                                                                          ACCEPTED
                                                                      03-16-00514-CV
                                                                            12930167
                                                           THIRD COURT OF APPEALS
                                                                      AUSTIN, TEXAS
                                                                 9/27/2016 3:15:20 PM
                                                                    JEFFREY D. KYLE
                                                                               CLERK
                  NO. 03-16-00514-CV

                                                     FILED IN
           IN THE COURT OF APPEALS            3rd COURT OF APPEALS
                                                  AUSTIN, TEXAS
   FOR THE THIRD JUDICIAL DISTRICT OF         TEXAS
                                              9/27/2016 3:15:20 PM
                  AT AUSTIN                     JEFFREY D. KYLE
                                                      Clerk


  OAK CREST MANOR NURSING HOME, LLC, DAY LIFE
CORPORATION, TERRY ROWAN, NORMA ELEMENTO, AND
                GROVER MOORE,
                   Appellants,

                           v.

        PEGGY BARBA, AS GUARDIAN OF S.F.,
                   Appellee.


            On Appeal from the Probate Court,
     Travis County, Texas, Cause No. C-1-PB-16-00776


                 BRIEF OF APPELLEE


                         Jeff Diamant (Of Counsel)
                         State Bar No. 00795319
                         John C. Ramsey
                         State Bar No. 24027762
                         Joel Pardo
                         State Bar No. 24083617
                         RAMSEY LAW GROUP, P.C.
                         7521 Westview Drive
                         Houston, TX 77055
                         Phone: (713) 489-7577
                         Fax: (888) 858-1452
                         Email: john@ramseylawpc.com
                         Email: jeff@ramseylawpc.com
                         Email: joel@ramseylawpc.com
                    Jacques G. Balette
                    MARKS, BALETTE, GEISSEL &
                    YOUNG, PLLC
                    State Bar No. 00798004
                    10000 Memorial Drive, Suite 760
                    Houston, Texas 77024
                    Phone: (713) 681-3070
                    Fax: (713) 681-2811
                    Email: JacquesB@marksfirm.com




BRIEF OF APPELLEE                                     PAGE II
  	
                                        TABLE OF CONTENTS

  RECORD AND APPENDIX REFERENCES .................................................... 2

  STATEMENT REGARDING ORAL ARGUMENT ....................................... 2

  INTRODUCTION ................................................................................................ 2

  ISSUES PRESENTED........................................................................................... 3

  STATEMENT OF FACTS .................................................................................... 4

  SUMMARY OF THE ARGUMENT .................................................................. 8

  ARGUMENT........................................................................................................ 10

      I.       THE NURSING HOME ADMISSION AGREEMENT IS VOID
               AS APPELLEE LACKED CAPACITY TO CONTRACT. .............. 10

               A. Shawn Frank lacked capacity to contract before, during and
                  after his execution of the Admission Agreement. .................... 10

               B. Appellants’ own contemporaneous records establish Shawn
                  Frank lacked capacity upon admission. ..................................... 12

               C. Appellee Established Lack of Capacity to Contract. ................ 14

                   1. Expert David E. Mansfield, M.D. establishes Shawn Frank
                      as totally incapacitated on the date and time of the
                      execution of the agreement at issue. ........................................ 15

                   2. The affidavit of Peggy Barba, Shawn Frank’s mother, also
                      establishes that he was totally incapacitated on the date
                      and time the agreement at issue was executed. ..................... 17

               D. Appellants’ “lucid interval” argument fails. ............................ 18

                   1. The Affidavit of Terry Rowan must be disregarded and
                      certainly does not support a “lucid interval” argument. ..... 19

BRIEF OF APPELLEE                                                                                       PAGE III
  	
                   2. Appellants’ argument that other records generated by them
                      show “lucid interval” also fail to substantiate their claim
                      and are not qualified opinions or observations. ................... 22

               E. The evidence establishes Shawn Frank lacked capacity to
                  contract on the date and time of his execution of the
                  agreement. ........................................................................................ 23

      II.      THERE IS NO WAIVER OF ANY “RIGHT TO VOID” THE
               ADMISSION AGREEMENT, NOR IS APPELLEE SOMEHOW
               ESTOPPED FROM ESTABLISHING IT IS VOID, NOR BOUND
               BY THE DIRECT-BENEFITS ESTOPPEL THEORY. .................... 24

               A. Appellants’ “void v. voidable” argument is not valid. ........... 25

               B. An incapacitated person can no more disaffirm an agreement
                  than bind himself to it in the first place. ................................... 25

               C. Appellee’s previous pleading of breach of contract does not
                  create an estoppel as it is a permissive “alternative theory”,
                  subsequently dropped by Appellee. .......................................... 26

               D. The Direct-Benefits Estoppel argument does not apply......... 27

      III.     THE ARBITRATION AGREEMENT IS VOID AND FEDERAL
               PREEMPTION OF STATE LAW BY THE FEDERAL
               ARBITRATION ACT ARGUMENTS FAIL.................................... 28

               A. Texas Civil Practice and Remedies Code § 74.451 bars
                  enforcement of this arbitration provision. ................................ 29

               B. The FAA does not preempt Chapter 74 due to a lack of
                  interstate commerce. ...................................................................... 30

               C. As a matter of policy, validating Appellants’ position would
                  destroy state’s rights to enforce state law on many issues. .... 34
  	
  CONCLUSION .................................................................................................... 35




BRIEF OF APPELLEE                                                                                          PAGE IV
  	
                                       TABLE OF AUTHORITIES

    CASES	

    Buckeye Check Cashing v. Cardegna,
     546 U.S. 440, 448 (2005) .................................................................................... 25

    The Fredricksburg Care Company, L.P. v. Perez,
     461 S.W.3d 513 (Tex. 2015), reh’g denied (June 26, 2015) .............................. 30
    	
    Gaston v. Copeland,
     335 S.W.2d 406 (Tex. Civ. App.—Amarillo 1960, writ ref’d n.r.e.) ............ 25

    Harrell v. Hochderffer,
     345 S.W.3d 652 (Tex. App.—Austin 2011, no pet) ................................. 20, 22

    In re December Nine Co., Ltd.
      225 S.W.3d 693 (Tex. App.—El Paso, no pet) ............................................... 32

    In re Estate of Gray,
      279 S.W.2d 936 (Tex. App.—El Paso 1955, writ ref’d n.r.e.) ........... 16, 21, 22

    In re L & L Kempwood Assoc, L.P.,
      9 S.W.3d 125 (Tex. 1999) .................................................................................. 30

    In re Morgan Stanley & Co,
      293 S.W.3d 182 (Tex. 2009) .............................................................................. 25

    In re Nexion Health at Humble, Inc.
      173 S.W.3d 67 (Tex. 2005) ................................................................................ 31

    In re Tenant Healthcare, Ltd.,
      84 S.W.3d 760 (Tex. App.—Houston [1st Dist.] 2002, no pet.) ................... 32

    J.M. Davidson Inc. v. Webster,
      128 S.W.3d 223 (Tex. 2003) .............................................................................. 11

    Oram v. General American Oil Company of Texas,
     513 S.W.2d 533 (Tex. 1974) .............................................................................. 26



BRIEF OF APPELLEE                                                                                        PAGE V
    	
	
  Prima Paint Corp. v. Flood & Conklin Mfg.,
    388 U.S. 395 (1967) ............................................................................................ 11

  Regency Advantage L.P. v. Bingo Idea-Watauga, Inc.,
   936 S.W.2d 275 (Tex. 1996) .............................................................................. 27

  Rent-A-Center West, Inc. v. Jackson,
   130 S.Ct. 2772, 2778 (2010) ............................................................................... 11

  United States v. Girod,
   646 F.3d 304 (5th Cir. 2011).............................................................................. 33

  Zimmerman v. First American Title Ins.,
    790 S.W.2d 698 (Tex. App.—Tyler 1990, writ denied)................................. 27

  STATUTES	

  TEX. CIV. PRAC. & REM. CODE § 74.451 ............................................................... 29

  TEX. R. CIV. P. 48 ................................................................................................... 27

  TEXAS GOVERNMENT CODE § 531.021 .................................................................. 31

  	




BRIEF OF APPELLEE                                                                                            PAGE VI
  	
                            NO. 03-16-00514-CV


                   IN THE COURT OF APPEALS
           FOR THE THIRD JUDICIAL DISTRICT OF TEXAS
                          AT AUSTIN


       OAK CREST MANOR NURSING HOME, LLC, DAY LIFE
     CORPORATION, TERRY ROWAN, NORMA ELEMENTO, AND
                     GROVER MOORE,
                        Appellants,

                                     v.

                 PEGGY BARBA, AS GUARDIAN OF S.F.,
                            Appellee.


                    On Appeal from the Probate Court,
             Travis County, Texas, Cause No. C-1-PB-16-00776


                            BRIEF OF APPELLEE



TO THE HONORABLE THIRD COURT OF APPEALS:

     Appellee Peggy Barba, As Guardian of S.F., files this Brief of Appellee,

and submits this Brief in response to the Brief of Appellant in support of

their interlocutory appeal of the Probate Court’s decision to deny

Appellants’ Motion to Compel Arbitration, and would respectfully show

this Court the following:
                    RECORD AND APPENDIX REFERENCES
  	
         References to the Clerk’s Record and Reporter’s Record in this Brief

  are to page numbers. Clerk’s Record references are abbreviated by page

  number as “(CR __).” Reporter’s Record references are abbreviated by page

  number as “(RR __).” Appendix references to the Appendix attached to this

  document are abbreviated as “(Appellee App. __).” Appendix references to

  the Appendix attached to Appellants’ Appendix are abbreviated as “(App.

  __),” to conform to Appellants’ designation and to avoid confusion.

                STATEMENT REGARDING ORAL ARGUMENT
  	
         Appellants have requested oral argument. Appellee has no objection

  to oral argument if the Court deems it necessary. If oral argument is to take

  place, Appellee requests to have the opportunity to participate in same.

                               INTRODUCTION
  	
         Appellee is an incapacitated, schizophrenic person that signed a 15-

  page nursing home admission agreement upon his involuntary admission to

  the home. This agreement contained an arbitration provision. Appellant

  seeks to enforce this agreement. Appellee contends that this admission

  agreement is void as the Appellee lacked capacity to enter into such

  agreement. As the law on this issue is unquestionably clear, if this Court

  agrees that Appellee lacked capacity to contract, this admission agreement

  is void, there is no arbitration provision to enforce, and therefore, there are

BRIEF OF APPELLEE                                                       PAGE 2
  	
  no other issues to address in this appeal. Simply, if Appellee lacked capacity,

  every other issue presented by Appellants is moot.

