Cardinal Care Management, LLC v. Afable

Filed 4/20/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
CARDINAL CARE MANAGEMENT,
LLC et al.,
Plaintiffs and Appellants, A154062, A155229
v. (Contra Costa County
EDGARDO AFABLE et al., Super. Ct. No. N180119)
Defendants and Respondents.
Appellants operate several residential care facilities for the elderly.
Respondents are seven former employees who worked at the facilities, and
who brought administrative proceedings against appellants before the Labor
Commissioner (the Commissioner) seeking unpaid wages and penalties.
When the Commissioner awarded the employees more than $2.5 million,
appellants sought de novo review in the trial court, an action that required
them to post an undertaking in the amount of the award or to obtain a
waiver. (Lab. Code, § 98.2; 1 Code Civ. Proc., § 995.240.) The primary
question we must address is whether the trial court provided an adequate
hearing on appellants’ financial ability to post the undertaking. We conclude
the proceedings were adequate and comported with due process, and
accordingly affirm the trial court’s dismissal of the consolidated trial court
1 All undesignated statutory references are to the Labor Code.
1
actions. Appellants also challenge an award of attorney fees, which we
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Respondents Edgardo Antonio Afable, Ma Christina Milan, Jennifer
Panopio, Alexander Ranoco, Dennielain Ranoco, Francis Sobremonte, and
Rosalina Sumile each filed claims with the Commissioner’s office seeking
unpaid overtime wages, liquidated damages (§ 1194.2), and waiting time
penalties (§ 203), and a hearing on their claims was held before a hearing
officer.
Appellants Cardinal Care Management, LLC (Cardinal Care) and
Welcome Home Senior Residence LLC (Welcome Home) operated several
licensed residential care facilities for the elderly. Both entities had a sole
member, appellant Steve Chou. Appellants employed respondents either as
live-in caregivers or as relief caregivers. The hearing officer found appellants
failed to pay respondents for all of the time they worked and, as to each
appellant, awarded overtime wages, liquidated damages, interest, and
waiting time penalties. The combined amount of the seven awards was more
than $2.5 million. Cardinal Care and Welcome Home were found liable for
all of this amount. With Chou individually liable for all or a portion of each
of the awards, his liability came to more than $2.2 million.
Appellants sought to appeal the Commissioner’s award to the trial
court. (§ 98.2.) The clerk of the superior court refused to file the notices of
appeal, but permitted appellants to file petitions for relief from the
requirement that they first post an undertaking in the amount of the award.
(§ 98.2, subd. (b).) The trial court later allowed appellants to file their
2
appeals conditionally, subject to being stricken if their petition to waive the
bond requirement was denied. The actions were consolidated. 2
In support of appellants’ motion for relief from the requirement to post
an undertaking, Chou submitted a declaration stating that he, Cardinal
Care, and Welcome Home lacked the financial ability to pay the awards or to
deposit the amount of the awards with the court; that he had contacted two
bonding companies, which had informed him they would not provide a bond
unless he provided collateral for the amount of the bond sum; and that
neither he, Cardinal Care, Welcome Home, nor the three collectively, could
provide security in that amount. Chou also stated he was willing to provide
copies of his, Cardinal Care’s, and Welcome Home’s financial statements, for
the court’s in camera review. Appellants’ attorney submitted a declaration
stating on information and belief that Chou was “in the process of rebuilding
his life after a bankruptcy and divorce. He owns no real property, and has no
income other than that of his businesses, both of which have significant
expenses.”
In their turn, respondents argued Chou had made no showing he was
indigent, and provided evidence that, while the administrative action was
pending, Chou had transferred title to four residential care facilities, as well
as another property, from his own name to that of certain trusts and limited
liability companies of which Chou’s wife was the sole manager; that Chou
and his wife were governors of a Washington State corporation that operated
a 50-bed assisted-living facility; and that Chou was the sole manager of a
limited liability company that was the licensee of another Welcome Home
senior residence. They also provided evidence that the value of the four
Specifically, trial court cases No. N18-0119, N18-0120, N18-0121,
2
N18-0127, N18-0128, N18-0129, N18-0130 were consolidated, with case No.
