Court Opinion

ID: 9941791
Source: CourtListenerOpinion
Date Created: 2024-02-16 21:10:59.567028+00
Date Added: 2024-06-11T13:47:02.606218
License: Public Domain

02/16/2024

                  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
                      ___________________________________

                             No. M2021-00927-SC-R11-CV
                        ___________________________________

HOLLY KIRBY, C.J., dissenting.

       I agree with many of the points made in Justice Lee’s dissenting opinion. I write
separately out of concern about the practical implications of the majority’s decision to leave
the law so unsettled in an area that touches so many.

        Whether or not one agrees with the holding in 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)), its holding was clear.
Under Owens, an attorney-in-fact acting under a durable power of attorney for health care
had authority to sign a nursing home admissions agreement that included an arbitration
provision. This was premised on the Court’s holding that the decision to admit a relative
to a long-term care facility is a “health care decision” within the meaning of the Durable
Power of Attorney for Health Care Act, and execution of the entire admissions
agreement—including the arbitration agreement—was “necessary to ‘consent . . . to health
care.’” See id. at 884 (citing Tenn. Code Ann. §§ 34-6-201(3), 34-6-204(b)). As a result
of Owens, it was well-settled that a health care power of attorney was needed—and
sufficient—to complete all of the paperwork to obtain health care for a loved one.

        “Was” well-settled. No more. The majority does not overrule Owens but instead
distinguishes it based on the thinnest of reeds, its assertion that, in Owens, execution of the
arbitration agreement presented with the facility admission documents was mandatory
while the arbitration agreement in the instant case was not. Respectfully, whether the Court
in Owens viewed the arbitration agreement as mandatory is unclear. The Owens Court
made no express finding that the arbitration agreement was mandatory. The admissions
agreement did not contain any language conditioning admission to the defendant’s facility
on the arbitration agreement, and the arbitration agreement contained a separate signature
block from the larger admissions agreement. See id. at 880–81. Likewise, there was no
circumstantial evidence in Owens to suggest that the facility required consent to arbitration
as a condition of the principal’s admission. In fact, when asked by the plaintiff to consider
whether the arbitration agreement was unenforceable on unconscionability grounds, the
Court specifically noted the lack of evidence concerning “the circumstances under which
Daniel signed the arbitration agreement on behalf of King, including whether the
arbitration agreement was offered on a ‘take it or leave it basis.’” Id. at 889 (emphasis
added). It declined to address “whether the arbitration agreement [was] unconscionable
due to the limited nature of the factual record.” Id.

        The majority goes to surprising lengths to show that the arbitration agreement in
Owens really and truly was mandatory, even going so far as to plumb briefs filed by the
parties after this Court’s opinion was filed. This is beside the point if the Owens Court
itself viewed the question as unclear.

        This tees up the main point—the question of whether the arbitration agreement was
mandatory had little to do with the Owens Court’s reasoning on whether signing the
arbitration agreement was a health care decision. The Court construed the durable power
of attorney for health care in that case “in accordance with . . . the Tennessee Durable
Power of Attorney for Health Care Act.” Id. at 884. Applying the Act, Owens held that
one acting pursuant to a durable power of attorney for health care may sign a nursing-home
contract that includes an arbitration agreement. Id. The Owens Court reasoned that the
arbitration agreement was part and parcel of the overall health care decision to admit the
relative into a nursing home, one of the many sub-decisions made as part of the process.
Id. at 884-85. On that basis, Owens plainly held that, under the Tennessee Durable Power
of Attorney for Health Care Act, executing the arbitration agreement was a “health care
decision.”

       In this case, the majority frames the question as “whether entering the arbitration
agreement is a ‘health care decision’ within the meaning of the Durable Power of Attorney
for Health Care Act.” Owens held that the answer to that question is “yes.” Despite this
holding, citing its view that the arbitration agreement in Owens was “a condition of
admission to the facility,” the majority shunts Owens off to one side, characterizes the
question on appeal in this case as “a matter of first impression,” and proceeds with a textual
analysis of the Durable Power of Attorney for Health Care Act that ignores the bulk of
Owens’s reasoning.

