Machuca v. Collins Bldg. Servs., Inc.

Machuca v Collins Bldg. Servs., Inc.

2024 NY Slip Op 30816(U)

March 13, 2024

Supreme Court, New York County

Docket Number: Index No. 651676/2023

Judge: Gerald Lebovits

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This opinion is uncorrected and not selected for official

publication.

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SUPREME COURT OF THE STATE OF NEW YORK

NEW YORK COUNTY

PRESENT: HON. GERALD LEBOVITS PART 07

Justice

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MICHAEL MACHUCA and MICHAEL LEWIS,

MOTION DATE 02/28/2024

Plaintiffs,

MOTION SEQ. NO. 001

-v-

COLLINS BUILDING SERVICES, INC., DECISION + ORDER ON

MOTION

Defendant.

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The following e-filed documents, listed by NYSCEF document number (Motion 001) 11, 12, 13, 14, 15,

16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27

were read on this motion for DISMISSAL .

Virginia & Ambinder, LLP, New York, NY (Lloyd R. Ambinder and Jenny S. Brejt of counsel),

for plaintiffs.

Jackson Lewis P.C., White Plains, NY (Rebecca M. McCloskey of counsel), for defendant.

Gerald Lebovits, J.:

In this putative class action, named plaintiffs Michael Machuca and Michael Lewis have

sued defendant, Collins Building Services, Inc. Plaintiffs allege that Collins breached contractual

provisions made for plaintiffs’ benefit that assertedly required Collins to pay them prevailing

wages for their labor. Collins moves under CPLR 3211 (a) (1) and (a) (7) to dismiss the

complaint in its entirety or, in the alternative, to dismiss plaintiffs’ class claims. The motion is

denied.

BACKGROUND

Plaintiffs have alleged that they were employed by Collins. In that capacity, they contend,

they performed “various types of exterior and interior building cleaning and maintenance work”

at the MetroTech complex in Brooklyn, pursuant to contracts between Collins and “the City of

New York or agents of the City of New York.” (NYSCEF No. 1 at ¶¶ 6-7.) Plaintiffs further

allege that under the contracts between Collins and the City, Collins was required to pay

plaintiffs the prevailing wages for their cleaning and maintenance work, but did not do so; and

that plaintiffs may bring a third-party beneficiary claim against Collins for this alleged breach of

contract. (See id. at ¶¶ 12-15.)

Collins moves to dismiss under CPLR 3211. Collins’s motion relies on the affidavit of its

vice president of human resources. (See NYSCEF No. 13.) The affidavit attaches copies of what

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it represents to be copies of the relevant contracts. (See id. at ¶¶ 4-6; NYSCEF Nos. 14-18.)

Plaintiffs do not dispute this representation.

The contracts each recite that Collins is agreeing to provide janitorial cleaning services to

First New York Partners Management, LLC, as the authorized agent of several LLCs and

partnerships that own different buildings and areas within the MetroTech complex.1 The

contracts do not reference the City of New York as a party. Nor do they indicate that any of the

entities named in the contracts as Collin’s counterparties are contractors or subcontractors of the

City. And the contracts do not include any express undertaking by Collins to pay prevailing

wages. At most, they provide that Collins “shall, in the conduct of its operations, comply with all

applicable laws, orders and regulations of any governmental and/or quasi-governmental

authorities having jurisdiction over the Services being provided by Contractor hereunder.”

(NYSCEF No. 15 at § 6.)

DISCUSSION

As an initial matter, the complaint is evidently inaccurate in having alleged, on

information and belief, that Collins’s contracts “set forth the terms and conditions for paying

prevailing rates of wages and supplemental benefits to the Plaintiffs.” (NYSCEF No. 1 at ¶ 12.)

It also appears somewhat doubtful that the complaint is correct in alleging that Collins or its

agents entered into “publicly financed contracts . . . with the City of New York.” (Id. at ¶ 2.) This

court does not view these discrepancies as themselves rendering the complaint subject to

dismissal. The sufficiency of the complaint, though, must be judged on the actual terms of the

contracts as supplied on this motion, not on the complaint’s descriptions of those contracts.

