Contractual Disputes and Identical Duties: Moresi v. Res. Energy Ventures & Constr. Co. LLC

Moresi v. Res. Energy Ventures & Constr. Co. LLC, 2018 U.S. Dist. LEXIA 167237 (W.D. La 2018).

By: Emily Welch

This action arises out of a class action brought by Dylan John Moresi and other similarly situated plaintiffs who allege that Gulf Coast Services, Inc. (“GSSI”) and Resource Energy Ventures and Construction Company LLC (“REVCO”) failed to pay overtime wages pursuant to the Fair Labor and Standards Act (“FLSA”). Moresi states that REVCO failed to classify himself and the other plaintiffs as non-exempt employees which resulted in the lack of overtime pay.Moresi amended the complaint to include GSSI, alleging that GSSI was a “joint employer”. The district court held that there was sufficient evidence to find that GSSI and REVCO were joint employers under the FLSA. GSSI and REVCO had a Master Services Agreement (“MSA”) to provide labor to GSSI in connection with its work building vessels. Additionally, the MSA stated that REVCO had to comply with all federal law, pay 100% of amounts due directly to REVCO employees, and to provide subcontractor labor if it chose to do so. The plaintiffs signed written agreements with REVCO which stated that they were independent contractors rather than employees. Additionally, the MSA requires REVCO to have workers’ compensation coverage, Longshore and Harbor workers’ compensation coverage, and employer’s liability coverage for the workers it provided regardless of their classification.The MSA provides that REVCO will owe GSSI defense and indemnity for Plaintiffs’ claims in this matter which includes the reimbursement of all defense costs and attorneys’ fees accumulated by GSSI in defending the suit. Louisiana law permits indemnification obligations in contracts provided that the contractual language of the provision is unambiguous and the intent of the parties is clear from consideration of the whole contract. Furthermore, under Louisiana law, the duty to defend does not always exceed the duty to indemnify especially in non-insurance contracts.In the case at bar, the duty to defend is set out in the same provision as the duty to indemnify. The court reasons that this was intended to imply that they are to be treated identically. The MSA does not give any indication that the duty to defend is meant to be determined on its own. The court is not able to determine the scope of the duty to defend because of the following reasons: (1) the duties are co-extensive, (2) there has been no finding that REVCO violated the FLSA, or (3) that GSSI is owed indemnity.  The court held that there must be a judicial finding as to if REVCO violated the FLSA before there can be determination of REVCO’s obligation for cost of defense.