Monday, July 30, 2012

Attorneys' Fees on an Appeal of a Labor Commissioner Decision: Arias v. Kardoulias

I'm reminded of the addage -- pigs get fat, hogs get slaughtered -- as I read the case of Arias v. Kardoulias 2012 DJDAR 10297 (July 26, 2012).  Arias filed a claim for unpaid wages associated with her care of the defendants' elderly father.  The Labor Commissioner awarded her $6,319.69. 

I can imagine how the case unfolded.  Arias worked for a home health care agency.  The family liked her, but didn't enjoy paying the fees associated with the agency.  Arias suggested that she work for the family directly, cutting out the agency.  But then Arias realized that she could make more money than she was paid.  Of course, the family didn't understand employment laws and how to pay a personal attendant.  When the relationship ended (perhaps with the death of the father), Arias sued for unpaid wages.  Thus, she probably is not a litigant with clean hands.  But wage and hour law doesn't care.  It requires payment for services rendered without regard to particular defenses. 

The family should have felt lucky to escape with a $6K award.  I have seen awards much higher than that.  And Arias probably should have been happy with her award, realizing that she would probably need legal help to appeal the case to Superior Court.  Yet, that's what she did.  Arias appealed, which means she is entitled to a hearing "de novo".  This means "do-over."  It's a second chance to prove your case before a Superior Court judge. 

But Arias filed the appeal late.  Thus, the court lacked jurisdiction to hear the case.  Eventually, the case was dismissed on the jurisdictional, not substantive, reason.  Arias should have been happy with her successful outing with the Labor Commissioner.  Instead, she became a hog and lost.  (She didn't lose enough, however, as she was still entitled to her $6K.) 

This is where the defendants turned from pig to hog.  They sought $8,495 in attorneys' fees and costs in getting the appeal dismissed. 

Under Labor Code section 98(c) if the party filing the appeal is unsuccessful, the court must assess attorneys' fees and costs.  According to this provision, an employee is successful if the court awards an amount greater than zero.  Thus, the court had to determine whether a dismissal of an appeal on jurisdictional grounds is the equivalent of an award of zero for purposes of assessing attorneys' fees. 

The court concluded that a dismissal on jurisdictional grounds is not the equivalent of an award of zero.  When the court dismisses a case on jurisdictional grounds, it does not determine the merits of the appeal.  An employee presents an unmeritorious appeal, on the other hand, only when the court reaches the merits of the appeal. 

So the result in this case is was the defendants did not recover any attorneys' fees.  The Labor Commissioner's decision constituted a judgment and the defendants were still required to pay Arias $6K in unpaid wages. 

Perhaps defendants would have been better off to forgo the claim for attorneys' fees (which probably could not have been recovered from a home caregiver), and forget the appeal and all of its associated costs. 

Pigs may get fat, but hogs definitely get slaughtered. 

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