Elizabeth Sanders, by and through her next of kin, Tonita Minter v. Harbor View Nursing and Rehabilitation Center, Inc.

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
March 11, 2015 Session
ELIZABETH SANDERS, BY AND THROUGH HER NEXT OF KIN,
TONITA MINTER v. HARBOR VIEW NURSING AND
REHABILITATION CENTER, INC., ET AL.
Appeal from the Circuit Court for Shelby County
No. CT00386113 Robert L. Childers, Judge
No. W2014-01407-COA-R3-CV – Filed May 29, 2015
This is an appeal from the denial of a motion to compel arbitration in a healthcare
liability case. The Decedent executed a power of attorney in favor of her
daughter, the Appellee, granting Appellee broad powers, but exempting healthcare
decisions. The Decedent was subsequently admitted to the Appellant nursing
facility. The Appellee signed the Decedent‟s admission contract and a separate,
voluntary arbitration agreement. After the Appellee filed this action against the
nursing facility and its managing companies, the Appellants filed motions to
compel arbitration pursuant to the arbitration agreement signed at the time of the
Decedent‟s admission. The trial court denied the motions. We affirm.
Tenn. R. App. P. Rule 3; Judgment of the Trial Court is
Affirmed and Remanded
KENNY ARMSTRONG, J., delivered the opinion of the Court, in which J. STEVEN
STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J., joined.
Howard B. Hayden and Kimberly G. Silvus, Nashville, Tennessee, for the
appellants, Harbor View Nursing and Rehabilitation Center, Inc., and Tennessee
Health Management, Inc.
Jeffrey C. Smith and Emily C. Taube, Memphis, Tennessee, for the appellant,
American Health Companies, Inc.
Thomas R. Greer and Austin Fleming, Memphis, Tennessee, for the appellee,
Tonita Minter.
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OPINION
I. Background
Sometime in 2010, Elizabeth Sanders (“Decedent”) suffered a “significant
stroke.” As of result of this stroke, she required 24-hour nursing care, a feeding
tube, and a lift for mobility. The stroke also left Mrs. Sanders unable to
communicate verbally, although she could communicate using gestures.
Following the stroke, Mrs. Sanders became a patient at Camden Care Center
(“Camden”) in Minneapolis, Minnesota. Despite her health problems, Camden
staff described Mrs. Sanders as “quite aware of her surroundings and […] able to
understand and process conversations.”
On April 24, 2012, Mrs. Sanders executed a statutory short form power of
attorney (“power of attorney”) in favor of her daughter, Tonita Minter
(“Appellee”). The power of attorney was executed pursuant to Minnesota Statutes
Annotated Section 523.23, and it grants Mrs. Minter the power “[t]o act for [Mrs.
Sanders] in any way that [the Decedent] could act with respect to…” a multitude
of matters, including banking transactions, business operating transactions,
insurance transactions, fiduciary transactions, claims, litigation, and “all other
matters.”
Also on April 24, 2012,1 the Decedent executed a durable power of attorney
for healthcare (“healthcare power of attorney”) in favor of the Appellee pursuant
to Minnesota Statutes Annotated Section 145C.01, et seq. This healthcare power
of attorney designated the Appellee as the Decedent‟s “agent (my attorney-in-fact)
to make any health care decisions for me—when, in the judgment of my attending
physician, I am unable to make this decision myself and my agent consents to
make the decision on my behalf.” It is undisputed that a physician never
determined that the Decedent was incompetent or otherwise unable to make
healthcare decisions for herself, and, consequently, the parties agree that the
healthcare power of attorney never became effective.
Mrs. Sanders was discharged from Camden Care Center in May of 2014,
and she relocated to Memphis, Tennessee on June 1, 2014, to be closer to Mrs.
Minter. Upon her arrival in Memphis, Mrs. Sanders experienced chest pain and
was admitted to St. Francis Hospital. On June 6, 2014, in order to facilitate further
care for Mrs. Sanders after her discharge from St. Francis Hospital, she was
admitted to Harbor View Nursing and Rehabilitation Center (“Harbor View”). As
1
The copy of this healthcare power of attorney contained in the record is dated April 24, 2003. All parties
assert that this document was executed on April 24, 2012, the same day as the power of attorney. Because
the parties agree that the document was signed in 2012 and because it is immaterial to the issue on appeal,
we accept as true that the healthcare power of attorney was signed in 2012.
