Day on Torts
Where an arbitration agreement had been signed by a decedent’s attorney in fact upon the decedent’s admission into a nursing home, and on a motion to compel arbitration filed by the nursing home the trial court considered evidence on whether the decedent had the mental capacity to execute the power of attorney for healthcare, the Tennessee Supreme Court affirmed the trial court’s consideration of such evidence. The Supreme Court held that the immunity provisions in Durable Power of Attorney for Health Care Act and the Health Care Decisions Act did not bar the trial court from considering evidence of the decedent’s mental capacity.
In Welch v. Oaktree Health and Rehabilitation Center LLC d/b/a Christian Care Centers of Memphis, No. W2020-00917-SC-R11-CV, — S.W.3d — (Tenn. Aug. 31, 2023), plaintiff was decedent’s brother and brought this wrongful death claim against defendant nursing home. Decedent had been diagnosed with down syndrome when he was born, and he could not read and had difficulty understanding instructions. In connection with an eye surgery in 2012, plaintiff had helped decedent scratch his name on a durable power of attorney for healthcare (“POA”). Plaintiff had printed and filled out the POA.
In the subsequent years, plaintiff used the POA several times when assisting decedent with obtaining healthcare. In 2016, plaintiff had decedent admitted to defendant nursing home. Plaintiff filled out several documents in connection with the admission, including an optional arbitration agreement, on behalf of decedent. It was uncontested that plaintiff would have shown defendant the POA during the admission process.
Several months after his admission to defendant nursing home, decedent was transferred to a hospital and died. Plaintiff filed this wrongful death suit, and defendant filed a motion to compel arbitration. Plaintiff responded by asserting that he had no authority to bind decedent to the arbitration agreement because decedent did not have the mental capacity to execute the POA. Defendant argued, however, that the immunity provision of Tennessee’s Durable Power of Attorney for Health Care Act prohibited the trial court from looking beyond the face of the POA to consider evidence regarding decedent’s mental capacity.
The trial court ultimately agreed with plaintiff and denied the motion to compel arbitration. The Court of Appeals, however, found that the Health Care Decisions Act applied and that the immunity provision found therein meant that the trial court should not have looked into decedent’s mental capacity. In this opinion, the Supreme Court overturned the Court of Appeals and remanded the case for consideration of decedent’s mental capacity.
After a preliminary discussion of the Court of Appeals choosing to consider whether a statute that neither party had brought up or referenced applied, the Court moved to its consideration of both the Durable Power of Attorney for Health Care Act and the Health Care Decisions Act. First, the Court noted that when a motion to compel arbitration is made, the normal procedure is for a trial court to consider the enforceability of the arbitration agreement, which is what the trial court did here. By reviewing whether decedent had the capacity to execute the POA, which in turn gave plaintiff the authority to sign the arbitration agreement, the trial court was following the normal procedure for a motion to compel. Defendant’s argument, however, was that the immunity provision of the statutes should have overridden this process.
Looking first at the Durable Power of Attorney for Health Care Act, Tenn. Code Ann. § 34-6-208(a) provides immunity to a healthcare provider who relies on a decision made by a healthcare attorney-in-fact if the “the decision is made by an attorney in fact who the health care provider believes in food faith is authorized” and “the health care provider believes in good faith that the decision is not inconsistent with the desires of the principal….” Considering the facts of this case, the Court found that defendant could not show that it “relied” on plaintiff’s decision to execute the arbitration agreement. The arbitration agreement was optional and not required for admission, and defendant “did not act or refrain from acting based on it.” Further, “the text of section 34-6-208 contemplates that the civil liability from which the provider gets immunity is related to or arises out of the health care decision,” and the wrongful death and negligence claims asserted here did not arise out of the decision to sign the arbitration agreement. Finally, the immunity provision cited by defendant only provided immunity from “criminal prosecution, civil liability or professional disciplinary action;” it did not provide immunity from “litigating in a particular forum.” For all these reasons, the Court found that defendant had no statutory immunity under the Durable Power of Attorney for Health Care Act.
In its argument, defendant cited a footnote from a previous Tennessee Supreme Court decision, Owens v. National Health Corporation, 263 S.W.3d 876, 889 n. 4 (Tenn. 2007), which defendant asserted supported its position. While noting that there were some factual differences in the cases, the Court also acknowledged the similarities and held that it “overruled the holding in footnote four of Owens to the extent it is inconsistent with the above analysis of whether the Defendants met the conditions for statutory immunity in section 34-6-208(a).”
Moving to the Health Care Decisions Act, Tenn. Code Ann. § 68-11-1810(a)(1), the Court noted that this immunity provision is more simple and broadly provides immunity to a “health care provider…acting in good faith…complying with a health care decision of a person apparently having authority to make a health care decision for a patient…” The Supreme Court found that defendant was also not entitled to immunity under this statute, explaining:
The immunity in this statute applies to civil liability ‘for’ complying with the apparent agent’s health care decision for the patient. This statutory language directly links the civil liability to the provider’s compliance with the agent’s health care decision. It makes it clear that, to have the statutory immunity offered in section 68-11-1810(a)(1), the civil liability of the health care provider must arise out of its compliance with the agent’s health care decision.
…
Defendants in this case do not meet the requirements… Defendants did not ‘comply’ with the agent’s decision here. …The Defendants’ potential civil liability does not arise out of [plaintiff’s] decision to execute the Arbitration Agreement.
(internal citations omitted).
Having found that defendant was not entitled to immunity under either statute and that neither statute prevented an analysis of whether decedent was mentally competent to execute the POA, the Supreme Court remanded the case to the Court of Appeals for consideration of whether decedent had the requisite mental capacity to execute a POA.
This was a good analysis by the Supreme Court, coming to the correct decision that the cited statutes did not prevent an inquiry into the validity of the POA.
This opinion was released 9.5 months after oral arguments in this case.
Note: Chapter 117, Section 17 of Day on Torts: Leading Cases in Tennessee Tort Law has been updated to include this decision.
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