Revocation provisions in arbitration agreements within health care contracts are "indicative of the reasonableness of the arbitration agreement," according to the Tennessee Court of Appeals.

In Philpot v. Tennessee Health Management, Inc., No. M2006-01278-COA-R3-CV, 2007 WL 4340874 (Tenn. Ct. App. Dec. 12, 2007), Philpot brought a wrongful death suit against National Healthcare Corporation (NHC). Philpot, as his mother's attorney-in-fact, had signed an admission contract with NHC upon his mother's admission to NHC's health care facility. This contract contained an agreement to arbitrate all disputes and claims under the contract.

NHC sought to compel arbitration of Philpot's wrongful death claim. The trial court denied NHC's motion to compel, finding the agreement unenforceable as an oppressive and unconscionable contract of adhesion.

On appeal, the Tennessee Court of Appeals reversed, holding that the provisions of the agreement and the circumstances were not oppressive or unconscionable.

According to the Court, Philpot may have entered the contract under "urgent" circumstances. However, the record reflected that Philpot knew there was another health care facility in the area and that the "urgency" surrounding the contract "was due in principal part to [Philpot's] desire to attend to this matter during his lunch break."

The Court similarly rejected Philpot's allegation that the arbitration agreement was hidden within the contract. The Court found the provisions of the arbitration agreement "were prominently disclosed… in several places," set apart from other elements, and in bold, capital letters. Under these circumstances, a signatory such as Philpot was "presumed to know the contents of a contract he has signed."

The Court also found no evidence that the agreement lacked mutuality or that arbitration was cost-prohibitive under the circumstances. The agreement "expressly state[d] that the parties mutually waived the right to a jury trial," and Philpot had failed to bear the burden of showing the likelihood that arbitration would be cost-prohibitive.

Finally, the Court rejected Philpot's specific unconscionability challenge to the revocation provision within the agreement. Philpot argued that the revocation provision facially allowed him to revoke the arbitration agreement within ten business days of signing, but that exercising the revocation right might lead to discharge of the patient.

The Court cited the Tennessee Supreme Court's decision in Buraczynski v. Eyring, 919 S.W.2d 314 (Tenn. 1996), for the proposition that "a revocation provision was indicative of the reasonableness of the [arbitration] agreement."

While Philpot might have been presented with the prospect of discharge upon revocation, the Court found that prospect was no more problematic than the possible interruption of medical treatment upon revocation at issue in Buraczynski. Since NHC's revocation provision was substantially similar to the one held reasonable by the Tennessee Supreme Court in Buraczynski, the Court held NHC's revocation provision to be reasonable as well.