### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON S ep te m be r 18, 200 8 S es sio n
LOV IE MITC HELL, as Executr ix of the Estate of Mack Mitc hell, De ceased v. K INDRED HE ALTH CARE OPERATI NG, INC., ET AL

. Direc t Appeal from the Circ uit Court for Sh elby County No. CT-003280-06 D 'Arm y Bailey, Jud ge

No. W2008-00378-C OA-R3-C V - F iled Novem ber 19, 2008

This appea l conce rns the enf orce ability of an arbitration a g ree ment betwee n a nursing home and one of its patients

. Al though the trial court f ound that the patient’s spouse ha d authority to sign the ag r e e me n t u n d e r th e te r

ms o f a p o w e r o f a tt o r

n e y , th e c o urt c o n c lu d e d th a t th e s p o u s e did not knowing ly

and voluntarily

waive the patient’s rig ht to a jury trial. Ther efor e, the tria l c ourt denied the def en d an t ’s m o t i on to compel ar bitration. After

revie wing the entire rec ord, we find that the fac ts do not support the trial court’s c onclusion. Acc ording ly , we r ever se and r emand.

Te nn. R . A pp. P . 3 ; A ppe al a s o f Rig ht ; J udgm e ntof t he of t he Ci r c uitCo ur t R e ve r se d and Rem anded

J. S TEVE N S T A FF O RD , J ., delivere d the opinion of the court, in which Alan E. H ighe rs, P.J ., W.S . and David R. Fa

rmer, J., joined.
David J. W ard, Chattanoog a, TN, f or Appe llant T. Ry an Malone , Chattanoog a, TN, f or Appe llant J ill J ensen Thr ash, Chattanoog a, TN, f or Appe llant Cameron C. Jehl, Nashville, TN, for Appe llee Debor ah Truby

Riordan, Nashville, TN, f or Appe llee Carey L . Ace rra , Nashville, TN, f or Appe llee Br ian G. B rooks, Gre enbrie r, AR, for A ppellee

OP IN ION

Fa ctual B ackgroundT he A D R Agr eement s hows M r

. M i t che l l ’ s si gn at ur e, b ut M s

. M i t che l l s t at ed i n h er depo s i t i on t hat s he s i gn ed 1 her hu s band’ s na me. T he part i es ag r ee, an d t he t r i al cour t f ound, t hat i t was M s

. M i t che l l ’ s s i gn at ur e. -2- Ma c k M i t c h e ll h a d a

lon g his tor

y of me dic a l pr ob le ms. He ha d s uf fe re d s e ve ra l mi ni- str ok e s, and in 2004, was diag nosed with Alzheimer’s disea se. Afte r anothe r stroke in Mar ch, 2005, Mr. Mitchell was tre ated at Ba ptist Hospit al in Co l l i ervill e, Te nnessee . Two we eks later , the hospital tr ans fe rr e d h im t o Co rd ov a Re ha bil itatio n a

nd Nu rs ingCe nte r ( “ Cor dova”)

. Th e ho sp ita l c ho se Cordova for

Mr. Mitchell bec ause it wa s the only nursing fa ci lity

with a bed available f

or Alzheimer’s patients. Cordova a dmitted Mr. Mitchell on April 6th or 7th, 2005. On April 8, 2005, Mr. Mitchell’s wife, L ovie M itchell, went to Cordova to visit him. W hen she ar rived at Cordova, Ms. Mitche ll was direc ted to Cordova’s a dmissions counselor, Ron L ee. Mr

. Mit c he ll w a s n ot c omp e te nt to s ig n h is o wn a dmi ssi on s p a

pe rs , a nd Cor do va ne e de d M s. Mit c he ll to sign them for

him. Ms. Mi tchell pre sented a po wer of attorne y

that g ave he r authority

to make health ca re de cisions for her

husband. The pow er of

attorney had bee n signe d by

Mr. Mitchell on J uly 22, 2004.