Collins argues that the complaint must be dismissed under CPLR 3211 because (i)

plaintiffs may not sue to enforce the contracts as third-party beneficiaries; and (ii) plaintiffs are

not entitled to prevailing wages in any event. Collins also argues, in the alternative, that the class

claims asserted in the complaint must be dismissed as foreclosed by CPLR 901 (b). These

arguments are unpersuasive.

I. Collins’s Argument that Plaintiffs May Not Sue as Third-Party Beneficiaries

Collins contends first that plaintiffs may not bring third-party beneficiary claims alleging

that it breached its janitorial contracts by failing to pay plaintiffs prevailing wages, because those

contracts do not contain provisions that expressly require payment of prevailing wages. (See

NYSCEF No. 12 at 5-7.) That is, Collins asserts, a third-party beneficiary prevailing-wage claim

“will only survive a motion to dismiss where a prevailing wage provision is included in the

contract that creates a contractual obligation pursuant to which a contractor’s employees have

standing to become third-party beneficiaries to the contract.” (Id. at 6.) Absent “prevailing wage

language in the subject contract,” Collins says, “a plaintiff’s third-party beneficiary claim must

be dismissed.” (Id.)

1

The affidavit represents that a different company later acquired the umbrella organization of

those LLCs and partnerships; and that Collins has since performed its contractual janitorial

services for the acquiring company. (NYSCEF No. 13 at ¶ 5.)

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Collins’s contention fails. It is foreclosed by the Court of Appeals’s decision in Filardo v

Foley Bros., Inc. (297 NY 217 [1948], revd on other grounds sub nom Foley Bros, Inc. v Filardo

336 US 281 [1949]), and the decision of the Appellate Division, First Department, in Lewis v

Hallen Construction Co., Inc. (193 AD3d 511 [1st Dept 2021]).

Filardo involved a claim for overtime pay brought by an employee of a federal-

government contractor. The underlying contract included a provision under which “defendants

agreed to ‘obey and abide by all applicable laws . . . of the United States.’” (297 NY at 219

[quoting contract].) The employee alleged that defendants had failed to pay him overtime pay in

violation of an applicable federal law. (Id. at 219-220.) The Appellate Division, reversing a jury

verdict in the employee’s favor, held that the claim was subject to dismissal because the federal

overtime-pay law at issue did not give rise to a private right of action. (Filardo v Foley Bros,

Inc., 272 AD 446, 448-449 [1st Dept 1947].)

The Court of Appeals, rejecting the Appellate Division’s legal conclusion, held first that

the statute should be construed as including an implied private right of action. (297 NY at 221-

225.) But the Court then went on to hold that “quite apart from the cause of action given by the

statute,” the employee “clearly has a right to sue on the basis of the contract between defendants

and the Federal Government.” (Id. at 225.) Because defendants, “by their contract with the

government, expressly agreed to ‘obey and abide by all applicable laws . . . of the United

States,’” including the overtime statute, the contract, “when related to the statute, was, in effect,

a promise to pay extra compensation for overtime work, and entitled an aggrieved laborer or

mechanic to enforce that promise as a third party beneficiary.”2 (Id. at 225-226.)

Similarly, Collins’s contracts at issue here include an express commitment to comply

with all applicable laws and regulations of any governmental authority with jurisdiction over

Collins’s contractual services. If an applicable law or regulation required Collins to pay

prevailing wages to its employees providing services pursuant to the contract, those employees

may sue to enforce that prevailing-wage requirement as third-party beneficiaries.

Collins attempts to distinguish Filardo on the ground that the employee in that case was

hired to perform work “pursuant to a contract his employer had directly with the federal

government.” (NYSCEF No. 25 at 5.) Collins does not explain, though, why this distinction

should make a difference. That the employee was working pursuant to a federal contract would

affect only whether the overtime statute at issue applied to the employee’s work (see 297 NY at

219-220)—not the employee’s right to bring a third-party beneficiary claim to enforce the

contract’s implicit incorporation of the obligations of federal statutes where they applied.

