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Watermark Senior Living Retimrement Communities, Inc. v. Morrison Management Specialists, Inc.

United States District Court, E.D. Michigan, Southern Division

August 28, 2019




         This matter is before the Court on Defendant Morrison Management Specialists, Inc.'s motion for judgment on the pleadings (Dkt. 28). Plaintiff Watermark Senior Living Retirement Communities, Inc., brings this breach of contract action against Morrison for allegedly failing to exercise ordinary care in executing its obligations to manage the kitchen at one of Watermark's retirement communities, resulting in the death of one of its residents. Briefing on the motion is complete. Because oral argument will not aid the Court's decisional process, the motion will be decided based on the parties' briefing. See E.D. Mich. LR 7.1(f)(2). For the following reasons, the Court denies Morrison's motion.

         I. BACKGROUND

         This action arises from the tragic death of Willie Mae Henderson. Henderson resided at Watermark's assisted-living community, The Fountains of Franklin. In 2012, Henderson wandered from her room in the memory care unit to the facility's kitchen, opened a cabinet door under a sink that contained toxic dishwashing detergent, and drank the toxic detergent, which resulted in her death. Compl. ¶¶ 5-7. At that time, Morrison was under contract to provide dietary services at the facility, which included managing and securing the kitchen facility. Id. ¶ 8; Agreement, Ex A. to Mot., at 1 (Dkt. 28-1).[1] According to Watermark, two Morrison employees were the last individuals to have access to the cabinet door immediately prior to the incident. Compl. ¶ 11.

         Henderson's estate sued Watermark in state court, alleging that Watermark was negligent for leaving the cabinet door unlocked. Compl. ¶¶ 4-6. Watermark did not implead Morrison in the state court action. Instead, it defended the action alone. Countercl. ¶ 4 (Dkt. 25). The jury found against Watermark and awarded Henderson's estate $5.08 million. Id. ¶ 5. Rather than appeal the judgment, Watermark settled with Henderson's estate for $3.65 million. Id. ¶ 6.[2]Morrison's counsel attended the settlement mediation. Compl. ¶ 16. A few months later, Watermark filed the present action against Morrison alleging claims of contractual indemnification and breach of contract seeking to recover the $3.65 million plus all associated expenses. Countercl. ¶ 8; Compl. at 5.

         Morrison filed a motion to dismiss this case, arguing that collateral estoppel barred the action (Dkt. 3). Judge O'Meara agreed with Morrison and granted the motion (Dkt. 17). Watermark appealed. The Sixth Circuit found that the indemnification claim was precluded, because it depended on Watermark showing that the damages it sought were not the result of its own negligence - a proposition it could not establish, as the state court jury had found to the contrary. Watermark Senior Living Ret. Communities, Inc. v. Morrison Mgmt. Specialists, Inc., 905 F.3d 421, 430 (6th Cir. 2018). However, the Sixth Circuit held that the same preclusive effect did not apply to the breach of contract claim, because Watermark's negligence is not a defense to such an action. Id. at 431. The Sixth Circuit remanded the breach of contract claim and the matter was reassigned to the undersigned after Judge O'Meara's retirement. Morrison answered the complaint and filed a counterclaim for contractual indemnification (Dkt. 25). The present motion for judgment on the pleadings seeks dismissal of the breach of contract claim and a judgment for Morrison for its expenses and attorney fees in defending against the breach claim.


         Morrison moved under Federal Rule of Civil Procedure 12(c) for judgment on the pleadings. Any party may move for the entry of a judgment after the pleadings are closed, but early enough not to delay trial. Fed.R.Civ.P. 12(c). Courts apply the same analysis to motions for a judgment on the pleadings under Rule 12(c) as is applied to applications for dismissal under Rule 12(b)(6). Warrior Sports, Inc. v. Nat'l Collegiate Athletic Ass'n, 623 F.3d 281, 284 (6th Cir. 2010). “For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007). However, a court need not accept as true legal conclusions or unwarranted factual inferences. Id. at 581-582.

         When evaluating a motion for a judgment on the pleadings, a court considers the complaint, the answer, and any written instrument attached as exhibits. Fed.R.Civ.P. 12(c). A court may also consider any undisputed facts. See Mills v. Barnard, 869 F.3d 473, 486 (6th Cir. 2017) (citing Stafford v. Jewelers Mut. Ins. Co., 554 Fed.Appx. 360, 369-370 (6th Cir. 2014) (taking judicial notice of undisputed facts in documents considered by district court on ruling on Rule 12(c) motion)).

         III. ANALYSIS

         Morrison makes three arguments in support of its motion for judgment on the pleadings. First, it argues that Watermark sat on its rights for more than four years and, therefore, laches bars any recovery in this case. Second, it argues that Watermark fails to state a breach of contract claim because the damages it seeks do not naturally arise from a contract breach. Finally, Morrison argues that the Sixth Circuit has already found that Watermark was responsible for Henderson's death, which triggers Morrison's contractual right to indemnification. The Court will take each argument in turn.

         A. Laches

         Morrison argues that the doctrine of laches bars Watermark's breach of contract claim, because Watermark delayed bringing this action for more than four years. Mot. at 7. Laches is an affirmative defense that bars an action where there is an unexcused or unexplained delay in commencing the action resulting in prejudice to an opposing party. Pub. Health Dep't v. Rivergate Manor, 550 N.W.2d 515, 520 (Mich. 1996). Although the passage of time is important, “laches is not triggered by the passage of time alone.” Knight v. Northpointe Bank, 832 N.W.2d 439, 442 (Mich. Ct. App. 2013) (citation omitted). “It is the prejudice occasioned by the delay that justifies the application of laches.” Id. Generally, “‘[w]here the situation of neither party has changed materially, and the delay of one has not put the other in a worse condition, the defense of laches cannot . . . be recognized.'” Kuhn v. Sec'y of State, 579 N.W.2d 101, 108 (Mich. Ct. App. 1998) (quoting Lothian v. City of Detroit, 324 N.W.2d 9, 14 (Mich. 1982)).

         There is an interplay between laches and the statute of limitations. Innovation Ventures, LLC v. Custom Nutrition Labs., LLC, 912 F.3d 316, 343 (6th Cir. 2018). Under Michigan law, a claim filed within the statute of limitation gives rise to a rebuttable presumption that any delay in the filing of the complaint was reasonable. Id. When the presumption is rebutted, however, laches may bar a claim even where the applicable ...

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