[Cite as Internatl. Bhd. of Elec. Workers Local Union No. 8 v. Bd. of Defiance Cty. Commrs., 2013-
Ohio-5198.]




                      IN THE COURT OF APPEALS OF OHIO
                          THIRD APPELLATE DISTRICT
                              DEFIANCE COUNTY




INTERNATIONAL BROTHERHOOD
OF ELECTRICAL WORKERS,
LOCAL UNION NO. 8,
                                                                    CASE NO. 4-13-05
        PLAINTIFF-APPELLANT,

        v.

BOARD OF DEFIANCE COUNTY                                            OPINION
COMMISSIONERS,

        DEFENDANT-APPELLEE.




                Appeal from Defiance County Common Pleas Court
                          Trial Court No. 11-CV-41393

                                      Judgment Affirmed

                          Date of Decision: November 25, 2013




APPEARANCES:

        Joseph M. D’Angelo for Appellant

        Jack Rosati, Jr. and Russell R. Herman for Appellee
Case No. 4-13-05


ROGERS, J.

       {¶1} Plaintiff-Appellant, International Brotherhood of Electrical Workers,

Local Union No. 8 (“Local No. 8”), appeals the judgment of the Court of Common

Pleas of Defiance County granting summary judgment in favor of Defendant-

Appellee, Defiance County Commissioners (“the County”), and denying Local

No. 8’s motion for summary judgment. On appeal, Local No. 8 contends that the

trial court committed the following errors: (1) denying Local No. 8’s motion for

summary judgment and granting the County’s motion for summary judgment; (2)

finding that federal funds were used to pay both the principal and interest

obligations on the bonds; and (3) finding that the Project was exempt from the

application of Ohio Prevailing Wage Law under R.C. 4115.04(B)(1). For the

reasons that follow, we affirm the trial court’s judgment.

       {¶2} On June 17, 2011, Local No. 8 filed a R.C. 4115.16(B) interested

party prevailing wage enforcement action against the County, alleging violations

of the Ohio prevailing wage law during a Defiance County building project at the

Historic Jail Building (“the Project”). The County filed its answer on July 15,

2011. The following relevant facts were stipulated by both parties.

       {¶3} The County began planning the Project in Fall 2009. The County then

advertised for bids on the Project, initially stating that Ohio prevailing wage law

would apply to the Project.       On December 24, 2009, the County adopted


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Resolution No. 09-12-848, which declared the entire area within the County as a

“Recovery Zone.” On February 4, 2010, the County issued County Building

Improvement General Obligation Bonds, Series 2010 (Federally Taxable –

Recovery Zone Economic Development Bonds) (“the Bonds”) to finance the

construction of the Project. The United States Treasury agreed to pay the County

an amount equal to 45 percent of the interest payable on the Bonds, which

triggered the application of the Davis-Bacon Act.       Funding for the Treasury

payments derived from the American Recovery and Reinvestment Act (“ARRA”).

      {¶4} On January 5, 2010, the County requested that each of the lowest

bidders for the Project execute an acknowledgment stating that the provisions of

Ohio prevailing wage law no longer applied, and that instead, the provisions of the

Davis-Bacon Act applied to the Project.       Each of the bidders executed the

acknowledgments by January 14, 2010.          These acknowledgments were then

attached to the original construction contracts. On February 4, 2010, the Bonds

were issued by the County and sold to Fifth Third Securities, Inc. The County

deposited the proceeds from the Bonds into the County’s Permanent Improvement

Fund, which was used to pay for the construction of the Project.

      {¶5} Meanwhile, the County deposited the Treasury’s reimbursement

payments into a Bond Retirement Fund in order to “extinguish its interest and

principal obligations under the Bonds.” (Docket No. 7, p. 4). Although no money


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from the Bond Retirement Fund was transferred into the Permanent Improvement

Fund, the funding for the Project was obtained from the Bonds that will be retired

through the Bond Retirement Fund. Checks to pay Project expenses were linked

to the Permanent Improvement Fund.

      {¶6} The parties stipulated that the Davis-Bacon Act does not preempt the

Ohio prevailing wage laws and that the Project was a “public improvement” as

defined by R.C. 4115.03(C).

