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-CV-2474-WYD-PAC CHARLOTTE SCHNEIDER and DEAN WYMER, Plaintiffs, v. LANDVEST CORPORATION, a Kansas corporation, And DAVID MASON, individually Defendants.

Plaintiffs' Findings of Fact and Conclusions of Law - Underlined Revised October 24, 2005

A trial to the Court of the above captioned matter was held on September 26, 27 and 28, 2005, October 5, 2005 and October 6, 2005. After considering the testimony of the witnesses, the credibility of the witnesses, the exhibits submitted, and the arguments of counsel, the Court enters the following findings of fact and conclusions of law: Findings of Fact 1. The Defendant, Landvest Corporation, (hereafter Landvest) is a Kansas

Corporation which manages over 2 million square feet of self-storage space consisting of over 20,000 units. The 50-plus facilities managed by Landvest Corporation are self -1-

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storage facilities located in Colorado, Kansas, Louisiana, Missouri, New Mexico, Ohio and Texas. 2. Landvest's corporate headquarters are located in Wichita, Kansas. All

corporate decision-making with respect to general corporate policies and procedures, procedures concerning operation of facilities, personnel policies and pay practices, including compliance with the federal Fair Labor Standards Act, occurs in Wichita, Kansas where David Mason's office is located. 3. Substantial interstate activity is engaged in by agents of the corporation at

all levels. Corporate managers frequently travel interstate to supervise facilities, resident managers frequently communicate with corporate headquarters by phone, fax, mail and Internet. Payroll is processed in Kansas and distributed by mail or direct deposit to employees or banks in other states. Landvest has annual gross sales in excess of $500,000.00. 4. At all times relevant to the Complaint, Defendant David Mason was a 50%

owner of the company, and an officer of the Defendant Corporation (Vice President). He formulated, or contributed to the formulation of, most corporate personnel and pay policies, including compliance with the federal Fair Labor Standards Act. He also had final decision-making authority over the management of the business of Landvest, including the payment of overtime to the Plaintiffs. 5. On December 20, 1998 an employee of Landvest, Don Wooldridge, made

a complaint to the United States Department of Labor alleging that Landvest was not keeping accurate records of hours worked by employees; that it required employees to

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record 22 hours a week regardless of the number of hours worked; and was not paying overtime. Ex. 071-004, 005. 6. Landvest's attorneys, Husch and Eppenberger, wrote to the United

States Department of Labor by letter on March 11, 1999, apparently in response to the Wooldridge complaint. Ex. 69-006. Through its attorneys, Landvest represented to the United States Department of Labor that resident managers never worked more than 40 hours a week and offered to produce time sheets to prove that they only worked 22 hours a week. Ex. A 30. 7. Landvest began paying resident managers time and a half for some hours

worked in excess of forty in a single work week one month later in April, 1999. Ex. 011002. Prior to April, 1999 it classified resident managers as exempt, salaried employees and did not pay overtime. Id. Landvest denies that the change in classification from exempt to nonexempt status was the result of any event. Rather, it claims that the change resulted from a "periodic review" of personnel and pay practices. Ex. 009-008, 009. 8. The change in status of Landvest's resident managers from exempt to

nonexempt in April, 1999 was not accompanied by any change in the form of contract used by Landvest. See response to Request for Production No. 2 (Exhibit 6-005) and compare Exhibit 68-013,14 to Exhibit 68-002. 9. At trial Landvest's attorney represented to the Court that Landvest's pay

plan was a "Department of Labor approved " pay plan. However, Landvest admitted in response to a request for admission made by the Plaintiffs that "neither David Mason nor Landvest Corporation ever sought or received a written or oral opinion from the -3-

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United States Department of Labor approving any of its pay practices." Request for Admission No. 3. Exhibit 4-005-006. No evidence of any approval was offered by Defendants at trial. Plaintiffs' Background and The Application for Employment 10. The Plaintiff, Charlotte Schneider, applied for employment with Landvest

on or about March 27, 2002, and began working at the storage facility located at 10601 Iliff, Aurora, Colorado, on April 10, 2002, as a resident manager. Testimony of Charlotte Schneider, Tr. 24, ll 20-24. 11. The Plaintiff, Dean Wymer, applied for employment with Landvest on or

about March 27, 2002, and also began working at the storage facility located at 10601 Iliff, Aurora, Colorado, on April 10, 2002, as a resident manager. Testimony of Dean Wymer, Tr. 267-268. 12. 13. The Plaintiffs are married to each other. Prior to their employment with Landvest, the Plaintiffs resided near

Edgemont, South Dakota. Plaintiff Charlotte Schneider was not working at the time she applied for employment with Landvest. She had previously worked as an accounts receivable clerk, a motel manager, and a manager of an apartment complex. She had also worked as an assistant manager in a convenience store. Ex. A14-0002. 14. Plaintiff Dean Wymer had previously owned businesses, including a

pawn shop and a sound business. He had worked as a musician, a motel manager, and a manager of an apartment complex. Ex. A13-0002. 15. At the time they were hired by Landvest, Plaintiffs owned their home near

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16.

In March, 2002, Charlotte Schneider saw an on-line classified

advertisement in the Denver Post for a Landvest resident manager. 17. In response to the advertisement, Plaintiffs called Landvest and spoke to

John Cramer, a Landvest regional manager. Cramer asked them to fax their resumes to him. 18. During Charlotte Schneider's first telephone conversation with Cramer, he

told her the job required two persons to work the site, that managers live on site and that managers worked 4 hours each per day. Testimony of Charlotte Schneider, Tr. 25, ll 16-24. 19. At John Cramer's request, Plaintiffs traveled to Denver two or three days

after the first telephone conversation with John Cramer. They met John Cramer at a restaurant and spent approximately one hour with him. Testimony of Charlotte Schneider, Tr. 26, ll 20-24. He again mentioned 4 hours a day of work per person and stated that they would earn $416.00 every two weeks. Testimony of Charlotte Schneider, Tr. 27, ll 5-9; Testimony of Dean Wymer, Tr. 267, l 19- Tr. 268 l 11. 20. John Cramer then told them that a final decision would be made in the

future concerning their employment and that he would contact them in a day or two. 21. Plaintiffs returned to South Dakota and were offered employment with

Landvest shortly thereafter. They were asked to begin work on April 1, 2002. 22. Plaintiffs were later notified by John Cramer that there was a problem with

the apartment they were to occupy and were told to report to duty on April 10, 2002.

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23.

