People v. Valdivia

ILLINOIS OFFICIAL REPORTS
Appellate Court
People ex rel. Department of Labor v. Valdivia, 2011 IL App (2d) 100998
Appellate Court THE PEOPLE ex rel. THE DEPARTMENT OF LABOR, Plaintiff, v.
Caption PEDRO VALDIVIA, Individually and d/b/a V&A Landscaping,
Defendant and Third-Party Plaintiff-Appellant (Pasqualino Divito,
Individually and d/b/a Patnick Construction, Inc., Third-Party Defendant-
Appellee).
District & No. Second District
Docket No. 2-10-0998
Filed August 16, 2011
Held In an action alleging that defendant subcontractor violated the Prevailing
(Note: This syllabus Wage Act, the trial court properly dismissed the subcontractor’s third-
constitutes no part of party complaint against the general contractor seeking contribution for
the opinion of the court any judgment entered against it based on the allegation that the general
but has been prepared contractor failed to comply with the notice requirements of the Act.
by the Reporter of
Decisions for the
convenience of the
reader.)
Decision Under Appeal from the Circuit Court of Du Page County, No. 09-L-1345; the
Review Hon. John T. Elsner, Judge, presiding.
Judgment Affirmed.
Counsel on Lance C. Ziebell, of Lavelle Law, Ltd., of Palatine, for appellant.
Appeal
David N. Michael and Joseph P. Bonavita, both of Gould & Ratner LLP,
of Chicago, for appellee.
Panel JUSTICE ZENOFF delivered the judgment of the court, with opinion.
Justices Hutchinson and Birkett concurred in the judgment and opinion.
OPINION
¶1 The Department of Labor (Department) filed a complaint against defendant,
subcontractor Pedro Valdivia, individually and doing business as V&A Landscaping
(Valdivia), alleging that he violated the Prevailing Wage Act (Prevailing Wage Act or Act)
(820 ILCS 130/1 et seq. (West 2004)). Valdivia filed a two-count third-party complaint
against general contractor Pasqualino Divito, individually and doing business as Patnick
Construction, Inc. (Divito), seeking the full amount of any judgment entered against Valdivia
and in favor of the Department. Valdivia appeals from the trial court’s dismissal of the
second count. For the following reasons, we affirm.
¶2 I. BACKGROUND
¶3 In June 2004, the Village of Woodridge, Illinois, accepted Divito’s bid on its “Suburban
Estates Water Main Improvements” project. The bid included a cost of $85,638 for “sodding,
special.” In September 2004, Divito entered into an oral agreement with Valdivia in which
Valdivia would install the topsoil and sod for the project for $44,493.75. Valdivia completed
his work on the project in November 2004. Valdivia paid his employees his standard wage
and overtime rates. Divito paid Valdivia the agreed amount of $44,493.75.
¶4 On February 4, 2005, the Department sent Valdivia a letter stating that its audit showed
that he failed to pay the prevailing wage to his employees on the project and demanding
payment within 10 days on behalf of those employees. Valdivia’s attorney responded with
letters to both the Department and Divito, disclaiming any liability under the Prevailing
Wage Act and asserting that Divito was liable for the back wages due to his failure to inform
Valdivia of the Act’s applicability to the project and his failure to post the prevailing wage
rates at the jobsite.
¶5 On March 15, 2005, the Department sent Divito a letter stating that it would hold him
responsible for Valdivia’s failure to pay the back wages owed to Valdivia’s employees.
Divito’s attorney responded by letter to the Department disclaiming any liability under the
Prevailing Wage Act. On March 29, the Department sent Divito a letter indicating that it had
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a right to pursue a bond claim on his contractor bond for the project. The Department gave
Divito 10 days to respond. Thereafter, the Department made no more contact with Divito.
¶6 On October 23, 2009, the Department filed against Valdivia a complaint alleging that
Valdivia violated the Prevailing Wage Act by failing to pay the prevailing wage to his
employees on the project. It sought payment of back wages of $78,185.55; a statutory penalty
of $15,637.11; and statutory punitive damages of $14,386.04.
