Free Proposed Findings of Fact - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 03-D-2474 (PAC)

CHARLOTTE SCHNEIDER AND DEAN WYMER, Plaintiffs, v. LANDVEST CORPORATION, a Kansas corporation, and DAVID MASON, individually, Defendants.

DEFENDANTS' PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW _____________________________________________________________________________ FINDINGS OF FACT A. 1. Parties Landvest Corporation is a Kansas Corporation which manages self storage space. The

50-plus facilities managed by Landvest Corporation are located in Colorado, Kansas, Louisiana, Missouri, New Mexico, Ohio and Texas. [Doc. 67, Approving Final PTO; PTO: p. 5, ¶ 6.] 2. At all times relevant to this action the Defendant corporation was doing business in

Colorado. [Doc. 67, Approving Final PTO; PTO: p. 5, ¶ 7.] 3. Charlotte Schneider and Dean Wymer are natural persons who resides in El Paso

County, Colorado. [Doc. 67, Approving Final PTO; PTO: p. 5, ¶ 1, 3.] 4. Schneider and Wymer were employed by the Defendant, Landvest Corporation, as

resident managers of a storage facility located at 10601 Iliff, Aurora, Colorado from April 10, 2002 until April 4, 2003. [Doc. 67, Approving Final PTO; PTO: p. 5, ¶ 2, 4.]

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B. 5.

Plaintiffs' Agreed Job Responsibilities At the time of their hire, on April 10, 2002, Schneider and Wymer signed a joint

Managers Employment Agreement which set forth the terms of their employment, duties and compensation. [A0004.] 6. Soon thereafter, they signed a revised joint Managers Employment Agreement dated

July 23, 2002 (" Agreement" This contract was substantially similar to their April 2002 contract July ). setting forth the terms of their employment, duties and compensation. [A0005.] 7. Pursuant to the July Agreement, Schneider and Wymer agreed and understood that

they were to perform, collectively, the following duties, as set forth in the July Agreement: 1. 2. Direct leasing to new tenants [and meet and greet customers]. . .. Generally promoting the rental space, by responding to phone calls, marketing to outside businesses, distributing informational leaflets to area businesses and apartment complexes, campaigning perspective tenants by phone and encouraging tenants to help through word-of-mouth efforts. Helping tenants solve problems; taking care of complaints. Handling " books," keeping track of the fact about tenants, who are planning local i.e. to move in or move out, on what dates, who has which unit, which units are vacant, accepting rental payments when necessary, and reminding tenants to make their payments by phone or written correspondence. Maintaining the mini warehouse complex in good condition and good order, keeping the areas swept clean, taking care of the public facilities, such as the restroom, and cleaning any units vacated in an untidy condition; Following office instructions to lock out any tenants listed as delinquent in rental payments. Collecting payments in arrears from locked-out tenants, and reopening the units restored to a current status. Conducting a regular, but unscheduled surveillance at least six times each day of the entire complex, watching to see that unauthorized persons are not allowed to remain on the premises; keeping an eye on the tenants to see that they do not interfere with each other'activities. s Providing security for the complex by ascertaining that the outside gates are locked and unlocked on schedule; or that the computerized security system is on and working properly. Making sure exterior lights and signs function correctly at night.

3. 4.

5.

6. 7. 8.

9.

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Examining perimeter protection, such as fencing to see that it is functional; phoning the police or fire department in case of an emergency. 10. Representing the Home Office/developer to the public; creating a favorable image of the entire operation to tenants and prospective tenants, thereby helping accomplish the overall objectives of the mini-storage project.

[Schneider Depo. p. 195:24-196:10; A0004-006.] 8. As part of their job responsibilities, Schneider and Wymer were trained and agreed that

they were to " devote their entire time, attention and energies to the business of the Employer" not by engaging in any other full-time business activity. [Cramer Depo. 44:8-17; A0004-002.] 9. Plaintiffs were free, however, to engage in part-time work or outside of their

employment with Landvest. Plaintiffs were aware of this because they knew other resident managers in the Denver area who held part-time employment outside of Landvest. The managers at the Holly facility in Denver are one such example. [Murray Depo. 33:3-11.] 10. 11. Landvest did not require them to be on-site at all times. [Cramer Depo. 44:8-17.] In fact, Landvest only required one of the team managers to be on-site during the

scheduled office hours. [Murray Depo. 30:24-31:6.] 12. This did not necessarily mean that Plaintiffs were required to be in the office during the

scheduled office hours. [Trial Transcript _______.] 13. Landvest expected them to also perform the regular responsibilities of showing storage

space, picking up the grounds, maintaining the storage units, and conducting unscheduled surveillance of the property which required them to work outside of the office. [Trial Transcript _______.] 14. Schneider and Wymer were trained and understood that when there were no

customers in the office, they could perform their duties outside of the office or could easily walk into the apartment and engage in activities not associated with work. Their only responsibility in manning the office was to make sure that they answered the phone within a reasonable number of rings,

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greeted any and all people who came through the front door, and completed the required daily paperwork for the site. [Cramer Depo. 38:16:13; Mason Depo. ______.] 15. Cramer specifically trained Schneider that she was not required to be in the office

during the hours that the business was open, she could either be in her apartment or in her office and she was allowed to keep the door open between the two during working hours. [Cramer Depo. 39:20-40:8.] 16. Many resident managers, including Plaintiffs, had a bell in the office that customers

could ring to alert the manager if he or she was in the apartment. [Trial Transcript _______.] 17. In addition, the home office distributed a sign to resident managers that they could

post on the door if they were on-site but doing other things, indicating that the manager is unavailable but will return. [Murray Depo. 38:7-15; Mason Depo. _____.] 18. Resident managers, including Plaintiffs, also had cordless telephones so that they could

answer incoming calls while they are away from the office. [Murray 38:16-19.] D. 19. Plaintiffs' Agreed Compensation Pursuant to the Managers Agreement, Schneider and Wymer agreed that, in exchange

for performing their duties under the agreement, they would receive a combined annual salary of $21,600, or $10,800 each1 [A0005.] 20. This salary rate did not include the value of lodging because it was a condition of

employment. Resident managers are required to live on the property. A resident manager cannot live off of the property. [Mason Depo. 33-34.] 21. Landvest paid Schneider and Wymer on a bi-weekly basis. As provided and agreed to

in their Agreement, each were paid a fixed bi-weekly salary of $415.39 as straight time pay for a