         If, however, this Court finds that Appellee had capacity to enter into

  this agreement, stripping him of his constitutional right to trial by jury, the

  Court must address the applicability of Federal preemption, which would

  cause the Federal Arbitration Act to govern the enforceability of this

  particular arbitration provision. To reach a finding of Federal preemption,

  Appellants seek to have this Court find that interstate commerce is

  implicated in this situation involving a Texas resident and a Texas nursing

  home, solely because the Texas resident received Texas Medicaid benefits.

  This is a question of first impression.

         If this Court finds that Appellee had capacity, and that Federal

  preemption does not apply, the arbitration provision at issue can not be

  enforced as it is in clear violation of Texas’ laws regarding arbitration

  provisions in a health care liability context.

                              ISSUES PRESENTED
  	
         Issue No. 1: Did Shawn Frank have capacity to execute the admission

  agreement at issue? Shawn Frank lacked capacity to contract when

  Appellants had him sign the 15-page contract waiving his constitutional

  rights. He lacked such capacity prior and following, continuously, as well,

  and this fact was known to Appellants upon Appellee’s admission to


BRIEF OF APPELLEE                                                       PAGE 3
  	
  Appellants’ nursing home. As such, there is no enforceable agreement, let

  alone an enforceable arbitration provision.

         Issue No. 2: If Shawn Frank had capacity to execute the admission

  agreement at issue, does Federal preemption by the Federal Arbitration Act

  preempt the Texas’ law statute that would render the arbitration provision

  in the admission agreement void for failure to comply with Texas law

  requisites for enforceable arbitration provisions in a health care context? The

  question of Federal preemption by the Federal Arbitration Act is never at

  issue as the entire agreement is void due to Shawn Frank’s lack of capacity

  to contract. But even if it were, there is no implication of intestate commerce,

  precluding Federal preemption.

                            STATEMENT OF FACTS
  	
         Shawn Frank is a mentally incapacitated adult, so much so that he was

  found totally incapacitated by the Probate Court for Travis County twice.

  (CR 117). He has a lengthy history of serious mental illness and total

  incapacitation. (CR 203, Appellee App A; CR 198, Appellee App B). Shawn

  Frank had been at Seton Shoal Creek Hospital for a month prior to his

  admission to Oakcrest Manor due to a psychotic event where he attacked an

  outpatient social worker after hearing voices and having delusions. He was

  put into Oakcrest Manor by a case worker upon his discharge from Shoal

  Creek and transfer to Appellants’ facility, Oakcrest Manor, contrary to


BRIEF OF APPELLEE                                                        PAGE 4
  	
  Appellants’ assertion that he “voluntarily” checked himself in as if he

  walked in, put down a credit card, and got a hotel room for the night. (CR

  198, Appellee App B).

         Upon his admission to Oakcrest Manor, staff of Oakcrest Manor made

  no less than 6 independent records at the time of his admission noting Mr.

  Frank’s diagnosis of a history of mental illness including, but not limited to:

                    •   Bipolar Affec
                    •   Schizoaffective Disorder (Schizophrenia)
                    •   Neurotic Disorder
                    •   Depression

  Appellants’ records upon admission indicate “Hx of multiple psych

  admissions”, “25(+) yr Hx of MI [mental illness}”, and “suicidal attempts.”

  (CR 200-06, Appellee App A). Nevertheless, the Administrator of Oakcrest

  Manor, Terry Rowan, had the totally incapacitated Shawn Frank execute the

  15-page “Oakcrest Manor Nursing Home Admission Agreement”

  containing a waiver of his Constitutional right to trial by jury by way of an

  arbitration provision on page 12 that does not, in any way, comply with the

  Texas Civil Practice and Remedies Code’s ban on and requirements for

  arbitration provisions in the health care field. (CR 106, App 3). The only

  signatures on the “contract” at issue are Plaintiff Shawn Frank, an

  incapacitated person, and Oakcrest Manor’s Administrator. Id.

         On January 13, 2014, Peggy Barba, Shawn Frank’s current guardian,

  filed an application to be the guardian of Shawn Frank based on his complete

BRIEF OF APPELLEE                                                       PAGE 5
  	
  lack of capacity. (CR 110). Around that same time, she notified Appellants

  that Shawn Frank had called and warned of his intent to elope and jump off

  a bridge. After Appellee provided warning of his intent to elope and attempt

  suicide by jumping off a bridge,1 Oakcrest Manor took no action, and

  allowed Shawn Frank to do that very thing about 1-day later, causing serious

  permanent injuries.

         A physician appointed by the Probate Court, Dr. Roger McRoberts,

  examined Shawn Frank approximately 6 weeks after his admission to

  Oakcrest Manor and then filed with the Probate Court a Physician’s

  Certificate of Medical Examination wherein he found:

         • Mental Diagnosis: Schizophrenia (p.1)

         • Ability to Make Reasonable Decisions (p.2):

                    NO – Make complex business, managerial, and financial
                         decisions

                    NO – Determine the proposed ward’s own residence

                    NO – Attend to instrumental activities of daily living

                    NO – Consent to medical and dental treatment

                    NO – Consent to psychological and psychiatric treatment

         • Evaluation of Capacity (p.4)



  																																																								
  1
     Oakcrest was well aware of Shawn Frank’s history of elopement and suicide attempts.
  (CR 147, 207, Appellee App A).

BRIEF OF APPELLEE                                                              PAGE 6
  	
                    YES – “Based upon my last examination and observations of
                         the Proposed Ward, it is my opinion that the Proposed
                         Ward is incapacitated according to the legal
                         definition… [emphasis in original]

         • If you indicated that the Proposed Ward is incapacitated, indicate
           the level of incapacity:

                    TOTAL – The Proposed Ward is totally without capacity (1)
                           to care for himself and (2) to manage his or her
                           property.

  (CR 113-16, Appellee App C). In fact, Dr. McRoberts’ findings were so

  significant, he also found and indicated that Shawn Frank would NOT even

  be able to attend, understand and participate in his own guardianship

  hearing and recommended that he NOT attend such hearing. Id.

         Nevertheless, Appellants seek to enforce this agreement and strip a

  totally incapacitated person of his Constitutional right to trial by jury.

         In addition to the evidence above, Appellee also presented testimony

  from Dr. David Mansfield, a qualified physician in this area attesting to the

  fact that Shawn Frank was totally incapacitated on the date and time of his

  execution of the agreement at issue, and his guardian/mother, who not only

  repeated this fact, but further attested that Shawn Frank had been in the

  same condition for nearly 2 decades prior. (CR 198-99, Appellee App B). In

  stark contrast, Appellants contend that Shawn Frank had a “lucid interval”

  on the day of his admission, based on non-expert impressions from the

  nursing home administrator, Terry Rowan, who claims Appellee “seemed


BRIEF OF APPELLEE                                                         PAGE 7
  	
  fine,” (CR 131), and vague nurse’s notes that do not even attempt to claim

  Shawn Frank had capacity on their face. (CR 201, App 5; CR 203, App 7).

         Appellants seek a finding from this Court that Shawn Frank had a

  “lucid interval” in an attempt to make the agreement enforceable, then seek

  this Court to address a question of first impression and find that because

  Shawn Frank received Medicaid benefits, interstate commerce is affected

  and, therefore, the Federal Arbitration Act preempts the Texas law that

  would otherwise make this arbitration agreement unenforceable as a matter

  of law, assuming Shawn Frank had capacity in the first place.

                     SUMMARY OF THE ARGUMENT
  	
         The clear evidence establishes that Shawn Frank was totally

  incapacitated by way of his extensive and severe mental illness, which the

  record demonstrates he had for about two decades prior to his admission to

  Oakcrest Manor. This was further supported by the Court-appointed

  physician who declared him totally incapacitated approximately 6-weeks

  after Mr. Frank’s admission, yet Appellants characterize to this Court Mr.

  Frank’s incapacity as if he was just fine on the date of his admission, yet

  suddenly contracted schizophrenia and neurotic disorder during the next 6

  weeks as if he caught the flu. Their only real evidence is that Terry Rowan,

  the Administrator, not a health care professional, said he “seemed fine.”




BRIEF OF APPELLEE                                                     PAGE 8
  	
         No matter what position Appellants take regarding Federal

  preemption or the Federal Arbitration Act, no matter what case or statutory

  authority they present, Texas law is clear that any presumption favoring

  arbitration arises only after the party seeking to compel arbitration proves

  that a valid arbitration provision exists. In other words, if there is no valid

  contract, the arbitration provision and the relevant laws governing just do

  not matter. Appellants simply cannot jump this hurdle.

         The undeniable facts are:

                1. Shawn Frank was incapacitated on December 13,
                   2013 (the date of his admission to Oakcrest
                   Manor), suffering from the same mental illnesses
                   that he still had on January 30, 2014, and had for
                   at least 15 years prior; and

                2. Appellants knew on December 13, 2013 (the date
                   of Plaintiff’s admission) that Shawn Frank was
                   incapacitated.

  This was the basis for the Probate Court’s decision to deny Appellants’

  request to compel arbitration.

         Assuming this Court finds that Shawn Frank did have the capacity to

  contract, Appellants seek a ruling of Federal Arbitration Act preemption

  because the arbitration provision forced on this incapacitated Plaintiff does

  not comply with Texas state law, but may possibly comply with the FAA’s

  more lax standard. Appellants’ arguments are fatally flawed for the

  following reasons:


BRIEF OF APPELLEE                                                       PAGE 9
  	
         1) Shawn Frank was, is and continues to be an incapacitated person
            (as deemed by the Probate Court), clearly lacking capacity to enter
            into the “contract” and voiding the agreement containing the at-
            issue arbitration provision;

         2) Texas Civil Practices and Remedies Code § 74.451 clearly bars
            arbitration provisions in Health Care Liability Claims other than in
            limited circumstances, which do not exist in this case;

         3) The Federal Arbitration Act does not preempt the above-referenced
            Texas statute due to a lack of interstate commerce implications; and

         4) Public policy mandates rejection of Appellants’ arguments as
            accepting same would have catastrophic results on not only health
            care liability law, but on contract law and state’s rights in general.

         The analysis of this case is, therefore, did Shawn Frank have capacity

  to enter into this agreement? If no, there is no arbitration and no other issues

  are reached. If yes, does Federal preemption apply? If no, the arbitration

  agreement at issue is unenforceable and there is no arbitration. If yes, must

  this Court compel arbitration?

