seen one twenty nine watermark senior living retirement communities incorporated birth is more thing management specialist incorporated oral argument not to exceed fifteen minutes per side mr letterman for the concluded there collateral estoppel applied premised upon a jury finding of negligence on behalf of this plaintiff watermark in the underlying henderson trial subsequent to that trial the trial court vacated the judgment in that action the case settled and the judgment again was vacated as part of this settlement under michigan collateral estoppel rules the primary requirement for application of collateral stop book is the existence of a valid and final judgment upon which the defendant may assert stoppel if there is no existing valid and final judgment then collateral estoppel is not available i haven't seen too many cases exactly on this issue in either direction and other words i know there are cases that say just what you said and one could say here well there is no final judgment because it was vacated is part of the settlement but i am i right that there's not any i'm out of that help or hurt either of you but i really haven't seen anything just like this you're correct you're correct what we hear of in michigan is number one the ability of a judge to vacate a judgment under that under the court's discretion given or under the guidelines of the corporal's in number two the existence of a quote unquote veil of sign or judgment is set forth by the michigan supreme court there is no authority in either way it is as you indicate with respect to whether or not a valid judgment may include a judgment has been set aside here is clearly not a judgment clearly vacates set aside judgment for various reasons and could then be appealed but here there's no substantive reason for the vacating it was a settlement and as i understand from the  briefing you know you paid your side paid significantly less than the total judgment is of seventy percent or something but you could just as easily have paid ninety nine point nine percent for the benefit of having the judgement vacated so if we if we had a rule that anytime you settle there's no effect of it wouldn't wouldn't that give the losing party the libel party out from what the jury found simply by settling for the full amount of the virtually the full amount of the judgment parties in particular judgment debtors never want to see a judgment on their record one of the impetus is to settle the case not only is to have a reduction we're not talking about any debts he's he's the judgment debtor at that point before the judgment is set aside he's a judgment debtor ok so if there points up to the trial court in that case the trial court could do one of two things if it wants the judgment to remain intact for any purpose including for collateral estoppel purposes the judgment i'm sorry the judge may insist on entering a satisfaction of judgment even if the judgment was satisfied for an amount less than the actual judgment itself but the judgments that the judges have partially doesn't really care a judge would care however because if the judgment is set aside then there is no longer a veil of judgment for purposes of collateral estoppel and any subsequent lawsuit such as this lawsuit for indemnity would have to be retried by that same judge and that's what we had lee you can go to a different judge will under the local rules if it arises out of the same occurrence a transaction is going to be reassigned to the same judge that had  understand your answer judge boggs question which seems to me a really important one yes if we rule for you there's a serious incentive for what you call judgment debtors to pay to get rid of these judgments now you say the innocent reason for doing this people don't like don't like having judgments out there on credit that that there is an innocent explanation for doing this but there's also a very sharp elbowed explanation if we say what you're doing is ok and weiss and that's just going to create a situation where people are trying to do this all the time and i take it your only answer is well they can only do it if district courts or trial courts let them do it is that your answer that's my personal answer but the second partial answer would there at it further is it actually furthers the goal of collateral estoppel sometimes one of the eliminates continued litigation in their principle action in this case had the case not settled the underlying action would have gone up to the michigan court of appeals there are a number of appealable issues which plaintiff's counsel underlying plaintiff's counsel recognized could result in a new trial you get two levels of appeals in the state of michigan you get the court of appeals in the supreme court either of them could have reversed the judgement i don't get this i don't get this point i mean i get why you're calling partial but i'm starting to think it's non point when you say we have a ruling against you you're still stuck you're still back where you were and that's you unless you're really confirming for me this is the utility of it no it delivered what i'm trying to  whether we give the underlying jury verdict collateral estoppel if we can all say settlements are still good you can still have subtle ones the question here is in what i was saying is that it actually my position does further had the case not settled excuse me had the case not settled the underlying henderson case would have gone up to the michigan court of appeals it would have gone up there after to the michigan supreme court no matter who won or lost because of the amount of money that was filed and then there was a very good chance that it was going to go back to the point here well it would be the case directly on point no that's the problem directly am point no but the monad case which was cited by morrison talks about encouraging settlement and not guidelines in the court is supposed to weigh those guidelines and michigan now you have a situation where exercising the diversity jurisdiction argument the morrison remove the case to federal court in therefore  you have the second point which is what