Alabama Somerby, LLC, d/b/a Brookdale University Park IL/AL/MC Brookdale Senior Living, Inc. and Undrea Wright v. L.D., as next friend of E.D. ( 2023 )

Rel: May 12, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
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SUPREME COURT OF ALABAMA
OCTOBER TERM, 2022-2023
_________________________
SC-2022-0828
_________________________
Alabama Somerby, LLC, d/b/a Brookdale University Park
IL/AL/MC; Brookdale Senior Living, Inc.; and Undrea Wright
v.
L.D., as next friend of E.D.
Appeal from Jefferson Circuit Court
(CV-22-900852)
SHAW, Justice.
Alabama Somerby, LLC, d/b/a Brookdale University Park
IL/AL/MC; Brookdale Senior Living, Inc.; and Undrea Wright, who are
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defendants in the action below, appeal from the Jefferson Circuit Court's
order denying their motion to compel arbitration of the claims asserted
against them by the plaintiff, L.D., as the next friend of her mother, E.D.1
We reverse and remand.
Facts and Procedural History
Alabama Somerby and Brookdale Senior Living (collectively
referred to as "Brookdale") operate an assisted-living facility for seniors
("the nursing home") in Jefferson County; Wright is the administrator of
the nursing home.
In December 2016, E.D. executed in Illinois both a durable "Power
of Attorney for Property" ("the property POA") and a "Power of Attorney
for Health Care" ("the health-care POA"). The property POA specifically
named E.D.'s daughter, C.C., as E.D.'s agent and attorney-in-fact
authorized to make decisions on E.D.'s behalf with respect to broad
categories of personal business, including transactions, claims, and
1For purposes of this appeal, the Court, pursuant to Rule 52, Ala.
R. App. P., has used initials when referring to certain individuals to
protect the anonymity of E.D., who is alleged to be the victim of sex
offenses.
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litigation. It also included a specific authorization for "Estate and Long
Term Care Planning" that authorized C.C. as follows:
"Caregiver Agreements. I authorize my agent to enter
into, execute, modify, alter or amend any contract agreement
(for example, a Caregiver Agreement or Personal Services
Contract) pertaining to my medical, personal or general care
that I may require at my residence, assisted living facility,
nursing facility, or in another's residence on my behalf."
(Emphasis added.) The property POA further provided both that it would
become "effective on the date [E.D.'s designated agent] determines that
[E.D. is] unable to give prompt and intelligent consideration to financial
decisions" and that any "such determination shall be made only with the
concurring opinion of a physician who ha[s] examined or treated [E.D.]
within the last three months of rendering such an opinion."
The health-care POA similarly designated C.C. as E.D.'s "health
care agent" with, among other powers, the authority to make health-
related decisions, including "agreeing to admit [E.D.] to or discharge [her]
from any hospital, home, or other institution." Pursuant to the health-
care POA, L.D., E.D.'s other daughter, was named as an optional
successor in the event that C.C. "is unable or does not want to make
health care decisions for [E.D.]." The health-care POA further provided
that "[o]nly one person at a time [could] serve as [E.D.'s] agent." Like the
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property POA, it expressed E.D.'s desire that C.C. become her health-
care agent and "[m]ake decisions for [E.D.] only when [E.D. could not]
make them for [herself]" and further specified:
"The physician(s) taking care of [E.D.] will determine when
[she lacks] this ability. Starting now, for the purpose of
assisting … with … health care plans and decisions, [C.C.]
shall have complete access to my medical and mental health
records, the authority to share them with others as needed,
and the complete ability to communicate with [E.D.'s]
personal physician(s) and other health care providers,
including the ability to require an opinion of [E.D.'s] physician
as to whether [E.D. lacks] the ability to make decisions for
[herself]."