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regular workweek of 35 hours. The Agreement set forth that in exchange for this salary, Schneider and Wymer shall collectively " work approximately 44 hours per week but may be called upon to work additional hours as needed," that " but [e]mployees shall not work more than a combined total of 70 hours per week." [A0005-002.] 22. Except in cases of emergencies, however, Schneider and Wymer understood and

agreed that they were not to perform work outside of their scheduled hours in the contract. If there was work that could not be performed, they agreed and understood that they were to inform Landvest of this work. [A0005-002.] 23. " Emergencies" were classified by the contract as " situation [occurring] outside of a

operation hours when it is impossible to reach management personnel and time must be spent to handle the emergency. [A0005-002.] 24. In the event either Plaintiff, individually, worked over 40 hours in a workweek, the

regular rate for purposes of calculating overtime was based on the 35-hour workweek set forth in the agreement. [Trial Transcript _______.] 25. For example, where Schneider worked 45 hours in a workweek, she would be entitled

to her regular salary wage ($207.69), plus $5.94 per hour for five hours ($29.70), plus $8.90 an hour for the remaining five hours ($44.50), for a total of $281.89 for that workweek. [Trial Transcript _______.] 26. At all times during their employment, Landvest compensated Plaintiffs pursuant to this

agreed pay plan. Often times, Plaintiffs were compensated in excess of their agreed salary amount for approved work performed in which they received a flat premium rate for those hours. [Trial Transcript _______.]

1 This does not include compensation for bonuses.

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E. 27.

Adequate Time Records Schneider and Wymer also agreed and understood that it was their responsibility to Their contract clearly spelled out that

maintain accurate time records of work performed.

" Employees shall keep accurate records of work performed."[A0005-0002.] 28. On every timesheet completed by Plaintiffs from their first week of employment to

their last week of employment, Plaintiffs' timesheet contained a certification that signed their timesheet certifying " the above is a correct record of my time worked for the period indicated." that [See, e.g. A0001-0003; A0001-0081; A0002-0004; A0002-0080.] 29. John Cramer trained Schneider and Wymer, along with other resident managers, in

how to fill out their time sheets. He trained them consistent with the training that he received, which was to fill out the actual hours worked by the resident manager on the time sheet. [Cramer Depo. 20:4-21:2.] 30. Plaintiffs did in fact keep daily time records and submitted these to Defendant

Landvest bi-weekly. [See generally, Trial Exhibits A0001 and A0002.] 31. At all times, Plaintiffs were compensated for all hours worked. [See generally, Trial

Exhibits A0001 and A0002.] 32. During each week of employment, Plaintiffs received their regular salary pay, and, in

most instances where they recorded hours outside of their normal scheduled office hours for training, late lease or an emergency, they received additional compensation for this straight time at a premium rate. [See generally, Trial Exhibits A0001 and A0002.] 33. There were occasions where Schneider and Wymer worked only their scheduled office

hours for a total of 22 hours per week (or 44 hours bi-weekly). [A0001 and A0002.]

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34.

There were also occasions where Schneider and Wymer worked and recorded hours in

addition to their scheduled office hours up to 35 hours per week. [A0001 and A0002.]2 35. In both instances, where Plaintiffs worked and submitted time records for up to 35

hours per week each (or 70 hours total), they were compensated their regular salary wage of $415.39. [A0001 and A0002.] 36. Plaintiffs' workweek was Monday through Sunday. They each had one scheduled day

off during the week. If they were required to work Sundays, the office was only open for 4 hours. They generally each recorded 2 hours on Sundays. [A0001 and A0002.] 37. As a reward for doing a good job of leasing units, Plaintiffs were not required to work

Sundays if they achieved a high occupancy at the site. Regardless of whether a manager worked on Sundays, he or she still received the fixed salary wage. [Mason Depo. 41:13-23.] 38. Plaintiffs, however, routinely worked on Sundays because their site was not

performing as well as it should have been. [Mason Depo. 41:13-23.] 39. As an incentive and a reward for working beyond their normal scheduled hours,

Landvest compensated its resident managers, in addition to their salary wage, an hourly premium rate wage for approved straight-time work performed. Such work included attending training or working on a scheduled day off or where they had to work additional hours due to an " emergency" [Trial .3 Transcript _______.] 40. The premium pay was a flat rate of $14.16 per hour for approved hours. This rate was

pre-determined as a set amount for all resident managers employed at Landvest during that period regardless of their salary rate. This figure was picked so that it would be high enough to cover the

2 See A0001-0019; A0001-0022; A0002-0020; A0002-0023 3" Premium pay" was termed " overtime pay" Plaintiffs' on timesheets and pay stubs although it was not necessarily an overtime rate as calculated under the FLSA.

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minimum regular and/or overtime rate for all employees, regardless of their salary, as well as any other type of compensation such as the residence. [Mason Depo. 107:13:18.] 41. " Premium pay" reflected on Plaintiffs' stubs in the " was pay overtime" column as there

was no other place to indicate this additional payment on their paycheck. [Trial Transcript _______.] 42. Plaintiffs were employed by Landvest for a total of 52 calendar weeks. Plaintiffs did

not work an entire workweek (Sunday through Monday), the first or last weeks of their employment. [Trial Transcript _______.] 43. Out of the 50 calendar weeks where Schneider and Weimer worked the entire

workweek, Schneider recorded work performed outside of the 22 scheduled office hours in 22 of those weeks. [A0001.]4 44. In all but seven of those 22 weeks, Schneider received a flat premium pay rate of

$14.16 an hour for each hour worked over 22 hours a week for working her day off, training or other special " emergency" situations. [A0001.] 45. During those remaining seven weeks, Schneider was not paid a premium rate for a

total of 26.5 hours as those hours were not considered hours eligible for the premium pay. [A0001.] 46. Regardless, Schneider was paid her salary wage for each workweek worked for all

time worked up to 35 hours. There were only two weeks where Schneider recorded more than 35 hours in one workweek. During those weeks, Schneider'premium pay sufficiently compensated s Schneider for her regular and overtime rate for those hours worked that were not covered under her salary wage. [A0001.]5

4 See A0001-0006; A0001-0009; A0001-0012; A0001-0017; A0001-0020; A0001-0023; A0001-0029; A0001-0032; A0001-0035; A0001-0038; A0001-0044; A0001-0053; A0001-0056; A0001-0062; A0001-0066; A0001-0069; A00010078; A0002-0007; A0002-0010; A0002-0021; A0002-0024; A0002-0033; A0002-0036; A0002-0045; A0002-0056; A0002-0062; A0002-0054; and A0002-0077. 5 See A0001-0004 through A0001-0006; A0001-0021 through A0001-0023.

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47.

