Court Opinion

ID: 9394193
Source: CourtListenerOpinion
Date Created: 2023-05-12 17:02:42.435512+00
Date Added: 2024-06-11T17:18:57.835873
License: Public Domain

Rel: May 12, 2023

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
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         SUPREME COURT OF ALABAMA
                             OCTOBER TERM, 2022-2023

                                _________________________

                                      SC-2022-0828
                                _________________________

     Alabama Somerby, LLC, d/b/a Brookdale University Park
   IL/AL/MC; Brookdale Senior Living, Inc.; and Undrea Wright

                                                  v.

                              L.D., as next friend of E.D.

                      Appeal from Jefferson Circuit Court
                                (CV-22-900852)

SHAW, Justice.

       Alabama Somerby, LLC, d/b/a Brookdale University Park

IL/AL/MC; Brookdale Senior Living, Inc.; and Undrea Wright, who are
SC-2022-0828

defendants in the action below, appeal from the Jefferson Circuit Court's

order denying their motion to compel arbitration of the claims asserted

against them by the plaintiff, L.D., as the next friend of her mother, E.D.1

We reverse and remand.

                      Facts and Procedural History

     Alabama Somerby and Brookdale Senior Living (collectively

referred to as "Brookdale") operate an assisted-living facility for seniors

("the nursing home") in Jefferson County; Wright is the administrator of

the nursing home.

     In December 2016, E.D. executed in Illinois both a durable "Power

of Attorney for Property" ("the property POA") and a "Power of Attorney

for Health Care" ("the health-care POA"). The property POA specifically

named E.D.'s daughter, C.C., as E.D.'s agent and attorney-in-fact

authorized to make decisions on E.D.'s behalf with respect to broad

categories of personal business, including transactions, claims, and

     1For purposes of this appeal, the Court, pursuant to Rule 52, Ala.
R. App. P., has used initials when referring to certain individuals to
protect the anonymity of E.D., who is alleged to be the victim of sex
offenses.
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litigation. It also included a specific authorization for "Estate and Long

Term Care Planning" that authorized C.C. as follows:

           "Caregiver Agreements. I authorize my agent to enter
     into, execute, modify, alter or amend any contract agreement
     (for example, a Caregiver Agreement or Personal Services
     Contract) pertaining to my medical, personal or general care
     that I may require at my residence, assisted living facility,
     nursing facility, or in another's residence on my behalf."

(Emphasis added.) The property POA further provided both that it would

become "effective on the date [E.D.'s designated agent] determines that

[E.D. is] unable to give prompt and intelligent consideration to financial

decisions" and that any "such determination shall be made only with the

concurring opinion of a physician who ha[s] examined or treated [E.D.]

within the last three months of rendering such an opinion."

     The health-care POA similarly designated C.C. as E.D.'s "health

care agent" with, among other powers, the authority to make health-

related decisions, including "agreeing to admit [E.D.] to or discharge [her]

from any hospital, home, or other institution." Pursuant to the health-

care POA, L.D., E.D.'s other daughter, was named as an optional

successor in the event that C.C. "is unable or does not want to make

health care decisions for [E.D.]." The health-care POA further provided

that "[o]nly one person at a time [could] serve as [E.D.'s] agent." Like the
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property POA, it expressed E.D.'s desire that C.C. become her health-

care agent and "[m]ake decisions for [E.D.] only when [E.D. could not]

make them for [herself]" and further specified:

     "The physician(s) taking care of [E.D.] will determine when
     [she lacks] this ability. Starting now, for the purpose of
     assisting … with … health care plans and decisions, [C.C.]
     shall have complete access to my medical and mental health
     records, the authority to share them with others as needed,
     and the complete ability to communicate with [E.D.'s]
     personal physician(s) and other health care providers,
     including the ability to require an opinion of [E.D.'s] physician
     as to whether [E.D. lacks] the ability to make decisions for
     [herself]."