In reliance, in part, upon the representations of John Cramer, Plaintiffs

moved to Denver with their belongings and listed their South Dakota home for sale. Their home was subsequently sold. Testimony of Dean Wymer, Tr. 269, ll 4-9. 24. Plaintiffs were hired by Landvest to manage a self storage facility located

at 10601 East Iliff, Aurora, Colorado. They worked at the Iliff facility until they terminated their employment on April 4, 2003. Training 25. Plaintiffs received three days of training at the Iliff site (April 10-12, 2002)

from Judi French, a resident manager. John Cramer was present for part, but not all, of the training. At the end of the first day of training Plaintiff Dean Wymer had worked 8 hours (Testimony of Dean Wymer, Tr. 272 ll. 2 ) Charlotte Schneider has worked 9 hours (Testimony of Charlotte Schneider, Tr. 29, ll 15.) They were instructed by Judi French to record only 4 hours each on their time sheets. Tr. 273 ll.9-10 26. The following day they were again instructed to record 4 hours of work

although they had each worked a full day. When questioned by Charlotte Schneider about this practice John Cramer told her that "that was just the way it was." Testimony of Charlotte Schneider, Tr.46, l. 6. 27. The Plaintiffs were instructed by John Cramer to only record 4 regular

hours of work per day regardless of the number of hours actually worked. He explained to them that their pay was based on 4 hours a day and that their time sheets had to record 4 hours a day. He told them that they were salaried. Testimony of Charlotte Schneider, Tr. 48, l. 18- Tr. 49, l. 17.

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28.

The Plaintiffs' testimony was supported by the statement of John Cramer

to the Colorado Department of Labor, dated July 2, 2003. Exhibit A 28-0001. He wrote: Dean and Charlotte were told by me that they should record 22 hours of work per person on their time record each week and that overtime would only be approved in emergencies. Ex. A 28-0001 paragraph 1. 29. At the end of the second pay period Charlotte Schneider attempted to

submit a time sheet reflecting her actual hours worked. She was told that she was required to submit hours as she had been trained or that she would not be paid; she was told to create a new time sheet. Testimony of Charlotte Schneider, Tr. 47, ll 6-12. 30. The Plaintiffs' testimony was also supported by the payroll records of

Landvest which showed that the trainer, Judi French, recorded 9 hours on April 10, 2002, 8 hours on April 11, 2002 and 8 hours on April 12, 2002 (Exhibit 35-051) the days when Charlotte Schneider testified she was being trained by Judi French. The Plaintiffs' time sheets for the same days only record 4 hours each per day. Exhibits A1003 and Exhibit A2-004. 31. Shortly after beginning work John Cramer told the Plaintiffs that they were

both required to be at the site and available to work, during office hours (10:00 a.m.6:00 p.m. Monday through Friday and 9:00 a.m. - 5:00 p.m. on Saturday), unless they were performing work-related errands. Testimony of Charlotte Schneider, Tr. 40, l.1-2; Testimony of Dean Wymer, Tr. 294, l. 8. 32. Plaintiffs' testimony was supported by John Cramer's first letter to the

Colorado Department of Labor (A29) where he explained:

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On several occasions during the years I have worked for Landvest Corp. I had several managers complain that they were not being allowed by Landvest to record the full amount of hours they worked. This claim was based on the fact that Landvest work agreement required both managers to devote their full time and attention to the business of the employer. Their complaint was that they both had to devote 8 hours each or(sic) every day worked but they were only being allowed by Landvest to record 4 hours on every day worked. It was explained to the Managers that they could spend time in their apartments as long as the manager was available to answer the business phone and greet customers that came in the office. Exhibit A 29-0001, final paragraph 0001 first paragraph 0002. Execution of the Employment Agreement 33. On April 10, 2002, John Cramer presented the Plaintiffs with a Managers

Employment Agreement. Ex. A0004 (hereafter MEA). Plaintiffs read and signed the MEA. A second MEA, identical to the first in all material respects, was signed by the Plaintiffs at the request of Landvest on July 23, 2002. Ex. A0005. 34. Before they signed, John Cramer reviewed the MEA (Ex. A0004) with the

Plaintiffs. During that conversation John Cramer did not say anything inconsistent with his earlier representations that they would each work 22 hours per week. Testimony of Charlotte Schneider, Tr. 33, ll 7. John Cramer told the Plaintiffs that if additional work was required, it would be paid at an overtime rate. He specifically referred to work on days off, and gave an example of a relief manager not being available to work. He also said that when circumstances arose after business hours, they would be paid for "overtime." Testimony of Charlotte Schneider, Tr. 33, l. 12-14.36.

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35.

John Cramer could not be located at the time of trial and was not available

to testify. The parties stipulated to the admission of three statements by John Cramer: Exhibit A 29: a hand written letter dated May 21, 2003 addressed to Mr. Joseph Herrera at the Colorado Department of Labor; Exhibit A 28: a hand written letter dated July 2, 2003 addressed to Mr. Joseph Herrera at the Colorado Department of Labor; and Exhibit 26: a letter on Landvest stationary written by the Landvest attorneys for John Cramer's signature. Exhibit 26 was a document which Mr. Cramer admitted at his deposition he didn't spend very much time reading. Deposition of John Cramer p. 60 lines 24-, p. 61 line 1. John Cramer's deposition was also admitted into evidence. 36. John Cramer's written statements and deposition support Plaintiffs'

testimony that they understood that they were hired to work 4 hours a day or 22 hours a week. Cramer's statements all refer to a job duty of 4 hours a day or 22 hours a week, while he quotes the contract language prohibiting more than a combined total of 70 hours a week, his statements and deposition never mentioned a 35 hour work week. Even the statement written by the Landvest attorney's dated June 5, 2002 (Exhibit A 26) makes no mention of an agreement to work 35 hours a week. 37. The July 2, 2003 letter (Exhibit A-028) is specific about the expectation of

the parties that resident managers work 4 hours a day. He wrote: The Iliff site is a busy site, it has a lot of turnover in renters and the property itself collects a lot of trash. During the time I supervised this couple they began stating concerns about the number of hours it was taking them to keep the property clean and complete the paperwork relating to the renters. They believed that no one could do the work expected by the company if they both only worked 4 hours a day . . .

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I know from first hand experience that 4 hours per day per person is not always enough time to do the job as expected. . . .Exhibit A 28-001,002. The Managers Employment Agreement (MEA) 38. The form of the MEA used on April 10, 2002 by Landvest (Ex. A4) had

undergone at least four revisions since it was first used by Landvest in 1993. See Ex. 68. The contract was written by the Landvest attorneys, Husch & Eppenberger, LLC. Testimony of David Mason, Tr. 492, l.11. 39. Paragraph 5 of the Managers Employment Agreement titled "Hours and

Days of Work" states in part: In performance of the duties described herein, Employees shall not work more than a combined total of 70 hours per week. The employees shall work approximately 44 hours per week but may be called upon to work additional hours as needed. Ex. A4-0001. 40. The contract is ambiguous as to whether: (1) 44 hours or 22 or some

other number of hours was expected of each employee; (2) how hours over 22 including overtime hours would be compensated. 41. The reference to 44 hour per week does not differentiate whether 44 is a

combined total of hours for two employees or a job duty of each employee. 42. The contract contains a prohibition at paragraph 5 against two employees

working more than "a combined total of 70 hours" per week but does not prohibit an individual employee from working more than 40 hours a week. Paragraph 7 only limits employees to working within scheduled hours. There were 44 scheduled hours a week. Ex. A4-0007. -10-

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43.

