Filed 5/28/24; certified for publication 6/25/24 (order attached)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

LUSARDI CONSTRUCTION 

COMPANY,

Plaintiff and Appellant,

v.

DEPARTMENT OF INDUSTRIAL 

RELATIONS et al., 

Defendants and Respondents,

DIVISION OF LABOR STANDARDS 

ENFORCEMENT, 

 Real Party in Interest and 

 Respondent.

 D081704

 (Super. Ct. No. 

 37-2020-00021750-CU-WM-NC)

APPEAL from an order of the Superior Court of San Diego County, 

Robert P. Dahlquist, Judge. Affirmed.

Herold & Sager and Nicholas B. Salerno for Plaintiff and Appellant. 

No appearance for Defendants and Respondents Department of 

Industrial Relations and Katrina S. Hagen. 

Lance A. Grucela for Real Party in Interest and Respondent.
2

Plaintiff and appellant Lusardi Construction Company’s (Lusardi) 

subcontractor, Pro Works Contracting Inc. (Pro Works), violated certain 

Labor Code1 provisions by failing to hire apprentices for construction of the 

San Marcos K-8 School Project (the Project). Defendants and respondents 

Department of Industrial Relations, its director Katrina S. Hagen (the 

Director), and real party in interest and respondent, Division of Labor 

Standards Enforcement (DLSE) cited Pro Works for those violations. 

Following an investigation, DLSE ordered Lusardi to pay penalties for the 

violations. Lusardi’s administrative appeal was unsuccessful, and it 

thereafter filed a petition for writ of administrative mandamus under Code of 

Civil Procedure section 1094.5, which the superior court denied.

Lusardi contends the superior court erroneously concluded that: (1) the 

Director’s interpretation of former section 1777.7 subdivision (d) was proper; 

(2) substantial evidence supported a finding Lusardi knew of Pro Works’s 

violations; (3) section 1743, subdivision (a)’s joint and several liability 

provision applied; (4) substantial evidence supported the amount of the 

penalty assessed against Pro Works; and (5) Lusardi was not denied due 

process. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In 2014, San Marcos Unified School District (the District) awarded 

Lusardi a contract to construct the Project. Lusardi subcontracted with Pro 

Works to install the iron reinforcing work for the Project.

1 Undesignated statutory references are to the 2014 versions of the 

Labor Code. We grant the parties’ separate requests to take judicial notice of 

different items of legislative history under Evidence Code section 452; 

however, we deny the portion of Lusardi’s request seeking judicial notice of a 

decision of the Department of Industrial Relations because that decision is 

not necessary for our disposition of this appeal. 
3

The DLSE Investigation

In 2015, DLSE opened an investigation into a complaint that Pro 

Works violated former section 1777.5 by failing to: (1) provide contract award 

information; (2) request dispatch of apprentices from applicable apprentice 

committees; (3) employ registered apprentices in compliance with a required 

apprentice to journeyperson ratio; and (4) make certain required training 

fund contributions to an approved apprenticeship program. 

Deputy Labor Commissioner Kari Anderson served the following 

documents on Lusardi and Pro Works: a “notice of investigation,” a “request 

for payroll records,” a “statement of employer payments” form, and a “notice 

of apprenticeship compliance” form, which in turn sought Department of 

Apprenticeship Standards (DAS) forms2 and “accounting and proof of 

2 The notice of apprenticeship compliance form states that a DAS 140 

form relates to “contract award information (or equivalent) with proof of

submission to applicable apprenticeship committees,” and a DAS 142 form

relates to a “request for dispatch of an apprentice (or equivalent) with proof of 

submission to applicable apprenticeship committees.” (Some capitalization 

omitted.) 

The documents sought are routinely used by contractors who are 

awarded public contracts. Former section 1777.5 subdivision (e) provided: 

“Before commencing work on a contract for public works, every contractor 

shall submit contract award information to an applicable apprenticeship 

program that can supply apprentices to the site of the public work. The 

information submitted shall include an estimate of journey[person] hours to 

be performed under the contract, the number of apprentices proposed to be 

employed, and the approximate dates the apprentices would be employed. A 

copy of this information shall also be submitted to the awarding body, if 

requested by the awarding body. Within 60 days after concluding work on 

the contract, each contractor and subcontractor shall submit to the awarding 

body, if requested, and to the apprenticeship program a verified statement of 

the journey[person] and apprentice hours performed on the contract. The 

information under this subdivision shall be public. The apprenticeship 

programs shall retain this information for 12 months.”
4

payment of the training fund contributions to California Apprenticeship 

Council or approved apprenticeship program.” (Some capitalization omitted.) 

The entities responded differently to Anderson’s documents request. 

The District provided some information but stated Lusardi “holds all certified 

payroll [records (CPR’s)] on sub-contractors.” Pro Works provided some 

CPR’s but only after the Project was completed, claiming the tardy 

submission was due to staff turnover. Lusardi provided no information, and

Anderson testified she did not hear from or communicate with any Lusardi 

representative during her investigation.