¶7 In addition to filing an answer and affirmative defense, Valdivia filed a two-count, third-
party complaint against Divito, alleging that Divito violated section 4 of the Prevailing Wage
Act by failing to notify Valdivia that the Act applied and by failing to post the prevailing
wage rates on the jobsite (820 ILCS 130/4 (West 2004)). Count I, entitled “Violation of the
Illinois Prevailing Wage Act,” alleged that Divito’s failure to comply with the Act’s notice
requirement subjected Valdivia to suit by the Department. Count II, entitled “Fraudulent
Concealment,” alleged that Divito knew that the Act was applicable to the project but did not
notify Valdivia because Divito intended to induce Valdivia to enter into the landscaping
contract for a price less than he would have agreed to had he known that he would be
required to pay the prevailing wage. Both counts sought as relief Divito’s payment of the full
amount of any judgment entered against Valdivia in the underlying suit.
¶8 Divito filed a combined motion to dismiss the third-party complaint pursuant to section
2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2010)). The trial
court granted the motion with respect to count I, dismissing it with prejudice. It is not at issue
in this appeal. The court denied Divito’s motion with respect to count II. The court stated that
count II, though entitled “Fraudulent Concealment,” was essentially a claim for contribution
under the Joint Tortfeasor Contribution Act (Contribution Act) (740 ILCS 100/1 et seq.
(West 2010)). The court granted Divito leave to file a motion to reconsider or to provide
supplemental authority as to count II. Divito filed a motion to reconsider; Valdivia
responded; and Divito replied. On August 19, 2010, the court heard argument and dismissed
count II with prejudice. On September 2, the court entered an order modifying its August 19
order to include a finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26,
2010). Valdivia timely appealed.
¶9 II. ANALYSIS
¶ 10 Valdivia argues that he stated a claim for contribution in count II of his third-party
complaint and that the trial court erred in dismissing it. After construing count II as a claim
for contribution, the trial court dismissed it for failure to state a claim. A cause of action
should not be dismissed for failure to state a cause of action “unless it is clearly apparent that
no set of facts can be proved that would entitle the plaintiff to relief.” Tedrick v. Community
Resource Center, Inc., 235 Ill. 2d 155, 161 (2009) (reviewing dismissal pursuant to section
2-615 of the Code (735 ILCS 5/2-615 (West 2010))). We take all well-pleaded facts as true
and draw all reasonable inferences in favor of the nonmoving party. Tedrick, 235 Ill. 2d at
161. Our review is de novo. Tedrick, 235 Ill. 2d at 161.
¶ 11 Section 2 of the Contribution Act provides for a right of contribution “where 2 or more
persons are subject to liability in tort arising out of the same injury to person or property.”
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740 ILCS 100/2(a) (West 2010). The same-injury requirement refers to “that which is
incurred by the plaintiff, as opposed to any injury suffered by the parties seeking
contribution.” People v. Brockman, 143 Ill. 2d 351, 371 (1991). Thus, to state a claim under
the Contribution Act, a party must show that both he and the party from whom he seeks
contribution are subject to liability in tort for the injury suffered by the plaintiff in the
underlying suit. Vroegh v. J&M Forklift, 165 Ill. 2d 523, 529 (1995). Here, the underlying
plaintiffs were Valdivia’s employees. See 820 ILCS 130/11 (West 2004) (provision of the
Prevailing Wage Act stating that the Department has a right of action on behalf of any person
with a right of action under this section). The injury they suffered was underpayment of
wages. Therefore, the relevant inquiry is whether Valdivia showed that both he and Divito
were subject to liability in tort for the underpayment of wages to Valdivia’s employees.