The contract did not require that the employees split the "combined total

of 70 hours" evenly. Testimony of David Mason, Tr. 488, l.4-8; Tr. 499, l. 18- 489, l. 1; Tr. 490, l. 11. Managers could for example split hours 50/20. Testimony of David Mason, Tr. 490, l.11. The payroll records of Landvest demonstrate uneven splits in hours. See Ex. 29-188-200, time sheets of Neil and Kathy Murray. 44. The ambiguities contained in the Landvest contract were created, in part

by, the decision of Landvest to use one contract for two employees. For example, the language referring to 44 hours a week was taken from an earlier form of contract used for a single employee. See Exhibit 68-013, 014. Thus when originally written the reference to 44 hours a week was intended by Defendant to refer to the duties of a single employee. No explanation was given by the Defendants at trial for the reference in the contract to "approximately 44 hours per week" rather than a "combined total of 44 hours per week" or "22 hours per week." 45. David Mason admitted in a memorandum to employees dated April 15,

2003 that the contract was confusing. Exhibit A9-0001, paragraphs 2,3. David Mason admitted at trial that the language of the contract was ambiguous. Testimony of David Mason, Tr. 494, l.4. 46. Given the contract's vague and ambiguous language on this issue, it does

not unambiguously identify how many hours each employee was to work for the biweekly salary of $415.39. 47. It would have been a simple drafting task to disclose that each employee

was "agreeing to work between 22 and 35 hours a week for a fixed salary of $10,800.00," if that had been the intention of the employer, Landvest. -11-

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48.

The ambiguous paragraph 5 (Exhibit A4) served the business purposes of

Landvest by making the agreed pay of $21,600.00 for two employees appear more generous and by allowing potential employees to believe that they would earn $9.44/hour. David Mason admitted he never told any resident manager that they would be paid $5.93/hour. Testimony of David Mason, Tr. 492, l. 3. 49. The MEA was interpreted by Landvest's attorney's Husch & Eppenberger,

LLC for the Colorado Department of Labor in May of 2003. Exhibit 1. The interpretation of the contract language made by the Landvest attorneys who wrote the employment agreement was that it required 22 hours of work a week. Exhibit 001-004 (second full paragraph- "She was to work 22 hours a week."). The lawyers who wrote the contract did not discern the unlikely interpretation of the MEA advanced at trial by the Defendants. 50. Circumstances surrounding the execution of the MEA which are relevant

to its interpretation are: a. Cramer's representation to the Plaintiffs that they would work 22 hours a week; b. Cramer's representation that additional work beyond that discussed (22 hours a week) would be required and that the work would be compensated; and c. The illegality of the hourly rate resulting from an interpretation requiring 44 hours per week for $207.70 - an hourly rate below the minimum wage.

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51.

Plaintiffs reasonably interpreted the MEA to be an agreement to work 22

hours per week each for a salary of $10,800.00 each. Record Keeping at Landvest. 52. The Plaintiffs were instructed that they could only record and submit 4

regular hours per day and that they could not submit overtime hours for routine work. Testimony of Charlotte Schneider, Tr.51, ll.11,12. Her testimony was supported by the written statement of John Cramer. He wrote: ". . . overtime would only be approved in emergencies." Ex A28-0001, ll. 13,14. An example given to her by John Cramer was a circumstance where no relief manager was available. Testimony of Charlotte Schneider, Tr. 51, ll 25- Tr. 52, l. 9. All recorded overtime had to be approved by a regional manager before being submitted to Landvest for payment. Testimony of Jeff Etter, Tr.669, l. 14. 53. Charlotte Schneider did not attempt to submit more than 4 regular hours

of time per work day after being instructed not to do so. However, Charlotte Schneider repeatedly attempted, with her regional manager's approval, to submit additional hours for payment which were worked outside of scheduled hours. She testified, and the business records of Landvest confirmed, that she was repeatedly denied payment for recorded hours which were worked outside of scheduled business hours and which were worked in excess of forty hours per week. Testimony of Charlotte Schneider, Tr. 58-72; Exhibits A17,A18,A23,A27,A28,A29. 54. Thereafter and throughout their employment Plaintiffs recorded 22 regular

hours of work per week although they regularly worked many more hours "off the clock."

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At times, and when approved by their supervisor, they recorded additional hours as "overtime hours." 55. The testimony of other witnesses supported Charlotte Schneider's

testimony that she was only allowed to record 4 regular hours a day. Shirley Noe, a former resident manager at the Iliff site, testified that she was instructed by David Mason to only record a total of 8 hours per couple per day. Testimony of Shirley Noe, Tr 252, l. 11-12. Louise Adolphson, the resident manager of the Buckley site, testified she was trained to record 4 hours per day. Testimony of Louise Adolphson, Tr. 166, l.18. Earl Adolphson testified that he was told to "put down" 4 hours a day. Testimony of Earl Adolphson, Tr. 337, l.7. 56. John Cramer as the regional manager for Colorado and the Plaintiffs'

direct supervisor was authorized by Landvest to train the Plaintiffs in the record keeping practices of Landvest, to represent the pay plan to them, to instruct them on how to fill out time sheets, he was authorized to approve and deny requests for overtime pay. Testimony of David Mason, Tr. 438, l. 8 -Tr. 439, l. 4; Deposition of John Cramer, p. 33, l.11-14. 57. There was overwhelming evidence of a corporate policy of requiring

employees to only record 4 hours of work per day, which extended beyond the regional manager, John Cramer. The first complaint of the practice was from a regional manager, Wooldridge, who worked in Texas in 1998. Ex. 71-0004,0005; John Cramer testified at deposition that he was following a company policy, "that's basically what was put out by the company. . ." Deposition of John Cramer, p. 22, l. 2-3; Shirley Noe testified that she was instructed by David Mason to record 8 hours for two employees -14-

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(Testimony of Shirley Noe, Tr 252, l. 11-12.); The volume of uniform time sheets filled out by employees prior to September of 2003 which uniformly record exactly 4 hours a day is overwhelming and undeniable evidence of the corporate policy. Ex. 61, 62 (time sheets of Adolphsons); Ex. 25 (time sheets of Cosper); Ex. 29 (time sheets of Murray); Ex. 31 (time sheets of Caires, who complained to John Cramer that they were being required to only record 4 hours of work. Deposition of John Cramer p. 31 l. 11-p.32, l. 4); Ex. 35 (time sheets of French); Ex 39 (time sheets of Van Kirk); Ex. 43 (time sheets of Davis); Ex. 45 (time sheets of Shooley); Ex. 47 (time sheets of Andrews); Ex. 55 (time sheets of Rix). When employees recorded more than 22 regular hours a week the time sheets were changed to show 22 hours a week. 58. Plaintiffs proved by a preponderance of the evidence that throughout

their employment they prepared time sheets according to instructions provided by their trainer, Judi French, and according to instructions provided by their supervisor John Cramer and recorded only 22 regular hours a week. At all times relevant to their employment, Cramer knew that the time sheets were not an accurate representation of their actual hours worked and he admitted as much in a written statement to the Colorado Department of Labor dated May 22, 2003. Exhibit A0029. 59. David Mason knew or should have known that the Plaintiffs' time sheets

did not record actual hours worked. Notations on time sheets indicate that David Mason was personally involved in granting or denying requests for overtime compensation which included review of resident manager's time sheets. See Ex. A10080; Ex 25-081. Ex.39-028. He personally authorized payment of, or denial of, individual resident manager's requests for overtime compensation. The uniformity of -15-

