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Perez v. C.R. Calderon Construction, Inc.

United States District Court, District of Columbia

December 22, 2016

FREDDY PAZ PEREZ, et al ., Plaintiffs,
v.
C.R. CALDERON CONSTRUCTION, INC., et al ., Defendants.

          MEMORANDUM OPINION SETTING FORTH FINDINGS OF FACT AND CONCLUSIONS OF LAW

          BERYL A. HOWELL Chief Judge.

         Thirteen construction workers bring this action against a first-tier subcontractor and its owners, C.R. Calderon Construction, Inc. (“CRC”), Carlos R. Calderon and Ana P. Calderon (collectively, the “CRC defendants”), a second-tier subcontractor and its owner, Jacinto Construction, Inc. (“JCI”) and Jacinto E. Cespedes (“Jacinto Cespedes”) (collectively, the “JCI defendants”), and a company which served as a surety on a payment bond with CRC, Travelers Casualty and Surety Company of America (“Travelers”), for alleged violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., the District of Columbia Wage Payment and Collection Act (“DCWPCA”), D.C. Code § 32-1301 et seq., and the District of Columbia Minimum Wage Revision Act (“DCMWRA”), D.C. Code § 32-1001 et seq., and for common-law breach of contract.[1] The plaintiffs seek the payment of wages they claim are owed in connection with drywall, ceiling and other work they performed on a construction project at the H. Carl Moultrie Courthouse in Washington, D.C (the “Project”). The defendant CRC has asserted cross-claims for indemnification and breach of contract against the JCI defendants, and the JCI defendants, likewise, have asserted cross-claims for contribution and breach of contract against the CRC defendants. Following a bench trial, the Court concludes that the JCI and CRC defendants were plaintiffs' employers under the relevant statutes and are liable to plaintiffs for unpaid wages and statutory liquidated damages, and that Travelers is liable to the extent of its surety bond with CRC. Finally, since the Court declines to enforce the subcontracts between CRC and JCI, the various cross-claims among the CRC and JCI defendants are denied. The factual and legal findings supporting these conclusions are summarized after review of the procedural background in this case.

         I. PROCEDURAL BACKGROUND

         The plaintiffs' allegations as well as significant issues raised and either resolved or deferred in pre-trial motions are summarized below.

         A. CLAIMS

         The plaintiffs' operative complaint in this action, Pls.' First Amended Compl. (“Pls.' FAC”), ECF No. 40, asserts six claims for relief. All thirteen plaintiffs claim that the CRC and JCI defendants violated (1) the regular payment schedule requirement of the DCWPCA, by failing to pay the plaintiffs promptly, on regular payment dates, and upon the plaintiffs' discharge, for “all wages earned” for certain work performed, id. ¶¶ 39-50 (Count I); (2) the prompt payment requirement of the FLSA, by failing to pay the plaintiffs “promptly on regular payment dates” for certain work performed, id. ¶¶ 56-57 (Count III); (3) the minimum wage provisions of the DCMWRA, by failing to pay the plaintiffs minimum wages “for the first 40 hours that Plaintiffs worked” for certain work performed, id. ¶¶ 58-63 (Count IV); and (4) the minimum wage provisions of the FLSA, by failing to pay the plaintiffs minimum wages “promptly on regular payment dates” for certain work performed, id. ¶¶ 64-72 (Count V). All thirteen plaintiffs additionally claim that the defendant Travelers breached the terms of a payment bond by which Travelers, acting as a surety, agreed to answer for the debts owed by the defendant CRC to laborers on the Project. Id. ¶¶ 73-77 (Count VI). Lastly, nine plaintiffs- Gerardo Moya, Mario Moya, Peter Soto, Wilson Perez Zapata, Jose Lenin Rocha, Juan Amurrio Quiroz, Edgardo Pablo Terceros, Samuel Lopez, and Jose Rocha Cespedes-claim that all the defendants violated the overtime provisions of the FLSA and the DCMWRA by failing to pay these plaintiffs overtime wages earned. Id. ¶¶ 51-55 (Count II). The plaintiffs seek unpaid wages and liquidated damages in the total amount of approximately $340, 974.64, an unspecified amount in “unpaid overtime wages, ” id. at 13, “an additional amount of liquidated damages equal to the unpaid overtime wages, ” id. at 14, as well as attorneys' fees and costs.

         The defendant CRC, in its operative cross-complaint in this action, CRC's First Amended Cross-Compl. Against JCI Defs. (“CRC's Cross-Compl.”), ECF No. 79, asserts four cross-claims against the JCI defendants. Specifically, CRC claims that it is entitled to indemnification from the defendant JCI for any amounts found to be owed to the plaintiffs (1) based on “two sub-subcontract[]” agreements between CRC and JCI, id. ¶¶ 11-15 (Count I), and (2) by the Department of Labor for any Davis-Beacon Act violations arising from the plaintiffs' work on the Project, “[a]s a direct result of JCI's actions and inactions, ” id. ¶¶ 16-19 (Count II). CRC further claims that it is entitled to indemnification from the defendant Jacinto Cespedes, personally, for any amounts found by the Department of Labor to be owed to the plaintiffs for any Davis-Bacon Act violations arising from the plaintiffs' work on the Project, because Cespedes allegedly knowingly signed certified payrolls and false certifications that “JCI had paid for all labor supplied to the Project.” Id. ¶¶ 20-28 (Count III). Lastly, CRC asserts a breach of contract claim against the defendant JCI for damages in the amount of $200, 879.26 as a result of JCI's breach of the two subcontracts when JCI allegedly abandoned and failed to complete the work for the Project. Id. ¶¶ 29-36 (Count IV).

         The JCI defendants assert similar cross-claims against the CRC defendants. See JCI Defs.' Countercl. Against CRC Defs. (“JCI's Cross-Compl.”), ECF No. 29.[2] The JCI defendants claim that they are entitled to contribution from the CRC defendants “for any amounts found” to be owed by the JCI defendants to the plaintiffs. Id. at 3.[3] The JCI defendants further assert they are entitled to damages “resulting from breach of agreement” by the CRC defendants, and that the CRC defendants failed to pay JCI all it was owed under the parties' “agreement for services, ” id. ¶ 1, as well as “for extra work” performed by JCI outside the scope of the subcontracts, id. ¶ 2; “for overtime work” for which the CRC defendants promised to pay; for “holiday pay cost for the plaintiffs that [JCI] never contracted to pay, ” id. ¶ 4; and “for work [Cespedes] personally performed, ” id. ¶¶ 3-5.

