Billy Coffey v. Hamblen County
E2016-01116-COA-R3-CV
| Tenn. Ct. App. | Dec 28, 2016Background
- On July 4, 2015 Thomas Coffey (Decedent) was found unconscious from an apparent suicide attempt in the Hamblen County Jail; he was transported to the hospital and died July 11, 2015.
- Plaintiffs (Decedent’s relatives) sued Hamblen County and Morristown-Hamblen Emergency Medical Services (EMS) alleging EMS breached a county service agreement by failing to timely respond after notice of the suicide attempt.
- EMS moved to stay and compel arbitration under an arbitration clause in its service contract with the County; Plaintiffs sued as alleged third-party beneficiaries to that contract.
- Plaintiffs and the County argued the dispute was a “Consumer Case” under the American Health Lawyers Association (AHLA) Rules and that the arbitration clause was unenforceable because it lacked a separate conspicuous consumer-notice advising waiver of jury trial and appeal.
- The trial court denied EMS’s motion, finding the required AHLA consumer notice was absent; EMS appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator or court decides arbitrability | Plaintiffs argued court should resolve validity of arbitration provision | EMS argued AHLA rules vest arbitrator with authority to decide arbitrability | Court: Absent clear and unmistakable evidence, courts decide whether a valid arbitration agreement exists; trial court properly decided validity. |
| Whether arbitration clause is enforceable against Plaintiffs (third-party beneficiaries) | Plaintiffs argued AHLA defines this as a Consumer Case requiring separate notice; lacking notice makes arbitration unenforceable | EMS argued Plaintiffs are third-party beneficiaries bound by the contract’s broad arbitration clause and arbitration is favored | Court: Plaintiffs are third-party beneficiaries and bound by the contract’s arbitration provision; arbitration must be compelled and trial court’s denial reversed. |
| Applicability of AHLA "Consumer Case" protections | Plaintiffs and County claimed AHLA definitions (liberally construed) make this a consumer dispute | EMS argued this is a contract/service dispute between County and EMS, not an AHLA consumer case | Court: Under a liberal reading, the claim is not a Consumer Case here because Plaintiffs’ claim rests on third-party-beneficiary breach of the service agreement. |
| Concern over bifurcated/inconsistent proceedings | Plaintiffs/County argued enforcing arbitration could produce inconsistent or inefficient parallel proceedings | EMS argued arbitration preference and enforceability of contract control | Court: Possible bifurcation or inefficiency is insufficient to avoid arbitration; parties may face separate forums; arbitration remains enforceable. |
Key Cases Cited
- Spann v. American Express Travel Related Servs. Co., 224 S.W.3d 698 (Tenn. Ct. App. 2006) (standard of review for appeal of denial of motion to compel arbitration)
- Johnson v. Johnson, 37 S.W.3d 892 (Tenn. 2001) (de novo review of legal questions)
- Taylor v. Butler, 142 S.W.3d 277 (Tenn. 2004) (courts generally determine existence of a valid arbitration agreement)
- Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003) (absent clear and unmistakable evidence, courts decide arbitrability)
- Benton v. The Vanderbilt Univ., 137 S.W.3d 614 (Tenn. 2004) (third-party beneficiaries cannot accept favorable contract terms while avoiding unfavorable ones such as arbitration)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (arbitration agreements valid even if they produce separate, possibly inefficient, proceedings)