At the tim e of

the me e ti ng , M s. Mit c he ll w a s a lso e xpe ri e nc ingse ve re he a lthpr ob le ms. Sin c e Janu ary

20 04 , s he be e n un de rg oin g c he mot he ra py tr e a tme nt fo r Sta g e 3 c anc e r. She wa s a lso takin g me dic a tio n to tr e a t de pr e ssi on , a nxie ty , fat igue , a

nd c hr on ic ane mia . Si de e ff e c ts o f t his t re at m en ti n cl u d ed

b l u rry v i s i o nan d

d i ff i cu l ty co n ce n tra t i n g.
At the mee t i n g, Mr. L ee g ave Ms. Mitche ll severa l documents related to her husba nd’s admission to Cordova. One of these doc uments was the “ Alternative Dispute Resolution Agr eeme nt Be tween Re sident and F acility ” (A DR Ag ree ment”). Under the terms of the ADR Ag ree ment, Mr. Mitchell ag ree d to submit any claims ag ainst the nursing fac ility to binding ar

bitration. The ADR Ag ree ment was a

stand-alone ag ree ment, distinct from the g ener al admissions ag ree ment. The AD R Ag ree ment stated that “the execution of this Agr eeme n t i s n o t a pre condition to the furnishing of service s to the R esident by the Facility , and thi s Arbitration Agr eeme nt may be revoked by written notice to the Fa cility from the Resident within thirty (30) day s of signature.” Be cause o f h er condition, Ms. Mit chell asserts she could not rea d the ag ree ment herse lf. Instead, Mr. L ee summa ri zed its te rm s, and

Ms. Mit c he ll s ig ne d it

. 1

Mr . M itc he ll r e ma ine d at Co rd ov a un til his de a th on July 13 , 20 05 . O n Jun e 27 , 2 00 6, Ms. Mitchell, as executor of Mr . Mitchell’s estate, f iled a C o m p l ai nt in the Circuit Court of Shelby County ag ainst the companie s th at o wn edan d o p er at edC o rd o v a– Ki n dre d He al th ca re Opera

ting, I nc., et al. (“ Kindred” ). The Complaint asser ts severa l cause s of ac tion: neglig ence , g ross neg lige nce, willful, wanton, rec kless, malicious and/or intentional c o n d u c t, me d ic a l m a lp r a c ti c e , wr o n g ful death, and violations of the Te nnessee Adult Protection Act. In response , Kindred filed a mot ion asking the trial cour

t to enforc e the ADR Ag ree ment. The parties conducte d limit ed discove ry reg arding the e xec uti on

of the AD R A g re e me nt.B o t h pa rt i es as ser t t hat t he t ri al co urt f o und t he A D R A greem ent void as agai nst pub l i c p o l i cy. I f t he t ri al co urt 2 h a d m a d e this c o n c lus io n , i t wo u ld ha v e b e e n inc o rr e c t. See , O wens v . Nat i onal H eal th Cor p. , 200 7 W L 32 84 66 9 at *1 0 -1 1 ( T e nn

. N o v. 8 , 2 0 0 7 ). A l t ho ug h the tri al co urt’ s st atem en t s are i m p rec i se, i t ap p ea rs t o ha ve f o un d t ha t M s. M itch e ll la c k e d the c a p a c ity to e x e c u te the a g re e m e n t. -3- On J anuar

y 11, 2008, the trial cour

t held a hea

ring on Kindred’ s motion. At the conc lusion of the he aring , the trial cour t denied the motion. An O rd er incorporating the tr ial court’s or al finding s was filed J anuar

y 18, 2008. At the hear ing, the trial court made sever al finding s of fac t and conclusions of law : 1) Mr. Mitchell was incompete nt on April 8, 2005, the day Ms. Mitchell signed the ADR Ag ree ment. 2) Th e Dura

ble Pow e r of Attor

ne y fo r H e a lthCare g ave Ms. Mit c he ll the a uth or ity to bind Mr. Mitchell to the terms of the ADR Agree ment. 3) Ms. Mitchell, howeve r, lac ked the c apac ity to execute the ADR Ag ree ment beca use she wa s ex p er iencingharmful side e ffe cts (blurry vision and poor
c on c e ntr a tio n) re su lti ngfr om c he mot he ra py and oth e r m e dic a l tr e a tme nts

. 2

Ki nd re d a pp e a ls a nd ra ise s o ne is su e for

re vie w: wh e the r t

he tr ia l c ourt

e rr e d in fa ili ngto enfor ce the ADR Ag ree ment signe d by the parties. As Appellee , Ms. Mitche ll r aises three additional iss ue s: 1)Whether the tr ial court e rre d in finding that the Dura ble Power of

