Court Opinion

ID: 8502667
Source: CourtListenerOpinion
Date Created: 2022-11-23 00:03:03.059462+00
Date Added: 2024-06-11T16:50:45.215274
License: Public Domain

Filed 11/22/22
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                          DIVISION ONE

 BALUBHAI PATEL et al.,                 B312985

        Plaintiff and Appellants,       (Los Angeles County
                                        Super. Ct. No. BC681074)

        v.

 MANUEL CHAVEZ et al.,

        Defendants and Respondents.

      APPEAL from an order and judgment of the Superior Court
of Los Angeles County, Maureen Duffy-Lewis, Judge. Affirmed.
      Frank A. Weiser for Plaintiffs and Appellants.
      Law Office of Eugene Lee and Eugene D. Lee for Defendant
and Respondent Manuel Chavez.
      No appearance for Defendant and Respondent California
Labor Commissioner’s Office.

                 ________________________________
      Appellants Balubhai Patel, DTWO & E, Inc. (DTWO), and
Stuart Union, LLC (Stuart Union) (collectively, appellants) have
been before this court numerous times in connection with a labor
dispute with a former employee, respondent Manuel Chavez, that
resulted in two California Labor Commissioner orders (ODAs)1
in Chavez’s favor. The instant appeal challenges a superior court
order forfeiting a bond appellants had posted in an unsuccessful
attempt to challenge the ODAs, as well as a judgment against
them as bond principals. We affirm the order and judgment.2

            FACTS AND PROCEEDINGS BELOW
      From 2002 to 2016, Chavez worked as an on-site property
manager of a hotel owned and/or operated by appellants.
In October 2015, Chavez filed a wage claim with the Labor
Commissioner’s office alleging that, for 14 years, appellants
paid him less than minimum wage and engaged in other forms
of wage theft. Appellants responded by filing a lawsuit in the
Los Angeles County Superior Court seeking $10 million from
Chavez, alleging he was an independent contractor who had

      1 Both Labor Commission documents are captioned “order,
decision, or award,” which courts refer to as an ODA (see, e.g.,
Corrales v. Bradstreet (2007) 153 Cal.App.4th 33, 40), and this is
the terminology utilized by the relevant statutes. We therefore
employ this terminology as well.
      2 We deny as moot Chavez’s motion to dismiss the appeal.
To the extent Chavez’s motion addresses appellants’ listing
in their notice of appeal an order compelling appellants to
respond to postjudgment discovery, the motion is moot, because
appellants have abandoned this challenge. To the extent the
motion seeks dismissal of the appeal from the bond order and
related judgment under the disentitlement doctrine, the motion
is moot in light of our disposition on the merits as outlined below.

                                 2
stolen hotel rental moneys. Appellants dismissed the suit the
day before trial.
       In 2017, the Labor Commissioner’s office issued two ODAs
(one against Patel and DTWO and one against Stuart Union)
requiring appellants to pay Chavez a total of over $235,000 in
unpaid wages, penalties, and interest. At that time, appellants
were informed of their rights to challenge the ODAs under
Labor Code section 98.2.3
       Section 98.2 sets forth the procedures by which a party
to a proceeding before the Labor Commissioner resulting
in an ODA “may seek review [thereof] by filing an appeal to
the superior court, where the appeal shall be heard de novo.”
(§ 98.2, subd. (a).) Section 98.2, subdivision (a) contains
specific requirements for properly noticing such an appeal, and
subdivision (b) requires the party seeking review to post a bond
or cash deposit with the superior court in the amount owed
under the ODA. (§ 98.2, subd. (b).) Both the notice and bond
requirements are prerequisites to the superior court having
jurisdiction to hear such an appeal. (§ 98.2, subds. (a) & (b);
Pressler v. Donald L. Bren Co. (1982) 32 Cal.3d 831, 837 [timely
notice is required to vest court with jurisdiction to conduct trial
de novo under section 98.2]; Palagin v. Paniagua Construction,
Inc. (2013) 222 Cal.App.4th 124, 130–131 (Palagin) [employer
undertaking is required to vest court with jurisdiction to conduct
trial de novo under section 98.2].) Specifically, section 98.2,
subdivisions (a) and (b) provide:

