Defendants Strong Steel Door, Inc. ("SSD") and David Wei ("Wei") move pursuant to [*2]CPLR 3212 (e) for partial summary judgment dismissing the claims of plaintiff Carlos Huerta ("Huerta") and, pursuant to CPLR 3211 (a)(7), to dismiss the first through fifth, seventh, and eighth causes of action of the plaintiffs' Second Amended Complaint ("Complaint"). Defendants also seek an order pursuant to 22 NYCRR-1.1, imposing sanctions against plaintiffs and their counsel on the ground that the plaintiffs and their attorneys engaged in frivolous conduct by asserting claims that are without merit in law. Plaintiffs seek leave to amend the complaint to reflect additional discovery and to correct purported typographical errors.

BACKGROUND

This proposed class action arose from various alleged public works contracts entered into by SSD with governmental agencies to perform construction related work. Plaintiffs, for themselves and on behalf of all others similarly situated, commenced this action on May 11, 2005, to recover prevailing wages and supplemental benefits, including overtime compensation for work performed in excess of 40 hours, that they allegedly failed to receive for labor performed pursuant to the public works contracts. The complaint alleges that plaintiffs furnished labor to SSD, including carpentry, painting, laboring, and masonry commencing in 2002 and continuing through the present, in satisfaction of certain contracts with Lincoln Hospital, Richmond Early Learning Center, Staten Island Botanical Garden, Snug Harbor Cultural Center, and other parks and public projects in New York. Plaintiffs have joined two payment sureties as additional defendants: Colonial Surety Company ("Colonial") and First National Insurance Company of America ("FNIC").

Plaintiffs allege that defendants SSD and Wei "willfully failed to pay . . . wages due and owing to them," pursuant to public works contracts which required that SSD pay all workers prevailing wages and supplemental benefits. The complaint sets forth nine causes of action. The sixth and ninth causes of action are alleged against the above-named payment sureties. As those defendants are not parties to this motion, the claims against them will not be discussed further. The first cause of action alleges trust diversion pursuant to Lien Law §§ 70, 71, and 75. The second cause of action alleges breach of fiduciary responsibility pursuant to Lien Law § 71. The third cause of action alleges breach of contract. The fourth cause of action sounds in quantum merit. The fifth cause of action alleges unjust enrichment. The seventh cause of action alleges failure to pay prevailing wages and overtime compensation in violation of New York Labor Law §§ 190, 191, and 198-c. The eighth cause of action alleges failure to pay overtime compensation in violation of New York Labor Law § 655 and 12 NYCRR 142-3.2.^[FN1]

In their statement submitted pursuant to Rule 19-a of the Rules of the Commercial Division, SSD and Wei contend that plaintiff Segundo Jara worked solely at Lincoln Hospital from March 7, 2005 until April 15, 2005, and that plaintiff Huerta worked solely at Lincoln Hospital from December 27, 2004 until March 30, 2005. In their affirmation, however, plaintiffs dispute these facts, contending that Huerta also worked for SSD from July 2003 until September 2003, and that the employment consisted of work on six separate sites.

It is undisputed that in order to obtain employment with SSD, Huerta, as an alien, was required to provide proof of his eligibility for employment in the United States and that he [*3]initially provided a social security card and alien registration card to SSD. However, following the termination of Huerta's employment, SSD discovered that the social security number provided by Huerta did not match his name. Upon investigation through the United States Department of Justice, the Immigration and Naturalization Service, and the Social Security Administration, it was revealed that the documentation provided by Huerta was forged. At oral argument, plaintiff's counsel acknowledged that this fact is not disputed.

Defendants have moved pursuant to CPLR 3212 (e) for partial summary judgment dismissing plaintiff Huerta's claims as a matter of law based upon his submission of fraudulent documents in violation of the Immigration and Reform Control Act of 1986, 8 USC  1324c (a) ("IRCA"), which criminalizes the presentation of forged evidence of entitlement to employment within the United States, and upon the decision of the Supreme Court in Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, 535 US 137 (2002), in which an illegal alien who had similarly violated the statute, was found to be ineligible for reinstatement and backpay in compensation for his wrongful termination in violation of the National Labor Relations Act ("NLRA"). As to the facts relevant to this motion there is no dispute and a pure question of law is presented.

