Disputing capacity to execute power of attorney

In Citigroup Global Markets, Inc. v. Brown, 261 S.W.3d 394 (Tex. App.—Houston [14th Dist.] 2008, no pet. h.), 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.