         B. DISPOSITIVE MOTIONS

         The parties engaged in extensive motions practice requiring the resolution prior to trial of, inter alia, seven dispositive motions, including a motion to dismiss or, in the alternative, for summary judgment filed by Travelers, ECF No. 43; two motions for partial summary judgment filed by the plaintiffs, ECF Nos. 45, 96; and three motions for summary judgment filed by the CRC defendants, ECF Nos. 49, 95, 99.

         Specifically, the Court denied cross-motions filed by the plaintiffs and Travelers regarding the issue of Travelers' liability for breach of contract, under Count VI of the FAC, based on a payment bond in the amount of $929, 693, which Travelers signed as a surety on March 4, 2011, in connection with CRC's subcontract agreement (“Prime Subcontract”) with the Project's prime contractor, Whiting-Turner Contracting Company (“Whiting-Turner”).[4] Mem. & Order (July 10, 2013) at 2, ECF No. 58. Finding the language of the bond unambiguous, the Court concluded “that the plaintiffs are potential third-party beneficiaries of the bond” and held that, as a result, Travelers' liability, if any, depends entirely upon CRC's liability. Id. at 8, 10- 12; see Id. at 11 (“Travelers' obligation under the payment bond is co-extensive with [CRC]'s obligation to pay ‘all persons supplying labor . . . in the performance of the said Contract.'” (ellipsis in original)). CRC's liability and the plaintiffs' third-party-beneficiary status, however, could not definitively be determined due to a genuine dispute of material fact as to whether CRC was the plaintiffs' employer and “obligated to pay the plaintiffs for their work, ” which question “remain[ed] to be decided.” Id. at 11.

         For the same reason, the Court subsequently denied the CRC defendants' motion for summary judgment regarding whether the plaintiffs were the CRC defendants' “employees” for purposes of the DCWPCA, the DCMWRA, and the FLSA. Order (Nov. 15, 2013) at 1, ECF No. 74. Material factual disputes precluded a determination of whether the plaintiffs were the CRC defendants' “employees, ” including, inter alia, factual disputes as to whether the CRC defendants (1) had the express or de facto power to hire and fire the plaintiffs, (2) supervised or controlled the plaintiffs' work schedules or the conditions of the plaintiffs' employment or manner of work, (3) determined the rate and method of the plaintiffs' payment, and (4) maintained employment records for the plaintiffs. Id. at 2.

         Similarly, the Court denied the plaintiffs' motion for partial summary judgment regarding (1) whether the CRC and JCI defendants were the plaintiffs' “joint employers, ” (2) “the exact wage rate to which the plaintiffs are entitled, ” (3) whether CRC qualifies as an “enterprise under the FLSA, ”[5] and (4) whether the plaintiffs were “engaged in commerce” under the FLSA. Mem. & Order (Mar. 30, 2015) at 5-7, ECF No. 108. Notwithstanding that “both the CRC and JCI defendants apparently concede that the plaintiffs performed work for which they were not paid, in violation of established local and federal laws, . . . disputed facts about CRC's role in hiring the plaintiffs and/or the control, if any, CRC exercised over the plaintiffs, ” precluded summary judgment on the issue of “whether CRC should be considered a joint employer.” Id. at 5-6. The plaintiffs' request for a judicial determination that they were entitled to a wage rate of “$33.98 per hour up to 40 hours in a work week and $39.57 for each hour over 40 that they worked in a particular week” was also disputed and precluded resolution of that issue. In particular, the parties raised material issues about “the skill level required for the jobs assigned to the plaintiffs and the rate of pay to which they were entitled based on the jobs they actually performed, ” which issues were “dependent upon credibility determinations as to what was promised by Jacinto Cespedes and understood by the plaintiffs, which are quintessential determinations for the fact finder.” Id. at 6-7. In light of these factual disputes, the Court concluded that it was “premature to make a finding that CRC (and/or JCI) met the definition for enterprise liability under the FLSA or other findings as a matter of law regarding the plaintiffs' coverage under the FLSA.” Id. at 8.

         Finally, the Court denied the CRC defendants' motion for summary judgment against the JCI defendants for “breach of contract, ” “fraudulent misrepresentation, ” and “indemnification for any and all amounts found due to the Plaintiffs from CRC.” Id. at 2, 8. The JCI defendants raised genuine disputes of material fact regarding the negotiation, creation, performance and enforceability of the parties' subcontracts by presenting evidence of alleged “unfairness and exploitation of Jacinto Cespedes, ” including his “limited education, rudimentary business acumen” and lack of experience, as well as evidence that the total payment due from CRC to JCI for the subcontract work (approximately $230, 499) was almost four times less than the total payment due from the prime contractor, Whiting-Turner, to CRC for the same work ($929, 639). Id. at 9. Moreover, the validity of the subcontracts were potentially undermined by the JCI defendants' allegations that the subcontracts “‘do not contain [] federally required clauses'” and that “a Department of Labor employee allegedly ‘told Jacinto Cespedes [that] JCI's contract with [CRC] was invalid because he was not advised of or required to obtain a pay bond insurance, because JCI did not have a net gross income of $500, 000, and because no bidding took place for the contract.'” Id. (citation omitted).

         The enforceability of a broad indemnification clause contained in the subcontracts depended upon the validity of the subcontracts as a whole, thereby “highlight[ing] the need to resolve the genuine issues of material fact surrounding the validity, or lack thereof, of the [subcontracts] before any judicial determinations may be made about the meaning, scope and application of the indemnification clauses.” Id. at 10. To the extent that the CRC defendants attempted “to assert that the indemnification clauses require JCI to indemnify CRC not only for JCI's own negligent action but also any negligent actions of CRC, ” however, the Court found “that allegation would fail as a matter of law.” Id. at 10 n.2 (citing Rivers & Bryan, Inc. v. HBE Corp., 628 A.2d 631, 635 (D.C. 1993) (“If the [C]ourt determines that the contract is ambiguous on the issue of indemnifying the negligence of the indemnitee, then rather than the interpretation becoming a jury question, a particular result is required, . . . there is no indemnification for the indemnitee's own negligence.”)).

