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Posted by: Christy Gibson on Feb 14, 2014

by Marnie Huff*

ADR News and Resources

A.    Proposed Rule 31 Amendments

On July 15, 2013, the Tennessee ADR Commission petitioned the Tennessee Supreme Court to adopt amendments to the Court's Rule 31. See a summary of the proposed amendments.

On July 22, 2013, the Court published the proposed amendments.  The comments deadline on the proposed amendments was January 15, 2014.

B.    Term Limits for Commissioners in Amended Rule 31, §19(a).

On November 20, 2013 the Tennessee Supreme Court ordered term limits for the Commissioners on the Tennessee ADR Commission:

On December 27, 2006, the Court filed an order in which it created three-year terms for members of the Alternative Dispute Resolution Commission. The Court has now determined that it is in the best interest of the Commission to create term limits for Commission members. Moreover, the Court has historically appointed the Chair of the Commission to a two-year term and believes that it would be beneficial to formalize that term length in the existing rule. Therefore, the Court hereby deletes the existing language of subsection (a) of Tennessee Supreme Court Rule 31, Section 19, and substitutes the following:

The ADRC's members shall be appointed by the Supreme Court to three-year terms. No member who has served two successive three-year terms shall be eligible for reappointment to the ADRC until three years after the termination of the most recent term. The Court shall appoint one of the ADRC's members as the Chair for a two-year term.

Order at

C.    ADR Commission’s New Policy 17.

The Tennessee ADR Commission adopted Policy 17: “Any complaint received by the AOC Programs Manager regarding an approved Rule 31 trainer or training course, or a CME course provider or CME course shall be requested to be put in writing and sent to the AOC Programs Manager, who will forward the complaint to the Training Committee for review.” (Adopted 10/17/13)

D.   Proposed Rule 21 Amendments on CLE – 3/20/14 Comments Deadline

The Tennessee Supreme Court filed an order soliciting comments on comprehensive amendments to Supreme Court Rule 21 on mandatory CLE proposed by the Tennessee Commission on Continuing Education. The comments deadline is March 20, 2014. Proposed changes include:

·      ending an exemption for lawyers 65 or older, citing the increasing number of lawyers in that age bracket and the number of complaints filed with the Board of Professional Responsibility against age 65+ attorneys; only age 65+ attorneys “not practicing law” would be able request an exemption from the CLE Commission;

·      requiring at least 5 credit hours to be live, in-person CLE; and

·      ending presumptive approval of CLE courses by certain providers (current rule allows presumptive approval of CLE activities of “worthy providers” who have demonstrated a track record of meeting approval standards).

The Petition mentions that the CLE Commission intends to separately petition the Court on the topic of certification of specialists. Copy of order (with Commission’s petition attached) at  

E.    2014 Grayfred Gray Public Service in Mediation Award

On February 14, 2014 at the Lipscomb Institute for Conflict Management, the Coalition for Mediation Awareness in Tennessee (CMAT) will present the 2014 Grayfred Gray Public Service in Mediation Award. The three awardees - Anne Sides, Carol Berz, and Jean Munroe - will be honored for their lasting contributions to the field of mediation in Tennessee. Each of them developed mediation programs and trained many of the state’s mediators, especially in East Tennessee. The TBA Section of Dispute Resolution, the Tennessee Association of Professional Mediators, the Lipscomb ICM, many Tennessee community mediation centers, and other groups are members of CMAT.

F.    ABA Promotes ADR

The ABA Section of Dispute Resolution has three public service announcements promoting mediation. One of the PSAs, “Play Nice,” was used to kick off Mediation Weeklast October to illustrate that not all disagreements need to be knock-down-drag-outs. The PSAs are on YouTube with the tag line "Mediation.  Efficient. Effective. Economical."

·      "Play Nice"- take the fight out of it . . .

·      "I Speak Argue" - there are two sides to every story . . .

·      "Equal Levels" - not too loud . . . not too soft . . . just right . . .

G.   Recent ABA Formal Ethics Opinions and Ethics Tip Column

Controversial Opinion on Dividing Legal Fees with other Lawyers Who May Lawfully Share Fees with Nonlawyers in their Jurisdiction. ABA Formal Ethics Opinion 464 (August 19, 2013) states that, “Lawyers subject to the Model Rules may work with other lawyers or law firms practicing in jurisdictions with rules that permit sharing legal fees with nonlawyers. Where there is a single billing to a client in such situations, a lawyer subject to the Model Rules may divide a legal fee with a lawyer or law firm in the other jurisdiction, even if the other lawyer or law firm might eventually distribute some portion of the fee to a nonlawyer, provided that there is no interference with the lawyer’s independent professional judgment.”  Opinion at Query whether this opinion may influence views on the ethics of fee sharing for multi-jurisdiction mediations.

ABA ethics advice to advocates in stalled settlement negotiations. If negotiations are stalled and you’re not sure opposing counsel is forwarding your settlement offers to his/her client:

·      Can you cc opposing counsel’s client when you send a letter to opposing counsel?

·      Can you suggest that your client to communicate directly with the opposing party?

Check out the thorough discussion in the December YourABA enews article "Stalled negotiations: Communication tactics."

ABA Ethics Tip Column. The ABA website includes helpful ethics tips, such as a November 2013 tip on blogging and the October 2013 tip on client billing. The blogging tip discusses a situation where a lawyer wants to have a blog to “explain his cases and to comment on issues that affect his practice. He also hopes to attract clients that are faced with issues that relate to his area of practice.” The article discusses when blogging is considered advertising under Rules 7.1 Communication Concerning a Lawyer's Servicesand 7.2 Advertising and subject to the state’s restrictions on advertising . The billing tipstates, “The art of billing is not addressed clearly by the rules of professional conduct.  Rule .5, FEES speaks about reasonableness, and the desirability of a written fee agreement, but not about how to bill. . . . a bill is a form of communication, and in many cases, it may be a central aspect of the contact between the lawyer and the client.  To the extent that the bill is unclear or lacking in sufficient detail, this can lead to trouble, misunderstandings, an elevated critical view of the legal work performed and a negative assessment of the lawyer’s services.  At an extreme, it can also implicate the black letter of Rule 1.4 Communication.  Subpart (b) of the Rule states:  (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” The tip concludes with an excerpt on billing from Statement of Principles, 51 Buslaw 1303 (1996) published by the ABA Section of Business Law Task Force on Lawyer Business Ethics.

