Truxell & Valentino
Landscape v. Baker





















Filed 7/3/12 Truxell & Valentino Landscape v. Baker
CA5

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>NOT TO BE PUBLISHED IN
THE OFFICAL REPORT

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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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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



FIFTH APPELLATE DISTRICT




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TRUXELL & VALENTINO LANDSCAPE DEVELOPMENT, INC., Plaintiff and Appellant, v. CHRISTINE BAKER, AS ACTING DIRECTOR OF CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS, Defendant and Respondent; DEPARTMENT OF INDUSTRIAL RELATIONS, DIVISION OF LABOR STANDARDS ENFORCEMENT, Real Party in Interest and Respondent.

F061206 (Super. Ct. No. 09CECG01198) >OPINION

APPEAL
from a judgment of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Fresno
County. Jeff Hamilton, Judge.

Michael
J. F. Smith, A Professional Corporation, Michael J. F. Smith, for Plaintiff and
Appellant.

Ramon
Yuen-Garcia for Defendant and Respondent, and for Real Party in Interest and
Respondent.

-ooOoo-

Appellant
Truxell & Valentino Landscape Development, Inc. (Truxell), removed and
replaced landscaping at Clovis West High School. The job included the construction of a large
paved area with cement walkways and cement seating areas. Truxell paid its employees at the prevailing
wage rate for landscape workers for the entire job. Respondents and Real Party in Interest
Department of Industrial Relations, Division of Labor Standards Enforcement
(DLSE), issued a wage-and-penalty assessment, finding that the workers who
performed the cement work were misclassified and should have been paid the
prevailing wage for cement masons. The
assessment included the difference in wages plus penalties.

After
a hearing, respondent Director of the Department of Industrial Relations
(Director)href="#_ftn1" name="_ftnref1"
title="">^[1] modified and affirmed the
wage assessment, imposed liquidated
damages, and remanded the case to the DLSE for a redetermination of the
penalties. The DLSE redetermined the
amount of the penalties, and Truxell did not request review by the
Director. Truxell filed a petition for a
writ of mandate in the superior court seeking reversal of all the relief
ordered. The court denied the
petition.

Truxell
appeals from the denial, asking us to hold that the misclassification finding
was not supported by substantial evidence
and that the penalties were excessive, amounting to an abuse of
discretion. Truxell also argues that,
even if its position on the classification is wrong, it had a reasonable belief
that the law supported its position, and that liquidated damages therefore
cannot properly be imposed.

We
hold that substantial evidence supports the agency finding on the
misclassification issue. Further,
Truxell forfeited its claim on the issue of penalties when it decided not to
request administrative review of the redetermination of the penalties. We agree with Truxell, however, that there
was a reasonable (though mistaken) basis in law and fact for its position on
the classification of the workers, and that liquidated damages therefore were
not appropriate. We reverse the judgment
and direct the superior court to grant relief on the liquidated damages issue.

FACTUAL AND PROCEDURAL HISTORIES

Truxell
entered into a contract with Clovis Unified School District on June 19,
2006, to carry out “[s]ite and [l]andscape [i]mprovements” at Clovis West High
School. The work was divided roughly
into thirds: One-third was grading and
the removal of existing landscaping; another one-third was the installation of
a new underground irrigation system and the planting of new trees, shrubs and
grass; and the remaining one-third was cement work.

The
cement work, as described in the Director’s written decision, included “the
construction of curbing, sidewalks, seating walls, mowstrips, concrete stairs,
and disabled ramps, and the installation of bollards,” which are removable
cement posts used to control vehicle access.
Blueprints and photographs of all these concrete features are included
in the administrative record. The
photographs indicate that “seating wall[s]” are low walls, usually located at
borders between sidewalks and planted areas, on which students can sit. “Mowstrips” are narrow strips of concrete separating
lawns from other areas.

For
the cement work, Truxell hired a separate crew of seven workers and a
supervisor. Truxell’s regular employees
did the balance of the work. At least
five of the workers hired for the cement work had experience as cement masons,
ranging between two and 20 years.
Truxell paid the crew that did the cement work at the same wage rates as
it paid the remaining workers, the rates for landscape tradesmen and landscape
assistant journeymen, which ranged from $14 to $25 per hour. The applicable rate for cement masons would
have been about $40 per hour. Truxell’s
president, John Valentino, stated in a letter to Deputy Labor Commissioner
Rachel Farmer that he believed paying all the workers at the lower rates was
appropriate because “all the work on this project is covered by a landscape
contractors license (C-27), and as such, we consider it all landscape work.”href="#_ftn2" name="_ftnref2" title="">^[2]

The
DLSE conducted an investigation to determine whether the cement workers were
classified correctly. As the parties
agree, the classification question is controlled by the scope-of-work
provisions of the governing collective bargaining agreements for landscape
workers and cement masons. The scope of
work for landscape workers is as follows:

“The
Landscape industry is defined as follows:
Decorative landscaping, such as decoration walls, pools, ponds,
fountains, reflection units, low voltage lighting displays, hand grade
landscape areas, tractor grade landscape areas, finish rake landscape areas,
spread top soil, build mounds, trench for irrigation manual or power, layout
for irrigation backfill trenches, asphalt, plant shrubs, trees, vines, set
boulders, seed lawns, lay sod, use ground covers such as flatted plant
materials, rock rip rap, colored rocks, crushed rock, pea gravel, and any other
landscapeable ground covers, installation of header boards and cement mowing
edges, soil preparation such as wood shavings, fertilizers (organic, chemical
or synthetic), top dress ground cover areas with bark of any woods residual or
other specified top dressing, watering of plants and all clearing and clean up
prior to and after landscaping.

“A. In addition to the above Paragraph, the
work covered shall include but not be limited to all work involved in the
distribution, laying, and installation of landscaping irrigation pipe, the
installation of low voltage automatic irrigation and lawn sprinkler systems,
including but not limited to the installation of automatic controllers, valves,
sensors, master control panels, display boards, junction boxes and conductors
including all components thereof.

“B. Installation of valve boxes, thrust
blocks, both precast and poured in place, pipe hangers and supports, incidental
to the installation of the entire piping system.

“C. Start-up testing, flushing, purging,
water balancing, placing into operation all piping equipment, fixtures and
appurtenances installed under the Agreement.

“D. Any line inside a structure which
provides water to work covered by this Agreement, including piping for ornamental
pools and fountains when performed in conjunction with landscaping.

“E. All piping for ornamental stream beds,
and waterways.

“F. All swimming pools in connection with
single family residential units, condominiums, town house[s], apartment houses,
including remodels, additions, all service and repair, mobile home parks, and
motels and hotels up to four stories in height may be performed under the terms
and conditions and wage and fringe rates of this Agreement. All other swimming pool piping shall be done
by Building Trades Journeyman and Apprentices only, who may be dispatched out
of UA Local 355, at no less than the wage and fringe rate of the UA Local Union
Master Labor Agreement having jurisdiction in the geographical area where the
work is being performed. The Hiring Hall
provisions contained in the Local Union’s Master Labor Agreement where the work
is being performed shall not apply.

“G. All temporary irrigation and lawn
sprinkler systems and all types of hydro mulching and erosion control.

“H. This Agreement may be used to cover
maintenance and plant establishment.
Plant establishment as such work is described in the [employer’s]
contract documents shall be work covered by this agreement. This work may be performed exclusively by all
classifications outlined in this agreement without the supervision of a
Journeyman except for Apprentice which would require the supervision of a
Journeyman. No ratios.

“I. Trenchers are covered by this Agreement
provided the Trencher is of 35 horsepower or less.

“J. The installation of playground equipment
and prefabricated park service equipment.”


The scope of work for cement masons
provides:

“Without limiting the scope of the work
covered hereby, it is agreed that Cement [Masons’] work shall include but shall
not be limited to all the following construction work:

“(1) All
building construction, including but not limited to the construction, erection,
alteration, repair, modification, demolition, addition or improvement in whole
or in part of any building structure.

“(2) All
heavy highway and engineering construction, including but not limited to the
construction, improvement modifications and demolition of all or part of any
streets and highways (including sidewalks, curbs and gutters), bridges, viaducts,
railroad, tunnels, airports, water supply, irrigation, flood control and
drainage systems, sewers and sanitation projects, wharves, docks, break-waters
or rip rap stone, or operation incidental to such heavy construction work.

“Subject to the foregoing provision of
this Section and to the provisions of Section 6 of this Agreement, the work to
be performed by Cement [Masons] shall include but not be limited to the
following, when tools of the Cement Masons’ trade are used or required:

“Setting screeds, screed pins, curb
forms and curb and gutter forms, rodding, spreading and tamping concrete, hand
application of curing compounds, applying topping (wet or dry) colors or grits;
using Darby and push floats, hand troweling or hand floating; marking edging, brooming
or brushing, using base cover or step tools; chipping, and stoning, patching or
sacking; dry packing; spreading and finishing gypsum, operating mechanical
finishers (concrete) such as Clary, Jackson, Bidwell Bridge Deck Paver or
similar types; grinding machines, troweling machines, floating machines,
powered concrete saws, finishing of epoxy and resin materials, bush hammering
and exposed finishes for architectural work.

“Operation of skill saw, chain saw,
Laser Screed, Laser Level, Curb and Slipform machines, Epoxy Type Injection
pumps, stamps or other means of texturing, any new devices which are beneficial
to the construction of or with concrete or related products.

“The foregoing shall apply to temporary
yards established off the jobsite, to service a particular job, for the
duration of that job.”