      {¶7} On June 25, 2012, both parties filed competing motions for summary

judgment on the basis of these stipulated facts. On April 23, 2013, the trial court

granted the County’s motion for summary judgment, denied Local No. 8’s motion

for summary judgment, and dismissed Local No. 8’s complaint.

      {¶8} Local No. 8 filed this timely appeal, presenting the following

assignments of error for our review.

                           Assignment of Error No. I

      THE TRIAL COURT ERRED IN DENYING LOCAL 8’S
      MOTION FOR SUMMARY JUDGMENT AND GRANTING
      THE COUNTY’S MOTION FOR SUMMARY JUDGMENT.

                           Assignment of Error No. II

      THE TRIAL COURT ERRED IN MAKING A FINDING OF
      FACT THAT DIRECTLY CONFLICTS WITH THE
      STIPULATED RECORD: THE PARTIES STIPULATED
      THAT FEDERAL FUNDS WERE USED SOLELY TO
      REIMBURSE A PORTION OF THE COUNTY’S INTEREST
      PAYMENT OBLIGATION ON THE BONDS IT ISSUED TO

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       FINANCE THE PROJECT, BUT THE COURT FOUND THAT
       THE FEDERAL FUNDS WERE USED TO PAY BOTH THE
       PRINCIPAL AND INTEREST OBLIGATIONS ON THE
       BONDS.

                           Assignment of Error No. III

       THE TRIAL COURT ERRED IN HOLDING THAT THE
       PROJECT WAS EXEMPTED FROM APPLICATION OF
       OHIO PREVAILING WAGE LAW UNDER R.C. 4115.04(B)(1)
       WHERE FEDERAL FUNDS WERE NOT USED IN
       CONSTRUCTING THE PROJECT, BUT RATHER WERE
       USED SOLELY TO REIMBURSE A PORTION OF THE
       COUNTY’S INTEREST PAYMENT OBLIGATION ON THE
       BONDS IT ISSUED TO FINANCE THE PROJECT.

       {¶9} Due to the nature of the assignment of errors, we elect to address them

together.

                      Assignments of Error Nos. I, II, & III

       {¶10} In its first, second, and third assignments of error, Local No. 8

essentially argues that the trial court erred by granting the County’s motion for

summary judgment and denying its motion for summary judgment. We disagree.

                               Standard of Review

       {¶11} An appellate court reviews a summary judgment order de novo.

Hillyer v. State Farm Mut. Auto. Ins. Co., 131 Ohio App.3d 172, 175 (8th Dist.

1999). Accordingly, a reviewing court will not reverse an otherwise correct

judgment merely because the lower court utilized different or erroneous reasons as

the basis for its determination. Diamond Wine & Spirits, Inc. v. Dayton


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Heidelberg Distrib. Co., 148 Ohio App.3d 596, 2002-Ohio-3932, ¶ 25 (3d Dist.),

citing State ex rel. Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d

217, 222 (1994). Summary judgment is appropriate when, looking at the evidence

as a whole: (1) there is no genuine issue as to any material fact, and (2) the moving

party is entitled to judgment as a matter of law. Civ.R. 56(C). In conducting this

analysis the court must determine “that reasonable minds can come to but one

conclusion and that conclusion is adverse to the party against whom the motion for

summary judgment is made, [the nonmoving] party being entitled to have the

evidence or stipulation construed most strongly in the [nonmoving] party’s favor.”

Id. If any doubts exist, the issue must be resolved in favor of the nonmoving

party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-59 (1992).

       {¶12} The party moving for summary judgment has the initial burden of

producing some evidence which demonstrates the lack of a genuine issue of

material fact. Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). In doing so, the

moving party is not required to produce any affirmative evidence, but must

identify those portions of the record which affirmatively support his argument. Id.

at 292. The nonmoving party must then rebut with specific facts showing the

existence of a genuine triable issue; he may not rest on the mere allegations or

denials of his pleadings. Id.; Civ.R. 56(E).




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                     Federal and Ohio Prevailing Wage Laws

        {¶13} This matter implicates both the federal and Ohio prevailing wage

laws.   The Davis-Bacon Act, passed in 1931, requires that “contractors and

subcontractors on federal construction projects pay qualified employees * * * the

prevailing wage rate for their job classification as determined by the Secretary of

Labor.” Frank Bros., Inc., v. Wisconsin Dept. of Transp., 409 F.3d 880, 882 (7th

Cir. 2005); see 40 U.S.C. 3142(b); 23 U.S.C. 113; 23 C.F.R. 633.102. To show

compliance with the Davis-Bacon Act, contractors and subcontractors who are

subject to the federal wage provisions must give weekly payroll records to the

Department of Labor. Frank Bros, at 882. In addition to complying with federal

prevailing wage laws, on construction projects that have state and federal funding,

contractors must also abide by supplemental state prevailing wage laws. Id. at

883.