It appears undisputed that E.D. was competent at the time these powers
of attorney were executed. 2
On January 19, 2021, C.C. executed a "Transfer of Health Care
Power of Attorney" ("the transfer POA"), purporting to transfer the
health-care POA to L.D.:
"Pursuant to the Health Care Power of Attorney signed
by [E.D.] on December 14, 2016, I, [C.C.], am the appointed
health care agent for [E.D.]. Effective January 30, 2021, I
voluntarily relinquish my position as health care agent for
2Although, in her brief on appeal, L.D. suggests that the health-care
POA also designated C.C. as E.D.'s legal guardian, the document instead
merely indicated E.D.'s preference that C.C. be named as her guardian
"[i]f a guardian of [her] person is to be appointed." There is nothing in
the record before us indicating that actual proceedings to establish legal
guardianship over E.D. were ever initiated in either Illinois or Alabama.
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[E.D.] and transfer this authority to the successor agent [L.D.]
as directed by the above referenced Health Care Power of
Attorney. This transfer of authority is effective until such time
as [L.D.] is no longer able or willing to act as health care agent
for [E.D.], at which time the authority will revert back to me
and I will resume the position as health care agent for [E.D.]."
In July 2021, then 81-year-old E.D., who had, by that time,
purportedly been diagnosed as suffering generally from "dementia," was
admitted to the nursing home. In connection with E.D.'s admission,
Brookdale was provided, as part of its routine business practices in such
circumstances, copies of the property POA, the health-care POA, and the
transfer POA. Also at that time, C.C. executed all admission-related
documentation on E.D.'s behalf, including, among others, a "Residency
Agreement" ("the residency agreement") that contained an "Agreement
to Arbitrate" ("the arbitration provision") providing, in pertinent part:
"1. Any and all claims or controversies arising out of, or
in any way relating to, this [Residency] Agreement or any of
your stays at [the nursing home], excluding any action for
involuntary transfer or discharge or eviction, and including
disputes regarding interpretation, scope, enforceability,
unconscionability, waiver, preemption and/or violability of this
[Residency] Agreement, whether arising out of Local, State or
Federal law, whether existing or arising in the future, whether
for statutory, compensatory or punitive damages and whether
sounding in breach of contract, tort or breach of statutory
duties, or otherwise, irrespective of the basis for the duty or
the legal theories upon which the claim is asserted, shall be
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submitted to binding individual arbitration … and shall not be
filed in a court of law. The parties to this [Residency]
Agreement further understand that a judge and/or jury will
not decide their case.
"2. The parties hereby expressly agree that this
Arbitration Provision, the Residency Agreement and the
Resident's stays at [the nursing home] substantially involve
interstate commerce, and stipulate that the Federal
Arbitration Act ('FAA') shall exclusively apply to the
interpretation and enforcement of this [Residency] Agreement,
and shall preempt any inconsistent State law and shall not be
reverse preempted by the McCarran-Ferguson Act; United
States Code Title 15, Chapter 20, or other law. Any party who
demands arbitration must do so for all claims or controversies
that are known, or reasonably should have been known, by the
date of the demand for arbitration, and if learned of during the
course of the arbitration proceeding, shall amend the claims or
controversies to reflect the same. All current damages and
reasonably foreseeable damages arising out of such claims or
controversies shall also be incorporated into the initial
demand or amendment thereto. Except as otherwise stated
explicitly herein, this Arbitration Provision is entered into
pursuant to, is governed by, and must be interpreted and
enforced under the [FAA]."
(Emphasis omitted.)
C.C. executed the residency agreement as E.D.'s "Legal
Representative" and referenced, as the supporting "legal authority" on
which she relied in doing so, a "Financial Power of Attorney." A "Resident
Move-In Record and Agreement" contemporaneously executed by C.C. as
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E.D.'s "Legal Representative and … Financially Responsible Party," as
well as E.D.'s "daughter [and] POA," also identified L.D. as E.D.'s
"daughter [and] healthcare POA." That same form identified, as reported
by C.C., the sole "medical reason" that E.D. herself was "physically
unable" to sign the admission documentation as "dementia."