N18-0119 the lead case.
3
residential care properties Chou had recently transferred collectively
exceeded five million dollars, according to the Internet site Zillow, and that
the fifth property had been purchased in April 2015 for $1,050,000.
In reply, appellants reiterated their willingness to provide documents
for the court’s review in camera and asserted that Chou and his wife were
involved in divorce proceedings. Chou did not deny that he transferred the
properties, but averred that each of the properties had a mortgage debt and
that the properties were transferred “as part of an estate plan to clarify the
rights and interests of the respective businesses” managed by Chou, not as
part of an effort to hide his assets; that he had no family member or friend
willing and able to provide a bond or collateralize an undertaking; that he
was unable to provide collateral for an undertaking without depriving
himself and his dependents of the necessities of life; that neither he, Cardinal
Care, nor Welcome Home owned any real property or personal property
sufficient to provide collateral for a bond; that he had no ownership interest
in the corporations that owned the transferred properties; and that the award
would bring financial ruin to himself, Welcome Home, and Cardinal Care,
and could accordingly disrupt services to the elderly residents of the senior
care facilities.
Chou was not present at the hearing on the motion to waive the
undertaking requirement, nor did his counsel explain his absence. The trial
court stated that there were no witnesses to conduct an in camera showing of
appellants’ financial position, and that, in any case, appellants had not
shown why any hearing should be conducted in camera. The court also found
not credible Chou’s assertions that he transferred the corporations out of his
own control for estate planning purposes and that he was unable to post a
bond, finding the transfers “transparently an effort to avoid a judgment.”
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Appellants’ attorney said she had a declaration that Chou had signed, which
included his tax returns and profit-and-loss statements, and that she could
probably arrange for Chou to come to court that day and testify about the
documents, an offer the court found untimely. The trial court denied
appellants’ request for a waiver of the requirement of an undertaking and
dismissed their appeals from the Commissioner’s award.
DISCUSSION
I. Fair Hearing on Waiver of Undertaking
A. Statutory Framework
When an employer does not pay wages as required by law, an employee
may file either a civil action in court or a wage claim with the Commissioner.
(§§ 98-98.8.) If the employee chooses the administrative route, a deputy
commissioner then holds a hearing commonly known as a “Berman” hearing.
(OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 121 (OTO).) The Berman
procedure “ ‘is designed to provide a speedy, informal, and affordable method
of resolving wage claims.’ ” (Ibid.)
Within ten days after service of notice of the Commissioner’s order,
decision, or award, either party may appeal to the superior court, which
considers the matter de novo. (§ 98.2, subd. (a); Murphy v. Kenneth Cole
Productions, Inc. (2007) 40 Cal.4th 1094, 1116-1117 [section 98.2 proceeding
is not conventional appeal or review of Commissioner’s decision, but review
de novo of wage dispute].) As a condition to filing an appeal, an employer
must first post an undertaking in the amount of the award, in the form of
either an appeal bond or a cash deposit. (§ 98.2, subd. (b).) This requirement
discourages unmeritorious appeals and minimizes the time for an employer
to divest itself of assets in order to deprive the employee of the possibility of
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enforcing the award. (Palagin v. Paniagua Construction, Inc. (2013) 222
Cal.App.4th 124, 137 (Palagin); OTO, supra, 8 Cal.5th at p. 123.)
