IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

February 22, 2023 Session

JAMES WILLIAMS v. SMYRNA RESIDENTIAL, LLC ET AL.

Appeal by Permission from the Court of Appeals

Circuit Court for Rutherford County

No. 78245 Bonita Jo Atwood, Judge

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No. M2021-00927-SC-R11-CV

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SHARON G. LEE, J., dissenting.

To enforce and compel arbitration in this case, the majority rewrites a health care 

facility admission contract, disregards the Durable Power of Attorney for Health Care Act, 

ignores precedent, and creates confusion in an important area of the law. I respectfully 

dissent.

Granville Earl Williams, Jr., signed a durable power of attorney (not a power of 

attorney for health care) naming his daughter, Karen Sams, as his attorney-in-fact. The 

power of attorney granted Ms. Sams certain powers but did not give her the authority to 

make health decisions for her father. Under the Durable Power of Attorney for Health Care 

Act, “[a]n attorney in fact under a durable power of attorney for health care may not make 

health care decisions unless . . . [t]he durable power of attorney for health care specifically 

authorizes the attorney in the fact to make health care decisions.” Tenn. Code Ann. 

§ 34-6-203(a)(1) (2015). 

Three years after signing the power of attorney, Mr. Williams moved to an assisted 

living facility. The facility allowed Ms. Sams to sign its admission agreement as Mr. 

Williams’s attorney-in-fact. The admission agreement contained an alternative dispute 

resolution clause and an arbitration agreement. Under Owens v. National Health 

Corporation, 263 S.W.3d 876 (Tenn. 2007) (abrogated on other grounds by Welch v. 

Oaktree Health & Rehab. Ctr., LLC, 674 S.W.3d 881 (Tenn. 2023)), the signing of a health 

care facility admission agreement is a health care decision. Ms. Sams had no authority as 

her father’s attorney-in-fact to make a health care decision for him. 

02/16/2024
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Even though the facility made a mistake by admitting Mr. Williams without proper 

authority, it seeks to enforce the arbitration agreement contained in the invalid admission 

agreement. The majority remedies the facility’s error by holding the arbitration agreement 

contained in the admission agreement was a separate agreement and by severing the 

arbitration agreement from the admission agreement. Yet the majority never explains how 

Ms. Sams could bind her father to arbitration when she had no authority to sign the 

admission agreement that contained the arbitration provisions. The majority effectively 

overrules Owens without saying so; its effort to distinguish Owens is weak. The trial court 

and the Court of Appeals correctly decided this case. I would affirm their judgments.

The admission agreement makes clear that it contains an arbitration agreement that 

was attached as “Exhibit C and incorporated herein.” The admission agreement also 

provides that the “terms and conditions of arbitration under this agreement are contained 

in the Arbitration Agreement and incorporated herein by reference.” Directly above the 

signature lines of the admission agreement is the warning that it “CONTAINS” an 

enforceable and binding arbitration agreement. The term “contain” has been defined as “to 

have within: hold” and “to consist of wholly or in part: comprise, include.” Contain,

Webster’s Third New International Dictionary 491 (1993). The parties to the agreement

were clear about their intent that the arbitration agreement was part of the admission 

agreement—not a separate agreement.

The admission agreement also contains an integration or merger clause which means 

the parties intended that all of their agreements related to the subject matter of the 

agreement were to be integrated or merged into one writing, which represented the entire 

contract. See, Individual Healthcare Specialists, Inc. v. BlueCross BlueShield of Tenn., 

Inc., 566 S.W.3d 671, 697 n.27 (Tenn. 2019) (“[A] typical integration clause . . . states 

specifically that the contract constitutes the final and entire agreement between the parties

. . . .”) (citing Uri Benoliel, The Interpretation of Commercial Contracts: An Empirical 

Study, 69 Ala. L. Rev. 469, 481 & n.75 (2017) (“A merger clause, known also as an 

‘integration’ . . . clause, merges all pre-contractual negotiations between the parties into 

the written contract.”)). Yet the majority treats the admission and arbitration agreements as 

two separate contracts. 

It is a fundamental principle of Tennessee contract law that unless there is “fraud, 

mistake, or some other defect, our courts are required to interpret contracts as written, 

giving the language used a natural meaning.” Eberbach v. Eberbach, 535 S.W.3d 467, 478 

(Tenn. 2017) (citing U.S. Bank, N.A. v. Tenn. Farmers Mut. Ins. Co., 277 S.W.3d 381, 

386–87 (Tenn. 2009)). This basic “rule does not change or lose its force because the parties 

to an agreement are before an appellate court. Indeed, one of the bedrocks of Tennessee 

law is that our courts are without power to make another and different contract from the 
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one executed by the parties themselves.” Id. (citing Dubois v. Gentry, 184 S.W.2d 369, 371 

(Tenn. 1945); Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc., 521 S.W.2d 

578, 580 (Tenn. 1975)); see also Individual Healthcare Specialists, Inc., 566 S.W.3d at

701 (“A court is not at liberty to make a new contract for parties who have spoken for 

themselves.” (quoting Smithart v. John Hancock Mut. Life Ins. Co., 71 S.W.2d 1059, 1063 

(Tenn. 1934))); Garrison v. Bickford, 377 S.W.3d 659, 670 (Tenn. 2012) (“[W]e ‘cannot 

under the guise of construction make a new and different contract for the parties . . . .’” 