The first week ended May 5, 2002, and Schneider recorded 20 hours in addition to her

regularly scheduled 22 hours. She was paid a premium rate of $14.16 an hour for these 20 hours worked and recorded. [A0001.]6 48. The second week ended July 7, 2002, and Schneider recorded a total of 13.5 hours in

addition to her regularly scheduled 22 hours. She was paid a premium rate of $14.16 an hour for 9.5 hours where she was engaged in training. Although Schneider did not receive a premium rate for 4 of the additional recorded hours, these hours were considered part of her regular duties " to the 35 up hours" which she received her regular salary compensation for. [A0001.]7 49. Similarly, out of the 50 calendar weeks where Weimer worked the entire workweek,

Wymer recorded work performed outside of the 22 scheduled office hours in 12 of those weeks. [A0002.] 50. In all but one of those 12 weeks, Wymer received a flat premium pay rate of $14.16 an

hour for each hour worked over 22 hours a week for working his day off, training or other special " emergency" situations. [A0002.] 51. The week that Wymer did not receive premium pay, he worked a total of 26 hours.

He was compensated his regular salary wage for these hours worked. [Trial Transcript _______.] 52. On the occasions where Plaintiffs recorded that they worked over 40 hours in a

workweek, they were compensated a premium rate that exceeded the Fair Labor Standards Act minimum requirement of time and one-half of their regular rate of $5.94 an hour. [A0001 and A0002]

6 See A0001-0004 through A0001-0006. 7 See A0001-0021 through A0001-0023.

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E. 53.

Plaintiffs' Claimed Unpaid Wages Notwithstanding the hours that they recorded and submitted to Landvest on their

timesheets, Schneider and Wymer filed separate complaints with the Colorado Department of Labor (" CDOL" after they resigned their employment effective April 4, 2002. [A0022.] ) 54. Schneider claimed that she arrived at the amount of her claim by " adding the additional

(actual hours worked) but forbidden to put down on the time sheet, times the regular hourly rate. Then added the overtime hours worked but denied payment for, times 1 ½ regular hourly rate." [A0022-0001.] 55. Wymer claimed that he " added all hours worked but not allowed to put down on time

sheet times the hourly rate plus the amount of overtime on time sheet that was not paid."[A00220002.] 56. In their complaint to the CDOL, Schneider and Wymer claimed that they each worked

" least 4 hours more per day than allowed to record on our time sheets."" order to operate a at In Security Self Storage facility to Landvest'specifications, it was necessary for us to work 8 hours s each per day."[A0031-0001.] 57. This consisted of working four week days per week from 10:00 a.m. until 6:00 p.m.

and Saturdays from 9:00 a.m. until 5:00 p.m. In addition, they claimed to have worked four hours on every Sunday except one from November, 2002 ­ March 2003. [Trial Transcript _______.] 58. An itemization of Plaintiffs' damages as alleged in their complaint to the CDOL can be

summarized as follows: Schneider Regular Hours 1,092.50 (at $9.44/hr = $10,313.20) Overtime Hours 24.75 Wymer Regular Hours 1,057 (at $9.44/hr = $9,978.08) Overtime Hours 12

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(at $14.16 /hr = $350.46) Total unpaid wages = $10,663.66 [A0021-0001; A0024-0002.] 59.

(at $14.16/hr = $169.92) Total unpaid wages = $10,148.00

Since filing this lawsuit, however, Plaintiffs have expanded their wage claim to include

an additional two to three hours every week after 6:00 p.m. preparing end of day, end of week and end of month reports. [Plaintiffs' Initial Rule 26(a)(1) Disclosures, January 30, 2004.] 60. An itemization of Plaintiffs' damages as alleged in their disclosures after the filing of

this lawsuit can be summarized as follows: Schneider Regular Hours 954 (at $9.44/hr = $9005.76) Overtime Hours 229.50 (at $17.12 /hr = $3,929.04) Total unpaid wages = $12,934.80 Wymer Regular Hours 954 (at $9.44/hr = $9005.76) Overtime Hours 92 (at $17.12/hr = $1,575.04) Total unpaid wages = $10,580.808

[Plaintiffs' Supplemental Rule 26(e) Disclosures, March 15, 2004.] 61. Other than Plaintiffs' complaint made to the CDOL, David Mason, Vice President of

Landvest, was not aware of any other mangers complaining of not being paid for all hours worked or complained about an adjustment of hours made either by a regional manager or by the payroll department at Landvest. [Mason Depo. 24-25.] 62. Plaintiffs were instructed, agreed and understood to write down all hours worked.

They recorded the hours that they worked, which varied from week to week, and submitted a weekly timesheet every two weeks. Plaintiffs were paid according to the time that they submitted on their timesheets. [Trial Transcript _______.] 63. Other than Plaintiffs' timekeeping records of work performed, Landvest had no

knowledge that Plaintiffs' were not properly recording the hours that they were working. Plaintiffs

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were largely unsupervised and entrusted with performing their duties under the agreed hours of operation. [Trial Transcript _______.] 64. Landvest had no reason to suspect that the regular operation of Plaintiffs' facility

required them to work more than the hours that they were recording, let alone more than 40 hours in a single workweek. [Trial Transcript _______.] 65. In fact, it was the experience of prior managers of that facility that under normal

circumstances for any day' work, four hours a day per person, between them, was sufficient to s operate the facility. [Cramer Depo. 24:20-25:9; Murray Depo. 16:17-17:5.] 66. During the time that Plaintiffs were employed with Landvest, resident managers were

required to prepare an end-of-week and end-of-month reports. The end-of-week report was completed once a week and took anywhere from 15 minutes to a half hour to complete. [Murray 31:11-17.] 67. The end-of-month report was completed once a month and would take approximately

30 minutes to complete. [Murray Depo. 31:18-19.] 68. Resident managers were trained to start preparing them enough time before closing so

that if there are any problems, then the service companies are available to help them on the computer end of it. [Murray Depo. 31:20-25.] 69. As a condition of their job, resident managers were required to fax the end-of-week

rental activity report to company headquarters. Normally these are faxed during business hours but there may be occasions where they are set aside to finish up other things and then fax it out. [Murray Depo. 32:8-33:2.]

8 Plaintiffs also claim liquidated damages in the amount of $3,929 for Schneider and $1,575.04 for Wymer for a grand total of $16,863.80 in claimed damages for Schneider and $12,155.84 in claimed damages for Wymer.

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70.