Attorney for Hea lth Care was sufficie nt to g ive M s. Mitchell authority to bind her husband to the AD R A g re e me nt. 2) Whether, c onsist en t with the trial court’ s findings, e nforc ement of the ADR Ag ree ment is unconscionable. 3) Whether Ms. Mitchell knowing ly and voluntarily ag ree d to the terms of the A DR Ag re e me nt.
Standard of Re view

On app e a l , w e r e v i e w a g r an t o r d e n i a l o f a m o t i o n t o c o mp e l ar b i tr a t i o n un d e r the sa me standards that apply

to bench tria ls. Spann v. Am
. Express T ravel Related Serv

s. Co. , 224 S.W .3d 698, 706-07 (Te nn. Ct. App. 2006). There fore , we will re view the r ecor d de novo and wi ll p re sume that the finding s of fa ct ar e correc t “unless the preponde ranc e of the evidenc e is otherwise .” Te nn. R. App. P. 13( d). We w ill re view the trial court’s resolution of leg al issues without a presumption of cor rec tness. Johns on v. Johns on , 37 S.W .3d 892, 894 (Tenn. 2001)

.-4- L aw a nd An a ly sis
We first addre ss whether

Ms. Mitche ll ha d the authority to execute the ADR a g ree ment on behalf of Mr. Mitchell. Relying he avily on O wens v

. N a tio na l He a lt

h Corp. , No. M2005-01272-SC-R11-CV, 2007 WL 3284669 (Tenn. N ov. 8, 2007), the trial c ourt found that the po we r o f atto rn e y

fo r h e a lthc are g ave he r s uc h a uth or ity . We a ff

ir m the tr ia l c ourt ’s fi nd ingon thi s issue. A power

of attorne y

is a written instrument that cr eate s a principal-ag ent relationship. The instrument itself indicates the purpose of the ag ency and the extent of the ag ent’s powe rs. Ther efor e, “the languag e of a

power of attorne y

deter mines the extent of the power that the power

of attorne y c on ve y s, and

the lang ua g e sh ou ld b e c on str ue d u sin g the same ru le s o f c on str uc tio n g e ne ra lly applicable to contrac ts and other wr itten instruments.” Cab any v . M ay fi e ld R e h ab ili

tat ion and Special Care Center , No. M2006-00594-COA- R3-CV, 2007 WL 3445550, at *4 (Te nn. Ct. App. No v
. 1 5 , 2 0 0 7 ) ( ci t i n g Te nn. Farme rs Lif eRe as suranc eCo. v

. Ro se , 239 S.W .3d 743, 749 (Tenn. 2 0 0 7 )

. T h e r e f

o r e , w e m u s tl o o k

t o t h e t e r m s o f th e p o w e r

o f a t t o r n e y: 1) I , Mack C. Mitchell...her eby appoint and author ize my wife, L ovie L . Mitchell,...as my ag ent a n d at t o rney -in-fa ct to act f or me a nd in my

name to make and communicate he alth car e dec isions for me as a uthorized in thi s d o cument. F or purposes of this docume nt, “hea lth ca re decision” sha ll mean conse nt, refusa l of
c on se nt, or

wi thd ra wa l o f c on se nt t o a

ny c are , tr e atme nt, se rv ic e or pr oc e dure to maintain, diag nose or tre at any medical or

phy sical condition. 2) B y thi s d oc ume nt I

int e nd to c re a te a

dura ble po we r of

a tto rn e y fo r h e a lthc are to the fu ll e xtent a llo we d und e r t he statut e s o f T e nn e sse e . It is my in te nt t hat th is durable power

of attorne y

for he alth car e shall be construed in a ccor dance with the laws of the State of

Te nn e sse e

. Th e a

uth or ity of my a g e nt a

nd a tto rn e y -i n- fa c t sh a ll not terminate if I

become disabled, incompete nt or incapa citated. 3) Subject to any

limit ations in this document, in the event I at any time do not have the c a pa c ity to make inf

or me d h e a lthc are de c isi on s f or my se lf , I he re by g ra nt t o my a g e n tf u l l p o w e r an d a u t h o r i t y t o m ak e h e a l thc ar e d e c i s i o n s f o r m e t o th e s ame e x t e n tt h a tI c o u l d

m ak e s u c hd e c i s i o n s f

o r m y s e l f i f I h a d th e c a p a c i ty t o d o s o

. In exercising this authority , my ag ent shall make he alth car e dec i s i o ns that are
c on sis te nt w ithmy

de sir e s a s st a te d in

thi s d oc ume nt o r o the rw ise ma de kn ow n to my ag ent.... 4)