Collins does not provide any authority since Filardo that would undermine its binding

effect on this court. At most, Collins identifies a decision of the Court of Appeals, and one of the

2

The U.S. Supreme Court reversed the Court of Appeals’s decision in Filardo on the ground that

the federal overtime statute did not apply to work performed by employees of a private

contractor in a foreign country. The Court therefore expressly declined to reach the third-party

beneficiary issue. (See 336 US at 284-291.)

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Appellate Division, Second Department, holding that an employee may sue as a third-party

beneficiary to enforce contracts that expressly incorporate prevailing-wage requirements

imposed by statute. (See NYSCEF No. 12 at 6, citing Wright v Herb Wright Stucco, Inc., 50

NY2d 837, 839 [1980], revg on op below, 72 AD2d 959, 960-961 [4th Dept 1979] [Cardamone,

P.J., and Hancock, J., dissenting]; Stennett v Moveway Transfer & Stor., Inc., 97 AD3d 655, 656-

657 [2d Dept 2012].) That these decisions have held express contractual incorporation of

prevailing-wage requirements to be sufficient to support a third-party beneficiary claim does not,

as Collins suggests, mean that this kind of express incorporation language is necessary to support

a claim. Nor does any language in Wright, Stennett, or the cases cited in those decisions indicate

that express incorporation language is necessary.3

In any event, the First Department’s 2021 decision in Hallen Construction reaffirms

Filardo’s holding that a contract’s implicit or indirect incorporation of statutory wage

requirements will support an employee’s third-party beneficiary claim. That case, like this one,

involves a breach-of-contract claim for failure to pay prevailing wages, brought by asserted

third-party beneficiaries of a construction contract. Before the motion court, defendant argued

under CPLR 3211 (a) (2) that jurisdiction was absent as a matter of federal labor preemption,

because resolving plaintiffs’ claims assertedly required interpreting the terms of related

collective-bargaining agreements. (See Lewis v Hallen Constr. Co., Inc., 2019 NY Slip Op

31205[U], at *1-2 [Sup Ct, NY County 2019].) Supreme Court (Jaffe, J.) rejected that argument.

One of the two construction contracts at issue included a “provision mandating compliance with

all applicable federal and state laws” and thus, “perforce, include[d] an agreement to pay

statutorily mandated wage rates”—giving rise to a third-party contractual “right to prevailing

wages . . . independent of the collective bargaining agreements.”4 (Id. at *3, citing Filardo, 297

NY at 225.) The court then went on to deny the contractor’s CPLR 3212 request for summary

judgment, concluding that the contractor had not made out a prima facie case for judgment as a

matter of law because plaintiffs had viable claims to “payment of prevailing wages deriv[ing]

from their status as third-party beneficiaries to utility contracts.” (Id. at *4.)

On appeal, the contractor argued again that plaintiffs’ claims were preempted. In

challenging the motion court’s conclusion that plaintiffs could rely on a contract’s “general

requirements that the parties abide by all federal, state and local laws,” the contractor contended

that these requirements were “legally insufficient to convert [plaintiffs’] claims to prevailing

wage claims” absent an independent basis to require the contractor to pay prevailing wages. (Br.

for Defendant-Appellant, Hallen Constr., 2020 WL 9216008, at *35 [1st Dept Oct. 4, 2020].) In

advancing this contention, the contractor asserted that Filardo was distinguishable and that “the

3

To the extent that the U.S. Court of Appeals for the Second Circuit has interpreted these cases

as imposing an express-incorporation requirement (see Ramos v SimplexGrinnell LP, 740 F3d

852, 858 [2d Cir 2014] [citations omitted]), this court respectfully disagrees with the Second

Circuit’s interpretation.

4

The other construction contract directly and expressly required payment of prevailing wages

required by New York City Administrative Code § 19-142, which in turn incorporated by

reference Labor Law § 220. (See Br. for Plaintiffs-Respondents, Hallen Constr., 2020 WL

9216009 at *12 [1st Dept Dec. 9, 2020] [quoting contract language].)

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lower court erred in its reliance on Filardo to create a state law cause of action where none

exists.” (Id. at *36.)

