Int'l Union of Operating Eng'rs, Local Union No. 132 Health & Welfare Fund v. L.A. Pipeline Constr. Co.

237 W.Va. 261

786 S.E.2d 620

INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 132 HEALTH AND WELFARE FUND, et al., Plaintiffs Below, Petitioners,

v.L.A. PIPELINE CONSTRUCTION COMPANY, INC., Defendant Below; and UNITED BANK, INC., Intervenor Below Respondents.

No. 15–0898.

Supreme Court of Appeals of West Virginia.

Submitted April 27, 2016.

Decided May 18, 2016.

Lawrence B. Lowry, Esq., Barrett, Chafin, Lowry & Amos, Huntington, WV, for the Petitioners.

Patrick Morrisey, Esq., Attorney General, Elizabeth G. Farber, Esq., Assistant Attorney General, Charleston, WV, for Amicus Curiae West Virginia Division of Labor.

James S. Huggins, Esq., Daniel P. Corcoran, Esq., Theisen Brock, Marietta, OH, for the Respondent, L.A. Pipeline Construction Company.

Floyd E. Boone Jr., Esq., Bowles Rice LLP, Charleston, WV, for Intervenor, United Bank, Inc.

Thomas A. Heywood, Esq., Sandra M. Murphy, Esq., Julia A. Chincheck, Esq., Daniel J. Cohn, Esq., Bowles Rice LLP, Charleston, WV, for Amicus Curiae West Virginia Bankers Association, Inc., and Community Bankers of West Virginia.

Chief Justice, KETCHUM :

The United States District Court for the Southern District of West Virginia presents this Court with one certified question regarding a “Perpetual Irrevocable Letter of Credit/Wage Bond.” This letter of credit/wage bond was obtained pursuant to the West Virginia Wage Payment Collection Act (“WPCA”) by an out-of-state corporation.¹

The letter of credit/wage bond's duration is governed by two competing bodies of law: (1) the WPCA, which pertains to wage bonds; and (2) the Uniform Commercial Code, which pertains to letters of credit. Consequently, the district court presented us with the following question, which has been reformulated by this Court:²

Does a “Perpetual Irrevocable Letter of Credit/Wage Bond” obtained pursuant to the Wage Payment Collection Act remain in effect until terminated with the approval of the Commissioner of the Division of Labor, as provided by the Wage Payment Collection Act, or does it automatically expire five years from its stated date of issuance, regardless of whether it has been terminated with the Labor Commissioner's approval, as provided by the Uniform Commercial Code?

We answer: To the extent they conflict, the WPCA prevails over the Uniform Commercial Code on the duration of a letter of credit/wage bond obtained pursuant to the WPCA. Thus, under West Virginia law, the letter of credit/wage bond at issue in this case remains in effect until terminated with the approval of the Labor Commissioner.

I.FACTUAL AND PROCEDURAL BACKGROUND

This dispute arises from a corporation's failure to fully pay its employees. The employer is L.A. Pipeline Construction Company, an Ohio corporation. The aggrieved employees are a group of engineers who worked on a pipeline job in West Virginia.³ L.A. Pipeline admitted liability for failing to pay the engineers' fringe benefits and administrative union dues. Now, it seeks to avoid paying on that liability by claiming a wage bond ensuring employee access to wages has expired.

Before these facts occurred, L.A. Pipeline had not conducted much work in West Virginia. Therefore, the WPCA required it to obtain a wage bond securing its employees' wages. A wage bond obtained pursuant to the WPCA may take various forms, including a letter of credit.⁴ Under the WPCA, it may be terminated with the Labor Commissioner's approval only after the Commissioner has determined that all wages and fringe benefits have been paid.⁵

Pursuant to the WPCA's wage bond requirement, L.A. Pipeline obtained a “Perpetual Irrevocable Letter of Credit/Wage Bond” in January 2009. The letter of credit/wage bond provided in part:

This perpetual irrevocable letter of credit is posted as a wage bond pursuant to [the WPCA], and is subject to the provisions thereof, and the laws of the State of West Virginia.... This perpetual irrevocable letter of credit/wage bond may only be terminated with the approval of the Commissioner of the West Virginia Division of Labor pursuant to the terms and conditions of [the WPCA].... The Issuing bank further agrees to notify the Commissioner ... prior to the five (5) year anniversary of the Issuing date so that the Commissioner can determine if the wage bond may be terminated pursuant to [the WPCA].

The letter of credit/wage bond was issued by United Bank, Inc. and listed the Labor Commissioner as the beneficiary. Under the letter of credit/wage bond, the Labor Commissioner would draw funds from United Bank if L.A. Pipeline failed to fully pay its employees. In this event, L.A. Pipeline would owe United Bank the amount withdrawn by the Labor Commissioner.

