Cardinal care management, LLC v. Edgardo Afable

Appellants operate several residential care facilities for the elderly.

Respondents are seven former employees who worked at the facilities, and

who brought administrative proceedings against appellants before the Labor

Commissioner (the Commissioner) seeking unpaid wages and penalties.

When the Commissioner awarded the employees more than $2.5 million,

appellants sought de novo review in the trial court, an action that required

them to post an undertaking in the amount of the award or to obtain a

waiver. (Lab. Code, § 98.2;1 Code Civ. Proc., § 995.240.) The primary

question we must address is whether the trial court provided an adequate

hearing on appellants’ financial ability to post the undertaking. We conclude

the proceedings were adequate and comported with due process, and

accordingly affirm the trial court’s dismissal of the consolidated trial court

1 All undesignated statutory references are to the Labor Code.

2

actions. Appellants also challenge an award of attorney fees, which we

affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Respondents Edgardo Antonio Afable, Ma Christina Milan, Jennifer

Panopio, Alexander Ranoco, Dennielain Ranoco, Francis Sobremonte, and

Rosalina Sumile each filed claims with the Commissioner’s office seeking

unpaid overtime wages, liquidated damages (§ 1194.2), and waiting time

penalties (§ 203), and a hearing on their claims was held before a hearing

officer.

Appellants Cardinal Care Management, LLC (Cardinal Care) and

Welcome Home Senior Residence LLC (Welcome Home) operated several

licensed residential care facilities for the elderly. Both entities had a sole

member, appellant Steve Chou. Appellants employed respondents either as

live-in caregivers or as relief caregivers. The hearing officer found appellants

failed to pay respondents for all of the time they worked and, as to each

appellant, awarded overtime wages, liquidated damages, interest, and

waiting time penalties. The combined amount of the seven awards was more

than $2.5 million. Cardinal Care and Welcome Home were found liable for

all of this amount. With Chou individually liable for all or a portion of each

of the awards, his liability came to more than $2.2 million.

Appellants sought to appeal the Commissioner’s award to the trial

court. (§ 98.2.) The clerk of the superior court refused to file the notices of

appeal, but permitted appellants to file petitions for relief from the

requirement that they first post an undertaking in the amount of the award.

(§ 98.2, subd. (b).) The trial court later allowed appellants to file their

3

appeals conditionally, subject to being stricken if their petition to waive the

bond requirement was denied. The actions were consolidated.2

In support of appellants’ motion for relief from the requirement to post

an undertaking, Chou submitted a declaration stating that he, Cardinal

Care, and Welcome Home lacked the financial ability to pay the awards or to

deposit the amount of the awards with the court; that he had contacted two

bonding companies, which had informed him they would not provide a bond

unless he provided collateral for the amount of the bond sum; and that

neither he, Cardinal Care, Welcome Home, nor the three collectively, could

provide security in that amount. Chou also stated he was willing to provide

copies of his, Cardinal Care’s, and Welcome Home’s financial statements, for

the court’s in camera review. Appellants’ attorney submitted a declaration

stating on information and belief that Chou was “in the process of rebuilding

his life after a bankruptcy and divorce. He owns no real property, and has no

income other than that of his businesses, both of which have significant

expenses.”

In their turn, respondents argued Chou had made no showing he was

indigent, and provided evidence that, while the administrative action was

pending, Chou had transferred title to four residential care facilities, as well

as another property, from his own name to that of certain trusts and limited

liability companies of which Chou’s wife was the sole manager; that Chou

and his wife were governors of a Washington State corporation that operated

a 50-bed assisted-living facility; and that Chou was the sole manager of a

limited liability company that was the licensee of another Welcome Home

senior residence. They also provided evidence that the value of the four

2 Specifically, trial court cases No. N18-0119, N18-0120, N18-0121,

N18-0127, N18-0128, N18-0129, N18-0130 were consolidated, with case No.

N18-0119 the lead case.

4

residential care properties Chou had recently transferred collectively

exceeded five million dollars, according to the Internet site Zillow, and that

the fifth property had been purchased in April 2015 for $1,050,000.

