DECEMBER 2, 2008 REPORT:
Attached opinion filed from the TN COA, Mitchell v. Kindred, provides a
welcome relief from the recent trend in the Tennessee appellate courts
re: enforcement of ADR provisions in the nursing home context. Here,
the COA reversed the trial court and enforced the arbitration agreement
signed by the parties. Wilkes & McHugh represents the Plaintiffs. The D
filed a MTC arbitration which the trial court denied on the basis that
the resident’s spouse lacked the capacity to execute the agreement under
a DPOAHC because of her own physical and mental ailments at the time.
After addressing the issues of authority and unconscionability, the COA
turned to the P’s argument that she lacked the mental capacity to
execute the agreement. The COA tackled and disposed of that issue as
well, reversing the trial court’s finding that the P did not knowingly
and voluntarily waive the patient’s right to a jury trial when signing
the arbitration agreement.
The P met with the facility’s admissions counselor and signed the
resident’s admissions papers, including the arbitration agreement. At
the time of the meeting, P was taking her own medication to treat
depression, anxiety, fatigue and chronic anemia. Side effects included
blurry vision and difficulty concentrating. The P asserted on appeal
that she could not read the arbitration agreement and had the admissions
counselor summarize its terms before she signed it. The COA found these
circumstances to be an insufficient basis to support a finding of
unconscionability and/or mental incapacity.
The COA relied on its earlier opinion in Reagan v. Kindred (Dec. 2007)
in finding that "this exact agreement" in the Reagan case contained no
unfair advantage and was not procedurally or substantively
unconscionable. Important was the fact that the agreement merely
shifted the dispute to a different forum but did not change D’s duty to
use reasonable care and did not limit liability for breach of that duty.
It is also important to note that the court stated that the P’s
authority was triggered under the DPOAHC once both parties agreed that
the resident was incompetent. This differs from the standard recently
set forth in the McKey and Rickett’s COA cases which analyzed authority
based on TN’s surrogacy statute. In those cases, the parties’ agreement
as to the resident’s incompetence did not satisfy the surrogacy statute
which requires that a physician declare a resident incompetent.
Only after authority is clearly established does the burden shift to the
P to show that the agreement is unconscionable, or in this case, that
the P lacked mental capacity to contract. Under these facts, P failed
to meet her burden. This opinion from the COA underscores the
importance for health care providers to ensure that a proper grant of
authority has been given to the person who signs an arbitration
agreement on behalf of the resident.
Glad to be reporting this positive event from the COA. Let us know if
you have any questions/comments.
Rebecca Adelman, Esq.
The Law and Mediation Offices of
Rebecca Adelman, PLC
545 South Main Street
Memphis, Tennessee 38103