After
considering these definitions, the DLSE concluded that the cement crew had been
misclassified and should have been paid at the prevailing wage for cement
masons, which it found to be $40.91 per hour.
The DLSE also found that Truxell committed 369 overtime violations and
failed to pay most of its regular crew members fully for the fringe-benefit
portion of the prevailing wage. It
issued a civil wage-and-penalty assessment requiring Truxell to pay $91,606.20
in unpaid wages, $41,450 in penalties under Labor Code section 1775 (823
violations at the maximum statutory rate of $50 per violation),href="#_ftn3" name="_ftnref3" title="">^[3] and $9,225 in penalties under
Labor Code section 1813href="#_ftn4"
name="_ftnref4" title="">^[4] (369 overtime violations at
the statutory rate of $25 per violation).
The penalties were payable to the school district, the government agency
that awarded the contract.
(§§ 1775, subd. (a)(1), 1813.)


The
assessment advised Truxell that under section 1742.1 it would be liable
for liquidated damages equal to the amount of the unpaid wages if it failed to
pay the assessment within 60 days of service, except that the liquidated
damages would be waived if Truxell demonstrated that there were substantial
grounds for believing the assessment to be erroneous. Liquidated damages are distributed to the
affected employees. (§ 1742.1,
subd. (a).)

Pursuant
to section 1742, Truxell requested review of the assessment by a hearing
officer appointed by the Director. The
hearing was held on November 28 and 29, 2007.

At
the hearing, the DLSE presented blueprints and photographs of the cement work
Truxell performed at Clovis West. Five
of the cement workers testified. In
addition to describing the benches, walkways, planters, curbs, bollards, and
mowstrips they constructed, they also described some of the processes and
techniques they used: building wooden
forms, placing rebar, pouring cement, finishing with brooms, floats and
trowels, installing joints, and removing forms.


Richard
Vaillancour, a landscape architect who designed the project, was called as a
witness by Truxell. He testified, first,
that the cement seating walls or benches constructed as part of the project had
two purposes: “First of all, to provide
places for people to sit under a tree canopy and be able to have conversation,
essentially. And the second thing is to
kind of be able to control foot traffic and dissuade people from walking
through planted areas.” Then he said,
“[P]retty much all the walls, if not every wall, is a decorative wall on that
site.” Finally, he testified, “The
function of the seating wall is just to provide a place for people to sit upon,
essentially. And the alternative—or
the—in addition to that, that function would also be aesthetic value of
creating a three-dimensional form within the space.” He did not know whether terms such as
“decoration” have the same meaning for an architect as they have in the
scope-of-work provisions of the collective bargaining agreements at issue.

Truxell
also called Valentino, its president. He
opined that all the cement work the company did at Clovis West was “decorative
landscaping,” and that all the seating walls were “decoration walls,” within
the meaning of the scope-of-work provision in the collective bargaining
agreement for landscape workers. He also
testified that the walkways were only three and one-half inches thick and did not have rebar or other reinforcing
materials, and that this showed that they were for pedestrians, not cars. He said, “I think the key is not concrete
that trucks and cars drive on, but concrete that people walk on. That’s what landscape architects do, that’s
what you learn about if you go to a landscape school, that’s who installs it
and that’s because it’s landscaping. And
if it’s landscaping, I think you can pay it with a landscape rate. And that’s really what this boils down
to.”

In
response to a question intended to establish that he had good-faith reasons for
requesting the review, Valentino testified:

“You
know, I really thought—I don’t think I’m right all the time, I think I can be
wrong, but I really thought I did this properly.

“What
I wanted to do was talk to somebody. I
was very frustrated all along the process that no one really seemed to want to
talk about it. Even when we were
assessed this amount, that wasn’t without—that wasn’t with any discussion with
me, or comparing notes, or trying to understand how we arrived at these
classifications, which I think are very reasonable.

“So,
yes, I still thought I was right [after the assessment]. I was concerned that others thought I was
wrong, and I was eager to talk to someone about it. And that’s why I’m very eager to have an
impartial person hear it. Because it’s
been frustrating to me not to be able to understand why is it that my reasoning
is wrong.”

Valentino also testified, again to show his
good faith, that his company was unusual in that it pays union-scale wages and
benefits even on private projects.

Dennis
Soares, a business manager for United Association Local 355, the union that
negotiated the agreement for landscape workers, testified for Truxell at the
hearing. He said he had known Valentino
for 15 years and never knew him not to pay the union rate for any job. He opined that any work within the scope of a
C-27 landscape contracting license would also be within the scope of work for
landscape workers, and that other cement work would fall outside that
license. He was not asked, and did not
say, however, whether all the work at Clovis West fell within the C-27 license.

