Health Care POA Must Have Specific Authority to Agree

The Tennessee Court of Appeals recently decided Wilkins v. GGNSC Springfield, a case involving alleged nursing home abuse and neglect in which the decedent’s health care power of attorney signed an optional arbitration agreement on behalf of the decedent. The nursing home sought to compel arbitration, but the trial court denied the motion holding that the POA did not have authority to sign the arbitration agreement on behalf of the decedent. The Court of Appeals upheld this decision of the trial court.

n this case, the Court of Appeals reminds us of Tennessee law regarding powers of attorney:

The execution of a power of attorney creates a principal–agent relationship. Tenn. Farmers Life Reassurance Co. v. Rose, 239 S.W.3d 743, 749 (Tenn. 2007). “[A] person executing a power of attorney may empower his or her agent to do the same acts, to make the same contracts, and to achieve the same legal consequences as the principal would be personally empowered to do.” Id. “The language of a power of attorney determines the extent of the authority conveyed.” Id. (quoting Armstrong v. Roberts, 211 S.W.3d 867, 869 (Tex. Ct. App. 2006). “The more specific a power of attorney is concerning the performance of particular acts, the more the agent is restricted from performing acts beyond the specific authority granted.” Id. A power of attorney evidences to third parties the purpose of the agency and the extent of the agent’s powers. Id. A power of attorney “should be construed using the same rules of construction generally applicable to contracts and other written instruments, except to the extent that the fiduciary relationship between the principal and the agent requires otherwise.” Id. at 749–50 (footnote omitted). The legal effect of a written contract or other written instrument is a question of law. Id. at 750.

Examining the specific language of the POA at issue, the court found that the POA did not authorize the agent to sign the optional arbitration agreement. The court also noted that signing the document was not a condition to admission at the nursing home. Here is the language of the preamble of the POA. 

The Agent is authorized in her sole and absolute discretion to exercise the powers granted herein relating to matters involving Principal’s health and medical care. The Agent is authorized by and on Principal’s behalf to consent to proposed medical treatment, and shall give, withhold or withdraw consent for Principal based upon any choices of treatment within her best discretion, and to that end, Principal grants the following powers to Agent:

The court then looked to paragraph 2(c) of the power of attorney, which authorized the agent to “arrange for Principal’s hospitalization, convalescent care, hospice or home care,” but, the court noted that this power was only granted in order to “consent to proposed medical treatment” and to “withhold or withdraw consent … based upon any choices of treatment.”

The court found that this language did not grant the agent authority to sign the optional and separate arbitration agreement on behalf of the principal.