      3 Unless otherwise indicated, all statutory references and
citations are to the Labor Code.

                                 3
       “(a) Within 10 days after service of notice of an order,
decision, or award the parties may seek review by filing an
appeal to the superior court, where the appeal shall be heard
de novo. . . . A copy of the appeal request shall be served upon
the Labor Commissioner by the appellant. . . .
       “(b) As a condition to filing an appeal pursuant to this
section, an employer shall first post an undertaking with the
reviewing court in the amount of the order, decision, or award.
The undertaking shall consist of an appeal bond issued by a
licensed surety or a cash deposit with the court in the amount of
the order, decision, or award. The employer shall provide written
notification to the other parties and the Labor Commissioner
of the posting of the undertaking. The undertaking shall be
on the condition that, if any judgment is entered in favor of the
employee, the employer shall pay the amount owed pursuant
to the judgment, and if the appeal is withdrawn or dismissed
without entry of judgment, the employer shall pay the amount
owed pursuant to the order, decision, or award of the Labor
Commissioner unless the parties have executed a settlement
agreement for payment of some other amount, in which case
the employer shall pay the amount that the employer is obligated
to pay under the terms of the settlement agreement. If the
employer fails to pay the amount owed within 10 days of entry
of the judgment, dismissal, or withdrawal of the appeal, or the
execution of a settlement agreement, a portion of the undertaking
equal to the amount owed, or the entire undertaking if the
amount owed exceeds the undertaking, is forfeited to the
employee.” (§ 98.2, subds. (a) & (b).)
       Appellants did not file a valid notice of appeal of the ODAs
under section 98.2, subdivision (a). Instead, they again filed suit

                                4
against Chavez. This time, appellants’ complaint contained a
claim under section 1983 of title 42 of the United States Code,
a claim for inverse condemnation, and a petition for a writ of
mandamus ordering the Labor Commissioner to reverse the
ODAs. Appellants also added as additional defendants then-
Labor Commissioner Julie Su and Martha Huerta, the then-
Deputy Labor Commissioner who had presided over the hearing
on Chavez’s claims against appellants. The complaint alleged
as a basis for all of these claims that Chavez had given false
testimony at the hearing before the Labor Commissioner. The
complaint demanded “a de novo hearing” and alleged, in the writ
of mandate section, that “[t]his writ of mandate is filed, among
other authority and limited therein, pursuant to the California
Labor Code . . . [s]ection 98.2.”
      At the same time that the appellants filed the complaint,
they also filed a document captioned, “notice of intent to post
bond or undertaking pursuant to . . . section 98.2 under protest,”4
and Philadelphia Indemnity Insurance Company (PIIC) posted,
on appellants’ behalves, bonds in the amount owed Chavez under

      4  The notice provided in full: “[Appellants] hereby notify
[Chavez, Huerta, and Su] that they will be posting a bond or
undertaking in the amount of the Labor Commission Order
and Decision filed September 26, 2017 that is the subject of the
complaint and the petition for writ of mandate. [¶] The posting
or undertaking will be done pursuant to . . . [s]ection 98.2 and
is made under protest and without waiver of [appellants’] . . .
rights . . . in this lawsuit or any other lawsuit challenging . . .
[s]ection 98.2 and the requirement to post such bond or
undertaking.”

                                 5
the ODAs.5 These bonds indicate that they were “give[n]
[as] an undertaking for appeal in accordance [with the bond
requirements of ] . . . [s]ection 98.2.”
       The trial court granted two anti-SLAPP motions filed
by Chavez: the first seeking to strike appellants’ complaint
in its entirety and the second seeking to strike appellants’ first
amended complaint in its entirety. Appellants appealed the
court’s order granting the first anti-SLAPP motion, and this
court affirmed. (See Patel v. Chavez (2020) 48 Cal.App.5th 484.)
Appellants also appealed an order sustaining the demurrer of
the government defendants (Su and Huerta) to the first amended
complaint, and this court again affirmed. (Patel v. Su (July 30,
2021, B294686) [nonpub. opn.].) In so doing, we expressly held
that appellants’ writ of mandate cause of action did not constitute
a valid notice of appeal from the ODAs pursuant to section 98.2,
and thus appellants had not filed a section 98.2 appeal.6 (Patel v.
Su, supra, B294686.)

