Mental Incompetence. Dorothy Drury suffered from dementia and chronic confusion.
ID: 1099168 • Letter: M
Question
Mental Incompetence. Dorothy Drury suffered from
dementia and chronic confusion. When she became unable
to manage her own affairs, including decisions about medical
and ?nancial matters, her son Eddie arranged for her to move
to an assisted living facility. During admission, she signed a
residency agreement, which included an arbitration clause.
After she sustained injuries in a fall at the facility, a suit was
?led to recover damages. The facility asked the court to com-
pel arbitration. Was Dorothy bound to the residency agree-
ment? Discuss. [Drury v. Assisted Living Concepts, Inc., 245
Or.App. 217, 262 P.3d 1162 (2011)] (See page 230.)
Explanation / Answer
A state appellate court held that a resident of an assisted living facility could not be bound by an arbitration clause as a third party beneficiary of a Residency Agreement signed by her son, when the resident suffered from dementia and the son was not her guardian. The court explicitly rejected the holding of the Fifth Circuit as well as two other state appellate courts that had compelled arbitration on the basis that the resident is a third party beneficiary of the contract
When Dorothy Drury entered the assisted living facility, her mental functioning was severely impaired by dementia. Her son signed a Residency Agreement containing an arbitration clause. Approximately a year later, Dorothy died from injuries sustained in a fall at the facility. After the decedent