Bed & Breakfast Allegedly Violates Fair Labor Standards Act


Accounting ExpertCourt: United States District Court for the District of Maryland
Jurisdiction: Federal
Case Name: Balbed v. Eden Park Guest House, LLC
Citation: 2019 U.S. Dist. LEXIS 132738

Facts

The plaintiff filed a motion against the defendant alleging that she had not been paid wages that were due to her according to the Maryland Wage and Hour Law, Fair Labor Standards Act, and the Montgomery County, Maryland minimum wage law.

The defendant, Eden Park Guest House, was a Maryland-based bed and breakfast. Eden Park hired the plaintiff to serve as its innkeeper. The parties entered into a written agreement in which the defendant paid the plaintiff $800/month and provided her with lodging at the inn, laundry, utilities, and food. The plaintiff’s duties as innkeeper included answering phones, making reservations, replying to emails, checking guests in and out, serving breakfast to guests, cleaning public areas and guest rooms, and managing social media presence.

The defendant contended that the contract required the plaintiff to work only 29 hours per week, entitling her to $1107.80 per month. The defendant further claimed that it generously compensated the innkeeper by providing lodging valued upwards of $1800/month. The plaintiff contested the assessment of the lodging’s value and alleged that the defendant forced her to work more than 100 hours per week without time off. The plaintiff subsequently filed the present suit.

During discovery, the defendant offered the expert opinion of an accounting expert witness. The accounting expert used data given by the defendant to calculate the in-kind compensation of food and lodging provided to the plaintiff by the defendant. The plaintiff filed the current motion to exclude the defense expert’s testimony.

The Accounting Expert

The defendant’s accounting expert witness was a certified public accountant (CPA) and a certified valuation analyst. The expert was supremely skilled at interpreting and analyzing business and financial data and co-founded an accounting firm in Maryland. Here, she served as the accounting and auditing principal overseeing the firm’s audits and reviews, conducting business valuations, and leading strategic performance management.

The expert graduated summa cum laude from Mount Saint Mary’s College in Emmitsburg, Maryland with a bachelor’s degree in accounting. The expert was also a member of several industry organizations including the American Society of CPAs, Maryland Association of CPAs, National Association of Certified Valuation Analysts, Consulting Accountants’ RoundTable, and Leadership Frederick County.

Discussion

According to the court, the expert was sufficiently qualified to offer an expert opinion in this case because she possessed specialized knowledge, skill, experience, training, and education that could assist the trier of fact in determining the amount of credits the defendant can claim (citing In re Minh Vu, No. DKC-12-3184, 2013 U.S. Dist. LEXIS 127759, 2013 WL 4804822, at *11 (D. Md. Sept. 6, 2013 where the court found an accountant to be qualified enough to be an expert in a forensic accounting issue).

The court found the expert’s testimony to be reliable as she had used logical formulas to calculate the lodging and food expenses incurred by the defendant, which was based on the prevalent accounting practices,according to the court. The court also noted that because the expert’s opinion was subject to being tested by vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof, it did not seem as if the evidence had “greater potential to mislead than to enlighten.” (citing Westberry v. Gislaved Gummi AB, 178 F.3d 261 (4th Cir. 1999).

The court further noted that the expert’s opinion was relevant because it could assist a fact-finder in ascertaining the cost of food and lodging of the plaintiff which was borne by the defendant and necessary to determine whether the plaintiff was due further wages.

Held

The court held that the expert’s opinion was admissible under the standards set by Daubert.

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