficiaries. Further, SLSCO argues that Plaintiffs may only recover as third party beneficiaries of a contract between a municipality and their employer, and SLSCO is not their employer.

         In opposition, Plaintiffs argue that the negation clause language in the Prime Contract does not affect their right to recover for underpayment of wages as third party beneficiaries, a right which is set forth in both statutory and common law. Plaintiffs also argue that, in the Prime Contract, SLSCO agreed to ensure that all employees, including subcontractors' employees, would be paid prevailing wages, and that upon a subcontractor's failure to do so, the Plaintiffs, as third-party beneficiaries of the Prime Contract, should be able to recover against SLSCO.

          Discussion

         The Labor Law was enacted to protect workers, see, e.g., Vasquez v Urbahn Assoc. Inc., 79 A.D.3d 493, 499 (1st Dep't 2010) (Acosta and Freedman, JJ., dissenting in part). Thus, Labor Law § 220 (3) (a) provides that "[t]he wages to be paid for a legal day's work, as hereinbefore defined, to laborers, workmen or mechanics upon such public works, shall be not less than the prevailing rate of wages as hereinafter defined." Further, public works contracts "shall contain a provision that each laborer, workman or mechanic, employed by such contractor, subcontractor or other person about or upon such public work, shall be paid the wages herein provided." Id. Under Labor Law ยง 220, a laborer alleging that ...


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