H.   Arbitration in the News

New AAA Appellate Arbitration Rules.Effective November 1, 2013, the AAA issued its Optional Appellate Arbitration Rules.  Assuming a contract has a standard arbitration clause, the parties have the option to agree to allow an appeal to an appellate arbitral panel that would apply a higher standard of review compared to federal court review of arbitral awards. The rules permit review of material and prejudicial errors of law and also clearly erroneous determinations of fact. The rules are available at

Federal government preliminary report on arbitration clauses in consumer financial products/services agreements. In a Dec. 12, 2013 press release, the Consumer Financial Protection Bureau reported its preliminary research on arbitration agreements in connection with consumer financial products and services. See the CFPB’s press release at A copy of the 168 page report, "Arbitration Study Preliminary Results" is at

I.      Clients Prefer Mediation. 

Do clients prefer negotiation, mediation, non-binding arbitration, binding arbitration, jury trials, or judge trials? In a recent study, law professor Donna Shetowsky finds that litigants preferred mediation, judge trials, and attorney negotiations with the clients present. Read Shetowsky's law review article, The Psychology of Procedural Preference: How Litigants Evaluate Legal Procedures Ex Ante.

J.     Mediation in the News

Mediation in Meningitis Case; Settlement Fund Set Up. In August 2013, a federal judge in Boston set up a court-approved mediation procedure, attempting to foster quick settlement of pending lawsuits filed in the nationwide fungal meningitis outbreak cases. See news story. But as later reported in The Tennesseanin October, attorneys for St. Thomas Outpatient Neurosurgical Center and other defendants declined to participate in the mediation. In late December, the New England Compounding Center's owners and insurers agreed to establish a $100 million compensation fund for its creditors, including injured plaintiffs who had received injections of contaminated steroids.  See more at: The State of Tennessee filed a 10 million dollar claim in the Massachusetts compounding firm’s bankruptcy case, as also reported in The Tennessean.

Spouse Shot after Divorce Mediation on Dec. 4 in Manchester, TN. A couple going through a bitter divorce had just left a mediation session at a law firm near the Manchester town square when the wife allegedly shot her husband. Both had filed domestic violence allegations against the other. This story prompts the reminder below on statutes related to domestic abuse situations in mediation.

Tennessee statutes on mediation in cases involving domestic abuse.  Tenn. Code Ann. § 36-4-131 provides:

(a)   Except as provided in subsections (b), (c) and (d), in any proceeding for divorce or separate maintenance, the court shall order the parties to participate in mediation.

(b)  The court may waive or extend mediation pursuant to subsection (a) for reasons including, but not limited to:

(1)  Any factor codified in § 36-6-409(4);

      (6) For other cause found sufficient by the court.

(d)  (1) In any proceeding for divorce or separate support and maintenance, if an order of protection issued in or recognized by this state is in effect or there is a court finding of domestic abuse or any criminal conviction involving domestic abuse within the marriage that is the subject of the proceeding for divorce or separate support and maintenance, the court may order mediation or refer either party to mediation, only if: (A) Mediation is agreed to by the victim of the alleged domestic or family violence;

(B) Mediation is provided by a certified mediator who is trained in domestic and family violence in a specialized manner that protects the safety of the victim; and

(C) The victim is permitted to have in attendance at mediation a supporting person of the victim's choice, including, but not limited to, an attorney or advocate. No victim may provide monetary compensation to a non-attorney advocate for attendance at mediation.

Tenn. Code Ann. §36-6-409 provides for procedures and restrictions applicable to dispute resolution including:

(3) When dispute resolution is utilized in this chapter, it shall be preceded by a pretrial conference and the attendance by parents at the parent educational seminar set forth in § 36-6-408;

(4) The court shall not order a dispute resolution process, except court action, if the court:

      (A) Finds that any limiting factor under § 36-6-406 applies;

(5) If an order of protection issued in or recognized by this state is in effect or if there is a court finding of domestic abuse or criminal conviction involving domestic abuse within the marriage that is the subject of the proceeding for divorce or separate support and maintenance, the court may order mediation or refer the parties to mediation only if:

(A) Mediation is agreed to by the victim of the alleged domestic or family violence;

(B) Mediation is provided by a certified mediator who is trained in domestic and family violence in a specialized manner that protects the safety of the victim; and

(C) The victim is permitted to have in attendance at mediation a supporting person of the victim's choice, including, but not limited to, an attorney or advocate. No victim may provide monetary compensation to a non-attorney advocate for attendance at mediation. The other party may also have in attendance at mediation a supporting person of such party's choice, including, but not limited to, an attorney or advocate;

Tenn. Code Ann. §36-6-406 provides for restrictions in temporary or permanent parenting plans, including:

(a) The permanent parenting plan and the mechanism for approval of the permanent parenting plan shall not utilize dispute resolution, . . . if it is determined by the court, based upon a prior order or other reliable evidence, that a parent has engaged in any of the following conduct: . . . (2) Physical or sexual abuse or a pattern of emotional abuse of the parent, child or of another person living with that child as defined in § 36-3-601.

Resources on screening for domestic abuse in mediation cases.  Resources include:

·      ABA Commission on Domestic Violence, Mediation in Family Law Matters Where DV is Present(January 2008) (compilation of state statutes);

·      Beck, C. J. A., et al, Intimate partner abuse in divorce mediation: Outcomes from a long-term multi-cultural study.NCJ 236868. Washington, DC: United States Department of Justice, National Institute of Justice (2011);

·      Pearson, J. (1997).  Divorce mediation and domestic violence. NCJ 164658. Washington, DC: US Department of Justice, National Institute of Justice (1997);

·      Saccuzzo, D. P., et al, Mandatory custody mediation: Empirical evidence of increased risk for domestic violence victims and their children. NCJ 195422. Washington, DC: US Department of Justice, National Institute of Justice (2003); and

·      Alison E. Gerencser, Family Mediation: Screening For Domestic Abuse , Fla. St. U. Law Rev. (1995).

