Inn faces bigger troubles than local lodging tax
Three court judgments totaling more than $151,000 and nearly $114,000 worth of unpaid West Virginia sales taxes are among the mounting troubles for the owners of The Country Inn in downtown Berkeley Springs.
In addition, another lawsuit against the Inn is now working its way through the court system.
The Inn has been in default of a court settlement with the Town of Bath to cover the remainder of a $47,795 debt for back hotel taxes and $12,705 in unpaid garbage and street fees.
Town attorney Richard Gay filed the judgment details with the Morgan County Clerk’s office on April 2, as part of a record of liens against the Inn.
The judgment specified that the debt wouldn’t be filed with the land records of Morgan County “unless there is failure of the Defendant 5042 Holdings and/or Nancy Sostaric to comply with the terms” of the court order.
Sales taxes unpaid
Among other liens listed for the Inn and owners Nancy and Stjepan Sostaric are ten separate tax liens from the State of West Virginia for overdue sales tax.
While some of these date as far back as several months in 2005, they largely reflect sales from 2009 to 2011 and total $113,958 in taxes, interest and penalties owed to the State Tax Department. The most recent tax lien was recorded in the County Clerk’s office on April 27.
In addition to the court judgment about overdue hotel taxes, the Inn and its owners face a federal court judgment of $85,000 plus interest.
That judgment stems from the 2011 settlement of a lawsuit that was brought by several former Inn employees, who claimed they were sexually harassed by other employees while management failed to stop the harassment.
The Inn also owes $6,171 plus court costs to Saval Foodservice under a court judgment from August 2011, according to documents in the County Clerk’s Office.
The company sued the Inn in 2010 for breach of contract and failure to pay for food supplies.
Employee sues over pay
A civil case against the Inn in Morgan County Circuit Court also accuses the Sostarics of conspiring to use an employee’s tax and medical insurance withholdings for their own purposes.
Former Inn employee Cindy Farris initiated the case in Magistrate Court in May 2011, claiming the Inn withheld $836 in medical insurance premiums from her paycheck between September and December 2010, knowing that Farris’ insurance policy had been cancelled.
This February, Farris amended the complaint, claiming that the Sostarics had also failed to properly report and remit taxes taken from her paycheck.
She is also arguing that she wasn’t paid wages due to her within 72 hours of terminating her employment at the Inn, as required by the West Virginia Wage Payment & Collection Act.
The lawsuit accuses the Sostarics of conspiring with each other to “convert the wages of the plaintiff and other employees for their own use.”
The case is now set to go on trial in September.
When the suit was originally filed against the Sostarics, they were represented by local attorney Tina Byers, but, according to court documents, they are now representing themselves.
Farris is represented by Martinsburg law firm Hammer, Ferretti and Schiavoni.