Soares
also said decoration walls, within the meaning of the scope of work for
landscape workers, are sometimes made of cement. Asked to elaborate, he said, “We have
decorative walls that are basically smaller walls that are sometimes built up
with blocks or something and coated with concrete or mixtures of that and then
designs put in them.” Further,
“[D]ecorative walls are for visual effect.”
When asked what sort of wall building would be reserved for cement
masons, Soares mentioned highway sound walls, walls of buildings, and “a
structural wall supports something, holds something up .…” In Soares’s opinion, the term “landscapeable
ground cover” in the scope of work for landscape workers also could include
“some concrete work.”

The
Director issued a written decision after the hearing. The decision upheld the DLSE’s determinations
that the cement workers should have been paid the prevailing wage for cement
masons and that Truxell failed to pay some of the fringe benefits owed to the
other landscape workers.

The
Director found:

“The
record establishes that the cement work done on the Project included specific
processes described in the Cement Mason scope of work provisions (including
floating and sacking and patching). The
testimony, photographs of the completed work, and the Project blueprints (which
were a significant source of objective information for the hearing officer)
show that the cement work was performed predominantly, if not exclusively, in
areas designed for extensive student use for walking or sitting. The work includes sidewalk areas, three and a
half inches thick and ranging from widths as narrow as five feet to an open
section in the front of the campus which appears to be over 100 feet in width
and 150 feet in length, and seating walls, which were low and wide enough for
students to sit down. The cement work
intersects with other landscaping primarily as retaining walls, sometime with
bench seating, for raised planted areas located adjacent to buildings or in
rectangles or circles within the open paved areas. The walls incorporated decorative elements to
make them aesthetically pleasing, but this appears to be secondary to their
functional purpose. The breadth of the
open space and presence of bollards also shows that some of these areas are
designed for vehicular access when necessary.”


In
light of these findings, the Director concluded that the bulk of the cement
work was neither expressly nor impliedly authorized by the scope-of-work
provision for landscape workers. That
provision could not be read to cover the work without wrongly “divorcing
‘decoration walls’ and ‘ground cover’ from their context as specific items
included within the general definition of ‘decorative landscaping.’” Instead, “the work explicitly fell within the
ambit of the Cement Masons’ scope of work, in that it included items such as
sidewalks and gutters and specific work processes that are enumerated
therein. The work also was far more
appurtenant to building construction than to the landscaping of grounds, in
that it created or repaired plazas, seating areas, and sidewalks adjacent to
school buildings.” The Director further
concluded that Truxell’s own actions showed that it should have known that the
cement masons’ scope of work was applicable:

“Though
Truxell is an experienced landscape contractor and considered this work to be
within the scope of its landscape contractor license, it did not use its own
regular crew to perform the cement work.
Rather Truxell hired a separate crew comprised largely of experienced
cement workers to perform that work. By
its own action, Truxell should have been on notice of the need to classify and
compensate those workers as Cement Masons.”


The
Director reduced the wage assessment by a small amount, however, because the
cement mowstrips installed by Truxell fell within the express terms of the
scope of work for landscape workers. The
wages due were reduced by $1,367.52 and the number of violations for purposes
of penalties was accordingly reduced.

The
Director also reduced the amount assessed for fringe-benefit payments. The decision stated that Truxell should have
been credited with $2,002.81 more than the DLSE found, but he rejected
Truxell’s contention that an additional $7,189.52 had been paid. After the adjustments, the wages due were
$88,235.87.

The
Director’s decision reversed the $41,450 in penalties under
section 1775. Section 1775,
subdivision (a), provides a maximum penalty of $50 per day for each worker
who was not paid the correct prevailing wage.
(§ 1775, subd. (a)(1).)
In determining the amount, the DLSE is required to consider whether the
failure was a good-faith mistake that was promptly and voluntarily corrected
and whether the contractor had a prior record of failing to pay prevailing
wages. (§ 1775,
subd. (a)(2)(A)(i), (ii).) The
Director found that the DLSE failed to consider Truxell’s prior violation-free
record of public works contracting. The
case was remanded to the DLSE for a redetermination of the section 1775
penalties. The $9,225 in penalties under
section 1813 was affirmed.

Finally,
the Director’s decision applied section 1742.1, subdivision (a), to
impose liquidated damages of $88,235.87, equal to the amount of the unpaid
wages. That section requires imposition
of liquidated damages equal to the unpaid wages if the contractor fails to pay
an assessment within 60 days after the assessment is served. As it read until the end of 2008,
section 1742.1 provided that the liquidated damages would not be imposed,
however, if the contractor “demonstrates to the satisfaction of the director
that he or she had substantial grounds for believing the assessment … to be in
error.”href="#_ftn5" name="_ftnref5"
title="">^[5] (Former § 1742.1,
subd. (a).) California Code of
Regulations, title 8, section 17251(b), known as Rule 51(b),
provides the following standard for finding substantial grounds:

“To demonstrate ‘substantial grounds
for believing the Assessment … to be in error,’ the Affected Contractor or
Subcontractor must establish (1) that it had a reasonable subjective
belief that the Assessment … was in error; (2) that there is an objective
basis in law and fact for the claimed error; and (3) that the claimed
error is one that would have substantially reduced or eliminated any duty to
pay additional wages under the Assessment .…”

The
DLSE issued the assessment on June 8, 2007, the Director’s decision was
filed on February 17, 2009, and Truxell paid no part of the back wages in
the intervening time, so the assessment had gone unpaid for more than 60 days. The Director found:

“The
evidence shows that Truxell had a reasonable subjective belief that the
Assessment was in error, and that the claimed classification error would have
eliminated most of Truxell’s liability for back wages, thereby meeting the
first and third tests of Rule 51(b).
However, Truxell failed to establish that it had an objective basis in
law and fact for classifying its cement workers as Landscape Tradesmen. In the final analysis, Truxell understood
that the cement work required the services of experienced cement workers, that
is, cement masons, and the facts could not be stretched to fit its arguments on
why that work should be regarded as part of the landscape trade. In addition, Truxell now has been fully
credited for all fringe benefit payments it has established were made for
Project work. Accordingly, there are no
grounds for waiving liquidated damages on the modified wage assessment.”

The
Director’s decision imposed a total of $185,696.74 in wages due, penalties
under section 1813, and liquidated damages under section 1742.1, plus
interest on the wages. Regarding the
remand for redetermination of the penalties under section 1775, the
Director’s decision stated that the DLSE had 30 days to issue a new penalty
determination and that Truxell would have the right to request review of the
redetermination by the hearing officer.

Truxell
submitted a request for reconsideration on February 26, 2009, in which it
argued that the seating walls should have been found to be decorative. On this basis, it asked for a reduction in
the wage assessment of $20,961.74. The
Director denied the request on March 4, 2009. In a written order, the Director stated:

“The
only support for calling the walls ‘decorative walls’ is a conclusory statement
by Truxell’s architect, which was somewhat undercut by the testimony of
Truxell’s union witness who said that decorative walls are generally for
‘visual effect’ rather than being structural.
There is no reference to ‘decoration’ or ‘decorative’ walls anywhere within
the Project blueprints. Instead, the
blueprints identified the items in question as ‘concrete seating walls,’ which
by design and appearance serve the principal purpose of providing places for
high school students to sit in between classes.”

The
DLSE issued its redetermination of the penalties on March 16, 2009. It reduced the section 1775 penalties to
$35 per violation, for a total of $28,805.
The administrative record contains no written explanation of the amount
imposed. Truxell did not request review
of the redetermination by the hearing officer.


On
April 22, 2009, Truxell filed a petition in the superior court pursuant to
Code of Civil Procedure section 1094.5 for a writ of mandamus reversing
the Director’s decision. The court
denied the petition on June 28, 2010, and entered judgment for the
Director on July 14, 2010. The
court found that the record supported the findings that the cement paving was
not a “‘landscapeable ground cover,’” and the seating walls were not
“‘decoration walls’” within the meaning of the scope-of-work provision for
landscape workers. It also found that
there was no abuse of discretion in the imposition of penalties. Liquidated damages are not specifically
mentioned in the court’s written order.

DISCUSSION

I. Standard
of review

Code
of Civil Procedure section 1094.5 governs a trial court’s review of an
administrative agency’s proceedings upon a petition for administrative
mandamus. Except in a limited class of
cases involving fundamental vested rights (Bixby
v. Pierno (1971) 4 Cal.3d 130, 143-144), the trial court reviews the whole
administrative record to determine whether the agency’s findings are supported
by substantial evidence and whether the agency committed any errors of law (>Concord Communities v. City of Concord
(2001) 91 Cal.App.4th 1407, 1413; Ryan v.
California Interscholastic Federation-San Diego Section (2001) 94
Cal.App.4th 1048, 1077).
Section 1742, subdivision (c), also specifies that if the
petitioner claims the Director’s findings are not supported by the evidence,
the substantial evidence standard applies.
On appeal, our function is identical to that of the trial court. (Ryan
v. California Interscholastic Federation-San Diego Section, supra, at
p. 1077.)

Substantial
evidence is “relevant evidence that a reasonable mind might accept as adequate
to support” the challenged conclusion. (>California Youth Authority v. State
Personnel Bd. (2002) 104 Cal.App.4th 575, 584.) The evidence must be “reasonable, credible,
and of solid value.” (>Id. at p. 585.) We do not independently reweigh the
evidence. Conflicts in the evidence and
reasonable doubts about the agency’s decision must be resolved in the agency’s
favor. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th
559, 571; Laurel Heights Improvement
Assn. v. Regents of University of California (1988) 47 Cal.3d 376,
407.)