Madison Co. Commission Votes to Mediate Sexual Harassment Claims. In a 19-6 vote on Dec. 16, 2013, the Madison County Commission approved entering into mediation with the attorneys of the women who have accused Sheriff David Woolfork of sexual harassment. Read more at

Ohio Supreme Court to create new dispute resolution program for public officials.

On December 2, 2013, the Ohio Supreme Court Dispute Resolution Section announcedthat it is urging Ohio government officials to participate in a survey to help create a new Government Dispute Resolution Program "to provide flexible, practical, and confidential assistance to resolve and prevent conflict among public officials involving budget, public records requests, and other organizational issues without court involvement."

K.   Confidentiality

AG Opinion No. 13-93 on Confidentiality of DCS Complaints.  On November 27, 2013 the Tennessee Attorney General issued an opinion responding to four questions related to the confidentiality of child abuse reports made to the Department of Children’s Services. First, the opinion stated that the alleged abused child’s parent or legal guardian may obtain a copy of DCS records concerning that child if the parent or legal guardian is “not the alleged perpetrator of or in any way responsible for the child abuse.” Tenn. Code Ann. § 37-5-107(c)(7). Second, records and information covered by the confidentiality provisions of Tenn. Code Ann. §§ 37-1-409, 37-1-612, and 37-5-107 may only be subpoenaed or otherwise subject to discovery in a state civil court proceeding pursuant to the statutory exceptions contained in Tenn. Code Ann. § 37-1-612. Citing Farley v. Farley, 952 F. Supp. 1232 (M.D. Tenn. 1997), the opinion states that these state statutes, however, may not necessarily apply in a federal civil rights action in federal court. The court in Farley cited its federal law authority on broad discovery, admissibility, and prioritization of federal privileges doctrine under Fed. R. Evid. 501 to order production of DCS records. Third, the state confidentiality statutes do not allow disclosure where DCS determines the child abuse allegations are unfounded, although a false report of abuse may be the basis of a criminal prosecution under Tenn. Code Ann. § 37-1-413. Fourth, the state confidentiality statutes do not allow disclosure if there is reason to believe that the complaint was a false report or that the person reporting the abuse has a history of making false reports of alleged child abuse. Copy of AG opinion at

Caselaw Update

I.               U.S. Supreme Court ADR Cases & Pending Cert Petition

Pending Cert Petition re: Arbitration of Employment Discrimination Claims. In a cert petition filed September 17, 2013 in McCutchen v. Harris, No. 13-351, the issue is "Whether the Federal Arbitration Act preempts a state-law rule that forbids arbitration of state-law employment-discrimination claims unless an arbitration agreement 'clearly and specifically' refers to those claims, even when the parties agree to arbitrate 'any legal disputes . . . which arise out of, or are related in any way to' the 'employment . . . or its termination.'” More at

Arbitrator’s Class Arbitration Decision Upheld.  In a unanimous decision on June 10, 2013, Oxford Health Plans LLC v. Sutter, No. 12–135,  __ U.S. __, 133 S.Ct. 2064 (2013), the Court considered a situation where the parties had agreed that an arbitrator should decide whether their contract provided for class arbitrations. The contract provided, “No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the rules of the American Arbitration Association with one arbitrator.” The arbitrator, construing the wording of the contract, decided the parties’ contract unambiguously authorized class arbitration, even in the aftermath of Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U. S. 662 (2010) (arbitrator may use class procedures only if parties authorized them). The federal circuit courts were split on whether such a decision exceeded the arbitrator’s powers under §10(a)(4) of the Federal Arbitration Act (FAA). Compare 675 F. 3d 215 (3rd Cir. 2012) (case below) (vacatur not proper), and Jock v. Sterling Jewelers Inc., 646 F. 3d 113 (2nd Cir. 2011) (same), with Reed v. Florida Metropolitan Univ., Inc., 681 F. 3d 630 (5th Cir. 2012) (vacatur proper).  The Supreme Court held that the arbitrator’s decision survives the limited judicial review allowed under Section 10(a)(4) of the FAA. That statute allows a federal court to set aside an arbitral award only if the arbitrator exceeded his powers. The Court distinguished Stolt-Nielsen where: 1) there was no contractual basis for ordering class procedures, and 2) the parties had stipulated that they had never reached an agreement on class arbitration. Under Section 10(a)(4), “the question for a judge is not whether the arbitrator construed the parties’ contract correctly, but whether he construed it at all.”  Slip op. at 9. 

In a concurring opinion joined by Justice Thomas,  Justice Alito states that “absent members of the plaintiff class never conceded that the contract authorizes the arbitrator to decide whether to conduct arbitration” and “it is far from clear that they will be bound by the arbitrator’s ultimate resolution of this dispute.” Further, absent concessions like Oxford’s in this case, the possibility of absent class members unfairly claiming the “‘benefit from a favorable judgment without subjecting themselves to the binding effect of an unfavorable one,’” should “give courts pause before concluding that the availability of class arbitration is a question the arbitrator should decide.” Concurring slip op. at 2-3, quoting American Pipe & Constr. Co. v. Utah, 414 U. S. 538, 546– 547 (1974).