.. .I fu rt he r d e le gate to my

a g e nt a nd a tto rn e y -i n- fa c t th e po we r a nd a uth or ity to se le c t, e mpl oy , a

nd dis c ha rg e he a lth care personn e l, s uc h a s p hy sic ians , nur se s, thera pists, hospi ce c are and home he alth car e provide rs, and other medical p r o f e s s i o n a l s ; t o a dm i to r

d i s c h ar g e m e ( i n c l u d i n g tr an s f e r f r o man o th e r

f a c i l i ty) from any hospital, hospic e, nursing home, adult home or othe r medica l car eU nl i ke t he p res ent case, t he agreem ent i n O wens was cont ai ned wi t hi n a l ar ger admi s s i ons ag r eement

. H er e, 3 the A D R A g re e m e n t wa s a se p a ra te d o c u m e n t.
-5- fa c i l i t y
. . . an d

t o c o n t r a c ti nm y

n am e an d

o nm y b e h a l f f o r a l l h e a l thc ar e s e r

v i c e s, including w ithout li mitation medi ca l , nursing and hospital ca re, a s my ag ent and attorney -in-fa ct may

deem a ppropriate

.... 6) Ia uth or ize my a g e nt an d att or ne y -i n- fa c t to e xec ute on my be ha lf a ny do c ume nts nece ssary or desira ble to implement the health ca re d ec i s i o n s that my

ag ent and attorney -in-fa ct is authorized to m ak e p ursuant to this document, including ...any waiver s or re lease s from liability require d by

a phy sician or he alth car e provide r.
I n Ow e ns, the Tenne ssee Supre me Court a ddresse d a situation in which a powe r of attorney for health car e was used by the age nt as authority to sign a n arbitration ag ree ment on behalf of the patient. The a

rbitration ag ree ment was a clause within a larg er admissions ag ree ment. The c ourt 3 found that “[b]ecause [the patient] could have de cided to sign the nursing home contra ct containing the arb itr a tio n p ro vis ion

ha d [th e patie nt] be e n ca

pa ble , Te nn . Co de Ann. § 3 4- 6- 20 4( b) le a ds us to c on c lud e tha

t [th e a tto rn e y -i n- fa c t] wa s aut ho ri zed to sig n the arb itr a tio n p ro vis ion on [the patie nt’ s] behalf .” Id . at *18. The c ourt supported its conclusion with a policy rationale : [The] purported distinction betwe en makinga leg al dec ision an d a hea lth care decision fails to appre ciate that signinga contr act f or hea lth care service s, even one without an arbitration pr ovision, is itself a “leg al decision.” The implication of the plaintiff’s ar g ument is that the at t o rn ey -in-fa ct may make one “leg al dec ision,” contra cting for he alth car e service s for the principal, but not a nother, a g ree ing in the contra ct to binding a

rbitration. That res u l t would be untena ble....Holding that an attorney -in-fa ct ca

n make some “ leg al dec isions” but not others would introduce an element o f u n c e rta inty

into h e a lt

hc ar e c o n tr a c ts s ign e d

b y a tt o r n e y s - in

- f a c t t h at likely would have ne g ative ef

fec ts o n t h ei r principa ls. Such a holding c ould make it m or e dif

fi c ult to o bta in h e a lthc are se rv ic e s f or the pr inc ipa l. And

in s ome c a se s, an attorne y -in-fa ct’s appa rent lac k of authority

to sign a n arbitration ag reem ent on be ha lf of the pr inc ipa l pr e suma

bly c ou ld re su lt in the pr inc ipa l bei ngun a ble to o bta in neede d health ca

re se rvice s.
Id. at *18-19.