¶ 12 “Tort law *** applies in situations where society recognizes a duty to exist wholly apart
from any contractual undertaking. Tort obligations are general obligations that impose
liability when a person negligently, carelessly or purposely causes injury to others.” Collins
v. Reynard, 154 Ill. 2d 48, 51 (1992). A tort duty can derive either from the common law or
from statute. Harnischfeger Corp. v. Gleason Crane Rentals, Inc., 223 Ill. App. 3d 444, 452
(1991). A statute may expressly create a tort duty. Rommel v. Illinois State Toll Highway
Authority, 405 Ill. App. 3d 1124, 1128 (2010). Or, a tort duty may be inferred from a statute
intended to protect human life or property. Rommel, 405 Ill. App. 3d at 1128; see, e.g.,
Calloway v. Kinkelaar, 168 Ill. 2d 312, 326 (1995) (holding that the Illinois Domestic
Violence Act of 1986 (750 ILCS 60/1 et seq. (West 1992)) imposed a duty on law
enforcement to take reasonable steps to assist a person protected under that act); Doyle v.
Rhodes, 101 Ill. 2d 1, 17 (1984) (holding that violation of a “safety statute” such as the Road
Construction Injuries Act (Ill. Rev. Stat. 1981, ch. 121, ¶ 314 et seq.) can subject a party to
liability in tort sufficient to satisfy the Contribution Act). But cf. Jodelis v. Harris, 118 Ill.
2d 482, 487 (1987) (holding that the liability created by the Illinois Dramshop Act (Ill. Rev.
Stat. 1979, ch. 43, ¶ 135) was “ ‘exclusive, sui generis nontort liability’ ” that did not satisfy
the requirement of the Illinois Contribution Act (quoting Hopkins v. Powers, 113 Ill. 2d 206,
211 (1986))).
¶ 13 Valdivia argues that the Prevailing Wage Act imposes a duty on general contractors and
that violation of the Act’s requirements subjects a general contractor to liability in tort. The
Act requires both general contractors and subcontractors on public-works projects to pay the
prevailing wage to their employees. 820 ILCS 130/4 (West 2004). The policy behind the Act
is to ensure that workers on public-works projects are paid the prevailing wage for their work
and that public-works projects will therefore be completed efficiently and expeditiously. 820
ILCS 130/1 (West 2004); People ex rel. Department of Labor v. Sackville Construction, Inc.,
402 Ill. App. 3d 195, 198 (2010). Section 11 of the Act creates a right of action in those
underpaid employees included within its scope, allowing them to claim back wages and
punitive damages. 820 ILCS 130/11 (West 2004). The Act does not expressly create a tort
duty, and a plain reading of the Act indicates that it was not intended to protect human life
or property. Therefore, the Act cannot create a duty in tort. See Rommel, 405 Ill. App. 3d at
1129 (holding that the Toll Highway Act (605 ILCS 10/1 et seq. (West 2008)) was a
mechanism to finance construction and maintenance of highways and did not create a duty
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to prevent crossover collisions because it was not designed to protect human life or property).
Accordingly, even if Divito violated the Prevailing Wage Act, he was not subject to liability
in tort within the meaning of the Contribution Act, and the trial court did not err in
dismissing count II of the third-party complaint. See Vroegh, 165 Ill. 2d at 531 (holding that,
because the contribution defendant had no duty to the underlying plaintiff, it was not subject
to liability in tort within the meaning of the Contribution Act).
¶ 14 Valdivia specifically argues that section 4 of the Prevailing Wage Act imposed duties on
Divito to notify Valdivia of the Act’s applicability to the project and to post the prevailing
wage rates at the jobsite. Valdivia asserts that Divito’s violations of section 4’s requirements
were the cause of Valdivia’s failure to pay his employees the prevailing wage, thus causing
the injury suffered by Valdivia’s employees. According to Valdivia, therefore, Divito’s
failure to comply with the Act rendered Divito liable in tort to Valdivia’s employees.
¶ 15 Divito initially responds that Valdivia forfeited his argument that Divito owed a duty to
Valdivia’s employees, because he neither alleged such a duty in his third-party complaint nor
argued to the trial court that such a duty existed. See In re Marriage of Holthaus, 387 Ill.