         C. PRETRIAL TRIAL PROCEEDINGS

         Both before and after the pretrial conference, the parties argued extensively over (1) the admissibility of certain summary chart exhibits related to the total amount of the plaintiffs' damages; (2) this Court's jurisdiction to determine whether the plaintiffs' wage rate was properly classified as carpenters; and (3) the effect of a pre-trial settlement agreement between the U.S. Department of Labor (“DOL”) and CRC (“DOL Settlement”). The parties' positions and the resolution, or deferral of resolution, with respect to each of these issues is summarized seriatim below since this background provides helpful context for the factual findings and legal conclusions reached by the Court.

         1. Charts Summarizing the Plaintiffs' Damages

         In a motion in limine filed before the pretrial conference, the CRC defendants and Travelers requested that the plaintiffs be barred from introducing any testimony at trial supporting the plaintiffs' claims for damages, and that the plaintiffs' proposed summary chart regarding their alleged damages derived from interrogatory answers provided by the JCI defendants, be excluded. See CRC Defs. & Travelers' Motion in Limine at 2-3, ECF No. 111. This motion in limine was denied in its entirety at the pretrial conference, in light of Federal Rule of Evidence 1006, which provides that a summary chart may be used to prove the content of voluminous writings that cannot be conveniently examined in court, as long as the proponent makes the underlying documents reasonably available for review. Rough Trial Tr. of Pretrial Conference Hr'g (June 16, 2015) (“PTC Tr.”) at 78-80. To the extent the defendants argued that the underlying supporting documentation for the summary chart was “inconsistent with other underlying supporting documentation, ” PTC Tr. at 78, the defendants were permitted to make those arguments in evaluating the weight to be given the summary chart, but the Court held that such arguments did not warrant exclusion altogether, id. at 79-80.

         Despite resolving the challenge to the plaintiffs' summary chart, the issue was raised again when, after the pretrial conference, the plaintiffs and the JCI defendants jointly moved to admit a “Replacement Wage and Hour Summary as a Joint Exhibit” (“Consolidated Summary Chart”), to replace both the plaintiffs' initially proposed summary chart exhibit and a separate summary chart proposed by the JCI defendants. Mem. Op. & Order (July 1, 2015) (“Evid. Op. & Order”) at 1-2 & n.2, ECF No. 137. The CRC defendants and Travelers sought to exclude the Consolidated Summary Chart, as well as another chart, offered solely by the JCI defendants, reflecting unpaid wages information for eleven non-plaintiff workers (“Non-plaintiff Summary Chart”). Id. To assist in evaluating the objections to the exhibit, the plaintiffs and JCI defendants were required “to submit . . . a description identifying for each entry on their [Consolidated Summary Chart], the derivation and source documents for the entry, ” and the CRC defendants and Travelers to submit, in response, an explanation of “the basis for any objection to any entry in the [Consolidated Summary Chart], ” detailing “any contrary information and provid[ing] citation to any source document relied upon for the objection that the entry is erroneous.” Minute Order (June 24, 2015).

         In a written Memorandum Opinion and Order, the objections of the CRC defendants and Travelers to the Consolidated Summary Chart and the Non-plaintiff Summary Chart were rejected. See generally Evid. Op. & Order. The Court explained that the Consolidated Summary Chart Exhibit, which “reflects a compilation of evidence from disparate sources, including ‘certified payrolls, daily reports, sign-in sheets' and other records . . . regarding the dates and hours allegedly worked by the plaintiffs that were not paid at all or at the rates required by applicable law, ” is “plainly relevant to the plaintiffs' claims for unpaid wages and overtime.” Id. at 2-3. The CRC defendants and Travelers' objections were merely attempts to avoid “deal[ing] with” the varied sources of evidence necessary to calculate the plaintiffs' damages and did not identify any “actual inaccuracies in the entries” on the proffered chart. Id. The objections amounted to arguments about “which set of time records are most reliable, whether the plaintiffs qualify as skilled carpenters or other category of labor and how much of the Federal and State taxes have already been paid on the wages owed.” Id. at 4-5. Since “[s]uch arguments may be made at trial and in post-trial briefing and do not undercut the usefulness and accuracy of the chart in reflecting the claims of the plaintiffs, ” the objections were rejected. Id. at 5. In the end, the Court noted that “the challenged summary charts will certainly aid the Court in consolidating multiple sources of information relevant to the plaintiffs' claims and the defendants' cross-claims as well as help focus the disputed facts among the parties and clarify the substance of their respective arguments.” Id. at 7.

         After the pretrial conference and on the eve of trial, the CRC defendants moved to add a trial exhibit, a document entitled “Profit and Loss Statement, ” ECF No. 135-1 at 9-27, containing a “summary with respect to the actual costs incurred by [CRC]” on the Project, Trial Tr. at 26.[6] The underlying documents used to create the Profit and Loss Statement, including “invoices, delivery tickets, the certified payrolls, [and] the check entry dates, ” were located in eight to ten file boxes in defense counsel's office and had been available to all parties' since May 2013. Id. at 27-28, 30. According to the CRC defendants, the exhibit constitutes an admissible business record and has “absolutely no bearing” on the plaintiffs' “proof of their damages” but, rather, pertains only to the JCI defendants' unconscionability argument. Id. at 26. Upon consideration of the parties' arguments, including the plaintiffs' and the JCI defendants' objections, a ruling on the admissibility of the exhibit was reserved pending the introduction of evidence and foundational support satisfying the requirements of Federal Rule of Evidence 803(6). Id. at 35; see Fed. R. Evid. 803(6)(A)-(E) (providing five requirements that must be satisfied for records of a regularly conducted activity to be admissible notwithstanding the rule against hearsay).