Defendants SSD and Wei have also moved, pursuant to CPLR 3211 (a) (7), to dismiss the complaint in its entirety as to them claiming that the complaint fails to state claims upon which relief may be granted. Upon review of the pleadings and the motion papers from both plaintiffs and the moving defendants, this Court finds that, although the complaint lacks the specificity generally required in a case of this nature premised upon alleged breaches of contracts for public works, there is no dispute that plaintiffs did perform labor for defendants on at least one such contract. As to other contracts alleged to have been breached, the actual contracts are presumably within the control of defendants which would be signatories thereto. Plaintiffs, as employees, are not in direct privity with the governmental entity but are merely third party beneficiaries and would have no direct access to or knowledge of the terms of the contracts. There is sufficient information as to location and time-frame to enable defendants to ascertain the validity of the allegations from their own records. At oral argument, plaintiffs' counsel maintained that defendants had objected to turning over copies of contracts which had been requested, but that plaintiffs have now obtained copies of all relevant contracts except those relating to the school on which plaintiffs allegedly worked. Dismissal of the complaint is therefore inappropriate at this time and plaintiffs must be afforded the opportunity to amend the complaint based upon the newly-acquired information.

In order to obtain summary judgment, the movant must establish its cause of action sufficiently to warrant a court's directing judgment in its favor as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Zuckerman v. City of New York, 49 NY2d 557, 562 (1980); CPLR 3212 (b). Where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action.Vermette v. Kenworth Truck Company, 68 NY2d 714, 717 (1986); Zuckerman v. City of New York, supra at 562. The parties' competing contentions are viewed in the light most favorable to the party opposing the motion. Marine Midland Bank, N.A. v. Dino & Artie's Automatic Transmission Co., 168 AD2d 610 (2d Dep't, 1990); Trustco [*4]Bank v. Canon Building of Troy Associates, 246 AD2d 797 (3d Dep't, 1998).

Defendants move for partial summary judgment pursuant to CPLR 3212 (e) on the ground that Huerta's claims are barred because, in proffering fraudulent documents to demonstrate his right to be employed, he obtained employment through illegal and criminal conduct, in violation of 8 USC § 1324c (a) and 18 USC § 1546 (b),^[FN2] the former of which is encompassed by the IRCA. Defendants argue that where employment has been procured through fraud and illegal conduct, an act of Congress, the IRCA, will trump state statutes providing for compensation and preclude a common law breach of contract claim. It is defendants' position that Huerta is therefore precluded from maintaining this action to recover unpaid wages earned under the public works contracts. Plaintiffs argue, however, that Hoffman is inapplicable here and that no court has ever held that a worker could not maintain a claim for unpaid earned wages by virtue of his immigration status. Plaintiffs maintain that the public policy of the State of New York, as reflected in its Labor Law, should be enforced. New York Labor Law  220 (3) mandates the inclusion in all public works contracts of a provision requiring the payment of prevailing wages. The obligation thus placed on the employer is enforceable by the employee as a third party beneficiary thereof. Maldonado v. Olympia Mechanical Piping & Heating Corp., 8 AD3d 348, 350 (2d Dep't, 2004).

By enacting the IRCA, Congress made prohibiting the employment of illegal aliens central to the enforcement of United States immigration policy, intending to reduce future illegal immigration through employment sanctions. Hoffman, 535 US at 147; Balbuena v. IDR Realty LLC, 6 NY3d 338 (2006); 8 USC  1324c (a). Aliens in fact cannot legally obtain employment unless they present specified documents that establish eligibility. Hoffman at 148; 8 USC § 1324a. Employers must verify the immigration status of all prospective employees before offering them employment. 8 USC  1324a (b). It is illegal for an undocumented alien to undermine this requirement by submitting fraudulent documentation, as the IRCA explicitly makes it unlawful to knowingly "use, attempt to use, possess, obtain, accept, or receive or to provide any forged, counterfeit, altered, or falsely made document in order to satisfy any requirement of [the IRCA] or to obtain benefit under [the IRCA]." 8 USC § 1324c (a)(2). An alien who uses, or attempts to use, such documents is subject to fines and criminal prosecution. 18 USC § 1546 (b).

As there is no dispute that Huerta violated the IRCA, defendants argue that Huerta is thus precluded from maintaining any action that would result in his benefitting from his criminal activity. In support of this contention, defendants rely on Hoffman, in which the United States Supreme Court held that an illegal alien who gained employment by presenting false work authorization documents was not entitled to backpay for work that he would have performed absent a wrongful termination in violation of the NLRA. In Hoffman, the Supreme Court noted that an award of backpay for work not performed would be contrary to the policies underlying the IRCA, and would effectively condone and encourage future violations of immigration laws. Hoffman at 149.

