United States District Court, E.D. Michigan, Southern Division
WATERMARK SENIOR LIVING RETIREMENT COMMUNITIES, INC., Plaintiff,
MORRISON MANAGEMENT SPECIALISTS, INC. Defendant.
OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO
CORBETT O'MEARA UNITED STATES DISTRICT JUDGE
the court is Defendant Morrison Management Specialists,
Inc.'s motion to dismiss Plaintiff's complaint, which
has been fully briefed. Pursuant to L.R. 7.1(f)(2), the court
did not hear oral argument.
Watermark Senior Living Retirement Communities, Inc.
(“Watermark”) operates a nursing home in
Franklin, Michigan. Watermark contracted for Defendant
Morrison Management Specialists, Inc.
(“Morrison”) to provide kitchen and dining
services at the facility. In 2012, Willie Mae Henderson, an
elderly patient with Alzheimer's, wandered away from her
room and subsequently died after drinking dishwashing
detergent. Ms. Henderson's estate sued Watermark,
alleging that the nursing home was negligent in understaffing
its facility and improperly maintaining and securing the
kitchen cabinet where the detergent was located.
did not bring Morrison in as a third-party defendant. The
Henderson lawsuit went to trial in October 2015 in Oakland
County Circuit Court. Watermark argued at trial that Morrison
employees locked the cabinet doors in question, but that some
unknown person pried open the cabinet between the time those
employees left and when Ms. Henderson ingested the detergent.
The jury found Watermark to be negligent and awarded $5.08
million to Ms. Henderson's estate. See
Def.'s Ex. C (Trial Transcript) at 123-25. A judgment in
favor of the Henderson estate was entered on November 4,
2015. Watermark filed a motion for judgment notwithstanding
the verdict, new trial, or remittitur, which was denied by
the court. See Pl.'s Br. at 4. The court also
awarded case evaluation sanctions against Watermark.
rather than appealing the judgment, Watermark settled with
the Henderson estate for $3, 650, 000. Compl. at ¶ 16.
On December 1, 2016, the court entered a stipulated order
setting aside the judgment and dismissing the action
“with prejudice and without costs to either
party.” Pl.'s Ex. B.
23, 2017, Watermark filed this action against Morrison,
alleging claims of contractual indemnification and breach of
contract. Watermark alleges that Morrison breached its
contractual duties to Watermark by failing to safely operate
and maintain the nursing home's kitchen. Specifically,
Watermark contends that Morrison's negligent failure to
lock the kitchen cabinet allowed Ms. Henderson to access the
detergent, which led to her death. Compl. at ¶¶
5-8, 10-11, 21-22. Watermark seeks $3, 650, 000 in damages
Standard of Review
has filed a motion to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6), arguing that Watermark's claims
are precluded by collateral estoppel. To survive a motion to
dismiss, the plaintiff must allege facts that, if accepted as
true, are sufficient “to raise a right to relief above
the speculative level” and to “state a claim to
relief that is plausible on its face.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).
See also Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50
(2009). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. at 1949.
See also Hensley Manuf. v. Propride, Inc., 579 F.3d
603, 609 (6th Cir. 2009). “Although
typically courts are limited to the pleadings when faced with
a motion under Rule 12(b)(6), a court may take judicial
notice of other court proceedings without converting the
motion into one for summary judgment.” Buck v.
Thomas M. Cooley Law Sch., 597 F.3d 812, 816
(6th Cir. 2010).
courts must give the same preclusive effect to a state-court
judgment as that judgment receives in the rendering
state.” Abbott v. Michigan, 474 F.3d 324, 330
(6th Cir. 2007) (citing 28 U.S.C. § 1738).
This court, therefore, must look to Michigan law to determine
the preclusive effect of the judgment in the Henderson
lawsuit against Watermark. Under Michigan law, in general
three elements must be satisfied for collateral estoppel to
apply: “(1) a question of fact essential to the
judgment must have been actually litigated and determined by
a valid and final judgment; (2) the same parties must have
had a full and fair opportunity to litigate the issue; and
(3) there must be mutuality of estoppel.” Monat v.
State Farm Ins. Co., 469 Mich. 679, 682-84 (2004)
(citation omitted). However, “where collateral estoppel
is being asserted defensively against a party who has already
had a full and fair opportunity to litigate the issue,
mutuality is not required.” Id. at 695.
complaint, Watermark alleges Morrison was responsible for
leaving a cabinet unlocked and allowing Ms. Henderson to
access toxic detergent. Compl. at ¶¶ 5-8. This
issue is central to both of Watermark's claims of
contractual indemnification and breach of contract. See
id. at ¶¶ 10-11, 20-22. Watermark does not
dispute that it actually litigated this issue, and that it
had a full and fair opportunity to do so, in the Henderson
lawsuit. Indeed, the Henderson estate alleged that Watermark
was responsible for the unlocked cabinet and for allowing Ms.
Henderson to wander unsupervised. This issue was presented to
the jury, which found in favor of the estate. A judgment was
entered, and the court denied Watermark's motion for
contends that because the judgment was subsequently vacated
due to settlement, there is no “valid and final
judgment” upon which to apply collateral
estoppel. It is true that a judgment that has been
set aside on appeal has no preclusive effect.
See generally Erebia v. Chrysler Plastic Prods.
Corp., 891 F.2d 1212, 1215 (6th Cir. 1989)
(judgment reversed on appeal has no preclusive effect).
Watermark cites no authority, however, for the proposition