Diversicare Leasing Corp. v. Hubbard

Summary

The Alabama Supreme Court considers whether a nursing facility established an enforceable arbitration agreement for a wrongful-death claim involving an incapacitated adult resident who did not sign the agreement. The court examines the authority of the resident’s mother, who signed as the resident’s representative without being a court-appointed guardian, attorney-in-fact, or personal representative, and distinguishes prior nursing-home arbitration cases. The document affirms the denial of the facility’s motion to compel arbitration.

Holdings

1. A mentally incompetent adult nursing-home resident cannot be bound by an arbitration agreement signed by a relative or responsible party who lacked legal authority to act for the resident and whom the resident was incapable of authorizing.
2. Betty was not bound to arbitrate the wrongful-death claim in her capacity as personal representative because the agreement did not validly bind Johnathan and her prior signature as his relative or next friend did not independently bind her in a later representative capacity.

Questions Presented

1. Whether an arbitration agreement signed by a relative or responsible party can bind a mentally incompetent adult nursing-home resident who lacked the capacity to authorize that person to act on his behalf and whose signer was not otherwise legally authorized to represent him.
2. Whether Betty Hubbard was bound in her capacity as personal representative to arbitrate the wrongful-death claim merely because she had signed the arbitration agreement in a different capacity before Johnathan's death.

Disposition

affirmed