It appears undisputed that E.D. was competent at the time these powers

of attorney were executed. 2

     On January 19, 2021, C.C. executed a "Transfer of Health Care

Power of Attorney" ("the transfer POA"), purporting to transfer the

health-care POA to L.D.:

          "Pursuant to the Health Care Power of Attorney signed
     by [E.D.] on December 14, 2016, I, [C.C.], am the appointed
     health care agent for [E.D.]. Effective January 30, 2021, I
     voluntarily relinquish my position as health care agent for

     2Although,  in her brief on appeal, L.D. suggests that the health-care
POA also designated C.C. as E.D.'s legal guardian, the document instead
merely indicated E.D.'s preference that C.C. be named as her guardian
"[i]f a guardian of [her] person is to be appointed." There is nothing in
the record before us indicating that actual proceedings to establish legal
guardianship over E.D. were ever initiated in either Illinois or Alabama.
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     [E.D.] and transfer this authority to the successor agent [L.D.]
     as directed by the above referenced Health Care Power of
     Attorney. This transfer of authority is effective until such time
     as [L.D.] is no longer able or willing to act as health care agent
     for [E.D.], at which time the authority will revert back to me
     and I will resume the position as health care agent for [E.D.]."

     In July 2021, then 81-year-old E.D., who had, by that time,

purportedly been diagnosed as suffering generally from "dementia," was

admitted to the nursing home. In connection with E.D.'s admission,

Brookdale was provided, as part of its routine business practices in such

circumstances, copies of the property POA, the health-care POA, and the

transfer POA. Also at that time, C.C. executed all admission-related

documentation on E.D.'s behalf, including, among others, a "Residency

Agreement" ("the residency agreement") that contained an "Agreement

to Arbitrate" ("the arbitration provision") providing, in pertinent part:

            "1. Any and all claims or controversies arising out of, or
     in any way relating to, this [Residency] Agreement or any of
     your stays at [the nursing home], excluding any action for
     involuntary transfer or discharge or eviction, and including
     disputes regarding interpretation, scope, enforceability,
     unconscionability, waiver, preemption and/or violability of this
     [Residency] Agreement, whether arising out of Local, State or
     Federal law, whether existing or arising in the future, whether
     for statutory, compensatory or punitive damages and whether
     sounding in breach of contract, tort or breach of statutory
     duties, or otherwise, irrespective of the basis for the duty or
     the legal theories upon which the claim is asserted, shall be

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     submitted to binding individual arbitration … and shall not be
     filed in a court of law. The parties to this [Residency]
     Agreement further understand that a judge and/or jury will
     not decide their case.

           "2.   The parties hereby expressly agree that this
     Arbitration Provision, the Residency Agreement and the
     Resident's stays at [the nursing home] substantially involve
     interstate commerce, and stipulate that the Federal
     Arbitration Act ('FAA') shall exclusively apply to the
     interpretation and enforcement of this [Residency] Agreement,
     and shall preempt any inconsistent State law and shall not be
     reverse preempted by the McCarran-Ferguson Act; United
     States Code Title 15, Chapter 20, or other law. Any party who
     demands arbitration must do so for all claims or controversies
     that are known, or reasonably should have been known, by the
     date of the demand for arbitration, and if learned of during the
     course of the arbitration proceeding, shall amend the claims or
     controversies to reflect the same. All current damages and
     reasonably foreseeable damages arising out of such claims or
     controversies shall also be incorporated into the initial
     demand or amendment thereto. Except as otherwise stated
     explicitly herein, this Arbitration Provision is entered into
     pursuant to, is governed by, and must be interpreted and
     enforced under the [FAA]."

(Emphasis omitted.)

     C.C.   executed   the   residency   agreement    as   E.D.'s   "Legal

Representative" and referenced, as the supporting "legal authority" on

which she relied in doing so, a "Financial Power of Attorney." A "Resident

Move-In Record and Agreement" contemporaneously executed by C.C. as

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E.D.'s "Legal Representative and … Financially Responsible Party," as

well as E.D.'s "daughter [and] POA," also identified L.D. as E.D.'s

"daughter [and] healthcare POA." That same form identified, as reported

by C.C., the sole "medical reason" that E.D. herself was "physically

unable" to sign the admission documentation as "dementia."

