The Tennessee Supreme Court today held that an arbitration agreement signed by a power of attorney as part of the paperwork for admittance to an assisted living facility was not a health care decision because it was optional and not required for admission. The Court also concluded that the next of kin in the wrongful-death suit filed is bound by the arbitration agreement.
In 2007, Granville Williams, Jr., executed a durable power of attorney naming Karen Sams as his attorney-in-fact. The power of attorney gave Sams authority to act for Williams in “all claims and litigation matters” but not to make health care decisions.
In 2020, Williams was admitted to an assisted-living facility called Azalea Court. Sams completed the admission forms as Williams’s representative under the power of attorney. Those forms included an arbitration agreement that was not required for admission to the facility. Sams signed this agreement on Williams’s behalf.
Williams died two months after being admitted to Azalea Court. His son, James Williams, brought a wrongful-death lawsuit against two corporations that managed or operated Azalea Court—Smyrna Residential, LLC, and Americare Systems, Inc. The defendants sought to compel arbitration. James Williams argued that he was not required to arbitrate. He contended that Sams lacked authority to agree to arbitration because that decision was a “health care decision” within the meaning of the Durable Power of Attorney for Health Care Act and the power of attorney did not authorize Sams to make health care decisions. James Williams also argued that the arbitration agreement would not bind him in any event because he was not a party to it.
The trial court declined to compel arbitration. The Court of Appeals affirmed. The Tennessee Supreme Court granted the defendants’ application for permission to appeal and reversed.
First, the Court considered whether Sams had authority to enter the arbitration agreement on Williams’s behalf. The Court held that signing the arbitration agreement was not a “health care decision,” which the Act defines as “consent, refusal of consent or withdrawal of consent to health care.” The Court reasoned that an agreement to arbitrate does not constitute “consent . . . to health care” if the agreement is not required for admission to a facility. The Court distinguished its previous 2007 decision in Owens v. National Health Corp. by explaining that the arbitration agreement in that case was required for admission. The Court further held that the provision of the durable power of attorney giving Sams authority to act in “all claims and litigation matters” provided authority for her to sign the optional arbitration agreement.
Second, the Court considered whether James Williams was bound by the arbitration agreement even though he was not a party to it. The Court held that he was. In wrongful-death actions, the decedent’s cause of action “passes” to the beneficiary, in this case James Williams. Therefore, claims brought by wrongful-death beneficiaries are subject to the same limitations as the decedent’s claim, including any arbitration requirement.
Chief Justice Holly Kirby dissented. She disagreed with the majority’s decision to distinguish Owens and argued that Owens required the Court to hold that signing the arbitration agreement in this case was a “health care decision.” She expressed concern that the majority’s decision to distinguish Owens leaves the law unsettled.
Justice Sharon G. Lee also dissented, expressing concerns that the majority’s decision ignores the Durable Power of Attorney for Health Care Act, disregards precedent, and causes confusion and practical problems for health care facilities and individuals. In her view, signing the arbitration agreement was a “health care decision” under Owens, and Owens is not materially distinguishable from this case. Justice Lee reasoned that the arbitration agreement was expressly contained within the admission agreement and should not be severed from it, and that Sams lacked authority to enter either of those agreements because the power of attorney did not authorize her to make health care decisions.
To read the majority opinion authored by Justice Sarah K. Campbell, the dissenting opinion authored by Chief Justice Kirby, and the dissenting opinion authored by Justice Lee, go to the opinions section of TNCourts.gov.
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