Lix v. Kenney

No. 90-316
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
GEORGE DAVID LIX, LEONARD PERKINS,
RICHARD LEN PITSCH, and all other persons
known and unknown, but similarly situated,
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Plaintiffs and Respondents,
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STEPHEN J. KENNEY, and CORY KENNEY, :' xiti [I :x iggl
jointly, individually, and d/b/a 8
STEPHEN J. KENNEY CONTRACTORS,
Defendants and Appellants.
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DAVID L. HUNTER and THE DEPARTMENT OF
LABOR AND INDUSTRY,
Plaintiff and Respondent,
STEPHEN J. KENNEY d/b/a STEPHEN J. KENNEY
CONTRACTORS,
Defendant and Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Big Horn,
The Honorable William J. Speare, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Randall G. Nelson and Laurence R. Martin; Felt,
Martin, Frazier & Lovas; Billings, Montana
For Respondent:
William Richardson, Butte, Montana
David Scott; Dept. of Labor & Industry; Helena,
Montana
Submitted on Briefs: November 29, 1990
Decided: January 10, 1991
Filed:
Justice R. C. McDonough delivered the Opinion of the Court.
Stephen J. Kenney d/b/a Stephen J. Kenney Contractors appeals
from an order of the Thirteenth Judicial District, Big Horn County,
granting summary judgment in favor of the Department of Labor and
Industry (Department) and George Lix, Leonard Perkins and Richard
Pitsch, employees of Kenney Contractors. In its order, the
District Court held that Kenney Contractors was liable for back
wages, costs, penalties as required by § 39-3-206, MCA, and
attorneys' fees. We affirm.
The sole issue on appeal is:
Whether the District Court erred when it ruled that Kenney
Contractors was bound by a contractual provision requiring it to
pay its employees certain hourly wages.
In 1982, the City of Hardin solicited bids to build a
pumphouse and river intake structure. The project qualified as a
public works project subject to Montana's Little Davis-Bacon Act.
See 8 5 18-2-401 through 432, MCA.
In March of 1982, Kenney Contractors successfully bid on the
project and on May 21, 1982 signed a construction contract with the
City. The contract, which was agreed to by all parties, contained
a schedule of specific prevailing wage rates such as $15.90 per
hour, for a journeyman electrician. These rates were minimum wage
determinations based on job classifications common in the
construction industry. They were established by the Department
pursuant to 5 18-2-402(l), MCA. It is undisputed that Kenney
Contractors failed to pay its employees according to the prescribed
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rates in the contract.
On August 22, 1983, the Department filed a complaint against
Kenney Contractors alleging that it failed to pay the wage rates
as required by the contract. The Department sought damages in the
form of unpaid wages, on behalf of the employees, and penalties for
its failure to comply with the express terms of the contract.
Later, several employees of Kenney Contractors filed their own
complaint, in which they sought damages for unpaid wages. The
individual plaintiffs also sought permission to intervene in the
Department's action against Kenney Contractors and to join their
claims to the Departmentst claim. On February 9, 1988, the
District Court consolidated the two cases.
All parties moved for summary judgment. Following the
submission of written briefs and hearing oral argument, the
District Court granted partial summary judgment in favor of the
Department and the employees. This appeal followed.
As stated above, the pumphouse and river intake structure
qualified as a public works project under the Montana "Little
Davis-Bacon Act." Sections 18-2-401 - 432, MCA. This act requires
contractors on public projects to pay their employees "the standard
prevailing rate of wages . . . applicable to the district in which
the work is being performed. 'I Section 18-2-403 (2), MCA.
In compliance with this mandate, the Department required a
provision to be included in the contract, which directed Kenney
Contractors to pay its workers according to the standard prevailing
wages determined by the Department. A full and complete list in
dollar amounts of these specific wages was appended to the
contract.
Kenney Contractors maintains that it is not bound to pay these
wages because the wage rates were not adopted in compliance with
the Montana Administrative Procedure Act. See 5 5 2-4-101 through
711, MCA. Therefore, because the rates were not determined in
compliance with the law, Kenney Contractors argues that their
inclusion constitutes an illegal provision in the contract.
Because the provision is illegal, Kenney Contractors argues, it was
not required to comply with its mandate and this Court is precluded
from enforcing its language. See, e.q. MPH Company and Tropic
Industries v. Imagineering, Inc. and Bill R. Williams (1990), 47
St.Rep. 947, 792 P.2d 1081.
We disagree with this argument. Kenney Contractors relies
heavily upon a district court case which held the Department of
Labor did not have express rule making authority to determine
standard prevailing wage rates. Therefore its determinations of
these standards lacked the force of law. See Townsend Electric
Inc. v. Dept. of Labor and Industry, First Judicial District No.
47160 (1983).
The decision in that case is not, however, applicable to the
facts here. In the case now before us, Kenney Contractors
expressly agreed to pay wage rates contained in the contract that
it voluntarily executed with the City of Hardin. Therefore the
issue presented for our review is one of contract law. It has
nothing to do with administrative rule making authority.
Furthermore, it is uncontested that Kenney Contractors failed to
pay the contractually set wages. We disagree with its assumption
that the wage provisions were illegal. These provisions were not
contrary to law, public policy or good morals. See 5 28-2-701,
MCA .
We therefore hold that the District Court properly granted
summary judgment. There are no genuine issues of fact and because
Kenney Contractors is contractually bound to pay the wage rates,
the Department as well as the individual employees are entitled to
judgment as a matter of law. The order of the District Court is
affirmed. 1
We Concur:
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Chief Justice
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