                                   ARGUMENT
  	
  I.     THE NURSING HOME ADMISSION AGREEMENT IS VOID AS
         APPELLEE LACKED CAPACITY TO CONTRACT.

         A.     Shawn Frank lacked capacity to contract before, during and
                after his execution of the Admission Agreement.

         Shawn Frank, a diagnosed schizophrenic, is and was totally

  incapacitated. This fact was substantiated by the qualified physician expert

  who examined Shawn Frank for the Probate Court (CR 113-16, Appellee App

  C), and then further ratified by this Court when this Court granted


BRIEF OF APPELLEE                                                        PAGE 10
  	
  guardianship to Peggy Barba, Shawn Frank’s mother. (CR 117). The Probate

  Court stated in its order “that Shawn Frank continues to be an incapacitated

  person and that he no longer has capacity to manage his property.” Id.

         It is fundamental to contract law that a party must have capacity to

  contract to form a valid and binding agreement. Neither arbitration

  provisions, nor the Federal Arbitration Act (FAA), are immune from basic

  principles of contract formation. In Rent-A-Center West, Inc. v. Jackson, the

  United States Supreme Court (citing an earlier of its opinions) stated:

                “To immunize an arbitration agreement from
                judicial challenge on the ground of fraud in the
                inducement would be to elevate it over other forms
                of contract,”

  130 S.Ct. 2772, 2778 (2010) (citing Prima Paint Corp. v. Flood & Conklin Mfg.

  388 U.S. 395 (1967)). In so doing, the Supreme Court clearly delineates that

  challenges to the validity of the entire agreement are issues for state law, not

  that of an arbitrator.

         The Texas Supreme Court has remained consistent with the U.S.

  Supreme Court in noting that the strong presumption favoring arbitration

  arises only after the party seeking to compel arbitration proves that a valid

  arbitration provision exists. J.M. Davidson Inc. v. Webster, 128 S.W.3d 223,

  227 (Tex. 2003). Thus, a party seeking to compel arbitration must first show

  that the agreement itself meets all requisite contract elements. Id. There is not



BRIEF OF APPELLEE                                                        PAGE 11
  	
  a state in this country that fails to require capacity to contract as a

  fundamental prerequisite of a contract.

         As Shawn Frank is, was, and continues to be totally incapacitated,

  Frank could not form a valid contract with Oakcrest Manor, and certainly

  not a valid and binding agreement to arbitrate, which according to Dr.

  McRoberts, Frank could not have understood. (CR 113-16, Appellee App B).

  As such, Appellants’ Motion to Compel Arbitration, centered around a 15-

  page contract made between a nursing home and a judicially-adjudicated

  incompetent person, was properly denied by the lower Court.

         B.     Appellants’ own contemporaneous records establish Shawn
                Frank lacked capacity upon admission.

         Appellants’ own admission records establish Shawn Frank was

  incapacitated at the time of admission. The records of Oakcrest Manor

  demonstrate that Appellee was admitted on December 13, 2013 at or around

  3:00pm. Oakcrest Manor itself generated the following records, most of

  them made immediately upon admission (same day, and often within the

  first hour after admission), all of which demonstrate clearly Appellee’s lack

  of capacity at the date and time of his admission:

         1. Oakcrest Manor Face Sheet, made by Oakcrest Manor on December
            13, 2013 at 4:12pm, delineating under “Current Dx” that Frank had:


                          1. 296.52 Bipolar affec, Depressive
                          2. 295.40 Ac Schizophrenia
                          3. 300.9 Neurotic Disorder

BRIEF OF APPELLEE                                                     PAGE 12
  	
            (CR 200, Appellee App A).

            Oakcrest Manor Resident - Data Collection Status Upon Admission,
            made by J. Chudleigh (Attending Physician) on December 13, 2013
            at 3:10pm showing a diagnosis of “Bipolar, Depression,
            Schizophrenia. (CR 201, Appellee App A).

         2. Oakcrest Manor Nursing Home Discharge Summary, created on
            January 15, 2014, noting that Frank’s admission to Oakcrest was on
            December 13, 2013 and his “admission diagnosis(es)” were “Bipolar
            Affec. Depr-mod., Schizophrenia, Neurotic Disorder”. (CR 202,
            Appellee App A).

         3. Oakcrest Manor Nurse’s Notes, created upon admission on
            December 13, 2013 stated:

                    3pm adm. From Shoal Creek 40 yr old
                    schiz[ophrenic] w/ male. Long Hx of mental
                    illness. Suicidal…jumped from a bridge in Nov.
                    Has a long Hx of violence.

            (CR 203, Appellee App A).

         4. Oakcrest Manor All Disciplines to Use Progress Notes, created only
            4 days later on December 17, 2013 stated:

                    First OCNH [Oakcrest Nursing Home] admission
                    for this 40 yo single male who came to NH from
                    SCH [Shoal Creek Hospital]. He has a long Hx of MI
                    & multiple psych stops. His MI started in teen years &
                    was worsened by drug use. Res jumped off bridge
                    on 6/12 . . . Since then he has been in/out of psych
                    hosp . . . He denies MI.

            (CR 204, Appellee App A).

         5. Oakcrest Manor Social Services Assessment, created on December
            17, 2013, recites all of the following facts about Shawn Frank:

                            1. Hx of multiple psych admissions
                            2. Schizophrenic

BRIEF OF APPELLEE                                                            PAGE 13
  	
                           3. Long Hx of MI [mental illness]
                           4. Reports of suicidal attempts
                           5. 25 (+)- yr Hx of MI with multiple psych st.

              (CR 205, Appellee App A).

         Each of these records were created by the Appellants, and most at the

  precise date and time of Appellee’s admission to Oakcrest Manor, and all of

  them establish Plaintiff’s lack of capacity at the date and time of the

  execution of the agreement at issue. Each of these records created by the

  Appellants demonstrate clearly that, upon his admission, Mr. Frank was

  suffering from the precise mental conditions that caused him to be totally

  incapacitated that were the basis of the Probate Court’s decision to find him

  incapacitated as a matter of law. Hence, Appellants’ own records create

  more than sufficient proof that Shawn Frank lacked capacity to contract at

  the precise time Oakcrest Manor made him sign their 15-page Admission

  Agreement, waiving his Constitutional right to a trial by jury.

         C.     Appellee Established Lack of Capacity to Contract.

         Appellee established that Shawn Frank lacked capacity to contract on

  the date and at the time that he was forced to sign a contract, which does not

  comport with Texas law, upon his involuntary admission to Oakcrest Manor.

  Such proof came in the form of the following:

                1. Appellants’ own nursing home admission records
                   demonstrating that Oakcrest Manor knew at the
                   exact date and time of Shawn Frank’s admission
                   to Oakcrest Manor that Shawn Frank lacked

BRIEF OF APPELLEE                                                      PAGE 14
  	
                    capacity to contract. As well, these records prove
                    that at the time of the hearing on this issue in the
                    Probate Court, Appellants were aware that they
                    knew of Shawn Frank’s lack of capacity at the
                    exact date and time he was admitted to the home,
                    although they attempted to divert the issue.
                    (Addressed in the previous section).

                2. Affidavit of David E. Mansfield, M.D., a medical
                   doctor with over 40 years of experience, attesting
                   that Shawn Frank suffered from schizoaffective
                   disorder (schizophrenia), bipolar disorder and
                   depression on December 13, 2013 at the time of
                   Shawn Frank’s admission to this nursing home.
                   As such, he lacked the capacity to contract (he was
                   totally incapacitated) and that, given the nature of
                   his mental illness, he may even present as if he
                   was coherent and able to process and understand
                   the 15-page contract, even though he was not. (CR
                   196-97, Appellee App D).

                3. Affidavit of Peggy Barba, Shawn Frank’s mother,
                   who attests that her son was admitted to this
                   home by a case worker, not voluntarily (unlike
                   Appellants’ assertion), and that her son had
                   suffered from these same mental illnesses for at
                   least 15 years prior to his admission to Oakcrest
                   Manor that rendered him totally incapacitated.
                   (CR 198-99, Appellee App B).

                1. Expert David E. Mansfield, M.D. establishes Shawn Frank as
                   totally incapacitated on the date and time of the execution
                   of the agreement at issue.

         David E. Mansfield, M.D. is a medical doctor with extensive

  experience in both medicine and nursing homes. In his affidavit, Dr.

  Mansfield describes Shawn Frank as “a person who likely cannot distinguish

  what is real and what is false” and notes that persons with Frank’s


BRIEF OF APPELLEE                                                          PAGE 15
  	
  conditions “can even appear lucid, responsive and as if they have full

  capacity when, in fact, they do not.” (CR 196-97, Appellee App D).

         Most importantly, Dr. Mansfield declares:

                …to a reasonable degree of medical probability,
                based on Shawn Frank’s condition, he would lack
                sufficient capacity to contract and would require a
                guardian. It is further my opinion that, to a
                reasonable degree of medical probability, Shawn
                Frank was totally incapacitated on December 13,
                2013, the day he was admitted to Oakcrest Manor, as
                he was prior to his admission, and as he continues to
                be.

  Id. This expert testimony should establish that Appellee was totally

  incapacitated when executing the agreement at issue, rendering it

  unenforceable.

         Appellants’ contention regarding Dr. Mansfield’s testimony is that is

  is “conclusory” or “vague.” They are critical of Dr. Mansfield’s general

  descriptions of how persons with the psychological ailments suffered by

  Shawn Frank manifest such ailments. They skip over the quoted portion of

  Dr. Mansfield’s testimony above that opines conclusively that Shawn Frank

  lacked capacity on December 12, 2013. If this Court considers any evidence of

  capacity, it must weight Dr. Mansfield’s testimony the most heavily.

         As is addressed directly in In re Estate of Gray, 279 S.W.2d 936 (Tex.

  App.—El Paso 1955, writ ref’d n.r.e.), which is both cited and relied upon by

  Appellants, absent sufficient familiarity with the alleged incapacitated


BRIEF OF APPELLEE                                                       PAGE 16
  	
  person, the Court should exclude non-expert testimony regarding capacity.

  This should result in the exclusion of all of Appellants’ proposed evidence,

  but should as well result in the expert opinion of Dr. Mansfield (and Dr.

  McRoberts) being the most heavily weighted evidence of Shawn Frank’s

  incapacity.2

                 2. The affidavit of Peggy Barba, Shawn Frank’s mother, also
                    establishes that he was totally incapacitated on the date and
                    time the agreement at issue was executed.