App. 3d 367, 377 (2008) (arguments not raised in the trial court are forfeited on review). We
agree that Valdivia did not allege in count II that Divito owed a duty to Valdivia’s
employees. However, the trial court sua sponte construed count II for fraudulent concealment
as a claim for contribution, and the parties briefed and argued the issue. In his written
response to Divito’s motion to reconsider, Valdivia argued that Divito’s violations of the
Prevailing Wage Act subjected Divito to liability in tort to both the State and Valdivia’s
employees. Under the unique procedural history here, Valdivia did not forfeit his argument
that Divito owed a duty to Valdivia’s employees, because the issue was thoroughly addressed
by the parties and the court below. See Cambridge Engineering, Inc. v. Mercury Partners
90 BI, Inc., 378 Ill. App. 3d 437, 453 (2007) (one purpose of the forfeiture rule is to prevent
prejudicing a party who had no opportunity to argue the issue before the trial court).
¶ 16 Divito further responds that the posting requirement was not in effect in October and
November 2004, when the underlying plaintiffs were underpaid. The 2004 version of the
Prevailing Wage Act included two section 4s. One reflected amendment by Public Acts 93-
15, § 905 (eff. June 11, 2003) and 93-16, § 5 (eff. Jan. 1, 2004), which were identical and
added the posting requirement. The other reflected amendment by Public Act 93-38, § 5 (eff.
June 1, 2004), which added the notice requirement. The language of section 5 of Public Act
93-38 did not include the language adding the posting requirement. However, because the
notice and posting requirements do not irreconcilably conflict, we give effect to both. See 5
ILCS 70/6 (West 2010) (“Two or more Acts which relate to same subject matter and which
are enacted by the same General Assembly shall be construed together in such manner as to
give full effect to each Act except in case of an irreconcilable conflict.”).
¶ 17 We now address Valdivia’s argument that failure to comply with the notice requirement
of section 4 of the Prevailing Wage Act subjected Divito to liability in tort to Valdivia’s
employees because the lack of notice caused Valdivia not to pay the prevailing wage. Section
4 of the Act requires both general contractors and subcontractors to pay the prevailing wage
to all those “employed by them” on a public-works project. 820 ILCS 130/4 (West 2004).
Section 4 additionally requires a general contractor to “insert into each subcontract *** a
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written stipulation to the effect that not less than the prevailing rate of wages shall be paid
to all *** performing work under the contract.” Pub. Act 93-38, § 5 (eff. June 1, 2004).
However, notice is not a condition precedent to the obligation to pay the prevailing wage.
See Sackville Construction, 402 Ill. App. 3d at 203 (holding that the failure of a public body
to provide notice to a general contractor does not alleviate the obligation of the general
contractor or its subcontractors to pay the prevailing wage to their employees). Neither is a
general contractor a guarantor of payment for a subcontractor’s employees in the event that
the subcontractor fails to pay the prevailing wage. Cement Masons Pension Fund v. William
A. Randolph, Inc., 358 Ill. App. 3d 638, 645-46 (2005).
¶ 18 In Cement Masons, the plaintiffs were fringe-benefit-funds administrators who sued
defendant, the general contractor on a public-works project, for its subcontractor’s failure to
pay the prevailing wage. Cement Masons, 358 Ill. App. 3d at 639. The appellate court
declined to expand the plain meaning of the Prevailing Wage Act and held that the Act did
not allow a cause of action against a general contractor for its subcontractor’s violation.
Cement Masons, 358 Ill. App. 3d at 646. This holding was the basis of the trial court’s
dismissal here of count I of the third-party complaint, which alleged Divito’s violation of the
Act. Although Valdivia does not appeal from the dismissal of count I, he makes much of the
fact that Cement Masons was decided in June 2005, after the conduct at issue here occurred
(in the fall of 2004). Nonetheless, the relevant language of the Act interpreted by the court
in Cement Masons was the same as that in effect in 2004; thus, Cement Masons is apposite.
We agree with Valdivia that Cement Masons does not directly address the issue presented
here–the viability of a contribution claim. However, it is persuasive for the proposition for
which we cite it–that a general contractor is not a guarantor of payment for its
subcontractor’s employees.
