Wright v. Herb Wright Stucco, Inc.

Order reversed, without costs, motion granted, and complaint dismissed. Memorandum: Defendant Jewel Builders was the general contractor for the Perinton Residential Project. According to its contract with Perinton-Fairport Houses, Inc., a subsidiary of the New York State Urban Development Corporation, Jewel Builders was required to pay "prevailing wages” and to impose the same obligation on each of its subcontractors. Plaintiffs worked on the Perinton Residential Project as employees of the Herb Wright Stucco, Inc., a subcontractor of Jewel Builders. Alleging that they were paid less than the "prevailing wage”, these plaintiffs sought to enforce their rights as third-party beneficiaries of the contract between Jewel Builders and Perinton-Fairport Houses, Inc. Jewel Builders and Perinton-Fairport Houses, Inc., moved to dismiss the complaint, contending that plaintiffs’ sole and exclusive remedy is the statutory enforcement proceeding found in the Labor Law. They appeal Special Term’s order denying their motion, and we reverse. Plaintiffs have no common-law cause of action against appellants. The dissenters, in upholding plaintiffs’ right to sue as third-party beneficiaries, rely upon Fata v Healy Co. (289 NY 401). In that case the Court of Appeals stated quite clearly (in dicta, to be sure) that employees do not have a common-law contractual right based upon a provision in the contract that the "contractor shall pay prevailing wages” as defined by section 220 of the Labor Law. In Fata the action was permitted because the contract contained not only a general reference to "prevailing wages”, as here, but also a "schedule of wages” filed by the fiscal officer before the contract was bid and executed which stated plaintiff’s hourly rate. The Court of Appeals held that since the wages were set forth in a schedule, the obligation was fixed and a common-law action was proper. In doing so, however, the court distinguished the case from others, such as the one before us now, which contain only a reference to "prevailing wages”. It stated: "It seems plain that nothing that was said or decided in [People ex rel. Rodgers v Coler, 166 NY 1] indicates that where a valid statute requires the insertion of provisions 960 intended for the protection of laborers or other groups in contracts relating to matters which are subject to regulation by the State, no contractual obligation is created which may be enforced by action brought by one of the group for whose benefit the provisions have been inserted. No rule so broad is justified by reason or authority, though in many cases—perhaps in most cases—limitations not only of the scope of the statutory obligations but also of the remedy for its violation may apply also to the contractual obligation formulated in the same language. No such problem is here presented. Here the agreement which the parties have inserted in their contract is not an agreement merely to pay wages at an unfixed rate not less than the 'prevailing rate’ as defined by the statute, but an agreement to pay wages at rates fixed in accordance with the statute and set forth in a schedule of wages annexed to the contract” (Fata v Healy Co., supra, at p 406; see, also, Olsen v Brooklyn Ash Removal Co., 268 NY 693). Moreover, there are persuasive policy reasons why the prevailing wages for any given locality should be determined uniformly by administrative action rather than judicially and why employers should not be subject to numerous actions by their employees when the Legislature has established an efficient and expeditious method for employees to obtain relief. All concur, except Cardamone, J. P., and Hancock, Jr., J., who dissent and vote to affirm the order, in the following memorandum.