I n Nec essary v

. Life Care Centers of

Am erica, Inc. , No. E2006-00453- COA-R3-CV, 2007 W L 3 4 4 6 6 3 6 ( T e n n

. C t

. Ap p

. N o v
. 1 6 , 2 0 0 7 ) , th i s C o urta p p l i e d th e r u l e e s t a b l i s h e d b y Ow e ns
. In Ne c essa ry , th e patie nt o ra lly g ave his wi fe e xpre ss autho ri ty to s ig n a ll d oc ume nts ne c e ssa ry fo r h is admission to the nursing fac ility

. Id

. at *5

. He d id n ot e xplic itl y g ra nt h e r a uth or ity to w a ive his rig ht to a jury

trial. Id . The wife , howeve r, whe n completing the admissions ag ree ments, signe d a stand-alone Arbitration Ag ree ment. Id . at *1. Execution of that ag ree ment was not a pr econdition-6-

for a dmission. Id . Applying the rationale of Ow e ns , we held that the wife had authority to sign the
a g re e me nt: Although the prese nt c ase doe s not involve a written powe r of attorney , we think the rationale and hold i ng of Owe ns is neverthe less dispositi ve of this appe al. In the prese nt case , Plaintiff essentially argues that she ha d express authority from the Dec edent...to s ign a ll of the admission documents and make all of the de cisions
re g ard inghis a dmi ssion to L if e Care ’s fa c ili ty -e xce pt o ne : sh e did no t ha ve his authority to sign a n arbitration ag ree ment, even thoug h he d i d n o t wi thhold such authority . Such a conc lusion would result in the ty pe of ‘ untenable’ situation de sc ri be d in

Ow e ns

. Id . at *5 ; se eals o Jones v. Kin dred Healthcare Operating, Inc. , No. W2007-02568-COA-R3-CV, 2 0 0 8 WL 3 8 6 1 9 8 0 ( T e n n

. Ct

. Ap p

. A u g

. 2 0 , 2 0 0 8 ) ( f in d in g th a t a

p o w e r o f a tt o r

n e y c ana u th o r iz e the a tto rney -i n- fa c t to e nte r i nto an a rb itr a tio n a g re e me nt o n b e ha lf of the pr inc ipa l) ; Rain es v. National H

ealthcare Corp. , No. M2006-1280- C OA -R 3-CV, 2007 WL4322063 (Tenn. Ct. App. D e c

. 6 , 2 0 0 7 ) ( r e c o g n iz in g th a t a p o w e r o f a tt o r n e y c o v e r in g h e a lt

hc ar e d e c is ions do e s a

u th o r iz e the a tto rn e y -i n- fa c t to wa ive the pr inc ipa l’ s r ig ht t o a jur y tr ia l) ; Cabany, 2007 WL 344550, at *4 (re cog nizi ng that signing an arbitration a g ree ment as a part of a nursing home admissions ag ree ment is a leg al, not a medica l, decision).

Her e, the powe r of attorney g ave Ms. Mitchell authority to make ce rtain dec isions for Mr. Mitchell in the event that he beca me incapa citated. B oth parties agree that M r. M i t ch el l was incompetent; there fore , Ms. Mitchell’s authority under the power of attorney was trig g ere d. Under the power of attorne y , Ms. Mitchell had authority to act as attorney -in-fa ct “to the s ame e x tent” as Mr. Mitchell and to the “ full ext ent allowed unde r the statu tes of the state of Tenne ssee.” F ur the rm or e , th is p art ic ula

r p ow e r o f a

tto rn e y pe rm its Ms. Mit c he ll t o e xec ute “ wa ive rs ” on be ha lf of Mr. Mitchell. Ap p l y i n g the rules of Ow e ns and its prog eny , we f ind that Ms. Mit chell had authority as attorne y -in-fa ct to make the le g al dec ision to ex ecute the ADR Ag ree ment.

Un c on sc ion a

bil ity

We n owa dd

re ss t he iss ue of

un c on sc ion a

bil ity

. Al tho ug h M s. Mit c he ll r a ise d th is d e fe ns e at the trial, the c ourt did not address this issue–presumably beca use it found that Ms. Mitchell lacke d
c a pa c ity . Re vie wi ng c ourt s o ft e n r e mand fo r d isc ov e ry