In any event, sending a fax requires minimal time and effort, requiring just a few

seconds to place the fax on the machine and key in the numbers. [Trial Transcript _______.] F. 71. Plaintiffs' Resignation from Employment and Motive for Claim

On March 21, 2003, Plaintiff Wymer sent a hand-written letter of resignation by

facsimile to Neil Murray and David Mason. [A0020-0002.] 72. Plaintiff Wymer informed Murray and Mason that he was giving his two-weeks notice

that he was leaving his position as an Area and Resident Manager, effective Friday, April 4, 2003. [A0020-0002.] 73. Wymer indicated in his resignation letter that one of the reasons for his resignation was

that " David Mason treats all of his ` managers' cruelty, suspicion, and disrespect. Even though with his ` managers' good, hard-working, devoted and responsible people ­ leaves their site only are he after making them feel that their work is never good enough ­ matter how wonderful a job they no are doing."[A0020-0002.] 74. When Murray contacted Wymer to discuss the letter, Wymer was very confrontational

and said that he had been " abused and mistreated as a child and would be damned if he was going to put up with it as a grown man."[A0020-0001.] 75. From this conversation, Murray felt that Wymer " have serious anger problems may

that have the potential for physical confrontation," indicated he would try to take someone with and him as a witness when he went to the site the following day to collect the keys to the office. [A00200001.] 76. In speaking with Wymer, Murray had also discovered that he had faxed his resignation

letter to all resident managers in the Denver area. [A0020-0001.]

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77.

Murray continued publicizing his anger in a public protest of the facility after he left

Landvest. [A0041-001.] 78. Wymer'sudden hostility towards Mason and his attempt to engage other resident s

managers in his coup resulted from Landvest'refusal to restructure Plaintiffs' s compensation in a way that could violate the Fair Labor Standards Act. 79. In April, Schneider made a written request to Murray and Mason that the annual salary

of $21,600 not be divided equally among both of them while making no offer to reduce her hours worked. [A0017-0001.] 80. Schneider explained that the reason for the request was because:

I receive Social Security Disability and Medicare Benefits for a congenital condition called Charcot-Marie-Tooth (a form of Muscular Dystrophy). There is no known cure for this disease and should I have a severe enough relapse of my condition in the future, I would need to depend solely on the Medicare and Disability Benefits. I have checked into several private insurance companies and most will not even consider me a policyholder and all but one would not cover any Preexisting Conditions. Once Medicare or Social Security Disability has dropped you, it is almost impossible to go back on the program. [A0017-0001.] 81. Schneider claimed that previous employers had " legally divided [their] pay unevenly"

and that there would be " legal problems with the situation" long as she was paid enough " be no as to covered by Workers' Compensation."[A0017-0001.] 82. Schneider stressed the urgency of her request and indicated that she needed to " make a

decision within the next 2 months based on the decision you make." She explained that she is " allowed one period of nine months where I am able to make any amount above $700.00 per month before I am dropped by Social Security."According to Schneider, her nine-month period was to end on December 31, 2002. [A0017-0001.]

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83.

Schneider did not receive a response to her request and followed up with a memo to

Mason and Murray that was faxed on December 2, 2002 asking if a decision had been made for her " to be lowered and the difference to be given in Dean'name."[A0018-0001.] pay s 84. On December 17, 2002, Mason, on behalf of Landvest, responded to Schneider' s

request. Mason apologized for not responding sooner and denied Schneider' request. Mason s indicated that, at the advice of counsel, " slanting one Manager' duties would compromise the s minimum wage structure without having to include the value of the apartment as income."[A00190001.] 85. In other words, without decreasing the agreed upon fixed workweek of 35 hours per

manager or 70 hours total, the salary rate could not be reduced. A reduction in the salary without a reduction in the hours worked would bring Schneider'regular rate below minimum wage and in s violation of the Fair Labor Standards Act. [Trial Transcript ___.] 86. 001.] 87. Shortly thereafter Schneider began making arrangements to move off-site and Mason apologized for not being able to accommodate Schneider'request. [A0019s

terminate her employment. This was evident after receiving a request on January 2, 2003 for verification of employment from Fresh Start Mortgage. [A0016-0001.] 88. Given the amount of time to process a mortgage loan and close on a house, the

temporal proximity of Wymer' resignation letter in March was clearly motivated by Landvest' s s refusal in late December to restructure Plaintiffs' plan to allow Schneider to undermine the federal pay wage thresholds set out by the Fair Labor Standards Act, as well as the benefit qualifications under Medicare and Social Security. CONCLUSIONS OF LAW

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I.

FAIR LABOR STANDARDS ACT UNPAID WAGES CLAIM A. Plaintiffs are estopped from bringing a claim for unpaid wages.

Plaintiffs claim they worked hours in excess of those recorded on their weekly time sheets. Plaintiffs also claim they are entitled to pay for hours worked in excess of 22 per week. Landvest disputes both of these contentions. However, even assuming plaintiffs' allegations to be true, they are estopped from bringing a claim for unpaid wages. Plaintiffs admit they have affirmatively

misrepresented to Landvest the number of hours they worked. Landvest relied upon plaintiffs' misrepresentations when determining the amount of compensation to which plaintiffs were entitled. Plaintiffs are estopped from bringing their claim for unpaid wages, and it must fail. Estoppel principles may be applied to bar claims in FLSA actions. See Bowe v. SMC Elec. Products, Inc., 935 F. Supp. 1126, 1135-36 (D. Colo. 1996) (considering defendant' estoppel s defense); Brumbelow v. Quality Mills, Inc., 462 F.2d 1324, 1327 (5th Cir. 1972) (applying estoppel defense to bar claim); Banks v. City of Springfield, 959 F. Supp. 972, 979-80 (C.D. Ill. 1997). To succeed on an estoppel defense, an employer must show (1) a misrepresentation by the other party and (2) that it reasonably relied upon the misrepresentation. Courts generally will not estop an employee from claiming compensation for unreported overtime where the employer knew or should have known of the overtime work or told the employee not to report the overtime. Abel v. Kansas Dep'of Corrections, 2 WH Cases 2d 1550, 1554 (D. Kan. 1995); Reich v. Department of Conser. & t Natural Resources, 28 F.3d 1076, 1081-84, (11th Cir. 1994). However, when an employee misleads or deceives an employer who reasonably relies on the employee'deception, the employee is estopped s from asserting the claim. See L.S. Teliier, Conduct of Employees as Estopping Them from Asserting Claim for Overtime Compensation or Liquidated Damages Under the Fair Labor Standards Act, 162 A.L.R. 305 (1946).

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Only for purposes of establishing this defense, Landvest concedes the very thing plaintiffs must prove to succeed on their FLSA claims ­ that plaintiffs made a misrepresentation to Landvest. In their complaint, plaintiffs admit they " routinely under-reported the hours they worked," only " of fear for their jobs and home."They have no evidence to suggest that but out they or any other Landvest employee risked losing their jobs or home for accurately reporting the number of hours worked. Landvest easily proves a misrepresentation by plaintiffs, and hence satisfies the first element of its estoppel defense. Landvest can also prove it relied upon plaintiffs' misrepresentation. When they started working for Landvest, Plaintiffs signed a contract agreeing to keep accurate records of work performed. Plaintiffs thereafter submitted time records on a bi-weekly basis and were paid based on the hours they recorded. Without supervising plaintiffs daily, Landvest had to rely upon these timesheets in determining what it owed plaintiffs. Landvest had no reason to question plaintiffs' time entries until plaintiffs claimed unpaid wages through the CDOL. Plaintiffs never informed Landvest management that they were not being paid for all hours worked. Plaintiffs deceived Landvest and Landvest reasonably relied upon their deception. Landvest satisfies both elements of an estoppel defense. Plaintiffs are estopped from asserting their claim for unpaid wages, and this claim should be dismissed.