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the time sheets submitted by all resident managers in the Colorado and New Mexico region prior to June, 2003 provided notice to anyone reviewing the time sheets that they did not reflect actual hours worked. Additionally, It is not plausible that employees working under different regional managers would consistently record exactly 4 hours per day of work or 22 regular hours unless they were instructed to do so by supervisors. It is not plausible that a uniform company wide practice of recording only 4 hours per day of work would exist unless regional managers had been told by management to instruct resident managers to record their time in this manner. 60. Landvest never recorded in any payroll record a regular hourly rate or an

overtime rate for any resident managers during the time that Plaintiffs were employed by Landvest. Landvest never disclosed in writing a regular hourly rate to resident managers during the time that Plaintiffs were employed by Landvest. Landvest never disclosed to resident managers the number of regular hours they were being compensated for or the number of overtime hours they were being paid for or the overtime rate being used or the calculation of the overtime rate. 61. The record keeping practices of Landvest made it impossible to determine

based on an examination of the payroll records at what rate employees were paid, how many hours they were paid for or whether time and a half was paid for recorded hours worked over 40 in a single work week. An example are the payroll records of Judi French for the week ending April 14, 2002. Ex. 35-051,35-052, 39-021. The employee recorded 43 + 22 hours in a single work week (Ex. 35-051,35-052). The employee was paid $311.50 in hourly wages plus her salary of $415.39. There is no indication that she was paid at a premium rate for hours over 35. It appears by deduction that she -16-

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was paid at $7.00/hr for 40 hours and $10.50 for 3 hours, a formula which bears no relationship to the requirements of the Act or Jeff Etter's claim that his regular rate was $5.93/hr. Testimony of Jeff Etter, Tr. 722,l.10. 62. Landvest's record keeping practice of failing to record all hours worked

allowed it to claim at trial that when it disallowed payment of recorded overtime hours of employees such as Charlotte Schneider that the overtime hours were actually non-overtime hours. 63. All indications from the payroll records of Landvest are that Landvest was

paying a fixed compensation for 22 hours a week. Hours recorded in addition to 22, when allowed were paid at hourly rates which ranged from $7.75 to $14.16 an hour. 64. No mutual understanding existed that the fixed compensation was a

salary for up to 35 hours of work a week because the same was never communicated to the Plaintiffs. 65. Landvest's record keeping practice of failing to record a regular rate for

employees allowed it to claim at trial that it paid more than time and a half for recorded overtime hours based on an artificially deflated regular rate. 66. There was no evidence in any pay record from before June, 2003 that any

resident manager was actually paid at a $5.93 hourly rate as Landvest claims. There is no pay record where an employee recorded 35 hours per week and was paid $415.39 for two weeks nor is there a payroll record where an employee's recorded hours worked was multiplied by $5.93. The Landvest Pay Plan

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67.

The Landvest pay plan was created by the Landvest attorneys.

Testimony of Jeff Etter, Tr. 674, ll.13,14. The plan was referred to at trial as a "fixed work week salary pay plan." The plan was never recorded in any written manual, written payroll procedure, memoranda to payroll clerks or others. See response to document request No. 10 Ex. 7-007. No memoranda to employees was produced at trial explaining the plan to employees. The only place where the pay plan existed in writing was in the MEA. Testimony of David Mason, Tr. 420. Ll. 14-16. 68. A pay plan providing for payment of $415.39 for as many as

35 hours of work and premium pay for hours worked over 35 is not described in the MEA. The MEA describes "overtime" as work that cannot be performed within the scheduled hours" A4-0002, paragraph 7. To the extent the MEA provides for the payment of overtime, it ties the payment of overtime pay to work performed outside scheduled hours not work in excess of 35 hours per week. 69. Defendants did not offer any evidence at trial that the Landvest "fixed

work week salary pay plan" was ever communicated to the Plaintiffs. Neil Murray testified that he explained the pay plan at a meeting of resident managers. However, Louise Adolphson testified that the meeting where the pay plan was discussed occurred after the Plaintiffs left employment with Landvest. Testimony of Louise Adolphson, Tr. 197, l. 5. 70. At trial Jeff Etter testified that he is a certified public accountant and the

CFO of Landvest. He testified that he oversees the payment of overtime at Landvest. (Testimony of Jeff Etter, Tr. 645, ll.9,10) and is responsible for compliance with the Fair Labor Standards Act. Testimony of Jeff Etter, Tr. 689, l.5. At trial he demonstrated -18-

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surprisingly little working knowledge of the Fair Labor Standards Act, for example he was unable to calculate a regular hourly rate which included lodging. (Testimony of Jeff Etter, Tr. 651) This was surprising for the CFO of a corporation which provides housing to hourly workers. He appeared ignorant of the record keeping requirements of the Act, testifying unbelievably that Landvest had selected payroll software that didn't allow it to record a regular hourly rate. 71. At trial David Mason and Jeff Etter testified that a "fixed work week salary

pay plan" existed at Landvest which compensated resident managers for up to 35 hours at a biweekly salary of $415.39. Testimony of Jeff Etter, Tr. 647, ll. 8,9. They were not consistent in describing the "fixed work week salary plan" which they claimed existed between April 10, 2002 and April 3, 2003. At times Jeff Etter testified that "basically a premium rate" was paid for any hours over 22 and "in some occasions 22 and in you know over 35 hours." Testimony of Jeff Etter, Tr. 646, l. 18. At times Jeff Etter testified that employees received premium pay for hours worked over 22 in a work week. Testimony of Jeff Etter, Tr. 662, l. 17. At other times he testified that Landvest used "35 hours to calculate overtime." Testimony of Jeff Etter, Tr. 660, l. 21-23. He testified that in some circumstances where employees worked between 22 and 35 hours they received premium pay. Testimony of Jeff Etter, Tr. 678, ll. 22-24. He testified that those circumstances were "training emergencies, no relief manager." Testimony of Jeff Etter, Tr. 679, l.1. 72. Although there were thousands of pages of payroll records admitted into