Anderson issued a “Penalty Review” summarizing her findings. She 

concluded that in February 2015, Pro Works violated the statutes and 

regulations relating to apprenticeships by failing to submit compliant DAS 

140 and 142 forms and other required information. Anderson found that Pro 

Works “failed to hire any apprentices.” She also concluded Pro Works had a 

“history” of apprentice violations, and specifically listed their dates and 

descriptions. Anderson concluded the penalty should be assessed based on 

Pro Works’s failure to comply with four out of the five factors set forth in 

former section 1777.7, subdivision (f).3 Anderson testified that Senior 

Deputy Labor Commissioner Michael Nagtalon reviewed her report and 

3 Former section 1777.7, subdivision (f) listed five factors the Labor 

Commissioner “shall consider” in calculating the monetary penalty. 

“Whether the party has committed other violations of section 1777.5. [¶] 

Whether, upon notice of the violation, the party took steps to voluntarily 

remedy the violation. [¶] Whether, and to what extent, the violation resulted 

in lost training opportunities for apprentices. [And] [¶] Whether, and to 

what extent, the violation otherwise harmed apprentices or apprenticeship 

programs.” The fifth factor, and the one Anderson did not find applicable 

here, was “whether the violation was intentional.”
5

assessed penalties in the amount of $30,800, consisting of $200 per each of 

154 days of section 1777.5 violations. 

Lusardi timely filed a request for review of Anderson’s decision with 

the Director. 

Before the review hearing started, the hearing officer ruled the 2014 

version of the relevant Labor Code provisions and regulations would apply,

based on the Project’s bid advertisement date. He also ruled regarding the 

burden of proof that “DLSE will have to come forward with sufficient 

evidence to provide prima facie support for the penalty assessment, including 

evidence of Lusardi’s knowledge of the alleged violation by the subcontractor 

or Lusardi’s alleged failure to comply with the requirements of [former 

section] 1777.7[, subdivision] (d).[4] If this is done, Lusardi will have . . . the 

4 Former section 1777.7, subdivision (d) provided: “If a subcontractor is 

found to have violated Section 1777.5, the prime contractor of the project is 

not liable for any penalties under subdivision (a), unless the prime contractor 

had knowledge of the subcontractor’s failure to comply with the provisions of 

Section 1777.5 or unless the prime contractor fails to comply with any of the 

following requirements: [¶] (1) The contract executed between the contractor 

and the subcontractor or the performance of work on the public works project 

shall include a copy of the provisions of Sections 1771, 1775, 1776, 1777.5, 

1813, and 1815. [¶] (2) The contractor shall continually monitor a 

subcontractor’s use of apprentices required to be employed on the public 

works project pursuant to subdivision (d) of Section 1777.5, including, but not 

limited to, periodic review of the certified payroll of the subcontractor. [¶] (3) 

Upon becoming aware of a failure of the subcontractor to employ the required 

number of apprentices, the contractor shall take corrective action, including, 

but not limited to, retaining funds due the subcontractor for work performed 

on the public works project until the failure is corrected. [¶] (4) Prior to 

making the final payment to the subcontractor for work performed on the 

public works project, the contractor shall obtain a declaration signed under 

penalty of perjury from the subcontractor that the subcontractor has 

employed the required number of apprentices on the public works project.”
6

burden of proof set forth in [California Code of Regulations, title 8, section] 

232.50[, subdivision] (b).”5

On the first day of the hearing, Lusardi’s counsel initially stated three 

of its representatives as well as Nagtalon would testify. Counsel stated 

Nagtalon was a necessary witness. But Nagtalon was not available. DLSE’s 

sole witness, Anderson, was the only person who testified that day. 

On the second and last day of the hearing, Lusardi’s counsel sought the 

testimony of Nagtalon, who was under subpoena. DLSE’s counsel explained 

Nagtalon was unavailable as he was outside of the country, but he offered to 

produce Nagtalon for a rescheduled hearing. However, Lusardi elected not to 

request a continuance to obtain Nagtalon’s testimony or to put on its case. 

Instead, its counsel stated, “Lusardi will rest without presenting any further 

evidence and will not move any of Lusardi’s exhibits into evidence in this 

matter.” Counsel explained: “We are not going to present any evidence 

because we feel very strongly the Labor Commissioner has failed to meet its 

burden in this matter.”

The Director’s Review

The Director affirmed the hearing officer’s findings, concluding DLSE 

met its burden to present evidence showing prima facie support for the 

penalty assessment, including that Lusardi knew of Pro Works’s violations 

and was liable for the penalties. The Director summarized Anderson’s 

testimony at length. In concluding Pro Works violated the apprentice 

requirements, the Director explained that former section 1777.5 and the 

applicable regulations required an employer who had obtained certain public 

work contracts to hire apprentices to perform one hour of work for every five 

5 California Code of Regulations, title 8, section 232.50, subdivision (b)

was subsequently repealed.
7

hours of work performed by journeypersons in the applicable craft or trade. 

She stated that under the applicable regulation, “a contractor shall not be 

considered in violation of the 1:5 ratio requirement if it has properly 

requested the dispatch of apprentices and no apprenticeship committee in the 

geographic are[a] of the public works project dispatches apprentices during 

the pendency of the project, provided the contractor made the request in 

enough time to meet the required ratio.” The Director concluded, “There is no 

dispute that Pro Works failed to employ any apprentices on the Project.”

The Director also concluded Pro Works violated former section 1777.5, 

subdivision (e) and the applicable regulations, including by failing to submit

proper contract award information to an apprenticeship program. The 

Director summarized Pro Works’s violations: “Pro Works had first assigned 

an Iron Worker journeyperson to work on the Project on December 23, 2014. 