Effective-Vindication Rule Eviscerated by Supreme Court in Italian Colors.On June 20, 2013, in American Express Co. v. Italian Colors Restaurant, No. 12-133, __ U.S. __, 133 S.Ct. 2304 (2013), the Court held that the Federal Arbitration Act (FAA) does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff's cost of arbitrating an individual federal statutory claim exceeds the potential amount of recovery. The record in the case showed that the expense involved in proving the antitrust claim against American Express Co. (Amex) in arbitration was at least several hundred thousand dollars, while the maximum recovery for an individual plaintiff was only $12,850 to $38,549 when trebled.  Slip op  at 2. The Court's analysis is the following. Arbitration is a “matter of contract” which courts must “’rigorously enforce’” pursuant to the FAA, including “’the rules under which that arbitration will be conducted.’” Id. at 3, quoting Rent-A-Center, Stolt-Nielsen and Volt cases.  This rule applies to claims alleging violations of federal statutes unless the FAA’s mandate is “‘overridden by a contrary congressional command.’” Id. at 4, citing CompuCredit. Congress did not require rejection of the class arbitration waiver in the Amex contract. “[T]he antitrust laws do not guarantee an affordable procedural path to the vindication of every claim.” Id. Moreover, Fed. R. Civ. P. 23 does not establish entitlement to invalidating a class arbitration waiver. Id. at 5. Notwithstanding the plaintiffs’ claim that they have no economic incentive to pursue their claims in individual arbitrations, the “effective vindication” exception does not apply here. The Mitsubishi dictum on invalidating a prospective waiver of a party’s “’right to pursue statutory remedies’” is not a basis for invalidating the arbitration agreement at issue; Mitsubishi “did not hold that federal statutory claims are subject to arbitration so long as the claimant may effectively vindicate his rights in the arbitral forum.” Id. at 6 n. 2. “[T]he fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.” Id. at 7. “AT&T Mobility all but resolves this case.” Id. at 8. In that case, the Court “rejected the argument that class arbitration was necessary to prosecute claims ‘that might otherwise slip through the legal system.’” Id. at 9. Lastly, the FAA’s “command to enforce arbitration agreements trumps any interest in ensuring the prosecution of low-value claims.” Id. at 9 n. 5.

In his concurring opinion, Justice Thomas states that the result in the case “is also required by the plain meaning of the [FAA]” which requires the courts to enforce arbitration agreements “’unless a party successfully challenges the formation of the arbitration agreement, such as by proving fraud or duress.” Concurring slip op. at 1, quoting Thomas’s opinion in AT&T Mobility. Here, Italian Colors did not argue that the contract was not properly made.

The dissent states that the result of the Court’s decision is that Amex “has insulated itself from antitrust liability—even if it has in fact violated the law.” Dissenting slip op. at 1. Prior cases established that an “arbitration clause will not be enforced if it prevents the effective vindication of federal statutory rights, however it achieves that result.” Id. at 3. Green Tree “confirmed that this principle applies when an agreement thwarts federal law by making arbitration prohibitively expensive.” Id. at 4. The effective vindication rule “furthers the purposes not just of laws like the Sherman Act, but of the FAA itself.  That statute reflects a federal policy favoring actual arbitration—that is, arbitration as a streamlined ‘method of resolving disputes,’ not as a foolproof way of killing off valid claims.” Id. at 5, quoting Rodriguez de Quijas. Here, Italian Colors is faced with a prohibitive cost if its claim were arbitrated on an individual basis. In addition to prohibiting class arbitration, the contract at issue: 1) disallows joinder or consolidation of claims or parties; 2) prevents producing a common expert report; and 3) precludes any cost shifting to Amex. Id. at 7. Disagreeing with the majority, the dissent states that the effective vindication rule is not mere dictum in Mitsubishi. That case held that “federal statutory claims are subject to arbitration ‘so long as’ the claimant ‘effectively may vindicate its [rights] in the arbitral forum.’” Id. at 8, quoting Mitsubishi (emphasis added by Court). Further, the majority opinion does not square with theRandolph case which involved prohibitive expenses foreclosing consideration of federal statutory claims.  Id. at 10. The majority opinion “rests on a false premise: that this case is only about a class-action waiver.” The effective-vindication rule instead “asks whether an arbitration agreement as a whole precludes a claimant from enforcing federal statutory rights.  . . . The [Amex] agreement’s problem is that it bars not just class actions, but all mechanisms—many existing long before the Sherman Act, if that matters—for joinder or consolidation of claims, informal coordination among individual claimants, or amelioration of arbitral expenses.” Id. at 11. The FAA “conceived of arbitration as a “method of resolving disputes”—a way of using tailored and streamlined procedures to facilitate redress of injuries. In the hands of today’s majority, arbitration threatens to become more nearly the opposite—a mechanism easily made to block the vindication of meritorious federal claims and insulate wrongdoers from liability. The Court thus undermines the FAA no less than it does the Sherman Act and other federal statutes providing rights of action.” Id. at 15.

II.             6th Circuit ADR Cases

Sixth Circuit Vacates Award Due to Arbitrator’s Evident Partiality. In Thomas Kinkade Co. v. White LLC, 711 F.3d 719, 720 (6th Cir. 2013), the Court vacated an award due to the arbitrator’s evident partiality. See article on Kinkade.

III.           Tennessee ADR Cases

A.    Arbitration

Court Rejects Implied Actual Authority and Apparent Authority Theories in Nursing Home Arbitration Case.In a case of first impression, Jerald Farmer, Individually and as Surviving Spouse for the Wrongful Death Beneficiaries of Marie A. Farmer v. South Parkway Associates, L.P., D/B/A Parkway Health and Rehabilitation Center,  No. W2012-02322-COA-R3-CV (Tenn. Ct. App. September 25, 2013), the Court affirmed the trial court’s denial of a motion to compel arbitration. No prior Tennessee case discusses implied actual authority in the context of agreements to arbitrate in nursing home cases. Here, the decedent’s sister had signed healthcare facility admissions documents on the decedent’s behalf and an optional arbitration agreement. The arbitration agreement was not explained to the decedent and was signed outside the presence of the decedent. The decedent had not executed any power of attorney and there was no issue as to her competency. In this wrongful death action, the healthcare facility (“Parkway”) moved to compel arbitration, arguing that the sister had authority to bind the decedent to the terms of the arbitration agreement based on two agency theories: 1) implied actual authority and 2) apparent authority. The Court rejected both arguments.