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rate only after they exceeded 35 hours. Most records show hours over 22 recorded in the "overtime" column of the time sheet and payment of those hours at $14.16/hr. Because Landvest instructed resident managers to only record 22 regular hours per week there are very few pay records from before April, 2003 which record 36 or more hours. 73. When asked about the few time records which did exist where employees

did record more than 35 hours in a single work week Etter could not apply the pay plan he claimed existed to show how the employee's pay was calculated. When asked to calculate LaRue Van Kirk's pay from her time sheet (Ex. 39-030), he declined to calculate the pay. Testimony of Jeff Etter, Tr. 701-711. When asked to apply the pay plan to Esla Cooper's time sheet (Ex 25-083), he declined claiming that the Cospers were operating under a different agreement. When asked to apply the pay plan to Judi French's time sheet for April, 2002 (Ex. 35-051), he declined. Testimony of Jeff Etter, Tr. 719-721. 74. The first pay record in evidence where resident managers appear to be

paid at a premium rate for hours over 35 are the pay records of the Fishers beginning in June of 2003. Ex. 65. 75. There is no evidence in the record other than the testimony of Jeff Etter

and David Mason that the "fixed work week salary pay plan" as described by them was used by Landvest before June, 2003 when it was first applied to calculate the pay of Warren and Diane Fisher. 76. Some employees, such as Charlotte Schneider, and Louise Adolphson,

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depending on site occupancy. This work was performed without knowledge of a "fixed work week salary pay plan," which if it existed as described by David Mason, would have paid them additional compensation for all hours worked over 35. 77. Landvest's failure to communicate its fixed work week pay plan to the

resident managers, if it existed, served Landvest's purposes by allowing Landvest to avoid paying compensation for hours worked between 35 and 40 and for all hours worked over 40 in a single work week. 78. It served Landvest's purposes to not record all hours worked by

employees, and to instead require employees to only record 22 hours. The practice allowed Landvest to represent to the Colorado Department of Labor that Plaintiffs only worked 22 hours per week and were therefore not entitled to overtime. The practice also allowed David Mason to disallow overtime hours recorded by employees and claim that they had not worked over 35 hours and were therefore not entitled to any additional pay. 79. The practice of paying fixed compensation­ "a salary"­ for fluctuating

hours, as employed by Landvest, created confusion in the minds of employees who were unclear as to whether they were hourly employees and as to whether they were entitled to overtime compensation. 80. As applied to Plaintiffs, Landvest's pay plan did not provide Plaintiffs with

compensation at one and one half times their regular hourly rate for all hours worked over 40.

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81.

As applied to Plaintiffs, the Landvest Pay Plan provided compensation at

a rate of $4.65 per hour for work weeks when Plaintiffs worked 44 hours a week during scheduled business hours. Credibility of the Witness- Jeff Etter 82. Jeff Etter made many assertions during his testimony which denied the

obvious weight of the evidence. As a result, his testimony was unpersuasive. He refused or was unable to answer many questions which should have been easy for a person with his background and training who was motivated to provide forthright testimony. 83. He denied that there was any pattern to the payroll records of the resident

managers of Landvest before June of 2003 when thousands of pages of time sheets which were in evidence demonstrated an obvious pattern of 4 recorded regular hours per day per employee. 84. He refused to admit that he had seen many time sheets by 2003,

although he had been supervising the payroll department for three years at that time. Testimony of Jeff Etter, Tr. 694, l.6. 85. He claimed that the hourly rate of resident managers was disclosed to

them in the MEA. A4. 86. He appeared unfamiliar with the payroll records of Landvest. For

example, he claimed that he didn't know what the code "e" referred to when printed next to a dollar amount of compensation. Tr. 687, l.13. He refused to calculate pay from an employee time sheet (Tr. 702) and insisted on seeing the "recap" sheet which contained notes of a payroll clerk. -22-

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87. hourly rate. 88.

He claimed the payroll software used by Landvest could not print an

He claimed that he did not remember any change to the pay practices of

Landvest in 2003, when the payroll records show employees began recording actual time and Landvest began paying for hours over 35 (beginning with the Fishers and the O'Dells) in June of 2003 and including all employees after September, 2003. Testimony of Jeff Etter, Tr. 693. Ll. 18-20 89. He claimed that he did not know that Landvest began paying for hours

over 35 at a reduced premium rate ($8.90/hour) when it began recording actual hours worked in 2003. Testimony of Jeff Etter,Tr. 692. 90. He claimed that the value of lodging was included in the premium rate for

resident managers but did not know what amount was allocated for lodging. Testimony of Jeff Etter, Tr. 648, ll.9-12. He also claimed that he "tested" the rate. Tr. 691, l.4. 91. He refused to admit that the overtime rate of $14.16 an hour which was

paid to the Plaintiffs was calculated by multiplying $9.44 times 1.5. The Iliff Site 92. Plaintiffs were assigned to the largest and oldest site operated by

Landvest in Colorado, which was referred to at trial as the Iliff site. The site consisted of 456 units and covered more than 2 acres. Ex. A52. The description of the site provided by the Plaintiffs' supervisor was of a busy site with a high turnover of tenants which collected lots of trash. Exhibit A 28-001,002. Shirley Noe testified that it was a "very busy" site.

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93.

Defendant's attempts to compare the Iliff site and the amount of time

required to operate it to sites in Colorado Springs, particularly the Wood Avenue site operated by Derald Beck and the Old Broadmoor Road site operated by the Shaws was not persuasive. The Wood Avenue site by comparison had 294 units and the Old Broadmoor Road site in Colorado Springs was admittedly a newer site located in a quiet neighborhood. Additionally, the operators of the Colorado Springs sites testified that almost no time was required to perform work related errands such as banking and trips to the post office. Additionally, the Court had no information as to whether these sites were maintained to the same standards as the Iliff site. 94. Dean Wymer testified that the site was located on a busy street and

across the street from a casino. He testified that tickets and other trash were blown on to the Iliff site from the casino. Work Performed By Dean Wymer 95. Dean Wymer performed the outdoor maintenance required to maintain the

Iliff site to the standards of Landvest. Site inspections, which were conducted without notice by regional managers, praised his work with comments such as "great job," "very fine job" and "site looks good!" 96. Landvest's standards for site maintenance were high according to the

operations manual and site inspection reports. According to Dean Wymer's testimony and the Landvest Manual he was expected to and did perform all maintenance and repairs required to keep the site "market ready" at all times. Ex. A40-012 Landvest Manual. The Manual describes in detail the types of repairs expected of a resident

