Jones v. Basich

• Decision Date: 09 January 1986
• Citation: Jones v. Basich, 222 Cal.Rptr. 26, 176 Cal.App.3d 513 (Cal. App. 1986)
• Court: California Court of Appeals
• Parties: , 27 Wage & Hour Cas. (BNA) 1060 Vernon E. JONES, Plaintiff and Respondent, v. Rodney N. BASICH et al., Defendants and Appellants. Civ. F004865

Page 26

222 Cal.Rptr. 26

176 Cal.App.3d 513, 27 Wage & Hour Cas. (BNA) 1060

Vernon E. JONES, Plaintiff and Respondent, v. Rodney N. BASICH et al., Defendants and Appellants.

Civ. F004865

Court of Appeal, Fifth District, California.

Jan. 9, 1986.

Review Denied March 26, 1986.

James M. Radnich, Los Angeles, Fullerton, Lang, Richert & Patch and Charles M. Barrett, Fresno, for defendants and appellants.

Price & Welsh and Brett L. Price, Bakersfield, for plaintiff and respondent.

Division of Labor Standards Enforcement, Lloyd W. Aubry, Jr., State Labor Com'r, San Francisco, and H. Thomas Cadell, Jr., San Diego, as amicus curiae, upon the request of the Court of Appeal.

BEST, Associate Justice.

This case presents the novel question of whether a defendant-employer against whom a wage claim has been filed with the Labor Commissioner must appear and participate at the hearing before the Labor Commissioner in order to preserve his right to appeal to the courts.

THE CASE

Defendants appeal the judgment of the superior court dismissing defendants' appeal from an order of the Labor Commissioner.

In December 1983, plaintiff commenced an action before the Labor Commissioner to collect amounts which he claimed he was owed by defendants in accordance with the provisions of LABOR CODE SECTION 98¹ et seq. Defendants answered the complaint.

On May 7, 1984, after proper notice to both plaintiff and defendants, a hearing was held in connection with plaintiff's complaint before the Labor Commissioner. Plaintiff appeared with counsel. Several witnesses appeared and testified, and documentary evidence was introduced in support of plaintiff's claim.

Defendants failed to appear or participate in any manner in the hearing before the Labor Commissioner.

Thereafter, on or about May 22, 1984, Barry L. Davis, hearing officer for the Labor Commissioner, issued the decision and award of the Labor Commissioner, concluding that plaintiff was entitled to payment for the full amount of wages or compensation and subsistence claimed and was entitled to certain additional wages pursuant to section 203. The total amount of the award was $34,287.50.

Defendants appealed the Labor Commissioner's decision to the superior court.

Plaintiff then filed a motion to dismiss the defendants' appeal on the grounds that defendants failed to exhaust their administrative remedies and failed to comply with the statutory prerequisites for the bringing of their appeal. The superior court granted plaintiff's motion, stating, "... Defendants have failed to exhaust their administrative remedies by failing to appear, participate and present any evidence, defense, authority or argument at the administrative hearing before the Labor Commissioner, ..."

DISCUSSION

Section 98 provides:

"(a) The Labor Commissioner shall have the authority to investigate employee complaints. The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation properly before the division or the Labor Commissioner including orders of the Industrial Welfare Commission, and shall determine all matters arising under his or her jurisdiction. It shall be within the jurisdiction of the Labor Commissioner to accept and determine claims from holders of payroll checks or payroll drafts returned unpaid because of insufficient funds, if, after a diligent search, the holder is unable to return the dishonored check or draft to the payee and recover the sums paid out. Within 30 days of filing of the complaint, the Labor Commissioner shall notify the parties as to whether a hearing will be held within a reasonable period of time, or whether action will be taken in accordance with Section 98.3, or whether no further action will be taken on the complaint. However, the Labor Commissioner may postpone or grant additional time before setting a hearing if the Labor Commissioner finds that such would lead to an equitable and just resolution of the dispute.

"It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the right of the parties.

"(b) When a hearing is set, a copy of the complaint, which shall include the amount of compensation requested, together with a notice of time and place of the hearing, shall be served on all parties, personally or by certified mail.

"(c) Within 10 days after service of the notice and the complaint, a defendant may file an answer with the Labor Commissioner in such form as the Labor Commissioner may prescribe, setting forth the particulars in which the complaint is inaccurate or incomplete and the facts upon which the defendant intends to rely.

"(d) No pleading other than the complaint and answer of the defendant or defendants shall be required. Both shall be in writing and shall conform to the form and the rules of practice and procedure adopted by the Labor Commissioner.

"(e) Evidence on matters not pleaded in the answer shall be allowed only on such terms and conditions as the Labor Commissioner shall impose. In all such cases, the claimant shall be entitled to a continuance for purposes of review of such new evidence.

"(f) If the defendant fails to appear or answer within the time allowed under this chapter, no default shall be taken against him or her, but the Labor Commissioner shall hear the evidence offered and shall issue an order, decision, or award in accordance with the evidence. A defendant failing to appear or answer, or subsequently contending to be aggrieved in any manner by want of notice of the pendency of the proceedings, may apply to the Labor Commissioner for relief in accordance with the provisions of Section 473 of the Code of Civil Procedure. The Labor Commissioner may afford such relief. No right to relief, including the claim that the findings or award of the Labor Commissioner or judgment entered thereon are void upon their face, shall accrue to such defendant in any court unless prior application is made to the Labor Commissioner in accordance with this chapter.

"(g) All hearings conducted pursuant to this chapter are governed by the division and by the rules of practice and procedure adopted by the Labor Commissioner."

Subdivision (a) provides that within 30 days of filing of the complaint notice shall be given to the parties as to whether a hearing will be held.

Subdivision (b) provides that when a hearing is set a copy of the complaint, together with notice of the time and place of the hearing, be served on the parties.

Subdivision (c) provides that within 10 days after service of the notice and the complaint a defendant may file an answer. Under subdivision (d), no pleading other than the complaint and answer shall be required.

It is thus clear, under the plain words of the statute, that a defendant may elect not to file an answer and appear at the hearing to contest the claim or, conversely, elect to file an...