In light of that evidence, it was reasonable for DLSE to infer that Pro Works 

knew of its apprentice needs by February 23, 2015. Indeed, given all the 

facts in the record, it is also reasonable to infer that Pro Works never had any 

intention of employing apprentices on this Project in December of 2014, in 

February of 2015, or even in May of 2015 when it finally submitted a 

complete and valid DAS 140 form. That Anderson did not directly inquire of 

Pro Works or make a finding as to the state of Pro Works’[s] knowledge of 

apprentice needs does not detract from the record of Pro Works’[s] violations 

in this case.”

The Director further concluded Pro Works failed to properly request 

dispatch of apprentices, adding: “Pro Works’[s] violations of apprentice 

requirements are deemed to be ‘knowing’ within the meaning of [former] 
8

section 1777.7, subdivision (a)(1).6 This is so because, as reflected in DLSE 

records, Pro Works had previously been found to have violated [former] 

section 1777.5.”

The Director stated DLSE presented prima facie support for the 

calculation of penalty days. The Director further pointed out Anderson 

checked four of the boxes on a pre-printed form corresponding to the former 

section 1777.7, subdivision (f) factors. The Director reasoned: “According to 

Anderson’s testimony and the penalty review, Nagtalon considered the five 

penalty factors, approved the penalty review prepared by Anderson, and set 

the penalty rate at $200.00 per violation ‘due to the nature of the violations,’ 

before returning the penalty review to Anderson for preparation of the 

assessment. These facts establish a prima facie showing that Nagtalon 

reviewed the summary of the investigation prepared by Anderson, considered 

the statutory factors, and properly exercised his discretion in setting the 

penalty rate.” (Some capitalization omitted.) 

6 Former section 1777.7, subdivision (a)(1) provided that a contractor or 

subcontractor that is determined by the Labor Commissioner to have 

knowingly violated former section 1777.5 shall forfeit as a civil penalty $100 

per day of noncompliance, but if there are subsequent violations within a 

three-year period, the penalty shall be not more than $300 for each full 

calendar day of noncompliance.
9

The Director concluded the penalty rate per violation was appropriately 

high.7 She pointed out that Pro Works’s violations were intentional and it 

had a history of other apprentice violations. Moreover, Pro Works took few 

meaningful steps to voluntarily remedy its violations upon its receipt of the 

initial packet, which occurred before the end of the Project.

The Director made a specific finding Lusardi was liable for the penalty 

assessed because under former section 1777.7 subdivision (a)’s first prong, 

“DLSE produced evidence that Lusardi knew about the ongoing apprentice 

violations by Pro Works, and that it possessed this knowledge while the 

Project was still underway and while Pro Works was using ironworker 

journeypersons on the Project. DLSE’s initial investigation packet, received 

by Lusardi on April 24, 2015, placed Lusardi on notice that DLSE had a 

7 The Director concluded: “DLSE properly calculated the number of days 

that Pro Works was in violation of the apprenticeship requirements. . . .

DLSE could have extended the penalty period back to ten days from the 

execution of the subcontract, but instead DLSE took the more conservative 

course and counted 135 penalty days from the day after the first day Pro 

Works had workers on the Project (December 22, 2014) to the May 7, 2015 

date of the first valid DAS 140 form that Pro Works submitted. To those 135 

penalty days, DLSE properly added another 19 days’ worth of ratio 

violations, representing the number of work days that Pro Works had 

journeypersons on the Project with no apprentices between May 7, 2015, and 

June 23, 2015, Pro Works’[s] last day on the Project. [¶] The best evidence 

for the duration of both penalties would have been a complete set of CPR[’]s. 

However, the copy admitted into evidence at the hearing ends on March 28, 

2015, and is therefore incomplete, in and of itself. . . . The gap in the 

evidentiary record between March 28, 2015, and June 23, 2015, was bridged 

by Anderson’s oral testimony, the penalty review Anderson prepared, and the 

DAS 142 forms prepared by Pro Works in May and June 2015. Altogether, 

this evidence provides prima facie support for the duration of the penalty 

period as calculated by DLSE, even in the absence of a complete set of Pro 

Works’[s] CPR[’]s. Lusardi presented no evidence to carry its burden to 

disprove the basis for, or the accuracy of, DLSE’s showing as to the number of 

penalty days.” (Footnote and some capitalization omitted.)
10

complaint that Pro Works was not in compliance with section 1777.5. DLSE’s 

packet specified the nature of the alleged violations, most notably on the 

notice of apprenticeship compliance, where Lusardi and this Project were 

identified. On April 29, 2015, Pro Works’s principal Gary Lane informed 

Anderson that Lusardi was withholding a retention from Pro Works in 

connection with the complaint about apprentice violations.” (Some 

capitalization omitted.) 

The Director added: “In this case, DLSE produced prima facie evidence 

that Lusardi had knowledge of Pro Works’[s] apprentice violations, thus 

satisfying the first prong of [former section 1777.7,] subdivision (d). This 

conclusion could have conceivably been rebutted by Lusardi, but Lusardi did 

not deny it had knowledge. Had Lusardi denied knowledge, evidence may 

have been explored as to whether Lusardi failed to comply with the second 

prong of subdivision (d). However, in the absence of such evidence, it is 

reasonable to infer that Lusardi possessed knowledge, thereby depriving 

Lusardi of the safe harbor from liability for Pro Works’[s] violations.”