                                             -2-
       This leaves practitioners and trial courts with two binding Tennessee Supreme Court
decisions with analyses that cannot be reconciled or synthesized. In effect, the majority
overrules Owens without engaging in this Court’s traditional analysis for reconsidering its
precedent. See In re Estate of McFarland, 167 S.W.3d 299, 306 (Tenn. 2005) (“Generally,
well-settled rules of law will be overturned only when there is obvious error or
unreasonableness in the precedent, changes in conditions which render the precedent
obsolete, the likelihood that adherence to precedence would cause greater harm to the
community than would disregarding stare decisis, or an inconsistency between precedent
and a constitutional provision.”).

        The majority’s decision also ignores other legal developments in this area. Between
2016 and 2019, the Centers for Medicare & Medicaid Services (“CMS”) enacted new
regulations for the use of arbitration agreements by long-term care facilities. See Revision
of Requirements for Long-Term Care Facilities: Arbitration Agreements, 84 Fed. Reg.
34718 (July 18, 2019) (codified at 42 C.F.R. § 48) (providing background on the
developments in arbitration-related regulations). As enacted, the new regulations prohibit
facilities that participate in Medicare or Medicaid from “requir[ing] any resident or his or
her representative to sign an agreement for binding arbitration as a condition of admission
to, or as a requirement to continue to receive care at, the facility.”1 42 C.F.R. §
483.70(n)(1). Assuming that facilities are complying with federal law, few arbitration
agreements for nursing homes arising after the enactment of the CMS regulations would
be considered “mandatory” under the majority’s analysis.2

       I am concerned that little will be clear to practitioners or the public in the wake of
the majority opinion in this case. The majority opinion limits the analysis to a power of
attorney that does not reference Tennessee Code Annotated section 34-6-109 and bats aside
section 34-6-108(c)(9). But subsection 34-6-108(c)(9) signals that a health care power of
attorney is needed for “any decisions regarding medical treatments or health care,” which
would likely include a related arbitration agreement on health care disputes. Would the
analysis be different for a power of attorney that does reference Tennessee Code Annotated

        1
          To ensure compliance, facilities must “explicitly inform the resident or his or her representative
of his or her right not to sign the agreement,” and the agreement “must explicitly state that neither the
resident nor his or her representative is required to sign an agreement for binding arbitration as a condition
of admission to, or as a requirement to continue to receive care at, the facility.” 42 C.F.R. §§ 483.70(n)(1),
(n)(4).
        2
          As of 2023, 311 of the 316 licensed nursing homes in Tennessee are Medicare or Medicaid
participants and are therefore subject to CMS regulations. See Tenn. Health Facilities Comm’n, Rep. to
113th General Assembly, Nursing Home Inspection and Enforcement Activities, at 4 (Feb. 2023),
https://www.tn.gov/content/dam/tn/hfc/documents/HFC-
Nursing_Home_Inspection_Enforcement_Report2023.pdf.

                                                    -3-
section 34-6-109? Does the majority create a donut hole of sorts, where, under section 34-
6-108(c)(9), a regular power of attorney is not sufficient to assist a relative in obtaining
health care, but under the majority’s interpretation of section 34-6-201(3), a health care
power of attorney is not sufficient either? I am not sure. In an area where people need
certainty about how to take care of incapacitated loved ones, the majority leaves significant
uncertainty.

       The majority downplays the uncertainty sure to follow its opinion, shrugging that
“we may only decide the questions that are presented by this case.” Respectfully, the
problem is not the issue presented in this case. The problem is how the majority chooses
to resolve it. Judges have leeway in how they address the questions presented by the
parties. If the Court feels that resolving an issue presented by the parties requires us
reconsider prior precedent, we may ask for supplemental briefing on that question so we
can address it directly. But the worst choice is to create two irreconcilable binding
decisions and leave it for others to sort out.

        If the reality is that the majority disagrees with the reasoning in Owens, it would be
much more practical for the Court to just overrule it. Leaving Owens in its current state of
legal limbo is untenable. At least overruling Owens would offer the opportunity to clarify
the overall analytical framework and provide guidance to those who must try to obtain
health care for loved ones who need assistance.

                                           _________________________________
                                           HOLLY KIRBY, CHIEF JUSTICE

                                             -4-