Buffi Lynne Stancil Ex Rel. Rebecca Mae Gentry v. Dominion Crossville, LLC

Citation: Not availableDocket: E2021-01378-COA-R3-CV

Court: Court of Appeals of Tennessee; July 29, 2022; Tennessee; State Appellate Court

Original Court Document: View Document

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The case involves an interlocutory appeal regarding the denial of a motion to compel arbitration in a health care liability lawsuit filed by Buffi Stancil, as power of attorney for her mother, Rebecca Gentry, against Dominion Crossville, LLC, and related entities. The complaint alleges that these entities are responsible for Gentry's care at an assisted living facility and seeks punitive and compensatory damages based on claims against them. 

The defendants sought to compel arbitration based on a clause in the Admission Contract signed by Stancil, who acted as the "Financially Responsible Party" and "Resident’s Representative." However, the arbitration provision, found in the Admission Contract, lacked clarity regarding the arbitration process and did not explicitly inform Stancil or Gentry about the waiver of the right to a jury trial. The court affirmed the trial court's order denying the motion to compel arbitration, emphasizing that the appeal primarily concerns the appropriate forum for the claims rather than the claims' substance.

The arbitration provision in the Admission Contract for Ms. Gentry's admission to Dominion Crossville does not allow for an opt-out option and lacks a revocation period. It specifies that the arbitrator can award economic and non-economic damages but cannot award punitive damages, with both parties sharing the arbitrator’s fees equally. Following Ms. Gentry's death, a motion to substitute her estate, represented by Buffi Lynne Stancil, was filed. Discovery related to the arbitration included depositions from Ms. Stancil and Kellie Dodson, a former administrator at the facility. Ms. Stancil testified about her mother's dementia diagnosis in 2010 and her subsequent admission to Fletcher House in 2016. Ms. Gentry's condition deteriorated, leading to episodes of wandering, prompting Ms. Stancil to seek safer accommodations for her mother. Ms. Gentry was admitted to Dominion Crossville on December 1, 2017, due to safety concerns and a lack of stimulating activities at Fletcher House. Ms. Stancil was also influenced by her trust in Ms. Dodson, who was familiar to the family and had recently started working at Dominion Crossville. Ms. Dodson expressed emotional ties to both Ms. Stancil and Ms. Gentry during her testimony, highlighting their close relationship.

Ms. Stancil and Ms. Dodson provided conflicting accounts regarding the execution of the Admission Contract. Ms. Stancil claimed she was unaware of the term "arbitration" prior to the lawsuit and signed the documents after work when most employees had left, alleging that Ms. Dodson hurried her through the paperwork without explaining its contents, including the arbitration clause and limitations on liability. In contrast, Ms. Dodson asserted that she reviewed the Admission Contract with Ms. Stancil but acknowledged that she did not explain key aspects of the arbitration provision, such as its triggering threshold or associated costs. Ms. Dodson's recollection of the meeting time differed, stating it occurred in the morning, and she was not familiar with JAMS, the arbitration entity mentioned in the provision. The trial court denied the Defendants' motion to compel arbitration, ruling the arbitration clause was a contract of adhesion and unconscionable, and determined that Ms. Stancil did not sign the contract on behalf of her mother, thus the estate was not bound by her signature. The Defendants appealed, contesting the trial court's ruling and its alternative findings. The appellate review will be conducted de novo, with factual findings presumed correct unless proven otherwise. Legal issues will be evaluated without a presumption of correctness.

In Mitchell v. Kindred Healthcare Operating, Inc., the Tennessee Court of Appeals examined the standards for reviewing denials of motions to compel arbitration. The court noted the trial court failed to specify whether the Federal Arbitration Act (FAA) or the Tennessee Uniform Arbitration Act (TUAA) applied. Tennessee Code Annotated section 29-5-319 allows interlocutory appeals from orders denying applications to compel arbitration, applicable even when the agreement is under the FAA.

