James Williams v. Smyrna Residential, LLC et al. (Authority of Facility Patient to Make Legal and Medical Decision)

Style: James Williams v. Smyrna Residential, LLC et al.

TSC Docket Number: M2021-00927-SC-R11-CV

Court of Appeals Opinion: https://www.tncourts.gov/sites/default/files/james.williams.opn_.pdf

Summary by the Court of Appeals:

This appeal concerns the enforceability of an arbitration agreement in a wrongful death lawsuit. James Williams (“Plaintiff”), individually as next of kin and on behalf of the wrongful death beneficiaries of Granville Earl Williams, Jr., deceased (“Decedent”), sued Smyrna Residential, LLC d/b/a Azalea Court and Americare Systems, Inc. (“Defendants,” collectively) in the Circuit Court for Rutherford County (“the Trial Court”). Decedent was a resident of Azalea Court, an assisted living facility. Plaintiff alleged his father died because of Defendants’ negligence. Defendants filed a motion to compel arbitration, citing an arbitration agreement (“the Agreement”) entered into by Decedent’s daughter and durable power of attorney Karen Sams (“Sams”) on behalf of Decedent when the latter was admitted to Azalea Court. Notably, the durable power of attorney (“the POA”) did not cover healthcare decision-making. The Trial Court held that Sams lacked authority to enter into the Agreement and that, in any event, the wrongful death beneficiaries would not be bound by the Agreement even if it were enforceable. Defendants appeal. We affirm.

Issues the Court Will Consider:

1. Whether the Court of Appeals erred in creating a bright line rule that an attorney-in-fact, validly appointed pursuant to a general Durable Power of Attorney and granted with the authority to act on behalf of a principal “in all claims and litigation matters,” has no authority to sign an independent arbitration agreement because it was executed in conjunction with the principal’s admission to a long-term care facility? The standard of appellate review is de novo without a presumption of correctness. Williams, 2022 WL 1052429, at *3.

2. Whether the Court of Appeals’ determination that a durable power of attorney who indisputably has the authority to bind the principal to arbitration cannot bind that principal to arbitration in the health care context improperly places nursing home arbitration agreements on unequal footing with other contracts, thereby disfavoring arbitration, contrary to the Federal Arbitration Act, 9 U.S.C. § 2? The standard of appellate review is de novo without a presumption of correctness. Williams, 2022 WL 1052429, at *3.

3. Whether the Court of Appeals erred in determining that Defendants waived their surrogate authority argument when the parties presented both the Living Will and the Tennessee Physician Orders for Scope of Treatment (“POST”) to the Circuit Court, and the Circuit Court considered the evidence and made a ruling regarding the agent’s authority based on that evidence? The standard of appellate review is de novo without a presumption of correctness. State v. Rowland, 520 S.W.3d 542, 544 (Tenn. 2017).

4. Whether the Court of Appeals erred in determining that Defendants failed to establish the statutory requirements for surrogate status were met with respect to the Mr. Williams, when Defendants presented a form signed by a designated physician and entered into the clinical record that on its face showed that the Mr. Williams lacked capacity and that the physician recognized Ms. Sams as his surrogate? This requires interpretation of the Tennessee Health Care Decisions Act, Tenn. Code Ann. § 68-11-1801, et seq., so the standard of appellate review is de novo.

5. Whether the Court of Appeals erred in finding that pursuant to Beard v. Branson, 528 S.W.3d 487 (Tenn. 2017), the Decedent’s wrongful death beneficiaries are not bound by the Arbitration Agreement, where it was a validly-executed agreement and Tennessee law establishes that their claims are derivative of the estate’s claim?

Permission to Appeal Granted: September 29, 2022

Appellants’ Briefs Filed: October 31, 2022

Appellees’ Briefs Filed: December 7, 2022

Appellants’ Reply Brief Filed: January 4, 2023

Appellees’ Reply Brief Filed:

Amicus Briefs Permitted:  

Oral Argument Date: February 22, 2023

Link to Oral Argument Video: https://www.youtube.com/watch?v=jV0Dnq1XNu4

Date of TSC Opinion: February 16, 2024

Opinion of the TSC: https://tncourts.gov/sites/default/files/OpinionsPDFVersion/Majority%20Opinion%20-%20M2021-00927-SC-R11-CV.pdf

TSC Summary of the Opinion:

Granville Williams, Jr., died while residing at an assisted-living facility. The central question in this appeal is whether his son’s ensuing wrongful-death action against the facility must be arbitrated. To answer that question, we must resolve two subsidiary issues—first, whether the attorney-in-fact who signed the arbitration agreement as Williams’s representative had authority to do so and, second, whether Williams’s son and other wrongful-death beneficiaries who were not parties to the arbitration agreement nevertheless are bound by it. We hold that signing an optional arbitration agreement—that is, one that is not a condition of admission to a health care facility—is not a “health care decision” within the meaning of the Durable Power of Attorney for Health Care Act. The durable power of attorney that gave Williams’s attorney-in-fact authority to act for him in “all claims and litigation matters” thus provided authority to enter the optional arbitration agreement even though it did not specifically grant authority to make health care decisions. We further hold that Williams’s son is bound by the arbitration agreement because his wrongful-death claims are derivative of his father’s claims. Because we conclude that the claims in this action are subject to arbitration, we reverse the Court of Appeals’ contrary decision and remand to the trial court.