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Validity of Arbitration Agreements Signed by a Family Member in Tennessee

Screen Shot 2016-10-24 at 2.10.56 PMMany nursing home negligence claims are subject to arbitration agreements signed by a family member. The validity of the agreement can be a significant source of controversy because if the finding is for the defendant nursing home, the plaintiff loses the right to a jury trial.

In the 2011 case of Blackmon v. LP Pigeon Forge, LLC, a Tennessee court considered whether an arbitration agreement bound the son of a woman who died in a nursing home. The mother had been hospitalized in 2008, before which she’d lived alone for more than 10 years, handling her own meals and finances. She admitted herself to a medical center due to sores. She was hospitalized for three days and interacted intelligently with her family during that period.

She was alert when she left the hospital to stay at Pigeon Forge, a rehabilitation center for a short period. She stayed for 20 days. The son later sued, claiming that she had declined while there and hadn’t received adequate care. When she was finally removed from Pigeon Forge, she had Stage IV bedsores that were massively infected, and she died due to organ failure from those infections.

The defendants moved to compel arbitration, based on an agreement signed by the son when the mother had been admitted to Pigeon Forge. The son was a minister, and he testified that he’d been told he had to talk to the Social Services Director before visiting his mother. The Social Services Director had him sign documents that she told him were essential so that Medicare would pay the facility. He didn’t read the materials, believing that she was a social worker, and signed because he was anxious to get to his mother. He wasn’t given copies of the documents, but included in them was an agreement waiving the mother’s right to a jury trial and agreeing to arbitration if there was any conflict based on her care and treatment.

The defendants argued that the woman hadn’t met with the son to sign these documents, but instead he’d met with the marketing director for the facility. The marketing director testified that the son had called him to take care of paperwork and held himself out as the oldest son. He also testified that the son had told him he was the executor of the mother’s affairs. No evidence was presented on this point. He also testified he’d spent time with the mother on the date she was admitted and that she was comatose at the time. However, the appellate court noted that the director’s signatures on the documents also signed by the son were made at a different time, and the dates appeared to be added by someone else after the date the documents had originally been signed.

The social worker testified she presented the son with a physician order for scope of treatment but not the arbitration agreement. She testified that the reason she would give him this paperwork would be if he told her he was his mother’s power of attorney. She also testified she didn’t talk to the mother about this, although the mother had been alert and could communicate her needs.

The son testified he hadn’t considered a 1991 durable power of attorney signed by his mother.

The arbitration agreement was part of a 39-page admission packet. However, it stated that if a resident’s legal representative, rather than the resident, was signing it, he or she would need to present a power of attorney or guardianship papers.

The trial court held a hearing on the motion to compel arbitration. It was stipulated that the mother was competent on the date she was admitted, and it was also stipulated that the facility didn’t have the 1991 power of attorney at the time the son signed the agreement. The trial court denied the motion to compel arbitration, concluding that the actual arbitration agreement wasn’t unconscionable, but the 1991 power of attorney lapsed after 10 years, so the son didn’t have the authority to sign the agreement on behalf of his mom.

The appellate court explained that the mother was able to make her own decisions on the date of admission according to the defendants’ own records, yet they never gave her a chance to read the agreement. The defendants had stipulated to her competence. The defendants argued that the son was still an authorized power of attorney, even though they weren’t previously aware of the 1991 power of attorney. The appellate court disagreed, explaining that a power of attorney creates a principal-agent relationship and has to be scrutinized carefully.

In this case, the 1991 power of attorney was put in place to permit the son and his brother to distribute their stepfather’s property if the mother became incompetent. This distribution happened in 1994, so the son had believed the purpose of the power of attorney had long since passed. He didn’t represent himself as serving in that capacity. Meanwhile, the mother hadn’t taken steps to give her son authority to act as her agent since then. Although there was a signature blank that was specifically for “power of attorney,” the son signed one for “responsible party.”

The appellate court affirmed the lower court’s denial of the motion to compel arbitration in the son’s nursing home negligence case.

If you are being abused or you suspect a loved one was abused or neglected, the Tennessee nursing home negligence attorneys at Nahon, Saharovich & Trotz may be able to help. Contact us toll-free at 1-800-529-4004 or by completing our online form.