         In further support, Appellee submitted the affidavit of Peggy Barba,

  Frank’s mother and legal guardian. (CR 198-99, Appellee App B). Having

  clearly superior personal knowledge of his condition, Mrs. Barba testifies

  that her son has suffered from severe mental illness since he was a teenager.

  Id. This fact is also supported by Defendant’s own records. (CR 200-205,

  Appellee App A). Mrs. Barba also notes her son has a long history of mental

  illness that preceded his admission to Oakcrest Manor by at least 15 years.

  (CR 198-99, Appellee App B).

         In addition, Mrs. Barba testifies that Appellee did not “voluntarily

  check himself in” as Appellants would have this Court believe. According to

  Mrs. Barba, a case worker checked Shawn Frank in to Oakcrest Manor.

  Appellants couch the facts as if Appellee was normal, lucid and had full



  																																																								
  2
     This case is discussed in further detail below in Section I.D.1.

BRIEF OF APPELLEE                                                       PAGE 17
  	
  faculties and he simply elected to move in to Oakcrest Manor to support

  their argument that the agreement at issue should be enforced. Mrs. Barba’s

  testimony proves this is simply not the case.

         D.     Appellants’ “lucid interval” argument fails.
  	
         Appellants essentially argue to this Court that a known schizophrenic,

  whom even they admit lacked capacity 6 weeks after his admission to their

  nursing home, had, at the time of signing their admission paperwork, a

  “lucid interval,” rendering Appellee temporarily competent when he was

  asked to sign their 15-page Admission Agreement. The foundation of

  Appellants’ argument is built around the observations of their nursing home

  Administrator, Terry Rowan (who has no medical training), and their

  records that indicate Shawn Frank was “alert” and “answered questions”,

  was “cooperative” and showed no “behavior problems.” In doing so,

  Appellants ignore the testimony and opinions of the only two trained

  medical professionals whom have offered opinions (Dr. McRoberts and Dr.

  Mansfield), both of whom opine that Shawn Frank was totally incapacitated

  and, further, “can even appear lucid, responsive and as if they have full

  capacity when, in fact, they do not,” based on a reasonable degree of medical

  probability, and based on his mental condition. Their provided “proof,” at

  best, fails to substantiate a “lucid interval,” but practically speaking,

  provides no evidence of his mental condition/mental capacity.


BRIEF OF APPELLEE                                                     PAGE 18
  	
         Appellants admit that “Frank had battled mental illness prior to his

  admission to Oakcrest Manor.” (Brief of Appellant at 12). Yet they claim that

  “the facts show he was still capable of lucid intervals. . .” Id. Appellants

  provide no proof of this assertion whatsoever. There is not a single piece of

  evidence that a person with Shawn Frank’s condition was capable of “lucid

  intervals.” Rather, they take the same testimony that fails to establish that

  Shawn Frank contracted during a “lucid interval” and claim that same

  insufficient evidence also establishes that he was capable of having “lucid

  intervals,” which is not only unsupported by the medical testimony, but

  contrary to it.

                    1. The Affidavit of Terry Rowan must be disregarded and
                       certainly does not support a “lucid interval” argument.

         Terry Rowan’s affidavit is evidence of nothing. Terry Rowan is the

  Administrator of Oakcrest Manor. By its own terms, the affidavit establishes

  that Terry Rowan has no relevant or admissible opinion. Terry Rowan’s only

  area of knowledge, by the statements in the affidavit itself, establish that he

  has no medical knowledge of any kind, yet Mr. Rowan opines that Appellee

  was “lucid” during their meeting. (CR 131). His statement is, at best,

  speculative, particularly given his complete lack of medical expertise. Mr.

  Rowan’s opinion would not be admissible at trial on this issue, and should

  not be considered in this appeal.



BRIEF OF APPELLEE                                                       PAGE 19
  	
         Mr. Rowan’s testimony is that “Frank was able to follow along and

  participate in the conversation.” Id. As noted by Dr. Mansfield, Shawn

  Frank’s condition could make him appear “lucid, responsive and as if they

  have full capacity when, in fact, they do not.” (CR 196-97, Appellee App D).

  He further patently speculates that Shawn Frank “understood Rowan’s

  questions”, for which there is no baseline, no verification, and being stated

  by a person with no medical training to make such an evaluation or render

  such an opinion.

         Appellants rely on Harrell v. Hochderffer, 345 S.W.3d 652, 661 (Tex.

  App.—Austin 2011, no pet) for a recitation of the law regarding what is

  required to show incapacity, but they ignore the central findings of this

  Court in that case. In Harrell, the evidence of incapacity was that the alleged

  incapacitated person signed his name as “G” even though he had no “G” in

  his name. Further, the alleged incapacitated person had a guardian ad litem

  appointed 4 months earlier. This Court noted that evidence of capacity

  “must transcend mere suspicion,” that evidence “so slight as to make an

  inference a guess” do not constitute evidence. Id. This Court found the

  evidence in Harrell insufficient, and that evidence was far more compelling

  than the observations of persons with no medical training, particularly when

  weighed against two qualified medical opinions as exist in this record.




BRIEF OF APPELLEE                                                       PAGE 20
  	
         More importantly, the Appellants also cite In re Estate of Gray, 279

  S.W.2d 936 (Tex. App.—El Paso 1955, writ ref’d n.r.e.) for the proposition

  that an incapacitated person may have a “lucid interval”, rendering such

  person with capacity during that interval. Even a cursory reading of this

  opinion demonstrates that Appellants’ arguments fail.

         In Gray, the Court examined at length the capacity of a testator.

  Directly demonstrating Appellee’s position that the “evidence” proffered by

  Appellant is insufficient as a matter of law, the Court stated:

                Now it must be observed with reference to the
                preceding points and the matters involved therein
                that it is a matter of law as to whether or not a lay
                witness has qualified himself so as to testify and give
                opinions as to lack of sanity of a testator. Here the
                court ruled that the witnesses involved had not had
                enough contact and observation to so qualify, and
                excluded their opinions on such grounds. . .

  Id. at 940. The Court’s holding was referring to not 1, but 2 witnesses whose

  testimony should be excluded as the witnesses had neither qualified as an

  expert witness, nor had sufficient familiarity with the testator to pass

  judgment on the testator’s state of mind when they made observations such

  as “her memory seemed to be defective”, or that “something was wrong

  with her” as she asked the same question twice. Id. at 939. In both cases, these

  witnesses had met the testator on previous occasions (unlike Mr. Rowan or

  any nurse at Oakcrest Manor), yet the Court still found lack of familiarity



BRIEF OF APPELLEE                                                         PAGE 21
  	
  with the testator for their “observations” to be of any relevance to the issue

  of capacity of the testator.

         Mr. Rowan’s statements should not be permitted as a lay opinion

  either. Mr. Rowan has no prior knowledge of Shawn Frank, and Appellants

  seek to admit his observations of a person who did not know, and had never

  met, Shawn Frank as evidence of Mr. Frank’s lucid mental state and capacity.

  This is particularly true given the expert testimony of Dr. Mansfield, who

  opines conclusively that people with Plaintiff’s condition can often appear

  lucid, even when they are not.

                2. Appellants’ argument that other records generated by them
                   show “lucid interval” also fail to substantiate their claim
                   and are not qualified opinions or observations.

         Appellants also refer to assessments of Shawn Frank that appear in

  nurse’s notes as further evidence of “lucid interval.” Their claim is that the

  following references support their position: Frank “Answers Questions:

  Readily,”     has   apparent   quick   comprehension,      is   “cooperative,”

  “independent mostly,” and shows “no behavior problems.” None of these

  references, on their face, address whether Shawn Frank “had sufficient mind

  and memory at the time of execution to understand the nature and effect of

  [his] act,” as required under Texas law. See Harrell, 345 S.W.2d at 661 (noting

  that the evidence must transcend mere suspicion); see also, In Re Estate of

  Gray, 279 S.W. 2d at 940 (excluding analogous evidence as the witnesses


BRIEF OF APPELLEE                                                       PAGE 22
  	
  lacked any expert credentials to attest on capacity issues and their personal

  knowledge of the testator was too limited to provide reliable observations of

  the testator).

         In this instance, Appellants’ alleged proof centers around untrained,

  non-expert witnesses, all of whom had no prior contact with Shawn Frank.

  As such, the proffered evidence of Appellants has no bearing on the issue of

  Shawn Frank’s capacity. However, the testimony of his mother and two

  independent, qualified physicians have direct bearing.

         E.     The evidence establishes Shawn Frank lacked capacity to
                contract on the date and time of his execution of the agreement.

         Simply, the most qualified evidence of capacity comes from the expert

  opinions of Dr. McRoberts and Dr. Mansfield, who find clearly, and

  medically, that Shawn Frank lacked capacity.          Second to the expert

  testimony, Shawn Frank’s mother, and guardian, is in the best position to

  know his state of mind that day due to her direct knowledge of her son and

  his nearly 20-year history of incapacitating mental illness. Although

  Appellants contend Shawn Frank had capacity that day, their own records

  establish not only his incapacitating mental illness, but their knowledge of it

  when they required he sign the admission agreement waiving his

  Constitutional rights. In response, Appellants only offer the affidavit of a

  non-medically trained, non-expert witness, Terry Rowan, the nursing home

  administrator who was responsible for getting Mr. Frank to sign the at-issue

BRIEF OF APPELLEE                                                       PAGE 23
  	
  agreement, and a few vague references from nurse’s notes that do not

  contain any information relevant to the question of Shawn Frank’s capacity.

  And even if they did, their observations are made by persons with no

  previous knowledge of Mr. Frank, rendering them useless as was the case in

  In Re Estate of Gray, where the witnesses at issue had met the testator on at

  least 1 prior occasion. In short, the evidence conclusively establishes Shawn

  Frank’s lack of capacity that day, rendering the admission agreement void.

  II.    THERE IS NO WAIVER OF ANY “RIGHT TO VOID” THE
         ADMISSION AGREEMENT, NOR IS APPELLEE SOMEHOW
         ESTOPPED FROM ESTABLISHING IT IS VOID, NOR BOUND BY
         THE DIRECT-BENEFITS ESTOPPEL THEORY.

         In an attempt to sidestep the issue that Shawn Frank lacked capacity

  to contract in the first place, Appellants’ contend in their second issue that

  Appellee somehow waived his right to void the contract. Their contention is

  based on three positions:

         (1) That a contract made by a person who lacked capacity is merely
             voidable and, therefore, some step must be taken to disaffirm it or
             it remains valid.

         (2) By counsel for Appellee pleading an alternative theory of recovery
             in the underlying case of breach of a contract that Appellants
             contend exists, he is somehow estopped from establishing that the
             contract is void.

