Dyane Corbett filed suit against Manorcare of America, Inc. (“Manorcare”) on behalf of her mother’s estate, alleging, inter alia, violations of the Adult Protective Services Act, A.R.S. § 46-451 et seq. (“APSA”). Manorcare removed the case to federal district court. During discovery, Corbett learned that Manorcare had several subsidiaries. She amended her complaint pursuant to the parties’ stipulation to include the subsidiaries. But the subsidiaries moved to dismiss the complaint on the ground that they were not timely served, and the district court granted the motion. When Corbett sought leave from the district court to amend the complaint, the district court denied the motion, finding that amendment would be futile because the claims would be barred by the statute of limitations – an issue the court raised sua sponte. The court then granted summary judgment to Manorcare, finding that Corbett had “pursued the incorrect defendant.” Corbett appealed the case to the Ninth Circuit. While the appeal was pending, Corbett filed another lawsuit in Pima County Superior Court against the subsidiaries and their employees. The defendants moved for summary judgment, citing res judicata, collateral estoppel, statutes of limitations, and the statute’s language respecting individual liability. The superior court granted summary judgment to all of the defendants, holding that the claims against the subsidiaries were barred by res judicata and collateral estoppel, certain claims against the employees were barred by collateral estoppel, other claims against the employees were barred by statutes of limitations, and the claims against the employees were invalid because the employees were not “employed to provide care” to Corbett’s mother under APSA (A.R.S. § 46-455(B)).
Claims against one employee were dismissed on the ground that he was not timely served. On appeal, Division Two first held that the trial court correctly found that the latter employee was not timely served, as he was not employed by Manorcare at the time the complaint was served, and had not authorized Manorcare to accept service for him. With respect to the grant of summary judgment for the subsidiaries, the court held that res judicata did not bar Corbett’s claims, because the subsidiaries had not shown that the first and second lawsuits involved the same parties. The court found that collateral estoppel also did not bar Corbett’s claims against the subsidiaries, because the statutes of limitation issue had not been “actually litigated” in the first lawsuit: The district court had raised the issue sua sponte, and when Corbett sought reconsideration of the ruling, she was unable to obtain it because her notice of appeal had divested the district court of jurisdiction. The Court of Appeals further noted that Corbett should not be estopped from litigating the limitations argument because an important Arizona Supreme Court decision affecting the argument (City of Tucson v. Clear Channel Outdoor, Inc., 209 Ariz. 544, 105 P.3d 1163 (2005)) had been issued while the case was pending. Finding that the claims aginst the employees were not barred by res judicata or collateral estoppel for the same reasons, the court next turned to the trial court’s statutory interpretation reasoning. The employees argued that APSA required a “direct caregiver-patient relationship” for a duty to arise under the statute. The Court of Appeals disagreed, finding that APSA was intended to cover “a broader class of tortfeasors” than the employees argued. At the same time, the court found that summary judgment was proper for those individuals who Corbett conceded were employees of the parent company only, and who had no personal involvement in her mother’s care. The court rejected the argument, made by another employee who was personally involved in caring for Corbett’s mother, that res judicata barred the claim against her because she was in privity with a subsidiary that was involved in the first lawsuit. The court reasoned that, because the subisiaries were dismissed from the first lawsuit prior to the issuance of the statutes of limitations rulings from which the employee sought to benefit, she was not entitled to res judicata with respect to those rulings.
The opinion was authored by Judge Vásquez and joined by Judges Pelander and Howard.