In reply, appellants reiterated their willingness to provide documents

for the court’s review in camera and asserted that Chou and his wife were

involved in divorce proceedings. Chou did not deny that he transferred the

properties, but averred that each of the properties had a mortgage debt and

that the properties were transferred “as part of an estate plan to clarify the

rights and interests of the respective businesses” managed by Chou, not as

part of an effort to hide his assets; that he had no family member or friend

willing and able to provide a bond or collateralize an undertaking; that he

was unable to provide collateral for an undertaking without depriving

himself and his dependents of the necessities of life; that neither he, Cardinal

Care, nor Welcome Home owned any real property or personal property

sufficient to provide collateral for a bond; that he had no ownership interest

in the corporations that owned the transferred properties; and that the award

would bring financial ruin to himself, Welcome Home, and Cardinal Care,

and could accordingly disrupt services to the elderly residents of the senior

care facilities.

Chou was not present at the hearing on the motion to waive the

undertaking requirement, nor did his counsel explain his absence. The trial

court stated that there were no witnesses to conduct an in camera showing of

appellants’ financial position, and that, in any case, appellants had not

shown why any hearing should be conducted in camera. The court also found

not credible Chou’s assertions that he transferred the corporations out of his

own control for estate planning purposes and that he was unable to post a

bond, finding the transfers “transparently an effort to avoid a judgment.”

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Appellants’ attorney said she had a declaration that Chou had signed, which

included his tax returns and profit-and-loss statements, and that she could

probably arrange for Chou to come to court that day and testify about the

documents, an offer the court found untimely. The trial court denied

appellants’ request for a waiver of the requirement of an undertaking and

dismissed their appeals from the Commissioner’s award.

DISCUSSION

I. Fair Hearing on Waiver of Undertaking

A. Statutory Framework

When an employer does not pay wages as required by law, an employee

may file either a civil action in court or a wage claim with the Commissioner.

(§§ 98-98.8.) If the employee chooses the administrative route, a deputy

commissioner then holds a hearing commonly known as a “Berman” hearing.

(OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 121 (OTO).) The Berman

procedure “ ‘is designed to provide a speedy, informal, and affordable method

of resolving wage claims.’ ” (Ibid.)

Within ten days after service of notice of the Commissioner’s order,

decision, or award, either party may appeal to the superior court, which

considers the matter de novo. (§ 98.2, subd. (a); Murphy v. Kenneth Cole

Productions, Inc. (2007) 40 Cal.4th 1094, 1116-1117 [section 98.2 proceeding

is not conventional appeal or review of Commissioner’s decision, but review

de novo of wage dispute].) As a condition to filing an appeal, an employer

must first post an undertaking in the amount of the award, in the form of

either an appeal bond or a cash deposit. (§ 98.2, subd. (b).) This requirement

discourages unmeritorious appeals and minimizes the time for an employer

to divest itself of assets in order to deprive the employee of the possibility of

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enforcing the award. (Palagin v. Paniagua Construction, Inc. (2013) 222

Cal.App.4th 124, 137 (Palagin); OTO, supra, 8 Cal.5th at p. 123.)

An escape valve exists for employers who are unable to post the

necessary security: “[A] party appealing a decision of the Commissioner is

entitled as a matter of due process to seek relief from the section 98.2(b)

undertaking requirement. ‘The right of an indigent civil litigant to proceed in

forma pauperis is grounded in a common law right of access to the courts and

constitutional principles of due process. [Citations.] “[R]estricting an

indigent’s access to the courts because of his poverty . . . contravenes the

fundamental notions of equality and fairness which since the earliest days of

the common law have found expression in a right to proceed in forma

pauperis.” ’ ” (Burkes v. Robertson (2018) 26 Cal.App.5th 334, 343-344

(Burkes).) Thus, statutory provisions applying to all bonds include an

exception for indigency. (Williams v. Freedomcard, Inc. (2004) 123

Cal.App.4th 609, 614 (Williams).) Specifically, Code of Civil Procedure

section 995.240 provides that a court “may, in its discretion, waive a

provision for a bond in an action or proceeding . . . if the court determines

that the principal is unable to give the bond because the principal is indigent

and is unable to obtain sufficient sureties.”

Burkes and Williams make clear that this exception applies to the

undertaking required by section 98.2. We accordingly reject respondents’

suggestion that a bond waiver is not available in an appeal from a decision in

a Berman proceeding, and turn to appellants’ arguments that they were

deprived of sufficient opportunity to obtain such a waiver.

