Trusts and Estates

Algo-Heyres v. Oxnard Manor LP

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Cite as B319601
Filed February 28, 2023
Second District, Div. Six

By Jaime B. Herren
Holland & Knight LLP

Headnote: Contractual Capacity – Arbitration Agreement

Summary: Arbitration agreement was not valid and enforceable against successors-in-interest to a decedent who was without capacity to consent to arbitration when he executed the contract. 

Oxnard Manor skilled nursing facility sought to enforce an arbitration clause when successors-in-interest to deceased resident Cornelio brought an action for wrongful death and elder abuse, among other claims.  Based on medical records, the trial court found Cornelio lacked capacity to consent to arbitration and denied Oxnard’s petition to compel arbitration.

The appellate court affirmed.  Although Oxnard argued that it was not its burden to prove capacity, it was Oxnard’s burden to prove a valid arbitration agreement.  The presumption that all persons have capacity is rebuttable and mental capacity is a fact specific inquiry.  Substantial evidence established lack of capacity, including failure to recognize his spouse and grandchild, inability to understand speech, and ability to respond only to simple questions or commands.  Further, the agreement was a relatively complex five page contract that included waiving the constitutional right to trial.  Because substantial evidence supported the conclusion that Cornelio was not competent, Oxnard did not meet its burden to establish a valid arbitration agreement. 

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