Filed 9/15/14 RG Garcia Corp. v. Loftis CA2/6 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SIX

RG GARCIA CORPORATION, 2d Civil No. B248784 (Super. Ct. No. 56-2012-00427138- Plaintiff and Appellant, CU-JR-VTA) (Ventura County) v. STEVEN W. LOFTIS, Defendant and Respondent.

RG GARCIA CORPORATION, 2d Civil No. B249067 (Super. Ct. No. 56-2012-00427136- Plaintiff and Appellant, CU-JR-VTA) v. CHRISTOPHER BITETTI, Defendant and Respondent.

RG Garcia Corporation appeals the dismissals for failure to post an undertaking of its appeals from the Labor Commissioner's awards to Steven W. Loftis and Christopher Bitetti.1 RG Garcia contends that the trial court erred by failing to waive

FACTUAL AND PROCEDURAL BACKGROUND RG Garcia had a contract with the U.S. Army Corps of Engineers to extract and remove rock from the Santa Paula Creek. It formed a second entity, Santa Paula Rock, Gravel & Sand LLC (SPRGS), to screen, clean, and sort the rock. RG Garcia and SPRGS employed Loftis and Bitetti to perform personal services as operators.

From January 15, 2010, through May 21, 2011, RG Garcia paid Loftis's and Bitetti's wages. From May 22 through July 2, SPRGS paid their wages. Beginning July 3, Loftis and Bitetti were not remunerated for their services. Bitetti quit without notice on July 29. Loftis's employment was terminated on August 5.

Loftis, Bitetti, and four other individuals filed claims with the Labor Commissioner alleging that RG Garcia and SPRGS owed them unpaid wages, penalties, and interest. RG Garcia argued that it was never the claimants' employer and that it merely acted as SPRGS's payroll service. The Commissioner concluded, however, that RG Garcia and SPRGS jointly employed the claimants through May 21, 2011, when RG Garcia severed its joint employer status. The Commissioner cited several factors supporting its conclusion, including the following: (1) RG Garcia was a partner in Solrick LLC, the majority owner of SPRGS; (2) RG Garcia hired some of the claimants and paid all of their wages during the relevant time frame; (3) RG Garcia offered no evidence that SPRGS had ever reimbursed it or paid it any fees for providing payroll services; (4) RG Garcia paid for SPRGS's equipment; and (5) RG Garcia and SPRGS both exercised control over the claimants' wages, hours, and working conditions until May 21, 2011.

The Commissioner awarded Loftis $40,588.53 from RG Garcia and SPRGS jointly and severally, consisting of $29,767.50 in unpaid overtime wages (Cal. Code Regs., tit. 8, § 11160), $7,200.00 in waiting time penalties (Lab. Code, § 203),2 and

DISCUSSION RG Garcia contends that the superior court erred by failing to waive the undertaking requirement. Loftis and Bitetti argue that the court's waiver analysis was

Section 98.2, subdivision (b) provides that "[a]s a condition to filing an appeal" from an award of the Labor Commissioner, "an employer shall first post an undertaking with the reviewing court in the amount of the order, decision, or award." In Palagin v. Paniagua Construction, Inc. (2013) 222 Cal.App.4th 124, 140 (Palagin), the court held that "the undertaking requirement of section 98.2(b) is mandatory and jurisdictional, and . . . the [superior] court has no authority to extend the deadline for posting the undertaking beyond the deadline for filing the notice of appeal." In reaching its holding, Palagin first considered the plain meaning of section 98.2, subdivision (b), taking into account its context in the statutory scheme. The court observed that the 10- or 15-day deadline for filing the notice of appeal set forth in subdivision (a) is undisputedly jurisdictional (citing Pressler v. Donald L. Bren Co. (1982) 32 Cal.3d 831, 837–838) and that subdivision (b) requires that the employer post the undertaking "first"—i.e., before the jurisdictional notice-of-appeal requirement—as a "condition" to filing the notice of appeal. (Palagin, supra, 222 Cal.App.4th at p. 132.)

Palagin then examined the legislative intent behind the statutory text. Prior to 2010, the statute was much less specific as to when the undertaking was due. It merely stated that "'"[w]henever an employer files an appeal pursuant to this section, the employer shall post an undertaking with the reviewing court in the amount of the order, decision, or award."'" (Palagin, supra, 222 Cal.App.4th at p. 133.) A case interpreting this prior version of the statute, Progressive Concrete, Inc. v. Parker (2006) 136 Cal.App.4th 540, 547–548, found the language to be directory rather than jurisdictional, in part because it failed to specify the consequences of not filing an undertaking.

Progressive Concrete contrasted the language in the prior version of section 98.2 with language in another statute requiring an undertaking—where the requirement was jurisdictional—that characterized the undertaking as "a condition precedent to filing an appeal." (§ 2673.1, subd. (g).) By amending section 98.2, subdivision (b) to include similar language in 2010, the Legislature sought to overturn Progressive Concrete, which, according to a senate committee analysis, "'is plainly inconsistent with the clear purpose behind enactment of Section 98.2(b).'" (Palagin, supra, 222 Cal.App.4th at p. 135, italics omitted.)

Lastly, Palagin explained that a jurisdictional interpretation of the undertaking requirement was consistent with the public policy underlying the statute.

The purpose of section 98.2, subdivision (b) "is to 'discourage employers from filing frivolous appeals and from hiding assets in order to avoid enforcement of the judgment.'" (Palagin, supra, 222 Cal.App.4th at p. 137.) Palagin reasoned that treating the undertaking deadline as jurisdictional furthers these goals by discouraging employers from filing frivolous appeals merely for the purpose of delay and minimizing the time in which an employer might hide assets. (Ibid.)

We agree with Palagin that the undertaking requirement in section 98.2, subdivision (b) is mandatory and jurisdictional. Because RG Garcia failed to post the

required undertakings or request a waiver before the time to appeal expired, the superior court lacked jurisdiction over the appeals and properly dismissed the actions.

The judgments are affirmed. Costs to respondents.

NOT TO BE PUBLISHED.

PERREN, J.

We concur:

GILBERT, P. J.

YEGAN, J.

Rebecca S. Riley, Judge Superior Court County of Ventura

Law Offices of Peter C. Giffin, Peter C. Giffin, Rosa E. Shelton for Appellant.

Division of Labor Standards Enforcement, William A. Reich for Respondents.