The Director rejected Lusardi’s claim of due process violations: “Given 

DLSE’s evidence supporting a prima facie showing of Lusardi’s knowledge of 

actual and ongoing apprentice violations by Pro Works during the course of 

the Project, and given the opportunity to be heard in the form of the hearing, 

Lusardi was not deprived of its due process rights. Lusardi was put on notice 

by the contents of DLSE’s initial packet, and it cannot plausibly assert that 

its potential liability was not manifest from the start of DLSE’s investigation. 

. . . Further, by virtue of section 1743 and former section 1777.7, Lusardi was 

on notice that its liability was at issue.” (Footnote omitted.) 
11

Writ Proceedings

Lusardi filed a petition for writ of administrative mandate arguing the

Director’s decision should be invalidated: “[DLSE] acted in excess of its 

authority and contrary to [former] sections 1777.5 and 1777.7 in issuing an 

excessive and unsupported civil wage and penalty assessment against [Pro 

Works] for alleged apprentice employment violations. In turn, the [Director] 

improperly affirmed the assessment and, in direct contravention to the rule of 

law set forth in [former] section 1777.7 subdivision (d) that a prime 

contractor is not liable for the apprentice violations of a subcontractor, found 

that Lusardi is liable for the assessment against its subcontractor without 

sufficient evidence to show that Lusardi either had knowledge of Pro 

Works’[s] alleged violation or that Lusardi failed to comply with any of the 

requirements of [former section 1777.7] subdivision (d)(1)-(4). In doing so, 

the [Director] proceeded in excess of her jurisdiction, without affording 

Lusardi a fair hearing, and prejudicially abused her discretion.” 

Lusardi further argued, “The DLSE failed to produce . . . Nagtalon 

pursuant to a timely served subpoena to compel his attendance at the 

hearing on merits in order to allow Lusardi to examine him as to how the 

daily penalty rate assessed against Pro Works was determined pursuant to 

[former] section 1777.7, subdivision (f).” (Some capitalization omitted.) 

Lusardi also sought declaratory relief “as to the legality of the decision 

and order and the DLSE’s enforcement against [it] under section[ ] 1743 and 

[former section] 1777.7[,] including a determination of the question of 

validity.” (Some capitalization omitted.) 

The superior court denied Lusardi’s writ petition, interpreting former 

section 1777.7 subdivision (d) in the disjunctive: “Based on the plain 

language of the statute, the [c]ourt believes that the Legislature intended for 
12

the [Director] to have the burden of establishing that petitioner had 

knowledge of the subcontractor’s failure to comply with [former section]

1777.5 or that petitioner failed to comply with any [of] the requirements set 

forth in [former section 1777.7 subdivision] (d)(1)-(4). [¶] . . . [¶] The 

Director focused on the first prong of [former section] 1777.7[,subdivision] (d), 

and made a finding that Lusardi had knowledge of the subcontractor’s 

apprentice violations.” 

The court further found that substantial evidence supported the 

findings “relating to the amount of the penalty assessment” based on the 

Director’s independent review of the penalty amount. It also found the CPR’s 

provided substantial evidence showing Lusardi knew of Pro Works’s failure to 

hire any apprentices. 

The court rejected Lusardi’s claim it was denied due process: “[A]s a 

result of the notices given to Lusardi, and the applicable provisions of the law 

pertaining to public works projects, the [c]ourt is satisfied that Lusardi was 

on notice of the potential for being held jointly and severally liable for Pro 

Works’[s] apprentice hiring violations.” 

The court also ruled: “[T]he Director had the obligation to, and did, 

conduct a de novo consideration of any penalties to be assessed. As such, . . . 

Nagtalon was not the ultimate decision-maker concerning the amount of the 

penalty. While the [c]ourt believes that the better practice for the DLSE 

would have been to produce . . . Nagtalon for examination at the 

administrative hearing, the [c]ourt is not persuaded that the failure to 

produce . . . Nagtalon resulted in a violation of Lusardi’s due process rights.”
13

DISCUSSION

I. Interpretation of Former Section 1777.7, Subdivision (d)

Lusardi contends the court erroneously adopted the Director’s 

“interpretation and unprecedented application of the two prongs of [former]

section 1777.7, subdivision (d)(1)-(4).” (Bold and capitalization omitted.)

A. Standard of Review

“Statutory construction is a question of law we decide de novo. 

[Citation.] Our primary objective in interpreting a statute is to determine 

and give effect to the underlying legislative intent. [Citation.] Intent is 

determined foremost by the plain meaning of the statutory language. If the 

language is clear and unambiguous, there is no need for judicial construction. 

When the language is reasonably susceptible of more than one meaning, it is 

proper to examine a variety of extrinsic aids in an effort to discern the 

intended meaning. We may consider, for example, the statutory scheme, the 

apparent purposes underlying the statute and the presence (or absence) of 

instructive legislative history.” (Starving Students, Inc. v. Department of 

Industrial Relations (2005) 125 Cal.App.4th 1357, 1363.)

The California Supreme Court has stated: “The conditions of 

employment on construction projects financed in whole or in part by public 

funds are governed by the prevailing wage law [set forth in sections 1720 

through 1861].” (Lusardi Construction Co. v. Aubrey (1992) 1 Cal.4th 976, 

985.) “This statutory scheme also governs the employment of apprentices. 