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part of Mrs. Sanders‟s admission to Harbor View, the Appellee signed an
admission contract and a separate, voluntary arbitration agreement. The
arbitration agreement states that Harbor View and its patients will “submit their
disputes to mediation and arbitration” and also states, in relevant part, that:
PATIENT and FACILITY agree that this Agreement is entered into
on a voluntary basis. The PATIENT understands they have a choice
of long-term care providers and that other nursing facilities may or
may not use arbitration and/or mediation to resolve disputes. By
signing below, the PATIENT agrees that the FACILITY is not
requiring them to sign this Agreement and understands that they may
be admitted to the FACILITY without entering into this Agreement.
PATIENT and FACILITY also agree that PATIENT‟S decision to
enter into this Agreement is within the scope of a “health care
decision” under Tennessee law.
The arbitration agreement also states that “PATIENT‟S signing this Agreement
(agreeing to submit disputes to [arbitration]) is not a condition of admission to the
FACILITY; and the decision to sign this Agreement is solely within the discretion
of PATIENT.” Mrs. Sanders remained at Harbor View until August 19, 2012,
when she was discharged.
On September 5, 2013, the Appellee, in the posture of the Decedent‟s “next
friend,” filed suit against Harbor View, Tennessee Health Management, Inc.
(“THM”), and American Health Companies Inc., (“AHC”) (collectively,
“Appellants”). THM is the managing company of Harbor View, and AHC is the
sole shareholder of THM.2 The complaint asserts claims for ordinary negligence,
violations of the Tennessee Adult Protection Act,3 medical malpractice, and
“reckless, malicious and/or intentional conduct.” The complaint alleges that Mrs.
Sanders suffered multiple injuries while in the care of Harbor View, which injuries
caused her death.
On October 1, 2013, Harbor View and THM filed motions to compel
arbitration. Harbor View filed a supplemental motion to compel arbitration on
February 6, 2014. On March 17, 2014, AHC filed a motion to compel arbitration.
Following her mother‟s death, Appellee filed a motion to substitute herself as the
plaintiff in the case on May 8, 2014. In an order dated June 24, 2014, the trial
court denied the Appellants‟ motion to compel arbitration, holding that the
Decedent‟s healthcare power of attorney was ineffective and that the power of
2
The claims against AHC are based upon theories of alter ego, agency and joint enterprise. For
purposes of this appeal, we need not determine whether AHC is liable for the actions of Harbor
View and THM.
3
See Tenn. Code Ann. § 76-6-101 et seq.
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attorney did not grant Appellee the authority to bind the Decedent to the
arbitration agreement. In a separate order, also dated June 24, 2014, the trial court
granted the Appellee‟s motion to substitute herself as the plaintiff. The Appellants
timely appealed the denial of their motions to compel arbitration pursuant to
Tennessee Code Annotated Section 29-5-319.4
II. Issue
The sole issue raised on this appeal is whether the Appellee had the authority
under the power of attorney to bind the Decedent to the arbitration agreement.
III. Standard of Review
We review a denial of a motion to compel arbitration under the same
standards as a bench trial. Mitchell v. Kindred Healthcare Operating, Inc., 349
S.W.3d 492, 496 (Tenn. Ct. App. 2008) (citing Spann v. Am. Express Travel
Related Servs. Co., 224 S.W.3d 698, 706-707 (Tenn. Ct. App. 2006)).
Accordingly, we review the trial court‟s conclusions of law de novo. Id. We
review the trial court‟s findings of fact de novo with a presumption of correctness
unless the evidence preponderates otherwise. Tenn. R. App. P. 13(d).
IV. Analysis
This case requires us to determine whether the Appellee was authorized to
bind the Decedent to arbitration. All parties agree that the healthcare power of
attorney was not effective at the time the Decedent was admitted to Harbor View
because no physician ever declared Mrs. Sanders unable to make decisions on her
own behalf. Neither party challenges this holding on appeal. Therefore, we need
only determine whether the Appellee had the authority under the power of attorney
to bind the Decedent to a voluntary arbitration agreement.
“A power of attorney is a written instrument that creates a principal-agent
relationship.” Mitchell, 349 S.W.3d at 496. “The instrument itself indicates the
purpose of the agency and the extent of the agent‟s powers.” Id. “[T]he language
of a power of attorney determines the extent of the power that the power of
attorney conveys, and the language should be construed using the same rules of
construction generally applicable to contracts and other written instruments.”
Cabany v. Mayfield Rehabilitation and Special Care Center, No. M2006-00594-
COA-R3-CV, 2007 WL 3445550, at *4 (Tenn. Ct. App. Nov. 15, 2007) (citing
Tenn. Farmers Life Reassurance Co. v. Rose et al., 239 S.W.3d 743 (Tenn.