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B.

Plaintiffs Cannot Establish a Prima Facie Case of Unpaid Wages

Plaintiffs do not meet their burden of establishing that Landvest either knew of the hours they worked or actually owed them anything. They do not make their prima facie showing of unpaid wages, and their claim must be dismissed. The party asserting a wage claim bears the burden of proving by a preponderance of the evidence all elements necessary to establish a violation of the FLSA. The burden of production does not shift to the employer unless the claimant first establishes a prima facie violation of the FLSA. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 6 WH Cases 83 (1946); Bowe v. SMC Electrical Products, Inc., 916 F. Supp. 1066 (D. Colo. 1996). Landvest can satisfy its burden of

production, and plaintiffs' claim then fails unless they can demonstrate pretext by a preponderance of the evidence. To establish a prima facie wage claim, Plaintiffs must show the following: (1) they were employed by Landvest; (2) that they performed work sufficiently connected to interstate commerce to establish coverage under the Act; (3) that Landvest had constructive or actual knowledge of overtime worked or unpaid wages in violation of the Act; and (4) that they were not properly compensated under the Act in some amount of capable of supporting a just and reasonable inference. Murray v. Stuckey' Inc., 939 F.2d 614, 621, 30 WH Cases 705 (8th Cir. 1991), cert. denied, 502 U.S. 1073 s, (1992) (plaintiff in falsified records case must present prima facie case of unpaid overtime before burden of production shifts to defendant). Because plaintiffs cannot meet their prima facie burden under the FLSA, their claims for unpaid wages must fail. Plaintiffs fail on the third element of their prima facie case because there is no evidence of knowledge of the employer of the hours worked. To the contrary, Plaintiffs were instructed from their first day work to " keep accurate records of work performed" pursuant to their Employment

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Contract. Plaintiffs thereafter submitted time records on a bi-weekly basis and were paid based on the hours they recorded. Without supervising plaintiffs daily, Landvest had no choice but to rely upon the timesheets submitted by plaintiffs. Plaintiffs rely upon their own testimony to attempt to show they " understood" " or were instructed" only record 4 hours a day or 22 hours a week. They would have the Court believe they to were good employees just following instructions " of fear for their jobs and home."However, out their timesheets do not reflect this fear. As previously summarized, for 22 of the 50 weeks she worked, Schneider submitted more than 22 hours per week. Of 12 of the 50 weeks he worked, Wymer submitted more than 22 hours per week. Plaintiffs' contention that they were just following instructions is undermined by the fact they did not follow the alleged instructions, and still placed themselves within the zone of danger they purport existed. Plaintiffs also fail to demonstrate they were not properly compensated for hours they worked, and hence fail to establish the fourth element of their prima facie case. Where an employee brings suit under Section 16(b) of the Act for unpaid minimum wages or overtime, he " the burden of has providing that he performed work for which he was not properly compensated."Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687, 6 WH Cases 83 (1946). Plaintiffs claim they underreported the hours they worked because they were instructed to do so. An equally plausible explanation is that plaintiffs reported exactly the hours they worked, and contrived these mysterious instructions for purposes of this lawsuit. As noted above, the fact that plaintiffs often reported more than 22 hours despite alleged instructions not to do so conflicts with their claim that such instructions were ever given. Plaintiffs, whose credibility is undermined by the fact that they lied on their timesheets, offer no proof besides their own self-serving testimony that they worked any hours for

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which Landvest did not compensate them. They hence fail to sufficiently establish the fourth element of their prima facie showing, and their claims must fail. Accordingly, Plaintiffs cannot meet their burden of proof and establish that Landvest knew or had reason to believe that the information was inaccurate. Plaintiffs' claim for unpaid wages should, therefore, be dismissed. See McKnight v. Kimberly Clark Corp., 149 F.3d 1125, (10th Cir. 1998) (holding that the employee'failure to adequately record claimed overtime is " s fatal" a later claim to for that time of the company has no reason to be aware of it). Assuming plaintiffs are able to demonstrate a prima facie case of an FLSA violation, Landvest satisfies its burden of production. Landvest did not pay plaintiffs for the work they allegedly performed because Landvest relied on plaintiffs' timesheets and did not know plaintiffs were eligible for additional compensation. For the reasons discussed above, plaintiffs cannot establish pretext. C. Defendants maintained adequate or accurate time records.

Should this court determine that Plaintiffs have met their prima facie case, the burden of production shifts to the employer to negate inferences of that the employer has failed to keep adequate or accurate records. Once this inference is established, " burden then shifts to the employer to come forward the with evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference to be drawn from the employee'evidence."Id. at 687-88. If the employee produces s evidence sufficient to establish the inference, and the employer fails to rebut that inference, the employee is entitled to damages, and the employer cannot complain that the damages are speculative, because the impreciseness of the damage claim stems from the employer'deficient records. Id. at s 688.

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Plaintiff Schneider claims that she worked 4 week days per week from 10:00 a.m. until 6:00 p.m. and Saturdays from 9:00 a.m. until 5:00 p.m. In addition, she worked four hours on every Sunday except one from November, 2002 through March, 2003. Finally, since filing this lawsuit, Plaintiff Schneider now claims that she worked between two and three hours every week after 6:00 p.m. performing her job responsibilities. Plaintiff Wymer makes a similar damage claim for unpaid wages but has not broken down his calculation of unpaid overtime. For each week worked, Plaintiffs filled out a daily timesheet and a bi-weekly summary of the time worked. Plaintiffs certified on each of their daily timesheets that the recorded time was " a correct record of my time worked for the period indicated." Although many of the timesheets reflected four hours each day for each, there were many weeks where one or both Plaintiffs recorded additional hours worked for all types of reasons. There were computer malfunctions, late leases, training and days worked because there was no relief manager. Some of Plaintiffs' explanations on their timesheets included " relief manager had difficulties,"" EOM" " , sale unit with special circumstances & relief mgr difficulties," NSF check research," " " and problematic tenant ­began eviction proceedings."Despite Plaintiffs' claim that it was clear from a " pattern" time that they of were not recording all hours worked, Plaintiffs' timesheets gave the opposite impression. In fact, Plaintiff Schneider' submission of as many as 20 hours in addition to the business office hours s worked were a clear indication that she was recording all hours worked. In fact, clear up to the last week work Schneider was recording additional hours worked. Her last time sheet showed an additional 5.5 hours worked for late leases, late payers, vacates and preparing forms. [A0001-0081.] Plaintiffs now contend that they were instructed to only write down four hours regardless of the number of hours worked. If they were in fact instructed this, they clearly did not follow it. They also claim that they complained of not being paid for all hours worked during their employment.