The FAA promotes a liberal federal policy favoring arbitration, stating that arbitration clauses in commercial contracts are valid and enforceable unless legally or equitably revocable. The FAA applies to any arbitration agreement affecting interstate commerce, as confirmed by the court, which determined that the FAA governed the arbitration provision in the Admission Contract due to its explicit mention of interstate commerce and the "U.S. Arbitration Act."

The trial court had denied the motion to compel arbitration, labeling the arbitration provision as an adhesion contract, which is defined as a standardized contract imposed on consumers without the opportunity for negotiation. The court cited that an adhesion contract occurs when one party has significant control over the terms, leaving the weaker party with no real choice.

The arbitration provision in question is identified as an adhesion contract, placing Ms. Stancil and Ms. Gentry at a disadvantage compared to Dominion Crossville. Ms. Gentry’s admission to the facility was contingent on agreeing to the arbitration clause, which Ms. Stancil felt compelled to accept due to concerns for Ms. Gentry’s care amidst her advancing dementia and other circumstances. The trial court's classification of the arbitration provision as an adhesion contract does not automatically determine its enforceability. Instead, enforceability hinges on whether the contract terms exceed what an ordinary person would reasonably expect or are deemed oppressive or unconscionable. Courts are inclined to find adhesion contracts unconscionable unless the enforcing party proves the provision was negotiated or reasonable. 

The concept of unconscionability involves two dimensions: procedural unconscionability, which arises from a lack of meaningful choice, and substantive unconscionability, characterized by excessively harsh terms. Contracts deemed excessively imbalanced or oppressive are typically unenforceable. Tennessee case law provides guidance on evaluating adhesion contracts, as seen in the Buraczynski case, where the court found the arbitration agreements enforceable due to their clarity and fairness. The agreements contained no hidden terms, specified a balanced arbitration process, and clearly informed the patient of the implications of signing, including the waiver of the right to a jury trial. Additionally, terms regarding binding heirs and the retroactive effect were clearly delineated, ensuring transparency.

Patients signing the agreements retain access to the courts, with the ability to revoke the agreements within thirty days, thus regaining that right. The agreements do not alter the doctor's duty to exercise reasonable care in treatment nor limit liability for breaches of that duty; rather, they merely redirect disputes to a different forum. These provisions are not deemed unconscionable or oppressive, leading to the conclusion that the agreements are enforceable despite being contracts of adhesion.

Contrastingly, the court in Raiteri ex rel. Cox v. NHC Healthcare/Knoxville, Inc. found that arbitration provisions were unenforceable due to several factors: they were part of a lengthy contract rather than a separate document, lacked a clear explanation encouraging patient inquiries, and essential terms were obscured. Notably, the waiver of the right to a jury trial was not highlighted and blended with the rest of the text, with no elaboration on arbitration processes. Similar findings were made in another case where the arbitration clause was inadequately explained and presented as a 'take-it-or-leave-it' option.

In the current case, the arbitration provision is similarly buried within a lengthy Admission Contract, appearing on pages eight and nine without distinction from other provisions. The waiver of the jury right is not included in the arbitration section and lacks cross-referencing. Furthermore, the contract does not detail arbitration processes or offer an opt-out option. Admission to the facility required agreement to the arbitration provision, and Ms. Dodson’s account indicates that arbitration was not thoroughly discussed.

The arbitration provision in question is deemed unenforceable based on established legal principles and the specifics of the case. The Defendants argue that Ms. Stancil had a reasonable choice not to sign the Admission Contract and that there was no urgency in executing it. However, Ms. Stancil's concerns regarding her mother's past elopements and the approaching winter highlight the urgency of securing safe care. Ms. Stancil sought a facility that could adequately address her mother's advancing dementia, and she did not consider the Uplands memory care facility, affiliated with Fletcher House, as a viable alternative due to its inadequate care standards. The trial court concluded that Ms. Stancil reasonably determined that Dominion Crossville was the only appropriate option for her mother’s care. Consequently, the requirement to sign the agreement to obtain necessary care further supports the conclusion that the adhesive agreement is unenforceable. The trial court's order denying the motion to compel arbitration is affirmed, and the Defendants’ alternative argument regarding the binding nature of Ms. Stancil's signature is not addressed.