B. Abuse of Discretion Challenge

Appellants contend the trial court abused its discretion by failing to

provide an adequate hearing on their financial ability to post an undertaking,

7

before it denied their request for a waiver of this requirement. We are

unpersuaded. The party seeking relief from the requirement for a bond or

undertaking has the burden of proof to show entitlement to relief. (Williams,

supra, 123 Cal.App.4th at p. 614.) The trial court could properly find

appellants did not meet their burden to show they were indigent and

deserving of a waiver. (See Baltayan v. Estate of Getemyan (2001) 90

Cal.App.4th 1427, 1433 (Baltayan).)

In support of their request, appellants provided no details of their

financial situation. Instead, they averred that they lacked financial ability to

post the undertaking, that they owned no real property, and that Chou’s only

income was from the businesses. Confronted with evidence that Chou had

transferred several properties to entities controlled by his wife, appellants

stated in reply that the properties were encumbered by mortgages and that

they had been transferred for the purpose of estate planning; but he provided

no information about the amount of equity he had in each of the properties,

nor about the provisions of the so-called estate plan he cited as justification

for the transfers.

In considering whether to waive an undertaking, the court considers

“all factors it deems relevant, including but not limited to the character of the

action or proceeding, the nature of the beneficiary, whether public or private,

and the potential harm to the beneficiary if the provision for the bond is

waived.” (Code Civ. Proc., § 995.240, italics added.) Applying these

standards, it was not an abuse of discretion to reject appellants’ showing of

indigency. The court found appellants’ opening papers “barely qualif[ied] as

conclusory,” in that there was “no specification of any detail, any facts, any

reasons why, any anything.” The record supports this conclusion. Although

appellants offered a review of their financial records in camera and

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apparently had available at the hearing a declaration that included tax

returns and profit and loss statements, Chou himself was not present at the

hearing to submit to cross-examination on the statements. The record shows

no attempt before the hearing to submit the documents to the court, even

under seal, nor to provide them to opposing counsel for review. It is no abuse

of discretion to deny relief from an undertaking where, as here, a litigant has

made only a “weak and incomplete showing of indigency.” (See Baltayan,

supra, 90 Cal.App.4th at p. 1435.)

Equally important, a purpose of the undertaking requirement is to

prevent employers from divesting themselves of assets to deprive the

employee of the possibility of enforcement. (Palagin, supra, 222 Cal.App.4th

at p. 137.) And it is crystal clear that the trial court believed Chou had begun

to do precisely that during the pendency of the administrative action. It

rejected Chou’s explanation that he transferred the properties—with a

combined value of more than $5 million—for purposes of estate planning,

finding that explanation “pretty transparent” and “facially not credible,” and

concluding the transfers were made to preserve the properties from the

claims of a future judgment creditor. Appellants offered nothing to rebut the

trial court’s conclusion that “[i]t is not plausible that he has simply given

away these properties in a way that he cannot possibly get them back.”

Appellants argue that Alshafie v. Lallande (2009) 171 Cal.App.4th 421

(Alshafie) compels a different conclusion. The plaintiff in Alshafie brought a

medical malpractice action based on his child’s severe injuries incurred

during birth. (Id. at pp. 424-425, 426.) The defendants sought an order

requiring plaintiff, as an out-of-state resident, to post an undertaking to

secure an award of costs pursuant to Code of Civil Procedure section 1030.

(Id. at pp. 426-427.) In opposition to the motion, the plaintiff submitted a

9

declaration asserting he could not afford to post an undertaking: his family

lived in a rented apartment; he was a tow truck dispatch manager; his wife

did not work outside the home because she took care of the couple’s three

children, including the injured child, who could not speak, walk, feed herself,

or care for herself; and he had no tangible assets with which to secure a bond.

(Id. at pp. 426-427.) The trial court granted the motion for an undertaking,

and the defendants moved to dismiss the action. (Id. at p. 427.) In opposition

to the motion to dismiss, the plaintiff presented more specific information

about his financial position, including the family’s annual income, the

amount of their rent and savings, and the value of their vehicles. (Id. at p.

427.) The trial court dismissed the action, finding the plaintiff’s showing of

indigency remained inadequate. (Id. at p. 428.)

The appellate court concluded this was an abuse of discretion. The

court noted that a plaintiff seeking relief from a bond requirement would be

“well advised to provide the information requested in the mandatory Judicial

Council form for applying for in forma pauperis status”—including all sources

of income, interests in property, and monthly expenses. (Alshafie, supra, 171

Cal.App.4th at pp. 434-435.) Then, “to fulfill its statutory duties when

exercising its discretion, the court must review the plaintiff’s showing,

identify deficiencies, if any, and give the plaintiff the opportunity to supply

additional information that may be necessary to establish his or her

entitlement to a waiver under the circumstances of the particular case.” (Id.

at p. 435.) “In sum,” the court concluded, “because the [trial] court failed to

provide a meaningful opportunity for [the plaintiff] to demonstrate his

financial inability to post an undertaking and to address the court’s concerns

about the showing he had made,” the orders requiring an undertaking and

dismissing the action must be reversed. (Id. at p. 436.)