In March 2022, L.D. filed on E.D.'s behalf, in the Jefferson Circuit
Court, a complaint against Brookdale and Wright ("the Brookdale
defendants") and others, asserting various tort claims and seeking
related damages premised on allegations that, following her admission to
the nursing home, E.D. had been subjected to multiple sexual assaults
both by other residents and by an employee of Brookdale. The complaint,
which specifically alleged that E.D. was "legally incompetent" and
"lacked mental capacity to consent to any sexual conduct," included the
following footnote and accompanying citation to decisions from this Court
on the doctrine of apparent authority:
"[Brookdale] has an arbitration agreement that was
signed by a daughter that had relinquished her rights as …
[E.D.'s] healthcare power of attorney six (6) months prior to
executing the agreement. [Brookdale] was aware that the
individual had relinquished her rights and failed to have the
proper healthcare power of attorney sign their agreement,
which makes the agreement unenforceable. In order to enforce
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an arbitration clause a party must have the signature of
someone with a legal authority to act on their behalf for
healthcare."
In addition to filing responsive pleadings, the Brookdale defendants
jointly moved to compel arbitration of L.D.'s claims against them or,
alternatively, to dismiss the action without prejudice to allow those
claims to proceed via arbitration. Citing the fact that the residency
agreement containing the arbitration provision implicated interstate
commerce and specifically referencing the property POA, the Brookdale
defendants argued that C.C. explicitly had been granted authority to
handle claims, litigation, or arbitration and/or to enter into contracts for
medical or personal care on E.D.'s behalf, specifically including
" 'caregiver agreements.' " The motion further alleged that, during the
admission process and as required by the admission documentation, a
copy of the property POA and the transfer POA had been presented to
Brookdale as authorizing C.C. to act for E.D. and that C.C. had signed all
admission agreements as the authorized legal representative of E.D.
Thus, according to the Brookdale defendants, the arbitration provision
was both valid and enforceable with respect to L.D.'s claims.
Their motion was accompanied by, among other exhibits including
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the residency agreement, the affidavit testimony of Tara Bailey,
Brookdale's marketing director, who attested to the following: "Based on
documentation and information provided to Brookdale by [E.D.'s] family,
[C.C.] … was designated to Brookdale as the person with the legal
authority to sign documents on [E.D.'s] behalf." Bailey's affidavit
specifically referenced several places in the admission documents where
C.C. was designated as E.D.'s " 'Legal Rep,' 'Guarantor,' and
'daughter/POA.' " She further noted that E.D.'s removal from the nursing
home in September 2021 was effected by means of a letter from C.C. as
" 'POA for [E.D.]' " canceling the residency agreement on E.D.'s behalf.
Copies of those documents were attached as exhibits to Bailey's affidavit.
L.D. subsequently filed a response opposing the motion to dismiss
or to compel arbitration. In that response, she did not appear to dispute
either that a contract calling for arbitration existed, as the Brookdale
defendants alleged, or that that contract implicated interstate commerce.
She instead asserted that the arbitration provision was, under these
facts, unenforceable to the extent that C.C. purportedly had entered into
the agreement to arbitrate with a "healthcare provider" on E.D.'s behalf
when, according to L.D., she was E.D.'s sole attorney-in-fact for health-
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care purposes under the health-care POA and transfer POA. L.D. further
asserted that, as a result of her dementia, E.D. was not competent on the
date the residency agreement containing the arbitration provision was
executed. L.D.'s response included no accompanying medical evidence on
the issue of E.D.'s competency in July 2021, when the residency
agreement was executed.
In further filings on the issue, the Brookdale defendants continued
to maintain that C.C. had had explicit authority under the property POA
to bind E.D. but contended, alternatively, that, even assuming that C.C.
had lacked actual authority, which they disputed, the arbitration
provision was nonetheless enforceable under the doctrine of apparent
authority. As to apparent authority, the Brookdale defendants further
asserted that L.D. had made no evidentiary showing demonstrating that
E.D. was legally incompetent at the time of her admission to the nursing
home. They further noted that, with respect to all of the treatment E.D.
had received at the nursing home, C.C. had "specifically held herself out
as her mother's legal representative" and had provided documentation
supporting that she was E.D.'s legal representative.
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The trial court, following a hearing,3 denied the motion seeking to
dismiss the action or to compel arbitration. The Brookdale defendants
timely appealed, asserting that the trial court had erred by failing to
order arbitration. See Rule 4(d), Ala. R. App. P. Thereafter, L.D.
unsuccessfully sought to supplement the record from the trial court to
add affidavit testimony from E.D.'s treating physician aimed at
establishing E.D.'s incompetency as of July 2021.