The
burden of affirmatively showing a lack of substantial evidence to support the
agency’s findings is on the petitioner.
(Barthelemy v. Chino Basin Mun. Water
Dist. (1995) 38 Cal.App.4th 1609, 1617.)
To make this affirmative showing, it is not enough to point to portions
of the administrative record that favor the petitioner’s position. Instead, the petitioner must set forth all
the evidence material to the challenged finding and then demonstrate that this
evidence cannot reasonably support the finding.
A reviewing court is not obligated to search the administrative record
and assemble all the relevant evidence on the petitioner’s behalf. (California
Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603,
626.)



II. Classification

We
reject Truxell’s contention that substantial evidence does not support the
Director’s finding that the cement workers were misclassified. To the contrary, the evidence was sufficient
to support the finding.

There
is no doubt that Truxell’s cement workers employed processes described in the scope-of-work provision for cement
masons. The use of floats and trowels
and the spreading, rodding, and brooming of concrete were all testified to by
the cement workers and are all listed in the cement masons’ scope of work. These processes would have been employed
pervasively throughout the cement portion of the project. Further, the blueprints and photographs show
that curbs were built; this undoubtedly required the setting of curb forms, a
process listed in the cement masons’ scope of work.

There
also was substantial evidence to support the Director’s finding that the >things built were within the cement
masons’ scope of work. In essence, the
cement part of the project created plazas with walkways and seating to serve
the school buildings. This fact formed a
reasonable basis for the Director’s conclusion that “[t]he work also was far
more appurtenant to building construction than to the landscaping of the
grounds, in that it created or repaired plazas, seating areas, and sidewalks
adjacent to school buildings.” That
conclusion in turn is a reasonable basis for the view that the cement work fell
within the category described in the cement masons’ scope of work of “[a]ll
building construction, including but not limited to the construction, erection,
alteration, repair, modification, demolition, addition or improvement in whole
or in part of any building structure.”
Further, the cement paving was covered under the term “sidewalks” in the
cement masons’ scope of work.

Finally,
to the extent that a distinction between decorative and functional construction
is relevant, there was substantial evidence to support the Director’s finding
that the cement work at Clovis West was primarily functional. There is little room for disputing the
proposition that the main purpose of the cement work as a whole was to provide
places for students and staff to walk and sit while they were on campus. The result might be nice to look at, but it
was not built primarily to be looked at.


The
evidence supporting the view that the cement work fell within the scope-of-work
provision for landscape workers, by contrast, was weaker. No witness testified that the seating walls
were built primarily to serve as “decoration walls,” the term in the landscape
workers’ scope of work. Soares, the
union business manager, used the example of a wall built with blocks, covered
with concrete, and decorated with designs pressed into the concrete. The seating walls at issue here did not fit
that description.

Vaillancour,
the project architect, testified that the seating walls he designed had two
purposes: “to provide places for people
to sit under a tree canopy and be able to have conversation,” and to “control
foot traffic.” The walls >also were decorative and had an
aesthetic role, but this was merely “in addition” to the other two
purposes. Valentino testified that the
seating walls were decoration walls because of their “intricacy.” He said they were “decoration walls that do
lots of other things at the same time,” such as “[c]reating spaces, making
places for people to sit.” Valentino
opined that this clearly meant the walls fell within the landscape workers’
scope of work, but his opinion was conclusory.
His own account was, in essence, that the seating walls had a function
(i.e., seating) as part of the plaza, and also that they were appealing to see. This was consistent with Vaillancour’s
testimony to the effect that the seating walls were functional structures that
also were attractive.

The
evidence did not provide much support for Truxell’s contention that the
extensive concrete paving, including sidewalks and a plaza area of about 15,000
square feet,href="#_ftn6" name="_ftnref6"
title="">^[6] was a “landscapeable ground
cover” within the meaning of the landscape workers’ scope of work. Soares testified that landscapeable ground
cover could include “some concrete work,” but that description does not fit a
15,000-square-foot concrete plaza.
Truxell claims Vaillancour and Valentino gave supporting testimony on
this point, but the testimony it cites is not very helpful. Vaillancour said yes when asked whether
“landscaping design sometimes includes pedestrian paving” and whether that
paving sometimes is made of concrete.
These answers, however, do not show that paving a large area with
concrete is applying a landscapeable ground cover.

Valentino
said the paved area was a landscapeable ground cover because it was made for
pedestrians, not cars, and because landscape architects learn in landscape
architecture school to design paved areas for pedestrians. He went on to conclude that this meant the
installation of paved areas for pedestrians should be paid for at the wage rate
for landscape workers. This conclusion
is a non sequitur, since no evidence was presented indicating that landscape
architects never design or learn to design anything that must be built by
cement masons. The record also contains
no support for Valentino’s idea that whether cement pavement is a landscapeable
ground cover depends on whether it is made for pedestrians or cars. In sum, Truxell has not pointed out any
testimony that would have compelled the Director to find that building a
15,000-square-foot concrete pedestrian plaza is using a landscapeable ground
cover.

