The Supreme Court of Tennessee has approved a trial court’s consideration of extrinsic evidence regarding whether an individual with Down syndrome had the capacity to execute a durable power of attorney that his brother used to enter an arbitration agreement on his behalf.

James Welch’s brother David had Down syndrome. James had David execute a durable power of attorney for health care so that James could make health care decisions for David. David subsequently used the power of attorney to admit David to Oaktree Health and Rehabilitation Center LLC, doing business as Christian Care Center of Memphis. James executed an arbitration agreement as part of Christian Care’s admission process. David died several months later and James sought to sue Christian Care for negligence and wrongful death.

Christian Care moved to compel arbitration. In response, James argued that he did not have the authority to sign the arbitration agreement on David’s behalf because David did not have the mental capacity to appoint an agent through the power of attorney. The trial court looked beyond the four corners of the power of attorney over Christian Care’s objections and concluded based on that evidence that David lacked capacity. It therefore denied the motion to compel.

Christian Care appealed and the court of appeals reversed. The court of appeals “held that the trial court erred by considering evidence on whether David had the mental capacity to sign the [power of attorney].” James then appealed to the Supreme Court of Tennessee.

The Supreme Court of Tennessee held that the trial court had properly considered “evidence on the circumstances surrounding execution of the durable power of attorney for health care and whether [David] lacked the requisite mental capacity to sign it.” The court therefore remanded the case to the court of appeals for a determination on whether the evidence outside the four corners of the power of attorney created “clear and convincing evidence that David lacked the requisite mental capacity when he signed the power of attorney for health care.”

Welch v. Oaktree Health & Rehabilitation Center LLC, No. W2020-00917-SC-R11-CV (Tex. Aug. 31, 2023).