kind of constraints does the federal court have in creating new laws sensually or in creating an exception to the very strict requirement of the existence of a valid judgment we opened up this hearing with judge sutton observing that there is no case law either way so does that mean that there is indeed sufficient data which is the term that the six circuit uses which would permit the federal district court to create a new law to create an exception where one did not exist previously given the restraint that the federal courts are supposed to use when analyzing michigan law it's our position that the federal district court did not have that authority it had the authority instead to enforce the guidelines set forth by the michigan supreme court which require a v judgment no exceptions expressed by the michigan supreme court why didn't you and plead morrison in the initial lawsuit a strategic decision was made not to and i understand the long term approach you had well again under the law as it existed at the time we had the right to try to set aside the judgment in then to bring in a morrison without collateral estoppel the law permits that are about by all agreeing there was no law in this there was no laws on this which creates an exception to the general rule set forth by the michigan supreme court that you need a valid judgment on sleep times almost up here for a moment to your contract claim because it seems to me if if we rule against you on this part the collateral estoppel claim with respect to the contract claim is much weaker than with respect to the indemnity so yes it's our position if the contract law exists separately the breach of contract claim that you can boat you can be negligent and yet they can have breached their duties as well you're both bad guys that's correct comparative negligence our comparative negligence as against the underlying plaintiff does not as a bar to our breach of contract claim against morris and especially when our alleged negligence arose from morrison's alleged failure to do its for all of that  case has the potential to implicate public policy and how civil litigation proceeds and strategic choices that are undertaken by lawyers and the potential to multiply and expand civil litigation the reason for their client know about this litigation formal notice recently the first case that the first case morrison received notice days after the jury verdict so i didn't know about the filing of the action so your  point would be no i had no chance to intervene exactly no chance to intervene and really it's from a policy perspective i don't think you want to intervene that you had they should cage well no you never want to invite yourself into a lawsuit of course not but the whole purpose behind the policy if the case comes out their way future people in your client's position would intervene our submission to that is that's a that would create poor public policy and poor us in civil litigation because at the point that they're sued they can make strategic decisions to assess risk to mitigate their potential damages and loss and the biggest policy implication for other potential  litigants like morson which may or may not receive notice of a lawsuit is the party that's actually in the case has unilateral control over their ability to make strategic decisions and to have access to evidence to have access to that evidence while it's still fresh and to shape the facts without dealing with the trouble of not only litigating with a plaintiff but litigating with another codefendant who's interested wait too long though because they have statute of limitations problems if they tried to  sue you know five years down the road that's absolutely true your honor but you still that that in no way mitigates the difficulty of your unilaterally setting depositions doing the discovery working up your case for trial and you can hold back certain cards which the michigan supreme court has warned against face you meaning them yes exactly the defendant in the original personal injury wrongful death case can sit back hold his cards make decisions leave the other potential parties out in the dark and work up the case to take one bite to see if they fare better not having other potential adverse co defendants in the case if that doesn't go well in the meantime from a public policy perspective that they have had that unilateral access to make adverse facts for potential parties that don't even know what's going on in the litigation you know i get all your points but i mean  final judgment to be out there it requires no judgment out there it required to have a case that where we've applied anybody's apply cloud and stop the best i can tell when there's no final judgment there i think the judgment period i think that's partially true your honor but that was the case law about collateral estoppel and applying restatement section thirteen of judgments says collateral estoppel the final judgment rule doesn't require a final judgment in the traditional technicals and it walks through what does it mean for a stop a purpose is to have a valid final judgment and that standard is is the decision of the court whether it's a jury verdict a judgment or a legal ruling sufficiently firm and procedurally definite think about it this way i don't think this is that far off you know one rule is if a case becomes moot on appeal so your supreme court has had a case like this just the other day the normal rule is when it gets moved and you haven't been able to appeal all the way up months in where says you vacate the prior judgments ok now that's not through a settlement i get it but the point is it's mooted and the not you don't need to you don't need an agreement about this this is what happens as a matter of law they  vacates the lower court rulings because no one had a chance to peel it all the way up one can make the argument in your case even if this settlement agreement had said nothing about vacating the judgment that would have been a natural corollary of a settlement day that the d c circuit ruling that they vacated that ain't worth much collateral stoppel effect i don't think you're