Standard of Review
" ' "[T]he standard of review of a trial court's
ruling on a motion to compel arbitration at the
instance of either party is a de novo determination
of whether the trial judge erred on a factual or
legal issue to the substantial prejudice of the party
seeking review." Ex parte Roberson, 749 So. 2d
441, 446 (Ala. 1999). Furthermore:
" ' "A motion to compel arbitration is
analogous to a motion for summary
judgment. TranSouth Fin. Corp. v.
Bell, 739 So. 2d 1110, 1114 (Ala. 1999).
The party seeking to compel
arbitration has the burden of proving
the existence of a contract calling for
arbitration and proving that that
contract evidences a transaction
3A transcript of the hearing was not included with the record on
appeal.
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affecting interstate commerce. Id.'After a motion to compel arbitration
has been made and supported, the
burden is on the non-movant to present
evidence that the supposed arbitration
agreement is not valid or does not apply
to the dispute in question.' "
" 'Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277,
280 (Ala. 2000) (quoting Jim Burke Auto., Inc. v.
Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995)
(emphasis omitted)).'
"Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 752-53
(Ala. 2002)."
Elizabeth Homes, L.L.C. v. Cato, 968 So. 2d 1, 3 (Ala. 2007).
Discussion
Citing principles of both actual and apparent authority, the
Brookdale defendants contend on appeal that the trial court erred in
denying their motion seeking to compel the parties to arbitrate. The
parties dispute, as they did below, whether the property POA allowed
C.C. to act as E.D.'s attorney-in-fact for purposes of executing the
residency agreement or whether L.D. instead possessed that authority
under the health-care POA. We pretermit discussion of C.C.'s actual
authority because we conclude that, as the Brookdale defendants have
argued below and on appeal, C.C. clearly had apparent authority to
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execute the residency agreement and thus bound E.D. to the arbitration
provision. 4
Here, C.C. executed all the documents required to admit E.D. to the
nursing home in a representative capacity on E.D.'s behalf. In doing so,
C.C. identified herself as E.D.'s legal representative and, for all that
appeared, was fully authorized by E.D. to act, under the circumstances,
on E.D.'s behalf. E.D. accepted the benefits of Brookdale's services under
the residency agreement without objection. As the Brookdale defendants
note, this Court, in Tennessee Health Management, Inc. v. Johnson, 49
So. 3d 175 (Ala. 2010), considered the enforceability of an arbitration
agreement under comparable circumstances. Specifically, in Johnson,
the resident's daughter similarly signed all the documents required to
4There is no evidence before us indicating that, by their terms,
either power of attorney became effective. Specifically, L.D. provided no
evidence indicating that a physician had rendered the necessary opinion
or determination regarding E.D.'s mental condition that would have
triggered either the property POA or the health-care POA. If the powers
of attorney were in fact effective, then it is clear that, although the
health-care POA allowed E.D.'s health-care agent to make the medical
decision to obtain treatment for E.D. at a hospital, nursing home, or other
institution, the property POA gave C.C., at the time the residency
agreement was executed, the power to enter into and execute a contract
with an assisted-living or nursing-home facility to provide such
treatment.
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admit the resident to the defendant nursing home -- including an
agreement to arbitrate -- in various purported representative capacities,
including as the "family member responsible for the resident" and as the
resident's " 'Legal representative.' " 49 So. 3d at 176-77. When a dispute
subsequently arose between the personal representative of the resident's
estate and the defendant nursing home, the defendant nursing home,
relying on the documents executed by the daughter on the resident's
behalf, moved to compel arbitration. The personal representative
opposed that request on the grounds that the daughter had lacked a
power of attorney providing her authority to act on the resident's behalf,
that the daughter had signed all the admission documents in her
personal capacity, and that the resident neither had signed anything nor
had instructed the daughter to do so. Id. at 177-78.
