Algo-Heyres v. Oxnard Manor - Case Brief

Case Number: B319601
Court: California Court of Appeal, Second Appellate District, Division Six
Date Filed: 2025‑09‑01

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Holding

The court held that Cornelio Heyres lacked the legal capacity to consent to an arbitration agreement, and therefore the agreement is unenforceable; the trial court’s denial of Oxnard Manor’s petition to compel arbitration is affirmed.

Narrative

A senior‑care facility’s attempt to enforce an arbitration clause has been rebuffed by the California Court of Appeal, underscoring the strict capacity requirements that govern contract formation in the probate context. The decision in Algo‑Heyres v. Oxnard Manor clarifies that a resident who suffers a severe post‑stroke cognitive deficit cannot validly waive his right to a jury trial, even when the waiver is embedded in a standard‑issue arbitration agreement.

Procedural backdrop. In 2020, the Ventura County Superior Court denied Oxnard Manor LP’s petition to compel arbitration of claims brought by the estate of Cornelio Heyres, a resident who died in 2019 after a prolonged stay at the skilled‑nursing facility. The plaintiffs—Cornelio’s surviving spouse and son—asserted causes of action for elder abuse, wrongful death, statutory violations of resident rights, and negligent infliction of emotional distress. Oxnard Manor appealed, arguing that the trial court erred in placing the burden of proof on the facility to demonstrate the resident’s capacity to contract.

Factual matrix. Cornelio suffered a massive ischemic stroke on August 18, 2009, followed by two weeks of acute hospitalization and a month of inpatient rehabilitation at St. John’s Regional Medical Center. Four days after admission to Oxnard Manor, on October 7, 2009, he signed a five‑page arbitration agreement that waived his right to a jury trial for any claims arising from the facility’s services. At the time of signing, multiple medical assessments documented profound deficits: an occupational therapist rated his functional independence in comprehension, memory, and problem‑solving at the lowest level (requiring total assistance); a speech‑language pathologist described his cognitive insight as “poor” and noted total reliance on assistance for executive tasks; neurologists reported that he could answer simple yes/no questions but could not follow two‑step commands or engage in abstract reasoning. The resident’s son, Wernro Heyres, testified that his father “struggled with the simplest of speech,” could not recognize family members, and required repeated prompts to answer even basic questions.

Oxnard Manor countered with nursing notes and physician worksheets from the day of signing that checked boxes for “alert,” “oriented,” and “capacity to understand and make decisions.” The court found these entries “bare assertions” lacking corroborating detail, especially given the illegibility of handwritten notes and the absence of expert analysis.

Legal issues. The appeal hinged on two intertwined questions: (1) whether the resident possessed the requisite capacity under Probate Code §§ 810‑812 (and the complementary Civil Code § 39) to enter into a contract; and (2) whether the facility bore the burden of proving such capacity on a petition to compel arbitration.

Court’s analysis. The appellate court reiterated California’s strong public policy favoring arbitration but emphasized that enforcement is predicated on mutual consent, a core contract doctrine. Under Probate Code § 810, a person is presumed competent, but the presumption is rebuttable when evidence shows a “deficit in one or more mental functions” that “significantly impairs” the ability to understand the nature and consequences of the act. Sections 811 and 812 enumerate the functional domains—alertness, information processing, thought processes, and mood regulation—required for contractual capacity. The medical record evidence satisfied these thresholds: Cornelio’s scores indicated inability to manage a checking account, severe aphasia, and failure to follow multi‑step commands, all of which constitute substantial impairment of information processing and executive function.

The court affirmed that the burden of proof in a petition to compel arbitration lies with the party seeking enforcement, but that burden is satisfied only by a showing of capacity. The facility’s reliance on unchecked boxes could not overcome the substantial evidence of incapacity presented by the rehabilitation team and the son’s declaration. Citing Avila v. Southern California Specialty Care and Gallo v. Wood Ranch USA, the court stressed that capacity determinations are fact‑specific and must be supported by expert testimony when the issue is contested.

Conclusion and impact. By affirming the trial court’s denial, the appellate panel reinforced that arbitration clauses cannot be used to sidestep statutory protections for vulnerable elders. The decision signals to health‑care providers and senior‑living operators that capacity assessments must be thorough, contemporaneous, and documented by qualified professionals before obtaining any waiver of procedural rights. Unresolved questions remain regarding the precise evidentiary standard for “significant impairment” in borderline cases and whether facilities might mitigate liability by obtaining pre‑admission capacity evaluations.

Referenced Statutes and Doctrines

Probate Code §§ 810‑812 – legal capacity to contract; definitions of mental deficits and required functional abilities.
Civil Code § 39(b) – rebuttable presumption of capacity concerning financial management and susceptibility to undue influence.
Code of Civil Procedure § 1294(a) – petition to compel arbitration.
Public policy favoring arbitration – Avila v. Southern California Specialty Care, Inc., 20 Cal.App.5th 835 (2018).
Contract formation principles – Gallo v. Wood Ranch USA, Inc., 81 Cal.App.5th 621 (2022).
Standard of review – substantial evidence; Fabian v. Renovate America, Inc., 42 Cal.App.5th 1062 (2019).
Capacity case law – In re Marriage of Greenway, 217 Cal.App.4th 628 (2013); Smalley v. Baker, 262 Cal.App.2d 824 (1968).
Elder‑care liability – statutory resident rights under California Health & Safety Code (not expressly cited but underlying the claims).