An escape valve exists for employers who are unable to post the
necessary security: “[A] party appealing a decision of the Commissioner is
entitled as a matter of due process to seek relief from the section 98.2(b)
undertaking requirement. ‘The right of an indigent civil litigant to proceed in
forma pauperis is grounded in a common law right of access to the courts and
constitutional principles of due process. [Citations.] “[R]estricting an
indigent’s access to the courts because of his poverty . . . contravenes the
fundamental notions of equality and fairness which since the earliest days of
the common law have found expression in a right to proceed in forma
pauperis.” ’ ” (Burkes v. Robertson (2018) 26 Cal.App.5th 334, 343-344
(Burkes).) Thus, statutory provisions applying to all bonds include an
exception for indigency. (Williams v. Freedomcard, Inc. (2004) 123
Cal.App.4th 609, 614 (Williams).) Specifically, Code of Civil Procedure
section 995.240 provides that a court “may, in its discretion, waive a
provision for a bond in an action or proceeding . . . if the court determines
that the principal is unable to give the bond because the principal is indigent
and is unable to obtain sufficient sureties.”
Burkes and Williams make clear that this exception applies to the
undertaking required by section 98.2. We accordingly reject respondents’
suggestion that a bond waiver is not available in an appeal from a decision in
a Berman proceeding, and turn to appellants’ arguments that they were
deprived of sufficient opportunity to obtain such a waiver.
B. Abuse of Discretion Challenge
Appellants contend the trial court abused its discretion by failing to
provide an adequate hearing on their financial ability to post an undertaking,
6
before it denied their request for a waiver of this requirement. We are
unpersuaded. The party seeking relief from the requirement for a bond or
undertaking has the burden of proof to show entitlement to relief. (Williams,
supra, 123 Cal.App.4th at p. 614.) The trial court could properly find
appellants did not meet their burden to show they were indigent and
deserving of a waiver. (See Baltayan v. Estate of Getemyan (2001) 90
Cal.App.4th 1427, 1433 (Baltayan).)
In support of their request, appellants provided no details of their
financial situation. Instead, they averred that they lacked financial ability to
post the undertaking, that they owned no real property, and that Chou’s only
income was from the businesses. Confronted with evidence that Chou had
transferred several properties to entities controlled by his wife, appellants
stated in reply that the properties were encumbered by mortgages and that
they had been transferred for the purpose of estate planning; but he provided
no information about the amount of equity he had in each of the properties,
nor about the provisions of the so-called estate plan he cited as justification
for the transfers.
In considering whether to waive an undertaking, the court considers
“all factors it deems relevant, including but not limited to the character of the
action or proceeding, the nature of the beneficiary, whether public or private,
and the potential harm to the beneficiary if the provision for the bond is
waived.” (Code Civ. Proc., § 995.240, italics added.) Applying these
standards, it was not an abuse of discretion to reject appellants’ showing of
indigency. The court found appellants’ opening papers “barely qualif[ied] as
conclusory,” in that there was “no specification of any detail, any facts, any
reasons why, any anything.” The record supports this conclusion. Although
appellants offered a review of their financial records in camera and
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apparently had available at the hearing a declaration that included tax
returns and profit and loss statements, Chou himself was not present at the
hearing to submit to cross-examination on the statements. The record shows
no attempt before the hearing to submit the documents to the court, even
under seal, nor to provide them to opposing counsel for review. It is no abuse
of discretion to deny relief from an undertaking where, as here, a litigant has
made only a “weak and incomplete showing of indigency.” (See Baltayan,
supra, 90 Cal.App.4th at p. 1435.)
Equally important, a purpose of the undertaking requirement is to
prevent employers from divesting themselves of assets to deprive the
employee of the possibility of enforcement. (Palagin, supra, 222 Cal.App.4th
at p. 137.) And it is crystal clear that the trial court believed Chou had begun
to do precisely that during the pendency of the administrative action. It
rejected Chou’s explanation that he transferred the properties—with a
combined value of more than $5 million—for purposes of estate planning,
finding that explanation “pretty transparent” and “facially not credible,” and
concluding the transfers were made to preserve the properties from the
claims of a future judgment creditor. Appellants offered nothing to rebut the
trial court’s conclusion that “[i]t is not plausible that he has simply given
away these properties in a way that he cannot possibly get them back.”