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However, Landvest had no knowledge that Plaintiffs were not being compensated for all hours worked. Plaintiffs were unsupervised and entrusted to record all hours worked as instructed in their employment agreement, training and on their timesheets. Landvest relied upon these timesheets and paid Plaintiffs according to their hours recorded. D. Plaintiffs were paid a minimum wage and properly compensated for overtime pursuant to the FLSA. 1. Plaintiffs were compensated for all straight and overtime hours worked pursuant to their agreed fixed workweek pay plan as set forth in their contract of employment The Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219 requires, in its simplest form, payment of a minimum wage and an overtime premium. Currently, the minimum wage for non-exempt employees is $5.15 per hour. 29 U.S.C. § 206(a)(1). An employer is not required to pay an employee on an hourly basis, rather, the employee'pay, whether it is based on a salary, s piece work or other method of payment, must equal or exceed the required minimum wage for all hours worked. 29 U.S.C. § 206(a)(1); 29 C.F.R. § 778.109. It is necessary to compute the regular hourly rate of such employees during each workweek. 29 C.F.R. 778.109. According to Section 778.109 of the Code of Federal Regulations, " regular hourly rate of pay of an the employee is determined by dividing his total renumeration for employment in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid." Where, as here, an employee is paid a fixed salary for up to 35 hours of work in a workweek, the employee is guaranteed a fixed amount as straight time pay for the number of hours which the salary is intended to compensate. C.F.R. 778.113(a). .

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The federal regulations provide the following illustration that mirrors the present payment arrangement between Plaintiffs and Landvest: If the employee is hired at a salary of $182.70 and if it is understood that this salary is compensation for a regular workweek of 35 hours, the employee'regular rate of pay s is $182.70 divided by 35 hours, or $5.22 an hour, and when he works overtime he is entitled to receive $5.22 for each of the first 40 hours and $7.83 (one and one-half times $5.22) for each hour thereafter. 29 C.F.R. 778.113(a). Applying this formula to Schneider and Wymer'employment, they contracted with Landvest s for an annual combined salary of $21,600 or $10,800 each (exclusive of bonuses, lodging and benefits). Pursuant to their employment agreement, they agreed to work approximately 44 hours per week but in no event, " more than a combined total of 70 hours per week" They could be called no . upon to work additional hours as needed and agreed to be available during the scheduled office hours.

Thus, based on the plain language of the contract, it was understood that, as of January 20, 2003, they were each earning a salary of $10,800 per year (or $207.69 per week) and that this salary was compensation for a regular workweek of 35 hours. Accordingly, their regular rate of pay is calculated by taking the weekly wage of $207.69 divided by 35 hours, or $5.93 an hour. When either works overtime, they are each entitled to their salary wage plus $5.93 an hour for any straight time hours worked over 35 hours. The overtime rate is then calculated at one and one-half times this regular rate of $5.93. Therefore, any hours over 40 worked in a workweek would be compensated no less than $8.90. Despite Plaintiffs' potential for overtime, Schneider only recorded working more than 40 hours in a workweek on one occasion. That workweek, ending May 5, 2002, Schneider recorded 22 regular hours and an additional 20 hours in the " column. She received her regular salary of OT"

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$207.699, plus $283.20 of " overtime" This additional pay of $283.20 was premium pay at a flat rate . of $14.16 an hour for the entire 20 hours. The $14.16 flat rate was pre-determined as a set amount for all resident managers employed at Landvest during that period regardless of their salary rate. This figure was picked so that it would be high enough to cover the minimum regular and/or overtime rate for all employees, regardless of their salary, as well as any other type of compensation such as the residence. Accordingly, not only was Schneider paid for all hours worked, she received more compensation than she was entitled to under the wage and hour laws. In most instances where Plaintiffs worked beyond the office hours, Plaintiffs received a premium rate of $14.16 for those hours. Out of 22 workweeks that Schneider recorded hours in addition to her office hours worked, there were only nine workweeks that she did not receive premium pay for all additional hours recorded. Out of those nine workweeks, Schneider worked more than the contracted 35 hours only one workweek. That week, she recorded a total of 13.5 hours in addition to the 22 business hours worked for a total of 35.5 hours. She received her salary wage, plus 9.5 hours of premium pay at $14.16 an hour ($134.52). Accordingly, Schneider received her salary wage for the agreed upon 35 hours and therefore was only entitled to her regular rate of pay for .5 hours at $5.94 an hour. Landvest, however, approved 9.5 hours of premium pay and compensated her an additional $134.52, giving her $128.58 more than she was entitled to under wage and hour laws. For each of the remaining eight workweeks that Schneider recorded hours in addition to 22 but did not receive premium pay for each hour worked, Schneider worked a total of less than 35 hours for that workweek. Accordingly, despite being denied premium pay, she was not entitled to

9 Plaintiffs are paid bi-weekly. Accordingly, Plaintiffs' paycheck stub reflects $415.39 as the salaried amount paid for the two-week period.

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any additional compensation pursuant to her contract as she was paid her regular salary for these hours. Obviously, because Plaintiff did not work more than 40 hours during any of these nine workweeks that she is claiming we " refused"her overtime, she is not entitled to overtime compensation. Plaintiffs' records and pay checks clearly established not only that they were paid for all time straight-time and overtime hours worked, but they were paid at a rate which exceeded both their regular and overtime rate as required by the FLSA. 2. Plaintiffs were properly compensated under either a fixed or a fluctuating workweek salary pay plan. Plaintiffs' contract is clear that they agreed to be paid on a salary basis for a minimum of 44 hours or 70 hours per week, combined for both managers. Even if Plaintiffs were confused as to how their regular rate was calculated for purposes of determining their regular or overtime rate, Plaintiffs' regular rate remains the same under either a fluctuating or a fixed workweek pay plan if they work more than 35 hours. Anything less than 35 hours Plaintiffs were compensated for in their salary wage. II. BREACH OF CONTRACT A. Kansas Law Governs Plaintiffs' Breach of Contract Claim

The governing contract provides it " be governed by and constructed in accordance with shall the laws of the State of Kansas."" making choice of law determinations, a federal court sitting in In diversity must apply the choice of law provisions of the forum state in which it is sitting. This is true even when choice of law provisions involve the interpretation of contract provisions." Shearson Lehman Brothers v. M & L Investments, 10 F.3d 1510, 1514 (10th Cir. 1993). (applying Utah law to

