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Alleged Nursing Home Arbitration Agreement Held Invalid by Tennessee Court of Appeals

Doctors, nurses, hospitals, and nursing homes have a strong aversion to being sued. Of course, no one wants to be accused of carelessness or wrongdoing, and defendants facing claims of nursing home negligence or patient abuse are no different.

However, as compared to many other defendants, the medical establishment goes above and beyond in their efforts to dissuade injured individuals from seeking justice. Sometimes, such efforts begin very early in the process – with a requirement that a patient agree to arbitrate, rather than litigate, any possible claims as a condition to admission into a treatment facility. Fortunately, not all such attempts to deprive an injured person or his or her family of their day in court are successful. A Knoxville nursing home negligence lawyer may be able to challenge the validity of the agreement.

Facts of the Case

In a case filed in the Circuit Court for Shelby County, the plaintiff was a woman whose mother suffered a fractured tibia and fibula in a fall while she was a resident at the defendant nursing home. The plaintiff, acting as her mother’s next friend, filed suit against the defendant, asserting claims of ordinary negligence and violations of the Tennessee Healthcare Liability Act, codified at Tennessee Code Annotated §§ 29-26-101, et seq.  In response, the defendant filed a motion to compel arbitration and to stay the proceedings, relying upon a 2013 agreement signed by the plaintiff on her mother’s behalf when the mother entered the defendant’s facility.

The circuit court denied the defendant’s motion, finding that the plaintiff did not have authority, under the power of attorney granted to her by her mother in 2007, to bind the mother to the agreement. The defendant appealed.

Holding of the Appellate Court

On appeal, the defendant raised three issues:  1) whether the trial court erred in deciding the issue of the plaintiff’s authority, given that the Federal Arbitration Act, 9 U.S.C. §§ 1-16, required the issue of enforceability of an alleged arbitration agreement to be referred to the arbitrator for determination; 2) whether the trial court erred in finding that the plaintiff lacked either actual or apparent authority to bind her mother to the alleged arbitration agreement; and 3) whether the agreement should be enforced against the mother as a third-party beneficiary.

The Court of Appeals of Tennessee at Jackson resolved all the issues in the plaintiff’s favor and affirmed the circuit court’s order denying the defendant’s motion to compel arbitration. The court began by stating that, based on previous case law, the determination of whether an arbitration agreement was properly formed was a question for a court of law, rather than an arbitrator. The court then acknowledged that the power of attorney at issue specifically stated that it did not authorize the plaintiff to make “medical or other healthcare decisions” for her mother and that the alleged arbitration agreement explicitly stated that its signing constituted a “healthcare decision.”  Consequently, the appellate court agreed with the circuit court that the plaintiff lacked authority to bind her mother to the alleged arbitration agreement.

The court also held that, insomuch as the mother was incompetent at the time of her admission to the defendant’s facility, she could not have clothed the plaintiff with the appearance of authority to make health care decisions on her behalf, and that, since the plaintiff lacked authority to bind her mother to the agreement, there was no valid contract under which the mother could be a third-party beneficiary.

Speak to an Experienced Personal Injury Attorney in Knoxville

To speak to a knowledgeable nursing home abuse attorney about a possible lawsuit against a nursing home, long-term care facility, or other health care provider, contact the Hartsoe Law Firm at 865-524-5657. It is important that an attorney be consulted as soon as possible about suspicions of negligence or malpractice.

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