SANTANA v. SAN MATEO CONSTRUCTION CORP (2025)

Order, Supreme Court, New York County (Lyle E. Frank, J.), entered June 21, 2023, which, insofar as appealed from as limited by the briefs, granted defendants' motions to dismiss the complaint, unanimously modified, on the law, and the motions denied as to the first cause of action in its entirety and as to the second cause of action to the extent it is based on a contract between defendant Consolidated Edison Company of New York, Inc. and the City of New York, and otherwise affirmed, without costs.

The second cause of action was properly dismissed insofar as it was based solely on the Department of Transportation permit, but not insofar as it was based on an alleged underlying agreement between defendant Consolidated Edison Company of New York, Inc. and the City of New York pursuant to Administrative Code of City of N.Y. § 19–142, for the reasons stated in (Ross v. No Parking Today, Inc., 224 A.D.3d 559, 560–561, 203 N.Y.S.3d 608 [1st Dept. 2024]).  By its plain text, Administrative Code § 19–142 applies whenever a permit is issued “to use or open a street” and is not limited in application to public works projects.  This Court has previously held that flagging work is “consistent with the type of qualifying work identified by the Comptroller as entitled to prevailing wages – namely, work involving a protection of public safety near a construction site” (Herman v. Judlau Contr., Inc., 204 A.D.3d 496, 496, 164 N.Y.S.3d 455 [1st Dept. 2022]).  Although the Comptroller is the only party statutorily vested with the power to enforce Administrative Code § 19–142 directly, workers entitled to prevailing wages under that provision may enforce any agreements entered into pursuant thereto as third-party beneficiaries thereof (see Ortiz v. Consolidated Edison Co. of New York, Inc., 2024 WL 3086161, *31, 2024 U.S. Dist LEXIS 103088, *90-91 [S.D.N.Y. 2024];  see also Cox v. NAP Constr. Co., Inc., 10 N.Y.3d 592, 601–604, 861 N.Y.S.2d 238, 891 N.E.2d 271 [2008];  Wroble v. Shaw Envtl. & Infrastructure Eng'g of NY, P.C., 166 A.D.3d 520, 521, 88 N.Y.S.3d 21 [1st Dept. 2018]).

The first cause of action should not have been dismissed.  Defendant San Mateo Construction Corp. agreed in the subject flagging contracts to comply with all applicable laws, which necessarily includes Administrative Code § 19–142, and the putative plaintiff class members are third-party beneficiaries of that agreement (see Filardo v. Foley Bros., 297 N.Y. 217, 225–226, 78 N.E.2d 480 [1948], revd on other grounds 336 U.S. 281, 69 S.Ct. 575, 93 L.Ed. 680 [1949];  Machuca v. Collins Bldg. Servs., Inc., 82 Misc.3d 1211[A], 2024 N.Y. Slip Op. 50281[U], 2024 WL 1164653 [Sup. Ct., N.Y. County 2024]).  The contractual disclaimers of third-party beneficiary rights are void as against public policy (see Wroble, 166 A.D.3d at 521, 88 N.Y.S.3d 21;  see also Weiner v. Diebold Group, 173 A.D.2d 166, 167, 568 N.Y.S.2d 959 [1st Dept. 1991]).  It does not matter, for these purposes, whether public works projects were involved because the putative plaintiff class would have a statutory right to prevailing wages under Administrative Code § 19–142 even on private projects, the forfeiture of which would be against public policy.