Section 1777.5 requires the employment of apprentices on public works 

projects under the terms of a statutory formula, and mandates that the 

awarding body insert stipulations in the construction contract requiring 

compliance with the apprenticeship provisions of the prevailing wage law. 

Section 1777.7 specifies sanctions for failure to comply with the 
14

apprenticeship requirements, including debarment from public works 

contracting and monetary penalties.” (Lusardi v. Aubry, supra, at p. 986, &

fn. 2.)

In interpreting the disjunctive parts of former section 1777.7, 

subdivision (d), we turn to one court’s discussion of the challenges in 

interpreting the conjunction “or”: “ ‘The fact is that there is nothing very 

plain about the use of the connective “or” in legal drafting.’ [Citation.] 

‘ “Sometimes it joins alternatives; sometimes it doesn’t. Sometimes or means 

and; sometimes it doesn’t[ ].” ’ [Citation.] Additionally, if ‘or’ is a disjunctive 

connector, sometimes it connects words in the inclusive sense (i.e., A or B, or 

both); other times, it connects words in the exclusive sense (i.e., A or B, but 

not both). [Citation.] Thus, the potential ambiguity created by ‘or’ is not one

dimensional.” (Dow v. Honey Lake Valley Resource Conservation Dist. (2021) 

63 Cal.App.5th 901, 903-904.)

“ ‘ “Legal sources differ on which meaning of ‘or’ [(as inclusive or 

exclusive)] is authoritative. In the realm of symbolic logic, the exclusive ‘or,’

otherwise known as the exclusive disjunction, means that only one of the 

propositions or terms joined by the disjunction can be true. ‘Jim is eight or

nine years old’ is exemplary of an exclusive disjunction because only one 

proposition in the disjunction can be true. On the other hand, an inclusive 

disjunction assumes that either one or both of the terms or propositions on 

either side of the disjunction are true. A sentence like, ‘X will call or e[-]mail 

Y,’ does not necessarily denote an exclusive disjunction, but rather, it leaves 

open the possibility that X could call and e[-]mail Y. Essentially, an inclusive 

disjunction allows the possibility of either option, or both, which is also the 

literal meaning of and/or.” ’ [Citation.] ‘[I]t has been asserted that, in legal 

drafting, it is more often the case that the connective “or” is used in the
15

inclusive sense’ [citation] and ‘[i]n ordinary English, the phrase “P or Q” on 

its own often suggests the inclusive sense of “or.” ’ ” (Dow v. Honey Lake 

Valley Resource Conservation Dist., supra, 63 Cal.App.5th at pp. 913-914.)

We conclude the court did not err in interpreting former section 1777.7, 

subdivision (d). The statute’s plain language provides two inclusive and 

alternative ways for imposing liability on a prime contractor for penalties 

resulting from the subcontractor’s violations of former section 1777.5. 

Specifically, first, the prime contractor is not liable for the penalties “unless 

[it] had knowledge of the subcontractor’s failure to comply” with the statute; 

or, second, it is not liable for the penalties “unless the prime contractor fails 

to comply with any of the” requirements set forth in the remainder of section 

(d). (Former § 1777.7, subd. (d).) The DLSE properly determined that under 

former section 1777.7 subdivision (d)’s first prong, Lusardi had knowledge of 

Pro Works’s failure to comply with the applicable apprentice provisions set 

forth in former section 1777.5. That finding sufficed for the court to conclude 

Lusardi was liable for Pro Works’s violations of former section 1777.7, 

subdivision (d). 

Our conclusion regarding the proper interpretation of former section 

1777.7, subdivision (d) is bolstered by another court, which interpreted a 
16

parallel provision in section 1775, subdivision (b),8 that is also phrased in the 

disjunctive, as follows: “[T]he prime contractor is not liable for any monetary 

penalties unless the prime contractor knew the subcontractor had not paid 

prevailing wages to the subcontractor’s workers or unless the prime 

contractor fails to provide for the payment of prevailing wage in its contract 

with the subcontractor; to monitor such payments by reviewing the payroll 

records of the subcontractor; to undertake withholding, if necessary; and to 

obtain an affidavit from the subcontractor asserting payment was made.” 

(Violante v. Communities Southwest Development & Construction Co. (2006) 

138 Cal.App.4th 972, 979, bold added.)

8 Section 1775, subdivision (b) provides: “If a worker employed by a 

subcontractor on a public works project is not paid the general prevailing rate 

of per diem wages by the subcontractor, the prime contractor of the project is 

not liable for any penalties under subdivision (a) unless the prime contractor 

had knowledge of that failure of the subcontractor to pay the specified 

prevailing rate of wages to those workers or unless the prime contractor fails 

to comply with all of the following requirements: [¶] (1) The contract 

executed between the contractor and the subcontractor for the performance of

work on the public works project shall include a copy of the provisions of this 

section and Sections 1771, 1776, 1777.5, 1813, and 1815. [¶] (2) The 

contractor shall monitor the payment of the specified general prevailing rate 

of per diem wages by the subcontractor to the employees, by periodic review 

of the certified payroll records of the subcontractor. [¶] (3) Upon becoming 

aware of the failure of the subcontractor to pay his or her workers the 

specified prevailing rate of wages, the contractor shall diligently take 

corrective action to halt or rectify the failure, including, but not limited to, 

retaining sufficient funds due the subcontractor for work performed on the 

public works project. [¶] (4) Prior to making final payment to the 

subcontractor for work performed on the public works project, the contractor 

shall obtain an affidavit signed under penalty of perjury from the

subcontractor that the subcontractor has paid the specified general prevailing 

rate of per diem wages to his or her employees on the public works project 

and any amounts due pursuant to Section 1813.” (Italics added.)
17

In Lusardi’s alternative interpretation of former section 1777.7, 

subdivision (d), that provision “is intended to preclude the prime contractor’s 

liability for a subcontractor’s apprentice violation unless the prime contractor 

possessed knowledge of the subcontractor’s apprentice violations or, if so,

failed to comply with the requirements set forth in subsection[s] (1)-(4).” 