Appellants argue that Alshafie v. Lallande (2009) 171 Cal.App.4th 421(Alshafie) compels a different conclusion. The plaintiff in Alshafie brought a
medical malpractice action based on his child’s severe injuries incurred
during birth. (Id. at pp. 424-425, 426.) The defendants sought an order
requiring plaintiff, as an out-of-state resident, to post an undertaking to
secure an award of costs pursuant to Code of Civil Procedure section 1030.
(Id. at pp. 426-427.) In opposition to the motion, the plaintiff submitted a
8
declaration asserting he could not afford to post an undertaking: his family
lived in a rented apartment; he was a tow truck dispatch manager; his wife
did not work outside the home because she took care of the couple’s three
children, including the injured child, who could not speak, walk, feed herself,
or care for herself; and he had no tangible assets with which to secure a bond.
(Id. at pp. 426-427.) The trial court granted the motion for an undertaking,
and the defendants moved to dismiss the action. (Id. at p. 427.) In opposition
to the motion to dismiss, the plaintiff presented more specific information
about his financial position, including the family’s annual income, the
amount of their rent and savings, and the value of their vehicles. (Id. at p.
427.) The trial court dismissed the action, finding the plaintiff’s showing of
indigency remained inadequate. (Id. at p. 428.)
The appellate court concluded this was an abuse of discretion. The
court noted that a plaintiff seeking relief from a bond requirement would be
“well advised to provide the information requested in the mandatory Judicial
Council form for applying for in forma pauperis status”—including all sources
of income, interests in property, and monthly expenses. (Alshafie, supra, 171
Cal.App.4th at pp. 434-435.) Then, “to fulfill its statutory duties when
exercising its discretion, the court must review the plaintiff’s showing,
identify deficiencies, if any, and give the plaintiff the opportunity to supply
additional information that may be necessary to establish his or her
entitlement to a waiver under the circumstances of the particular case.” (Id.
at p. 435.) “In sum,” the court concluded, “because the [trial] court failed to
provide a meaningful opportunity for [the plaintiff] to demonstrate his
financial inability to post an undertaking and to address the court’s concerns
about the showing he had made,” the orders requiring an undertaking and
dismissing the action must be reversed. (Id. at p. 436.)
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Appellants argue the trial court here should likewise have informed
them of the deficiencies in their showing and allowed them to provide
additional information addressing the court’s concerns. But Alshafie is
readily distinguishable from the case before us. First, the effect of the
undertaking requirement in Alshafie was to deprive the plaintiff entirely of
the opportunity to recover for the injuries caused by a child’s devastating
injuries. Here, in contrast, appellants have already had an opportunity to
make their case during the administrative proceedings. As explained in
Palagain, “[t]he primary process for deciding wage claims is not the trial de
novo reflected in section 98.2, but the administrative procedure reflected in
section 98.” (Palagin, supra, 222 Cal.App.4th at p. 138; accord, Burkes,
supra, 26 Cal.App.5th at p. 347.) Second, the “ ‘overriding goal’ ” of section
98.2’s undertaking requirement is to “ensur[e] expeditious collection of wages
which are due but unpaid,” including by minimizing the time for employers to
hide assets to prevent employees from collecting their awards. (Burkes, at
p. 346.) The trial court here concluded Chou had already transferred
substantial assets for the purpose of impeding collection on a judgment, a
concern that did not exist in Alshafie. And third, the Alshafie plaintiff
provided detailed information quantifying his limited income and assets,
while Chou provided almost no information about his considerably greater
financial interests. Where the Alshafie plaintiff provided details like the
family’s monthly rent and the value of their personal vehicles, appellant
Chou baldly generalized that he could not provide collateral for the
undertaking “without depriving myself and my dependents of the
[unspecified] necessaries of life.” On the facts before us, there was no abuse
of discretion in denying appellants a waiver of the undertaking requirement
10
without reviewing the documents they offered for the first time at the
hearing, and only for in camera review.