         At trial, a revised version of the Consolidated Summary Chart was marked as “PJ Exhibit 15” and admitted, with no renewed objection from the CRC defendants or Travelers, as a joint exhibit between the plaintiffs and the JCI defendants. Trial Tr. at 90-91.[7] The Non-plaintiff Summary Chart was marked as “PJ Exhibit 6” and admitted as a joint exhibit between the plaintiffs and the JCI defendants during the defendant Jacinto Cespedes' testimony, after a foundation for its admission was established and upon no further objections. Trial Tr. at 524-27. Similarly, CRC's Profit and Loss Statement was marked at trial as “Defs.' Exhibit 13” and was admitted during the testimony of Edgar Butler, CRC's employee and accountant, over the plaintiffs' and JCI defendants' objections to the exhibit's alleged inaccuracy, which the Court ruled “goes to the weight” to be afforded to the exhibit “as opposed to its admissibility, ” particularly “given the fact that the underlying documents ha[d] been available [to the parties] for two years.” Id. at 569-72.

         2. Worker Classification Issue

         After the pretrial hearing but before trial, the plaintiffs moved, inter alia, for a determination that the Court lacks jurisdiction to decide the plaintiffs' correct employment classification. Pls.' Mot. Ruling Ct. Jurisdiction at 1, ECF No. 149.[8] The plaintiffs argued that the DOL alone has jurisdiction to determine worker classifications and that the Court may only decide the factual issue of what classification the plaintiffs actually received. Id. at 2-3, 7, 9. In response, the CRC defendants and Travelers argued that the plaintiffs were judicially estopped from claiming that the DOL controls the classification of laborers, since the plaintiffs' position has been that any DOL administrative determination regarding the Project “is not significantly related to this case.” CRC Defs. & Travelers' Mem. Opp'n Pls.' Mot. Ruling Ct.'s Jurisdiction at 1-2, ECF No. 151. The JCI defendants took no position, asserting that “it's always been Mr. Cespedes' position that [the plaintiffs] were carpenters.” Trial Tr. at 36. The Court reserved ruling on this belatedly raised issue until completion of post-trial briefing. Id. at 54.

         3. Department of Labor Settlement Agreement

         DOL's Wage and Hour Division (“WHD”) conducted an investigation of CRC and JCI for violations of the Davis-Bacon Act, 40 U.S.C. § 3141 et seq., and related regulations, 29 C.F.R. §§ 5.1-5.32.[9] Shortly before trial, the CRC defendants and Travelers notified the Court that CRC had finalized a settlement agreement with the DOL in June 2015, Second Joint Status Rep. at 1, ECF No. 134, and “resolve[d] all disputes arising from an FLSA, Davis-Bacon and CWHSSA investigation conducted by the WHD of [CRC] and [JCI] . . . on a construction contract . . . awarded by the District of Columbia Courts to Whiting-Turner, ” id., Ex. A, DOL Settlement Agreement ¶ 2, ECF No. 134-1; Defs.' Ex. 18 (DOL Settlement Agreement) ¶ 2.

         Pursuant to the DOL Settlement Agreement, CRC consented to pay “back wages in the amount of $150, 000, ” and agreed to waive its right to a hearing on the WHD's investigative findings. Defs.' Ex. 18 ¶ 4. The $150, 000 was to be distributed in specified amounts by WHD to twenty-two persons listed in an attachment to the agreement, id. ¶ 9, which list included the thirteen plaintiffs in this action. Although CRC and the WHD “agree[d] that all matters pertaining to the payment of wages for work performed by [CRC] on its subcontract with Whiting-Turner” were “fully and finally resolved by this agreement, ” id. ¶ 4, “[t]he WHD acknowledge[d] that” the plaintiffs in the instant case, “thirteen (13) of the twenty-two (22) employees listed on Exhibit A[, ]” had filed suit in this Court “concerning the same circumstances investigated by WHD, ” id. ¶ 9; id., Ex. A. Accordingly, the DOL Settlement Agreement provided that CRC “may request from the WHD notification of payment to any employee pursuing the [instant] [a]ction, and [CRC] may introduce such notification as evidence in the [instant] [a]ction, to the extent allowable by law, to prevent double recovery by any employee.” Id. Notably, the Settlement Agreement expressly stated that CRC did “not concede it employed five (5) of the employees included on Exhibit A, ” but none of those five employees is a plaintiff in the instant case. Id. ¶ 10.

         In light of the DOL Settlement Agreement, the Court directed the parties to submit before trial “an explanation of the impact, if any” of this agreement “on any factual and legal issues requiring resolution at the scheduled bench trial [in] this matter, including (1) whether CRC will seek to introduce notification of payment to the plaintiffs . . .; (2) whether the Settlement Agreement should be construed as CRC's concession of employment of the plaintiffs, particularly in light of CRC's express renouncement of employment of only five other individuals . . .; (3) whether CRC's cross-claims for indemnification for any amounts due to plaintiffs through the Department of Labor continue to have any viability since the prime contractor agreed to issue a check for the payment of back wages to the plaintiffs . . .; and (4) how [the JCI defendants'] cross-claim for ‘indemnification' from defendant CRC is affected, if at all, by the Settlement Agreement.” Minute Order (June 29, 2015).

         The parties submitted responsive briefing, but also “pose[d] a number of additional issues for the Court to consider.” Trial Tr. at 5. CRC informed the Court that it would “seek to introduce the Settlement Agreement with DOL” and would continue “to seek indemnification from Jacinto Construction, Inc. and Jacinto Cespedes.” CRC Defs.' Resp. Ct.'s Min. Order June 29, 2015 (“CRC Defs.' Resp.”) at 2-3, ECF No. 138. CRC also argued that the settlement agreement should not be construed as an admission of CRC's status as an “employer” of the plaintiffs. Id. at 3-4.

         The JCI defendants' response acknowledged that “[a]ny amount paid to the plaintiffs by either Calderon or Whiting Turner for payment of back wages to the plaintiffs” would affect both CRC and JCI's cross-claims “by reducing the amount of that claim.” JCI Defs.' Resp. Ct.'s Min. Order June 29, 2015 (“JCI Defs.' Resp.”) at 5-6, ECF No. 140. All parties agreed that payments made under the DOL Settlement Agreement would offset any damages to which the plaintiffs were entitled. Trial Tr. at 11 (Court noting that “everybody agrees, at a minimum, that the Department of Labor Settlement is an offset, at a minimum, against whatever unpaid wages the plaintiffs are seeking here.”).

