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Heading to Arbitration? Depends on Who Signed Agreement

Posted by Nina Whitehurst | Nov 28, 2018 | 0 Comments

So, just who signed the agreement?

The Alabama Supreme Court has ruled that the daughter of a deceased dementia patient does not have to submit to binding arbitration with a nursing and rehabilitation center, because of the question of having authority to sign the agreement, according to Legal NewsLine in “Alabama Supreme Court: Daughter in wrongful death case didn't have authority to sign arbitration agreement,”

The woman, Rhonda Stephan, was a personal representative of her father, the late Bobby Gene Hicks, and signed an arbitration agreement when he was admitted to a nursing home. This is something that many family members do, since it is part of many nursing home's admissions requirements. However, the Supreme Court said she did not have the power of attorney or any other authority to do so. She was signing as a family member and not as her dad's attorney in fact.

Because of this, she is not bound by the arbitration and the circuit court's order compelling her to pursue a wrongful death action through arbitration has been remanded.

Stephan, on behalf of her father's estate, sued the Millennium Nursing and Rehab center following her father's death in 2015. The facility moved for the enforcement of the arbitration agreement and Madison Circuit Court agreed this past February, when it granted Millennium's motion to compel arbitration. The state Supreme Court found that Hicks had been too incapacitated to enter into any legally binding contract when he was admitted and that Stephan had signed the agreement as a family member, not as an attorney in fact under a power of attorney.

There were dissenting opinions, including one from Justice Sellers, who said that Hicks had the legal authority to bind her father to his arbitration agreement and she did not object to his absence when she signed the paperwork admitting him to Millennium. She should not have the ability to wear both hats: that of a person with power of attorney and that of a family member.

It's an interesting dilemma. If a family member has power of attorney, which is frequently the case, and they sign all the admission papers to have their family member admitted to a care facility, in what capacity are they signing those papers?

ReferenceLegal NewsLine (Oct. 30, 2018) “Alabama Supreme Court: Daughter in wrongful death case didn't have authority to sign arbitration agreement”

About the Author

Nina Whitehurst

Attorney at Law Nina has been practicing law for over 30 years in the areas of estate planning, real estate and business law She is currently licensed in Alaska, Arizona, California, Colorado, Oregon and Tennessee. Her Martindale-Hubbell attorney rating is the highest achievable: 5 stars in peer...


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