United States District Court, District of Columbia
MEMORANDUM OPINION SETTING FORTH FINDINGS OF FACT AND
CONCLUSIONS OF LAW
A. HOWELL Chief Judge.
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. 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.
plaintiffs' allegations as well as significant issues
raised and either resolved or deferred in pre-trial motions
are summarized below.
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.
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).
defendants assert similar cross-claims against the CRC
defendants. See JCI Defs.' Countercl. Against
CRC Defs. (“JCI's Cross-Compl.”), ECF No.
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. 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.
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.
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”). 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.
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.
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, ” 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.
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).
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
PRETRIAL TRIAL PROCEEDINGS
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.
Charts Summarizing the Plaintiffs' Damages
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.
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).
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.
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
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).
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. 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.
Worker Classification Issue
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. 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.
Department of Labor Settlement Agreement
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. 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.
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.
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).
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.
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.”).
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.
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.
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.
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.
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.
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.
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. 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. The Court has considered these
submissions along with the testimony and exhibits at trial.
FINDINGS OF FACT
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
The Prime Subcontract
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.
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,
Carlos Calderon Hires Jacinto Cespedes
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,
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.
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.
Plaintiffs' Work on the Project
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.
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.
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.”).
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);
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. 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).
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
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.
The Second Subcontract
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.
Nonpayment of Wages Owed to Plaintiffs
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
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
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 ...