In response to defendants' argument, plaintiff contends that Hoffman does not support defendants' argument that Huerta's production of fraudulent documents bars recovery here, as [*5]Hoffman was only concerned with claims for backpay for work not actually performed and did not establish that an award of unpaid wages for work that was performed runs counter to the IRCA. This argument is supported by numerous authorities. See e.g. Flores v. Amigon, 233 F.Supp.2d 462 (EDNY 2002) (agreeing that Hoffman is limited to claims of backpay for work not performed); Liu v. Donna Karan Int'l, Inc., 207 F.Supp.2d 191 (SDNY 2002) and cases cited therein (denying defendant's request to discover plaintiffs' immigration status as not relevant to a claim for unpaid wages for work that was performed); Flores v. Albertson's, Inc., 2002 WL 1163623, *5, 2002 US Dist LEXIS 6171, *18 (CD Cal 2002, April 9, 2002) ("Hoffman did not hold that an undocumented employee was barred from recovering unpaid wages for work actually performed"); Singh v. Jutla, 214 F.Supp.2d 1056 (ND Cal 2002) (declining to extend Hoffman to an undocumented worker's action to recover unpaid wages for work actually performed); Garcia v. Pasquareto, 11 Misc 3d 1, 2 (App. Term, 9th & 10th Jud. Dist. 2004) (holding that undocumented aliens can bring an action against their employer for wages earned as "the policy issues addressed . . . in Hoffman do not apply with the same force"); Pineda v. Kel-Tech Constr., Inc., 15 Misc 3d 176, 187 (Sup. Ct, NY Co., 2007) ("Undocumented workers, no matter what type of documents they proffered or did not proffer at the time of employment, may still collect the prevailing wage under New York Labor Law section 220 for work they have performed"); Oro v. 23 East 79th Street Corp., 10 Misc 3d 82, 85 (Sup. Ct, Kings Co., 2005) (finding "no evidence that the IRCA, as construed by Hoffman, operated to preempt state law governing the right of undocumented aliens to recover damages of any sort in state court"); Andrzejewski v. Interphase Co., Ltd., Sup Ct, NY Co., Jan. 3, 2002, Ramos J., Index No. 131657/94 (holding that an undocumented worker's immigration status is irrelevant to a claim for prevailing wages arising out of a public construction project). In Del Rey Tortilleria v. National Labor Relations Board, 976 F2d 1115 (7th Cir. 1992), the court held that undocumented aliens discharged in violation of the NLRA were not entitled to backpay, but noted that a distinction is to be made between undocumented workers seeking pay for wages actually earned and those seeking backpay for work not yet performed.

In Hoffman, the Court reasoned that plaintiff-alien could not legally be employed by defendant or any other employer in the United States, and that an award of backpay in compensation for unlawful termination would thus be a reward for, not only labor not performed, but for labor that could not legally be performed in any case. Hoffman at 149-150. It is noted that it is the responsibility of an employer under IRCA to immediately terminate fraudulently obtained employment. The Court also noted that it would therefore be impossible for an illegal alien to mitigate damages by seeking new employment after his termination since he was not lawfully permitted to be in the United States. Hoffman at 150-151. In the instant case, defendants only discovered Huerta's use of fraudulent documents after termination of his employment. Huerta thus is only claiming wages for work performed prior to termination.

Defendants, however, emphasize that the essential feature of Hoffman was the determination that "Congress has expressly made it criminally punishable for an alien to obtain employment with false documents." Hoffman at 149. Defendants further rely on dicta from the New York Court of Appeals decision in Balbuena v. IDR Realty LLC, supra, in which the Court found that aliens illegally employed in the United States could not be deprived of lost wages as a result of injury, but noted that a key factor in Hoffman was that, as here, the undocumented alien [*6]had committed a criminal act. In holding that an undocumented alien was not precluded from recovering lost earnings as damages resulting from a workplace injury, the Court of Appeals reasoned that such a per se preclusion would "encourage[ ] the employment of undocumented aliens and undermine[ ] the objectives that both IRCA and the state Labor Law were designed to accomplish." Balbuena v. IDR Realty LLC, 6 NY3d at 362.

