Habermehl Electric, Inc. v. State Department of Transportation

2003 WI App 39, 659 N.W.2d 463, 260 Wis. 2d 466, 2003 Wisc. App. LEXIS 83
CourtCourt of Appeals of Wisconsin
DecidedJanuary 30, 2003
Docket02-1573
StatusPublished
Cited by6 cases

This text of 2003 WI App 39 (Habermehl Electric, Inc. v. State Department of Transportation) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Habermehl Electric, Inc. v. State Department of Transportation, 2003 WI App 39, 659 N.W.2d 463, 260 Wis. 2d 466, 2003 Wisc. App. LEXIS 83 (Wis. Ct. App. 2003).

Opinion

VERGERONT, P.J.

¶ 1. This action arises out of a dispute concerning the prevailing wage rates that Hab-ermehl Electric, Inc. was obligated to pay its employees under certain contracts for projects of the Department of Transportation (DOT). After DOT determined that Habermehl had not paid the proper rates according to the certification of prevailing wage rates by the Department of Workforce Development (DWD) incorporated into the contracts, Habermehl filed this action against DOT. The circuit court denied Habermehl's motion to add DWD as a party and granted judgment in DOT's favor, dismissing the complaint. Habermehl appeals, contending that the court erred in not allowing it to add DWD as a party and in concluding that its action was not timely filed against DOT for review of DOT's administrative decision.

¶ 2. We conclude that the court did not erroneously exercise its discretion in denying Habermehl's motion to amend its complaint to add DWD as a party because the amendment would have been futile. The claim Habermehl wishes to add for judicial review of DWD's administrative decision under Wis. Stat. ch. 227 would be subject to dismissal as time-barred, and the constitutional claims against DWD that Habermehl apparently seeks to pursue would be subject to dismissal based on the doctrine of claim preclusion. Because Habermehl concedes that DOT does not have the *471 statutory authority to grant the relief Habermehl seeks, we affirm the circuit court's dismissal of the complaint against DOT.

BACKGROUND

¶ 3. The procedural background to this action is complex, but the relevant facts are not disputed. Hab-ermehl is an electrical subcontractor that has performed work on various contracts that DOT has entered into with prime contractors. The eleven contracts involved in this dispute were executed between August 11,1998 and May 11, 2000. The contracts provided that the contractors and subcontractors had to pay employees covered by Wis. Stat. § 103.50 (2001-02) 1 at least the wages contained in the schedules of minimum wage rates attached to and incorporated into the contracts. Subsections 103.50(3) and (4) require DWD to conduct investigations and hold public hearings to determine the prevailing wages for all occupations commonly employed in the highway construction industry, and to certify annually to DOT by May 1 of each year the prevailing wage rates. Under § 103.50(6), the prevailing wage rates determined by DWD must be incorporated into every contract and subcontract, with an exception that is not applicable. "The prevailing wage rates . . . applicable to a contract or subcontract may not be changed during the time the contract or subcontract is in force." Subsection (6). DOT is obligated to require adherence to these wage rates, and violations by contractors and subcontractors subject them to fines; DOT may request the district attorney to enforce the penalties. Subsections 103.50(7) and (8). In addition to the *472 DWD-certified prevailing wage rates, the contracts contained federal prevailing wage rates because some projects are funded by both state and federal funds. The contracts provided that, when both federal and state prevailing wage rates for a given classification were included, the higher of the two rates governed.

¶ 4. The dispute in this case arose when DWD deleted five subclassifications, for the job of line constructor from its annual certifications for the years 1997 through 2000. Habermehl continued to use the federal prevailing wage rates for those subclassifica-tions, which were still contained in the contracts. However, DOT determined that, for each deleted sub-classification, an alternative existing classification certified by DWD was applicable, and those were higher than the federal prevailing wage rates Habermehl used. By letter dated May 25, 1999, DOT advised the prime contractor on a project and Habermehl, the subcontractor, that Habermehl was not paying the proper prevailing wage rates under that contract, and it demanded that Habermehl do so. By the end of January 2000, Habermehl paid, under protest, the wages DOT asserted were due under that contract and two others— $41,000.

¶ 5. Also in late January 2000, Habermehl requested an administrative hearing before DWD pursuant to Wis. Stat. § 103.005(6)(e), 2 seeking reinstate *473 ment of the five subclassifications or recognition of the federal prevailing wages for them. In its petition, Hab-ermehl alleged that DWD had acted arbitrarily and in a manner inconsistent with its own procedures in removing the five subclassifications. On April 6, 2000, DWD issued a final determination reinstating the five sub-classifications effective January 1, 2001. However, that determination did not address the issue of retroactive reinstatement of those subclassifications, and DWD assigned an administrative law judge to hear that issue. Habermehl's amended petition before DWD added allegations that DWD had violated its right to due process by removing the five subclassifications; it also sought *474 retroactive reinstatement of those subclassifications, monetary relief for the amounts it had paid DOT under protest, attorney fees, and punitive damages.

¶ 6. While the proceedings were pending before DWD, Habermehl continued to use the federal prevailing wage rates for the line contractor subclassifications, and DOT made demands that Habermehl pay the amounts DOT asserted were due for other projects. Habermehl wanted DOT to suspend its efforts to compel payment under the other contracts until DWD resolved the issue of retroactive reinstatement, but DOT refused to do so. DOT's position was that Haber-mehl was obligated to pay what was due under the contracts and DWD did not have the authority to alter those contracts. By letter dated July 14, 2000, DOT refused Habermehl's request to allow it to escrow the disputed amounts pending resolution by DWD of the retroactive reinstatement issue. DOT demanded that Habermehl comply by September 1, 2000; if Habermehl did not, DOT would "look to the prime contractors for payment of the correct wage rates." That letter prompted Habermehl to file this action on August 31, 2000, seeking judicial review of DOT's decisions under Wis. Stat. §§ 227.52 and 227.53, a declaratory ruling that DOT's conduct violated Wis. Stat. § 103.50 and Habermehl's right to due process and equal protection, and temporary and permanent injunctive relief.

¶ 7. The circuit court denied Habermehl's motion for a temporary injunction prohibiting DOT from compelling Habermehl to pay the higher wages or sanctioning Habermehl for not doing so. The court concluded that Habermehl had not demonstrated that DWD's deletions of the five subclassifications in its certifications were in error. The court also addressed, sua sponte, whether Habermehl's request for judicial re *475 view of DOT's administrative decisions was timely.

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Bluebook (online)
2003 WI App 39, 659 N.W.2d 463, 260 Wis. 2d 466, 2003 Wisc. App. LEXIS 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/habermehl-electric-inc-v-state-department-of-transportation-wisctapp-2003.