The Court first assumed arguendo that implied actual authority could be a basis to establish an agency relationship in the context of this case. But it noted that the court in Blackmon v. LP Pigeon Forge, LLC, No. E2010-01359-COA-R3-CV, 2011 WL 9031313, at *14 (Tenn. Ct. App. Aug. 25, 2011) excluded implied actual authority as a basis for such authority. The Court also pointed out that, unlike the situations discussed in Barbee v. Kindred Healthcare Operating, Inc., No. W2007-00517-COA-R3-CV, 2008 WL 4615858, at *6 (Tenn. Ct. App. Oct. 20, 2008), the parties here agreed that there was no express grant of actual authority to the sister. There had been a past course of dealings where the sister had routinely signed healthcare documents on behalf of her sister, and conduct Parkway described as a “pattern of acquiescence” by the decedent. But the Court found that is not enough to give the sister implied actual authority. “[T]he fact that [the decedent] never challenged [the sister’s] pattern of routinely signing admission documents on her behalf is not controlling as to the arbitration agreement in question because Farmer could not object to an optional arbitration document she knew nothing about.” Farmer v. South Parkway Associates at 9. Although past cases found that execution of an arbitration agreement constitutes a health care decision when there is either express actual authority to sign admission documents or a power of attorney, the Court determined that it did not need to address whether that concept was applicable to a situation involving an optional arbitration agreement with no express actual authority or power of attorney.  Compare Owens v. Nat’l Health Corp., 263 S.W.3d 876, 884-85 (Tenn. 2007) and Necessary v. Life Care Ctrs. of Am. Inc, No. E2006-00453-COA-R3,CV, 2007 WL 3446636, at *5 (Tenn. Ct. App. Nov. 16, 2007). The Court also distinguished the Necessary casewhere the “husband’s decision to give his wife express oral permission, or actual authority, to sign admitting documents on his behalf also extended to the optional arbitration agreement she chose to sign, although the husband was unaware of it.” Here, there is no express authority. Farmer v. South Parkway Associates at 9.

Turning to the apparent authority argument, the Court noted that “in order for a principal to be bound by an agent, the third party’s belief that the agent has such authority must be traceable to the principal’s manifestation and cannot be established by the agent’s acts, declarations, or conduct.” Id. at 11. Here, the decedent did not grant apparent authority to her sister by leaving a meeting in the healthcare facility office and allowing her sister to return to the meeting to sign admissions paperwork. This conduct did not clothe the sister with the appearance of authority, particularly where the Parkway representative knew there was no power of attorney. Copy of opinion at  

Lack of Good Faith in Enforcing Arbitration Clause. Healthmart USA, LLC and Gregg Lawrence v. Directory Assistants, Inc., No. M2012-00606-COA-R3-CV (Tenn. Ct. App. April 29, 2013), the second appeal of this case, addressed whether Directory Assistants, Inc. (DAI) acted in good faith in enforcing a consulting contract’s arbitration clause when it: 1) sent emails to Healthmart, but never returned Healthmart’s phone call about the disputed invoice or about the selection of arbitration particulars, 2) unilaterally demanded arbitration in a forum of its choice, 3) set an arbitrary deadline, and 4) then unilaterally accelerated the deadline, all giving DAI an unfair advantage in enforcing the arbitration clause. The parties’ contract provided, “Should a dispute arise we both agree to try and resolve it with the other party. If we cannot, we both want to resolve it quickly and cost effectively. To achieve that, we both agree to resolve any dispute arising out of or relating to this contract through confidential binding arbitration and agree to mutually choose an arbitration service, location and choice of law forum. If we are unable to come to a mutual agreement, or if one of us refuses to participate in choosing, the party filing a demand will have the right to make the choices unilaterally, as long as the filing party made a good faith effort to come to a mutual agreement, and the non-choosing/non-participating party expressly consents to and waives any and all objections to the choices made.” In the first appeal, the Court interpreted the last clause quoted above as allowing unilateral action, but remanded on the issue of good faith. In this second appeal, the Court affirmed the trial court’s decision that DAI breached the duty of good faith. The Court remanded the case again, with instructions to consider whether DAI’s lack of good faith operated as a waiver of the right to seek arbitration under the contract. Opinion at healthmartusa_043013.pdf.

Right to Enforce Arbitration Clause Not Waived in Three Year Old Case; Arbitration Clause not Unconscionable.  In Jonathan Burke Skelton v. Freese Construction Company, Inc., No. M2012-01935-COA-R3-CV (Tenn. Ct. App. December 9, 2013) the trial court held that the defendant had waived its right to enforce an arbitration clause in a construction subcontractor agreement. The Court of Appeals reversed  and remanded the case for entry of an order compelling arbitration. Although the name of the subcontractor in the construction contract was Outdoors Unlimited, LLC, the suit was originally filed by Mr. Skelton individually in January 2009, without naming Outdoors Unlimited, LLC as a plaintiff. The defendant filed a motion to compel arbitration three years later in February 2012. Although a three year delay can be the basis for a successful waiver argument, the Court of Appeals distinguished Carolyn B. Beasley Cotton Co. v. Ralph, 59 S.W.3d 110 (Tenn. Ct. App. 2000). In  Beasley the party seeking enforcement of an arbitration clause had conducted pre-trial discovery and made no mention of an arbitration clause until the day of trial. Here, on the other hand, the defendant responded to discovery but did not conduct any discovery of its own; it expressly reserved the right to arbitrate shortly after Mr. Skelton filed a Second Amended Complaint. Only in that amended complaint did Mr. Skelton name Outdoors Unlimited, LLC which had been the party to the construction contract that included an arbitration clause, explaining that Outdoors Unlimited, LLC was not a properly formed LLC at the time of execution of the construction contract. After the parties were unable to agree to arbitrate, the defendant promptly filed a motion to compel arbitration. Much of the three year delay in the case was attributable to the plaintiff. Accordingly, the evidence failed to demonstrate that the defendant had unequivocally and decisively waived arbitration.