(quoting Memphis Furniture Mfg. Co. v. Am. Cas. Co., 480 S.W.2d 531, 533 (Tenn. 

1972))). 

The controlling case in this area of health care law is Owens, which held that an 

attorney-in-fact acting under a durable power of attorney for health care was authorized to 

sign a nursing home contract, including its arbitration provisions. 263 S.W.3d at 885. Based 

on the language of the Durable Power of Attorney for Health Care Act, the Court concluded 

that an attorney-in-fact acting under a durable power of attorney for health care could sign 

a nursing home contract, including its arbitration provision, because this action was 

necessary to consent to health care. Id. at 884. The Owens Court wisely did not sever the 

arbitration agreement from the admission agreement, noting that to do so would create 

practical problems and make it more difficult to obtain health care: 

[The] purported distinction between making a legal decision and a health care 

decision fails to appreciate that signing a contract for health care services, 

even one without an arbitration provision, is itself a “legal decision.” The 

implication of the plaintiff’s argument is that the attorney-in-fact may make 

one “legal decision,” contracting for health care services for the principal, 

but not another, agreeing in the contract to binding arbitration. That result 

would be untenable. Each provision of a contract signed by an 

attorney-in-fact could be subject to question as to whether the provision 

constitutes an authorized “health care decision” or an unauthorized “legal 

decision.” Holding that an attorney-in-fact can make some “legal decisions” 

but not others would introduce an element of uncertainty into health care 

contracts signed by attorneys-in-fact that likely would have negative effects 

on their principals. Such a holding could make it more difficult to obtain 

health care services for the principal. And in some cases, an attorney-in-fact’s 

apparent lack of authority to sign an arbitration agreement on behalf of the 

principal presumably could result in the principal being unable to obtain 

needed health care services. For example, a mentally incapacitated principal 

could be caught in “legal limbo.” The principal would not have the capacity 

to enter into a contract, and the attorney-in-fact would not be authorized to 
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do so. Such a result would defeat the very purpose of a durable power of 

attorney for health care.

263 S.W.3d at 884–85. 

Ms. Sams did not have a health care power of attorney; thus, under Owens, she had 

no authority to sign the admission agreement which was a health care decision. It follows 

then that the admission agreement was not binding, and nothing in the admission 

agreement, including the arbitration provision, was enforceable. 

Our holding in Owens has been applied by many courts. As Justice (then Judge) 

Kirby correctly noted in Barbee v. Kindred Healthcare Operating, Inc., No. 

W2007-00517-COA-R3-CV, 2008 WL 4615858 (Tenn. Ct. App. Oct. 20, 2008), 

“[e]xecution of the documents admitting the Decedent to the Ripley skilled-care facility, 

including execution of the accompanying arbitration agreement, is clearly a ‘health care 

decision’ within the meaning of the [Tennessee Health Care Decisions] Act.” Id. at *11 

(citing Owens, 263 S.W.3d at 883–85); see, e.g., Jones v. Allenbrooke Nursing & Rehab. 

Ctr. LLC, No. W2019-00448-COA-R3-CV, 2019 WL 6842372, at *3–4 (Tenn. Ct. App. 

Dec. 16, 2019) (“Allenbrooke contends that the POA grant of power to Ms. Jones over Ms. 

Nesbitt’s ‘claims and litigation,’ and ‘[a]ll other matters’ inured her with the authority to 

bind Ms. Nesbitt to arbitration. The flaw in Allenbrooke’s argument is that the execution 

of admission documents at a health care facility is a healthcare decision.”); Watson v. 

Quince Nursing & Rehab. Ctr., LLC, No. W2019-00261-COA-R3-CV, 2019 WL 6877897, 

at *5 (Tenn. Ct. App. Dec. 17, 2019) (“[E]ven though the arbitration agreement at issue 

was not required for admission, it was nevertheless ‘part of the admission process,’ and we 

decline[] to draw a distinction between a health care decision and a legal decision in the 

nursing home admission process.” (quoting Bockelman v. GGNSC Gallatin Brandywood 

LLC, No. M2014-02371-COA-R3-CV, 2015 WL 5564885, at *6 (Tenn. Ct. App. Sept. 18, 

2015))); Bockelman, 2015 WL 5564885, at *5–6 (stating that “our Supreme Court has held 

that the decision to admit a patient to a nursing home clearly constitutes a health care 

decision” and noting that, “[a]lthough agreeing to arbitrate claims was not required for 

admission, the ADR Agreement was part of the admission process” (internal quotation 

marks omitted) (quoting Owens, 263 S.W.3d at 884)); Mitchell v. Kindred Healthcare 

Operating, Inc., 349 S.W.3d 492, 498 (Tenn. Ct. App. 2008); Necessary v. Life Care Ctrs. 

of Am., Inc., No. E2006-00453-COA-R3-CV, 2007 WL 3446636, at *5 (Tenn. Ct. App. 

