James Williams v. Smyrna Residential, LLC
February 22, 2023 Session (2024)
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Rule of Law:
Signing an optional arbitration agreement that is not a condition of admission to a health care facility is not a 'health care decision' requiring a specific grant of authority under the Durable Power of Attorney for Health Care Act. Wrongful-death beneficiaries are bound by such a pre-death arbitration agreement because wrongful-death claims in Tennessee are derivative of the decedent's claims.
Facts:
- In 2007, Granville Williams, Jr. executed a durable power of attorney, naming his daughter, Karen Sams, as his attorney-in-fact.
- The power of attorney granted Sams the authority '[t]o act for me in all claims and litigation matters' but did not grant specific authority to make health care decisions.
- In early 2020, Williams was admitted to Azalea Court, an assisted-living facility.
- Acting as Williams's representative, Sams signed an admission agreement and a separate, but incorporated, arbitration agreement with Azalea Court.
- The arbitration agreement explicitly stated that signing it was not a condition of admission to the facility and that it could be terminated by the resident within ten days.
- On April 27, 2020, approximately two months after his admission, Granville Williams, Jr. died.
Procedural Posture:
- James Williams, on behalf of his father's wrongful-death beneficiaries, filed a lawsuit against Smyrna Residential, LLC and Americare Systems, Inc. in the Circuit Court for Rutherford County, Tennessee (the trial court).
- The defendants (Smyrna Residential and Americare Systems) filed a motion to compel arbitration based on the agreement signed by Karen Sams.
- The trial court denied the motion to compel arbitration.
- The defendants appealed the trial court's decision to the Tennessee Court of Appeals (the intermediate appellate court).
- The Court of Appeals affirmed the trial court's ruling, holding that the attorney-in-fact lacked authority to sign the agreement and that the beneficiaries were not bound by it.
- The defendants (now appellants) petitioned for and were granted permission to appeal to the Supreme Court of Tennessee (the state's highest court).
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Issue:
Does an optional arbitration agreement, signed by an attorney-in-fact with authority over 'all claims and litigation matters' but not specific health care decisions, bind the decedent's wrongful-death beneficiaries to arbitrate their claims against a healthcare facility?
Opinions:
Majority - Justice Campbell
Yes, the optional arbitration agreement binds the decedent's wrongful-death beneficiaries. First, signing an optional arbitration agreement is not a 'health care decision' under the Durable Power of Attorney for Health Care Act. The Act defines a 'health care decision' as consent to 'health care,' which involves care, treatment, or services. Because the arbitration agreement was not a condition of admission, it was not necessary to consent to health care and thus falls outside the statutory definition. This distinguishes the case from Owens v. National Health Corp., where the agreement was a mandatory condition of admission. Second, the general power of attorney's grant of authority to Sams to act 'in all claims and litigation matters' was sufficiently broad to encompass the power to agree on the forum for resolving those claims. Finally, the wrongful-death beneficiaries are bound by the agreement because Tennessee's wrongful-death statute is a hybrid survival statute where the decedent's cause of action 'passes to' the beneficiaries. Their claim is therefore derivative, and they stand in the decedent's shoes, subject to any contractual limitations, like an arbitration agreement, that the decedent entered into.
Dissenting - Chief Justice Kirby
No, the agreement should not be binding. The majority's attempt to distinguish Owens based on the optional versus mandatory nature of the arbitration agreement is unpersuasive, as it was unclear if the agreement in Owens was truly mandatory. This decision creates two irreconcilable precedents, leaving practitioners and the public with significant uncertainty about what type of power of attorney is required for health care admissions. The court should have either followed Owens or explicitly overruled it rather than creating a confusing legal landscape, especially since recent federal regulations prohibit mandatory arbitration agreements in most long-term care facilities, rendering the majority's distinction less relevant for future cases.
Dissenting - Justice Lee
No, the arbitration agreement is unenforceable. The arbitration agreement was explicitly incorporated into and was part of the main admission agreement, which also contained an integration clause. Under Owens, executing a health care facility admission agreement is a 'health care decision.' Since Sams's power of attorney did not grant her authority to make health care decisions, she lacked the authority to sign the admission agreement at all. If the underlying admission agreement is invalid, then the arbitration clause contained within it is also invalid and cannot be severed and enforced separately.
Analysis:
This decision narrows the definition of a 'health care decision' under Tennessee law by creating a clear distinction between agreements that are conditions of admission and those that are optional. By doing so, it limits the precedent set by Owens and clarifies that a general power of attorney for 'claims and litigation' is sufficient to bind a principal to ancillary, optional legal agreements made during the healthcare admission process. The holding also strongly reaffirms that Tennessee's wrongful-death actions are derivative, meaning beneficiaries inherit the claim subject to any pre-death contractual limitations, which significantly strengthens the enforceability of arbitration clauses against non-signatory heirs.
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