         (3) The Direct-Benefits Estoppel argument precludes Shawn Frank
             from invalidating the agreement even though this theory only
             applies to third-party beneficiaries to an agreement.

  Appellants arguments not only fail, but do not make any logical sense.


BRIEF OF APPELLEE                                                      PAGE 24
  	
         A.     Appellants’ “void v. voidable” argument is not valid.
  	
         In their first point, Appellants contend that contracts made by

  incompetent persons are generally voidable, not void. Their only authority

  for this position is a single opinion from Amarillo issued nearly 60 years ago,

  Gaston v. Copeland, 335 S.W.2d 406 (Tex. Civ. App.—Amarillo 1960, writ ref’d

  n.r.e.), which has never been relied upon for this position, and is contrary to

  the law. The Texas Supreme Court directly addressed this issue in In re

  Morgan Stanley & Co, 293 S.W.3d 182 (Tex. 2009). In stark contrast to the

  Gaston opinion, the Texas Supreme Court noted that defenses to a contract

  as a whole, like incapacity, render the entire contract void or unenforceable.

  Id. at 185. In so doing, the Texas Supreme Court also noted that the United

  States Supreme Court “rejected the notion that the enforceability of the

  arbitration agreement depended on the distinction between void and

  voidable contracts.” Id. (citing Buckeye Check Cashing v. Cardegna, 546 U.S.

  440, 448 (2005)). Hence, Appellants’ contention is wrong, which is the

  foundation of their argument on this point.

         B.     An incapacitated person can no more disaffirm an agreement
                than bind himself to it in the first place.

         Further, Appellants’ extended position (that, as such a contract is

  merely voidable, thus requiring some action to disaffirm the contract),

  makes no logical sense. If this were true, their argument would literally

  mean that if an incapacitated person contracted, that same incapacitated

BRIEF OF APPELLEE                                                       PAGE 25
  	
  person would then have to take an affirmative step to disaffirm the contract.

  The whole point of incapacity is that the incapacitated person cannot

  properly understand the effects of his or her actions. The Court can no

  further rely on the disaffirmation of an incapacitated person than it can the

  original action sought to be disaffirmed.

         Appellants rely on Oram v. General American Oil Company of Texas, 513

  S.W.2d 533 (Tex. 1974). This case is in no way analogous. Oram dealt with a

  landlord that was incapacitated when he entered into a contract. However,

  after regaining capacity, he continued to seek the benefits of that agreement

  with full knowledge of its terms. As such, the Court found a ratification of the

  agreement that would have been otherwise unenforceable. Id. at 534. Unlike

  this case, Oram involved an incapacitated person that regained capacity and

  lived under a contract’s terms for several years after, whereas in this case,

  Appellee did not have capacity at execution of the agreement, did not have

  it for many years prior, and has not (nor will not) ever regain capacity.

         C.     Appellee’s previous pleading of breach of contract does not
                create an estoppel as it is a permissive “alternative theory”,
                subsequently dropped by Appellee.

         Appellants contend that by pleading breach of contract in the

  underlying case, Appellee is somehow estopped from contesting capacity or,

  in the alternative, has ratified the contract. However, Texas law expressly

  permits the assertion of “alternative theories.” The Rules provide:


BRIEF OF APPELLEE                                                       PAGE 26
  	
                A party may set forth two or more statements of a
                claim or defense alternatively or hypothetically,
                either in one count or defense or in separate counts
                or defenses. When two or more statements are made
                in the alternative and one of them if made
                independently would be sufficient, the pleading is
                not made insufficient by the insufficiency of one or
                more of the alternative statements. A party may also
                state as many separate claims or defenses as he has
                regardless of consistency and whether based upon
                legal or equitable grounds or both.

  TEX. R. CIV. P. 48. This Rule is equally applicable even when the alternative

  theories are inconsistent. Zimmerman v. First American Title Ins., 790 S.W.2d

  698 (Tex. App.—Tyler 1990, writ denied); see also, Regency Advantage L.P. v.

  Bingo Idea-Watauga, Inc., 936 S.W.2d 275, 278 (Tex. 1996). The express

  permission granted by the Texas Rules of Civil Procedure to plead

  alternative theories invalidates Appellants’ argument, particularly coupled

  with the fact that Appellee has amended her petition and dropped any

  breach of contract claim, or any contractual remedies, rendering this

  argument both invalid and moot.3

         D.     The Direct-Benefits Estoppel argument does not apply.
  	
         Lastly, Appellants contend that Appellee is bound to the

  unenforceable arbitration provision due to the direct-benefits estoppel

  theory, which is wholly misapplied. Each of the cases cited by Appellants


  																																																								
  3
     Prior to the filing of this Brief, Appellee filed an Amended Petition in the underlying
  case that removes any claim based in any contractual theory.

BRIEF OF APPELLEE                                                                  PAGE 27
  	
  addresses a singular point – a non-party who seeks the benefits of a contract

  is also bound by that contract’s arbitration provision. While true, it is

  inapplicable.

         In this case, Shawn Frank is not a non-party or a third-party beneficiary

  to this alleged contract. He is the claimed party. These laws are intended for

  third-party beneficiaries of a contract. Appellants contend nonetheless that

  it applies to Shawn Frank as he, a continuing incapacitated person,

  continued to get care from this nursing home. Well, of course he did. He is

  incapacitated and cannot even make his own choice as to where he can live

  or who can render care to him, nor does he have other living arrangements.

  More importantly, as an incapacitated person, he no more sought the

  benefits of this agreement than agreed to it in the first place as he lacks

  capacity for either and was moved out of this facility by his guardian after

  his recovery from his injuries at issue in this matter.

  III.   THE ARBITRATION AGREEMENT IS VOID AND FEDERAL
         PREEMPTION OF STATE LAW BY THE FEDERAL
         ARBITRATION ACT ARGUMENTS FAIL.

         To reach the issues of (A) the applicability of Chapter 74’s bar of non-

  compliant arbitration provisions and/or (B) the applicability of Federal

  preemption based on the Federal Arbitration Act (“FAA”), this Court would

  have to find Shawn Frank, an incapacitated person, had capacity. If this

  Court does, then it must address first the applicability of Chapter 74’s


BRIEF OF APPELLEE                                                        PAGE 28
  	
  mandates regarding arbitration provisions and whether they are preempted

  by the FAA. The FAA will preempt only in the instance of an interstate

  commerce transaction, and Appellants’ arguments in this regard stretch the

  law and authority in this area far beyond its finite elastic limit.

         The simple facts in this case are that Plaintiff Shawn Frank is and was

  a Texas resident, this is a Texas health care facility, and Plaintiff Shawn Frank

  did not receive Federal Medicare benefits.

         A.     Texas Civil Practice and Remedies Code § 74.451 bars
                enforcement of this arbitration provision.

         Section 74.451 definitively prohibits a health care provider from

  enforcing an arbitration provision, unless that provision was also signed by

  the patient’s attorney, which was not done in this case, and clearly not in

  dispute. The statute mandates:

                    No physician, professional association of
                physicians, or other health care provider shall request
                or require a patient or prospective patient to execute
                an agreement to arbitrate a health care liability claim
                unless the form of the agreement delivered to the
                patient contains a written notice in 10-point boldface
                type clearly and conspicuously stating:
                    UNDER TEXAS LAW, THIS AGREEMENT IS
                INVALID AND OF NO LEGAL EFFECT UNLESS IT
                IS ALSO SIGNED BY AN ATTORNEY OF YOUR
                OWN CHOOSING. THIS AGREEMENT CONTAINS
                A WAIVER OF IMPORTANT LEGAL RIGHTS,
                INCLUDING YOUR RIGHT TO A JURY. YOU
                SHOULD NOT SIGN THIS AGREEMENT
                WITHOUT FIRST CONSULTING WITH AN
                ATTORNEY.


BRIEF OF APPELLEE                                                         PAGE 29
  	
  TEX. CIV. PRAC. & REM. CODE § 74.451(a). Furthermore, this statute provides

  that a violation of section (a) constitutes a violation of the Texas Occupations

  Code (and therefore requires sanctions and penalties thereunder) and also

  constitutes a violation of the Texas Deceptive Trade Practices Act. Id. at (b)

  and (c).

         A cursory read of the at-issue Admission Agreement clearly

  establishes two things: (1) the arbitration provision does not comply with

  Section 74.451(a); and (2) the Admission Agreement was not signed by an

  attorney at all, let alone one of Shawn Frank’s choosing. (CR 108, App 2).

  This voids the arbitration provision as a matter of law and Appellants’

  Motion should be denied.

         B.     The FAA does not preempt Chapter 74 due to a lack of
                interstate commerce.

         A number of courts have found that, in limited instancdes, the Federal

  Arbitration Act preempts the state law, giving preference to the

  enforceability of an arbitration provision. As the Appellants point out, this

  preemption stems from arbitration clauses in contracts “that affect interstate

  commerce.” In re L & L Kempwood Assoc, L.P., 9 S.W.3d 125 (Tex. 1999).

  Curiously, the Appellants site a number of Texas cases, however, do not

  address the most recent – The Fredricksburg Care Company, L.P. v. Perez, 461

  S.W.3d 513 (Tex. 2015), reh’g denied (June 26, 2015). Although Perez finds

  Federal preemption in that case, it is exceedingly clear from its holding that

BRIEF OF APPELLEE                                                       PAGE 30
  	
  the preemption was based on the resident receiving Federal Medicare

  benefits, an unquestionably Federally-funded program.

         In this case, Plaintiff Shawn Frank received only Medicaid funds and

  the State of Texas, in its own documents, not only calls Medicaid a “state

  program”, the Attorney General issued a certification, certifying that the

  Health and Human Services Commission is “the single state agency

  responsible for administering the plan,” and that “The legal authority under

  which the agency administers the plan on a statewide basis is: Texas

  Government Code, Section 531.021(b).” (CR 120-22, Appellee App E).

  Further, in looking at the description of the plan in the “Organization and

  Functions of the State Agency and the Organization Chart of the Agency”

  along with the organization chart itself, there is simply no way to view

  Medicaid as a Federal program, giving this nursing home the protections of

  a non-compliant arbitration provision in an admission agreement their

  Administrator had signed by a diagnosed schizophrenic upon admission. Id.

         Appellants’ principal support for their argument comes first from In re

  Nexion Health at Humble, Inc. 173 S.W.3d 67 (Tex. 2005). In re Nexion involved

  a patient directly receiving Medicare benefits so the Court never addressed

  nor confronted the applicability of Federal preemption when dealing simply

  with Medicaid. Id.




