In this week's Alabama Law Weekly Update, we present for your consideration a decision released by the Supreme Court of Alabama. In this decision, the Court addressed whether an arbitration clause could be enforced when signed by the mother of an intellectually disabled person.
Diversicare Leasing Corp. v. Hubbard, [Ms. 1131027, September 30, 2015] -- So. 3d -- (Ala. 2015)
The personal representative, who was also the mother, of a “profoundly mentally retarded” decedent who had reached the age of majority, filed a wrongful death action against the nursing facility which cared for the decedent. Pursuant to an arbitration agreement signed by the decedent's mother as the “Resident's Representative,” the nursing facility moved to compel arbitration. The mother argued that the arbitration clause was unenforceable because when she admitted the decedent to the nursing facility, she lacked the legal authority to bind her son to the arbitration agreement. She argued that at the time the agreement was executed her son had reached the age of majority and she did not hold his power of attorney nor had she been appointed his personal representative or guardian by any court.
The Supreme Court of Alabama agreed and affirmed the circuit court's denial of arbitration. The Court stated that because the decedent was mentally incompetent at the time his mother executed the arbitration agreement, the decedent cannot be bound to the agreement because he was incapable of authorizing or empowering the mother to act on his behalf. Even though the mother was the sole custodial parent, made all of the decedent's health care related decisions, executed all of his Medicare and Medicaid documents and was the payee on all of the decedent's government benefit checks, the mother was without the legal authority or capacity to bind the decedent to the arbitration agreement. The mother did not hold his power of attorney nor had she been appointed as his personal representative or guardian by the court. Thus, she did not bind the decedent to the arbitration agreement by signing it.