Regarding the second issue on appeal, the Court declined to accept the defendant’s argument that a contract can never be an adhesion contract if between commercial parties. It did find that Mr. Skelton’s conclusory statement that the construction contract was presented on a take it or leave it basis was insufficient to show a contract of adhesion, even though the arbitration clause gave only the defendant a right to seek arbitration. There was no evidence that “the parties lacked equal commercial sophistication, that Mr. Skelton is a ‘weaker’ party, or that Freese possessed superior knowledge of the subject matter.” The Court did not address a third issue, raised for the first time on appeal, on whether the defendant’s delay in moving to compel arbitration violated an implied duty of good faith and fair dealing. Opinion at

Arbitration under CBA not Available – Assignments Did not Require Teacher’s License. In The Metropolitan Government of Nashville & Davidson County, Tennessee v. Metropolitan Nashville Education Association, No. M2012-02006-COA-R3-CV (Tenn. Ct. App. August 27, 2013), an arbitrator had found in favor of a teacher in an arbitration where the County Board of Education declined to participate. The board then sought a court declaration that the teacher’s complaints about re-assignments of certain extracurricular sponsorships were non-grievable and therefore not subject to arbitration under the collective bargaining agreement between the Board and the MNEA. The extracurricular sponsorship assignments did not require a professional teacher’s license. Following previous cases including Lawrence County Education Association v. Lawrence County Board of Education, 244 S.W.3d 302 (Tenn. 2007), the Court of Appeals affirmed the trial court’s summary judgment in favor of the board of education. Opinion at

Prior Webb Opinion Vacated as to Findings that Broker Fraudulently Induced Customer. On June 18, 2013, on a petition to rehear, the Court of Appeals withdrew its opinion in Franda Webb, et al. v. First Tennessee Brokerage, Inc., et al., No. E2012-00934-COA-R3-CV (Tenn. Ct. App. April 23, 2013), and issued a new opinion.  See Clerk’s docket at  In the new opinion, the Court again affirmed the trial court’s order denying the defendants’ motion to compel arbitration.  Interpretation of the customer agreement, including enforceability of the arbitration clause was governed by state law. Claims of fraudulent inducement were for a court, not an arbitrator, to decide. The arbitration agreement at issue was an unconscionable contract of adhesion that was not enforceable. The investor did not agree to arbitration, given her testimony that she never saw an arbitration agreement when she signed documents for the broker, and the brokerage was never able to locate pages containing a signed arbitration agreement. The Court vacated the lower court’s findings that the account representative fraudulently induced the customer to enter into the agreement. It clarified that it affirmed the decision of the trial court only as to the arbitration issues, vacated any findings that go to the merits of the underlying case, and remanded for further proceedings. Copy of opinion at

B.    Mediation

Tennessee Supreme Court Rejects BPR Panel’s Denigration of Mediation Training. In Walter Ray Culp, III v. Board of Professional Responsibility tor the Supreme Court of Tennessee, No. M2012-01816-SC-R3-BP (Tenn. June 24, 2013), the Court reviewed the denial of an attorney’s petition for reinstatement of his law license. The attorney was suspended from practicing law after he pled guilty to attempted extortion. After serving a prison sentence and a five-year suspension from the practice of law, the attorney petitioned for reinstatement. A hearing panel of the Board of Professional Responsibility denied the attorney’s request. The Chancery Court’s affirmed the hearing panel’s decision. The Tennessee Supreme Court affirmed the Chancery Court decision. Of note to ADR professionals are the following comments of the Court: "The Panel was critical of Mr. Culp’s compliance with the CLE requirements by taking seventy hours of mediation training in 2010. The Panel referred to this as a 'transparent attempt to catch up on his CLE requirements in anticipation of filing the Petition on which this hearing is based.' While we agree that Mr. Culp could have done much more to prove his legal competency, we do not agree that extensive mediation courses should count against any attorney." The Court also stated "There is nothing suspect about an attorney taking mediation training courses to satisfy CLE requirements." Opinion at

Tennessee Supreme Court Explains Impact of § 36-6-101(a)(2)(C) on Modification of Residential Parenting Schedule in Comprehensive Opinion on Parenting Plans.Andrew K. Armbrister v. Melissa H. Armbrister, No. E2012-00018-SC-R11-CV (Tenn. October 21, 2013) involved apost-divorce proceeding on a motion to modify a residential parenting schedule in a permanent parenting plan due to changed circumstances. The issue on appeal was whether a parent seeking the modification must prove that he could not reasonably have anticipated the material change in circumstances when the parenting schedule was originally established. The Tennessee Supreme Court held that Tenn. Code Ann. § 36-6-101(a)(2)(C)(2010), enacted in 2004, abrogated any prior Tennessee decision requiring proof that a parent could not reasonably anticipate the material change in circumstances. Here, the father was not required to prove that he did not anticipate his remarriage, relocation, changed work schedule, and natural aging of his children. The Court’s opinion includes a thorough review of the law on parenting plans. Opinion at

Court Remands Divorce Case Where Wife Had Alleged Misrepresentation by Husband at Mediation. In Karen Deonne Stamps v. Roy Denton Stamps, Jr., No. M2012-02512-COA-R3-CV (December 19, 2013), the wife appealed the trial court’s denial of her Tenn. R. Civ. P. 59 motion to alter or amend the final decree of divorce that included a mediated property settlement. The Court of Appeals vacated the order and remanded the case for the court to enter a supplemental order stating its basis for denying the motion. The Court noted that the affidavits submitted by the wife included allegations which, if true, might support an allegation of misrepresentation by the husband. In dicta, the Court stated:

Until it is approved by the court, a mediated agreement is essentially contractual in nature. Ledbetter v. Ledbetter, 163 S.W.3d 681, 685 (Tenn. 2005). Whether the mediated agreement is enforceable is, therefore, a question of law. Id. at 683. Although a party may not be released from his agreed obligation due to a “change of heart,” proof of misrepresentation at mediation is a different matter. See Coleman v. Coleman, E2011-00974-COA-R3-CV, 2012 WL 1622240, at *5 (Tenn. Ct. App. May 8, 2012). Further, although the implied covenant of good faith and fair dealing does not apply to the formation of a contract, Wallace v. Nat’l Bank of Commerce, 938 S.W.2d 684, 687 (Tenn. 1996), “[p]articular forms of bad faith in bargaining are the subjects of rules . . . as to [contract] invalidating causes such as fraud and duress.” Restatement (Second) of Contracts § 205 cmt. c (1981).”