(Italics added, bold and some capitalization omitted.) Lusardi’s addition of 

those two words, “if so,” completely alters the meaning of the statute in a way 

that the Legislature did not contemplate, and that we therefore cannot 

accept. “In the construction of a statute or instrument, the office of the Judge

is simply to ascertain and declare what is in terms or in substance contained 

therein, not to insert what has been omitted, or to omit what has been 

inserted.” (Code Civ. Proc., § 1858; Vikco Ins. Services, Inc. v. Ohio Indemnity 

Co. (1999) 70 Cal.App.4th 55, 61.) “Thus, ‘ “. . . ‘[i]n construing . . . statutory 

provisions a court is not authorized to insert qualifying provisions not 

included and may not rewrite the statute to conform to an assumed intention 

which does not appear from its language.’ ” ’ ” (Vikco, at p. 62.)

II. Substantial Evidence that Lusardi Knew of Pro Works’s Violations

Lusardi contends the superior court erroneously concluded that 

substantial evidence supported the Director’s finding Lusardi had knowledge 

of Pro Works’s apprentice violations. It specifically contends that no evidence 

showed Lusardi was provided the CPR’s that Pro Works produced at trial.

Lusardi further contends the CPR’s do not facially demonstrate whether Pro 

Works’s failure to employ apprentices on the project was a violation of any 

apprentice requirements, and those records have no bearing on whether Pro 

Works submitted contract award information to an applicable apprentice 

program. Finally, Lusardi contends Anderson’s testimony and case notes 
18

cannot support the finding Lusardi withheld a retention from Pro Works in 

connection with the complaint about apprentice violations.

A superior court’s review of an agency’s adjudicatory administrative 

decision under Code of Civil Procedure section 1094.5 is subject to two 

possible standards depending on the nature of the rights involved. (Mann v. 

Department of Motor Vehicles (1999) 76 Cal.App.4th 312, 320.) If the 

administrative decision involved or substantially affected a “fundamental 

vested right,” the superior court exercises its independent judgment upon the 

evidence disclosed in a limited trial de novo in which the court must examine 

the administrative record for errors of law and exercise its independent 

judgment upon the evidence. (Bixby v. Pierno (1971) 4 Cal.3d 130, 143-144 

(Bixby); Code Civ. Proc., § 1094.5, subd. (c).) The theory behind this kind of 

review is that abrogation of a fundamental vested right “is too important to 

the individual to relegate it to exclusive administrative extinction.” (Bixby, 

at p. 144.) Where no fundamental vested right is involved, the superior 

court’s review is limited to examining the administrative record to determine 

whether the adjudicatory decision and its findings are supported by 

substantial evidence in light of the whole record. (Bixby, at pp. 143-144.) 

Substantial evidence must be “ ‘of ponderable legal significance,’ ” which is 

reasonable in nature, credible and of solid value. (Kuhn v. Department of 

General Services (1994) 22 Cal.App.4th 1627, 1633.)

“Regardless of the nature of the right involved or the standard of 

judicial review applied in the trial court, an appellate court reviewing the 

superior court’s administrative mandamus decision always applies a 

substantial evidence standard. [Citations.] But depending on whether the 

trial court exercised independent judgment or applied the substantial 

evidence test, the appellate court will review the record to determine whether 
19

either the trial court’s judgment or the agency’s findings, respectively, are 

supported by substantial evidence. [Citation.] If a fundamental vested right 

was involved and the trial court therefore exercised independent judgment, it 

is the trial court’s judgment that is the subject of appellate court review. 

[Citations.] On the other hand, if the superior court properly applied 

substantial evidence review because no fundamental vested right was 

involved, then the appellate court’s function is identical to that of the trial 

court. It reviews the administrative record to determine whether the 

agency’s findings were supported by substantial evidence, resolving all 

conflicts in the evidence and drawing all inferences in support of them. 

[Citations.] [¶] If the administrative findings are supported by substantial 

evidence, the next question is one of law—whether those findings support the 

agency’s legal conclusions or its ultimate determination. [Citation.] If the 

administrative record reveals the theory upon which the agency has arrived 

at its ultimate decision, the decision should be upheld so long as the agency 

found those facts that as a matter of law are essential to sustain the 

decision.” (JKH Enterprises, Inc. v. Department of Industrial Relations (2006) 

142 Cal.App.4th 1046, 1058, fn. omitted.) Here, as the trial court reviewed 

the administrative record for substantial evidence, we apply that same 

standard to the agency’s findings.