     In March 2022, L.D. filed on E.D.'s behalf, in the Jefferson Circuit

Court, a complaint against Brookdale and Wright ("the Brookdale

defendants") and others, asserting various tort claims and seeking

related damages premised on allegations that, following her admission to

the nursing home, E.D. had been subjected to multiple sexual assaults

both by other residents and by an employee of Brookdale. The complaint,

which specifically alleged that E.D. was "legally incompetent" and

"lacked mental capacity to consent to any sexual conduct," included the

following footnote and accompanying citation to decisions from this Court

on the doctrine of apparent authority:

           "[Brookdale] has an arbitration agreement that was
     signed by a daughter that had relinquished her rights as …
     [E.D.'s] healthcare power of attorney six (6) months prior to
     executing the agreement. [Brookdale] was aware that the
     individual had relinquished her rights and failed to have the
     proper healthcare power of attorney sign their agreement,
     which makes the agreement unenforceable. In order to enforce

                                   7
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     an arbitration clause a party must have the signature of
     someone with a legal authority to act on their behalf for
     healthcare."

     In addition to filing responsive pleadings, the Brookdale defendants

jointly moved to compel arbitration of L.D.'s claims against them or,

alternatively, to dismiss the action without prejudice to allow those

claims to proceed via arbitration. Citing the fact that the residency

agreement containing the arbitration provision implicated interstate

commerce and specifically referencing the property POA, the Brookdale

defendants argued that C.C. explicitly had been granted authority to

handle claims, litigation, or arbitration and/or to enter into contracts for

medical or personal care on E.D.'s behalf, specifically including

" 'caregiver agreements.' " The motion further alleged that, during the

admission process and as required by the admission documentation, a

copy of the property POA and the transfer POA had been presented to

Brookdale as authorizing C.C. to act for E.D. and that C.C. had signed all

admission agreements as the authorized legal representative of E.D.

Thus, according to the Brookdale defendants, the arbitration provision

was both valid and enforceable with respect to L.D.'s claims.

     Their motion was accompanied by, among other exhibits including

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the residency agreement, the affidavit testimony of Tara Bailey,

Brookdale's marketing director, who attested to the following: "Based on

documentation and information provided to Brookdale by [E.D.'s] family,

[C.C.] … was designated to Brookdale as the person with the legal

authority to sign documents on [E.D.'s] behalf."       Bailey's affidavit

specifically referenced several places in the admission documents where

C.C. was designated as E.D.'s " 'Legal Rep,' 'Guarantor,' and

'daughter/POA.' " She further noted that E.D.'s removal from the nursing

home in September 2021 was effected by means of a letter from C.C. as

" 'POA for [E.D.]' " canceling the residency agreement on E.D.'s behalf.

Copies of those documents were attached as exhibits to Bailey's affidavit.

     L.D. subsequently filed a response opposing the motion to dismiss

or to compel arbitration. In that response, she did not appear to dispute

either that a contract calling for arbitration existed, as the Brookdale

defendants alleged, or that that contract implicated interstate commerce.

She instead asserted that the arbitration provision was, under these

facts, unenforceable to the extent that C.C. purportedly had entered into

the agreement to arbitrate with a "healthcare provider" on E.D.'s behalf

when, according to L.D., she was E.D.'s sole attorney-in-fact for health-

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care purposes under the health-care POA and transfer POA. L.D. further

asserted that, as a result of her dementia, E.D. was not competent on the

date the residency agreement containing the arbitration provision was

executed. L.D.'s response included no accompanying medical evidence on

the issue of E.D.'s competency in July 2021, when the residency

agreement was executed.

     In further filings on the issue, the Brookdale defendants continued

to maintain that C.C. had had explicit authority under the property POA

to bind E.D. but contended, alternatively, that, even assuming that C.C.

had lacked actual authority, which they disputed, the arbitration

provision was nonetheless enforceable under the doctrine of apparent

authority. As to apparent authority, the Brookdale defendants further

asserted that L.D. had made no evidentiary showing demonstrating that

E.D. was legally incompetent at the time of her admission to the nursing

home. They further noted that, with respect to all of the treatment E.D.

had received at the nursing home, C.C. had "specifically held herself out

as her mother's legal representative" and had provided documentation

supporting that she was E.D.'s legal representative.