As recognized both by the New York Court of Appeals in Balbuena and by Justice Breyer in dissent in Hoffman, the IRCA "was not intended to undermine or diminish in any way labor protections in existing law.' " Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, supra at 156 (Breyer, J., dissenting); Balbuena v. IDR Realty LLC, supra at 359 quoting HR Rep No. 99-682, part I, 99th Cong, 2d Sess, at 58, reprinted in 1986 US Code Cong & Admin News, at 5662. The IRCA, in fact, contains an express provision that provides for preemption only when a "state or local law [imposes] civil or criminal sanctions . . . upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens." 8 USC § 1324a (h)(2). See Balbuena at 357 ("The legislative history of IRCA confirms . . . [that] the preemption language in section 1324a (h)(2) was intended to apply only to civil fines and criminal sanctions imposed by state or local law"). A worker's failure to comply with federal immigration laws is a separate issue, as between the employee and the government, that does not permit an employer to disregard prevailing wage requirements in a public works contract. Majlinger v. Cassino Contracting Corp., 25 AD3d 14 (2d Dep't, 2005), aff'd sub nom. Balbuena v. IDR Realty LLC, supra; Oro v. 23 East 79th Street Corp., 10 Misc 3d 82 (Sup. Ct, Kings Co., 2005); Liu v. Donna Karan Int'l, Inc., supra at 192 (noting that undocumented workers are entitled to maintain an action for unpaid wages under the Fair Labor Standards Act ("FLSA"), as such does not contravene the policies underlying the IRCA); Garcia v. Pasquareto, supra at 2-3 ("enforcing the [FLSA] provisions requiring employers to pay proper wages to undocumented aliens when the work has been performed actually furthers the goal of the IRCA"); Pineda v. Kel-Tech Constr., Inc., supra at 186. New York Labor Law, in fact, "applies to all workers in qualifying employment situations—regardless of their immigration status . . ." Balbuena, supra at 358. An employee may therefore sue an employer for unpaid wages notwithstanding alleged IRCA violations.

Disregard of the statutory mandate to pay prevailing wages where the claimant is a undocumented alien would encourage employers to subvert the IRCA by offering illegal aliens lower wages than legal workers, or simply not paying them at all, knowing that the employee would have no legal recourse. Pineda v. Kel-Tech Constr., Inc., supra; Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, supra (Breyer, J., dissenting). Although defendants maintain that the IRCA would be undermined by awarding prevailing wages and supplemental benefits to Huerta, the argument is unavailing. Such an award would actually further the goals of the IRCA, as permitting undocumented workers to recover the same wages as legal workers removes all incentives to hire illegal aliens. Garcia v. Pasquareto, supra. The purpose of the IRCA, in fact, is to curtail employment of illegal aliens, rather than to prevent aliens from being compensated for work already performed. Oro v. 23 East 79th Street Corp., supra.

Defendants further argue that Huerta's criminal conduct renders him ineligible to recover as a third party beneficiary of the public works contracts pursuant to which he is claiming unpaid wages. While illegal contracts are often unenforceable (see Stone v. Freeman, 298 NY 268 [*7](1948); see also Spivak v. Sachs, 16 NY2d 163 (1965); McConnell v. Commonwealth Pictures Corp., 7 NY2d 465 (1960)), "the mere commission of an offense . . . does not bar a plaintiff from seeking redress for an injury suffered while engaging therein." Mischalski v. Ford Motor Co., 935 F.Supp. 203 (EDNY 1996). Like Huerta, Mischalski gained employment by allegedly obtaining a social security number and driver's license under false pretenses, but was permitted to recover lost earnings because illegal conduct only bars recovery "when there is a causal nexus between plaintiff's injury and his or her own misconduct." Mischalski v. Ford Motor Co., supra at 206; see also Balbuena v. IDR Realty LLC, 6 NY3d at 361 ("civil recovery is foreclosed if the plaintiff's conduct constituted a serious violation of the law and the injuries for which he seeks recovery were the direct result of that violation,' " quoting Barker v. Kallash, 63 NY2d 19, 24 (1984)). Huerta's presentation of fraudulent documents to SSD was not a contributing cause to the failure to pay prevailing wages. In fact, Huerta's use of fraudulent documents was only discovered following his discharge and after defendants had allegedly failed to pay him the wages to which he was entitled. Even if Huerta's employment had been illegally obtained, "New York courts do not . . . dismiss causes of actions for wages earned by undocumented workers simply because the labor contracts are illegal." Pineda v. Kel-Tech Constr., Inc., supra at 185; accord Garcia v. Pasquareto, supra at 3. "The practice of hiring [illegal] aliens, using their services and disclaiming any obligation to pay wages because the contracts are illegal is to be condemned." Nizamuddowlah v. Bengal Cabaret, Inc., 69 AD2d 875 (2d Dep't, 1979). Huerta's claim is not precluded on the basis of an illegal bargain with his employer.