Opinion at

Alleged Discrepancy in Permanent Parenting Plan Drafted by Mediator. In Charles Wade McCoy v. Alisha Poindexter McCoy, No. W2012-01503-COA-R3-CV (Tenn. Ct. App. July 22, 2013), the trial court erred in denying the mother’s motion to correct a mistake in the permanent parenting plan pursuant to Tenn. R. Civ. P. Rule 60.01. In a prior temporary parenting plan, the parties’ son was to reside with the father, and the mother would have visitation every weekend for 165 days. The parties’ daughter was to reside with the mother, and the father would have visitation every weekend for 165 days. The permanent parenting plan, on the other hand, provided for visitation every other weekend, but had the same reference to 165 days. The mother claimed this was a mistake – she had agreed to the same arrangement as in the temporary parenting plan. The father, on the other hand, asserted that the provision on the 165 days had remained the same for purposes of child support calculation. The Court of Appeals vacated and remanded because “an obvious conflict exists in the permanent parenting plan between the number of days of parenting time and the amount of child support ordered.” Of interest to ADR professionals is that the permanent parenting plan and the marital dissolution agreement were drafted by the mediator during the parties’ mediation. The mother asserted that a form was used where at first the names of other people were on the form; she felt pressured to sign the documents. Opinion at

Mediated Settlement Not Enforced; Father Had Not Acted in Good Faith. Kala Shay Hunn v. Kevin Carlton Hunn, No. M2013-00860-COA-R3-CV (Tenn. Ct. App. November 25, 2013) is a divorce case where the father appealed the trial court’s award of attorney’s fees to the mother. The parties had reached an agreement in mediation and the father filed a motion to enforce the agreement. The mother responded, asserting the mediated agreement was not in the best interests of the children and the case should proceed to trial. Later, the trial court ordered the father to disclose his current address and phone number, denied the father’s motion to amend a temporary order with respect to his paramour, and postponed hearing the motion to enforce the mediated agreement. A month later, the mother filed a second motion to obtain the address and location of the children. After a trial, the lower court entered a decree finding that it would not enforce the mediated agreement because the father had not acted in good faith, the father had perjured himself at trial, and the father had kept secret his location where he and the children were living. The trial court awarded attorney fees, including the fees the mother had incurred in connection with the mediation. The father appealed the fee award, asserting that the mediated settlement agreement provided that each party would pay his/her own fees. The father failed to supply a transcript or statement of evidence for the appeal. As a result, the Court of Appeals presumed sufficient evidence supported the trial court’s finding that the father had not acted in good faith. The Court affirmed and also granted to the mother her attorney’s fees incurred on appeal.

 Opinion at

Criminal Contempt Was for Violation of Parenting Plan, not Failure to Mediate. In Stephanie Lawson Miller v. Stephen Lee Miller, No. E2012-01414-COA-R3-CV (Tenn. Ct. App. May 30, 2013), the parties’ permanent parenting plan required that the parents jointly make any major decisions on religious upbringing. It also provided that, with certain exceptions, all disputes shall be submitted to mediation. The mother was held in criminal contempt of court for violating the parenting plan because she failed to engage in any joint decision-making regarding the child’s baptism and provided less than 24 hours notice of the baptism. The trial court suspended the sentence, provided the mother met certain conditions including a prompt appearance for mediation. On appeal, the Court affirmed the trial court’s order. The Court rejected the mother’s claim that the criminal contempt was for failing to mediate: the contempt was for violating the parenting plan’s requirement that the mother consult the father about the child’s religious upbringing. Opinion at

Discrepancies between Mediated Settlement and Final Decree. In Elizabeth LaFon Western Vinson v. James Gerald Vinson, No. W2012-01378-COA-R3-CV (Tenn. Ct. App. September 11, 2013), the father challenged rulings on parenting and financial issues. One of the issues on appeal was whether the trial court contradicted the terms of a mediated agreement in its final ruling, after it had found that the mediated agreement signed by the parties was valid, enforceable, and in the children’s best interests. The Court of Appeals rejected a number of the father’s claims of inconsistencies between the mediated agreement and the final decree, but agreed that there were some discrepancies. It corrected the Thanksgiving break provisions, reversed the trial court’s decision on the amount of child support, and deleted a provision delegating parenting arrangements to a counselor. It found no error in the trial court’s decision to reserve the issue of alimony under the unique facts of the case. Opinion at

Error in Child Support Calculation; Support was not Part of Mediated Co-Parenting Agreement. In Stacy Ramsey V. Phillip Ramsey, No. E2012-01940-COA-R3-CV (Tenn. Ct. App. October 29, 2013), one of the issues related to the trial court’s order approving child support. The parties had reached a co-parenting agreement in mediation. Reversing the trial court’s calculation of child support, the Court of Appeals held that the trial court erred in finding that the child support “calculated and agreed to at mediation” was accurate and complied with Tennessee Child Support Guidelines. In fact, neither party testified that an agreement on child support was reached in mediation and no such agreement is reflected in the co-parenting agreement. Also, regardless of whether the parties reached an agreement on child support, “the trial court must ensure that the Tennessee Child Support Guidelines are followed . . .” Slip Opinion at 11. Copy of opinion at

Despite Agreement to Mediate Post-Divorce Disputes, Waiver of Mediation Allowed. Rennee N. Dhillon v. Gursheel S. Dhillon, No. M2012-00194-COA-R3-CV (Tenn. Ct. App. July 31, 2013) involved a mother’s pro se post-divorce petition to modify child visitation. The original parenting plan provided that the parties would mediate any disagreement or modification of the plan. The trial court granted the mother’s motion to waive mediation. The father did not respond or object to that motion until more than a month after the court’s order and two days before a hearing on the mother’s petition. On appeal, the Court rejected the father’s argument that the trial court’s order was void. It also affirmed the trial court’s decision to modify the parenting plan based on a material change of circumstances. Opinion at