         In addition to the responses provided by the parties to the Court's questions, the CRC defendants and Travelers requested that DOL's finding “on the amount of back wages be given deference and adopted by the Court as full and final satisfaction of the claims asserted” by the plaintiffs in the instant case. CRC Defs.' Resp. at 3; Travelers' Resp. June 29, 2015 Min. Order (“Travelers' Resp.”) at 1-3, ECF No. 139. Travelers additionally requested a ruling that statutory liquidated damages and attorneys' fees are not recoverable against the payment bond, Travelers' Resp. at 4-6, and, in response, the plaintiffs requested a contrary ruling, that Travelers is liable for liquidated damages and attorneys' fees under the bond, Pls.' Consolidated Resp. June 29, 2015 Min. Order Impact Settlement Agreement & Resps. Travelers & CRC Defs. Same Order (“Pls.' Resp.”) at 2, ECF No. 145. Lastly, the plaintiffs and the JCI defendants requested a ruling that CRC made a binding admission in the DOL Settlement Agreement that it employed the plaintiffs and can, therefore, no longer contest the issue. JCI Defs.' Resp. at 6; Pls.' Resp. at 2.

         The Court found that the DOL Settlement Agreement “does not constitute the full and final satisfaction of the claims asserted by the plaintiffs in this case, ” since “[i]t is undisputed that” the plaintiffs “were not part of settlement negotiations with the [DOL], nor did they expressly or impliedly waive their right to proceed with this lawsuit, nor has the [DOL] asked them to waive their rights[, ] [a]nd they will not receive from the [S]ettlement all of the wages they claim they are owed, ” Trial Tr. at 74. By expressly acknowledging the instant case, the DOL Settlement Agreement “impliedly recognizes that the plaintiffs may still pursue this action for the balance of wages they are owed and that the money they receive through the settlement agreement will merely offset their recovery.” Id. at 74-75. Since the plaintiffs “did not sign any release surrendering any of their rights, nor were they ever asked to do so by the [DOL], ” the Court found that the plaintiffs “did not release their claims against the defendants.” Id. at 75 (citing Walton v. United Consumers Club, Inc., 786 F.2d 303, 306-07 (7th Cir. 1986)). Accordingly, the Court concluded “that the [DOL] settlement doesn't preclude the plaintiffs' claims here, but, instead, will serve only as an offset to any damages that may be found here.” Trial Tr. at 77.

         With respect to Travelers' and the plaintiffs' divergent requests for rulings about whether Travelers was liable under the surety bond for attorneys' fees and liquidated damages, the Court reserved ruling. Trial Tr. at 77. While the surety bond contains “very broad language” and “does not appear to exclude such payments or be so limited as Travelers seeks to narrowly construe it, ” the Court found no “reason for a final ruling on this issue yet, ” since a determination need only be made “in the event that CRC is found liable.” Id. at 78. Consequently, the Court reserved ruling on whether Travelers would be liable under the bond for attorneys' fees and liquidated damages. Id.

         Lastly, the Court similarly reserved ruling on whether CRC admitted in the DOL Settlement Agreement that it employed the plaintiffs, until hearing all of the evidence in the case. Id. at 79.

         D. BENCH TRIAL

         A bench trial was conducted over the course of four days, with live testimony from a total of fifteen witnesses, including twelve of the plaintiffs (Luis Rocha, Peter Soto, Wilson Perez Zapata, Edgardo Pablo Terceros, Freddy Paz Perez, Juan Amurio Quiroz, Jose Lenin Rocha Quiroz, Mario Moya, Geraldo Moya, Jose Rocha Cespedes, Samuel Lopez, and Javier Cespedes Becerra), defendant Jacinto Cespedes, Enrique Sanz, who worked as CRC's foreman on the Project, and Edgar Butler, who, as noted, was CRC's accountant. A stipulation was read into the record as to what the plaintiff Jose Ramiro Perez would say if called to testify. Trial Tr. at 575. None of the defendants called any witnesses for the defense case. See Trial Tr. at 576-77.

         The Court received the following exhibits into evidence during the bench trial: thirty-six exhibits submitted jointly by all of the parties, Joint. Exs. (“J. Ex.”) 1-36, see Ex. Log, ECF No. 158; six exhibits submitted jointly by the plaintiffs and the JCI defendants, Pls.' Joint Exs. (“PJ Ex.”) 6, 7, 9, 12, 13, 15, see Ex. Log., ECF No. 159; eight plaintiffs' exhibits, Pls.' Exs. 1-8, see Ex. Log, ECF No. 156, including the deposition of Jacinto Cespedes (May 22, 2013) (“Cespedes Dep.”) as Pls.' Ex. 5; the deposition of Ana Calderon (April 29, 2014) (“Ana Calderon Dep.”) as Pls.' Ex. 6; and the deposition of Carlos Calderon (October 22, 2013) (“Carlos Calderon Dep.”) as Pls.' Ex. 7; and thirteen exhibits submitted by the CRC defendants, Defs.' Exs. 1, 4, 10-11, 13, 15, 17-19, 21, 25, 27-28, see Ex. Log., ECF No. 157. In addition, the parties entered a number of stipulations, memorialized in two documents filed on the record. See Stipulations of the Parties (“First Stips.”), ECF No. 155; Stipulations of the Parties (“Second Stips.”), ECF No. 160.