Truxell
does not attempt in its appellate briefs to defend the position that all the
cement work was covered by its C-27 landscape contractor’s license and that all
work covered by that license falls within the landscape workers’ scope of
work. The record does not, in any event,
contain evidence on this point that would have compelled the Director to find
for Truxell. There was opinion testimony
by Soares that anything covered by the landscape license would be within the
landscape scope of work. There was no
evidence, however, that all the cement work at Clovis West was covered by the
C-27 license.href="#_ftn7"
name="_ftnref7" title="">^[7] Further, we have not found
in the record or briefs any legal argument intended to establish that the
landscape contractor’s license covers the same work as the landscape workers’
scope of work.

To
prevail under the substantial evidence standard of review, an appellant is
required to show not just that the record contains some evidence that supports
its position, but that the record contains no substantial evidence supporting
the agency’s decision. For the above
reasons, Truxell has failed to show this is the case.

III. Liquidated
damages

Truxell
argues that the Director abused his discretion in awarding liquidated
damages. Specifically, Truxell says the
Director could not reasonably conclude that there was no “objective basis in
law and fact for the claimed error .…”
(Cal. Code Regs., tit. 8, § 17251(b).) We agree.

As
we have said, substantial evidence supported the Director’s finding that the
cement work at Clovis West fell within the cement masons’ scope of work. In spite of this, it cannot be said that the
work in question clearly fell within
either the cement masons’ scope of work or the landscape workers’ scope of
work. As Truxell points out, the cement
masons’ scope of work emphasizes the construction of buildings and other heavy
construction. The scope of work is
expressly nonexclusive when it refers to these things, and that is one of the
reasons we are upholding the Director’s conclusion. An interpretation, however, according to
which light construction, like the construction of pedestrian paving and
benches, fell outside the scope of work was not objectively unreasonable. Further, the provision’s reference to
sidewalks and curbs comes immediately after a reference to streets and
highways, so there is some support for the inference that sidewalks and curbs
are within the cement masons’ scope of work only when they are built alongside
streets and highways. Some of the
processes expressly mentioned in the cement masons’ scope of work were employed
in the Clovis West work, as we have said, but there is a colorable argument
that the relevance of this depends on a prior determination that the structures
built via those processes are within the scope of work as well.

What
we have just said indicates that there was a reasonable basis for Truxell’s
view that the Clovis West cement work did not
fall within the cement masons’ scope of work.
There was, in addition, a reasonable basis for the view that the work >did fall within the landscape workers’
scope of work. The landscape scope of
work covered “[d]ecorative landscaping.”
The main thrust of Valentino’s testimony was that it would be sensible
to define this term to conform to the assumptions of landscape architects, who
are trained to design pedestrian plazas with seating like the Clovis West
project, and the assumptions of landscape design contractors, who often build
similar things. The law does not, of
course, always understand the same term to have the same meaning in different
contexts, and the record supported the Director’s implicit finding that
“decorative landscaping” within the meaning of the scope of work does not
necessarily cover everything landscape architects and landscape contractors
might assume it covers. Yet Valentino’s
view was not objectively unreasonable, given the failure of the landscape scope
of work clearly to include or exclude the type of work at issue here.

Further,
there is some inconsistency between the Director’s conclusion that Truxell had
no objective basis in fact and law for its erroneous view and his conclusion
that Truxell did have a reasonable
subjective belief that its position was correct. It is difficult to see how Truxell’s belief
was not just an actual subjective belief but also a reasonable one if it had no objective basis in fact and law. A subjective belief that lacks an objective
basis is an unreasonable subjective
belief.

Finally,
we are unpersuaded by the Director’s view that Truxell had no objective basis
for this view because “Truxell understood that the cement work required the
services of experienced cement workers .…”
The fact that Truxell hired experienced cement workers only shows that
Truxell knew the obvious: that it was
building a cement project. It does not
show that Truxell had knowledge of the more obscure proposition that this
particular cement project fell within the cement masons’ scope of work. Further, the notion that Truxell >knew the project required cement masons
as defined in the cement masons’ scope of work contradicts the Director’s
finding that Truxell had a subjective belief that it classified the workers
correctly.

For
these reasons, we conclude that, as a matter
of law, Truxell’s view had an objective basis in fact and law and the
Director’s contrary conclusion was an abuse of discretion. The Director conceded that the other prongs
of the Rule 51(b) test were satisfied, so liquidated damages should have
been waived.

IV. Penalties

Truxell
contends that the agency abused its discretion by imposing penalties under
section 1775. It says the record
shows the agency failed to consider the necessary factors and relied on
improper considerations when it imposed these penalties. The agency contends that the redetermination
cannot be challenged now because Truxell did not request a hearing before the
hearing officer to challenge it.