Although defendants have clearly articulated the tension between the competing policy considerations of the IRCA, the Fair Labor Standards Act, and the relevant provisions of New York's Labor Law, the cases cited by defendants in support of their motion do not establish that they are entitled to dismissal of Huerta's complaint. "No court has held that an undocumented alien may be deprived of wages for work already performed." Majlinger v. Cassino Contracting Corp., 25 AD3d 14, 26 (2d Dep't, 2005), aff'd sub nom. Balbuena v. IDR Realty LLC, supra. As a matter of law, the undisputed facts do not mandate judgment in defendants' favor. Defendants have not fulfilled their burden of making a prima facie showing of entitlement to summary judgment. See Vermette v. Kenworth Truck Company, supra, 68 NY2d 714, 717; Zuckerman v. City of New York, supra, 49 NY2d 557, 562. . Defendant's motion for partial summary judgment is therefore denied.

Motion to Dismiss the Complaint

Upon a motion to dismiss, a pleading must be afforded a liberal construction. Leon v. Martinez, 84 NY2d 83, 87 (1994); Casamassima v. Casamassima, 30 AD3d 596 (2d Dep't, 2006). The facts as alleged in the complaint must be accepted as true and plaintiffs must be accorded the benefit of every possible favorable inference. Leon v. Martinez, supra; Casamassima v. Casamassima, supra. The court must determine only whether the facts as alleged fit within any cognizable legal theory and not whether the cause of action has been properly pled. See 511 West 232nd Street Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, 151-152 (2002); Monroe v. Monroe, 50 NY2d 481, 484; Guggenheimer v. Ginzburg, 43 NY2d 268 (1977); Rovello v. Orofino Realty Co., 40 NY2d 633, 634 (1976). However, allegations consisting of bare legal conclusions, or that are inherently incredible or contradicted by [*8]documentary evidence, will not be accorded a favorable inference. SRW Associates v. Bellport Beach Property Owners, 129 AD2d 328 (2d Dep't, 1987).

On this motion, defendants move to dismiss the first through fifth, seventh, and eighth causes of action of the complaint pursuant to CPLR 3211 (a) (7) on the ground that the complaint is insufficient as pled and fails to state any claims upon which relief may be granted. Plaintiffs oppose the motion, contending that the motion must fail on procedural grounds since defendants have already submitted an answer and interposed discovery demands. Accordingly, plaintiffs argue that the court should not determine this branch of defendants' motion on the merits.

CPLR 3211 (e) provides:

"At any time before service of the responsive pleading is required, a party may move on one or more of the grounds set forth in subdivision (a) . . . [and] a motion based upon a ground specified in paragraph two, seven or ten of subdivision (a) may be made at any subsequent time or in a later pleading, if one is permitted."

Thus, although certain grounds for dismissal are waived if not asserted in the answer or in a motion to dismiss prior to the time service of the answer is required, a motion to dismiss for failure to state a cause of action may be raised at any time. See Rainbow Hospitality Mgmt., Inc. v. Mesch Engineering, P.C., 270 AD2d 906 (4th Dep't, 2000); Schel v. Roth, 242 AD2d 697 (2d Dep't, 1997); Herman v. Greenberg, 221 AD2d 251 (1st Dep't, 1995); Pace v. Perk, 81 AD2d 444 (2d Dep't, 1981). There is therefore no procedural defect impeding consideration of the merits of defendants' motion to dismiss pursuant to CPLR 3211 (a) (7).

Third Cause of Action

Plaintiff's third cause of action sounds in breach of contract and alleges that "the Public Works Contracts entered into by SSD set forth the prevailing rate of wages and supplemental benefits to be paid to Plaintiffs and putative class [and that] SSD breached the Public Works Contracts by failing to ensure that Plaintiffs and putative class received the prevailing rates of wages and supplemental benefits for all labor performed upon the Public Works Projects." Defendants contend that the complaint fails to give adequate notice of the transactions upon which the plaintiffs base their right to recovery, in that the complaint fails to reference any specific contract or contract provision upon which the claims are based. Defendants therefore maintain that it is impossible to determine the relevant prevailing wage and benefit rates, as well as the period during which plaintiffs were not paid prevailing wages.