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manager which included: minor electrical, plumbing and mechanical, caulking and painting, and snow and ice removal. Ex. 40-013. 97. Dean Wymer testified that he had a regular daily maintenance routine

which he described as beginning at 10:00 a.m. He performed a walking security check of the entire facility. He then returned to the office to retrieve a golf cart, which he used to pick up trash from the site. He then walked the front of the property picking up any trash that had accumulated during the night and swept the driveway and entry to the facility. In between the performance of these tasks, Dean would return to the office to check in with Charlotte to see if she needed him to show units or assist tenants. If needed, Dean would interrupt his routine to provide whatever assistance was necessary. After completing the morning clean-up, Dean would drive to the bank to make the daily deposit, and at least three times per week he would go to the Post Office as well. After returning from the bank and/or Post Office, Dean would check in with Charlotte in the office for any vacates or units that needed cleaning. If there were none at that time, he would then perform another security check. 98. He used his afternoons to perform tasks that were not required on a daily

basis such as: painting buildings, trim, bollards, and striping, fixing and repairing door latches, seals, and bolts that had pulled out of the drywall, cleaning vacated units, performing maintenance on the golf cart and the fences, and seasonal maintenance, such as pulling weeds, shoveling snow/de-icing, or sweeping and blowing leaves. He made trips to the hardware store and assisted at other sites. Testimony of Dean Wymer, Tr. 303, l. 21-25. His work day in the afternoons was not predictable. Any of

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his maintenance tasks would be interrupted if Charlotte or any tenants needed assistance. Testimony of Dean Wymer, Tr. 278-281 99. The evidence was that Dean also answered the phone in the office when

Charlotte required breaks, accepted payments from tenants, performed "tracing" on delinquent tenants, monitored the certified mail that was required on "lock outs" and performed marketing for the site. Testimony of Charlotte Schneider, Tr. 40, l. 24-41, l. 3. 100. Dean Wymer testified that he also had contact with tenants either to assist

tenants or resolve tenant complaints about once a day after business hours. Testimony of Dean Wymer, Tr. 284, l.13,14. 101. He performed at least one security check each day before he went to bed

and sometimes performed two outside of business hours. Testimony of Dean Wymer, Tr. 287. He performed security checks on Sundays and on his days off. Testimony of Dean Wymer, Tr. 288, l. 15-20. Security checks usually took him 30 minutes to perform. Testimony of Dean Wymer, Tr. 287, l. 8. 102. He assisted the relief manager on his days off with tasks she could not

perform such as repair of doors. Testimony of Dean Wymer, Tr. 289, l. 15. On Sundays he performed cleaning and security checks and worked 4 to 5 hours. Testimony of Dean Wymer, Tr. 301, l. 1. He performed other duties requested by the employer after business hours such as watering the lawn during the night. He testified that he turned on a sprinkler system to water the lawn but stayed outside while the sprinklers were running to watch for the water police. Testimony of Dean Wymer, Tr. 286, l. 9

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103.

He testified that he was able to go to the apartment and not work

approximately twice a week for periods of up to two hours during scheduled business hours, otherwise he was occupied with work. Testimony of Dean Wymer, Tr. 283, l. 2123. The job duties of resident manager at the Iliff site required a minimum of 8 hours a day, at times he worked 9 to 91/2 hours a day, for example when there were leaves on the ground. Testimony of Dean Wymer, Tr. 278, l.12-13. He testified that during the blizzard of March, 2003, he worked as many as 12 hours a day for three days. 104. Dean Wymer's testimony was supported by the business records of the

employer. The site inspection reports demonstrated that the site was maintained to the employer's high standards. Exhibit 65. All site inspection reports, including one performed six weeks before he terminated his employment are positive and even enthusiastic. Exhibit 65. The manager's job description attached to the MEA is comprehensive and describes a full time job, requiring for example security checks of the "entire complex" six times a day as well as marketing to outside businesses and "helping tenants solve problems; taking care of complaints" in addition to maintenance duties." A4-0006. The Landvest Manual describe Landvest's expectations that managers will take full responsibility for the property including painting and snow shoveling. Ex. 40 -0012-0016. Exhibit A50 describes Landvest's expectations that individual bollards would be repainted when scraped, that tree trimming and tree removal as well as fence post replacement would be performed by the resident manager. Ex. 50-001. 105. Dean Wymer's testimony was supported by the testimony of other

witnesses. Shirley Noe testified that when he husband, John Cramer, managed the Iliff -27-

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site he worked at least 8 hours a day. Testimony of Shirley Noe, Tr. 251, l. 25. Charlotte Schneider testified that Dean Wymer worked 6 to 8 hours a day not including work performed after business hours and work on Sundays. Testimony of Charlotte Schneider, Tr. 223. l.9; Tr. 239, l. 11-15. Earl Adolphson testified that the job of resident manager was a full time job requiring more than 40 hours a week. Testimony of Earl Adolphson, Tr. 340 l. 13-14. Earl Adolphson frequently recorded more than 40 hours on his time sheets, when first instructed to record actual time, even though his site was smaller, was closed on Sundays and he did not record trips to the bank and security checks performed outside business hours. Tr. 364,l. 7-9, Tr. 363, l. 13; Ex. A61- 0109, 0111, 0114, 0117. He was subsequently told to "keep his hours down." Testimony of Earl Adolphson, Tr. 354, l. 10. Louise Adolphson testified that very rarely did Earl perform his job in less that 8 hours. Testimony of Louise Adolphson, Tr. 182, l. 20, 21. Warren Fisher consistently recorded 40+ hours of work for the first 3 months of his employment. Ex. 65-0005-015. Charles Van Kirk recorded 8 hours a day throughout his employment, but only submitted 22 hours on the recap sheet for payment. Ex. 39. 106. Dean Wymer proved by a preponderance of the evidence that he

performed work for which he was not properly compensated. He produced sufficient evidence to show the amount and extent of the work performed as a matter of just and reasonable inference. 107. His testimony supports a reasonable inference that he worked at least 36

hours a week during business hours. On Sundays he worked an additional 4-5 hours performing trash detail, security checks, cleaning the office and assisting tenants. -28-

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Throughout his employment, Wymer regularly performed work outside regular hours, such as security checks and assisting tenants. While the amount of work performed cannot be established with precision, allowing 4 ½ hours per week for security work, and one hour per week for other work, such as dealing with tenants and monitoring the facility, is fair to the employee and employer. Credibility of Witness- Neil Murray 108. Neil Murray's testimony was directly contradicted by his own deposition,

the testimony of other witnesses and the records of Landvest. Neil Murray so grossly understated the time it took to perform tasks required by Landvest that one could reasonably conclude that he intentionally misrepresented the job of resident manager to the Court. For example, he testified that the "end of month" report only required half an hour to complete. Testimony of Neil Murray, Tr. 569, l. 4. Shirley Noe testified that it took 2 ½ to 3 hours. Testimony of Shirley Noe, Tr. 259, l. 7-10. Louise Adolphson testified it took more than 2 hours to prepare. Testimony of Louise Adolphson, Tr. 188, l. 25. He testified that all daily maintenance including sweeping, trash pick up, weed removal and cleaning units could be completed in one hour a day. Testimony of Neil Murray, Tr. 582, l. 11-12, Tr. 576, l. 21. He testified that he could go to the bank, conduct business and return to the site in 10 or 15 minutes. Testimony of Neil Murray, Tr. 575, l. 24. He could remove a stain from concrete in 5 minutes. Testimony of Neil Murray, Tr. 577, l.5. 109. He volunteered on direct examination that he encouraged resident

managers to go to their apartments during their "four hour shift." Testimony of Neil Murray, Tr. 583, l. 6-11. But when asked at deposition about Landvest's requirement -29-

