Necessary v. Life Care Ctrs. of America Inc., 2007 Tenn. App. LEXIS 698 (2007)

On appeal, the issue was the validity of an arbitration agreement entered into by Dorothy Necessary (“Plaintiff”) while signing documents on her husband’s behalf to have him admitted to a skilled nursing facility. Necessary had her husband’s oral express authority to sign all paperwork necessary for his admission to the facility. She claimed that this express authority did not include the power to enter into an arbitration agreement on her husband’s behalf. The Trial Court agreed and refused to enforce the arbitration agreement. The court of appeals vacated the judgment of the Trial Court and remanded for further proceedings.

Relying on Owens, the Court of Appeals held that Necessary had authority to execute the arbitration agreement. Although there was no power of attorney in this case, the Court found that Plaintiff essentially argued she had express authority from her husband to sign all of the admission documents and make all of the decisions regarding his admission to Life Care’s facility – except one: she did not have his authority to sign an arbitration agreement, even though he did not withhold such authority. Such a conclusion would result in the type of “untenable” situation described in Owens.

Decided November 16, 2007. Opinion at: http://www.tsc.state.tn.us/OPINIONS/Tca/PDF/074/NecessaryDOPN.pdf. (Note: there was a problem with this URL at the time of this writing. The webpage listing this link with the official court summary is at http://www.tsc.state.tn.us/OPINIONS/Tca/ca4qtr2007.shtml.)