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Velez v. Wilkerson Electrical Services

May 14, 2002

ELIZABETH VELEZ, ASSIGNEE OF JOSE VARGAS, AND IRVING VELEZ, PLAINTIFFS-APPELLANTS,
v.
WILKERSON ELECTRICAL SERVICES, INC., AND NOBE/BCC ASSOCIATES, DEFENDANT/THIRD PARTY PLAINTIFF, AND CHUBB INSURANCE CO., SUCCESSOR IN INTEREST TO FEDERAL INSURANCE CO., INDIVIDUALLY, JOINTLY AND SEVERALLY, DEFENDANT/THIRD PARTY PLAINTIFF-RESPONDENT,
v.
QEM ENTERPRISES, INC. THIRD PARTY DEFENDANT, AND NEW JERSEY HOUSING MORTGAGE FINANCE AGENCY, THIRD PARTY DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket Number ESX-L-10344-98.

Before Judges Baime, Fall and Axelrad.

The opinion of the court was delivered by: Fall, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: April 17, 2002

This case involves application of the time-limitation periods set forth in the New Jersey Public Works Bond Act (Bond Act), N.J.S.A. 2A:44-143 to -148, to the prevailing-wage claims by employees of a subcontractor against the bonding company that issued a payment and performance bond to the general contractor of a public works project funded through the New Jersey Housing Mortgage Finance Agency (NJHMFA).

On September 30, 1998, plaintiff, Elizabeth Velez (Elizabeth), assignee of Jose Vargas,*fn1 filed a complaint against defendants, Wilkerson Electrical Services, Inc. (Wilkerson), Nobe/BCC Associates (Nobe), and Chubb Insurance Co., successor in interest to Federal Insurance Co. (Federal), for failure to pay prevailing wages for labor performed on a public works project known as "Rehab 753-759 Clinton Ave., Ebon Sq., New Construction 87-89 Wakeman Sq." (Project). Jose was employed by Wilkerson and performed services as an electrician on the Project until February 11, 1996. Specifically, the Project was for the rehabilitation of the Ebon Square Housing Project for its owner, Nobe Urban Renewal Development Corporation. The Project was funded by NJHMFA. Nobe was the general contractor on the project; Wilkerson was a subcontractor of Nobe.

On April 19, 1994, Federal, as Surety, provided Nobe, as principal, a payment and performance bond for the project pursuant to the version of the Bond Act then in effect. The bond recognized that on December 23, 1993, Nobe had entered into a written contract with Nobe Urban Renewal Development Corporation, as Owner, for the construction, repair or improvement of a housing project, and that NJHMFA, as Lender, had agreed to lend the Owner monies to be secured by a mortgage on the project, which money will be used to make payments to Nobe under the terms of the contract. The bond provided, in pertinent part:

Now, if [Nobe] shall well and faithfully do and perform all of the things agreed by it to be done and performed according to the terms of the Contract, and shall pay all lawful claims or subcontractors, materialmen, laborers, persons, firms or corporations for labor performed or materials, provisions, provender or other supplies or teams, fuels, oils, implements or machinery furnished, used or consumed in the carrying forward, performing or completing of the Contract, we agreeing and assenting that this undertaking shall be for the benefit of any subcontractor, materialman, laborer, person, firm or corporation having a just claim, as well as for the Obligees herein then this obligation shall be void; otherwise the same shall remain in full force and effect; it being expressly understood and agreed that the liability of the surety for any and all claims hereunder shall in no event exceed the penal amount of this obligation as herein stated.

By letter to Vargas dated October 28, 1997, the Public Contracts Section of the Division of Workplace Standard in the Department of Labor, in conducting an audit of the Project, advised Vargas the required wage rate for an electrician on the subject public works site was $26.53 per hour, including fringe benefits, and that its investigation revealed that Vargas "may have been paid less than the above prevailing wage rate and that a balance of $24,093.88 may be due [him] as a result of the above." A similar letter, also dated October 28, 1997, was sent to plaintiff, Irving Velez, advising Velez that he "may have been paid less than the . . . prevailing wage rate and that a balance of $21,402.74 may be due [him] as a result[.]" Velez was also employed by Wilkerson as an electrician on the Project and worked thereon until May 11, 1996.

By letter to Federal dated May 6, 1998, the Public Contracts Section forwarded a "Bonding Company Lien Claim" for failure of Wilkerson to pay the proper prevailing wage rate on the Project.

By letter to the Department of Labor dated August 24, 1998, Vargas advised that it was his understanding he was "entitled to receive a monetary payment that was due [him] at the time of [his] resignation from [Wilkerson]."

By letter to Vargas dated September 8, 1998, the Public Contracts Section enclosed a wage claim form, advising, in pertinent part:

If your final decision is to go to a formal hearing, via our office, please be advised that there is a $10,000.00 threshold. Since our audit indicated you could be due $24,093.88, all monies above $10,000.00 would be waived.

Some other courses of action that you could take are as follows:

1. You could obtain your own attorney at your expense.

2. You could contact the bonding compa- ny of the general contractor, Nobe/BCC Associates, since our office put a lien ...


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