going to get anywhere with that and so why forget that there looks like there's some artful litigating going on in a way it's who cares and that would have happened would have happened anyway if you settle in the case on appeal i don't think for a stoppel purposes that is the outcome that most courts would reach that's not the outcome that the third circuit court of appeals reached  that's not the outcome the ninth circuit reached in the bates case when they assessed those are your point that there's there is not those things yes cases what's a those most cases what you're talking about those are both cases where a final judgment  in one instance from a jury in another instance a legal ruling and of findings in fact and conclusions of law from a court were both vacated as a condition of settlement and subsequent lawsuits were filed and the third circuit a respectively applied non mutual defense of collateral estoppel and the next action to bar that claim and said and the third circuit specifically just want to make sure you know what i'm saying when i'm talking months where if you don't don't worry about it but it's best just to say you don't know what i'm saying and i don't know the answer intricacies of months in ok great all right so you're talking about regular cases ok fine i got it exactly but i think they're highly analogous because those are the two published federal circuit courts that have wrestled with this and in particular i think the sentinel case is persuasive because that involved a state court judgment in tennessee chancery court extensive findings of fact that were reached case settles after the findings of fact litigation later ensues in the district of new jersey there is not the exact identity of claims causes of action but it still relates to the issue the bundle of same facts that the tennessee court construed and render judgment on that was vacated by settlement and the district of new jersey followed by the third circuit said for purposes of the restatement position which was what tennessee law would have applied even though tennessee law had no case directly on point look to tennessee law which applied the restatement view and reached the conclusion that the judgment although vacated by settlement was sufficiently final procedurally definite and firm to be accorded reclusive effect let me ask you a let's assume we rule in your favor on that point what about the breach of contract claim that is why is there any problem with their being negligent in action one and you're having breached the contract by not carrying out your duties under the contract because collateral  el applies to issues it does not require identity of claims it does not require identity of causes of action or the issue here is then applied if the issue is they were negligent that's what the jury was instructed on what is the logical or necessary conflict between their being negligent and your breaching the contract why can't you both be bad guy there is absolutely no conflict for application of a stoppel to bar that claim because whether you call it a contract claim or a negligence claim the issue that was litigated in this trial in the trial between watermark and the plaintiff's was what party bore responsibility in whole or in part for allowing this patient to have access to a supply or it in part but why can't you have also had liability on one theory or another that's what that's what i'm saying to back that thought your statement there was exactly right the jury found they bore some liability but some doesn't mean all and had we been sued in the in the first case had they not fully litigated that issue and been found wholly liable well but now you've said a hole in a minute ago you said to some patient to have access to a dangerous substance that led to her death that factual the series of facts was litigated whether morrison breached its contract and in a breach of contract played any role in the injury and the damages that flowed from it all relates to the same factual occurrence and that's that's how a stoppel is different from or a shooter caught in the case law that that we've cited from this court bears that out you don't need identity of exact claims if you look at for instance you look at cases like the autry case which which we've cited with one thousand nine hundred eighty three case for for false arrest and other matters they applied a stop all related to probable cause state court proceedings those findings later barred a civil one nine hundred eighty three case the monuc case michigan supreme court it's the same thing where case one involves driver suing another driver the cause an injury really put it this way i mean so you can have a principle get sued the principal get sued because they they left this detergent or whatever it is out so someone could use it and the principals clearly has responsibility for that it's proper to sue the principal and it's fair to say the jury was right in saying the principals negligent and quote wholly caused the injury and death i don't understand how that prohibits the principle from suing their agent when their agent messed it up i just don't get that in other words the principal as happened here can hire out or have employees or whatever law clerks doing things you can then sue the agent the principal can sue the agent because the agent's the one that made the mistake you can in the in the case so in the first proceeding but well why why why why is that so i don't know i don't because that's what your position is the only way they can do it is by your saying in pleader is mandatory and it's not complete or is not it says may it does not say shall it says you may so morrison may have been brought in it doesn't say you have to bring more sin and if you don't you're stuck that's just that is what the rule say correct but i think you always run the risk if you litigate something and work the facts and have a judge or jury make a determination on what allowed someone to ingest a dangerous substance and cause that person's injury if you fully litigate that issue that series of how we say fully how is there any litigation at all about