The Middle Section of the Tennessee Court of Appeals recently rendered an opinion addressing (1) the authority to sign arbitration agreements on an assisted living facility’s resident’s behalf and (2) waiver of the right to enforce the arbitration agreement.

In Rheatta F. Wilson, et al. v. Americare Systems, Inc., et al., No. M2008-00419-COA-R3-CV (Tenn. Ct. App., March 31, 2009)(attached below), the Court of Appeals considered the Defendants’ appeal of the trial court’s denial of the assisted living facility’s Motion to Compel Arbitration. Lee Russell was the trial court judge, C. J. Gideon represented the Plaintiffs, and Thomas Pinckney represented the Defendants.

With regard to authority, the resident’s daughter signed the arbitration agreement pursuant to a "springing" Power of Attorney that would take effect upon a finding of incompetency by a physician. As the record did not prove the resident was incompetent, and as no physician had deemed her to be incompetent, the Power of Attorney did not take effect. The assisted living home alternatively argued apparent authority, but the Court found the argument lacked merit.

As to whether the right to enforce the arbitration agreement was waived, the Court noted there is a generally recognized presumption against waiver due to the legislative and judicial policies favoring the enforcement of agreements to arbitrate. For this reason, "the plaintiffs bear a heavy burden of proof in establishing such a waiver." The Defendants filed a Motion to Compel Arbitration in December 2004, subsequently withdrew the Motion, and refiled the same on December 21, 2007. The Court stated the only evidence in the record relevant to the waiver issue was the passage of time between the withdrawal of the Motion to Compel Arbitration and the refiling of the new Motion to Compel Arbitration. The mere passage of time was found to be insufficient to waive the right to enforce an arbitration agreement.

Author: Larry Brock/Ryan Malone from Chambliss Bahner &Stophel