Former section 1777.5, subdivision (d) provides: “When the contractor 

to whom the contract is awarded by the state or any political subdivision, in 

performing any of the work under the contract, employs workers in any 

apprenticeable craft or trade, the contractor shall employ apprentices in at

least the ratio set forth in this section and may apply to any apprenticeship 

program in the craft or trade that can provide apprentices to the site of the 

public work for a certificate approving the contractor under the 
20

apprenticeship standards for the employment and training of apprentices in 

the area or industry affected.” Former section 1777.5, subdivision (g) 

specifies: “The ratio of work performed by apprentices to journey[persons]

employed in a particular craft or trade on the public work may be no higher 

than the ratio stipulated in the apprenticeship standards under which the 

apprenticeship program operates where the contractor agrees to be bound by 

those standards, but, except as otherwise provided in this section, in no case 

shall the ratio be less than one hour of apprentice work for every five hours of 

journey[person] work.”

The record establishes that the District reported to Anderson that 

Lusardi kept the CPR’s for the Project. That would be consistent with former 

section 1776, subdivision (a)’s requirement: “Each contractor and 

subcontractor shall keep accurate payroll records, showing the name, 

address, social security number, work classification, straight time and 

overtime hours worked each day and week, and the actual per diem wages 

paid to each journey[person], apprentice, worker, or other employee employed 

by him or her in connection with the public work. Each payroll record shall 

contain or be verified by a written declaration that it is made under penalty 

of perjury, stating both of the following: [¶] (1) The information contained in 

the payroll record is true and correct. [¶] (2) The employer has complied 

with the requirements of Sections 1771, 1811, and 1815 for any work 

performed by his or her employees on the public works project.”

Anderson concluded the CPR’s did not show that Pro Works recorded 

any apprentice hours worked. It follows that Pro Works failed to comply with 

the ratio of apprentice journeypersons ratio set forth in former section 1777.5, 

subdivision (a). As nothing in the record contradicts Andersons’s finding, the 
21

Director did not err by concluding that Lusardi knew, based on the CPR’s it 

retained, that Pro Works did not hire any apprentices. 

III. Section 1743’s Joint and Several Liability Provision

Lusardi contends, “Although it is not clear whether the Superior Court 

relied on the application of any joint and several provisions contained in 

section 1743[, subdivision] (a) in any meaningful way, the appellant is merely 

advising the court that it does not apply to create any sort of presumption 

that must be overcome by operation of [former section] 1777.7 [, subdivision] 

(d).” (Some capitalization omitted.) Lusardi relies on a case issued by the 

Director of Industrial Relations (Matter of W.A. Thomas Company, Inc., 

Director of Industrial Relations (July 26, 2017) No. 12-0106-PWH) and 

argues that “any analysis of the legislative intent behind [former section] 

1777.7[,subdivision] (d) should begin with a presumption that a prime 

contractor is not liable for a subcontractor’s apprentice violations unless the 

exceptions to this rule are found to apply.”

The DLSE counters that the legislative history of section 1743 

demonstrates its applicability. It also argues Lusardi’s reliance on the 

administrative decision is misplaced as it is not precedential and, in any 

event, it does not state the conclusion for which Lusardi cites it, namely that 

section 1743, subdivision (a) “applies to penalties for wage violations” and not 

to penalties for violations of the Labor Code’s apprenticeship provisions.

Section 1743, subdivision (a)’s language is plain. It provides: “The 

contractor and subcontractor shall be jointly and severally liable for all 

amounts due pursuant to a final order under this chapter or a judgment 

thereon. The Labor Commissioner shall first exhaust all reasonable remedies 

to collect the amount due from the subcontractor before pursuing the claim 

against the contractor.” Under this statue, both the contractor and 
22

subcontractor are jointly and severally liable for the penalties due. The 

Director’s order here is a final order under the prevailing laws, and is 

encompassed by this statute. 

In light of the above, we need not rely on section 1743’s legislative 

history. But even if we did, it supports our conclusion that the Legislature 

intended for contractors and subcontractors to be held jointly and severally 

liable for penalties imposed by the Labor Commissioner. An analysis of the 

proposed section 1743 legislation stated: “Existing law, . . . [s]ection 1775[, 

subdivision] (d), provides that ‘the contractor and subcontractor shall be 

jointly and severally liable in the enforcement action for any wages due,’ and 

specifies that the contractor is liable for collection only after enforcement of 

all reasonable remedies against the subcontractor has been exhausted. 

Section 1775[, subdivision] (b) makes a prime contractor liable for penalties 

for a subcontractor’s violation of the law when the contractor either knows of 

the subcontractor’s violation or fails to follow specific procedures to require 

the subcontractor to comply with the prevailing wage law and to monitor 

compliance. [¶] This bill would expressly hold a contractor jointly and 

severally liable for all amounts due (including penalties) pursuant to a final 

assessment of the commissioner or a judgment thereon.” (Sen. Floor Analysis 

of Sen. Bill No. 1646 (1999-2000 Reg. Sess.)

IV. Substantial Evidence Supported the Penalty Assessment Imposed

Lusardi contends the superior court erroneously found that substantial 

evidence supported the penalty assessment: “Neither the certified payroll 

records nor any other evidence presented by the DLSE support the 154 

penalty day calculation assessed against Pro Works. Accordingly, there is no 

substantial evidence in the record to support the penalty assessment of 

$30,800 based on 154 penalty days.” Lusardi contends: “The [Director’s] 
23

purported de novo review of the penalty amount is not based on substantial 

evidence.” (Bold and some capitalization omitted.)

