A Tennessee appellate court has rejected an executor's argument that she was incapacitated at the time she acted as attorney-in-fact on behalf of a nursing home admittee, noting that her condition was "undoubtedly genuine and painful," but did not show a lack of capacity to contract.

In Mitchell v. Kindred Healthcare Operating, Inc., No. W2008-00378-COA-R3-CV, 2008 WL 4936505 (Tenn. Ct. App. Nov 19, 2008), Mitchell's incapacitated husband was admitted to Kindred's nursing home facility. After admission, Mitchell executed a power of attorney, admission documents, and a separate arbitration agreement. At the time of the execution, Mitchell was suffering from side effects from cancer treatments.

After Mitchell's husband died while in Kindred's care, Mitchell brought suit against Kindred as executor of the estate. Kindred moved to compel arbitration, which the trial court denied. The trial court found that Mitchell had the authority to execute the agreement through the power of attorney, but found Mitchell was incapacitated at the time of execution.

On appeal, the Court agreed that Mitchell held a valid power of attorney to execute agreements "to the same extent" as her husband would have held. Furthermore, the Court also noted that the power of attorney expressly granted Mitchell the authority to execute waivers, such as the waiver of jury trial contained in the arbitration agreement.

However, the Court held that Mitchell was not incapacitated at the time of execution. While the Court acknowledged that "Mitchell's ailments are undoubtedly genuine and painful," it found "she did not present any evidence, other than her own testimony, that her condition rendered her unable to understand the agreement she executed."

Also, the Court noted that nothing in the record indicated that Mitchell informed Kindred of her condition at the time of execution, or that Kindred's representative had any reason to know of her condition at the time. Accordingly, the Court found Mitchell validly executed the arbitration agreement with the authority to bind her husband.

The Court rejected Mitchell's argument that the agreement was otherwise unconscionable or harsh, noting that the very same agreement was previously analyzed by the Court and was found to be enforceable. See Reagan v. Kindred Healthcare Operating, Inc., No. M2006-02191-COA-R3-CV 2007 WL 4523092 (Tenn. Ct. App. Dec. 20, 2007).