      5 PIIC issued bond No. PB03138603318 in the amount
of $202,294.10 on behalf of Patel and DTWO. PIIC issued bond
No. PB03138603317 in the amount of $33,348.80 on behalf of
Stuart Union.
      6  Specifically, we rejected appellants’ argument that
“their petition for a writ of mandate gave Chavez [sufficient]
notice of their intent to challenge the Labor Commissioner’s
decision.” (Patel v. Su, supra, B294686.) We explained that
“[t]o interpret a petition for a writ of mandate as a notice of
appeal would require going further than any case we are aware
of in interpreting a document as a notice of appeal. We decline
to do so in this case because [appellants’] decision to file their
complaint rather than a notice of appeal has prejudiced Chavez
by significantly delaying the case.” (Ibid.)

                                 6
       Given the lack of a section 98.2 appeal from the ODAs,
the ODAs automatically became final by operation of law (see
§ 98.2, subd. (d)), which triggered the Labor Commissioner’s
statutory obligation to “file . . . a certified copy of the final
order[s] with the clerk of the superior court of the appropriate
county.” (§ 98.2, subd. (e).) In accordance with this obligation,
the Labor Commissioner filed the two ODAs in Chavez’s favor
in the Los Angeles County Superior Court. This triggered
the court clerk’s statutory obligation to “immediately” enter
“[j]udgment . . . in conformity [with the ODAs].” (Ibid.) The
clerk of the superior court entered judgments against appellants
in Chavez’s favor in the amount of the ODAs plus costs and
interest (the clerk’s judgments).7
       Appellants appealed the clerk’s judgments, arguing
they had been improperly entered without affording appellants
sufficient due process. This court ultimately rejected appellants’
challenge to the clerk’s judgments, affirming them in an
unpublished opinion. (See Chavez v. Stuart Union LLC (Jan. 27,
2022, B307888, B307891).)
       While the appeal from the clerk’s judgments was pending,
PIIC refused Chavez’s request that PIIC release the bonds to
Chavez. Chavez therefore filed in the superior court a motion to
release the bonds to Chavez. The court granted the motion “on

      7 The clerk’s judgments were entered under two separate
trial court case numbers, neither of which was initially linked
to appellants’ action against Chavez alleging a claim pursuant
to section 1983 of title 42 of the United States Code and seeking
a writ of mandate. Because all three of these separate “actions”
were based on ODAs from the same Labor Commissioner
proceeding between Chavez and appellants, however, the court
ultimately deemed all three actions related.

                                7
the ground that [appellants] have failed to pay the [clerk’s]
judgments which have been entered in favor of Chavez and
that the bonds are consequently forfeited to Chavez.” The court
entered judgments “in the amount of $202,294.10 jointly and
severally against [Patel and DTWO], based upon their liability
as bond principals, and [PIIC], as surety, and $38,585.88 . . .
jointly and severally against . . . Stuart Union . . . based upon
[its] liability as bond principal, and against [PIIC], as surety.”

                            DISCUSSION
       On appeal, appellants claim the court lacked jurisdiction
to order the release of the bonds or enter judgment against
appellants as bond principals. Appellants base this purported
lack of jurisdiction on two arguments. First, they argue that the
trial court proceedings should have been stayed at the time the
court issued the challenged order and judgment, because two of
appellants’ appeals were still pending. Second, they argue that,
because they never succeeded in filing a valid section 98.2 appeal
with the trial court, the trial court lacked jurisdiction to issue any
orders regarding bonds posted under section 98.2.
       We disagree with appellants, as discussed below.

