Vaughn Industries, Inc. v. Dimech Services

856 N.E.2d 312, 167 Ohio App. 3d 634, 2006 Ohio 3381
CourtOhio Court of Appeals
DecidedJune 30, 2006
DocketNo. WD-05-039.
StatusPublished
Cited by8 cases

This text of 856 N.E.2d 312 (Vaughn Industries, Inc. v. Dimech Services) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vaughn Industries, Inc. v. Dimech Services, 856 N.E.2d 312, 167 Ohio App. 3d 634, 2006 Ohio 3381 (Ohio Ct. App. 2006).

Opinion

Pietrykowski, Judge.

{¶ 1} This case is before the court on appeal from a judgment of the Wood County Court of Common Pleas, which granted in part the summary judgment motion of plaintiff-appellee, Vaughn Industries, Inc. (“Vaughn”), in its action against defendant-appellant, Shambaugh & Son, L.P. (“Shambaugh”). In granting the motion in part, the court entered judgment in favor of Vaughn and against Shambaugh with respect to Vaughn’s claim for violations of the prevailing-wage law. Specifically, the court held that Shambaugh violated R.C. 4115.05 by allowing apprentices to work for it in excess of the allowable ratio of apprentices to skilled workers and violated R.C. 4115.071 by failing to prepare certified payroll reports in accordance with the regulations of the Ohio Administrative Code. In denying the motion in part, the court held that Shambaugh did not intentionally commit the violations of the prevailing-wage law. The court further ordered Shambaugh to pay $24,110 toward Vaughn’s attorney fees. Shambaugh now challenges the trial court’s judgment through the following assignments of error:

{¶ 2} “1. The trial court committed reversible error when it substituted its judgment for that of the agency charged with enforcing the prevailing wage law by failing to defer to O.A.C. 4101:9-4-16(H) regarding the meaning of ‘allowable ratio’ of apprentices to journeymen.

{¶ 3} “2. The trial court committed reversible error when it held that Shambaugh & Son, L.P. violated R.C. 4115.071(C) by submitting certified payroll reports containing an affirmation of payment of the scheduled fringe benefit rates set forth in the applicable prevailing wage determination because Shambaugh is signatory to the collective bargaining agreement from which the scheduled fringe benefit rates are derived.

{¶ 4} “3. The trial court committed reversible error when it awarded Vaughn its attorney’s fees against Shambaugh & Son, L.P.”

*637 {¶ 5} The undisputed facts of this case are as follows. On July 31, 2000, Bowling Green State University (“BGSU”), a public institution, began accepting bids for contract work on the BGSU student-union project. Vaughn and Dimech Services both submitted bids for the prime mechanical/heating, ventilating, and air conditioning contract for the project. Dimech was awarded that contract and subcontracted the fire suppression/sprinkler work to Shambaugh. Shambaugh is a signatory to a collective bargaining agreement (“the CBA”) between the National Fire Sprinkler Association, Inc. and the Road Sprinkler Fitters Local Union No. 669. Article 16 of the CBA addresses the issue of the ratio of apprentices to journeymen and reads: “Employers employing Apprentices under the terms and conditions of this Amendment shall be allowed one (1) Apprentice to the first Journeyman and one (1) Apprentice to each Journeyman thereafter. No Apprentice may be employed on a job where there are no Journeymen employed.”

{¶ 6} In September 2002, Vaughn filed a complaint with the Ohio Department of Commerce that alleged that Shambaugh had violated the prevailing-wage laws in Ohio by failing to pay employees working on the project the prevailing wage and benefits, misclassifying employees, and failing to maintain the required journeyman-to-apprentice ratio. The director of commerce did not rule on the merits of the complaint within 60 days of its filing, and so, pursuant to R.C. 4115.16(B), Vaughn was authorized to pursue its action in common pleas court.

{¶ 7} On January 27, 2003, Vaughn filed a complaint in the Wood County Court of Common Pleas against Dimech Services and six of its subcontractors involved in the project, including Shambaugh. Vaughn filed the complaint pursuant to R.C. 4115.16, alleging violations of Ohio’s prevailing-wage law. Vaughn alleged that Shambaugh violated Ohio’s prevailing-wage law while working on the project by failing to maintain the required journeyman-to-apprentice ratio at the worksite and by failing to prepare certified payroll reports enumerating each employee’s fringe-benefit payments. Vaughn further alleged that Shambaugh’s violations of the prevailing-wage law were intentional in that Shambaugh knowingly submitted incomplete or erroneous certified payroll reports, intentionally misclassified employees as apprentices rather than journeymen for the purpose of reducing their wages, and intentionally failed to comply with the allowable ratio of apprentices to skilled workers. Vaughn then sought against Shambaugh and the other defendants declaratory and injunctive relief, restitution to the affected employees in the form of back pay and statutory penalties, and attorney fees and costs.

{¶ 8} On September 15, 2004, both Shambaugh and Vaughn filed motions for summary judgment in the court below. Vaughn asserted that as a matter of law, Shambaugh was required to maintain a journeyman-to-apprentice ratio of one-to-one on the project worksite at all times, that Shambaugh failed to maintain that *638 ratio, and that therefore it violated Ohio’s prevailing-wage law by effectively paying apprenticeship wages and benefits to employees who would otherwise be earning journeyman-scale wages and benefits. Vaughn further asserted that as a union-signatory contractor with over 1,000 employees, some of whom have participated as members of the Joint Apprenticeship Training Committee, Shambaugh cannot plead ignorance of the ratio requirements, and so Shambaugh’s violations must be seen as intentional, not accidental. Next, Vaughn argued that Shambaugh violated the prevailing-wage law by failing to itemize in its certified payroll reports the fringe-benefit payments made on behalf of each employee. Rather, Vaughn asserted, the payroll reports simply listed the employee’s base pay and deductions for various state and federal taxes, and then included a category marked “Union DED.” Because Shambaugh did not document where the “Union DED” monies were allocated, Vaughn asserted that there was no way to assure that the proper contributions were being made to bona fide plans or programs. Vaughn further asked the court to determine whether the statements of compliance prepared by Kim Pedersen, Shambaugh’s payroll officer, and attached to the certified payroll reports for the period in question, constituted compliance with the requirements of R.C. 4115.071(C). On the statements of compliance, Pedersen put an “X” next to the paragraph that reads: “In addition to the basic hourly wage rates paid to each laborer or mechanic listed in the above referenced payroll, payments of fringe benefits as listed in the contract have been or will be made to appropriate programs for the benefit of such employees, except as noted in Section 4(c) below.” Finally, Vaughn argued that because the undisputed facts demonstrated that Shambaugh had violated sections of Ohio’s prevailing-wage law, Vaughn was entitled to an award of attorney fees and costs pursuant to R.C. 4115.16(D).

{¶ 9} In its motion for summary judgment and memorandum in opposition to Vaughn’s summary judgment motion, Shambaugh asserted that it had complied with the ratio requirements of the statutes and collective-bargaining agreement by maintaining a company-wide or shop ratio of journeyman to apprentices of one-to-one. With regard to the alleged violations of R.C. 4115.071(C), Shambaugh asserted that Pedersen’s affirmations on the statements of compliance were undisputed evidence that Shambaugh accurately completed the certified payroll reports.

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Bluebook (online)
856 N.E.2d 312, 167 Ohio App. 3d 634, 2006 Ohio 3381, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vaughn-industries-inc-v-dimech-services-ohioctapp-2006.