Arbitration - Lack of Mental Capacity


Stephan v. Millennium Nursing and Rehab Center, Inc., [Ms. 1170524, Oct. 5, 2018] __ So. 3d __ (Ala. 2018). This decision by Justice Bolin (Stuart, C.J. and Parker, Shaw, Main, Wise, Bryan, and Mendheim, JJ., concur; Sellers, J., dissents) reverses the Madison Circuit Court’s order enforcing a motion to compel arbitration filed by Millennium Nursing and Rehab Center, Inc. where plaintiff’s elderly decedent was admitted following hip surgery. Plaintiff was the daughter and personal representative of the decedent.

On de novo review of the order compelling arbitration, the Court reversed. At the time the daughter signed the admission agreement containing the arbitration provision, her father was suffering from dementia. The Court held that the decedent father “did not have sufficient capacity to understand in a reasonable manner the nature and effect of the act which he [or his daughter] was doing.” Ms. *22, quoting Ex parte Chris Langley Timber & Mgmt., Inc., 923 So. 2d 1100, 1105 (Ala. 2005) (internal quotation marks omitted).

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