The First Department affirmed. (193 AD3d 511.) The court held that the motion court

had correctly held that plaintiffs’ claims were not preempted because they rested on an

independent third-party-beneficiary contractual theory. (See id. at 511, citing Wysocki v Kel-Tech

Constr. Inc., 46 AD3d 251 [1st Dept 2007].) The statutory prevailing-wage requirements, the

First Department found, applied to plaintiffs’ work “pursuant to both Administrative Code of

City of N.Y. § 19-142 and a contractual provision.” (Id.) In so doing, the First Department

necessarily held that a plaintiff could rest a third-party beneficiary claim on a contractual

provision that impliedly incorporated prevailing-wage requirements through mandating

compliance with all applicable laws. Otherwise, the Court would have had to modify or reverse,

rather than affirm, the motion court’s denial of summary judgment with respect to plaintiffs’

reliance on the construction contract that lacked a provision expressly incorporating prevailing-

wage obligations.

In short, Collins misses the mark in arguing that plaintiffs here are categorically

foreclosed from seeking to enforce the contracts in this case as alleged third-party beneficiaries.

But that conclusion does not end the inquiry. Plaintiffs still must sufficiently allege for pleading

purposes that their work is subject to a state or local prevailing-wage ordinance, regulation, or

order: Absent such a governmental mandate, there would be nothing for the “compliance with all

laws” terms in the underlying contracts to incorporate, even implicitly. The court now turns to

that issue.

II. Collins’s Argument that Plaintiffs are Not Entitled to Prevailing Wages

The allegations in plaintiffs’ complaint, although brief and somewhat conclusory (see

NYSCEF No. 1 at ¶¶ 6-15), are sufficient to state a cause of action for breach of a contractual

obligation to pay prevailing wages. Indeed, Collins’s own motion papers address in detail the

applicability of the two prevailing-wage ordinances that could potentially apply to plaintiffs (see

NYSCEF No. 12 at 5, 8; NYSCEF No. 25 at 2), underscoring that the complaint suffices to put

Collins on notice of the basis of plaintiffs’ claims.

Beyond the incorporation-by-reference issue discussed above, Collins’s argument for

dismissal is that the affidavit of its vice president and the exhibits to that affidavit (including the

underlying janitorial contracts) show that plaintiffs lack a cause of action. (See NYSCEF No. 12

at 8-9; NYSCEF No. 25 at 2-4.) In substance, this argument rests on documentary evidence

under CPLR 3211 (a) (1). Collins has not, however, satisfied CPLR 3211 (a) (1)’s conditions for

a documentary-evidence dismissal.

A CPLR 3211 (a) (1) motion to dismiss “may be appropriately granted only where the

documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a

defense as a matter of law.” (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002].)

Evidence submitted in support of an (a) (1) motion will qualify as “documentary” only if it is

“unambiguous, authentic, and undeniable,” such as “judicial records and documents reflecting

out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents

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of which are essentially undeniable.” (Phillips v Taco Bell Corp., 152 AD3d 806, 807 [2d Dept

2017] [internal quotation marks omitted].) On the other hand, “[a]ffidavits are not documentary

evidence and are not appropriate on a CPLR 3211 (a) (1) motion to dismiss.” (Johnson v

Asberry, 190 AD3d 492, 492 [1st Dept 2021].)

At least two potential prevailing-wage provisions apply here: Labor Law § 231 and New

York City Administrative Code § 6-130. Collins has not provided documentary evidence that

conclusively refutes the applicability of either provision.

1. Labor Law § 231 (1) requires every “contractor” to pay prevailing wages to “service

employee[s] under a contract for building service work.” For these purposes, “building service

work” includes work performed by staff such as porters, handymen, and janitors “in connection

with the care or maintenance of an existing building.” (Labor Law § 230 (1), (2).) A “contractor”

is “any employer who employs employees to perform building service work under a contract

with a public agency,” including “any of the contractor's subcontractors.” (Id. § 230 [4].) “Public

agency” includes the state and any of its political subdivisions. (Id. § 230 [3].)

