THE PEOPLE ex rel. THE DEPARTMENT OF LABOR, Plaintiff, v. 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).
Docket No. 2-10-0998
Appellate Court of Illinois, Second District
August 16, 2011
2011 IL App (2d) 100998
JUSTICE ZENOFF delivered the judgment of the court, with opinion. Justices Hutchinson and Birkett concurred in the judgment and opinion.
Decision Under Review: Appeal from the Circuit Court of Du Page County, No. 09-L-1345; the Hon. John T. Elsner, Judge, presiding. Judgment: Affirmed.
(Note: This syllabus constitutes no part of the opinion of the court but has been prepаred by the Reporter of Decisions for the convenience of the reader.)
In an action alleging that defendant subcontractor violated the Prevailing Wage Act, the trial court properly dismissed the subcontractor‘s third-party complaint against the general contractor seeking contribution for any judgment entered against it based on the allegation that the general contractor failed to comply with the notice requirements of the Act.
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) (
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, speсial.” 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
¶ 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 (
¶ 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) (
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 failurе 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 (
¶ 11 Section 2 of the Contribution Act provides for а right of contribution “where 2 or more persons are subject to liability in tort arising out of the same injury to person or property.”
¶ 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 (
¶ 13 Valdivia argues that the Prevailing Wage Act imposes a duty on general contractors and that violatiоn 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.
¶ 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 pаy 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 thе 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 Vаldivia‘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 Octobеr 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 рosting requirements do not irreconcilably conflict, we give effect to both. See
¶ 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.
¶ 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 mаkes 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. Sеction 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.
¶ 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-opеrators 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 legislaturе‘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);
¶ 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.
¶ 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 plаin requirements of
¶ 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 priсe, 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 mаterials). 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 bеing barred from public-works projects for two years. See
¶ 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.