¶ 19 Under the Prevailing Wage Act, Valdivia’s employees were entitled to payment of the
prevailing wage from Valdivia, regardless of Divito’s notice to Valdivia. Accordingly,
section 4’s notice requirement could not have created any duty owed by Divito to Valdivia’s
employees, let alone one sounding in tort. See Sackville Construction, 402 Ill. App. 3d at 203
(analyzing language from the 2006 version of the Act, which was identical to that in the 2004
version, and holding that “the plain language of sections 1 and 4 requires payment of back
wages at the prevailing rate regardless of any notice to the subcontractor that the Act
applies”).
¶ 20 Valdivia also maintains that section 4’s requirement that a general contractor post the
prevailing wages for the various crafts at the jobsite is for the benefit of all of the workers
on a public-works project and, therefore, it created a duty owed by Divito to Valdivia’s
employees. Section 4 requires a general contractor to “post, at a location on the project site
of the public works that is easily accessible to the workers engaged on the project, the
prevailing wage rates for each craft or type of worker.” Pub. Act 93-16, § 5 (eff. Jan. 1,
2004). Although the posting requirement conceivably is for the benefit of the employees, the
required posting merely informs the employees of what the prevailing wage rates are, not that
they are entitled to receive them. Moreover, as discussed above, the intent to ensure that
workers employed in public works are paid the prevailing wage simply does not sound in
tort, because it has nothing to do with the prevention of personal injury or property damage.
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See Rommel, 405 Ill. App. 3d at 1129 (holding that a statute not designed to protect human
life or property did not create a duty).
¶ 21 In support of his proposition that the posting requirement created a duty, Valdivia relies
solely on Brockman. In Brockman, the State filed a complaint against the owner-operators
of a landfill for violations of the Illinois Environmental Protection Act (Ill. Rev. Stat. 1979,
Ch. 111½, ¶ 1001 et seq.). Brockman, 143 Ill. 2d at 358. The owner-operators filed a third-
party complaint against their customers–various generators and transporters of waste
deposited at the landfill. Brockman, 143 Ill. 2d at 359. The trial court dismissed the third-
party complaint with prejudice, and the owner-operators appealed. Brockman, 143 Ill. 2d at
360. Ultimately, the supreme court held that violation of the Environmental Protection Act
could constitute liability in tort under the Contribution Act because, “[w]ithout question,
third-party defendants had a duty not to contaminate the environment.” Brockman, 143 Ill.
2d at 372-73.
¶ 22 The court’s conclusion in Brockman that the Environmental Protection Act created a tort
duty is consistent with the concept of a tort itself. Brockman, like the cases mentioned above
in which courts found statutory tort duties, involved the legislature’s intent to prevent
personal injury or property damage, specifically to prevent injury to persons and harm to the
environment from hazardous substances. See Brockman, 143 Ill. 2d at 375 (noting that the
purpose of the Environmental Protection Act is to impose liability on those who create a
situation harmful to the environment); 415 ILCS 5/2(a)(i) (West 2010) (stating the General
Assembly’s finding that “environmental damage seriously endangers the public health and
welfare”). In contrast, the Prevailing Wage Act does not involve such concerns. Rather, the
purpose of the Act is to ensure that workers on public-works projects are paid the prevailing
wage. Accordingly, Brockman is inapposite.
¶ 23 Valdivia’s argument that a recent amendment to the Prevailing Wage Act compels a
different conclusion is not convincing. The Act was amended, effective January 1, 2010, to
require a general contractor to pay the penalties that would otherwise be imposed on a
subcontractor, if the general contractor failed to notify the subcontractor of the Act’s
applicability. 820 ILCS 130/4(b-2) (West 2010). Valdivia argues that this amendment, rather
than changing the law, served to clarify the law as it existed at the relevant time here, thus
supporting his right to contribution under the theory that general contractors have duties to
notify and post. We first note that, as Valdivia acknowledges, the amended language makes
clear that a general contractor’s failure to notify “does not relieve the subcontractor of the
duty to comply with the prevailing wage rate, nor of the obligation to pay any back wages.”