BRIEF OF APPELLEE                                                      PAGE 31
  	
         Second, the Appellants rely on In re Tenant Healthcare, Ltd., 84 S.W.3d

  760, 765 (Tex. App.—Houston [1st Dist.] 2002, no pet.). Appellants cavalierly

  site this case to this Court for the proposition that the Federal preemption

  extends to cases involving both Medicare and Medicaid. In re Tenant

  Healthcare is an arbitration provision contained in an employment agreement

  between the nursing home, and its employee, a distribution clerk. The Court

  did not have to address the interstate commerce issue for two reasons: (1)

  this nursing home unquestionably engaged in interstate commerce; and

  more importantly, (2) this issue was not challenged by the employee seeking

  to invalidate the arbitration provision. The court stated:

                Here, Tenet's first amended motion to compel
                arbitration alleged that Park Plaza Hospital, where
                Valyan worked, treated patients who lived out-of-
                state; received goods and services from out-of-state;
                received payments from out-of-state insurance
                carriers; and received federal funds such as Medicaid
                and Medicare. Valyan does not challenge these
                allegations.

  Id.

         Similarly, the Appellants cite In re December Nine Co., Ltd. 225 S.W.3d

  693 (Tex. App.—El Paso, no pet) for the proposition that Federal preemption

  is granted due to the existence of Medicaid benefits. While the Court in this

  case declines to limit Federal preemption based on Federal funding to

  Medicare cases only, and “sort of” suggests that it may apply in cases with

  Medicaid funding, the Court notes mainly that the arbitration agreement at

BRIEF OF APPELLEE                                                       PAGE 32
  	
  issue indicated on its face that it was to be “governed by Federal arbitration

  law.” Id. at 698. More importantly, In re December Nine was another example

  of the Court applying this decision only in the context of an employment

  contract, in this case, where two employees were fired for whistle-blowing.

         Finally, Appellants put, up front and center, the case of United States v.

  Girod, 646 F.3d 304 (5th Cir. 2011). This case is equally inapplicable.

  Appellants cite this case for the singular proposition that Medicaid is

  federally funded, therefore anything tied to it affects interstate commerce.

  But Girod is inapplicable on one significant point. As directly stated in that

  opinion, the Louisiana Medicaid program (at issue in that case) is a joint

  Federal-State program, in stark contrast to the Texas Medicaid program, as

  noted above. (CR 120-22, Appellee App E).

         The authority cited by the Appellants can not be stretched to the limit

  of their position. And the law on this issue simply does not address, let alone

  support, Appellants’ position. Not one of the cited cases reaches, or holds,

  that receipt of Medicaid benefits would give rise to interstate commerce

  implications sufficient to trigger Federal preemption. The reason is,

  undoubtedly, that, in Texas, Medicaid is a State program in contrast to

  Medicare, which is clearly a Federal program. Appellants request that this

  Court address a question of first impression and extend the law in this area

  beyond the limits of their own analysis and past the point of appropriate.


BRIEF OF APPELLEE                                                        PAGE 33
  	
         C.     As a matter of policy, validating Appellants’ position would
                destroy state’s rights to enforce state law on many issues.

         The Appellants’ position is:

                    (1) We know Medicaid is a State program, but some
                        of the money came from the Federal Government,
                        so that’s interstate commerce; and/or

                    (2) If a nursing home accepts Medicare, even if not for
                        the benefit of the actual resident/patient at issue,
                        the nursing home should have blanket protection
                        from the FAA.

         There can be no interpretation of these arguments that lead to anything

  other than a massive slippery slope, fundamentally destroying the State’s

  rights to enforce its own contract laws. If the Court were to accept premise

  (1), the law could be stretched to the extent that a patient in a nursing home

  would be subject to Federal preemption on this issue if the resident paid by

  credit card as the bank that issued the credit card or processed the credit card

  may have been out-of-state, or if the resident paid cash because the bills were

  printed by the Fed. In what case could a transaction ever be considered an

  in-state transaction? In such case, it would invalidate the State’s ability to

  charge sales tax as well.

         If the Court were to accept premise (2), this law could be stretched such

  that your visit to your own doctor could be governed by a non-conforming

  arbitration provision, because your doctor treats an out-of-state patient or

  accepts Federal funds on even a single patient. For that matter, the doctor


BRIEF OF APPELLEE                                                              PAGE 34
  	
  could enjoy preemption because he/she buys supplies from an out-of-state

  vendor, hence engaging in interstate commerce.

         While it seems ridiculous enough that the Courts agree with the

  proposition that accepting federal funding for a patient constitutes interstate

  commerce when the patient and health care facility are both from the same

  state, stretching these laws to the limit that is done so in Appellants’ Motion

  will radically alter states’ rights and the relationship of a patient to his/her

  health care provider irreparably and destructively.

                                 CONCLUSION

         This is a very simple situation. Plaintiff Shawn Frank was totally

  incapacitated at the time of his admission to Oakcrest Manor. This fact has

  been found as a matter of law by the Probate Court of Travis County twice.

  The Appellants are asking this Court to find a contract between a nursing

  home and its totally incapacitated resident enforceable, which was signed

  without the presence of a guardian or an attorney. This is simply impossible

  and conflicts with contract law.

         The evidence clearly establishes Plaintiff lacked capacity when he

  executed the agreement at issue, first through Appellants’ own records made

  immediately upon Plaintiff’s admission to Oakcrest Manor, second, the

  Probate Court’s independent medical examiner (Dr. Roger McRoberts), and

  as well through the expert testimony of David E. Mansfield, M.D. and also


BRIEF OF APPELLEE                                                       PAGE 35
  	
  through the testimony of Plaintiff’s mother, Peggy Barba. Further, the only

  expert medical evidence in this case proves that he did not, and that, given

  Plaintiff’s condition, he could have appeared to have had capacity even

  though medically he did not.

         Appellants’ only responses to Appellee’s capacity arguments are that:

  (1) there is no evidence that Plaintiff was incapacitated at the date and time

  Plaintiff executed the agreement, and (2) Plaintiff “seemed fine” to Terry

  Rowan, Oakcrest Manor’s administrator, and a person with no personal

  knowledge of Plaintiff when he was admitted, and no medical expertise

  whatsoever. The attached evidence establishes both objections without

  merit.

         Even assuming Appellee had capacity, which he did not, Appellants’

  Federal preemption argument likewise fails. This is a case involving a citizen

  and resident of the State of Texas and a Texas nursing home. Appellants’

  attempt to create a Federal issue due to Appellee’s status as a Texas Medicaid

  recipient stretches the law on this issue as well as creates far reaching public

  policy implications. The law simply does not permit this result.

                                     PRAYER
  	  
         Appellee Peggy Barba, as Guardian of S.F., respectfully requests that

  this Court confirm the order of the trial court denying Appellants’ Motion to




BRIEF OF APPELLEE                                                       PAGE 36
  	  
  Compel Arbitration and for such other and further relief to which she is

  entitled.

                                   Respectfully submitted,

                                   RAMSEY LAW GROUP



                                   Jeff Diamant (Of Counsel)
                                   State Bar No. 00795319
                                   John C. Ramsey
                                   State Bar No. 24027762
                                   Joel Pardo
                                   State Bar No. 24083617
                                   7521 Westview Drive
                                   Houston, TX 77055
                                   Phone: (713) 489-7577
                                   Fax: (888) 858-1452
                                   Email: john@ramseylawpc.com
                                   Email: jeff@ramseylawpc.com
                                   Email: joel@ramseylawpc.com
                                   ATTORNEYS FOR PLAINTIFF


                                   Jacques G. Balette
                                   MARKS, BALETTE, GEISSEL &
                                   YOUNG, PLLC
                                   State Bar No. 00798004
                                   10000 Memorial Drive, Suite 760
                                   Houston, Texas 77024
                                   Phone: (713) 681-3070
                                   Fax: (713) 681-2811
                                   Email: JacquesB@marksfirm.com




BRIEF OF APPELLEE                                                PAGE 37
  	  
                         CERTIFICATE OF SERVICE

        I hereby certify that a true and correct copy of the foregoing instrument
  was served on the below parties in accordance with the Texas Rules of
  Appellate Procedure 9.5(c) on September 26, 2016 via electronic mail,
  facsimile and/or certified mail, return receipt requested.

  Breck Harrison
  Jack Skaggs
  Jorge A. Padilla
  Jackson Walker, LLP
  100 Congress, Suite 1100
  Austin, Texas 78701
  Attorney for Appellants



                                             ______________________
                                             Jeff Diamant


                      CERTIFICATE OF COMPLIANCE

       This brief complies with the type-volume limitation of Texas Rules of
  Appellate Procedure 9.4(i) because, exclusive of the matters excepted from
  the word count limitations of the Rule, this brief contains 8,248 words.



                                             ______________________
                                             Jeff Diamant




BRIEF OF APPELLEE                                                       PAGE 38
  	  
                                  NO. 03-16-00514-CV


                         IN THE COURT OF APPEALS
                 FOR THE THIRD JUDICIAL DISTRICT OF TEXAS
                                AT AUSTIN


             OAK CREST MANOR NURSING HOME, LLC, DAY LIFE
           CORPORATION, TERRY ROWAN, NORMA ELEMENTO, AND
                           GROVER MOORE,
                              Appellants,

                                            v.

                       PEGGY BARBA, AS GUARDIAN OF S.F.,
                                  Appellee.