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Appellants argue the trial court here should likewise have informed

them of the deficiencies in their showing and allowed them to provide

additional information addressing the court’s concerns. But Alshafie is

readily distinguishable from the case before us. First, the effect of the

undertaking requirement in Alshafie was to deprive the plaintiff entirely of

the opportunity to recover for the injuries caused by a child’s devastating

injuries. Here, in contrast, appellants have already had an opportunity to

make their case during the administrative proceedings. As explained in

Palagain, “[t]he primary process for deciding wage claims is not the trial de

novo reflected in section 98.2, but the administrative procedure reflected in

section 98.” (Palagin, supra, 222 Cal.App.4th at p. 138; accord, Burkes,

supra, 26 Cal.App.5th at p. 347.) Second, the “ ‘overriding goal’ ” of section

98.2’s undertaking requirement is to “ensur[e] expeditious collection of wages

which are due but unpaid,” including by minimizing the time for employers to

hide assets to prevent employees from collecting their awards. (Burkes, at

p. 346.) The trial court here concluded Chou had already transferred

substantial assets for the purpose of impeding collection on a judgment, a

concern that did not exist in Alshafie. And third, the Alshafie plaintiff

provided detailed information quantifying his limited income and assets,

while Chou provided almost no information about his considerably greater

financial interests. Where the Alshafie plaintiff provided details like the

family’s monthly rent and the value of their personal vehicles, appellant

Chou baldly generalized that he could not provide collateral for the

undertaking “without depriving myself and my dependents of the

[unspecified] necessaries of life.” On the facts before us, there was no abuse

of discretion in denying appellants a waiver of the undertaking requirement

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without reviewing the documents they offered for the first time at the

hearing, and only for in camera review.

C. Due Process Challenge

Appellants next argue that the administrative hearing and the

requirement of an undertaking deprived them of procedural and substantive

due process.

Procedural “ ‘[d]ue process principles require reasonable notice and

opportunity to be heard before governmental deprivation of a significant

property interest.’ [Citations.] ‘However, there is no precise manner of

hearing which must be afforded; rather the particular interests at issue must

be considered in determining what kind of hearing is appropriate. A formal

hearing, with full rights of confrontation and cross-examination is not

necessarily required.’ ” (Mohilef v. Janovici (1996) 51 Cal.App.4th 267, 286.)

In deciding whether due process has been satisfied, a court considers the

private interest that will be affected by the official action, the risk of

erroneous deprivation of that interest, the interest in informing individuals of

the nature of the proceeding and enabling them to present their case to a

governmental official, and the governmental interest. (Id. at p. 287.) In the

statutory scheme before us, the Berman hearing is informal, while an

ensuing appeal to the trial court carries with it “full due process protections.”

(Corrales v. Bradstreet (2007) 153 Cal.App.4th 33, 60.)

Appellants contend they did not receive procedural due process because

the rules of evidence were not applied at the Berman hearing and, due to the

undertaking requirement, they were unable to have the trial court reconsider

the Commissioner’s decision. They also argue that in this case—where

respondents were fed and housed during their employment and received what

12

appellants characterize as a “massive windfall” in the Commissioner’s

awards—appellants’ rights must outweigh those of their former employees.

We reject these contentions. First, it is appellants’ burden to show

error on appeal (Shenouda v. Veterinary Medical Bd. (2018) 27 Cal.App.5th

500, 512), and they have not provided a record of the Berman hearing that

would allow us to evaluate what occurred at the hearing. Because “[t]he

primary process for deciding wage claims is . . . the administrative procedure

reflected in section 98,” appellants cannot succeed with a procedural due

process claim that ignores the particulars of the process provided in that

administrative hearing. (Palagin, supra, 222 Cal.App.4th at p. 138 [“even if

the jurisdictional undertaking requirement did affect the availability of the

trial de novo process for employers, by no means does it deprive the employer

of a full and fair opportunity to be heard on the employee’s wage claim”];

Burkes, supra, 26 Cal.App.5th at p. 347 [same].) Second, we cannot accept

appellants’ characterization of these awards as a “massive windfall,” as that

assumes a view of the merits that is, at best, premature. Third, appellants

were given an opportunity to introduce evidence and have a hearing on the

issue of whether section 98.2’s undertaking requirement should be waived,

and they failed to produce evidence sufficient to warrant waiver. It is no

violation of due process to refuse them a second opportunity to introduce

evidence in support of their motion, just because they failed to make the

necessary showing the first time.

