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ARBITRATION - TROY HEALTH AND REHABILITATION CENTER V. MCFARLAND

Troy Health and Rehabilitation Center v. McFarland [Ms. 1140090, Aug. 28, 2015], So.3d (Ala. 2015). The Supreme Court, in a plurality opinion, reverses the Pike Circuit Court's denial of a nursing home's motion to compel arbitration in a wrongful death case. The Court concluded the decedent's personal representative failed to prove that the decedent was not mentally competent when he executed a durable power of attorney in favor of his attorney-in-fact who, in turn, while acting as the attorney-in-fact executed an arbitration agreement with the nursing home providing that all claims or causes of action for medical negligence would be subject to arbitration.

"The presumption is that every person is sane, until the contrary is proven." Ms. at 19, quoting Thomas v. Neal, 600 So.2d 1000, 1001 (Ala. 1992). "'... [P]roof 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.'" Id., quoting Wilson v. Wehunt, 631 So.2d 991, 996 (Ala. 1994) (underlined emphasis in original). The burden of proof rests with the opponent to enforcement of the arbitration provision following Yates v. Rathbun, 984 So.2d 1189, 1195 (Ala. Civ. App. 2007):

[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 comprehend his or her actions. Queen v. Belcher, 888 So.3d 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.

Ms. at 18, quoting Yates v. Rathbun, supra. Because there were "no facts demonstrating [the decedent] was not mentally competent 'at the very time' he executed the ... power of attorney" in question, and were instead facts in the record indicating he was indeed competent at the time of such execution, the arbitration agreement executed by the decedent's attorney-in-fact was enforceable pursuant to the powers granted in the durable power of attorney. Consequently, the Pike Circuit Court's order denying arbitration was due to be reversed.

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