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ARBITRATION / WRONGFUL DEATH - DIVERSICARE LEASING CORP. D/B/A CANTERBURY HEALTHCARE FACILITY V. HUBBARD

Diversicare Leasing Corp. d/b/a Canterbury Healthcare Facility v. Hubbard, [Ms. 1131027, Sept. 30, 2015] __ So. 3d __ (Ala. 2015). The Supreme Court affirms the denial of arbitration in an action filed by the personal representative of a deceased nursing home patient. Reviewing cases, the Court emphasizes that the critical distinction when a person admitting a relative to a nursing home signs an agreement with an arbitration clause is whether the patient is mentally competent to authorize the relative to sign on their behalf. Here, Betty Hubbard signed admission documents for her mentally incapacitated son, Jonathan Bernard Hubbard. Because Hubbard was mentally incompetent and his mother had never been appointed his guardian or otherwise made his legal representative, and because he was an adult, her signature did not bind him. The Court also rejects an argument that Ms. Hubbard was bound in her capacities as personal representative of his estate and the wrongful-death plaintiff because she had signed the arbitration agreement. The Court disapproves Wells Fargo Bank, N.A. v. Chapman, 90 So. 3d 774 (Ala. Civ. App. 2012) as “represent[ing] a misapprehension of the foregoing caselaw, which defined the principle that an arbitration agreement that binds a nursing-home resident also binds the resident’s representative.” Approving the reasoning in Entrekin v. Internal Medicine Associates of Dothan, P.A., 689 F.3d 1248 (11th Cir. 2012), the Supreme Court holds “that Betty cannot be bound to the arbitration agreement in her capacity as the personal representative of Jonathan’s estate when she signed the arbitration agreement in what amounts to her capacity as Jonathan’s relative or next friend.”

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