C. Due Process Challenge
Appellants next argue that the administrative hearing and the
requirement of an undertaking deprived them of procedural and substantive
due process.
Procedural “ ‘[d]ue process principles require reasonable notice and
opportunity to be heard before governmental deprivation of a significant
property interest.’ [Citations.] ‘However, there is no precise manner of
hearing which must be afforded; rather the particular interests at issue must
be considered in determining what kind of hearing is appropriate. A formal
hearing, with full rights of confrontation and cross-examination is not
necessarily required.’ ” (Mohilef v. Janovici (1996) 51 Cal.App.4th 267, 286.)
In deciding whether due process has been satisfied, a court considers the
private interest that will be affected by the official action, the risk of
erroneous deprivation of that interest, the interest in informing individuals of
the nature of the proceeding and enabling them to present their case to a
governmental official, and the governmental interest. (Id. at p. 287.) In the
statutory scheme before us, the Berman hearing is informal, while an
ensuing appeal to the trial court carries with it “full due process protections.”
(Corrales v. Bradstreet (2007) 153 Cal.App.4th 33, 60.)
Appellants contend they did not receive procedural due process because
the rules of evidence were not applied at the Berman hearing and, due to the
undertaking requirement, they were unable to have the trial court reconsider
the Commissioner’s decision. They also argue that in this case—where
respondents were fed and housed during their employment and received what
11
appellants characterize as a “massive windfall” in the Commissioner’s
awards—appellants’ rights must outweigh those of their former employees.
We reject these contentions. First, it is appellants’ burden to show
error on appeal (Shenouda v. Veterinary Medical Bd. (2018) 27 Cal.App.5th
500, 512), and they have not provided a record of the Berman hearing that
would allow us to evaluate what occurred at the hearing. Because “[t]he
primary process for deciding wage claims is . . . the administrative procedure
reflected in section 98,” appellants cannot succeed with a procedural due
process claim that ignores the particulars of the process provided in that
administrative hearing. (Palagin, supra, 222 Cal.App.4th at p. 138 [“even if
the jurisdictional undertaking requirement did affect the availability of the
trial de novo process for employers, by no means does it deprive the employer
of a full and fair opportunity to be heard on the employee’s wage claim”];
Burkes, supra, 26 Cal.App.5th at p. 347 [same].) Second, we cannot accept
appellants’ characterization of these awards as a “massive windfall,” as that
assumes a view of the merits that is, at best, premature. Third, appellants
were given an opportunity to introduce evidence and have a hearing on the
issue of whether section 98.2’s undertaking requirement should be waived,
and they failed to produce evidence sufficient to warrant waiver. It is no
violation of due process to refuse them a second opportunity to introduce
evidence in support of their motion, just because they failed to make the
necessary showing the first time.
Appellants also argue they were deprived of substantive due process
because the government’s conduct “ ‘shocks the conscience’ ” and “interferes
with rights ‘implicit in the concept of ordered liberty.’ ” (United States v.
Salerno (1987) 481 U.S. 739, 746.) Specifically, appellants challenge (1) a
legal error made by the Commissioner in making Chou individually liable for
12
the awards, and (2) section 98.2’s prohibitive requirement that a small
business procure a large bond in only 10 days in order to secure review in the
trial court.
We reject these arguments as well. First, it would be inappropriate
here to decide whether the Commissioner erred in holding Chou individually
liable, for to address the merits of appellants’ challenge to the
Commissioner’s ruling would be tantamount to relieving appellants of the
requirement that they post a bond to appeal that ruling. (See Williams,
supra, 123 Cal.App.4th at p. 614.) Second, we reject appellants’ suggestion
that the limited 10-day time period for obtaining an undertaking deprived
them of substantive due process. Our colleagues in Burkes rejected a similar
argument, concluding there was no showing of undue burden where a self-
represented litigant knew of the requirement for an undertaking and its time
limit. (Burkes, supra, 26 Cal.App.5th at p. 345.) Appellants here had the
opportunity to persuade the court to waive the bond requirement, and for the
same reasons it was no abuse of the court’s discretion to deny their waiver
request, it was also no violation of substantive due process.