The record shows that Anderson checked the four boxes corresponding 

to the applicable former section 1777.7, subdivision (f) factors supporting her 

determination that penalties should be imposed. She testified regarding how 

she computed the number of days of violation, based on 154 days, 4,355 hours 

and zero apprentice hours. Anderson further testified Nagtalon reviewed her 

report and calculated the amount of penalty to be imposed for each day of 

violation. 

The Director exercised her de novo authority in reviewing the penalty, 

and concluded “DLSE properly calculated the number of days that Pro 

Works was in violation of the apprenticeship requirements.” For the reasons 

stated in Anderson’s report and the Director’s independent review, we 

conclude substantial evidence supported the penalty imposed. “[W]here, as 

here, our review is limited to examining the whole administrative record to 

determine if the [Labor Commissioner’s] findings and order are supported by 

substantial evidence, it is not our function to reweigh the evidence or the 

particular factors cited by the [Labor Commissioner] in support of [the] 

decision . . . . Once we conclude, as we have here, that the [Labor 

Commissioner’s] findings are indeed supported by substantial evidence, and 

that those findings in turn support the . . . legal conclusion or ultimate 

determination, our analysis is at an end.” (JKH Enterprises, Inc. v. 

Department of Industrial Relations, supra, 142 Cal.App.4th at p. 1066.) 

V. Claims of Due Process Violation

Due process has been identified as requiring notice, an opportunity to 

be heard in a meaningful way, and an impartial adjudicator. (Today’s Fresh 
24

Start, Inc. v. Los Angeles County Office of Education (2013) 57 Cal.4th 197, 

212.)

Lusardi contends the court erroneously found there was no due process 

violation; rather, the DLSE’s “Notice of apprentice compliance provided to 

Lusardi with the notice of investigation is addressed only to Pro Works and 

includes no indication that the DLSE is investigating whether Lusardi should 

be liable for Pro Works’s alleged violations. . . . [N]or did the DLSE request 

any information from Lusardi as part of its investigation. . . . Instead, the 

DLSE’s actions suggested no intent to hold Lusardi liable and an 

understanding that Lusardi is provided safe harbor under [former] section 

1777.7[, subdivision] (d)(1)-(4).” (Some capitalization omitted.)

The DLSE notices that were sent to Lusardi complied with due process 

by identifying Lusardi as the prime contractor and Pro Works as its 

subcontractor. The notice of investigation was addressed to Lusardi directly 

and advised it that the Labor Commissioner would issue an assessment 

pursuant to it under section 17419 if violations were found. The notice of 

apprenticeship compliance specifically states, “Non-compliance will result in 

civil penalties . . . per . . . [former] section 1777.7.” We conclude the DLSE 

notices adequately provided Lusardi notice of the potential to be held jointly 

and severally liable.

Lusardi also contends it was denied its due process right to confront 

Nagtalon at a hearing “to examine whether the DLSE could satisfy its burden 

to show that all the circumstances set forth in [former] section 1777.7, 

9 Section 1741, subdivision (a) provides: “If the Labor Commissioner or 

his or her designee determines after an investigation that there has been a 

violation of this chapter, the Labor Commissioner shall with reasonable 

promptness issue a civil wage and penalty assessment to the contractor or 

subcontractor, or both.”
25

subdivision (f), subparagraphs (1)-(4) were considered in the setting of the 

penalty assessment.”

The record of the second hearing shows Lusardi elected not to request a 

continuance to obtain Nagtalon’s testimony. Rather, it decided to rest its 

case at the end of the DLSE’s case-in-chief. It therefore cannot be heard to 

complain of a due process violation when it refused to enforce its subpoena or 

ask for a continuance to secure the witness’s attendance. (Accord, Monaghan 

v. Department of Motor Vehicles (1995) 35 Cal.App.4th 1621, 1626.) 

Moreover, the Director reviewed the penalty imposed by Nagtalon de novo, 

and in so doing applied the statutory factors set forth in former section 

1777.7 subdivision (f). Any testimony regarding the penalty that Lusardi 

sought to obtain from Nagtalon was not binding on the Director, and 

therefore, Lusardi’s failure to secure Nagtalon’s testimony did not deprive it 

of due process.

DISPOSITION

The order is affirmed. Costs are awarded to Real Party in Interest and 

Respondent. 

O’ROURKE, J.

WE CONCUR:

McCONNELL, P. J.

BUCHANAN, J.
Filed 6/25/24

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

LUSARDI CONSTRUCTION 

COMPANY,

Plaintiff and Appellant,

v.

DEPARTMENT OF INDUSTRIAL 

RELATIONS et al., 

Defendants and Respondents.

DIVISION OF LABOR STANDARDS 

ENFORCEMENT, 

 Real Party in Interest and 

 Respondent.

 D081704

 (Super. Ct. No.

 37-2020-00021750-CU-WM-NC)

ORDER GRANTING REQUEST 

FOR PUBLICATION 

THE COURT:

The opinion in this case filed May 28, 2024, was not certified for 

publication. It appearing the opinion meets the standards for publication 

specified in California Rules of Court, rule 8.1105(c), the request pursuant to 

rule 8.1120(a) for publication is GRANTED.

IT IS HEREBY CERTIFIED that the opinion meets the standards for 

publication specified in California Rules of Court, rule 8.1105(c); and
2

ORDERED that the words “Not to Be Published in the Official Reports” 

appearing on page one of said opinion be deleted and the opinion herein be 

published in the Official Reports.

McCONNELL, P. J.

Copies to: All parties