Arias v. Kardoulias

• Citation: 19 Wage & Hour Cas.2d (BNA) 1110,12 Cal. Daily Op. Serv. 8404,207 Cal.App.4th 1429,144 Cal.Rptr.3d 599,2012 Daily Journal D.A.R. 10297
• Decision Date: 26 July 2012
• Docket Number: No. B234263.,B234263.
• Court: California Court of Appeals Court of Appeals
• Parties: Rebecca C. ARIAS, Plaintiff and Appellant, v. Lupe KARDOULIAS, Defendant and Respondent.

207 Cal.App.4th 1429
144 Cal.Rptr.3d 599
19 Wage & Hour Cas.2d (BNA) 1110
12 Cal. Daily Op. Serv. 8404
2012 Daily Journal D.A.R. 10,297

Rebecca C. ARIAS, Plaintiff and Appellant,
v.
Lupe KARDOULIAS, Defendant and Respondent.

No. B234263.

Court of Appeal, Second District, Division 3, California.

July 26, 2012.

[144 Cal.Rptr.3d 601]

Rebecca C. Arias, in pro. per., for Plaintiff and Appellant.

Law Office of Paul H. Nankivell II and Paul H. Nankivell II, Los Angeles, for Defendant and Respondent.

ALDRICH, J.

[207 Cal.App.4th 1433]Labor Code section 98.2, subdivision (c)¹ states that if a party files an appeal in the superior court seeking review of the California Labor Commissioner's (commissioner) decision and is “unsuccessful in the appeal,” the court shall determine the reasonable attorney fees and costs 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 [on appeal] if the court awards an amount greater than zero.” The commissioner awarded Rebecca C. Arias $6,319.69 in unpaid wages, but her untimely appeal to the superior court was dismissed on jurisdictional grounds. The superior court considered Arias “unsuccessful on appeal,” and assessed $6,395 in attorney fees and costs against Arias, the party filing the appeal.

In this case of first impression, we must determine whether the dismissal on jurisdictional grounds of an untimely appeal from the commissioner's decision is equivalent to an “award of zero” for purposes of assessing attorney fees and costs against an unsuccessful employee under section 98.2, subdivision (c). Unlike a conventional case, when a party timely appeals the commissioner's decision, the superior court conducts a new trial on the merits of the employee's wage claim. (§ 98.2, subd. (a).) The statutory right to recover attorney fees under section 98.2, subdivision (c) depends upon success at trial. Because the purpose behind this one-way fee-shifting provision is to discourage unmeritorious appeals, based upon the statutory language and the legislative intent, we hold that section 98.2, subdivision (c) does not become operative unless the superior court has jurisdiction to conduct a trial on the merits of the employee's wage claim. We therefore reverse the attorney fees and costs assessed in this action.

BACKGROUND

Arias filed a wage claim with the commissioner against Lupe Kardoulias, her sister and employer, seeking to recover unpaid wages earned while caring for their elderly father. The commissioner awarded Arias $6,319.69. In Arias v. Kardoulias (Dec. 14, 2011, B232363, 2011 WL 6189447 [nonpub. opn.] ) ( Arias I ), we

[144 Cal.Rptr.3d 602]

concluded that Arias's appeal from the commissioner's decision to the superior court was untimely under section 98.2, subdivision (a). We held that the time limit for taking an appeal is “mandatory and jurisdictional,” as stated in [207 Cal.App.4th 1434]Pressler v. Donald L. Bren Co. (1982) 32 Cal.3d 831, 836, 187 Cal.Rptr. 449, 654 P.2d 219. Thus, we affirmed the dismissal.

While Arias I was pending, Kardoulias filed a memorandum of costs and a supporting declaration requesting attorney fees under section 98.2, subdivision (c). Kardoulias sought the filing fee of $395 and attorney fees in the amount of $8,100 incurred to obtain the dismissal.² Arias, in propria persona, moved to tax or strike the costs on the ground that attorney fees were recoverable under section 98.2, subdivision (c) only if the superior court conducted a trial de novo.

Following a hearing, the trial court granted Kardoulias's motion, awarding costs and $6,000 in attorney fees, for a total of $6,395. Arias timely filed this appeal.