Appellants also argue they were deprived of substantive due process

because the government’s conduct “ ‘shocks the conscience’ ” and “interferes

with rights ‘implicit in the concept of ordered liberty.’ ” (United States v.

Salerno (1987) 481 U.S. 739, 746.) Specifically, appellants challenge (1) a

legal error made by the Commissioner in making Chou individually liable for

13

the awards, and (2) section 98.2’s prohibitive requirement that a small

business procure a large bond in only 10 days in order to secure review in the

trial court.

We reject these arguments as well. First, it would be inappropriate

here to decide whether the Commissioner erred in holding Chou individually

liable, for to address the merits of appellants’ challenge to the

Commissioner’s ruling would be tantamount to relieving appellants of the

requirement that they post a bond to appeal that ruling. (See Williams,

supra, 123 Cal.App.4th at p. 614.) Second, we reject appellants’ suggestion

that the limited 10-day time period for obtaining an undertaking deprived

them of substantive due process. Our colleagues in Burkes rejected a similar

argument, concluding there was no showing of undue burden where a selfrepresented litigant knew of the requirement for an undertaking and its time

limit. (Burkes, supra, 26 Cal.App.5th at p. 345.) Appellants here had the

opportunity to persuade the court to waive the bond requirement, and for the

same reasons it was no abuse of the court’s discretion to deny their waiver

request, it was also no violation of substantive due process.

Whatever the merits of appellants’ challenge to the Commissioner’s

ruling, section 98.2 required appellants either to post an undertaking or to

show they were entitled to a waiver of the undertaking requirement before

proceeding in the superior court. They failed to do either. We must,

therefore, affirm the judgment of dismissal.

II. Attorney Fees

Respondents moved for attorney fees pursuant to section 98.2,

subdivision (c), and the trial court awarded fees of $16,700. Appellants

challenge this award on the ground they were not unsuccessful in the trial

court for purposes of the governing statute.

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Section 98.2, subdivision (c) provides: “If the party seeking review by

filing an appeal to the superior court is unsuccessful in the appeal, the court

shall determine the costs and reasonable attorney’s fees incurred by the other

parties to the appeal, and assess that amount as a cost upon the party filing

the appeal. An employee is successful if the court awards an amount greater

than zero.” This is not a standard prevailing party attorney-fee provision,

but rather “ ‘a one-way fee-shifting scheme that penalizes an unsuccessful

party who appeals the commissioner’s decision.’ [Citation.] Its purpose is to

‘act[] as a disincentive to appeal the commissioner’s decision’ [citation] and to

‘discourag[e] unmeritorious appeals of wage claims’” (Nishiki v. Danko

Meredith, P.C. (2018) 25 Cal.App.5th 883, 894, italics omitted; accord Lolley

v. Campbell (2002) 28 Cal.4th 367, 376.) The normal standard of review of an

attorney fee award is abuse of discretion, but we review the award de novo

where the availability of fees hinges on an issue of statutory construction.

(Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1213.)

Resolution of appellants’ challenge depends on an analysis of two

appellate decisions, Arias v. Kardoulias (2012) 207 Cal.App.4th 1429 (Arias)

and Arneson v. Royal Pacific Funding Corp. (2015) 239 Cal.App.4th 1275

(Arneson), which point in different directions but are not irreconcilable.

In Arias, an employee filed an untimely appeal of a commissioner’s

award after a Berman hearing. The case was dismissed for being untimely,

and the trial court awarded attorney fees against the employee under section

98.2 subdivision (c). (Arias, supra, 207 Cal.App.4th at p. 1433.) The

appellate court considered whether “the Legislature intended . . . an

employer to recover attorney fees and costs when the superior court dismisses

an employee’s appeal for lack of subject matter jurisdiction” (id. at p. 1436),

and concluded it did not. In these circumstances, the court ruled, the

15

attorney fee provision “does not become operative unless the superior court

has jurisdiction to conduct a trial on the merits of the employee’s wage

claim.” (Id. at p. 1433.) That is, “[a] dismissal of the appeal from the

commissioner’s decision on jurisdictional grounds is not the equivalent of the

superior court’s determination, after conducting a trial de novo, that the

employee is entitled to ‘zero’ ”; rather, the employer remains liable for the

amount of the original award. (Id. at p. 1438.) The appellate court therefore

held that the attorney fee provision of section 98.2, subdivision (c) “does not

become operative against an employee unless the employee has a new trial in

the superior court on the wage claim.” (Id. at pp. 1438-1439.)