on the iss ue of

un c on sc ion a

bil ity be c a us e it require s an “intensely fac t-driven inquiry .” Hill v. NHC H ealthcare/Nashville, LLC, No. M2005- 01818-COA-R3-CV, 2008 WL1901198, at *6 (Tenn. Ct. App. Apr. 30, 2008). Se eals o , Ow e ns , 20 07 WL32 84 66 9, a t *1 1; Rain es v. Nation al Health C orp. , No. M2006-1280-COA- R3-CV, 2007 WL 4322063, at *7-8 (Tenn. Ct. App. Dec. 6, 2007). I n the pre sent ca se, howe ver, the parties have conducte d discovery

on this iss ue, and the fac tual rec ord is sufficie ntly d ev el o ped for

our re view. See Reagan v. Kindr ed Healthcare Ope ratin g, Inc. , N o

. M 2 0 0 6

- 0 2 1 9 1

- CO A

- R3

- CV , 2 0 0 7 WL 4523092 (Tenn. Ct. App. De c. 20, 2007) ( ad d re ssing the unc onscionability of an a rbitration-7-

ag ree ment when the tr ial court made no finding s of fact or conclusions of law). W hether a par ticular contra ct i s unconsciona

ble i s a question of law

. Taylor v. Butler , 142 S.W .3d 277, 284-85 (Te nn. 2004).
There are two ty pes of unc onscionability : proce dural a nd substanti v e. P roce dural unconsciona

bility “may arise from a lack of a meaningf ul choice on the part of one party .” Trinit y I n d u s t r ies, Inc. V

. McKinn on Bri dge Co., Inc. , 77 S.W .3d 159, 170 (Tenn. Ct. App. 2001). A contra ct is substantively

unconsciona

ble when its “te rms are unrea sonably harsh.” Id . Tenne ssee c ourt s, ho we ve r, ble nd

the tw o ty

pe s and fi nd un c on sc ion a

bil ity wh e n “ the ine qu a lity

of the ba rg a in is s o ma nif e st a s to sh oc k th e jud g me nt o f a pe rs on of c omm on se ns e , a nd wh e re th e te rm s are so oppressive that no rea sonable pe rson would make the m on one hand, and no honest and fa ir person would acc ept them on the other .” Id. at 171 ( quo ting Hau n v . Ki ng , 690 S.W .2d 869, 872 (Tenn. Ct. App. 19 8 4 ). W hen dec iding whe ther a contra ct is unconscionable , a cour t considers the contra ct’s “se tting, purpose , and effec t,” and analy zes fac tors such as “ weaknesses in the c ontrac ting process like those involved in more spec ific rules a s to contrac tual capa city , fra ud, and other invalidating c auses....” Taylor , 142 S.W .3d at 285 (quoting Resta te me nt (Second) of

Contract § 208, cmt. a (1981) ).

Courts are mor e likely

to find that contra cts of adhesion are unconsciona ble. A “c ontrac t of
a dh e sio n” is “ a

sta nd ard ize d co ntr a c t for

m off e re d to con sume rs of

g oo ds and

se rv ic e s o n e sse nti a lly a ‘take it or leave it’ basis, without aff ording the consumer

a re alistic opportunity

to barg ain and under suc h con d i t i o n s t hat the consume r ca nnot obtain the desired pr oduct or ser vice e x cept by acquie scing to the form of the contra ct.” Bura c

zynski v . Ey ring , 919 S.W .2d 314, 320 (Tenn. 1996) ( quo ting Bla ck' s L aw Dictionary 40 (6th ed. 1990)). I f an ag ree ment is a contr act of adhesion, then the “de fenda

nt seekingenfor ceme nt.

. . m u st prove that the pa rties ‘a ctually

barg ained ove r the arbitration provision o r t h at it was a r easona ble term unde r the c ircumstance s.’” How e ll v . N HC Healthcare-Fort San ders, Inc. , 109 S.W .3d 7 3 1 , 7 3 4 (Tenn. Ct. App. 2003) ( quo ting Brown v. Karem or Intern ational

, Inc. , No. 01A01-9807- CH-00368, 1999 WL221799 (Tenn. Ct. App. Apr

. 19, 1999)). I f the ag ree ment is not a contr act of adhesion, the pa

rty seekingto avoid enfor ceme nt of the c ontrac t must prove unconsciona bility like any other defe nse of c ontrac t law. Di ag nos tic Ctr
. v . St e v e n B. S tub ble fi e ld, M. C., P. C. , 215 S.W .3d 843, 847 (Tenn. Ct. App. 2006).

