Hull Corp. v. Hartnett

571 N.E.2d 54, 77 N.Y.2d 475, 568 N.Y.S.2d 884, 1991 N.Y. LEXIS 361
CourtNew York Court of Appeals
DecidedMarch 26, 1991
StatusPublished
Cited by243 cases

This text of 571 N.E.2d 54 (Hull Corp. v. Hartnett) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hull Corp. v. Hartnett, 571 N.E.2d 54, 77 N.Y.2d 475, 568 N.Y.S.2d 884, 1991 N.Y. LEXIS 361 (N.Y. 1991).

Opinion

OPINION OF THE COURT

Bellacosa, J.

As a result of two 1986 determinations of willful violations of Labor Law § 220 issued by the Commissioner of Labor, the Hull Corporation has been debarred until August 1991 from bidding on or being awarded any public work contracts. Whether that debarment will continue through 1993 is the practical consequence stemming from two additional determinations by the Commissioner of Labor made in 1988. The legal issue on this appeal arises out of Hull’s article 78 proceeding challenging only the 1988 determinations of willfulness and the Commissioner’s postulate that contemporaneous and similar conduct on multiple public work contracts can be splintered into discrete determinations of willful failure to pay prevailing wages and supplements for debarment purposes (see, Labor Law § 220 [3]; § 220-b [3] [b]).

Concluding that the issue is ripe for judicial review because under Labor Law § 220-b (3) (b) debarment occurs by operation of law upon a determination of a second willful failure to comply with article 8 of the Labor Law, we hold that — for the debarment penalty purpose only — Hull’s contemporaneous and similar conduct at issue provides the basis for a single willful determination. Thus, we reverse.

Petitioner-appellant Hull Corporation entered into three [478]*478public work contracts in 1984-1985. The first contract involved construction of an interchange along Route 790 in the Syracuse area (Syracuse contract). The second and third contracts involved highway construction work in the Utica area (Utica contracts). As a contractor, it was bound under Labor Law § 220 (3) and the contracts to pay the employees not less than the prevailing rate of wages and supplements in each employee’s trade or occupation in the locality where the project was located.

While Hull was performing these contracts, the Commissioner of Labor issued a redetermined wage schedule effective from July 1, 1985 to June 30, 1986. After Hull was notified that the new schedule was applicable to ongoing projects, it chose not to pay its employees the redetermined wages pending a challenge to the Commissioner’s authority to affect these three contracts. Hull established three private "escrow” accounts into which it deposited the respective wage differentials between the original and the redetermined schedules. The Commissioner’s redetermination power was ultimately upheld (Matter of General Bldg. Contrs. v Roberts, 118 AD2d 173 [1986], lv denied 68 NY2d 612), and Hull paid the "escrowed” money with interest to its employees.

Prior to the 1988 Utica contract determinations under review in this appeal, Hull was debarred for five years based on two 1986 determinations of willful violations, the second of which was based on the Syracuse contract (see, Matter of Hull-Hazard, Inc. v Roberts, 129 AD2d 348 [1987], affd 72 NY2d 900 [1988]; see, Matter of Hull-Hazard, Inc. v Roberts, 136 AD2d 872 [1988], mod 74 NY2d 710 [1989] [upheld Commissioner’s determination regarding Syracuse contract]). This debarment, set to expire in August of 1991, and its predicate 1986 determinations of willful violations are not under review here and Hull seeks no relief in that respect in this appeal.

However, in May 1988, the Commissioner issued two more orders and determinations finding Hull had willfully failed to pay the redetermined wage rate and supplements on its September 1984 and January 1985 Utica contracts. These contracts and administrative determinations are the essential subjects of this appeal. Hull’s petition challenges the multiple willful determinations based on its contemporaneous similar conduct only for debarment purposes, and does not challenge the Utica determinations themselves or the civil penalties or wage payments imposed thereunder.

[479]*479Initially, we must address the Appellate Division conclusion that judicial review is premature because the Commissioner has not yet rendered a new, formal or extended debarment order based on the two Utica contract willful violations (156 AD2d 985). We disagree.

The debarment provision of the Labor Law provides that "[w]hen final determinations have been rendered against a contractor * * * in two instances within [a] consecutive six-year period determining that such contractor * * * has wilfully [sic] failed to pay the prevailing rate of wages or to provide supplements * * * such contractor * * * shall be ineligible to submit a bid on or be awarded any public work contract with the state * * * for a period of five years from the second final determination” (Labor Law § 220-b [3] [b] [emphasis added]). The statute uses the compulsory term "shall”, and while the Commissioner may issue a separate debarment document (see, Garden State Brickface & Stucco Co. v Roberts, 121 AD2d 597, lv denied 69 NY2d 601), the legal force of the penalty is self-executing by statutory command as of the date of the second final determination of willful violation. The debarment penalty automatically forecloses Hull from bidding on and being awarded public work contracts by operation of statutory prescription (see, Matter of Dadson Plumbing Corp. v Goldin, 104 AD2d 346, 347, mod 66 NY2d 713). Thus, the Commissioner’s formal order of debarment may be viewed as a ministerial implementation of the juridical event, like the striking of an attorney’s name from the Roll of Attorneys after automatic disbarment for a felony conviction (Judiciary Law § 90).

The conclusion that debarment is automatic potentially affects the length of Hull’s debarment. If the May 1988 Utica contract determinations of double willful violations are considered to be discrete from the August 1986 Syracuse contract determination for debarment purposes — as the Commissioner declared and as Hull now disputes — then Hull’s debarment would by statute be automatically extended until May 1993. Resolution of the disputed legal question will thus "have an immediate practical effect on the conduct of the parties” (New York Pub. Interest Research Group v Carey, 42 NY2d 527, 530), and the matter is therefore ripe for judicial review.

Turning to the pivotal issue on the merits, we must resolve whether Hull’s contemporaneous similar conduct in violating the article 8 Labor Law prevailing wage and supplement [480]*480provisions in its performance of three contracts can be trifurcated into discrete determinations of willful violations under Labor Law § 220-b (3) (b) for debarment purposes.

The Commissioner’s two May 1988 orders and determinations concluded that Hull had willfully failed to pay its employees on the two Utica contracts the prevailing rate of wages and supplements to which they were entitled from August 1985 to March 1986. Previously, the Commissioner’s August 1986 order and determination had concluded, among other things, that Hull had willfully underpaid wages and supplements on the Syracuse contract during the period of August 1985 to July 1986. The Commissioner expressly rendered separate determinations for these three contracts, treating each as a separate willful violation for debarment purposes (Labor Law § 220-b [3] [b]). This compounding of the violation for the purpose of aggregating and inflicting the most severe administrative penalty — debarment from future bidding for five years — is not within the reach of the statute and our interpretations of it.

Labor Law § 220-b (3) (b) "clearly requires one final determination prior to

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Bluebook (online)
571 N.E.2d 54, 77 N.Y.2d 475, 568 N.Y.S.2d 884, 1991 N.Y. LEXIS 361, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hull-corp-v-hartnett-ny-1991.