Although some of the language in Arias may be read to apply to both

employers and employees whose appeals are dismissed without a trial de

novo, the court’s holding is limited to appeals by employees, and its reasoning

is based in significant part on an asymmetry in the statute: that an

employee who receives an award of more than zero is considered successful

on appeal even if the trial court awards less than the employee received in

the administrative proceedings. (§ 98.2, subd. (c).) This is a fee-shifting

scheme that overtly favors employees. (OTO, supra, 8 Cal.5th at p. 123.) The

court in Arneson, on the other hand, was faced with an appeal to the superior

court by the employer, and reached a different conclusion.

The employee in Arneson filed a wage claim with the Commissioner

and obtained an award of $29,500, after which the employer filed an appeal

with the superior court and a bond guaranteeing the award. (Arneson, supra,

239 Cal.App.4th at p. 1277.) After a pretrial conference in which the

employee’s attorney indicated she might present additional claims, the

employer withdrew its appeal. (Ibid.) The employee then moved for attorney

fees, and, based on Arias, the trial court denied the motion. (Id. at pp. 1277-

16

1278.) The appellate court reversed, even though there had been no court

award on the merits. (Id. at pp. 1279, 1281.) It reasoned that, when the

Legislature amended section 98.2, subdivision (c) to specify that an employee

is successful in the appeal if the superior court awards any amount greater

than zero, the Legislature “never intended to give employers a chance to

whipsaw employees by filing section 98.2 appeals and then withdrawing

them”; such a reading would “incentivize[] employers to file frivolous appeals

and then withdraw them at the last minute so as to inflict gratuitous legal

costs on an employee who has been otherwise successful at the Labor

Commissioner level.” (Id. at p. 1280, fn. omitted.) Arneson concluded that

the employee was “successful” under subdivision (c) when the employer

withdrew its appeal because “[t]he employee gets to keep the money he or she

won at the administrative level as if the employee had completely prevailed

in a court trial.” (Id. at p. 1280)

The case before us is not precisely the same as either Arias or Arneson,

but the reasoning of these cases leads us to conclude that respondents were

entitled to their attorney fees. This is an appeal by employers that was

dismissed, not on their request as in Arneson, but on their failure to post an

undertaking or obtain a waiver. That distinction is not material. As in

Arneson, the Commissioner awarded respondents unpaid wages and other

amounts, and appellants filed an appeal in the superior court. At the end of

the trial court proceedings, respondents remained entitled to the original

Commissioner’s award. They were accordingly successful in the appeal, and

are entitled to attorney fees.

Against this conclusion, appellants argue that dismissal here, as in

Arias, was based on procedural and jurisdictional grounds, not on the merits,

rendering attorney fees unavailable. (See Palagin, supra, 222 Cal.App.4th at

17

p 132 [posting an undertaking is a condition to filing a notice of appeal, hence

“ ‘jurisdictional’ ”].) We are unpersuaded. Burkes makes clear that an

employer may proceed with an appeal by filing an application for relief from

the undertaking requirement within the period for filing a notice of appeal, as

appellants did here. The fact that the appeal was later dismissed due to

appellants’ failure to obtain a waiver does not change the facts that

appellants appealed to the trial court and respondents remained entitled to

an amount greater than zero after the trial court proceedings.

Appellants point out that the notices of appeal were filed only

conditionally, subject to being stricken if appellants failed to obtain a waiver

of the undertaking requirement. They argue that to the extent the waiver

was properly denied, the trial court thereafter lacked jurisdiction to hear the

appeal. The facts remain, however, that the notices of appeal were filed, the

trial court thereafter exercised its jurisdiction to determine whether the

appeal could proceed, and the outcome was that the appeal was dismissed

and respondents retained the Commissioner’s award. Under these facts, the

reasoning of Arneson leads us to conclude respondents were entitled to

attorney fees under section 98.2, subdivision (c).

The judgment and attorney fee order in the consolidated actions are affirmed. Appellants are to pay costs on appeal.