C.   Workers Comp; Employment Grievance Procedures

Timothy Gilliam v. Bridgestone North American Tire, LLC, No. M2012-02436-WC-R3-WC (Tenn. Workers Comp. Panel December 16, 2013) involves an employee’s eligibility to seek reconsideration of a workers’ comp settlement. After the employee settled his workers’ comp claim for a shoulder injury, his physician modified his work restrictions for an earlier, unrelated injury to his ankle. He was then laid off. He filed suit in Chancery Court seeking reconsideration of his shoulder injury settlement. He also filed an EEOC complaint, asserting that the employer failed to accommodate his work restrictions that had resulted from his ankle injury at work. While the Chancery Court was pending, the employee returned to work as the result of a confidential settlement of the EEOC claim. The Chancery Court decided the employee could seek reconsideration of the shoulder injury settlement and awarded additional disability benefits. The employer appealed, asserting the employee was not entitled to seek reconsideration. The employer asserted that, despite the layoff, the employee did not meet Tenn. Code Ann. § 50-6- 241(d)(1)(B)(ii)’s  requirement of “subsequently no longer employed by the pre-injury employer.” The Special Workers’ Comp Appeals Panel affirmed, holding that the employee could seek reconsideration. Opinion at

County Civil Service Grievance Case. In Jim Hammond, Sheriff of Hamilton County et al. v. Chris Harvey et al., No. E2011-01700-SC-R11-CV (Tenn. August 13, 2013), a group of sergeants at the county sheriff’s office filed a grievance regarding pay disparities. The County civil service board upheld the grievance and ordered the sheriff to equalize the pay of all sergeants. Pursuant to Tenn. Code Ann. § 8-8-409(3) (2011), the Tennessee Supreme Court held that the board had the authority to hear the grievance, but found there was no proof that the sheriff violated state law or the sheriff’s department civil service manual. The manual authorized the sheriff to determine individual pay. Therefore, the board lacked the power to order the remedy of salary equalization. Opinion at

D.   Settlements

Physician Waived Fair Hearing. In John R. Roberts, M.D. v. Saint Thomas Health Services d/b/a Saint Thomas Hospital, et al., No. M2012-01717-COA-R3-CV (Tenn. Ct. App. October 17, 2013), on the eve of a “fair hearing” pursuant to St. Thomas Hospital’s bylaws, the hospital and a surgeon represented by an attorney reached a settlement. The hospital suspended the surgeon’s hospital privileges pending counseling and evaluation by the TMF Physician Health Program, and restored the privileges less than three months later. The doctor also waived a “fair hearing.” As required by law, the hospital filed an “Adverse Action Report” with the National Practitioner Data Bank, using language negotiated between the attorneys for the surgeon and the hospital. The surgeon later sued the hospital, contending the hospital had not properly followed its own bylaws regarding suspension privileges. The hospital denied violating its bylaws and asserted it was immune from this action, given the Tennessee Peer Review Law of 1967 and the Federal Health Care Quality Improvement Act of 1986. In its motion for summary judgment, the hospital assumed arguendo that it had not followed federal law notice and hearing requirements prior to a meeting of its Medical Executive Committee (MEC). At that meeting, the MEC approved recommendations of the hospital’s Physician Performance Review Committee. The Court of Appeals affirmed the summary judgment granted to the hospital because the surgeon failed to show that the hospital did not follow its bylaws and the surgeon waived a fair hearing in his settlement.

Post-Nup Prevents Widow from Sharing in Wrongful Death Settlement. In Gary Rickman v. Virginia Rickman, et al, No. M2013-00251-COA-R3-CV (Tenn. Ct. App.  October 15, 2013), the widow of a decedent sought a share in a wrongful death settlement obtained by the decedent’s personal representative against a nursing home facility. Under Tennessee law, proceeds from a wrongful death action are not property of a decedent’s estate and pass outside the estate through intestacy statutes. In a postnuptial agreement between the widow and the deceased, both parties waived rights in assets of their respective estates and “all other rights which they may have acquired by reason of their marriage.” Distinguishing cases from other states, the Court of Appeals held that the postnuptual agreement prevents the widow from benefitting from the wrongful death settlement. Copy of opinion at

Omitted Exhibit to Divorce Settlement Agreed Order Results in Remand. Marianne Greer v. Philip Ernest Cobble, No. E2012-01162-Coa-R3-Cv (Tenn. Ct. App. August 15, 2013) involved an agreed order in a divorce case. The parties purportedly had agreed to a division of their property. Counsel for both parties signed an order entered by the trial court. Although the order referred to a handwritten list as an attachment, no such list was attached as an exhibit to the order. The husband later filed a pro se notice of appeal alleging he did not agree to the settlement and the order was incomplete because the exhibit was not included in the final order. The Court of Appeals remanded the case because it could not determine definitively whether a final judgment was entered.  Copy of opinion at

Post-Mediation Agreement’s Confidentiality Clause Did Not Refer to Contract Itself. In Timothy L. Wilson v. Hank E. Sledge, Jr., et al., No. W2012-00513-COA-R3-CV (Tenn. Ct. App. August 29, 2013), the Court affirmed the trial court’s order dismissing this action for professional malpractice based upon the running of the statute of limitations. The alleged malpractice related to a workers’ comp claim resolved in a mediation. Wilson had alleged in the malpractice suit that his signature was forged on the post-mediation agreement. In the alternative, he argued that the agreement was inadmissible in court due to a confidentiality clause that “'the parties agree that all mediation and all related proceedings are non-discoverable and inadmissible in any litigation.'” The Court of Appeals pointed out that the quoted language was not in the post-mediation agreement included in the record. In any event, the confidentiality clause only referred to mediation proceedings and not the contract itself. Opinion at


* Marnie Huff is a member and past Chair of the TBA Dispute Resolution Section.  She currently serves as an elected member of the ABA Section of Dispute Resolution Council and its Executive Committee. She chairs the Section’s Membership Committee, and is Council liaison to the Section’s Ethics Committee. She co-chairs the ABA Advanced Mediation and Advocacy Skills Institute. She was recently appointed to co-chair the Nashville Bar Association’s ADR Committee. Marnie is an independent mediator, arbitrator, and workplace conflict management consultant in Nashville.  Her website is at