Nov. 16, 2007). 

Two federal district court decisions, Crawford v. Allenbrooke Nursing and

Rehabilitation Center, LLC, No. 2:21-cv-02054-TLP-tmp, 2021 WL 3926244 (W.D. Tenn. 

Sept. 1, 2021) and Sykes v. Quince Nursing and Rehabilitation Center, LLC, No. 2:19-cv-
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02602-SHL-tmp, 2020 WL 7866881 (W.D. Tenn. Sept. 1, 2020), support the conclusion 

that an arbitration agreement signed as part of the admission process to a health care facility 

is a health care decision. The Crawford court, in addition to relying on the language of the 

arbitration agreement itself, independently analyzed Tennessee law before concluding that

“[s]igning the [arbitration] Agreement was a health care decision under Tennessee law . . . 

[I]n Owens v. National Health Corp., the Tennessee Supreme Court held that admitting 

someone to a nursing home ‘clearly constitutes a “health care decision”’ under 

§ 34-6-201.” 2021 WL 3926244, at *7 (internal citations omitted) (quoting Owens, 263 

S.W.3d at 884).

The majority’s reasoning seems to turn on its conclusion that the arbitration 

agreement here was optional and the agreement in Owens was mandatory. Yet as Justice 

Kirby notes in her dissent, this distinction is not factually sound as it is not clear from 

Owens that the arbitration clause was mandatory. The Owens opinion does not make the 

optional-mandatory distinction; this Court is not bound by any party concession on this 

issue. State v. Hester, 324 S.W.3d 1, 69 (Tenn. 2010); Barron v. State, Dept. of Hum.

Servs., 184 S.W.3d 219, 223 (Tenn. 2006). In any event, it is a distinction without a 

difference. Whether the arbitration agreement in Owens was optional was irrelevant to the 

issue before the Court—whether a durable power of attorney for health care authorized the 

attorney-in-fact to sign an arbitration agreement as part of a contract for admission to a 

nursing home. Owens, 263 S.W.3d at 882. The decision to admit a person to a health care 

facility is not a single admission decision; it involves many decisions about living 

arrangements, services, and numerous other aspects of the person’s life. Some directly 

pertain to health care, and some do not. Similarly, many decisions are not required to be 

made in a certain way, but they are still required to be made upon admission.

The arbitration agreements in Jones, Watson, Bockelman, Mitchell, and Barbee

were all optional, yet the court in each case held their execution to be a “health care 

decision.” See Jones, 2019 WL 6842372, at *1 (explaining that the appellee signed a 

“separate” arbitration agreement); Watson, 2019 WL 6877897, at *4 (“a stand-alone 

arbitration agreement that was not necessary for . . . admission to the facility”); Bockelman, 

2015 WL 5564885, at *2 (a “stand-alone Alternative Dispute Resolution Agreement” that 

was “not a condition of admission [] or continued residence”); Mitchell, 349 S.W.3d at 495 

(“a stand-alone agreement” that was “not a precondition to the furnishing of services”); 

Barbee, 2008 WL 4615858, at *1 (an arbitration agreement that was a part of the resident 

admission agreement and “not a precondition to the furnishing of services”). Thus, these 

Tennessee courts have held that signing an arbitration agreement is a health care decision, 

even where the arbitration agreement is described as “separate” or “stand-alone.” 
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Here the facility created its own problem by not requiring Ms. Sams to have the 

proper authority to sign the admission agreement. The majority’s ruling compounds that 

error by changing well-settled law to enforce arbitration and raising more questions than it 

answers. Did Ms. Sams have authority to sign the admission agreement when she was 

acting under a durable power of attorney that did not allow her to make health care 

decisions? If she had no authority to sign the admission agreement, then how is the 

admission agreement that contained the arbitration agreement valid? In practice, if a facility 

cannot legally admit a patient, presumably there is no admission and no treatment. So, what 

is there to arbitrate? How can there be arbitration without a valid admission? How much 

of the Owens decision and its substantial progeny remain good law, and how much has 

been silently overruled by today’s decision?

Besides creating confusion, the majority’s ruling causes practical problems for 

health care facilities and individuals. Under today’s decision, it appears an individual 

acting on behalf of another person during the health care admission process must have a 

health care power of attorney to execute the admission agreement that contains the 

arbitration agreement and a general durable power of attorney to execute the arbitration 

agreement contained in the admission agreement. This will needlessly complicate health 

care admissions, make it more difficult for individuals to obtain health care, and require 

individuals who seek health care to incur additional legal costs. 

All of this could be avoided by a simple, straightforward application of the Durable 

Power of Attorney for Health Care Act as construed by Owens. The execution of a health 

care admission agreement, and all parts of that agreement, is a health care decision that 

requires an attorney-in-fact to have a power of attorney specifically granting the 

attorney-in-fact to make health care decisions—just as the Act intends and requires. This 

interpretation also has the benefit of providing a clear, consistent, predictable, and 

understandable rule of law. Unfortunately, the majority muddies the water in this important 

area of the law. 

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SHARON G. LEE, JUSTICE