Background
NorthCrest (a hospital) and Sanderling (a dialysis services company) entered two contracts: a Dialysis Agreement and a Telehealth Professional Services Agreement. In October 2023, the parties disputed who bore responsibility for billing third-party payors for Sanderling’s professional fees. When negotiations failed, Sanderling unilaterally terminated both agreements and filed for arbitration in April 2024, seeking $232,250 in unpaid invoices.
NorthCrest counterclaimed for breach of contract based on the wrongful termination. An arbitrator conducted a hearing in December 2024 and issued a Final Award on February 24, 2025, finding Sanderling liable for breaching both contracts and awarding NorthCrest $432,227 in damages.
Sanderling then filed a notice of appeal with JAMS (Judicial Arbitration and Mediation Services), citing contract language that the parties had “reserved the right to contest the arbitrator’s decision and to appeal from any award.” NorthCrest objected, arguing this language did not constitute an agreement to submit to JAMS’s optional appellate procedures. The JAMS appellate panel dismissed Sanderling’s appeal based on NorthCrest’s objection, noting that JAMS rules require all parties to agree in writing. NorthCrest then sought court confirmation of the arbitration award.
The Court’s Holding
The Tennessee Court of Appeals affirmed the trial court’s order confirming the arbitration award and denying Sanderling’s motion to compel appellate arbitration. The court held that the contract language reserving the right to “contest the arbitrator’s decision and to appeal from any award” does not create an enforceable obligation to participate in JAMS optional appellate procedures. Instead, it merely preserves two existing rights: (1) the conditional right to appeal through JAMS if both parties consent in writing, and (2) the limited statutory right to judicial review under the Tennessee Uniform Arbitration Act and Federal Arbitration Act.
The court emphasized that the JAMS Optional Appeal Procedures explicitly require written agreement from all parties. By objecting to the appellate procedures, NorthCrest prevented their application. The parties’ adoption of JAMS rules meant that disputes over the arbitration clause itself—including whether optional appellate procedures applied—were submitted to the JAMS appellate panel for determination, which the panel properly exercised in dismissing the appeal.
The trial court properly deferred to the JAMS panel’s decision under the highly deferential standard applied to arbitration awards. Because Sanderling did not raise any of the narrow statutory grounds for vacating or modifying an arbitration award (such as fraud, corruption, or the arbitrator exceeding authority), the court was obligated to confirm the award.
Key Takeaways
- Contract language that reserves the right to “appeal” an arbitration award does not automatically create an agreement to submit to multi-tiered arbitration procedures; mutual, written consent is required for optional procedures.
- Under JAMS rules, one party’s timely objection is sufficient to prevent application of optional appellate procedures, even if the other party wishes to proceed.
- Courts apply an extremely narrow, deferential standard to arbitration awards and may only modify or vacate them on specific statutory grounds—not for errors of fact or law.
- Disputes regarding the scope and interpretation of an arbitration agreement are themselves arbitrable when parties have agreed to use an arbitration framework.
Why It Matters
This decision clarifies a critical distinction in arbitration practice: general reservation-of-rights language does not bind parties to optional appellate procedures. For businesses drafting arbitration clauses, the ruling means that expressing intent to use multi-tiered arbitration requires explicit, mutual agreement—not implicit language about appeal rights. Without express agreement to procedures like JAMS optional appeals, parties cannot be compelled to submit to arbitral appellate review, even if they reserve some form of appeal right. This protects finality of arbitration (a central benefit of arbitration) while ensuring that optional procedures require genuine mutual consent.
The decision also reinforces the well-established principle that judicial review of arbitration awards is extraordinarily limited. Unless a party can prove fraud, corruption, or that the arbitrator materially exceeded their authority, courts must confirm the award. This reflects the strong federal and state policy favoring arbitration and the premise that parties who agree to arbitrate have traded the right to judicial review on the merits for speed, confidentiality, and finality.