                           On Appeal from the Probate Court,
                    Travis County, Texas, Cause No. C-1-PB-16-00776


                                         APPENDIX



         A.  Records of Oakcrest Manor Regarding Shawn Frank

         B.   Affidavit of Peggy Barba

         C.  Physician’s Certificate of Medical Examination (completed by Dr.
             McRoberts)

         D.  Affidavit of David E. Mansfield, M.D.

         E.   Selected Documents from the 1,334-page Texas Medicaid State Plan,
              Attorney General’s Certification




BRIEF OF APPELLEE                                                     PAGE 39
  	  
APPENDIX TAB A
                                                                                   FACE SHEET                                                                              Page I of I
                                                                                                                                                                    12/13/13 4:12PM
                                                                            Oakcrest Manor Nursing Home                                                                      RI6100A

                                                                     Res No.:                             Admit Date:       12/13/13 3:00 pm Admitted From:                  02
 Preferred Name:                                                           Loc:   E6 B                    ReAdmitted:                                 Readmitted From:
                                                                           Plr:                           Discharged:                                 Discharged To:
                                                                           Sex:   M                          Discharge Status:
                                                                                                          D.O.B.:                                    SSN:

                                                                            MEDICAL INFORMATION
 Med Record no:                                                                          Allergies:                                 AdmitDx:
 Height:                        in.                                                       BACLOFE;W
 Admit Weiglrt:                 lbs.                                                                                                Discharge Dx:
 PrimaryP!rys:   CHUDLEIGH, JAMES        (512) 699-8819
                 FNP DAVID PFEIFER 512-291-7493                                                                                     Current Dx:
                 LEANDER, TX 78641                                                                                                    296.52 Bipolar Affec, Depr-Mod

 AJfenmte Plrys: PFERIFER, FNP, DAVID    (913) 486-1801                                                                                295.40 Ac Schizophrenia-Unspec
                 76201 DEER RUN                                                                                                        561.58 GERD
                 AUSTIN, TX 78641                                                                                                      300.9 Neurotic Disorder Nos
 Referring Phys:                                                 ( )-                                                                  281.0 Pernicious Anemia



 QL Hospital stay:
 From/Thru:
 Rehab Potential:         GOOD

 Admitted with:           0            Catheter preselll   O       Contractures         0      Restraillf Orders       D     Pressure Sores (other titan Stage 1)
        0   Received pneumococcal vaccine                                               D      Received influenza immunization                           0     In facility

                                DEMOGRAPHICS                                                            SERVICE PROVIDERS and PREFERENCES
     Marital Status:Never married Couuty:       TRAVIS                                          Pharmacy        AMERICAN PHARMACEU" (512) 928-8282
     Race: Caucasian              Primary Lang: English                                         Dentist         Jackson DDS, David M (512) 535-5530
     Religion: N/A                Birtlrplace:  CA                                              Optometrist     Baker 0. D., Linda L (210) 479-7907
     Occupation:   DISABLED                                                                     Podiatrist      HeralthSync          (836) 436-0351
     0 u.s. Citizen           0         MilitarySrv.                                            Psychiatrist    FLOCA, FRANKS        (512) 795-4344
1-..;;;;;..._ _ _                                                                                               VERI CARE            (800) 257-8715
                           BILLING INFORMATION                                                  Phys, Occu Ther SENIOR REHAB SOLUTIC (888) 210-9758
 AIR Type:       FV            CMG:                 Resources:
                                                                                                Speech Therapi! SENIOR REHAB SOLUTIC (888) 210-9"158
 Medicare#:                                         Ancillary AIR Ty'Pe:
                                                                                                Church                    NO PREFFERENCE
 Medicaid#:                                         Ancillary Co-b1s AIR Type:
                                                                                                Hospital                  SETON NORTH WEST HC                  (512) 324-4455
 Ins 1:
                                                    Grp:                                        Ambulance                 ACADIAN                              (512) 926-5652
 Pol:
                                                                                                Mortuary                  AUSTIN-PEEL AND SON                  (512) 419-7224
 Ins 2:
 Pol:                                               Grp:                                        Part D Plan:
 Recurring Room Cltg:                                                                           Effective:                   RxBIN:                    RxPCN:
                      0   AdvBill               D      Resident is SelfResponsible
                                                                                                Card/wider ID:
 Trust Fund:          0   Apply Interest        0      Max Balance Reminder                     Group No:                           Issuer:


 RESPONSIBLE PARTY                                                      SECOND CONTACT                                                   THIRD CONTACT




 Relationship:        Mother                                                Relationship:                                                     Relationship:
 Pltoite:    (Day)                                                          Phone: (Day)                                                      Phone: (Day)
             (Eve)                                                                    (Eve)                                                           (Eve)
             (Cell)                                                                   (Cell)                                                          (Cell)
                                                                        ADDITIONAL INFORMATION
  DNR Status                                                                      FULL CODE
  Advanced Directive                                                              NONE
  Nursing Alert                                                                   SMOKER
  Medicaid ID
  SSN
                                                                                  C                 NTIAL                                 OCM_Frank 00077
                                     RESIDENT- DATA COLLECTION




                                                                             Indicate below all body marks such as old or
                                                                             recent scars (surgical and other), bruises, d·is-
                                                                             cotorations, abrasions, pressure ulcers or any
                                                                             questionable markings. Indicate size, depth (in
                    PAIN                                                     ems), color and drainage.
(As described by resident/representative)                                    COMMENTS: ____________________
Fre51uency:
 11 No pain       D Daily; but not
 D Less than daily  constant
                  D Constant
Location: _ _ _ _ _ _ _ _ _ __
Intensity:
  D No pain            D Severe pain
  D Mild pain          D Horrible pain                                       SPECIAL TREATMENTS & PROCEDURES:
  D Distressing pain   D Excruciating
                         pain
Pain on admission?
 D No DYes, describe _ _ _ _ __




                                            Paralysis/paresis-site, degree _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
                                            Contracture(s)-site, degree_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
                                            Congenital anomalies _ _ _ _ _ _ _ _ _ _  -=--=-----=---------
                                            Prosthesis: D Glasses D Dentures: D Upper D Lower     D Hearing aid
                                             Other==================================================~
TRA)ISFERS·ABLE TO TRANSFER                   AMBULATION-ABLE TO AMBULATE               SUPPORTIVE DEVICES USED:
  ~Independently                                1\lfndependently                          D Elastic hose   D Footboard
  D 1 person assist                             D 1 person assist                         D Bed cradle     D Air mattress
  D 2 person assist                             D 2 person assist                         D Sheepskin      D Eggcrate
  D Total assist                                D With device                             D Hand rolls     D Trapeze
WEJGHT BEARING-ABLE TO BEAR
                                                   Type_ _ _ _ _ _ _ _ _ __               DSiing
  '16 Full weight                               D Wheelchair only                         Traction: Where _ _ _ _ _ __
  D Partial weight                              D Wheelchair/propels self                           When,_ _ _ _ _ __

                                                                                              Ot~hie~rijij~i~ijijiji
  D Non-weight bearing                          D Bedrest                                 0




                                                                                                           0 Continued on Reverse


                                                    CONFIDENTIAL                         OCM_Frank 00093
OAKCREST MANOR NURSING HOME DISCHARGE SUMMARY




                                                              .,
                                                               "




Condition on discharge:

                ..-o-

Discharge diagnosis(es):
         'Scutvv- - 0          o~( l   \0. ~


                           I
                                                                   '.
Prognosis:




                                                 Date




                                  CONFIDENTIAL          OCM_Frank 00076
(




                                                                                                Record No.



    Form 62SP 0 BRIGGS, Des Moines, lA 50306 (800) 247-Zl43 www.BriggsCorp.com
    R404                                PRINTED fll U.SA        •
                                                                                 CONFIDENTIAL              NURSE'S NOTES
                                                                                                OCM_Frank 00135
                                            All Disciplines to Use
                                                Pro ress Notes
      Date              Time                           Notes should be signed




                                                        Attend ing Physician:   Room #
  .    ~-··-                        ~-··-


                                                    NFIDENTIAL                   OCM_Frank 00151
10/1712011 -Progress Notes 1 or 2
(_

       Personal

       Gene~lappearance: --~~~~,r--~~~~~f---~~~~~~-r~;,~TT~~~~--~~
                                                                 ~~G~e;L~a~~~
                                                  0 Spanish




     Emotional &aws; ~~~~41~~~~~~~~~~~~~-=~~~~~~~~~~~~~~~~~~

     ~ntme~I-~··-----~~~~~Jr----~~~~~--~------~--~----~---.--------------


     Hearing:                          DAverage



     Please Note How Did Resident React 1 Cope Wrth Any Physical And I Ot Sensory   Losses



     Social Background




\




                                                  CONFIDENTIAL                               OCM_Frank 00152
Cate: -----Name: - - - - - - - - - - - - - - - - - - OOB: +----Admission Date;----

Community Involvement (Clubs. Gov't, C:tc.): _

Military   __ d_·---------------------::="'7•---ll--------------




                                                    If Supportive, C:xp\ain




    of Resident




                                          CONFIDENTIAL                        OCM_Frank 00153
APPENDIX TAB B
State of Texas                §
                              §
Hays County                   §


                        AFFIDAVIT OF PEGGY BARBA

     Before me, the undersigned authority, did personally appear the affiant
Peggy Barba, who upon being by me duly sworn, upon oath states the following:

     "My name is Peggy Barba. I am over 18 years of age and competent to
provide this affidavit.

       I am the mother of Shawn Frank. Shawn has had a history of mental illness
since at least 16 years old. He was diagnosed with schizophrenia and bipolar
disorder at least 15-20 years ago, to the best of my recollection. His diagnosis has
continued through today. Shawn was a schizophrenic and bipolar on the date
of his admission to Oakcrest Manor.

      While Shawn was admitted to Shoal Creek Hospital, prior to his admission
to Oakcrest Manor, I received a call from a female case manager who informed
me that Shawn could not stay any longer at Shoal Creek Hospital and had to be
transferred to Oakcrest Manor. I was not given any decision or choice in this
matter, I was simply informed of the impending transfer by the case manager. I
was not Shawn's legal guardian at the time as he was an adult at that time.
Shawn was mentally incapacitated at the time and on the date of his admission
to Oakcrest Manor, and had been for many years prior.

      Neither I nor any legal guardian for Shawn was present when he was
admitted to Oakcrest Manor and I was never informed that he had been required
to sign any paperwork, nor was I ever provided a copy of any such paperwork.
As his mother, and based on his mental diagnosis for many years, Shawn would
not have had capacity to understand any such paperwork or agreement on
December 13, 2014.

      Approximately 1 week or less after his admission to Oakcrest Manor, I
went to visit my son. I was unhappy with his conditions and concerned for his
safety. So I immediately began finding out how to apply for legal guardianship
of Shawn, which I filed shortly thereafter.

     I received a call from Shawn warning me that he was planning on eloping
from Oakcrest Manor and had intent to jump off a bridge about a day or so prior
to him jumping off the bridge that caused the injuries in this case. I immediately
called the Oakcrest Manor administrator and informed him of Shawn's call and
intent. He simply told me that Shawn was fine and getting his haircut and that
I had no reason to worry. I re-urged my request for them to watch Shawn
carefully, which was apparently disregarded. In fact, -I called the administrator
twice with this same warning and urging him to watch Shawn carefully. Then
Shawn eloped from Oakcrest Manor and jumped from a bridge. To my
knowledge, Oakcrest did not even know he was gone until about 9-lO:OOam the
next morning. In my call(s) with the administrator of Oakcrest Manor, I
reminded him that Shawn is suicidal and has a history of elopement and trying
to hurt himself.