In the ensuing appeal from the trial court's order refusing to enforce
the arbitration agreement, this Court, in Johnson, explained:
"Because [the resident] enjoyed the ease of checking into [the
defendant nursing home] without the requirement that she
sign anything, under circumstances in which no reasonable
person could consider the admission possible without the
intervention of an agent to act on [her] behalf, she thereby
passively permitted [her daughter] … to appear to [the
defendant nursing home] to have the authority to act on her
behalf, and [the daughter's] apparent authority is, therefore,
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implied. See Carraway [v. Beverly Enters. Alabama, Inc.,]
978 So. 2d [27] at 30 [(Ala. 2007)] ('Apparent authority "is
implied where the principal passively permits the agent to
appear to a third person to have the authority to act on [her]
behalf." ' (quoting Treadwell Ford, Inc. v. Courtesy Auto
Brokers, Inc., 426 So. 2d 859, 861 (Ala. Civ. App. 1983))).
"[The personal representative of the resident's estate]
relies upon the fact that [the resident] did not instruct [the
daughter] to sign the admission documents on her behalf.
Notwithstanding the absence of evidence indicating that [the
resident] instructed [her daughter] to sign the admission
documents on her behalf, there is no evidence indicating that
upon entering [the defendant nursing home] or any time after
her admission [the resident] ever signed any document
obligating herself to pay for the services, that she ever
objected to [her daughter's] having signed the admission
documents, or that she understood that [the defendant
nursing home] was treating her without charge, dispensing
with the necessity for an agreement. Instead, [the resident]
remained at [the defendant nursing home] …, accepting the
benefits of the services rendered without objection or
question. As was the case in Carraway, '[t]here is no evidence
indicating that [the resident] had any objection to [her
daughter's] acting on her behalf in admitting [the resident] to
the nursing home.' 978 So. 2d at 31.
"[The personal representative] also argues that [the
resident] is not bound by the [arbitration] agreement because
she did not sign it and she was not present when [her
daughter] signed it. [The daughter's] claims, if any, may be
subject to arbitration, [the personal representative] argues,
but as a nonsignatory to the agreement, [the resident] could
not be forced to arbitrate her claims. [The personal
representative] relies upon Noland Health Services, Inc. v.
Wright, 971 So. 2d 681 (Ala. 2007). In Noland, a plurality of
this Court held that a daughter-in-law's signature as the
responsible party on a nursing-home arbitration agreement
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was ineffective to bind the resident to the agreement. Noland
is distinguishable from this case, however, because the
nursing-home resident in Noland was mentally incompetent
and could not authorize anyone to act on her behalf and
because the daughter-in-law did not sign any document in the
capacity of her mother-in-law's legal representative.
"[The personal representative] also argues that [the
daughter] did not have a power of attorney over [the resident]
or any other legal authority to contractually bind [the
resident] to the [arbitration] agreement. In Carraway, [the
resident] executed a power of attorney a few weeks after she
was admitted to the nursing home that gave [her brother]
further authority to act on her behalf. The Court found that
her execution of the power of attorney was further evidence
suggesting that [the resident] approved of her brother's acting
on her behalf when he signed the admission documents. 978
So. 2d at 31. The arbitration agreement in Carraway did not
call for the signature of a legal representative; likewise, the
[arbitration] agreement [the daughter] executed did not
require the signature of [the resident's] legal representative.
The absence of a power of attorney in this case is not fatal to
our conclusion that [the daughter] had the apparent authority
to bind [the resident] at the time [the daughter] signed the
admission documents in view of the evidence indicating that
[the resident] passively permitted [her daughter] to act on her
behalf.
"Under these circumstances, [the defendant nursing
home] proved the existence of a valid contract calling for
arbitration and proved that the contract evidenced a
transaction affecting interstate commerce. The trial court
erred in denying the motion to compel arbitration."
49 So. 3d at 180-81. Johnson clearly controls our decision in the present
case.
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L.D., however, disputes the possibility of apparent authority
attaching to C.C.'s actions because, she contends, "[t]he evidence is clear
that [E.D.] could not make decisions on her own [as of her admission date
and, thus, could not] provide any sort of apparent authority" to C.C.
L.D.'s brief at 27. Contrary to that assertion, we see nothing establishing
either E.D.'s incompetency or that she objected at any time to C.C.'s
having executed the residential agreement on her behalf.