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determine if Delaware choice of law provision was applicable). Hence, Colorado law is applied to determine if Kansas law will govern the contract. Colorado courts apply the law chosen by the contracting parties unless applying such state'law would be contrary to the fundamental policy of s the State of Colorado. Hansen v. GAB Business Services, 876 P.2d 112, 113 (Col. App. 1994) (citing Woods Bros. Homes, Inc. v. Walker Adjustment Bureau, 198 Colo. 444, 601 P.2d 1369 (1979); Power Motive Corp. v. Mannesmann Demag Corp., 617 F.Supp. 1048 (D. Colo. 1985)). Kansas contract law is not contrary to the fundamental policy of the State of Colorado, and the choice of law provision is valid. Kansas law governs the parties' contract. B. The Terms of Plaintiffs' Employment Contract

On April 10, 2002, plaintiffs entered into an employment contract (" Contract"with Landvest. ) Within their proposed findings of fact, plaintiffs allege " Before signing the contract, Mr. Cramer reviewed the contract with them."They further allege that during and prior to this review, Mr. Cramer made certain representations to them regarding the terms of their employment and compensation. In any event, they allege no representations regarding compensation that occurred after contract formation. The Contract contains the following integration clause: This Agreement contains the entire understanding among the parties and supersedes any prior understandings between them regarding the within subject matter. There are no representations, agreement, or understandings, oral or written, between or among the parties relating to the subject matter hereof which are not fully expressed herein. If a written instrument is not ambiguous and can be carried out as written, courts should not deviate from its terms or substitute an alternative construction. Decatur County Feed Yard, Inc. v. Fahey, 266 Kan. 999, 1005, 974 P.2d 569 (1999); Butts v. Lawrence, 22 Kan.App.2d 468, Syl. 10, 919 P.2d 363 (1996). " contract is ambiguous when the words used to express the A

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intention of the parties may be understood to reach two or more possible meanings."Butts, 22 Kan.App.2d at 473. " primary rule when interpreting a written contract is to ascertain the intent of the The parties."Marquis v. State Farm Fire & Cas. Co., 265 Kan. 317, 324, 961 P.2d 1213 (1998). " interpretation of a contractual provision should not be reached merely by isolating one An particular sentence or provision, but by construing and considering the entire instrument from its four corners. The law favors reasonable interpretations, and results which vitiate the purpose of the terms of the agreement to an absurdity should be avoided."Saathoff v. Data Systems Intern., Inc., 83 P.3d 1270, 2004 WL 292103, **3 (Kan. App.) (Kan. App. 2004) (citing Johnson County Bank v. Ross, 28 Kan. App. 2d 8, 10-11, 13 P.3d 351 (2000)). Plaintiffs allege the following Contract language is ambiguous: In performance of the duties herein described, Employees shall not work more than a combined total of 70 hours per week. Employees shall work approximately 44 hours per week but may be called upon to work additional hours as needed. The quoted language is not ambiguous. It is a single paragraph within the Contract. The first sentence refers to an allowable " combined total" number of 70 hours the two plaintiffs could work; plaintiffs do not allege the first sentence is ambiguous. Plaintiffs allege the second sentence ­ " Employees shall work approximately 44 hours per week" is ambiguous because it is allegedly ­ unclear whether Landvest expected each employee to work 44 hours or 22 hours per week. If Landvest required each of the plaintiffs to work 44 hours per week, the plaintiffs'combined total" " would be 88 hours. Eighty-eight hours exceeds 70 hours ­the Contract would contradict itself within the short span of consecutive sentences. There is no ambiguity where, of two possible contractual interpretations, one results in absurdity and one does not. See Johnson County Bank v. Ross, 28 Kan. App. 2d 8, 10-11, 13 P.3d 351 (2000).

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Plaintiffs also claim the Contract is ambiguous as to " how hours over 22 would be compensated." The Contract is an employment contract. Within that context, employees are commonly ­ usually ­ denominated either " salaried" " or hourly."See 29 C.F.R. § 776.5; 29 C.F.R. § 778.117. The Contract is clearly one for salaried employment insofar as it provides for an annual salary and states plaintiffs must work approximately 44 hours per week to fulfill their job duties. The Contract delineates the parties' complete agreement as to compensation ­ discusses an annual salary, a rent it credit for the Residence, and overtime provisions. If the parties had contemplated an hourly wage provision for work over 22 hours, such language clearly would have been included in the Contract. There is no such provision because the parties did not intend for plaintiffs to receive additional compensation for work over 22 hours. Because the Contract is an integrated agreement, contains an integration clause, and is not ambiguous, the Court should not consider parol evidence of prior representations. The parties' entire agreement regarding employment terms and compensation is captured within the April 10, 2002 Contract. It provides, in relevant part, the following: a. Landvest shall pay plaintiffs a collective annual salary of $21,600 in cash and $4500 in rent credit. b. c. d. Plaintiffs shall not work more than 70 hours per week. Plaintiffs shall keep accurate time records of work performed. Plaintiffs shall only work overtime in the event of emergencies.

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C.

Landvest Did Not Breach The Contract with Plaintiffs

In Kansas, the essential elements of an action based on a contract are as follows: 1) the existence of a contract between the parties; 2) sufficient consideration to support the contract; 3) the plaintiff'performance or willingness to perform in compliance with the contract; 4) the defendant' s s breach of the contract; and 5) damages to plaintiff caused by the breach. Commerical Credit Corporation v. Harris, 212 Kan. 310, Syl. ¶ 2, 510 P.2d 1322 (1973). Landvest did not breach the contract. It paid plaintiffs their annual salary as promised within the Contract. When plaintiffs worked in excess of 40 hours, Landvest paid them overtime pursuant to federal law. Plaintiffs fail on the fourth element of their breach of contract claim. Even assuming plaintiffs' allegations to be true, they did not perform in compliance with the contract and fail on the third element of their breach of contract claim. Plaintiffs worked in excess of 70 hours per week in violation of the Contract. Plaintiffs did not submit accurate time records for work performed. II. CALCULATION OF DAMAGES A. Plaintiffs are not entitled to a regular rate inclusive of the value of their lodging..