2007)). “[P]owers of attorney should be interpreted according to their plain
4
Tennessee Code Annotated Section 29-5-319(a)(1) provides that an appeal may be taken from “[a]n order
denying an application to compel arbitration made under § 29-5-303.”
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terms.” Tenn. Farmers Life Reassurance Co., 239 S.W.3d at 750. “However,
when the meaning of a power of attorney is unclear or ambiguous, the intention of
the principal, at the time of the execution of the power of attorney, should be given
effect.” Id.
Appellants argue that the decision to sign a voluntary arbitration agreement
is within the scope of the powers granted to the Appellee by the power of attorney
because such an action is a legal decision, not a healthcare decision. Appellants
also argue that the power of attorney gives Appellee the authority to bind the
Decedent to arbitration because the Appellee has power over “claims and
litigation” on the Decedent‟s behalf. Appellee, on the other hand, argues that
signing the arbitration agreement was part of the healthcare decision to admit the
Decedent to Harbor View, and, therefore, was beyond the authority granted her by
the power of attorney executed by Mrs. Sanders.
When executing the power of attorney, the Decedent indicated that the
Appellee was to “act for me in any way that I could act with respect to the
following matters, as each of them is defined in Minnesota Statutes section
234.24.” The Decedent indicated that the Appellee was to have all of the powers
enumerated that can be granted under Minnesota Statutes Annotated Section
524.23,5 including claims and litigation.
Although Mrs. Sanders‟ power of attorney does not follow the language
provided in the statute verbatim, we note that the statutory form for a power of
attorney provides that, in granting all of the powers possible under that statute, that
an attorney-in-fact may act on behalf of the principal in the enumerated ways, as
well as “all other matters, other than health care decisions under a health care
directive that complies with Minnesota Statutes, chapter 145C.” Id. § 523.23,
subd. 1 (emphasis added). Minnesota Statutes Annotated Section 523.24, the
statute providing the construction of the terms in the power of attorney, provides
that, even when the power of attorney grants authority in all of the enumerated
categories and “all other matters,” “[t]he language conferring general authority
does not include any powers to make health care decisions for the principal.” Id. §
523.24, subd. 14. Despite the sweeping authority granted by the power of attorney,
the statutes explaining the scope of the power of attorney explicitly state that the
document does not grant authority regarding healthcare decisions. Accordingly, if
signing the arbitration agreement constituted a healthcare decision, the Appellee
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These enumerated powers include authority pertaining to real property transactions; bond, share
and commodity transactions; banking transactions; business operating transactions; insurance
transactions; beneficiary transactions; gift transactions; fiduciary transactions; claims and
litigation; family maintenance; benefits from military service; and records, reports, and
statements.
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did not have the authority under the power of attorney to bind the Decedent to
arbitration.
Moreover, the arbitration agreement here explicitly states that the parties
“agree that PATIENT‟S decision to enter into this Agreement is within the scope
of a „health care decision‟ under Tennessee law.” Appellants have argued that
their characterization of the signing of the arbitration agreement as a healthcare
decision is erroneous and should be considered a legal decision. We note,
however, that “parties are free to structure an arbitration agreement as they see
fit.” Pyburn v. Bill Heard Chevrolet, 63 S.W.3d 351, 359 (Tenn. Ct. App. 2001).
“The cardinal rule for interpretation of contracts is to ascertain the intention of the
parties and to give effect to that intention, consistent with legal principles.” Bob
Pearsall Motors, Inc. v. Regal Chrysler–Plymouth, Inc., 521 S.W.2d 578, 580
(Tenn.1975). “In interpreting contractual language, courts look to the plain
meaning of the words in the document to ascertain the parties‟ intent.” Allstate
Ins. Co. v. Watson, 195 S.W.3d 609, 611 (Tenn. 2006). The plain terms of the
arbitration agreement here clearly show that the parties intended the execution of
the arbitration agreement to constitute a healthcare decision. Because the decision
to execute the arbitration agreement is a healthcare decision as defined in the
parties agreement, and, as discussed previously, because the Appellee did not have
the authority to make healthcare decisions for the Decedent, we conclude that the
Appellee did not have the authority to bind the Decedent to arbitration. We,
therefore, affirm the judgment of the trial court denying the Appellants‟ motions to
compel arbitration.
V. Conclusion
For the foregoing reasons, we affirm the judgment of the trial court. The
case is remanded for such further proceedings as may be necessary and are
consistent with this opinion. Costs of this appeal are assessed against the
Appellants, Harbor View Nursing and Rehabilitation Center, Inc., Tennessee
Health Management, Inc., and American Health Companies Inc., and their
sureties, for all of which execution may issue if necessary.
_________________________________
KENNY ARMSTRONG, JUDGE
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