"Before determining whether [the resident's family
member] had the apparent authority to execute the
agreement, the Court must decide whether [the resident], on
whose behalf the agreement was signed, was mentally
competent at the time [the family member] signed the
agreement. [The defendant nursing home] argues that [the
plaintiff] has not met her burden of proving [the resident's]
incapacity. Specifically, [the defendant nursing home] argues
that [the plaintiff] has failed to demonstrate that [the
resident's] advanced age and dementia resulted in anything
more than short-term memory loss.
"In Troy Health & Rehabilitation Center v. McFarland,
187 So. 3d 1112 (Ala. 2015), this Court discussed the
enforceability of an arbitration agreement and whether a
nursing-home resident was mentally competent when he
executed a durable power of attorney naming his nephew as
his attorney-in-fact. We find the following reasoning from
that case to be analogous:
" ' "[T]he standard for determining
whether a person is competent to
execute a power of attorney is whether
that person is able to understand and
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comprehend his or her actions. Queen
v. Belcher, 888 So. 2d 472, 477 (Ala.
2003). The burden initially falls on the
party claiming that the person who
executed the power of attorney was
incompetent when he or she executed
the power of attorney. Id. If, however,
it is proven that the person who
executed the power of attorney was
habitually or permanently incompetent
before executing the power of attorney,
the burden shifts to the other party to
show that the power of attorney was
executed during a lucid interval. Id."
" 'Yates v. Rathbun, 984 So. 2d 1189, 1195 (Ala. Civ.
App. 2007).'
"187 So. 3d at 1119.
"We held that the presumption is that every person has
the capacity to understand until the contrary is proven.
McFarland, 187 So. 3d at 1119 (citing Yates v. Rathbun, 984
So. 2d 1189, 1195 (Ala. Civ. App. 2007), Thomas v. Neal, 600
So. 2d 1000, 1001 (Ala. 1992), and Hardee v. Hardee, 265 Ala.
669, 93 So. 2d 127 (1956)). The Court differentiated between
the burden of proving permanent incapacity and temporary
incapacity. Specifically, we held that proof of incapacity
" ' " ' "at intervals or of a temporary character would
create no presumption that it continued up to the
execution of the instrument, and the burden would
be upon the attacking party to show [incapacity] at
the very time of the transaction." ' " Wilson v.
Wehunt, 631 So. 2d 991, 996 (Ala. 1994) (quoting
Hall v. Britton, 216 Ala. 265, 267, 113 So. 238, 239
(1927) (emphasis added)).'
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"McFarland, 187 So. 3d at 1119.
"Thus, a party seeking to avoid a contract based on the
defense of incapacity must prove either permanent incapacity
or contractual incapacity at the very time of contracting. See
Ex parte Chris Langley Timber & Mgmt., Inc., 923 So. 2d
1100, 1106 (Ala. 2005). The party seeking to avoid the
contract bears the burden of proving incapacity to contract by
a preponderance of the evidence. See Hester v. Hester, 474
So. 2d 734, 736 (Ala. Civ. App. 1985).
"This Court recognizes that [the resident's] diagnosis of
dementia, by itself, does not establish permanent incapacity.
McFarland, 187 So. 3d at 1120 (citing Ex parte Chris Langley
Timber, 923 So. 2d at 1106). Although it may be apparent
that [the resident's] dementia was chronic in nature as
distinguished from temporary, it is not so apparent that the
state of [his] dementia constituted 'permanent incapacity' as
that term is used to describe the mental incapacity necessary
to justify the avoidance of the arbitration provision. See Ex
parte Chris Langley Timber, 923 So. 2d at 1106. The Court is
unable to discern from the medical records whether [the
resident's] mental-health condition had progressed to the
level of 'permanent incapacity' by the time he was admitted
…. [Physician's] notes indicate that [the resident's] dementia
caused no more than short-term memory loss. … [H]owever,
the record also indicates that [the resident's] condition was
'slowly progressive' and that he was able to follow commands
and sometimes converse with the physician. Thus, this Court
cannot conclude that [the plaintiff] has overcome her burden
of proving that [the resident's] condition rose to the level of
permanent incapacity as that term is used under the law to
void a contract.