I n Reagan v. Kindr ed Healthcare Operating, Inc. , No. M2006-02191-COA- R3-CV, 2007 WL 4523092 (Tenn. Ct. App. Dec

. 20, 2007), the court examined the exact ag ree ment at issue her e and found that it was not a co n t ra ct o f adhesion. Id . at *15. The A DR Ag ree ment is a separ ate, stand-alone document; it is not bur ied inside a larg er admissions a g ree ment. I t clear ly provides that execution of the ag ree ment is “not a pre condition to the furnishing of ser vices.” I t sta t es t h at the patient has the r ight to seek leg al counsel and that it can be revoke d within thirty day s of execution. The fir st pag e of the Ag ree ment states, in bold print, “[b] inding a rbitration means that the parties a re waivingtheir rig ht to a trial, including their right t o a jury trial, their right t o a trial by a Judge a nd th eir ri ght to a

pp e a l th e de c isi on

of the arb itr a tor (s ). ” Mo re ov e r, Ms. Mit c he ll d id n ot h ave to execute the a g ree ment for Mr. Mitchell to c ontinue rec eiving car e. In fac t, when Ms. Mitchell signe d the ag ree ment, Mr. Mitchell had a lrea dy been a dmitted and was re ceivingcar e.-8-

Even if this ag ree ment is not a contrac t of adhe si o n , M s

. Mitchell asserts that the
c ir c ums tanc e s su

rr ound ingthe e xec uti on of the AD R Ag re e me nt re nd e r i t un c on sc ion a ble . B e c a us e of her medical problems, Ms. Mitchell asser ts that she di d not rea d the agr eeme nt; howeve r, eve n if she had r ead it, she c ontends that she would not have understood i t. Ms. Mitchell admits that she did n ot tell Mr. L ee a

bout her c ondition, but i nstead she r elied on him to expl ain the agree ment’s te r ms to h e r

. H e r e , th e me mo r ie s o f b o th p arti e s b e c o me f

u zzy
. Wh il e M s

. M it c h e ll cannot reme mber most of Mr. L ee’ s explanation, she claims that he did not tell he r that she was wa iving the rig ht to a jury trial. She cannot r emember if he e x plained the a

rbitration proc ess or if he told her that the ag ree ment was optional. L ikewise, Mr. L ee c annot r em em b er the meeting , but asserts that he routi n el y ex p l ai n ed to ot her patients that ex ecution of the ag ree ment meant wa iving the r ight to a jury trial.

We c ann ot f

ind tha t th ese cir cumstanc e s su pp or t a fi nd ingof

un c on sc ion a

bil ity . M s. Mitchell’s ailments are undoubtedly g enuine a nd painful, but she did not prese nt any evidenc e, other than her own testimony , that her c o n d i t i o n rende red he r unable to understand the a g ree ment she
e xec ute d. He r p oo r m e mory may very wel l be a pr od uc t of he r m e dic a l c on dit ion , b ut i t is no t a su ff ic ie nt r e a so n to fi nd thi s a g re e me nt u nc on sc ion a

ble . F ur the rm or e , M s. Mit c he ll r e lie s h e avil y on Mr. L ee’ s inability , at his de position, to descr ibe the arbitration pr ocess in muc h detail. Howe ver, she does not pre sent any

evidenc e that Mr. L ee’ s descr iptio n o f t h e agree ment or the a rbitration proce ss d u ri n g t heir mee ting wa s inadequate or incor rec t. Finally , there is nothing in the re cord sug g esting that Ms. Mitchell was coe rce d into signing the ADR Agre ement, or that she was de nied an opportunity

to make a me aning ful choice

. Ms. Mitchell also argues that t he terms of t he ADR Agree ement we re unr easona bly harsh, and ther efor e unconsc ionable. In Reagan , this court deter mined that this e x act ag ree ment contained “no unfa ir adva

ntag e.” Id . at *15. The court based its conclusion on the clar ity of the a g ree ment’s te rm s. Spe c if

ic a lly , th e a g re e me nt “ did no t c ha ng e th e de fe nd ant’ s d

uty to u se re a so na

ble c are in treating [the patient], nor limi t lia b i l i t y fo r breach of that duty , but merely

shifted disputes to a differ ent forum.” Id . Ms. Mitc he ll a rgue s th a t Reagan is inapplicable be cause the plaintiff in that
case did not argue that the a g ree ment was substantively unconsciona ble. As previously

rec og nized, Tenne ssee c ourts do not strictly adher e to the proc edura l/substantive dichotomy when c onducting
an unconsc ionability

analy sis. Accor di ng ly , in Reagan , the cour t analy zed the terms of the ag ree ment and found the m to be enfor cea ble. Id