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for staffing the office he stated that the office had to be open and that the manager had to "be there." When asked what "be there" meant at deposition he said managers had to be "physically" in the office. Testimony of Neil Murray, Tr. 599, ll. 16-19. 110. He testified on direct examination that the job could easily be done

in 22-35 hours. Tr. 586. At deposition he testified that the job could "easily" be done in 22 hours. Tr. 598. And adopted that testimony at trial. Yet as regional manager he was supervising the Adolphsons, the Van Kirks and Charlotte Schneider and Dean Wymer all couples who had the wife perform full time duties in the office. He couldn't possibly have believed that the job could be performed in 22 hours since that would require the husband to spend 22 hours in the office and leave him no time to perform maintenance work. 111. He claimed that he worked full time at the Iliff site for 30 days after

the Plaintiffs resigned but his time sheets record no time at the Iliff site and show him working at the Austin Bluffs site in Colorado Springs at the time, working 10:00 a.m. to 2:00 p.m. Ex. 29-135-144 112. He testified at deposition that he had no recollection of anyone ever telling

him that he was supervising salaried employees. Testimony of Neil Murray. Tr. 595, l. 15-16. He admitted that at deposition he testified that he was supervising hourly employees. Testimony of Neil Murray, Tr. 596, l. 1. At trial he testified that he explained to everyone he supervised that they were salaried and that their pay was for between 22 and 35 hours and that his testimony was "absolutely consistent." Testimony of Neil Murray, Tr. 597. L. 8.

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113.

He testified that Dean Wymer's job performance declined after Landvest

denied Charlotte's request to lower her salary in early December 2002 yet the only documentation he created after December, 2002 states "office and site look good!" Ex. 65-008. 114. He testified at trial that he accurately recorded his hours worked, yet every

time sheet he submitted for a 2 year period records exactly 4 hours of work. Ex. 29. He claimed he rarely had to help a customer after 5:00 p.m. Testimony of Neil Murray, Tr. 603, l. 14-17. He refused to answer whether he performed all required security checks during his 4 hour shift. Testimony of Neil Murray, Tr. 602-603. 115. He testified that hand shoveling of snow was not the responsibility of

resident managers. Testimony of Neil Murray, Tr. 605, ll. 17-18. He testified that resident managers were not required to perform hand shoveling to prevent flooding of units, Testimony of Neil Murray, Tr 606, l. 3. Yet the Landvest Manual states: "Hand shoveling should be done to avoid snow melting and running into small units." Ex. 40015, para. 3. 116. He denied that he told Louise and Earl Adolphson that he was recording

35 hours on his time sheets and that they could do the same. Testimony of Neil Murray, Tr. 608, l. 22-609, l. 10. They both testified that he did. Testimony of Earl Adolphson,Tr. 359, l. 1; Testimony of Louise Adolphson, Tr. 178, l.5. Work Performed by Charlotte Schneider 117. The evidence was that Charlotte Schneider was a conscientious and

serious worker who carefully followed Landvest's detailed procedures. She testified

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credibly that she remained in the office working, except for short breaks during scheduled business hours. 118. Some of the tasks Plaintiff, Charlotte Schneider performed for Landvest

included: staffing the office 40 or 44 hours a week; direct leasing to new tenants; contact with potential tenants; answering phones; helping tenants "solve problems"; resolving complaints; handling "local books"; recording information about tenants and units; accepting rental payments; reminding tenants to make payments by phone and written correspondence; helping to maintaining the complex in "good condition and good order"; collecting payments from locked out tenants; reopening locked units; monitoring tenants activities; monitoring gates and computerized security systems; representing the company to the public; preparing days-end, week-end and month-end and other reports; and transmitting them to the home office. Ex. 068-018, 019. 119. It was Landvest's management's policy that one person be in the office

during office hours. Testimony of Charlotte Schneider, Tr. 42, l. 8-10. This requirement was also evidenced by: a. The site inspection report form which asks whether the manager was in the office; b. Landvest managers' expectation that the telephone be answered during office hours. Cordless phones were not provided prior to April, 2003, and the phone could not be answered from inside the apartment. Testimony of Charlotte Schneider, Tr. 42, l. 11; c. Landvest residents were to remove bells from their desks. Testimony of Charlotte Schneider, Tr. 42, l. 20-21; and -32-

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d.

Landvest managers requested that doors between offices and apartments be closed. Testimony of Charlotte Schneider, Tr. 43, l. 7.

120.

Plaintiffs fulfilled their duty by having Charlotte staff the office during

regular business hours. She remained in the office working during business hours and spent less than 30 minutes a day in the apartment. Testimony of Charlotte Schneider, Tr. 44, l. 10. 121. She testified that she was kept busy answering telephone calls, making

collection and other calls, (Tr. 103, l.1-6) leasing units, accepting payments preparing reports for Landvest, processing "vacates," making bank deposits, filing and performing numerous other duties and procedures as described in the Landvest Manual. Ex. 40. 122. In addition from November 2002- March 2003 she worked a four hours on

every Sunday staffing the office. Ex. A1. In addition she cleaned the office on Sundays and worked as many as 6 hours on Sundays when the office was open. Two to three hours on Sundays when the office was closed. Tr. 96.l. 6. Charlotte Schneider worked between two and three hours every week after 6:00 p.m. preparing end-of-day, end-ofweek, and end-of-month reports. Testimony of Charlotte Schneider, Tr. 38, l. 25- 39, l. 1. She devoted time after office hours to dealing with tenants who had been locked out of their units, potential tenants who were seeking to lease units, (Tr. 100, l. 24) and she spent 1 to 1 and ½ hours twice a month preparing late notices after hours. Tr. 110, l. 16-17. 123. Charlotte Schneider's testimony was supported by the testimony of other

witnesses. Shirley Noe testified that she worked 9 to 9 ½ hour days managing the Iliff -33-