820 ILCS 130/4(b-2) (West 2010). Even more significant here is that the amendment applies
to violations of the notice requirement, not the posting requirement. As it is only the posting
requirement that could possibly benefit Valdivia’s employees, the amendment does not
support the viability of Valdivia’s contribution claim.
¶ 24 Valdivia finally argues that the equities compel the conclusion that he be permitted to
seek contribution because otherwise Divito will be unjustly enriched and Valdivia will be
unfairly burdened with the total cost of the back wages owed plus penalties. Contribution is
based on principles of equity. Doyle, 101 Ill. 2d at 16. However, “[t]he equitable powers of
a court may not be exercised to direct a remedy in contradiction to the plain requirements of
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a statute.” 601 West 81st Street Corp. v. City of Chicago, 129 Ill. App. 3d 410, 418 (1984).
¶ 25 Valdivia’s argument that Divito will be unjustly enriched if he is not subject to
contribution is purely speculative. It is premised on the facts that Divito’s bid to the Village
included a cost of $85,638 for “sodding, special,” while under his contract with Valdivia for
sodding, he paid only $44,493.75. Superficially, these facts might suggest unfairness; indeed,
the trial court stated that the equities favored Valdivia. Nonetheless, to the extent that the
parties entered into a contract1 for the $44,493.75 price, the theory of unjust enrichment
really has no relevance. See People ex rel. Hartigan v. E&E Hauling, Inc., 153 Ill. 2d 473,
497 (1992) (stating that, because the theory of unjust enrichment is based on a contract
implied in law, it has no applicability where an actual contract exists). Moreover, Valdivia
actually paid $19,474.91 in wages and is subject to an additional $78,185.55 in back wages.
Thus, the total prevailing wage owed was $97,660.46–$12,000 more than the sodding cost
listed in Divito’s bid to the Village (and that does not include any cost for materials).
Consequently, it would seem that other factors, about which we decline to speculate, figured
into Divito’s sodding cost in his bid, which consisted of 47 different items and totaled
$653,829. We also disagree with Valdivia’s argument that precluding a contribution claim
in this type of situation allows general contractors to profit from their disregard for the notice
provision. The Act provides that general contractors who violate its provisions are subject
to being barred from public-works projects for two years. See 820 ILCS 130/11a (West
2004). Thus, any “profit” from a violation would be short-lived.
¶ 26 We are also not convinced that, absent a claim for contribution, Valdivia will be unfairly
burdened with the total cost of the back wages owed plus penalties. Valdivia was statutorily
obligated to pay the prevailing wage, regardless of notice of the Act’s applicability. See
Sackville Construction, 402 Ill. App. 3d at 203 (notice is not a condition precedent to the
obligation to pay the prevailing wage). Valdivia’s failure to comply with the Act subjected
him to owing back wages and penalties. See Sackville Construction, 402 Ill. App. 3d at 203
(holding that, despite lack of notice, the subcontractor’s failure to pay the prevailing wage
subjected it to back wages and penalties under the Act). Even if we were to agree with the
trial court’s conclusion that the equities favored Valdivia, we cannot circumvent the clear
mandate of the Contribution Act’s requirement that both parties be subject to liability in tort.
See 601 West 81st Street Corp., 129 Ill. App. 3d at 418 (court cannot use equity to contradict
a statute’s requirements). Any perceived unfairness must be rectified by the legislature.
Henrich v. Libertyville High School, 186 Ill. 2d 381, 394 (1998) (“The responsibility for the
justice or wisdom of legislation rests upon the legislature.”).
¶ 27 Based on the foregoing reasons, we affirm the judgment of the circuit court of Du Page
County.
¶ 28 Affirmed.
1
Paragraph 7 of Valdivia’s affirmative defense asserts that the parties “entered into an oral
agreement.” Paragraph 9 alleges that Valdivia performed all of his obligations “under said contract.”
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