Citigroup Global Markets, Inc. v. Brown, 261 S.W.3d 394 (Tex. App.—Houston [14th Dist.] 2008, no pet.).
Decedent signed a power of attorney naming his son as his agent.
Agent open an account with Brokerage which contained an arbitration
provision. After Decedent’s death, Administrators sued Brokerage. When
Brokerage moved to compel arbitration, Administrators claimed that
Decedent lacked capacity at the time he signed the power of attorney and
thus Administrators were not bound by the arbitration provision. The
trial court agreed.
The appellate court granted Brokerage’s request for mandamus relief. The
court explained that Administrators did not present evidence to show
Decedent lacked capacity at the time he signed the power of attorney.
Thus, the trial court abused its discretion by denying the motion to
compel arbitration.
Moral: A party attempting to show that the principal lacked capacity at
the time the principal signed a power of attorney must present evidence
to show that the principal did not have capacity.