Defendants rely on Maldonado v. Olympia Mechanical Piping & Heating Corp., supra, 8 AD3d 348, also an action to recover unpaid wages and supplemental benefits owed for work performed on public works projects, in which an order of the Supreme Court granting a motion to dismiss pursuant to CPLR 3211 (a) (7) was affirmed because plaintiffs did not identify the contracts that the defendant allegedly breached in the complaint. The court explained that" in order to plead a breach of contract cause of action, a complaint must allege the provisions of the contract upon which the claim is based.' " Maldonado v. Olympia Mechanical Piping & Heating Corp., supra at 350, quoting Atkinson v. Mobil Oil Corp., 205 AD2d 719, 720 (2d Dep't, 1994). "In an action to recover damages for breach of contract, the complaint must set forth the terms of the agreement upon which liability is predicated, either by express reference or by attaching a copy of the contract." Chrysler Capital Corp. v. Hilltop Egg Farms, Inc., 129 AD2d 927, 928 [*9](3d Dep't, 1987). Although the complaint is not required to quote contractual provisions verbatim, it must identify the agreement at issue by at least indicating the terms in that agreement which were allegedly breached. Howell v. American Airlines, Inc., 2006 WL 3681144, 2006 US Dist LEXIS 89229 (EDNY, Dec. 11, 2006).

Plaintiffs maintain, however, that there are critical differences between Maldonado v. Olympia Mechanical Piping & Heating Corp., supra and this case that must be considered. First, the motion to dismiss in Maldonado was made before an answer was filed by the movant, whereas the instant motion, while characterized as a 3211 motion, follows the service of an answer. Second, the complaint in Maldonado failed to identify any locations of the public works projects or any approximated dates upon which the claims were based. Maldonado v. Olympia Mechanical Piping & Heating Corp., 2003 WL 25519842 (Sup Ct, NY Co., March 31, 2003), aff'd as mod, 8 AD3d 348. In this case, the complaint specifies public contracts performed for various municipal entities, commencing in 2002 and continuing to the filing of the complaint, at Lincoln Hospital, "various park sites on Staten Island, including Snug Harbor, Richmond Hill Learning Center," a public marina in Nassau County, and "public school buildings in New York" (para. 9). In response to defendants' motion, plaintiff Carlos Huerta has submitted his affidavit stating that he was employed by defendant SSD from July 2003 until September 2003 and from December 2004 until March 30, 2005, at six sites including Lincoln Hospital, a park in Staten Island, a Myrtle Avenue apartment house, a Long Island marina, a Bronx school, and defendant's workshop. "[T]he Court may consider any affidavit submitted by the plaintiff to remedy any defect in the complaint." Maldonado, supra at 350. At least three of the sites enumerated appear to be public works projects subject to Labor Law  220. As observed in Maldonado (at 350), "the workers protected by Labor Law  220 are third-party beneficiaries of the contract between their employer and the municipality, and they possess a cause of action against their employer to recover damages for breach of contract when the contract between the employer and the municipality expressly provides for the wages to be paid to such workers."

New York Labor Law § 220 (3) provides:

"The wages to be paid for a legal day's work, as hereinbefore defined, to laborers, workmen or mechanics upon such public works, shall be not less than the prevailing rate of wages as hereinafter defined . . . Such contracts shall contain a provision that each laborer, workman or mechanic, employed by such contractor, subcontractor or other person about or upon such public work, shall be paid the wages herein provided."

Based upon the above statutory language, plaintiffs are entitled to presume that defendants' public works contracts contained the required provisions entitling them to sue for prevailing wages not paid.

Plaintiffs have also supplemented the complaint by providing documents obtained from the Health and Hospitals Corporation via a Freedom of Information request. At oral argument it was represented that plaintiffs have now obtained copies of all relevant contracts except those relating to the Bronx school on which plaintiffs claim to have worked, but that these documents were unavailable at the time the complaint was filed. According the pleading and opposing submissions the deference due on the instant motion (see Maldonado, supra at 350), it is clear that plaintiffs have demonstrated a cause of action for breach of contract available to them as third party beneficiaries. Given the status of these plaintiffs, it is not surprising that they were [*10]unable to articulate the particulars of the contracts between defendants and the municipal contracting entities.

"[W]hen knowledge of facts is necessary for a party to properly oppose a motion to dismiss, and those facts are within the sole knowledge or possession of the movant, discovery is sanctioned if it has been demonstrated that such facts may exist." Cantor v. Levine, 115 AD2d 453, 454; CPLR 3211 (d). As the record is uncontradicted that plaintiffs did perform work on public works projects at the behest of SSD and that copies of the relevant contracts would be in the defendants', but not the plaintiffs', possession, but were not disclosed before the filing of the instant motion, defendants' motion to dismiss the third cause of action is denied. Plaintiffs have requested leave to amend the complaint to reflect the particulars of the contracts. That request is granted. Plaintiffs are directed to specify the actual contracts and the terms which were allegedly breached. Defendants' motion to dismiss the third cause of action, alleging breach of contract, is therefore denied without prejudice, with leave to renew the motion upon an amended complaint. Such amended complaint shall be served and filed within twenty days of the date of this decision.