"The more important question is whether [the plaintiff]
has overcome her burden of demonstrating contractual
incapacity ' " ' "at the very time of the transaction." ' " '
McFarland, 187 So. 3d at 1119 (quoting Wilson v. Wehunt,
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631 So. 2d 991, 996 (Ala. 1994), quoting in turn Hall v.
Britton, 216 Ala. 265, 267, 113 So. 238, 239 (1927))."
Stephan v. Millennium Nursing & Rehab Ctr., Inc., 279 So. 3d 532, 539-
41 (Ala. 2018) (footnote omitted; initial emphasis added). Accordingly,
under Alabama law generally, only incompetent, nonsignatory nursing-
home residents lack the capacity to authorize anyone to act on their
behalf and are not bound by arbitration agreements executed by the
resident's representative. See id. See also Kindred Nursing Ctrs. E.,
LLC v. Jones, 201 So. 3d 1146, 1153 (Ala. 2016).
In the present case, the Brookdale defendants established that an
agreement providing for arbitration exists and that the agreement
affected interstate commerce. See Elizabeth Homes, supra. The burden
shifted to L.D. to counter with evidence demonstrating that arbitration
provision was either invalid or inapplicable to the parties' dispute.
In her response opposing enforcement of the arbitration provision,
L.D. made only unsupported representations that E.D. was not
competent in 2021. Notably, despite allegedly holding E.D.'s health-care
POA and having "complete access to [E.D.'s] medical and mental health
records," L.D. presented no medical evidence demonstrating E.D.'s legal
incompetency -- or even any explanation of E.D.'s symptoms or anecdotes
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evidencing her purported deteriorated mental state. This contrasts with
Stephan, supra, in which the Court ultimately held that the plaintiff had
adduced sufficient evidence establishing the resident's incompetency,
including affidavit testimony relaying accounts of the resident's
confusion, loss of cognition, and lack of comprehension; medical records
indicating the resident's inability to converse with medical personnel
regarding the circumstances of his care; and evidence indicating the
resident's potential mental impairment following a major surgery. Id. at
541.
We do note, as L.D. argues, that a diagnosis of dementia, at the very
least, may suggest intervals of mental incompetency that might render a
resident incapable of bestowing authority to act on the resident's behalf
or of ratifying such actions. In the present case, however, the record
contains no evidence demonstrating anything other than an
unsubstantiated, informal diagnosis that E.D. was suffering from
generalized "dementia and cognitive issues" and a corresponding request
that, following admission to the nursing home, E.D. be housed in the
"memory care" unit as opposed to the "assisted living" portion of the
nursing home. See Troy Health & Rehab. Ctr. v. McFarland, 187 So. 3d
21SC-2022-0828
1112, 1119 (Ala. 2015) (plurality opinion) (" 'The presumption is that
every person is sane, until the contrary is proven.' … Additionally,
' " 'proof of insanity at intervals or of a temporary character would create
no presumption that it continued up to the execution of the instrument,
and the burden would be upon the attacking party to show insanity at
the very time of the transaction.' " ' " ( citations omitted)). Cf. TitleMax
of Alabama, Inc. v. Falligant, 328 So. 3d 244, 255 (Ala. 2020) (plurality
opinion) ("[E]vidence indicating that [an individual] suffers from an
undefined mental illness, that she lacks the ability to manage her
financial affairs, and that she did not understand the terms of the
contracts is not sufficient evidence to create a genuine question of fact as
to whether she is permanently incapacitated and, thus, unable to
contract."). Thus, L.D. failed to establish that E.D. did not -- or could not
-- understand that she was, in acquiescing without objection to C.C.'s
actions, bestowing apparent authority.
Accordingly, because the trial court erred in denying the Brookdale
defendants' request to compel arbitration, we reverse the trial court's
order denying the motion to compel arbitration and remand the case for
further proceedings consistent with this opinion.
22
SC-2022-0828
REVERSED AND REMANDED.
Parker, C.J., and Bryan, Mendheim, and Mitchell, JJ., concur.
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