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State chases Castlerock for wage claims

By Jack Zemlicka

The Wisconsin Department of Justice is casting a wide legal net to recover more than $60,000 owed to two former employees of a Milwaukee construction company that closed earlier this year.

Attorney General J.B. Van Hollen’s office filed suit Dec. 6 in Milwaukee County against Castlerock Commercial Construction Inc. and three secondary defendants to collect $60,383.92 in unpaid prevailing wage claims.

Two former Castlerock employees in July filed complaints with the Wisconsin Department of Workforce Development claiming the company failed to pay prevailing wages.

According to Jim Chiolino, DWD Labor Standards Bureau director, Castlerock hired one employee for work on a nursery addition at the Wilson State Nursery in Boscobel and the other for a resurfacing and remodeling project in Camp Douglas. Work on both public projects was done during 2009 and 2010, he said.

The workers were paid $12 to $15 per hour, Chiolino said, instead of the statutory prevailing wage requirement of $27 for public projects. He said DWD unsuccessfully attempted to collect the outstanding amount owed by Castlerock and referred the matter to the DOJ in October.

“We had initial responses from the employer,” Chiolino said. “But they just sort of stopped dealing with us after awhile.”

There is the potential that Castlerock won’t be able to pay the outstanding claims, Assistant Attorney General Mark Bromley said, which forced the state to include additional defendants with financial ties to the construction company.

The secondary defendants are Marquette Mechanical Contractors Inc., Milwaukee; Aegis Security Insurance Co., Harrisburg, Va.; and Rex Runzheimer, owner of Waterford-based Runzheimer International Ltd., a commercial management company.

Aegis did not return a call seeking comment. A working number for Marquette Mechanical could not be found.

Runzheimer’s attorney, Andrew Oettinger of Godfrey & Kahn SC, Milwaukee, said there is no basis to include his client as a secondary defendant.

Bromley said Runzheimer is named because of a civil suit pending in Milwaukee County in which he seeks $2.89 million in unpaid loans from Castlerock.

Part of the loan, Oettinger said, included an agreement that gave Runzheimer security interest in all equipment, fixtures, inventory and other property owned by Castlerock.

Oettinger said the loans, which date from 2008 to 2009, predate the DWD investigation.

“The assets that Mr. Runzheimer took back,” he said, “were taken back before DWD had a lien on Castlerock.”

Bromley said Runzheimer is involved because he has a competing lien.

“So he has no direct liability,” Bromley said, “other than the fact that we both have claims rights to the same assets.”

Chiolino confirmed that Castlerock closed this year, but he did not know when.

Bromley said the inclusion of the secondary defendants is based on the potential that each may have either an existing claim or obtained assets from Castlerock, which could be used to pay the delinquent wage claims.

According to the complaint, Marquette paid Castlerock $200,000 in 2009 for assets acquired from the company.

But the complaint states Castlerock later indicated the balance had not been paid, which means a portion of the money could be subject to the state claim, Bromley said.

“We’ve got to sort out who owns which assets,” he said. “If Castlerock still has a right to collect from Marquette then that is an asset a lien holder could look to for recovery.”

Aegis is named as a defendant because the company issued a performance payment bond in March 2010 under a construction contract for a vehicle maintenance building at the Mead Wildlife Area in Milladore.

According to the complaint, Castlerock defaulted on the project, which left Aegis owing $15,297.36 to the DWD for unpaid prevailing wages.

As of Sept. 1, according to the complaint, Aegis has refused to pay the amount owed to DWD.

Castlerock Suit (PDF)

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