In April 2011, L.A. Pipeline failed to pay the engineers' fringe benefits and administrative union dues. When the engineers notified the Labor Commissioner about L.A. Pipeline's failure to pay, they were advised to obtain a court order to collect payment through the letter of credit/wage bond.⁶

In January 2013, the engineers relied on the Labor Commissioner's advice and sued L.A. Pipeline for unpaid wages in the United States District Court for the Southern District of West Virginia.⁷ In April 2014, the parties entered into an agreed judgment order in which L.A. Pipeline admitted it owed the engineers $129,273.90 in unpaid employee benefit contributions. L.A. Pipeline did not pay the engineers the amount owed under the judgment order.

In March 2015, the engineers filed a writ of suggestion calling on the Labor Commissioner to draw from the letter of credit/wage bond to satisfy the agreed judgment order. In response, L.A. Pipeline threatened to sue United Bank if it paid the Labor Commissioner under the letter of credit/wage bond.

In April 2015, L.A. Pipeline responded to the engineers' writ of suggestion, asserting the letter of credit/wage bond is no longer in effect. Citing provisions of the Uniform Commercial Code, L.A. Pipeline argued that the letter of credit/wage bond automatically expired in January 2014, five years after its issuance date in January 2009. United Bank intervened in this dispute and adopted L.A. Pipeline's position.

Essentially, this dispute is whether the letter of credit/wage bond is still in effect. The engineers argue that, under the WPCA, the letter of credit/wage bond is still in effect because it has not been terminated with the Labor Commissioner's approval and L.A. Pipeline has not paid them. L.A. Pipeline and United Bank assert it automatically expired in January 2014 under the Uniform Commercial Code. The district court found this issue has not been directly addressed by this Court. Therefore, on September 17, 2015, it certified a question on the letter of credit/wage bond's duration to this Court.

II.STANDARD OF REVIEW

In regard to a federal court's certified question, “A de novo standard is applied by this Court in addressing the legal issues presented by a certified question from a federal district or appellate court.”⁸

III.ANALYSIS

The federal court asks us to resolve the duration of a letter of credit/wage bond obtained pursuant to the WPCA. Two bodies of law govern this subject-matter: (1) the WPCA, which pertains to wage bonds; and (2) the Uniform Commercial Code, which pertains to letters of credit.

To answer this question, the parties dispute two issues: (1) whether the WPCA is clear and unambiguous that the letter of credit/wage bond remains in effect; and, if so, (2) whether the WPCA prevails over the Uniform Commercial Code to the extent they conflict on the letter of credit/wage bond's duration. We discuss both issues in turn.

A. The West Virginia Wage Payment Collection Act

In West Virginia Code Section 21–5–14(g), the WPCA provides that a wage bond may terminate only with the approval of the Labor Commissioner:

The bond may be terminated, with the approval of the commissioner, after an employer submits a statement, ... that the following has occurred: The employer has ceased doing business and all wages and fringe benefits have been paid, or the employer has been doing business in this State for at least five consecutive years and has paid all wages and fringe benefits. The approval of the commissioner will be granted only after the commissioner has determined that the wages and fringe benefits have been paid. The bond may also be terminated upon a determination by the commissioner that an employer is of sufficient financial responsibility to pay wages and fringe benefits.⁹

The engineers argue that, under West Virginia Code Section 21–5–14(g)'s clear and unambiguous terms, payment, or the ability to pay, wages and fringe benefits are a pre-requisite to terminating a letter of credit serving as a wage bond. Thus, the letter of credit/wage bond remains in effect because L.A. Pipeline has not paid their wages and fringe benefits.

However, L.A. Pipeline and United Bank assert West Virginia Code Section 21–5–14(g) is not as clear as it seems. They cite a provision in the Uniform Commercial Code which states: “A letter of credit that states that it is perpetual expires five years after its stated date of issuance [.]”¹⁰ They contend that, reading the two statutes together, the Uniform Commercial Code creates an ambiguity in West Virginia Code Section 21–5–14(g) despite its seemingly clear language.

We decline to find ambiguity in West Virginia Code Section 21–5–14(g)'s language merely because another statute may seemingly conflict with it. As we have held: “The rule that statutes should be read and construed together ... may not be invoked when the language of the statute is clear and unambiguous.”¹¹ Indeed, “a related statute cannot be utilized to create doubt in an otherwise clear statute.”¹²

If West Virginia Code Section 21–5–14(g) is clear and does not lend itself to multiple constructions, its language must be accepted as it is written. As is well-established, “[w]here the language of a statute is clear and without ambiguity the plain meaning is to be accepted without resorting to the...