. Fo l l o wi n g Reagan on this point , we f ind that the terms of the A DR Ag ree ment are not unrea sonable ha rsh or unc onscionable. Although Ms. Mitchell prese nts a number of fa cts supporting her unc onscionability defe nse, tho s e f a c ts , in li g h t o f th e e n ti r e r e c o r d , ar e in s u f f ic ie n t. H av in g c o n s id e r e d th e f a c ts and circ umstances pr esente d in the rec ord, we conclude that the ADR Ag ree ment is not unconscionable.

Me nta l Ca

pa c ity Finally , Ms. Mitchell argues that she did not knowing ly and voluntarily

waive the rig ht to a jury trial wh en si g ning the ADR Ag ree ment. Specifica lly , she conte nds that she did not have the-9-

mental ca pacity to execute the agre em en t

. T he degree of mental c apac ity require d to enter into a contra ct is a question of law

. Rawlings v. John Han cock Mut. Life Ins. Co. , 78 S.W .3d 291, 297 (T e nn . Ct . App . 2 00 1) . T he re fo re , o ur re vie w o f t

he tr ia l c ourt ’s fi nd ingon thi s is su e is de novo

. An adult i s presumed c ompetent, and the pa rty attempting to invalidate a contr act ba sed on the theory

of mental inca

pacity bear s the “burde n of proving t h at o n e o r b oth of the contra cting parties wer e mentally

incompetent whe n the contra ct was f ormed.” Id

. (c i t i n g Kni

ght v. Lancaster , 98 8 S. W.2 d 1 72 , 1 77 -7 8 ( Te nn . Ct . App

. 19 98 ). Spe c if ic a lly , p e rs on s se e kin gto s ho w i nc a pa c ity
mus t p r o v e e it

h e r “ ( 1 ) th e y ar e u n a

b le to un d e r s ta

n d in a r e a s o n a

b le ma n n e r th e natur e and conseque nces of

the transa ction or (2) they are unable to ac t in a reasonable manner in relation to the transac tion a

nd the other pa

rty has re ason to know of their condition.” Id

. “It is not enough to prove that a per son was depr essed or had senile de mentia; [rather], to prove m ental inca pacity , the per son with the burden of

proof must establish, in lig ht of all the surroundingfac ts and circ umstances, that the cog nitive impairment or disease rende red the contra cting party incompetent....” Id

. Th e su bje c t r e c or d d oe s n ot d e mo ns tr ate th at Mr. L e e ha d a ny re a so n to kn owof

Ms. Mitchell’s medi ca l condition. She did not inform him of her condition. Fur thermore , the re cord does n o t r e v e a l an y

th in g a b o u t M s

. M it c h e ll ’ s c o n d it io n o n th e d ay s h e e xe c u te d the ADR Ag ree ment. I n Reagan , the pl aintiff presented evidence from doctors and medical char ts indicating that cer tain medications would ca use conf usion and impairment. Reagan , 2007 WL 4 5 2 3 0 92, at *17. The c ourt found, in spite of this evidenc e, that t h e p l ai n t i ff h ad the capac ity to execute the contra ct. Id. Her e, Ms. Mitchell did not prese nt any evidenc e, other

than her own testimony , about he r c on dit ion . M or e ov e r, he r t e sti mony is r idd le d w ithc ontr a dict io ns and me mor y la ps e s. Theref o re , we fi nd that Ms. Mitchell has not met her burde n of demonstrating that she was inc omp e te nt at th e tim e sh e sig ne d th e AD R A g re e me nt.
Conclusion

For the fore g oing r easons, we reve rse the decision of the trial c ourt and re mand for the entry of an o rd e r co mpe lli ng arb itr a tio n. Cos ts of thi s app e a l ar e ta xed to t he Ap pe lle e , L ov ie Mit c he ll, for whic h execution may

issue if nec essar

y
.

___________________________________

J. S T E V E N S T A F F O R D , J.