Under the FLSA, where an employee is paid under a " fixed workweek" salary pay plan, the employee'overtime rate must be calculated based on the " s regular rate."In establishing the regular rate, the value of lodging is generally included in this rate. Where, however, the benefit of the lodging is attributed to the employer and not the employee, the cost of lodging shall not be considered part of the employee'wages or regular rate of pay. Who receives the benefit is a question of fact based on a s number of variables, including whether or not the employee is required to live at the provided housing. Here, because resident managers are required to reside at the storage facilities as a condition

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of their employment and their residence at the facility directly benefits Landvest, the value of their lodging would not need to be included in their regular rate for purposes of overtime compensation. 1. Value of Plaintiffs' Lodging is Not Included In the Computation of the Regular Rate

The FLSA defines the regular rate to include all renumeration for employment paid to an employee, except for certain payments that are expressly defined and set forth in the statute. 29 U.S.C. § 207(e). It has been held that " unless a benefit paid to an employee falls within one of these statutory exclusions, it must be included in determining the employee' regular rate." See s McLaughlin v. Quan, 1988 WL 62595, *4 (D. Colo., June 17, 1988) (citing to 29 C.F.R. § 778.200(c) (1987); 2 Lab. L. Rep. (CCH) ¶ 25,510, 25,510.40. " Wages" defined under 29 U.S.C. 203(m) which provides in pertinent part: are " Wage"paid to any employee includes the reasonable cost, as determined by the Administrator, to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging or other facilities are customarily furnished by such employer to his employees. The Code of Federal Regulations speaks to the calculation of the " reasonable cost" the of lodging, providing that: The term reasonable cost as used in section 3(m) of the Act is hereby determined to be not more than the actual cost to the employer of the board, lodging, or other facilities customarily furnished by him to his employees. 29 C.F.R. 531.3(a) (emphasis added). It further provides that: (d)(1) The cost of furnishing " facilities" found by the Administrator to be primarily for the benefit or convenience of the employer will not be recognized as reasonable and may not therefore be included in computing wages. (2) The following is a list of facilities found by the Administrator to be primarily for the benefit of convenience of the employer. The list is intended to be illustrative rather than exclusive: (i) Tools of the trade and other materials and services incidental to carrying on the employer'business; (ii) the cost of any construction by and for the s

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employer; (iii) the cost of uniforms and of their laundering, where the nature of the business requires the employee to wear a uniform. 29 C.F.R. 531.3(d)(1)-(2). Interpretive C.F.R. section 531.32 defines " other facilities" be something like board or to lodging. Such items might include " housing furnished for dwelling purposes." Further, C.F.R. sections 531.32 and 531.30 give credence to the argument that " facilities" a is broad term meant to include lodging. 29 C.F.R. 531.30 provides: The reasonable cost of board, lodging or other facilities may be considered as part of the wage paid an employee only where customarily " furnished" the employee. Not to only must the employee receive the benefits of the facility for which he is charged, but it is essential that his acceptance of the facility be voluntary and uncoerced. See Williams v. Atlantic Coast Line Railroad Co., (E.D.N.C.). 1 W.H. Cases 289. 29 C.F.R. 531.31 provides: The reasonable cost of board, lodging, or other facilities may be considered as part of the wage paid an employee only where " customarily"furnished to the employee. Where such facilities are " furnished" the employee, it will be considered a sufficient to satisfaction of this requirement if the facilities are furnished regularly by the employer to his employees or if the same or similar facilities are customarily furnished by other employees engaged in the same or similar trade, business, or occupation in the same or similar communities. See Walling v. Alaska Pacific Consolidated Mining Co., 152 F. (2d) 812 (C.A. 9), cert. denied, 327 U.S. 803; Southern Pacific Co. v. Joint Council (C.A. 9) 7 W.H. Cases 536. Facilities furnished in violation of any Federal, State, or local law, ordinance or prohibition will not be considered facilities " customarily" furnished. In Marshall v. Debord, 1978 WL 1705, *5, 23 Wage & Hour Cas. (BNA) 1188, 84 Lab. Cas. P 33,721 (E.D. Okla., Jul. 27, 1978), the court held that the defendant employer was not entitled to have the cost of furnishing lodging included in computing wages under 29 U.S.C. § 203(m) where the rooms were primarily furnished for the benefit of the defendant employer since the employees were required to live at the premises and since at least one employee had to be available at all times.

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Here, Plaintiffs were required, as a condition of their employment as full-time resident managers, to reside at the facility. They did not pay rent to reside at this apartment and their residence at the facility benefited Landvest. Their residence at the facility added an appearance of added security. It also allowed both Plaintiffs and Landvest more flexibility in maintaining the facility and allowing Plaintiffs time off for slow periods. Accordingly, because Plaintiffs' housing was furnished primarily for the benefit of Landvest, because Plaintiffs they are required to reside at the facility, the value of their lodging should not be included in the computation of their regular rate. 2. Even if Plaintiffs' Lodging is Computed in Their Regular Rate, They Were Paid At an Hourly Rate That Exceeded This Amount

The regular rate is only relevant when Plaintiffs, individually, work more than the contracted 35 hours in a workweek. Otherwise, Plaintiffs are compensated their salary wage for all hours worked up to 35 hours. For those additional hours, Plaintiffs receive their regular rate per hour for hours between 35 and 40 hours and time and one-half of their regular rate for all hours over 40 hours worked in a workweek. Even if the value of lodging was added to their salary wage, because Landvest paid a flat premium rate for those additional hours at $14.16 an hour, they are not owed any additional straight or overtime wages. The value of lodging, estimated by Plaintiffs at $2,250 a year, added to their annual salary of $10,800, comes to $13.050. This produces a weekly salary of $250.96. Therefore, based on 35 hours of work, the regular rate would be $7.17 an hour and the overtime rate would be $10.76. Plaintiffs were paid almost four dollars more than the overtime rate inclusive of lodging. Accordingly, even assuming the value of lodging should be included, Plaintiffs are not owed unpaid straight or overtime wages.

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CONCLUSION In April 2002, Ms. Schneider proposed her salary be restructured so she could undermine the benefit qualifications for Medicare and Social Security. Landvest refused the restructuring because it would have violated the minimum wage requirement of the Fair Labor Standards Act. As a result, plaintiffs resigned, attacked David Mason in a letter, picketed the storage facility, and filed this lawsuit ironically alleging an FLSA violation. Almost a year later and for the first time, plaintiffs claim Landvest required them to record less hours on their timesheets than they actually worked. Plaintiffs' contention is undermined by the fact that they consistently failed to follow the alleged instruction. Because Landvest paid plaintiffs for all hours they worked, compensated plaintiffs for overtime in an amount well above what the FLSA required, paid plaintiffs an hourly amount above the minimum wage, and fulfilled every obligation owed to plaintiffs contained within the parties' employment Contract, plaintiffs' claims should be, and are hereby, dismissed. Respectfully submitted,

KUTAK ROCK LLP By: s/ Stacia G. Boden 09/14/05 Alan L. Rupe, KS Bar # 08914 Stacia G. Boden, KS Bar # 20295 8301 East 21st Street North, Suite 370 Wichita, Kansas 67206-2295 Telephone: (316) 609-7900 Facsimile: (316) 630-8021 Heather Davis, CO Bar #30056 Mark C. Willis, CO Ba