      A.     The Pendency of Other Appeals When the
             Challenged Order and Judgment Issued
       The pendency of an appeal does not stay enforcement of
a money judgment absent an undertaking as set forth in Code
of Civil Procedure section 917.1, subdivision (a)(1). That section
provides: “Unless an undertaking is given, the perfecting of
an appeal shall not stay enforcement of [a] judgment or order in
the trial court if the judgment or order is for . . . [¶] . . . [m]oney
or the payment of money . . . whether payable by the appellant

                                   8
or another party to the action.” (Code Civ. Proc., § 917.1,
subd. (a)(1).) The undertaking needed to stay enforcement in
this manner “shall be for double the amount of the judgment or
order unless given by an admitted surety insurer in which event
it shall be for one and one-half times the amount of the judgment
or order.” (Id., § 917.1, subd. (b).) The only bonds appellants
posted here were for the exact amount owed under the ODAs—
not double or one and one-half times that amount. Thus, aside
from the fact that, when appellants posted the bonds, appellants
identified the bonds as undertakings related to their attempted
section 98.2 appeal to the trial court, not an appeal with this
court, the bonds were insufficient to stay the actions below based
on the pendency of any appeal with this court. The trial court,
therefore, did not lack jurisdiction based on the pendency of
related appeals in this court.

      B.    The Trial Court’s Lack of Jurisdiction
            To Hear a Section 98.2 Appeal
        Appellants argue that, in any case, appellants’ failure
to file a proper section 98.2 notice of appeal deprived the court
of jurisdiction to do anything under section 98.2, including
requiring forfeiture of what they refer to as the “[section] 98.2
appeal bonds.” We disagree. Appellants purported to post the
bonds “pursuant to . . . section 98.2.” (Capitalization omitted.)
Section 98.2 requires, as a condition of challenging an ODA in
the superior court, that a plaintiff post a bond in the amount
of the ODA. Further, “if any judgment is entered in favor of the
employee . . . [and] the employer fails to pay the amount owed
within 10 days of entry of the judgment . . . a portion of the
undertaking equal to the amount owed, or the entire undertaking
if the amount owed exceeds the undertaking, is forfeited to the

                                9
employee.” (§ 98.2, subd. (b).) Thus, by the express terms of
section 98.2, the bonds were subject to forfeiture if, inter alia,
appellants failed to pay a valid judgment in Chavez’s favor within
the statutory timeframe. Here, appellants had failed to pay the
clerk’s judgments based on the ODAs in Chavez’s favor for well
over 10 days by the time of the challenged order and judgment
were entered. Thus, the plain language of section 98.2 required
the court to forfeit the bonds to Chavez in satisfaction of the
clerk’s judgments and ODAs on which they were based.
       Appellants’ jurisdictional arguments misunderstand the
relationship between bonds issued pursuant to section 98.2
and jurisdiction. Section 98.2, subdivision (b) requires the filing
of a bond as a prerequisite to a court having jurisdiction to hear
a section 98.2 appeal. (§ 98.2, subd. (b) [“[a]s a condition to filing
an appeal pursuant to . . . section [98.2], an employer shall first
post an undertaking with the reviewing court in the amount
of the order, decision, or award”]; see Palagin, supra, 222
Cal.App.4th at p. 132.) This means a bond in the amount of the
challenged ODA is necessary for the court to have jurisdiction
to hear a section 98.2 appeal, but the reverse is not necessarily
true—i.e., a valid section 98.2 appeal is not necessarily a
jurisdictional prerequisite for a court to issue orders regarding
such a bond once posted.
       Other language in section 98.2 further supports our
interpretation that a valid section 98.2 appeal is not necessary
for a court to have jurisdiction over a bond an employer posts
under that section. Namely, section 98.2 requires the court to
order payment of the amount owed under an ODA from such a
bond when, inter alia, “the [section 98.2] appeal [from that ODA]
is withdrawn or dismissed without entry of judgment.” (§ 98.2,