                                   10
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     The trial court, following a hearing,3 denied the motion seeking to

dismiss the action or to compel arbitration. The Brookdale defendants

timely appealed, asserting that the trial court had erred by failing to

order arbitration.    See Rule 4(d), Ala. R. App. P. Thereafter, L.D.

unsuccessfully sought to supplement the record from the trial court to

add affidavit testimony from E.D.'s treating physician aimed at

establishing E.D.'s incompetency as of July 2021.

                            Standard of Review

                  " ' "[T]he standard of review of a trial court's
            ruling on a motion to compel arbitration at the
            instance of either party is a de novo determination
            of whether the trial judge erred on a factual or
            legal issue to the substantial prejudice of the party
            seeking review." Ex parte Roberson, 749 So. 2d
            441, 446 (Ala. 1999). Furthermore:

                 " ' "A motion to compel arbitration is
                 analogous to a motion for summary
                 judgment. TranSouth Fin. Corp. v.
                 Bell, 739 So. 2d 1110, 1114 (Ala. 1999).
                 The     party    seeking   to    compel
                 arbitration has the burden of proving
                 the existence of a contract calling for
                 arbitration and proving that that
                 contract evidences a transaction

     3A   transcript of the hearing was not included with the record on
appeal.

                                     11
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                affecting interstate commerce.       Id.
                'After a motion to compel arbitration
                has been made and supported, the
                burden is on the non-movant to present
                evidence that the supposed arbitration
                agreement is not valid or does not apply
                to the dispute in question.' "

           " 'Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277,
           280 (Ala. 2000) (quoting Jim Burke Auto., Inc. v.
           Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995)
           (emphasis omitted)).'

     "Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 752-53
     (Ala. 2002)."

Elizabeth Homes, L.L.C. v. Cato, 968 So. 2d 1, 3 (Ala. 2007).

                               Discussion

     Citing principles of both actual and apparent authority, the

Brookdale defendants contend on appeal that the trial court erred in

denying their motion seeking to compel the parties to arbitrate. The

parties dispute, as they did below, whether the property POA allowed

C.C. to act as E.D.'s attorney-in-fact for purposes of executing the

residency agreement or whether L.D. instead possessed that authority

under the health-care POA. We pretermit discussion of C.C.'s actual

authority because we conclude that, as the Brookdale defendants have

argued below and on appeal, C.C. clearly had apparent authority to
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execute the residency agreement and thus bound E.D. to the arbitration

provision. 4

      Here, C.C. executed all the documents required to admit E.D. to the

nursing home in a representative capacity on E.D.'s behalf. In doing so,

C.C. identified herself as E.D.'s legal representative and, for all that

appeared, was fully authorized by E.D. to act, under the circumstances,

on E.D.'s behalf. E.D. accepted the benefits of Brookdale's services under

the residency agreement without objection. As the Brookdale defendants

note, this Court, in Tennessee Health Management, Inc. v. Johnson, 49

So. 3d 175 (Ala. 2010), considered the enforceability of an arbitration

agreement under comparable circumstances. Specifically, in Johnson,

the resident's daughter similarly signed all the documents required to

      4There  is no evidence before us indicating that, by their terms,
either power of attorney became effective. Specifically, L.D. provided no
evidence indicating that a physician had rendered the necessary opinion
or determination regarding E.D.'s mental condition that would have
triggered either the property POA or the health-care POA. If the powers
of attorney were in fact effective, then it is clear that, although the
health-care POA allowed E.D.'s health-care agent to make the medical
decision to obtain treatment for E.D. at a hospital, nursing home, or other
institution, the property POA gave C.C., at the time the residency
agreement was executed, the power to enter into and execute a contract
with an assisted-living or nursing-home facility to provide such
treatment.
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admit the resident to the defendant nursing home -- including an

agreement to arbitrate -- in various purported representative capacities,

including as the "family member responsible for the resident" and as the

resident's " 'Legal representative.' " 49 So. 3d at 176-77. When a dispute

subsequently arose between the personal representative of the resident's

estate and the defendant nursing home, the defendant nursing home,

relying on the documents executed by the daughter on the resident's

behalf, moved to compel arbitration.       The personal representative

opposed that request on the grounds that the daughter had lacked a

power of attorney providing her authority to act on the resident's behalf,

that the daughter had signed all the admission documents in her

personal capacity, and that the resident neither had signed anything nor

had instructed the daughter to do so. Id. at 177-78.

