Escareno v. Kindred Nursing Centers West LLC – 1/26/2016

February 2, 2016

Arizona Court of Appeals Division Two holds that providing assistance to an elderly parent, without more, does not establish an agency relationship sufficient to allow the child to sign a contract on behalf of the parent.

This appeal involved an action brought by an adult son on behalf of his deceased mother’s estate.  The son admitted his mother, who suffered from dementia and other cognitive impairments, to an assisted-living facility.  The assisted-living facility presented a contract containing an arbitration provision.  The mother did not sign it, but the son signed on her behalf.  The mother passed away while in the care of the assisted-living facility and the son brought an action against the assisted-living facility in his capacity as personal representative of his mother’s estate and on behalf of his mother’s statutory beneficiaries.  The assisted-living facility moved to dismiss and compel arbitration based on the agreement the son had signed. 

The son claimed that his mother had never agreed to arbitrate disputes and that his signature did not bind his mother (or her estate) because he was not her agent.  The assisted-living facility claimed that he had authority to act on his mother’s behalf based on his “custom” of acting on her behalf.   The Court of Appeals held that the son’s signature could not bind the mother or her estate.

Before his mother’s death, the son had assisted his mother by transferring money from her bank account to pay her bills, taking her to medical appointments, and completing medical paperwork on her behalf.  The Court of Appeals found that the son’s pattern of assisting his mother with her affairs did not indicate her consent to form an agency relationship with her son, and she may not have had the capacity to grant that authority.  Even assuming the mother could create an agency relationship, the Court found that the types of actions taken by the son did not establish a “manifestation of assent” by the mother to a broad agency relationship which would have allowed the son to sign an ADR agreement on her behalf.  Because there was no evidence that the son had actual authority to sign the ADR agreement on his mother’s behalf, the Court held that the mother’s estate was not bound by the agreement.  

Presiding Judge Vasquez authored the opinion of the Court, which was joined by Chief Judge Eckerstrom and Judge Miller.