         Following the conclusion of the bench trial, the parties submitted tables of proposed findings of fact (“FOF”) regarding: (1) the plaintiffs' claims, see Pls.' Proposed FOF Re: CRC & Travelers (“FOF Table - Pls. v. CRC & Travelers”), ECF No. 174; Pls.' Proposed FOF re: JCI (“FOF Table - Pls. v. JCI”), ECF No. 173; (2) the CRC defendants' cross-claims against the JCI defendants, see CRC's Proposed FOF Re: Cross-Claim (“FOF Table - CRC v. JCI”), ECF No. 175; and (3) the JCI defendants' cross-claims against the CRC defendants, see JCI's Proposed FOF Re: Cross-Claim (“FOF Table - JCI v. CRC”), ECF No. 176.[10] The parties also submitted proposed conclusions of law (“COL”) regarding (1) the plaintiffs' claims, see Pls.' Proposed COL (“Pls.' COL”), ECF No. 177; Def. Travelers' Proposed COL (“Travelers' COL”), ECF No. 179; CRC Defs.' Resp. Pls.' Proposed COL (“CRC Defs.' Resp. Pls.' COL”), ECF No. 182; JCI Defs.' Proposed Resps. Pls.' COL (“JCI Defs.' Resp. Pls.' COL”), ECF No. 180; Pls.' Reply CRC Defs. & Travelers' COL (“Pls.' Reply CRC Defs.' & Travelers COL”), ECF No. 185; Pls.' Reply JCI Defs.' COL (“Pls.' Reply JCI Defs.' COL”), ECF No. 183; (2) the defendant CRC's cross-claims against the JCI defendants, see CRC Defs.' Proposed COL Regarding Cross-Cl. Against JCI Defs. (“CRC's COL”), ECF No. 178; JCI Defs.' Opp'n CRC's Proposed COL Regarding Cross-Cl. (“JCI Defs.' Opp'n CRC's COL”), ECF No. 184; and (3) the JCI defendants' cross-claims against the CRC defendants, see JCI Defs.' Proposed COL Regarding Cross-Cl. Against CRC Defs. (“JCI Defs.' COL”), ECF No. 181; CRC Defs.' Opp'n JCI Defs.' Proposed COL (“CRC Defs.' Opp'n JCI Defs.' COL”), ECF No. 186; JCI Defs.' Reply CRC's Opp'n Proposed COL Regarding Cross-Cl. (“JCI Defs.' Reply COL”), ECF No. 188.[11] The Court has considered these submissions along with the testimony and exhibits at trial.

         II. FINDINGS OF FACT

         Based upon the parties' stipulations, testimony presented, and exhibits admitted at the bench trial, the Court makes the findings of fact set forth below and further states its conclusions of law. See Fed. R. Civ. P. 52(a)(1) (“In an action tried on the facts without a jury . . ., the court must find the facts specially and state its conclusions of law separately. The findings and conclusions … may appear in an opinion or a memorandum of decision filed by the court.”). In setting forth the findings of fact, the court need not “address every factual contention and argumentative detail raised by the parties, ” Mayaguez v. Corporacion Para El Desarrollo Del Oeste, 824 F.Supp.2d 289, 295 (D.P.R. 2011), or “discuss all evidence presented at trial, ” Wachovia Bank N.A., Nat. Ass'n v. Tien, 598 F. App'x 613, 617-618 (11th Cir. 2014). Instead, the Advisory Committee Notes on Rule 52 explain that “a judge need only make brief, definite, pertinent findings and conclusions upon the contested matters; there is no necessity for over-elaboration of detail or particularization of facts.” Fed.R.Civ.P. 52(a), Advisory Committee's Note to 1946 Amendment. While “a district court's opinion should not simply state conclusions where circumstances require more detail, ” courts have “wide leeway… in determining what facts to include.” Thermo Electron Corp. v. Schiavone Constr. Co., 958 F.2d 1158, 1160-1161 (1st Cir. 1992) (Breyer, C.J.). The findings must be “sufficient to allow [the appellate] court to conduct a meaningful review, which is the main point of the rule.” Caffey v. West, 1998 U.S. App. LEXIS 4689, 6-7 (D.C. Cir. Feb. 9, 1998); see also Lyles v. United States, 759 F.2d 941, 943-945 (D.C. Cir. 1985)(noting that “an appellate court requires some reasonable measure of detail and exactness in the trial court's findings as a predicate for intelligent review”) (internal quotations omitted); Fasolino Foods Co. v. Banca Nazionale del Lavoro, 961 F.2d 1052, 1058 (2d Cir. 1992) (“All that is required by Rule 52(a) is that the trial court provide findings that are adequate to allow a clear understanding of its ruling”).

         A. The Prime Subcontract

         On January 7, 2011, Whiting-Turner entered into a subcontract (“the Prime Subcontract”) with CRC to complete portions of a project renovating the D.C. Superior Court for the fixed price of $929, 639.00. J. Ex. 2 (Subcontract between Whiting Turner and CRC). Carlos Calderon is president of CRC, which has been in business for over 20 years, but only recently began working on federal contracts. Pls.' Ex. 7 (Carlos Calderon Dep.) at 8-9. The Prime Subcontract required CRC to do “drywall, framing, ceilings, doors[, ] hardware” and “rough carpentry” for the Superior Court renovation. Id. at 14-15. Carlos Calderon estimated that 40 percent of his contract with Whiting-Turner concerned putting up drywall and “framing, ” thirty percent involved work on the ceilings, and the remaining thirty percent concerned “acoustics” and “GRG molding.” Id. at 16. He understood that, under the Prime Subcontract, he was required to pay workers “consistent[] with the Department of Labor's prevailing wages” at the time of the work, id. at 24, and that the contract expressly provided that any person classified as a “carpenter” was entitled to a wage of $33.38 per hour, id. at 30.

         The Prime Subcontract between Whiting-Turner and CRC required CRC to “provide on-site supervision and coordination” of “Second Tier Subcontractors, ” J. Ex. 2 at ¶ 13. To this end, in February 2011, Enrique Sanz began work on the Project as CRC's foreman, with only one other CRC employee, who helped “doing the layout” until the general contractor, Whiting-Turner, granted approval to “start with the framing” work. Trial Tr. at 97, 119, 171.