     In the ensuing appeal from the trial court's order refusing to enforce

the arbitration agreement, this Court, in Johnson, explained:

     "Because [the resident] enjoyed the ease of checking into [the
     defendant nursing home] without the requirement that she
     sign anything, under circumstances in which no reasonable
     person could consider the admission possible without the
     intervention of an agent to act on [her] behalf, she thereby
     passively permitted [her daughter] … to appear to [the
     defendant nursing home] to have the authority to act on her
     behalf, and [the daughter's] apparent authority is, therefore,
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    implied. See Carraway [v. Beverly Enters. Alabama, Inc.,]
    978 So. 2d [27] at 30 [(Ala. 2007)] ('Apparent authority "is
    implied where the principal passively permits the agent to
    appear to a third person to have the authority to act on [her]
    behalf." ' (quoting Treadwell Ford, Inc. v. Courtesy Auto
    Brokers, Inc., 426 So. 2d 859, 861 (Ala. Civ. App. 1983))).

          "[The personal representative of the resident's estate]
    relies upon the fact that [the resident] did not instruct [the
    daughter] to sign the admission documents on her behalf.
    Notwithstanding the absence of evidence indicating that [the
    resident] instructed [her daughter] to sign the admission
    documents on her behalf, there is no evidence indicating that
    upon entering [the defendant nursing home] or any time after
    her admission [the resident] ever signed any document
    obligating herself to pay for the services, that she ever
    objected to [her daughter's] having signed the admission
    documents, or that she understood that [the defendant
    nursing home] was treating her without charge, dispensing
    with the necessity for an agreement. Instead, [the resident]
    remained at [the defendant nursing home] …, accepting the
    benefits of the services rendered without objection or
    question. As was the case in Carraway, '[t]here is no evidence
    indicating that [the resident] had any objection to [her
    daughter's] acting on her behalf in admitting [the resident] to
    the nursing home.' 978 So. 2d at 31.

          "[The personal representative] also argues that [the
    resident] is not bound by the [arbitration] agreement because
    she did not sign it and she was not present when [her
    daughter] signed it. [The daughter's] claims, if any, may be
    subject to arbitration, [the personal representative] argues,
    but as a nonsignatory to the agreement, [the resident] could
    not be forced to arbitrate her claims. [The personal
    representative] relies upon Noland Health Services, Inc. v.
    Wright, 971 So. 2d 681 (Ala. 2007). In Noland, a plurality of
    this Court held that a daughter-in-law's signature as the
    responsible party on a nursing-home arbitration agreement
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        was ineffective to bind the resident to the agreement. Noland
        is distinguishable from this case, however, because the
        nursing-home resident in Noland was mentally incompetent
        and could not authorize anyone to act on her behalf and
        because the daughter-in-law did not sign any document in the
        capacity of her mother-in-law's legal representative.

              "[The personal representative] also argues that [the
        daughter] did not have a power of attorney over [the resident]
        or any other legal authority to contractually bind [the
        resident] to the [arbitration] agreement. In Carraway, [the
        resident] executed a power of attorney a few weeks after she
        was admitted to the nursing home that gave [her brother]
        further authority to act on her behalf. The Court found that
        her execution of the power of attorney was further evidence
        suggesting that [the resident] approved of her brother's acting
        on her behalf when he signed the admission documents. 978
        So. 2d at 31. The arbitration agreement in Carraway did not
        call for the signature of a legal representative; likewise, the
        [arbitration] agreement [the daughter] executed did not
        require the signature of [the resident's] legal representative.
        The absence of a power of attorney in this case is not fatal to
        our conclusion that [the daughter] had the apparent authority
        to bind [the resident] at the time [the daughter] signed the
        admission documents in view of the evidence indicating that
        [the resident] passively permitted [her daughter] to act on her
        behalf.

