Corine Broadnax v. Quince Nursing and
On August 11, 2009, the Tennessee Court of Appeal reversed the decision of the Shelby County Circuit Court denying the nursing homeâ€™s motion to compel arbitration and remanded the case to the trial court for entry of an order compelling the residentâ€™s estate to arbitrate her disputes with the Quince Nursing Home Rehabilitation Center. The arbitration agreement consisted of two pages and was included within a nineteen page admission agreement. The parties did not dispute that the residentâ€™s representative signed the arbitration agreement or that she was legally authorized to do so.
On appeal, the residentâ€™s estate argued that it was not required to arbitrate its disputes with the nursing home because the residentâ€™s attorney-in-fact, via durable power of attorney for healthcare, did not â€œknowâ€ that she was signing an arbitration agreement when executing renewal paperwork. The Court of Appeals held that courts must use an â€œobjective standard based on the manifestations of the partiesâ€ when determining whether the parties had a â€œmeeting of the minds,â€ and that the trial court erred by applying a subjective standard.
The Court of Appeals also held that the arbitration agreement was not a â€œcontract of adhesion,â€ and that, therefore, the nursing home was not required to prove that the parties â€œactually bargained over the agreement or that it was a reasonable termâ€ under the circumstances. Accordingly, the Court of Appeals refused to relieve the resident from performance under the arbitration agreement due to her failure to read the document.