         B. Carlos Calderon Hires Jacinto Cespedes

         In early April 2011, Carlos Calderon was put in contact with Jacinto Cespedes by Cespedes's brother for purposes of hiring a subcontractor for the Project. Id. at 313-14, 383. Cespedes had worked in the construction industry for approximately 30 years and owned JCI with his wife for the duration of its existence, from 2010 to 2013. Id. at 312-13, 394, 438. On around April 10, 2011, as instructed by Carlos Calderon, Cespedes went to the Project site and met with Enrique Sanz for approximately 30 minutes, reviewing the layout of the Project. Id. at 314-15. Enrique Sanz showed Cespedes “three floors, ” but did not show him the “basement” or “roof.” Id. at 315, 383-84. Immediately after the tour, Cespedes went to CRC's office and met with Carlos Calderon, who told Cespedes to start work on the Project right away and that four carpenters were needed. Id. at 314, 319. They did not sign a subcontract or speak about contract prices at this meeting but, nonetheless, the next day, on around April 11, 2011, Cespedes and three other workers, Juan Quiroz, Jose Rocha, and Luis Rocha, began work on the Project as carpenters. Id. at 314, 318, 320.

         Approximately one week later, during Cespedes' second week working on the Project, he met again at Calderon's office with Carlos Calderon, who presented him with a written subcontract agreement (“First Subcontract”). Id. at 322. The First Subcontract was drafted by CRC and set a fixed price of $191, 099.10 that JCI would receive for its work on the Project. Id. at 318; J. Ex. 3 (First Subcontract) at 4. The contract price was set regardless of the number of workers utilized or the overall cost of labor. See FOF Table - Pls. v. CRC & Travelers ¶ 8. Like the Prime Subcontract, the language of the First Subcontract provided that any person classified as a “carpenter” was entitled to a wage of $33.38 per hour. J. Ex. 3 (First Subcontract) at APPENDIX 4. Virtually all of CRC's construction work on the Project was, according to Carlos Calderon, performed by JCI under this Subcontract. Pls.' Ex. 7 (Carlos Calderon Dep.) at 59.

         Carlos Calderon and Cespedes did not negotiate the contract or review its contents. Trial Tr. at 324, 435-36. Rather, Carlos Calderon advised Cespedes that the first three pages were “just regulations” and did not need to be read. Id. at 326-29. Cespedes testified that he cannot read or write in the English language, id. at 312, 381, and that due to his illiteracy, he was unable to read the First Subcontract, to review the scope of the work described by its terms, or to compare that scope of work to the scope of the work required under the Prime Subcontract, which he never received or read, id. at 404-05. Cespedes signed the subcontract without reading it, and his testimony at trial did not help explain, what, if anything, he understood to be the terms of the agreement between JCI and CRC. Id. at 322-36.

         C. Plaintiffs' Work on the Project

         Both CRC's foreman, Enrique Sanz, and Jacinto Cespedes were present on site at the Project every day, except for one week in September or October 2011 when Cespedes was off-site. Id. at 100-101; 329-31. Sanz was responsible for ensuring that all the workers were equipped with the proper equipment, including ladders and scaffolding, which equipment was owned by CRC and needed for the workers on the Project. Id. at 100-01, 130-31, 171-72. While Carlos Calderon did not work directly on the site, he testified at his deposition that Sanz, would advise him of “any issues with [Whiting-Turner], and problems with the trades, and coordinations, [and] the scheduling” of the job. Pls.' Ex. 7 (Carlos Calderon Dep.) at 40. Carlos Calderon confirmed that CRC provided “scaffolds, lifts, and ladders” on the Project. Id. at 50.

         Sanz was also responsible for conducting “safety meetings” with the workers, communicating with the CRC office regarding materials needed for the work, coordinating with the general contractor regarding where work would start or continue, and directing the workers “where to go, what to do, what is the material.” Id. at 100-01, 131; see also Id. at 107 (Sanz agreeing that he gave “workers assignments each day on what they were supposed to do”). Sanz would typically spend “the whole day” supervising the workers on the Project, walking around each level of the building to “be sure that everybody is doing it the right way, ” particularly since workers must “follow the specific rules or directions on government jobs” to comply with certain federal construction specifications. Id. at 105-06. Workers generally treated Sanz as their supervisor and would ask or tell Sanz if they needed to take breaks or leave early. Id. at 109. Jacinto Cespedes also supervised the plaintiffs and acknowledged that, at a minimum, they were employees of JCI. Second Stips. ¶ 1. During the time JCI was engaged on the Project, Cespedes also had employees working on one or two other projects unrelated to its subcontracts with CRC. Id. at 488-92.

         Based on Whiting-Turner's needs or requests, Enrique Sanz would determine how many workers were needed for the Project each day and arrange for the right number of individuals to come to the site, coordinating “most of the time” with Jacinto Cespedes. Id. at 112. When the workers were “slow” and Whiting-Turner “wasn't happy, ” Sanz spoke with Carlos Calderon to keep him informed and solicit his instructions for dealing with the issue. Id. at 137-39. “[A]t least six [or] . . . seven times, ” when more workers were needed, Sanz also spoke to Carlos Calderon about it. Id. at 109, 112; see also Id. at 101 (“[I]n this case, my office send to me [the workers] in order to just make . . . the work to be done.”).

         The plaintiffs testified that they were supervised and instructed on the Project by both Jacinto Cespedes and Enrique Sanz and considered both of them to be their bosses. Id. at 178- 79 (Luis Rocha Moya); 190 (Peter Soto); 217, 223 (Wilson Perez Zapata); 240-41 (Edgardo Pablo Terceros); 251-52 (Freddy Paz Perez); 261 (Juan Amurio Quiroz); 263 (Jose Lenin Rocha Quiroz); 273 (Mario Moya); 284-86 (Gerardo Moya); 293, 300 (Jose Rocha Cespedes); 302 (Samuel Lopez). Both Sanz and Cespedes confirmed that they managed the plaintiffs on site, directing work on the site or coordinating who came to work and for what periods of time. Id. at 105-106 (Sanz); 336 (Cespedes).

