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Palagin v. Paniagua Construction, Inc.

California Court of Appeals, First District, Fifth Division

December 16, 2013

IGOR PALAGIN, Plaintiff and Appellant,
PANIAGUA CONSTRUCTION, INC., et al., Defendants and Respondents.

Superior Court of the City and County of San Francisco, No. CGC-12-522131, Lynn O’Malley Taylor, Judge, Retired.

The Law Office of George W. Wolff, George W. Wolff and Kristin Kerr, for Plaintiff and Appellant.

Law Offices of Frank S. Moore, APC., and Frank S. Moore, for Paniagua Construction, Inc., and Alfred Martinez, individually and doing business as Martinez & Sons Contractors, Defendants and Respondents.


Igor Palagin (Palagin) appeals from a judgment, entered against him after a trial de novo in the superior court, concerning a wage claim he initially brought before the Labor Commissioner. (Labor Code, § 98 et seq.)[1] Palagin contends: (1) the court should have dismissed the proceedings, because respondents did not post an undertaking by the statutory deadline (§ 98.2(b)); (2) the court erred in allowing respondents to withdraw the undertaking after entry of judgment; and (3) the court erred in ruling that Palagin was not respondents’ employee (§ 2750.5).

We conclude that the statutory deadline for an employer to post an undertaking, which the Legislature has identified as “a condition to” the filing of the notice that commences the court’s jurisdiction, is a jurisdictional deadline that cannot be extended by the trial court. (§ 98.2(b).) We therefore agree with Palagin that his motion to dismiss the proceeding should have been granted, and we reverse the judgment.


Palagin is a welder who was allegedly not paid for work he performed for respondents Paniagua Construction, Inc., and Alfred Martinez, an individual doing business as Martinez & Sons Contractors (Martinez). Pursuant to section 98, he filed a wage claim with the Labor Commissioner (Commissioner). On June 20, 2012, the Commissioner issued an “Order, Decision or Award” in favor of Palagin in the amount of $34, 259.32. The order was served by mail the following day.

Respondents filed a notice of appeal in the San Francisco Superior Court on July 6, 2012. (§ 98.2(a).) The notice of appeal is the statutory prerequisite for obtaining a trial de novo in superior court; although an “appeal” and “trial de novo” are distinct concepts, in this context the terms are often used interchangeably, and for brevity we will usually use the word “appeal.” (§ 98.2(a).)

A. Palagin’s Motion to Dismiss

On July 12, 2012, Palagin filed a motion to dismiss respondents’ appeal, on the ground that respondents failed to timely post an undertaking required by section 98.2(b). Section 98.2(b) provides in part: “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.”

Respondents opposed the motion, contending that a failure to post the undertaking did not require a dismissal in light of Progressive Concrete, Inc. v. Parker (2006) 136 Cal.App.4th 540, 552-553 (Progressive Concrete), which had held that the undertaking requirement in an earlier version of section 98.2(b) was not mandatory and jurisdictional. In essence, the parties debated the extent to which Progressive Concrete applied to the operative language of section 98.2(b), in light of the fact that the Legislature had amended the language after that decision.

By written order filed on August 7, 2012, the court granted Palagin’s motion in part. The court stated: “Under the clear language of... § 98.2(b), as amended in 2010, Defendants must post a bond before filing an appeal.” Nonetheless, the court extended the deadline for posting the bond: “Defendants are given ten [sic] days to post a bond in the amount of $34, 359.32. If the bond is not posted by 4:00 p.m. on [September 6, 2012], Plaintiff may appear ex parte and have this action dismissed.”[2]

Respondents did not comply with the court’s August 7, 2012 order. Instead, respondent Martinez posted a cash deposit with the court, in lieu of a bond, on September 10 — a few days after the court’s deadline. By ex parte application of that same date, Martinez represented to the court: “Over the past thirty days Martinez and Paniagua have complied with all underwriting requirements and have received the appeal bond approval. Exhibit B is a copy of a letter from the appeal bond company confirming this approval. There are wet signatures and seals that will take a few more days to secure so in the alternative Martinez and Paniagua shall provide a cashiers’ check to the court as provided in the alternative in the court order. [¶] Collateral became available on Saturday, September 8, 2012 and therefore a cashiers’ check is now provided as an alternative undertaking.”

A handwritten ex parte order, filed on September 10, 2012, reads: “For good cause shown, the bond posted by appellant on September 10, 2012, is accepted notwithstanding Judge Goldsmith’s August 7, 2012, Order requiring the bond to be posted by September 6, 2012. Respondent’s ex parte application to dismiss due to the late posting is denied.” Thus, respondents were given a total of 34 days after the court’s initial order — 66 days after the notice of appeal was filed — to post the undertaking.

B. Trial De Novo and Judgment

A de novo bench trial was held in December 2012. Later that month, the court issued a written judgment against Palagin on his wage claim. After recounting evidence in support of its ruling, the court concluded: “It is clear that Mr. Palagin performed work for which he was not paid. However, the court finds by a preponderance of the evidence that Igor Palagin was not an employee of either Paniagua Construction, Inc. or Alfred Martinez. Mr. Palagin was a subcontractor.” Judgment was entered for Martinez and Paniagua Construction, Inc.

C. Postjudgment Matters

Palagin filed a motion to vacate the judgment, contending that Palagin was indeed an employee of respondents under section 2750.5. The court denied the motion.

Meanwhile, Martinez applied to the court for an order releasing his undertaking. An order releasing the undertaking was issued on January 28, 2013, followed by additional ...

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