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 she did not have the 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, signed an arbitration agreement when her father was admitted to a nursing home (the Millennium Nursing and Rehab center). This is something that many family members do since it is part of many nursing home’s admissions requirements. However, the Supreme Court said that the woman did not have the power or authority to do so because she signed as a family member and not as a Power of Attorney. Because of this, when the woman became the personal representative of her father’s estate, she was not bound by the arbitration clause.
By way of background, Stephan, on behalf of her father’s estate, sued the Millennium Nursing and Rehab center for wrongful death following her father’s death in 2015. The facility moved for the enforcement of the arbitration agreement and the Madison Circuit Court agreed when it granted Millennium’s motion to compel arbitration. Subsequently, the State Supreme Court found that Stephan’s father 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 a power of attorney.
This case presents an interesting legal issue - 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?
If you are serving as someone’s power of attorney, you should consult with an experienced estate planning attorney regarding the responsibilities and liabilities of your role.
Reference: Legal NewsLine (Oct. 30, 2018) “Alabama Supreme Court: Daughter in wrongful death case didn’t have authority to sign arbitration agreement”