         In addition to their supervisory roles, both Cespedes and Sanz were in charge of keeping various records related to work on the Project. Cespedes was required to provide regular certified payrolls to CRC and used Oropeza and Associates, an accounting firm that had represented his previous business venture, to handle this paperwork and accounting for his new company. Id. at 449.[12] Certified payroll records were prepared by Oropeza, in coordination with “Calderon's accountant, ” and Cespedes signed them. Id. at 344. Cespedes then delivered the payrolls to Edgar Butler, CRC's accountant. Id. at 371. Cespedes also prepared daily contractor reports for the Project. J. Ex. 11 (Contractor's Daily Reports) at 494-576. Both the certified payroll records and the Contractor's Daily Reports classified the plaintiffs as “Carpenters, ” except for (1) Certified Payrolls 25 and 26, which classified some plaintiffs at the “Skilled Labor” wage instead of the “Carpenter” wage, J. Ex. 10 (certified payroll records) at 118- 126; and (2) Contractor's Daily Reports for July 13, 2011 to July 29, 2011, which listed Mario and Gerardo Moya as "finishers" while the certified payrolls for that time classified them as "carpenters." Compare J. Ex. 10 at 89-92 (certified payrolls listing both Moyas as "Carpenters"), with J. Ex. 11 at 559-570 (daily reports listing both Moyas as "Finishers"). Finally, Cespedes kept various handwritten records listing the names of the workers and the number of hours they worked on the Project by date. Id. at 366-67; J. Ex. 12 (copy of Jacinto Cespedes' handwritten records).

         Like Cespedes, Sanz kept written documentation of the time the plaintiffs worked on the Project and their tasks, id. at 95-96, including a “contractor's daily report” documenting “the people that I have working with me” and “any change on the progress of the job . . . in order to . . . let my office [CRC] know what we doing, ” id. at 101. Carlos Calderon instructed Sanz to record the number of hours that each worker worked on the daily reports, but did “[n]ot really” tell him to record the workers' classifications because “[Carlos Calderon] just said I want to just send you carpenters, you know, to the job.” Id. at 101-02. Sanz provided the contractor's daily reports, as well as a separate daily “timesheet” that he was required to complete, to CRC. Id. at 102-03. Sometimes, however, Sanz would be too busy to complete the daily report, so he would photocopy a sign-in sheet kept in a binder by Whiting-Turner, documenting each worker's daily sign-in, and send that to the CRC office instead of a daily report. Id. at 103, 121.

         In addition to the daily reports and timesheets, CRC required Sanz to complete work progress reports for CRC, approximately every two weeks, “about how many sheets of drywall or how many linear feet of the framing was done.” Id. at 115-16, 175. With respect to these reports, Ana Calderon, who was CRC's bookkeeper, instructed Sanz to “take some amount out” and not report the “whole thing.” Id. at 116. For example, if 100 sheets of drywall were hung, Sanz was required “to report it as 80.” Id. Sanz informed Jacinto Cespedes of this arrangement, telling Jacinto Cespedes “that was the way they were doing it.” Id. This under-reporting enabled CRC to make lower progress payments to JCI. Id. at 175. Though Jacinto Cespedes complained to Sanz about the reduced amount of work reported, Ana Calderon, nonetheless, firmly instructed Sanz to “just keep for the company, like, 20 percent . . . .” Id. at 117. Sanz was under the impression that underreporting the progress of the work was “the rule of the company [CRC].” Id. at 174-75.

         D. The Second Subcontract

         In June 2011, Cespedes again met with Calderon and signed a second subcontract (“the Second Subcontract”). Trial Tr. at 398-401. Pursuant to the Second Subcontract, JCI agreed to perform finishing work on the Project that Cespedes believed was not included in the First Subcontract. Cespedes testified that, since the workers “had already started work finishing, ” he felt he “would have to sign.” Id. at 400-01. The Second Subcontract, which was written in English, required JCI to perform work for a fixed price of $39, 400. J. Ex. 4 (Second Subcontract) at 1, 4-5. Again, Cespedes testified that he did not read or understand the Second Subcontract before signing it. Id. at 434-35.

         E. Nonpayment of Wages Owed to Plaintiffs

         Around this time, in June 2011, Jacinto Cespedes stopped paying the plaintiffs consistently, Second Stips. at ¶ 4, a circumstance about which he informed Ana and Carlos Calderon. Trial Tr. at 347, 353. Cespedes testified that he would visit the CRC office to discuss these payment issues and Ana Calderon “would say, ‘Why don't you pay them [the workers] a decreased rate?'” Id. On at least one occasion, in response to Cespedes's complaints about not being paid sufficient funds to pay the workers their wages owed, Carlos Calderon echoed Ana Calderon and also suggested that Cespedes change the classification of the workers, though Cespedes inconsistently claimed not to understand worker classification. Id. at 344-45; see Id. at 346 (“When he couldn't pay, Calderon suggested that I reduce them to skilled labor.”).

         Carlos Calderon also told Cespedes to hire workers who were in the country illegally, because he could pay them lower wages. Id. at 360-62. Cespedes hired four undocumented workers, who are not parties to this suit, and paid them less than the wages to which Cespedes himself believed they were legally entitled. Id. at 360, 362. Cespedes, with Sanz's assistance would sneak them into the site each day by using other employees' work badges to gain access to the Project site. Id. at 360-364. Sanz would “use his badge, and he would get a visitor badge from the office” for the undocumented workers, “and [the workers] would go in with the badges and nobody would say anything, ” id. at 414, effectively passing off the workers as individuals permitted to be on site.

         In addition to hiring undocumented workers, Cespedes complied with the Calderons' suggestion to change the wage rate classification for some of his workers from the amount that corresponded to “Carpenters” to a lower amount that corresponded to the classification for “Skilled Laborers” on the certified payrolls. Id. at 346. On September 30, 2011 and October 10, 2011, Cespedes signed Certified Payrolls 25 and 26, showing the “Skilled Labor” wage rate instead of the “Carpenter” wage rate for some of the plaintiffs. J. Ex. 11 (Contractor's Daily Reports) at CALD 118-122. On November 8, 2011, Edgar Butler sent a fax to Oropeza and Associates, asking JCI's accountant to reclassify certain employees “per Jacinto Cespedes[‘s] request.” J. Ex. 15. Butler sent this fax after conferring with Carlos Calderon. FOF: Pls. v. CRC ¶ 87 (not disputed). Butler claims, however, not to remember what specifically was discussed with Carlos Calderon or the latter's recommendations. Id. at 553. The resulting change in classification created certified payrolls with workers being paid at a lower rate than as carpenters. J. Ex.10 (Contractor's Daily Reports) at CALD 122. As ...


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