First and Second Causes of Action

Defendants acknowledge that the first and second causes of action which assert claims for trust diversion and breach of fiduciary responsibility under Article 3-A of the Lien Law, are derivative of plaintiffs' claims for unpaid prevailing wages and that dismissal is warranted only should the court dismiss the third cause of action. As the court has not granted defendants' motion as to the third cause of action, the branch of the motion seeking dismissal of the first and second causes of action is also denied.

Fourth and Fifth Causes of Action

Plaintiffs' fourth and fifth causes of action are quasi-contractual, sounding in quantum meruit and unjust enrichment, and are pled in the alternative. Generally, a quasi-contract claim arises only in the absence of any agreement, as the existence of a valid written contract precludes recovery in quasi-contract. Goldman v. Metropolitan Life Ins. Co., 5 NY3d 561 (2005); Curtis Properties Corp. v. Greif Companies, 236 AD2d 237, 238 (1st Dep't, 1997). However, "a party may assert causes of action in both breach of contract and quasi-contract where there is a bona fide dispute concerning existence of a contract." Randall v. Guido, 238 AD2d 164 (1st Dep't, 1997). Nevertheless, relying on the analogous case of Maldonado v. Olympia Mechanical Piping & Heating Corp., supra, in which plaintiffs' actions for quantum meruit and unjust enrichment were dismissed, defendants insist that the equitable claims contained in the fourth and fifth causes of action must be dismissed notwithstanding their dispute regarding the contractual claim.

Plaintiffs' complaint herein alleges that defendants failed to "pay the statutorily required prevailing wage, overtime and supplemental benefit rates" (para. 52). Thus the fourth and fifth causes of action are not duplicative of the third cause of action, alleging breach of contract, as plaintiffs also allege that there are specific statutes that provide a potential basis for recovery, independent of any contract provisions, and that defendants have been unjustly enriched by their retention of sums paid to defendants on plaintiffs' behalf.. The quasi-contractual claims should therefore survive pending service of the amended complaint. Defendants' motion to dismiss the [*11]fourth and fifth causes of action is accordingly denied without prejudice, with leave to renew the motion upon an amended complaint.

Seventh Cause of Action

Citing Labor Law  190, 191, and 198-c, plaintiffs' seventh cause of action alleges failure to pay wages. Defendants correctly contend that Labor Law  190 is not a substantive provision pursuant to which a claim may be made, but rather provides definitions of terms used throughout Article 6 of the Labor Law. However, plaintiffs do not assert a claim in violation of Labor Law  190. Plaintiffs complaint alleges that SSD "violated New York Labor Law  191 by failing to pay . . . the agreed upon wage and compensation rates for the work plaintiffs . . . performed during the period in which such wages were due" (para. 61).

Defendants maintain that Labor Law  191 is inapplicable to plaintiffs' action, as it governs frequency, rather than amount, of payments of wages. Labor Law  191 requires that "a manual worker shall be paid weekly and not later than seven calendar days after the end of the week in which the wages are earned." While acknowledging that in a similar putative class action brought by construction workers to recover prevailing wages, benefits, and overtime compensation pursuant to public works contracts, upon a motion for summary judgment, the court dismissed a claim alleging failure to timely pay wages in accordance with Labor Law  191, noting that the dispute was over the amount to be paid and not whether it was paid periodically (Wysocki v. Kel-Tech Construction, Inc., Sup. Ct, NY Co., April 8, 2005, Solomon, J., Index No. 603591/03, aff'd on other grounds, 33 AD3d 375 (1st Dep't, 2006)), plaintiffs argue that they were not paid the full prevailing wages and supplemental benefits on a weekly basis. . According the complaint the deference to which it is entitled upon a CPLR 3211 (a) (7) motion, this court cannot say that plaintiffs have failed to allege a violation Labor Law  191. Dismissal of the seventh cause of action is denied insofar as a violation of Labor Law  191 is alleged. Labor Law  198-c, however, is a penal statute not enforceable by plaintiffs and does not provide a predicate for plaintiffs' claims.

