Professional Negligence Law Reporter

A federal district court held that arbitration could not be enforced in a dispute where the underlying arbitration agreement was signed by an authorized representative of a then-incompetent nursing home resident.

Patricia Ann Harris, who was under county protective services due to her severe dementia, was admitted to North Hill Nursing and Rehabilitation Center. At the time of the admission, her daughter, Stephanie Amos—who did not have guardianship over Harris—signed an arbitration agreement as her mother’s authorized representative. Three years later, Amos sued the nursing home and related entities, alleging negligence and malpractice. The defense moved to stay or dismiss the case pending arbitration.

Denying the motion, the district court noted that although, generally, an authorized representative’s signature is sufficient to bind a third party to an arbitration agreement, nursing home residents who are incompetent cannot be bound by others absent sufficient legal authority. The court concluded that Amos had lacked the requisite authority in that she had no durable power of attorney when she executed the agreement and was not her mother’s guardian. The court rejected the defense argument that Amos had apparent authority to sign the arbitration agreement. For apparent authority to attach, the court held, the principal must have the capacity to consent to such authority, something Harris lacked at the time of her admission. Thus, the court concluded that Amos had acted as her mother’s responsible party and did not have sufficient authority to bind her to an arbitration agreement.

Citation: Amos v. North Hill Nursing & Rehab. Ctr., 2018 WL 4909956 (N.D. Ala. Oct. 10, 2018).