        {¶14} In Ohio, “[t]he prevailing wage statutes, R.C. 4115.03 through R.C.

4115.16, require contractors and subcontractors for public improvement projects

to pay laborers and mechanics the so-called prevailing wage in the locality where

the project is to be performed.” J.A. Croson Co. v. J.A. Guy, Inc., 81 Ohio St.3d

346, 349 (1998). Under R.C. 4115.03(C),

        “Public Improvement” includes all buildings, roads, streets, alleys,
        sewers, ditches, sewage disposal plants, water works, and all other
        structures or works constructed by a public authority of the state or
        any political subdivision thereof or by any person who, pursuant to a

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        contract with a public authority, constructs any structure for a public
        authority of the state or a political subdivision thereof.

        {¶15} However, under R.C. 4115.04(B), certain public improvements are

exempt from R.C. 4115.03 through 4115.16. R.C. 4115.04(B) states, in relevant

part:

        (B) Sections 4115.03 to 4115.16 of the Revised Code do not apply
        to:

        (1) Public improvements in any case where the federal government
        or any of its agencies furnishes by loan or grant all or any part of the
        funds used in constructing such improvements, provided that the
        federal government or any of its agencies prescribes predetermined
        minimum wages to be paid to mechanics and laborers employed in
        the construction of such improvements[.]

                                   Stipulated Facts

        {¶16} Local No. 8 contends that the trial court erred in making a finding of

fact that was contrary to the stipulated record. Specifically, Local No. 8 argues

that both parties stipulated that the federal funds are being paid to reimburse a

portion of the County’s interest payments exclusively, and did not go toward the

payment of any of the principal balance.

        {¶17} In making this argument, Local No. 8 relies on Stipulated Statement

of Facts Nos. 16 and 23, which state:

        16. The federal government’s partial reimbursement to the County of
        the interest payments due on the Bonds in the County issued to
        finance construction of the Project triggered application of the
        Davis-Bacon Act (federal prevailing wage law) on the Project.


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       ***

       23. The United States Treasury pays the County an amount equal to
       45% of the interest payable on the Bonds. Funding for the United
       States Treasury’s payments comes from the American Recovery and
       Reinvestment Act (“ARRA”).

(Docket No. 7, p. 3-4). However, Local No. 8 omits discussion on Stipulated

Statement of Facts No. 24, which states:

       24. The County deposits the United States Treasury’s
       reimbursement payments into a Bond Retirement Fund the County
       set up at Huntington National Bank to extinguish its interest and
       principal obligations under the Bonds.

(Emphasis added.) (Id. at p. 4).

       {¶18} Stipulated Fact Nos. 16 and 23 do not state that the United States

Treasury’s reimbursement payments are solely or exclusively meant to pay the

interest payments, as Local No. 8 argues. Indeed, in Stipulated Fact No. 24, Local

No. 8 agreed that the Treasury’s money is deposited in a bank account that was

used to pay off both the interest and principal payments.          Further, interest

payments are associated with the cost of bonds, so ultimately Local No. 8 is

making a distinction where there is no difference. Therefore, we find that the trial

court did not err in finding that the federal funding was used to extinguish its

interest and principal obligations under the Bonds.




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                                     Preemption

       {¶19} Local No. 8 also argues that the trial court erred in finding that the

Davis-Bacon Act preempted Ohio prevailing wage laws. While we agree with

Local No. 8 that the Davis-Bacon act does not preempt state prevailing wage laws,

we are unable to find where in the trial court’s judgment it made a finding to the

contrary. The trial court’s judgment entry, in relevant part, states:

       [I]t is stipulated that, when AARA [sic] grant funding became
       involved, the [County] required compliance with the Davis-Bacon
       Federal Prevailing Wage requirements, which on its face would
       make the statutory state prevailing wage exemption applicable.