Whatever the merits of appellants’ challenge to the Commissioner’s
ruling, section 98.2 required appellants either to post an undertaking or to
show they were entitled to a waiver of the undertaking requirement before
proceeding in the superior court. They failed to do either. We must,
therefore, affirm the judgment of dismissal.
II. Attorney Fees
Respondents moved for attorney fees pursuant to section 98.2,
subdivision (c), and the trial court awarded fees of $16,700. Appellants
challenge this award on the ground they were not unsuccessful in the trial
court for purposes of the governing statute.
13
Section 98.2, subdivision (c) provides: “If the party seeking review by
filing an appeal to the superior court is unsuccessful in the appeal, the court
shall determine the costs and reasonable attorney’s fees incurred by the other
parties to the appeal, and assess that amount as a cost upon the party filing
the appeal. An employee is successful if the court awards an amount greater
than zero.” This is not a standard prevailing party attorney-fee provision,
but rather “ ‘a one-way fee-shifting scheme that penalizes an unsuccessful
party who appeals the commissioner’s decision.’ [Citation.] Its purpose is to
‘act[] as a disincentive to appeal the commissioner’s decision’ [citation] and to
‘discourag[e] unmeritorious appeals of wage claims’” (Nishiki v. Danko
Meredith, P.C. (2018) 25 Cal.App.5th 883, 894, italics omitted; accord Lolley
v. Campbell (2002) 28 Cal.4th 367, 376.) The normal standard of review of an
attorney fee award is abuse of discretion, but we review the award de novo
where the availability of fees hinges on an issue of statutory construction.
(Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1213.)
Resolution of appellants’ challenge depends on an analysis of two
appellate decisions, Arias v. Kardoulias (2012) 207 Cal.App.4th 1429 (Arias)
and Arneson v. Royal Pacific Funding Corp. (2015) 239 Cal.App.4th 1275(Arneson), which point in different directions but are not irreconcilable.
In Arias, an employee filed an untimely appeal of a commissioner’s
award after a Berman hearing. The case was dismissed for being untimely,
and the trial court awarded attorney fees against the employee under section
98.2 subdivision (c). (Arias, supra, 207 Cal.App.4th at p. 1433.) The
appellate court considered whether “the Legislature intended . . . an
employer to recover attorney fees and costs when the superior court dismisses
an employee’s appeal for lack of subject matter jurisdiction” (id. at p. 1436),
and concluded it did not. In these circumstances, the court ruled, the
14
attorney fee provision “does not become operative unless the superior court
has jurisdiction to conduct a trial on the merits of the employee’s wage
claim.” (Id. at p. 1433.) That is, “[a] dismissal of the appeal from the
commissioner’s decision on jurisdictional grounds is not the equivalent of the
superior court’s determination, after conducting a trial de novo, that the
employee is entitled to ‘zero’ ”; rather, the employer remains liable for the
amount of the original award. (Id. at p. 1438.) The appellate court therefore
held that the attorney fee provision of section 98.2, subdivision (c) “does not
become operative against an employee unless the employee has a new trial in
the superior court on the wage claim.” (Id. at pp. 1438-1439.)
Although some of the language in Arias may be read to apply to both
employers and employees whose appeals are dismissed without a trial de
novo, the court’s holding is limited to appeals by employees, and its reasoning
is based in significant part on an asymmetry in the statute: that an
employee who receives an award of more than zero is considered successful
on appeal even if the trial court awards less than the employee received in
the administrative proceedings. (§ 98.2, subd. (c).) This is a fee-shifting
scheme that overtly favors employees. (OTO, supra, 8 Cal.5th at p. 123.) The
court in Arneson, on the other hand, was faced with an appeal to the superior
court by the employer, and reached a different conclusion.
