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Mental Capacity To Agree To Arbitrate

TitleMax of Alabama, Inc. v. Falligant, [Ms. 1190670, Dec. 4, 2020], ___ So. 3d ___ (Ala. 2020). In a plurality opinion, the Court (Mendheim, J.; Bolin, Wise, and Bryan, JJ., concur; Shaw and Sellers, JJ., concur in the result; Parker, C.J., and Stewart, J., dissent; Mitchell, J., recuses) reverses the Jefferson Circuit Court’s order carrying to trial whether the plaintiff’s ward lacked mental capacity to agree to arbitrate disputes with TitleMax relating to a title loan and subsequent repossession and sale of a vehicle. The opinion reasons

TitleMax met its burden of proving that a contract affecting interstate commerce existed and that that contract was signed by McElroy and contained an arbitration agreement. The burden then shifted to Falligant to prove that the arbitration agreement is void. Falligant failed to present substantial evidence indicating that McElroy is permanently incapacitated and, thus, lacked the mental capacity to enter into the contracts. Because Falligant has failed to create a genuine issue of fact, the circuit court erred in ordering the issue of McElroy’s mental capacity to trial.

Ms. *28.

The opinion explains “there is no evidence explaining the specifics of McElroy’s mental illness or how it affects her mental capacities. Falligant’s affidavit testimony is conclusory and generally asserts that McElroy is not able to manage her personal financial affairs and that she did not understand the terms of the contracts. But there is no evidence explaining McElroy’s mental illness and whether the reasons she is unable to manage her personal finances or understand the terms of the contracts mean that she is unable to understand and comprehend her actions generally.” Ms. **26-27.

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