Collins argues that because its janitorial contracts, on their face, were made with private

entities, rather than with the City, the State, or another public entity, those contracts fall outside

the scope of Labor Law § 231. (See NYSCEF No. 25 at 2-3.) There is considerable force to this

argument, particularly given that the contracts indicate that the owners of the MetroTech

buildings are private, rather than public. (See e.g., NYSCEF No. 15 at 1.) But this court is not

persuaded, at least at this stage, that the contracts conclusively establish a defense to the

applicability of Labor Law § 231. The introductory recitals of the contracts do not, for example,

definitively rule out the possibility that separate contracts exist between a public agency such as

the City and the building owners, under which Collins is ultimately serving as a public-agency’s

subcontractor in providing janitorial services. This possibility may not, on the current record,

appear especially likely. Still, the court is not prepared at this early stage to hold as a matter of

law that plaintiffs could not obtain and provide evidence that Collins is acting as a public-agency

subcontractor for purposes of Labor Law §§ 230 and 231.

2. Administrative Code § 6-130 requires, among other things, that when a private entity

leases space to a publicly financed New York City agency or department that is both 10,000

square feet or more and at least 51 percent “of the total square footage of the building to which

the lease applies,” the lessor must ensure that all janitorial employees at the “premises to which

[the] lease pertains are paid” prevailing wages. (Admin Code § 6-130 [a], [b] [1].)

Collins contends, relying on its vice president’s affidavit and the attached building

diagrams, that only two buildings within the MetroTech complex come within the scope of this

requirement. (See NYSCEF No. 12 at 2-3, 8-9, citing NYSCEF No. 13 at ¶¶ 8-13 [affidavit];

NYSCEF Nos. 19, 20 [diagrams].) Collins further contends, relying on the affidavit, that

plaintiffs were assigned only to work elsewhere within the MetroTech complex. (See NYSCEF

No. 12 at 7-9, citing NYSCEF No. 13 at ¶¶ 14-17.) But the vice president’s affidavit is not

documentary evidence. (See Asberry, 190 AD3d at 429.) Its representations cannot support a

CPLR 3211 (a) (1) motion. The building diagrams do not qualify as documentary evidence,

either. Collins’s motion papers do not, for example, identify what entity prepared those diagrams

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or what information (from which source) was used to prepare them, much less establish that the

authenticity and accuracy of the diagrams is essentially undeniable.

The affidavit’s representations (and supporting documents) could ultimately prove to be

both accurate and sufficient to defeat plaintiffs’ third-party beneficiary claims. This court

expresses no opinion here on that possibility. But for purposes of the present motion, the

materials submitted by Collins are not enough to warrant dismissal under CPLR 3211 (a) (1).

III. Collins’s Argument that Plaintiffs May Not Bring Class Claims

In the alternative, Collins argues that CPLR 901 (b) forecloses plaintiffs from

maintaining this action on behalf of a potential class because Administrative Code § 6-130 (e)

(1) permits recovering punitive damages—thereby putatively exceeding the scope of class relief

permissible under CPLR 901. (See NYSCEF No. 12 at 10.) This argument is groundless. As

plaintiffs contend, this restriction “is inapplicable where the class representative seeks to recover

only actual damages and waives the penalty on behalf of the class, and individual class members

are allowed to opt out of the class to pursue their punitive damages claims.” (Downing v First

Lenox Terrace Assocs., 107 AD3d 86, 89 [1st Dept 2013] [reversing grant of motion to

dismiss].) Plaintiffs’ complaint does not seek penalties (whether in the form of liquidated

damages, punitive damages, or otherwise) (see NYSCEF No. 1 at 3); and plaintiffs represent in

opposing the motion that “[s]hould this class be certified, individual members of the class will

have an opportunity to opt-out and pursue liquidated damages if they so choose” (NYSCEF No.

24 at 11.) No more is required at the pleading stage.

Accordingly, it is

ORDERED that the branch of Collins’s motion seeking dismissal under CPLR 3211 of

the complaint in its entirety is denied; and it is further

ORDERED that the branch of Collins’s motion seeking dismissal under CPLR 901 (b)

and CPLR 3211 of plaintiffs’ class claims is denied; and it is further

ORDERED that Collins shall serve and file an answer within 20 days of entry of this

order; and it is further

ORDERED that the parties shall appear before this court for a telephonic preliminary

conference on April 19, 2024.

3/13/2024

It

HON. GERALD

$SIG$

LEBOVtfli

J.S.C.-

DATE

CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION

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GRANTED X DENIED GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

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