Eighth Cause of Action

The eighth cause of action alleges failure to pay overtime compensation in violation of Labor Law  655 and 12 NYCRR 142-3.2. Plaintiffs have now conceded that they have no claims under these provisions and request leave to amend the complaint to correct a purported typographical error to cite Labor Law  663 instead of Labor Law  655, and 12 NYCRR 142-2.2 instead of 12 NYCRR 142-3.2. CPLR 3025 (b) provides that amendments of a pleading should ordinarily be freely granted by the court. Defendants contend, however, that the proposed causes of action are plainly without merit, and thus leave to amend should not be granted. See Sharon Ava & Co. v. Olympic Tower Associates, 259 AD2d 315 (1st Dep't, 1999); Daniels v. Empire-Orr Inc., 151 AD2d 370 (1st Dep't, 1989). Although leave to amend a pleading is liberally granted, where the proposed amendment is patently lacking in merit, it will not be permitted and leave should be denied as a matter of law. McKiernan v. McKiernan, 207 AD2d 825 (2d Dep't, 1994).

Defendants argue that Labor Law  663 relates solely to Article 19 of the Labor Law, New York's Minimum Wage Act, rather than Article 8 of the Labor Law, which deals with the payment of prevailing wages pursuant to Public Works Contracts. However, 12 NYCRR 142-[*12]2.2 specifically relates to wage claims alleging failure to provide overtime compensation for work performed in excess of 40 hours per week independent of any contractual allegation imposed pursuant to Labor Law  220, and Labor Law  663 expressly authorizes a civil action to recover such wages.. See Noble v. 93 University Place Corp., 224 FRD 330 (SDNY 2004). The eighth cause of action alleges that defendants willfully failed to pay "overtime compensation for work they performed in furtherance of the Public Works Contracts," however, should it be determined that there is no viability to plaintiffs' breach of contract claims, 12 NYCRR 142-2.2 would provide the predicate for relief. Defendants argue that plaintiffs do not contend that they were not paid minimum wage as provided in Labor Law Article 19 and have annexed documentation to support payment of wages to plaintiffs. However, plaintiff Huerta states in his affidavit that he was paid $70 per day. Thus, without evidence of the number of hours actually worked, defendants representations merely create an issue of fact as to whether Huerta was paid the wages mandated by Article 19 of the Labor Law.

Plaintiffs request to amend the typographical errors is therefore granted and the complaint is deemed so amended for the purpose of this motion. Defendants motion to dismiss the eighth cause of action is denied.

Motion to Impose Sanctions

Defendant moves under 22 NYCRR-1.1 to impose sanctions against plaintiffs for asserting claims that are without merit in law and for engaging in conduct undertaken to harass and maliciously injure defendants. The Court notes that 22 NYCRR-1.1 is not an existing provision, and assumes that defendants intended to move under 22 NYCRR 130-1.1, which provides:

"The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct . . . [and] may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct." 22 NYCRR 130-1.1 (a)

Frivolous conduct is defined as conduct that:

"(1) is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false." 22 NYCRR 130-1.1 (c).

The merits of a claim "must be judged with reference to whether a particular course of litigation is or is not designed to obtain some real form of relief as a remedy for some cognizable wrong." Weinstock v. Weinstock, 253 AD2d 873 (2d Dep't, 1998).Defendants argue that plaintiffs' frivolous litigation caused a substantial waste of judicial resources, as plaintiffs alleged causes of action under inapplicable provisions, as well as quasi-contract claims while also asserting breach of contract. Defendants further contend that plaintiffs failed to conduct basic legal research and failed to withdraw claims after having been informed of their complete lack of merit. In opposition, plaintiffs have presented ample precedent reflecting authority approving of similar [*13]wage actions. Moreover, this Court has already addressed the quasi-contract claims, as well as the Maldonado case, in this decision.. Sanctions are not warranted if the parties simply disagree on the law. In light of the overwhelming precedent supportive of plaintiffs' theories, it is defendants' application for sanctions that is frivolous. Defendants' motion to impose sanctions is denied, with $100 costs to plaintiff.

Accordingly, it is,

ORDERED that defendants' motion for partial summary judgment dismissing plaintiff Huerta's claims is denied; and it is further

ORDERED that defendants' motion to dismiss the third, fourth, and fifth causes of action is denied without prejudice, with leave to renew the motion upon an amended complaint specifying the actual contracts and terms which were allegedly breached; and it is further

ORDERED that defendants' motion to dismiss the seventh cause of action is denied insofar as a violation of Labor Law  191 is alleged and that branch of the motion requesting dismissal of the first, second, and eighth causes of action is also denied; and it is further

ORDERED that plaintiffs' request to amend the complaint is granted; and it is further

ORDERED that defendants' motion to impose sanctions against plaintiffs is denied with $100 costs to plaintiff.

Counsel shall appear for conference on October 3, 2007 at 11 a.m.

The foregoing constitutes the decision of the Court.