DISCUSSION 1. The Section 98.2, Subdivision (c) Attorney Fees Provision

Section 98.2, subdivision (c) is a one-way fee-shifting provision applicable in proceedings following an appeal from the commissioner's decision on a wage-related claim. ( Sampson v. Parking Service 2000 Com., Inc. (2004) 117 Cal.App.4th 212, 225–228, 11 Cal.Rptr.3d 595.) The California Supreme Court has provided an extensive overview of the special statutory scheme to pursue a wage claim before the commissioner, commonly referred to as the Berman hearing procedure (§ 98 et seq.). ( Post v. Palo/Haklar & Associates (2000) 23 Cal.4th 942, 946–948, 98 Cal.Rptr.2d 671, 4 P.3d 928; see also Smith v. Rae–Venter Law Group (2002) 29 Cal.4th 345, 355–357, 127 Cal.Rptr.2d 516, 58 P.3d 367, superseded by 2003 amend. to § 98.2, subd. (c) as stated in Sonic–Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659, 673–674, fn. 2, 121 Cal.Rptr.3d 58, 247 P.3d 130, judgment vacated on other grounds (2011) ––– U.S. ––––, 132 S.Ct. 496, 181 L.Ed.2d 343.) “An employee pursuing a wage-related claim ‘ “has two principal options. The employee may seek judicial relief by filing an ordinary civil action against the employer for breach of contract and/or for the wages prescribed by statute. [Citation.] Or the employee may seek administrative relief by filing a wage claim with the [commissioner] pursuant to a special statutory scheme codified in sections 98 to 98.8....” ’ [Citations.]” ( Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1115, 56 Cal.Rptr.3d 880, 155 P.3d 284.) The purpose of the Berman hearing procedure is “ ‘to avoid recourse to costly and time-consuming judicial proceedings in all but the most complex of wage claims.’ ” ( Smith v. Rae–Venter Law Group, supra, at p. 356, 127 Cal.Rptr.2d 516, 58 P.3d 367.)

[207 Cal.App.4th 1435]If an employee files a wage claim before the commissioner, the parties may seek review of the decision by filing an appeal to the superior court “where the appeal shall be heard de novo.” (§ 98.2, subd. (a); Post v. Palo/Haklar & Associates, supra, 23 Cal.4th at pp. 947–948, 98 Cal.Rptr.2d 671, 4 P.3d 928.) “The timely filing of a notice of appeal forestalls the commissioner's decision, terminates his or her jurisdiction, and vests jurisdiction to conduct a hearing de novo” in the superior

[144 Cal.Rptr.3d 603]

court. ( Post v. Palo/Haklar & Associates, at p. 947, 98 Cal.Rptr.2d 671, 4 P.3d 928.)

Unlike an appeal in a civil action, the appeal of the commissioner's decision to the superior court under subdivision 98.2, subdivision (a) nullifies the decision, and the superior court conducts a new trial of the wage dispute. ( Post v. Palo/Haklar & Associates, supra, 23 Cal.4th at p. 948, 98 Cal.Rptr.2d 671, 4 P.3d 928.) “The trial court ‘hears the matter, not as an appellate court, but as a court of original jurisdiction, with full power to hear and determine [the wage claim] as if it had never been before the labor commissioner.’ ” ( Murphy v. Kenneth Cole Productions, Inc., supra, 40 Cal.4th at pp. 1116–1117, 56 Cal.Rptr.3d 880, 155 P.3d 284.)

Section 98.2, subdivision (c) is the applicable fees and costs provision following an appeal from the commissioner's decision. ( Sonic–Calabasas A, Inc. v. Moreno, supra, 51 Cal.4th at p. 673, 121 Cal.Rptr.3d 58, 247 P.3d 130.)Section 98.2, subdivision (c) is not a prevailing party fee provision, instead it is a one-way fee-shifting scheme that penalizes an unsuccessful party who appeals the commissioner's decision. If an employer unsuccessfully appeals, that is, does not nullify the commissioner's decision following a new trial in the superior court, the employee is entitled to recover attorney fees and costs. If an employee appeals, however, the employer is not entitled to attorney fees and costs if the employee receives an award greater than zero on the wage claim following a new trial in the superior court.

Section 98.2, subdivision (c) was amended...