the relationship between the principal and the agent with respect to whether the agent dropped the ball with respect to its obligations the principal i just have no idea how that had anything to do with the first lawsuit the principal could be one hundred percent liable and that's what you litigated and that's or they won litigator that they won but that still allows the principal to go back to their agent and say what were you thinking and you had a contractual duty to do this you did you're you're going to pay some of the damages it's because they chose to litigate those facts and they took positions in the litigation with which are acts of the principal agent relationship were litigated you said they chose to litigate those facts what part of this lawsuit involved the principle agent relationship they chose to honor mark morrison they they chose to advance a case theory at trial that argued neither morrison nor watermarked did anything wrong instead last we knew this closet was locked up when everybody left for the day and they controlled that litigation that controlled those bundle of facts and how to shape them in that case and that's where the policy bases for collateral estoppel come in apply your your position as if they did play your client that's and in the case of stop stop it they had their chance and that's and under this fact pattern and what happened in this case yes but your case support for the idea that in pleader is mandatory because that's which that is what you're saying and i'm not either as mandatory in some settings what's the case that says it's mandatory in this setting i don't have a case in front of me that says employers are under michigan state court law is mandatory in some settings what we have is very defined bodies of collateral stoppel law where if you fully litigate and the issue now is not necessarily a single claim not necessarily identical claims or theories but if you litigate that fully and reach a judgment that sufficiently final in some instances you will not be able to go back and even if you decide you're going to reinvent your theory call it a contract claim an in indemnity claim try to differentiate the theory from the first case the effect could be in some cases collateral estoppel law means that you needed to employee that party before you developed facts before you asked a jury to render judgment on your case and in this in this particular lawsuit what was tried how it was tried and what they're now trying to do by saying we're going to call it a contract claim and we're going to call it an indemnity claim that series of events that led to this tragedy has already been fully litigated without morrison having any control over it and they took positions in the case and they took it to a verdict and the equitable frontals driving a stop apply broadly enough under the case of tory we've we've cited to bar this this relation baxter as i read the closing argument in some of the transcript below the the lawyers for the plaintiffs certainly argued that even if your people were the ones who left the cabinets open and did other bad things morrison was still responsible and so in any factual sense there's no judgment that your people were completely clean so you're saying that in effect you never get a chance to measure that because of the way the other action went on right i mean there's no factual preemption to say that your people did nothing wrong my right about that that's correct that was not part of the jury verdict but the bundle of issues that they litigated through verdict allows a stop to apply in this case ok i think we understand your argument thank you very much with respect to the breach of contract case comparative negligence on our per would not effect be a bar to a breach of contract action yes the principal may sue the agent after the after the first cases is over with complete or is not mean dettori under michigan law and there were no principal agent issues that were litigated in the underlying henderson case of a stripping them but since issues that were litigated there net instead created an exception to the general rule of strict privity in said that because the defendant in the first litigation had the full and complete opportunity to li the injury the damage issues it is true then the court was going to waive the strict privity requirement there was absolutely nothing in their case that discussed the issue of a village judgment remaining in th the only thing they knew is is that morrison was was last ones in the kitchen they had the kitchen responsibilities in the allegations of leaving the cabinet door unlocked mor responsibility and was the last one to do you knew that was your argument the perhaps did not buy all of it they might or might not because yes with the others the other side the plaintive side was throwing three or four different possible evils on your part and they might have ruled on any one of the might have been the morrison didn't i read it might have been maurice and didn't leave the cabinets open but you should have checked on it or she should train them or you should not let a miss henderson wonder or but there was no where in the us supreme court decision from just monday they apply it and so the normal rule is that when you something gets mooted on appeal if you vacate the lower court judgement that has nothing to do with why  just curious how that principle would work in the context of settlement it's quite possible it means nothing that the settlement required the vacation of the jury verdict it's quite possible that would have happened anyway because a settlement moats an appeal i don't know just i'm asking a question i know you haven't briefed it i have an answer tell it to me but if you don't think about it and if you have you think it out you have an insight write us i was only ask you don't yes if you don't write us we'll assume you don't have an insight may i have a week maybe we have a week to file or supplemental or correspondence to yeah i mean i don't i'm not insisting on it but if we don't hear from you in a week we'll assume you can't think of why this has anything do with this case