A Tennessee appellate court vacated an order denying a motion to compel arbitration, noting that the trial court erred in determining that a nursing home resident's wife did not have authority to execute a nursing home arbitration agreement on the resident's behalf.

In Cabany v. Mayfield Rehabilitation and Special Care Center, No. M2006-00594-COA-R3-CV, 2007 WL 3445550 (Tenn. Ct. App. Nov. 15, 2007), Thomas Cabany, Jr. (Thomas) executed a power of attorney designating his wife, Janie Cabany (Janie) as his agent or attorney-in-fact. The agreement stated that it only went into effect when Thomas was not able to make decisions for himself and that his physician and agent would decide when he had reached that point.

After a stay in the hospital for severe health problems caused by alleged poor health care from another nursing home, Thomas moved into NHC HealthCare, Murfreesboro (NHC). Prior to his discharge from the hospital, Janie signed an admission and financial contract provided by NHC, which included an arbitration agreement.

Thomas' health quickly deteriorated, and he died shortly after a do-not-resuscitate order was put in his chart. Janie filed a wrongful death action against NHC and other involved parties. NHC moved to compel arbitration.

The trial court held that the decision Janie made to sign the arbitration agreement did not fall under her power of attorney because it was a legal decision rather than a healthcare decision, and denied the motion to compel arbitration. NHC appealed.

This Court first noted that the trial court's reasoning had been rejected by the Supreme Court. See Owens v. Nat'l Health Corp., No. M2005-01272-SC-R11-CV, 2007 WL 3284669 at *6-7 (Tenn. Nov. 8, 2007). The authority given to Janie by the power of attorney agreement extended to all healthcare decisions, including the admission agreement to NHC.

However, the Court then introduced an issue which the trial court and parties had not considered. Thomas noted in his power of attorney that it only became effective when he was no longer able to make decisions for himself.

NHC conceded that the record provided no evidence that Thomas had been determined to be incapable of making his own decisions.

Moreover, the NHC admission form signed by Janie suggested that Thomas was not incapacitated at that time. Janie did not indicate what type and scope of authority she had over Thomas when she signed the NHC admission form, although the form asked for this information. Instead, she checked a box marked 'other' and wrote 'spouse' next to the box, indicating that she was signing as his spouse; not his attorney-in-fact.

Finally, the handwritten notation on the admission form that Thomas was unable to sign due to Parkinson's disease indicated that he was physically unable to sign, but may still have been mentally capable.

Accordingly, NHC did not meet its burden of showing that Thomas was incapacitated when Janie signed the admission agreement. Thomas' right to make his own decisions may not have yet been transferred to Janie.

Noting the importance of adult autonomy, the Court vacated the trial court's order because it had not made the latter determination and also because the trial court had erred in determining that Janie did not have the power to execute the admission agreement.