The employee in Arneson filed a wage claim with the Commissioner
and obtained an award of $29,500, after which the employer filed an appeal
with the superior court and a bond guaranteeing the award. (Arneson, supra,
239 Cal.App.4th at p. 1277.) After a pretrial conference in which the
employee’s attorney indicated she might present additional claims, the
employer withdrew its appeal. (Ibid.) The employee then moved for attorney
fees, and, based on Arias, the trial court denied the motion. (Id. at pp. 1277-
15
1278.) The appellate court reversed, even though there had been no court
award on the merits. (Id. at pp. 1279, 1281.) It reasoned that, when the
Legislature amended section 98.2, subdivision (c) to specify that an employee
is successful in the appeal if the superior court awards any amount greater
than zero, the Legislature “never intended to give employers a chance to
whipsaw employees by filing section 98.2 appeals and then withdrawing
them”; such a reading would “incentivize[] employers to file frivolous appeals
and then withdraw them at the last minute so as to inflict gratuitous legal
costs on an employee who has been otherwise successful at the Labor
Commissioner level.” (Id. at p. 1280, fn. omitted.) Arneson concluded that
the employee was “successful” under subdivision (c) when the employer
withdrew its appeal because “[t]he employee gets to keep the money he or she
won at the administrative level as if the employee had completely prevailed
in a court trial.” (Id. at p. 1280)
The case before us is not precisely the same as either Arias or Arneson,
but the reasoning of these cases leads us to conclude that respondents were
entitled to their attorney fees. This is an appeal by employers that was
dismissed, not on their request as in Arneson, but on their failure to post an
undertaking or obtain a waiver. That distinction is not material. As in
Arneson, the Commissioner awarded respondents unpaid wages and other
amounts, and appellants filed an appeal in the superior court. At the end of
the trial court proceedings, respondents remained entitled to the original
Commissioner’s award. They were accordingly successful in the appeal, and
are entitled to attorney fees.
Against this conclusion, appellants argue that dismissal here, as in
Arias, was based on procedural and jurisdictional grounds, not on the merits,
rendering attorney fees unavailable. (See Palagin, supra, 222 Cal.App.4th at
16
p 132 [posting an undertaking is a condition to filing a notice of appeal, hence
“ ‘jurisdictional’ ”].) We are unpersuaded. Burkes makes clear that an
employer may proceed with an appeal by filing an application for relief from
the undertaking requirement within the period for filing a notice of appeal, as
appellants did here. The fact that the appeal was later dismissed due to
appellants’ failure to obtain a waiver does not change the facts that
appellants appealed to the trial court and respondents remained entitled to
an amount greater than zero after the trial court proceedings.
Appellants point out that the notices of appeal were filed only
conditionally, subject to being stricken if appellants failed to obtain a waiver
of the undertaking requirement. They argue that to the extent the waiver
was properly denied, the trial court thereafter lacked jurisdiction to hear the
appeal. The facts remain, however, that the notices of appeal were filed, the
trial court thereafter exercised its jurisdiction to determine whether the
appeal could proceed, and the outcome was that the appeal was dismissed
and respondents retained the Commissioner’s award. Under these facts, the
reasoning of Arneson leads us to conclude respondents were entitled to
attorney fees under section 98.2, subdivision (c).
DISPOSITION
The judgment and attorney fee order in the consolidated actions are
affirmed. Appellants are to pay costs on appeal.
17
_________________________
TUCHER, J.
WE CONCUR:
_________________________
POLLAK, P. J.
_________________________
STREETER, J.
Cardinal Care Management, LLC et al .v. Afable (A154062, A155229)
18
Trial Court: Contra Costa County Superior Court
Trial Judge: Hon. Charles S. Treat
Counsel for Appellants: Ferber Law, APC, Michelle R. Ferber,
Jonathan R. Babione, Jennifer R. Lucas
Counsel for Respondents: Law Offices of Allan A. Villanueva, Allan
A. Villanueva
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