              "Under these circumstances, [the defendant nursing
        home] proved the existence of a valid contract calling for
        arbitration and proved that the contract evidenced a
        transaction affecting interstate commerce. The trial court
        erred in denying the motion to compel arbitration."

49 So. 3d at 180-81. Johnson clearly controls our decision in the present

case.

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     L.D., however, disputes the possibility of apparent authority

attaching to C.C.'s actions because, she contends, "[t]he evidence is clear

that [E.D.] could not make decisions on her own [as of her admission date

and, thus, could not] provide any sort of apparent authority" to C.C.

L.D.'s brief at 27. Contrary to that assertion, we see nothing establishing

either E.D.'s incompetency or that she objected at any time to C.C.'s

having executed the residential agreement on her behalf.

           "Before determining whether [the resident's family
     member] had the apparent authority to execute the
     agreement, the Court must decide whether [the resident], on
     whose behalf the agreement was signed, was mentally
     competent at the time [the family member] signed the
     agreement. [The defendant nursing home] argues that [the
     plaintiff] has not met her burden of proving [the resident's]
     incapacity. Specifically, [the defendant nursing home] argues
     that [the plaintiff] has failed to demonstrate that [the
     resident's] advanced age and dementia resulted in anything
     more than short-term memory loss.

           "In Troy Health & Rehabilitation Center v. McFarland,
     187 So. 3d 1112 (Ala. 2015), this Court discussed the
     enforceability of an arbitration agreement and whether a
     nursing-home resident was mentally competent when he
     executed a durable power of attorney naming his nephew as
     his attorney-in-fact. We find the following reasoning from
     that case to be analogous:

                 " ' "[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
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               comprehend his or her actions. Queen
               v. Belcher, 888 So. 2d 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."

         " 'Yates v. Rathbun, 984 So. 2d 1189, 1195 (Ala. Civ.
         App. 2007).'

    "187 So. 3d at 1119.

          "We held that the presumption is that every person has
    the capacity to understand until the contrary is proven.
    McFarland, 187 So. 3d at 1119 (citing Yates v. Rathbun, 984
    So. 2d 1189, 1195 (Ala. Civ. App. 2007), Thomas v. Neal, 600
    So. 2d 1000, 1001 (Ala. 1992), and Hardee v. Hardee, 265 Ala.
    669, 93 So. 2d 127 (1956)). The Court differentiated between
    the burden of proving permanent incapacity and temporary
    incapacity. Specifically, we held that proof of incapacity

         " ' " ' "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 [incapacity] at
         the very time of the transaction." ' " Wilson v.
         Wehunt, 631 So. 2d 991, 996 (Ala. 1994) (quoting
         Hall v. Britton, 216 Ala. 265, 267, 113 So. 238, 239
         (1927) (emphasis added)).'

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    "McFarland, 187 So. 3d at 1119.

          "Thus, a party seeking to avoid a contract based on the
    defense of incapacity must prove either permanent incapacity
    or contractual incapacity at the very time of contracting. See
    Ex parte Chris Langley Timber & Mgmt., Inc., 923 So. 2d
    1100, 1106 (Ala. 2005). The party seeking to avoid the
    contract bears the burden of proving incapacity to contract by
    a preponderance of the evidence. See Hester v. Hester, 474
    So. 2d 734, 736 (Ala. Civ. App. 1985).

          "This Court recognizes that [the resident's] diagnosis of
    dementia, by itself, does not establish permanent incapacity.
    McFarland, 187 So. 3d at 1120 (citing Ex parte Chris Langley
    Timber, 923 So. 2d at 1106). Although it may be apparent
    that [the resident's] dementia was chronic in nature as
    distinguished from temporary, it is not so apparent that the
    state of [his] dementia constituted 'permanent incapacity' as
    that term is used to describe the mental incapacity necessary
    to justify the avoidance of the arbitration provision. See Ex
    parte Chris Langley Timber, 923 So. 2d at 1106. The Court is
    unable to discern from the medical records whether [the
    resident's] mental-health condition had progressed to the
    level of 'permanent incapacity' by the time he was admitted
    …. [Physician's] notes indicate that [the resident's] dementia
    caused no more than short-term memory loss. … [H]owever,
    the record also indicates that [the resident's] condition was
    'slowly progressive' and that he was able to follow commands
    and sometimes converse with the physician. Thus, this Court
    cannot conclude that [the plaintiff] has overcome her burden
    of proving that [the resident's] condition rose to the level of
    permanent incapacity as that term is used under the law to
    void a contract.