The
procedure for obtaining review of a civil wage-and-penalty assessment is
described in section 1742. “An
affected contractor or subcontractor may obtain review of a civil wage and
penalty assessment under this chapter by transmitting a written request to the
office of the Labor Commissioner that appears on the assessment within 60 days
after service of the assessment.”
(§ 1742, subd. (a).) If
no hearing is requested during the 60-day period, “the assessment shall become
final.” (Ibid.) If a hearing is
requested, it is held before a hearing officer appointed by the Director. (Id.,
subd. (b).)

At
the hearing, “[t]he contractor or subcontractor shall have the burden of
proving that the basis for the civil wage and penalty assessment is
incorrect.… [¶] Within 45 days of the conclusion of the
hearing, the director shall issue a written decision affirming, modifying, or
dismissing the assessment.”
(§ 1742, subd. (b).) A
contractor “may obtain review of the decision … by filing a petition for
writ of mandate to the appropriate superior court pursuant to
Section 1094.5 of the Code of Civil Procedure within 45 days after service
of the decision.” (Id., subd. (c).) If no
petition is filed within the 45-day period, the director’s “order shall become
final.” (Ibid.) Section 1742 “shall
provide the exclusive method for review of a civil wage and penalty assessment
by the Labor Commissioner under this chapter .…” (Id.,
subd. (g).)

The
effect of these provisions is that an assessment can only be challenged via
mandate proceedings in the superior court after it has been challenged and
upheld in a hearing before a hearing officer.
There appears to be no explicit authority, however, on the question of
whether the same is true for a redetermination
issued by the DLSE after proceedings before the hearing officer have already
taken place. Is the contractor required
to request a second hearing before the hearing officer? In this case, the Director apparently assumed
that would be the proper procedure. The
Director’s decision stated that if the DLSE issues a new penalty assessment,
“Truxell shall have the right to request review in accordance with
section 1742, and may request such review directly with the Hearing
Officer, who shall retain jurisdiction for this purpose.”

Truxell
says it did not request a hearing to review the redetermination because it was
required to file its writ petition in the superior court within 45 days after
the Director issued his decision. When
the DLSE issued the redetermination on March 16, 2009, a month had already
passed since the Director issued his decision.
If Truxell had requested another hearing before the hearing officer,
some period of time would have been necessary for scheduling the hearing, and
then after the hearing the Director would have had 45 days to issue a
decision. Truxell therefore argues that
if it were required to go through a hearing to review the redetermination, it
would have lost its opportunity for review in the superior court.

We
reject Truxell’s argument.
Section 1742 makes it clear that the Legislature intended the
DLSE’s assessments to be reviewed by a hearing officer before being presented
to the superior court. This case
illustrates the wisdom of that policy.
The penalty assessment following the redetermination incorporates the
Director’s decision by reference but otherwise gives no reasons for the new
assessment of $35 per violation. Without
the record of a hearing on the penalty redetermination, there was nothing for
the superior court to review, and there is nothing for us to review. We cannot make a reasoned decision about
whether the DLSE abused its discretion under these circumstances. This tends to show that it would be
inconsistent with the scheme set up by section 1742 if we were to hold
that a contractor can proceed directly from a redetermination to the superior
court, with no intervening hearing. We
will not reach this conclusion, and instead agree with the agency that Truxell
has forfeited this issue.

Truxell
could have preserved its rights by requesting a hearing and filing a writ petition simultaneously. If it had done so, we (and the superior
court) would have had to choose between two rules: (1) the rule that a hearing before the hearing
officer must occur on all issues before a writ petition can be heard, so the
petition must be dismissed, the 45-day period for filing must be tolled during
the pendency of the hearing on the penalty redetermination, and Truxell must
re-file its writ petition after that hearing; or (2) the rule that writ
petitions on separate issues can proceed separately, so the issues on which the
hearing before the hearing officer was completed can be decided now, and the
penalty redetermination issue can be decided in new writ proceedings after the
hearing on that issue is completed.
Either of these rules would preserve the principle that
section 1742 requires a hearing with a hearing officer before court
proceedings take place on a given issue.
As it is, we need not make the choice, because Truxell has not preserved
the possibility of a hearing before a hearing officer on the penalty
redetermination issue.

Truxell’s
only argument about the section 1813 penalties is that they should be
vacated because the underlying wage assessment was not supported by substantial
evidence. We have rejected that
argument.



DISPOSITION

The
judgment is reversed and the case is remanded to the superior court. The court shall issue a writ of mandate
ordering the Director to issue a new order vacating the award of liquidated
damages but otherwise affirming the Director’s decision to uphold the DLSE’s
assessment. The parties shall bear their
own costs on appeal.



_____________________

Wiseman,
Acting P.J.



WE CONCUR:





_____________________


Cornell, J.





_____________________

Kane,
J.