Drury v. Assisted Living Concepts, Inc.

Children will not be contractually bound by arbitration provisions in contracts to which their parents are third-party beneficiaries if the parent in question did not assent to the provision because of lack of capacity, and the parent’s actions do not bind him or her to the agreement.

Drury’s mother died from injuries sustained in a fall while living at an Assisted Living Concepts, Inc. (ALC) assisted living home. Drury had signed a Residency Agreement when his mother moved into the home, though he was not then his mother’s guardian, conservator, personal representative, or trustee and he did not have power of attorney for her. Drury’s mother suffered from dementia, chronic confusion and memory impairment. The Residency Agreement included an arbitration provision. Drury sued ALC for wrongful death. ALC moved to compel arbitration, but the trial court denied the motion. On appeal, ALC argued that the agreement bound Drury because his mother was a third-party beneficiary of the Agreement. The Court of Appeals agreed with Drury that he was not bound by the Agreement because his mother never assented since she lacked capacity to assent to the contract and her actions did not bind her to the Agreement. Affirmed.