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site and did not take lunch breaks. Testimony of Shirley Noe, Tr. 247, l. 16. Louise Adolphson testified that it was difficult to manage a smaller site, the Buckley site, in fewer than 40 hours a week. Testimony of Louise Adolphson. Tr. 184, l. 14-15. Knowledge of Management of Work Performed By the Plaintiffs David Mason 124. Charlotte Schneider complained directly to David Mason that she was not

being paid for all hours worked. Testimony of Charlotte Schneider, Tr. 86, l. 11-16. His response, which was to the effect that those who liked Landvest stayed and those who didn't left, demonstrated a prior knowledge of or a lack of interest in paying her for all hours worked. John Cramer also told David Mason that Charlotte Schneider was complaining about not being paid for all hours worked. Deposition of John Cramer, p. 49, l. 15 to p.51, l. 7. 125. The evidence was that David Mason had authority over the pay practices

at Landvest (Testimony of David Mason, Tr. 382, l. 7.) and was involved in the implementation of the overtime policies of Landvest, including intervening in pay matters involving compensation to individuals for hours recorded on their time sheets. He personally authorized payroll clerks to alter time sheets to delete overtime hours submitted by resident managers that did not conform to Landvest's overtime policy. See Ex. A1-0080; Ex. 25-081. 126. David Mason knew or should have known that the Plaintiffs' time sheets

did not record actual hours worked. Records of Landvest indicate that David Mason personally reviewed at least some resident manager's time sheets which recorded overtime. See Ex. A1-0080; Ex. 25-081; Ex. 39-028; Ex. A36 (memo disallowing -34-

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payment for attending a sales meeting). The evidence was that he personally authorized payment of, or denial of, individual resident manager's requests for overtime compensation. While he claimed at trial that time sheets recording overtime were brought to him on an ad hoc basis by clerks, the evidence was that he was zealously involved in denying requests for pay. For example, disallowing a single hour's pay for a manager's snow shoveling. Ex. 39-28. 127. The uniformity of the time sheets submitted by all resident managers in

the Colorado and New Mexico region prior to June, 2003 provided notice to anyone reviewing the time sheets that they did not reflect actual hours worked. Additionally, it is not plausible that employees working under different regional managers would consistently record exactly 4 hours per day of work or 22 regular hours unless they were instructed to do so by supervisors. It is not plausible that a uniform company wide practice of recording only 4 hours per day of work would exist unless regional managers had been told by management to instruct resident managers to record their time in this manner. 128. David Mason acted directly in the interests of the employer in relation to

the Plaintiffs by formulating record keeping and overtime policies which insured that actual hours worked would not be recorded and by disallowing recorded overtime hours worked. Considering the level of interest David Mason showed in controlling overtime costs by denying payment for recorded overtime, it is not credible that someone other than Mason was responsible for formulating record keeping and overtime polices at Landvest which insured that employees, including the Plaintiffs, would not be paid for all hours worked. -35-

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129.

Shirley Noe testified credibly that David Mason was personally involved in

implementing the policy of having employees falsely record hours worked. Testimony of Shirley Noe, Tr. 252, ll. 11-12. 130. David Mason wrote a letter on December 17, 2002 to Charlotte Schneider

(Ex. A19) where he wrote: Slanting one manager's duties would compromise the minimum wage structure without having to include to value of the apartment as income. Ex. A19. 131. David Mason knew on December 17, 2002 that the Landvest pay plan

was based on payment of minimum wage for hours worked under 40 in a work week. It is not believable that the salary chosen by Landvest was coincidentally one dollar above minimum wage. (Biweekly salary = 415.39 /2 weeks = 207.70. 40 hours x $5.15 minimum wage = $206.00). If David Mason believed Charlotte Schneider was only working 22 regular hours a week as reported on her time sheets he could have lowered her salary, as he had done for others, without compromising "the minimum wage structure." Mason Credibility 132. David Mason maintained at trial that the payroll records of Landvest which

were admitted into evidence accurately recorded the hours worked by resident managers. Testimony of David Mason, Tr. 395, l. 14. No one who compares the time sheets made by resident managers after they were instructed to record "actual" hours worked (Ex. 59 memo to resident managers) with the 4 hour a day time sheets -36-

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could believe that the earlier time sheets accurately record hours worked. Compare Ex. A61-001-103 with Ex. A61- 104-118; compare Ex. A-65 (Fisher, hired June, 03) with Ex. A-67 (French); compare Ex. 51 (Paccione) with Ex. A63, A64 (Beck). David Mason was also aware that the job duties of resident manager required more than the 4 hour shift recorded on almost all time sheets created at Landvest before June, 2003. He knew all six required security checks (Ex. A4-006 para. 8) could not performed during the recorded 4 hour window. He knew that if a husband was working in the office 4 hours a day he would have no time for maintenance and repair duties. He knew that a manager couldn't perform maintenance and staff the office at the same time. David Mason testified falsely when he testified that the Landvest records produced at trial were accurate records of hours worked (Testimony of David Mason, Tr. 395, l. 14) and that Landvest always kept accurate records of hours worked by employees. Testimony of David Mason, Tr. 415, l. 18. 133. David Mason also testified falsely when he claimed that he had been

deceived by the Plaintiffs' time sheets which recorded 22 regular hours and that no one had any reason to believe that they worked more than 22 hours. Testimony of David Mason. Tr. 449, l. 12-13, Tr. 449, l. 21. Charlotte Schneider told him that she wasn't being paid for all hours worked. Testimony of Charlotte Schneider, Tr. 86, l. 11-16. John Cramer also told David Mason that Charlotte Schneider was complaining about not being paid for all hours worked. Deposition of John Cramer, p. 49, l. 15 - p. 51, l. 7. 134. David Mason testified falsely when he denied that the September 30,

2003 memorandum (Ex. 59) instructing employees to record actual hours worked was a change in the record keeping practices at Landvest. Testimony of David Mason, Tr. -37-

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470, ll. 22-23 and that recording actual hours worked had been the policy of Landvest "all along." Testimony of David Mason, Tr. 473, l. 8. The change in record keeping at Landvest in 2003 was accompanied by a lowering of the overtime rate to $8.90/hour. (See Ex. A65-005) It is only reasonable to believe, based on David Mason's direct involvement in the overtime policies at Landvest that the decision to lower the overtime rate was either made by him or that he was informed of the change. John Cramer 135. John Cramer was authorized by Landvest to train the Plaintiffs (Testimony

of David Mason, Tr. 438, l. 8) to represent the pay plan to the Plaintiffs (Testimony of David Mason, Tr. 438, l. 15) to supervise Plaintiffs and to review time sheets and disallow or approve hours submitted for payment (Testimony of David Mason, Tr. 439, l. 24; Testimony of Jeff Etter, Tr. 669, l. 14; Deposition of John Cramer, p. 33, l. 11- 14). 136. Charlotte Schneider told John Cramer that she and Dean were working

more than the hours recorded on their time sheets. Testimony of Charlotte Schneider, Tr. 45, l. 20- 46, l. 2. Deposition of John Cramer, p. 25, l. 25- p. 26, l. 5. Plaintiffs' Regular Rate of Pay 137. Plaintiffs' have demonstrated by a preponderance of the evidence

that their regular rate of pay was $9.44 per hour. 138. The letter dated May 22, 2003 written by Michael Gillespie, Landvest's

lawyer at Husch and Eppenberger, LLC. , in an analysis of the MEA for the Colorado Department of Labor admits that the regular hourly rate of pay was $9.44/hour. Ex. 001-004, para. 3. David Mason admitted that he read this letter before it was sent to the Colorado Department of Labor. Testimony of David Mason, Tr. 432, l