       ***

       It is the determination of the court that under the circumstances
       where federal funds are deposited in a bond retirement account and
       used to pay principal and interest on bonds issued to generate funds
       for construction of a public project, the statutory exemption provided
       applies, and therefore, based on compliance with Davis-Bacon
       federal minimum wage requirements, the [County] is not required to
       also demonstrate compliance with state prevailing wage law.

(Emphasis added.) (Docket No. 17, p. 2-3).

       {¶20} We fail to see how the trial court in any way implied that preemption

was an issue in this case. The trial court never used the word “preemption” in its

judgment entry and both parties stipulated that the Davis-Bacon Act does not

preempt state prevailing wage laws. The trial court merely explained that because

federal funding was involved for the construction of a public improvement,



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compliance with the Davis-Bacon Act was required, which in turn made the

exemption in R.C. 4115.04(B)(1) applicable.

                            R.C. 4115.04(B)(1) Exemption

        {¶21} Local No. 8 finally argues that the trial court erred by finding that the

County was exempted from the Ohio prevailing wage law under R.C.

4115.04(B)(1). According to Local No. 8, the funds that were actually used to

construct the Project came from the proceeds of the sale of the Bonds, which were

deposited in the County’s Permanent Improvement Fund; it was the County’s

Permanent Improvement Fund that paid for the “actual” construction of the

Project; thus, the federal funding, which was deposited into the Bond Retirement

Fund, did not contribute to the actual construction of the Project. Like the trial

court, we find that this argument is “contrary to reason and common sense * * *.”

(Id. at p. 4).

        {¶22} The parties stipulated that the County issued the Bonds to finance the

construction of the Project.      With the proceeds of the sale of the Bonds,

$2,308,910.18 was deposited into the County’s Permanent Improvement Fund,

which was used to construct the Project. The United States Treasury’s payments

were deposited into the Bond Retirement Fund, which, as discussed more fully

above, was used to extinguish its principal and interest obligations under the




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Bonds. Therefore, we are unable to find that the federal funding was not used in

the construction of the Project.

       {¶23} To avoid this result, Local No. 8 contends that the exemption found

in R.C. 4115.04(B) does not apply because of the timing and the amount of the

federal funds expended by the completion of the Project. We find this argument

unconvincing. R.C. 4115.04(B)(1) specifically states that for the exemption to

apply, the federal government may contribute “all or any part of the funds used in

constructing such improvements * * *.” Thus, it does not matter that federal

funding only paid for a small portion of the entire Project by the time construction

had ended.

       {¶24} In support of its argument, Local No. 8 analogizes this matter to

State ex rel. Northwestern Ohio Bldg. & Constr. Trades Council v. Ottawa Cty.

Improvement Corp., 122 Ohio St.3d 283, 2009-Ohio-2957. However, Ottawa

County is plainly distinguishable.      There, the project in dispute was not

constructed by or for a public authority, but instead, was constructed by and for a

private company. Id. at ¶ 23. Further, the project was financed by using both

public and private funding. Id. at ¶ 4-6. The public funding went only towards the

purchase of the real property, a building, and office equipment, while the private

funding went towards the renovation of the building. Id. at ¶ 4. The Ohio




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Supreme Court held that the project was not a public improvement, and therefore,

not subject to Ohio prevailing wage laws. Id. at ¶ 24.

       {¶25} Conversely, in this matter, the parties stipulated that the Bonds

“finance[d] the construction of the Project.” (Docket No. 7, p. 3). They also

stipulated that the federal funding went into the same account used to extinguish

both the principal and interest owed on the Bonds that were taken out to finance

the construction of the Project. Therefore, federal funding was clearly used for the

construction of the Project and Ottawa County does not control the disposition of

this matter.

       {¶26} In sum, we find that the federal funds were used in the construction

of a public improvement, and therefore, the Project is exempted under Ohio

prevailing wage laws under R.C. 4115.03(B). As such, it was proper for the trial

court to grant summary judgment in favor of the County and to deny Local No. 8’s

motion for summary judgment.

       {¶27} Accordingly, we overrule Local No. 8’s first, second, and third

assignments of error.

       {¶28} Having found no error prejudicial to Local No. 8 in the particulars

assigned and argued, we affirm the trial court’s judgment.

                                                               Judgment Affirmed

WILLAMOWSKI and SHAW, J.J., concur.
/jlr

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