         "The more important question is whether [the plaintiff]
    has overcome her burden of demonstrating contractual
    incapacity ' " ' "at the very time of the transaction." ' " '
    McFarland, 187 So. 3d at 1119 (quoting Wilson v. Wehunt,
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     631 So. 2d 991, 996 (Ala. 1994), quoting in turn Hall v.
     Britton, 216 Ala. 265, 267, 113 So. 238, 239 (1927))."

Stephan v. Millennium Nursing & Rehab Ctr., Inc., 279 So. 3d 532, 539-

41 (Ala. 2018) (footnote omitted; initial emphasis added). Accordingly,

under Alabama law generally, only incompetent, nonsignatory nursing-

home residents lack the capacity to authorize anyone to act on their

behalf and are not bound by arbitration agreements executed by the

resident's representative. See id. See also Kindred Nursing Ctrs. E.,

LLC v. Jones, 201 So. 3d 1146, 1153 (Ala. 2016).

     In the present case, the Brookdale defendants established that an

agreement providing for arbitration exists and that the agreement

affected interstate commerce. See Elizabeth Homes, supra. The burden

shifted to L.D. to counter with evidence demonstrating that arbitration

provision was either invalid or inapplicable to the parties' dispute.

     In her response opposing enforcement of the arbitration provision,

L.D. made only unsupported representations that E.D. was not

competent in 2021. Notably, despite allegedly holding E.D.'s health-care

POA and having "complete access to [E.D.'s] medical and mental health

records," L.D. presented no medical evidence demonstrating E.D.'s legal

incompetency -- or even any explanation of E.D.'s symptoms or anecdotes
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evidencing her purported deteriorated mental state. This contrasts with

Stephan, supra, in which the Court ultimately held that the plaintiff had

adduced sufficient evidence establishing the resident's incompetency,

including affidavit testimony relaying accounts of the resident's

confusion, loss of cognition, and lack of comprehension; medical records

indicating the resident's inability to converse with medical personnel

regarding the circumstances of his care; and evidence indicating the

resident's potential mental impairment following a major surgery. Id. at

541.

       We do note, as L.D. argues, that a diagnosis of dementia, at the very

least, may suggest intervals of mental incompetency that might render a

resident incapable of bestowing authority to act on the resident's behalf

or of ratifying such actions. In the present case, however, the record

contains    no   evidence   demonstrating     anything    other   than   an

unsubstantiated, informal diagnosis that E.D. was suffering from

generalized "dementia and cognitive issues" and a corresponding request

that, following admission to the nursing home, E.D. be housed in the

"memory care" unit as opposed to the "assisted living" portion of the

nursing home. See Troy Health & Rehab. Ctr. v. McFarland, 187 So. 3d

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1112, 1119 (Ala. 2015) (plurality opinion) (" 'The presumption is that

every person is sane, until the contrary is proven.' … Additionally,

' " 'proof 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.' " ' " ( citations omitted)). Cf. TitleMax

of Alabama, Inc. v. Falligant, 328 So. 3d 244, 255 (Ala. 2020) (plurality

opinion) ("[E]vidence indicating that [an individual] suffers from an

undefined mental illness, that she lacks the ability to manage her

financial affairs, and that she did not understand the terms of the

contracts is not sufficient evidence to create a genuine question of fact as

to whether she is permanently incapacitated and, thus, unable to

contract."). Thus, L.D. failed to establish that E.D. did not -- or could not

-- understand that she was, in acquiescing without objection to C.C.'s

actions, bestowing apparent authority.

     Accordingly, because the trial court erred in denying the Brookdale

defendants' request to compel arbitration, we reverse the trial court's

order denying the motion to compel arbitration and remand the case for

further proceedings consistent with this opinion.

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    REVERSED AND REMANDED.

    Parker, C.J., and Bryan, Mendheim, and Mitchell, JJ., concur.

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