Kruczek v. Wisconsin Department of Workforce Development

2005 WI App 12, 692 N.W.2d 286, 278 Wis. 2d 563, 2004 Wisc. App. LEXIS 1077
CourtCourt of Appeals of Wisconsin
DecidedDecember 28, 2004
Docket04-0090
StatusPublished
Cited by19 cases

This text of 2005 WI App 12 (Kruczek v. Wisconsin Department of Workforce Development) 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
Kruczek v. Wisconsin Department of Workforce Development, 2005 WI App 12, 692 N.W.2d 286, 278 Wis. 2d 563, 2004 Wisc. App. LEXIS 1077 (Wis. Ct. App. 2004).

Opinion

HOOVER, RJ.

¶ 1. John Kruczek and Kruczek Construction, Inc. (collectively, Kruczek), appeal a judgment affirming the Department of Workforce Development's debarment of Kruczek from municipal and state public works projects for six months. Kruc-zek contends among other things that DWD failed to abide by certain mandatory timelines, invalidating Kruczek's debarment. The court upheld DWD's interpre *571 tation of the time frame as directory. We agree with DWD's interpretation and therefore affirm that portion of the judgment. Kruczek's additional arguments will be discussed below. DWD cross-appeals the portion of the judgment determining it could only debar Kruczek from municipal, not state, projects. We conclude the circuit court lacked jurisdiction to consider that issue, and we therefore reverse that portion of the judgment.

Background

¶ 2. Kruczek is a contractor that works primarily on municipal sewer and water projects. Municipal projects are subject to the "prevailing wage" rules of Wis. Stat. § 66.0903. 1 On January 7,1999, a prevailing wage complaint was filed with DWD on behalf of Kruczek's former employee Justin Francken. 2 Francken complained Kruczek had improperly paid him for three projects by paying him at the lower "flagman" rate instead of the "topman" rate and by neglecting to pay overtime. The complaint was amended on April 8,1999, to correctly identify the projects at issue.

¶ 3. According to Kruczek, it initially attempted to settle the claim. When that was unsuccessful, Kruc-zek responded to the complaint on August 6, 1999, denying any wrongdoing. Kruczek stated it correctly paid Francken at the flagman rate.

¶ 4. In January 2000, M.J. Dixon was assigned as a new investigator on the claim. On February 3, 2000, Kruczek sent information at Dixon's request. On February 23, Dixon issued preliminary findings that Kruc- *572 zek failed to pay Francken the correct amounts, resulting in a deficiency of over $4,400.

¶ 5. On February 29, Kruczek requested an informal hearing, essentially appealing Dixon's findings. The hearing was scheduled for June 27, 2000, with Robert Anderson presiding as the examiner. During the hearing, Kruczek proposed a settlement of just under $3,800.

¶ 6. As part of the settlement, Kruczek drafted a release for Francken to sign. The release asked Francken to give up claims under various federal acts as well as the right to sue in tort or contract. DWD, by Anderson, objected to the initial draft because Francken was entitled to his wages under the statutes regardless of any other claim. Additionally, that language had not been approved at the hearing.

¶ 7. A revised release was ultimately executed on August 24, 2000. It contained an explicit denial of wrongdoing by Kruczek and a statement that the wage complaint was to be "withdrawn and dismissed with prejudice." The release was signed only by Francken. Once Francken signed the release, DWD accepted the settlement and closed the case.

¶ 8. On August 24, 2001, DWD sent Kruczek a "Notice of Proposal to Debar," signed by Anderson and based on the wage violations in Francken's complaint. Debarment is governed by Wis. Admin. Code ch. DWD 294 under rule-making authority granted by Wis. Stat. §§ 66.0903(12)(e) and 103.49(7)(e). The notice incorporated by reference the findings of investigator Dixon from the wage complaint.

¶ 9. Kruczek replied to the notice on September 17, and Anderson issued proposed findings of fact and a proposed order on October 3. On October 22, 2001, Kruczek responded to the proposed order. On February 28, 2003, DWD issued a final decision by Howard *573 Bernstein, debarring Kruczek from bidding on state and municipal projects for six months.

¶ 10. Kruczek appealed to the circuit court, which essentially upheld DWD's final decision. However, the court agreed with Kruczek that because Francken's claim arose from an alleged violation of the prevailing wage laws for municipal, not state, projects, DWD exceeded its authority in debarring Kruczek from state projects. Kruczek appeals the part of the judgment affirming DWD, raising seven main arguments: (1) DWD took too long to issue its debarment decision under the administrative code; (2) this delay violated due process; (3) claim and issue preclusion prevent DWD's debarment action; (4) the "withdrawal" of the wage complaint left insufficient evidence on which DWD could base a debarment decision; (5) DWD did not provide an impartial decision maker; (6) DWD failed to find a major violation of the wage law; and (7) DWD failed to find Kruczek's debarment was in the public interest. DWD cross-appeals the circuit court's determination that it could not debar Kruczek from state projects.

Discussion

I. Whether the code is mandatory or directory

¶ 11. Wisconsin Admin. Code § DWD 294.05(5)(b) says that upon appeal of proposed findings of fact, the department's representative "shall issue a findings of fact and final order within 30 calendar days of the receipt of the last argument filed." Kruczek maintains that this thirty-day time frame is mandatory and the debarment is therefore invalid because it took DWD fifteen months to issue its determination. DWD maintains the time frame is directory.

*574 ¶ 12. Interpretation of an administrative rule or regulation, like statutory interpretation, is a question of law this court reviews de novo. Trott v. DHFS, 2001 WI App 68, ¶ 4, 242 Wis. 2d 397, 626 N.W.2d 48. We review the agency’s determination, not the trial court's. Id. We are not bound by the agency's legal conclusions although we generally give great weight deference to an agency's interpretation of its own rules unless it is inconsistent with the language of the regulation or clearly erroneous. 3 Irby v. Bablitch, 170 Wis. 2d 656, 659, 489 N.W.2d 713 (Ct. App. 1992).

¶ 13. When interpreting administrative regulations, we generally use the same rules as those for statutory construction. State v. Busch, 217 Wis. 2d 429, 441, 576 N.W.2d 904 (1998). "The general rule is that the word 'shall' is presumed mandatory when it appears in a statute." Karow v. Milwaukee Cty. Civ. Serv. Comm'n, 82 Wis. 2d 565, 570, 263 N.W.2d 214 (1978). *575 When the words "shall" and "may" appear in the same section of a statute, we can infer the author was aware of the different denotations and intended the words' precise meanings. Id. at 571.

¶ 14.

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Bluebook (online)
2005 WI App 12, 692 N.W.2d 286, 278 Wis. 2d 563, 2004 Wisc. App. LEXIS 1077, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kruczek-v-wisconsin-department-of-workforce-development-wisctapp-2004.