                                 10
subd. (b).) Notably, the statute does not require any adjudication
of the dismissed or withdrawn section 98.2 appeal, or that the
superior court have had jurisdiction to hear the dismissed or
withdrawn appeal. For example, in Chavez v. Sarumi (2018)
36 Cal.App.5th Supp. 34, although the appellate division of the
superior court dismissed an attempted section 98.2 appeal for
lack of jurisdiction because the employer’s bond was untimely,
the court concluded it still had jurisdiction to order forfeiture
of the bond to the employee.8 (Chavez v. Sarumi, supra, at p. 40.)
Nothing in the statute supports that a bond should be treated
differently because it is filed in connection with an attempted
section 98.2 appeal that fails due to lack of proper notice (as
occurred here), rather than in connection with a section 98.2
appeal that fails for some other reason unrelated to the merits
of the appeal (such as an untimely bond). Thus, the statute
expressly contemplates a situation in which an attempted
section 98.2 appeal has failed without there necessarily having
been an adjudication on the merits or jurisdiction to hear a
section 98.2 appeal, and the court is not only empowered but
required to satisfy the relevant ODA from a bond posted under
such circumstances.
       Appellants cite Stowe v. Matson (1949) 94 Cal.App.2d 678,
which holds that “[w]here the [writ of] attachment is void for
lack of jurisdiction or statutory authority, the defendant’s
undertaking given to release the same is likewise void for lack of
consideration.” (Id. at p. 683.) This authority is inapposite and
of no assistance to appellants’ arguments. The challenged court

      8Although, as appellants note, Chavez v. Sarumi, supra,
36 Cal.App.5th Supp. 34 is a decision of the appellate division of
the superior court, we find its reasoning persuasive.

                                11
order in the instant case did not attach a litigant’s property on a
basis later determined to be invalid and void; rather, it required
forfeiture of bonds the appellants voluntarily posted in what
they describe as an effort to create jurisdiction for the trial
court to hear a section 98.2 appeal. The failure of that effort
does not deprive the court of jurisdiction to dispose of the bond
in accordance with the express instructions of the very statute
pursuant to which appellants indicated they were posting it.9
       Finally, the purpose of the bond requirement is “to provide
assurance that a judgment in favor of the employee will be
satisfied” and, more broadly, “ ‘discourage employers from . . .
hiding assets in order to avoid enforcement of the judgment.’ ”
(Palagin, supra, 222 Cal.App.4th at p. 130.) Courts have strictly
enforced the bond requirement as a jurisdictional prerequisite

      9 Although not directly on point, our interpretation is
also consistent with case law standing for the proposition that
“a court that lacks jurisdiction to determine the merits of an
action” (Barry v. State Bar of California (2017) 2 Cal.5th 318,
326)—here, jurisdiction to consider a section 98.2 appeal, given
appellants have not satisfied the statutory prerequisites for such
jurisdiction—“may nevertheless consider ‘collateral issues’ such
as whether the prevailing party should be awarded its litigation
expenses or whether sanctions should be imposed for a litigant’s
abuse of the judicial process.” (Barry, supra, at p. 326; see ibid.
[court may determine for purposes of an anti-SLAPP motion to
strike that it lacks subject matter jurisdiction and also award
attorney fees and costs because courts “may award costs as
incidental to the jurisdictional determination”]; Brown v. Desert
Christian Center (2011) 193 Cal.App.4th 733, 738 [judgment of
dismissal due to lack of jurisdiction does not deprive a court of
the ability to award costs to prevailing party under Code of Civil
Procedure section 1032].)

                                12
because doing so is consistent with achieving both of these goals.
(See id. at pp. 130−131.) Appellants’ jurisdictional argument,
by contrast, would be counterproductive to achieving these goals.
Appellants had the opportunity to challenge the ODAs, and their
efforts failed. Regardless of why those efforts failed, appellants
are now required to pay the judgments resulting from the ODAs.
Allowing appellants to avoid paying those judgments from the
bond currently under the court’s control would at best delay
and at worst prevent Chavez collecting under the judgments.
By contrast, rejecting appellants’ jurisdictional argument and
affirming the forfeiture of the bond to Chavez—which is, as
discussed above, what the plain language of the statute requires
in any event—is consistent with the goal of the jurisdictional
bonding requirement: assuring that where, as here, an employer
had been unsuccessful in its challenge to an ODA, the employer
pays what it owes.

                                13
                         DISPOSITION
     The order and judgment are affirmed. Respondent Manuel
Chavez shall recover his costs on appeal.
     CERTIFIED FOR PUBLICATION.

                                     ROTHSCHILD, P. J.
We concur:

                  CHANEY, J.

                  WEINGART, J.*

      * Judge of the Los Angeles County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6
of the California Constitution.

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