MONTGOMERY, Ala. (Legal Newsline) – The daughter of a deceased dementia patient will not have to submit to arbitration in her wrongful death lawsuit against a Huntsville, Alabama, nursing and rehabilitation center following an Alabama Supreme Court opinion issued earlier this month.
Rhonda Stephan was, as now, personal representative of her father, the late Bobby Gene Hicks, when she signed an arbitration agreement as part of his admission process, but she did not have power of attorney or any other authority, the Alabama high court said in its 35-page ruling issued Oct. 5.
"Accordingly, we conclude that Stephan cannot be bound to the arbitration provision in her capacity as the personal representative of Hicks's estate when she signed the agreement in what amounts to her capacity as Hicks's relative or next friend," the Supreme Court's ruling said. "Based on the foregoing, we reverse the circuit court's order granting the motion to compel arbitration and remand the case for proceedings consistent with this opinion."
Alabama Supreme Court Justice Michael F. Bolin
Justice Michael F. Bolin wrote the Alabama high court's decision in which Chief Justice Lyn Stuart and justices Tom Parker, Greg Shaw, James Allen Main, Alisa Kelli Wise, Tommy Bryan and Brady E. Mendheim Jr. concurred. Justice William B. Sellers dissented.
Stephan, on behalf of her father's estate, sued the Millennium Nursing and Rehab Center following Hick's death in 2015. The facility moved for the arbitration agreement Stephan signed to be enforced and Madison Circuit Court agreed this past February when it granted Millennium's motion to compel arbitration.
The state Supreme Court found that Hicks had been too incapacitated to enter into a contract when he was admitted.
"In this case, Stephan signed the agreement solely as a family member," the high court's opinion said. "Because this court concludes that Hicks lacked the capacity to contract at the time the agreement was signed, Stephan did not have apparent authority to execute the agreement on his behalf."
In his dissent, Justice Sellers said Hicks had "the legal authority to bind" her father to the arbitration agreement and that she did not object to his absence when she signed the paperwork admitting him to Millennium.
"Stephan cannot now argue that the agreement she signed was void because Hicks lacked capacity," Sellers stated in his dissent. "Stephan should not be allowed to induce Millennium to admit Hicks for treatment by agreeing to submit any dispute to arbitration and then, in her capacity as personal representative, repudiate her own actions on the grounds that Hicks was incompetent and that she did not have the apparent authority to bind Hicks's estate to arbitrate the wrongful-death issue."