     Affiant Further Sayeth Not,




This instrument was acknowledged before me on the {           day of July 2016.




                               otary u    c, State of Texas
APPENDIX TAB C
                                     PHYSICIAN'S CERTIFICATE OF MEDICAL EXAMINATION


In the Matter of the Guardianship of                                     For Court Use Only
                                                                         Court Assigned: _ _ _ _ _ __
an Alleged Incapacitated Person

                                                          To the Physician
              The purpose of this form is to enable the Court to determine whether the individual
             identified above is incapacitated according to the legal definition {set out on page 4},
                      and whether a guardian should be appointed to care for that per:;<;m.

1. General Information
Physician's Name 1>r. 'f~ /,.:.woN P..~~                                                        Phone:
        Office Address  bO \ S I S~
                                          ~~rl--.          r)C        'f'g.'vo\
[J'/'cs   0 N0-·-1 am a physician (u(rently licensed to practice In the State of Texas.
Proposed Ward's Name                           ~&utiL
       Date of Birth                                                          Age.                     Gender    ~         0 F
ProposedWard'sCurrentResidence:              wa,c& Dei-             tre-;t MM\oy= IJ>!J.t wilt tl\.0-\:7 rezW("-
llast examined the Proposed Ward on --------\'-'I.,;"Wo..::;..___,, 2o__IL
    at 1<11 Medical facility D the Proposed Ward's residence 0 Other:

BYES D NO---·The Proposed Ward is under my continuing treatment.
i<!'YES Cl NO----Before the examination, I informed the Proposed Ward that communications with me would not be
                 privileged.
DYES ,% NO----A mini-mental status exam was given. If "YES," please attach a copy.


   Physical Diagnosis:
   a. Severity: 0 Mild
   b. Prognosis:
   c. Treatment/Medical History: _..._,=~"""----==~-=~-t;,.,=.:::;~....::c.-IC:'=;;;A-=="--'.Q'--'-'x"-"""'~--=---""'---

3. Evaluation of the Proposed Ward's Mental Function
   Mental Diagnosis:    S'c.'r-1 "1.0 ~""'\'k... p
   a. Severity: Cl Mild D Moderate .6Severe
   b. Prognosis: --l.l:I.Qol""""'---:-:---.-----:-"7'"---:::---..-----;------;--::------
   c. Treatment/Medical History: _,_M.....:._,ll'l-'-1'ppL=---'l"'"N--L.!'c::';.,t!>"'-.jl9'-'~'--""t:.Ar\=_,_'JLf-"S=J't'-'cL"""''-''*==:>=-----
   If the mental ~iagnosis includes dementia, answer the following:
   Cl YES \l'NO ---It would be in the Proposed Ward's best Interest to be placed in a secured faCility for the elderly
                      or a secured nursing facility that specializes in the care and treatment of people with dementia.
   0 YES )l! NO --·It would be in the Proposed Ward's best interest to be administered medications appropriate tor
                      the care and treatment of dementia.
   DYES ~0 ---The Proposed Ward currently has sufficient capacity to give informed consent to the
                      administration of dementia medications.



                                                                  PAGElOF4




  G 'd
                                 PHYSICIAN'S CERTIFICATE OF MEDICAL EXAMINATION                           @evisian Novem~ 201J


4. Cognitive Deficits
   a. The Proposed Ward is oriented to the following (check all that apply):
         a'Person Zlime .af>lace D Situation
   b. The Proposed Word has a deficit in the following areas (check all areas in which Proposed Ward has a deficit):
          0---Short·term memory
          o ... Long-term memory
          o... Jmmediate recall
          0--- Understanding and communicating (verbally or otherwise)
          0-- Recognizing familiar objects and persons
          D·- Performing simple calculations
          D·- Reasoning logically
          ~-Grasping abstract aspects of his or her situation
          ~-Interpreting idiomatic expressions or proverbs
          iii!'-· Breaking down complex tasks down into simple <teps and carrying them out
    c. Cl YES    I<!"NO- The Proposed Ward's periods of impairment from the deficits indicated above (if any) vary
                         substantially in frequency, severity, or duration.

5. Abilitvto Make Responsible Decisions
   Is the Proposed ward able to initiate and make responsible decisions concerning himself or herself regarding the
   following:
   0 YES rpNO _... Make complex business, managerial, and financial decisions
    DYES        0'No -·Manage a personal bank account
             If "YES," should amount deposited in any such bank account be limited?       0 YES 0 NO
    0 YES    !1No ---Safely operate a motorvehide
    CJ YES    ltl' NO .... Vote in a public election
    0 YES     6 NO --·Make decisions regarding marriage
    0 YES     ~0 -·Determine the Proposed Ward's own residence
    0 YES     ~0 --Administer own medications on a daily basis
   ~ES        0 NO .... Attend to basic activities of daily living (ADLs) (e.g., bathing, grooming, dressing, walking,
                           toileting)
    0 YES     il"No ---Attend to instrumental activities of daily living (e.g., shopping, cooking, tra•ellng, cleaning)
    CJ YES    EfNO --Consent to medical and dental treatment at this point going forward
    0 YES      ~NO-- consent to psychological and psychiatric treatment at this point going forward

 6. Developmental Disability
    D YES criiio --·Does the Proposed Ward have developmental disability?
 If "NO," skip to number 7 on page 4.
 If "YES," answer the following question and look at the next page.
 Is the disability a result of tho following? (Check all that apply)
      0 YES Cl NO ---·Intellectual Disability?
      DYES CJ NO ----Autism?
      Cl YES Cl NO ----Static Encephalopathy?
      0 YES 0 NO ---Cerebral Palsy?
      0 YES 0 NO -Down Syndrome?
      0 YES 0 NO ----other? Please e x p l a i n - - - - - - - - - - - - - - - - - - -
                                                            PAGE20f4



    [   .d                                                              ltV:JHlWlH NOllS
                                    PHYSICIAN'S CERTIFICATE OF MEDICAL EXAMINATION



Developmental Disability, continued

Please answer the questions in the box below only if both of the following •re true:
   (1) The basis of a proposed ward's alleged incapacity is intellectual disability.
           ~
   (2) You are maklrc a "Determination of lntelletttJal Disability• In accordance with rules of the executive
       commissioner of the Health and Human Services Commission governing examinations of that kind.

If you are not making such a determination, please skip to number 7 on the next page.

"DFTERMINATION OF INTELLECTUAL DISABILITY"
Among other requirements, a Determination of Intellectual Disability must be based on an interview with the
Proposed Ward and on a professional assessment that includes the following:
   l) a measure of the Proposed Ward's intellectual functioning;
   2) a determination of the Proposed Ward's adaptive behavior level; and
   3) evidence of origination during the Proposed Ward's developmental period.
As a physl,iDn, you moy use a previous assessment, social history, or relevant reoord from a school district,
another physldan, o psychologist, a public agency, or a private agency if you determine that the previous
osses.sment, social history, or record is valid.

1. Check the appropriate statement below. If neither statement is true, skip to number 7 on the next page.
   D I examined the proposed ward in accordance with rules Of the executive commissioner of the Health
     and Human Services Commission governing Intellectual Disability examinations, and my written
     findings and recommendations include a determination of an intellectual disability.
   D I am updating or endorsing in writing a prior detetmlnation of an Intellectual disability for the
     proposed ward made in accordance with rules of the executive commissioner of the flealth and flu man
     Services Commission by a physician or psychologist licensed in this state or certified by the Department
     of Aging and Disability Services to perform the examination.

2. What is your assessment of the Proposed Ward's level of intellectual functioning and adaptive behavior?
         D Mild (IQ of 50-55 to approx. 70)         D Moderate (IQ of 35-40 to 50-55)
           D Severe (IQ of 20-25 to 35·40)                      D Profound (IQbelow 20-25)

3. DYes D No---Is there evidence that the intellectual disability originated during the Proposed Ward's
                developmental period?


     Note to attameys.' If the Q/xNe box is ji/fed out because a determinettlon of intellectual disability has been made In
     ar;cordonc=i with rules of the executive commissioner of the Health Qnd Human Services CommissiOii governing
     examinations of that kind, a Court may grant a gugrc/ictnshlp applica~lon if (l) the examination i.s made not eotl/er than
     2A months before the date of the hearing or (2) a pfior d~terminatior'l of an intellectual disability was updated or
     endorsed In writing not earlier them 24 months before tht hearing date. If a physician's diagnosis of lntellectl.lal
     disQbi/ity is not made in ac~rdance with rules of tht executive commissioner - and the above box is not filled out ~
     the court may grant a guardianship appliCCJtion only if the Physldan 's Cettiflcate of Medical &aminotirm Is based on an
     examination the physician petformed within 120 days of the date the application for gvof'dlanship wo.s filed. See rexa.s
     Eswes Code§ l101.104{1).




                                                             PAGe3oF4



7 d                                                                                                          ~d51 :~1 tiC~        "IE "NVr
                                PHYSICIAN'S CERTIFICATE OF MEDICAL EXAMINATION                        ~r.tlsion Nove-mber 201~


7, Definition of Incapacity
   For purposes of this certificate of medical examination, the following definition of incapacity applies:
         An "Incapacitated Person• is an adult who, because of a physical or mental condition, is substantially
         unable to: (a) provide food, clothing, or shelter for himself or herself; (b) care for the person's own
         physical health; or (c) manage the person's own financial affairs. Texas Estates Code§ 1002.017.

8. Evaluation of Capacity
 _.Ja"tes D NO -·-Based upon my last examination and observations of the Proposed Ward, it is my opinion that the
                   Proposed Ward is Incapacitated according to the legal definition in section 1002.017 of the
                   Texas Estates Code, set out in the box above.

   If you indicated that the Proposed Ward Is incapacitated, indicate the level of incapacity:
  p-fotal----------The Proposed Ward is totally without capacity (1) to care for himself or herself and (2) to manage
                   his or her property.
   0 Partial----····-The Proposed Ward lacks the capacity to do some, but not all, of the tasks necessary to care for
                     himself or herself or to manage his or her property.

   If you answered "NO" to all of the questions regarding decision-making in Section 5 (on page 2) and yet still believe
   the Proposed Ward is partiolly incapacitated, please explain: - - - - - - - - - - - - - - - - - -



   If you answered "YES" to 2m! of the questions regarding decision-mak(ng In Section 5 (on pafi.e 2) and yet still
   believe the Proposed Ward is totally incapacitated, please explain: __.,J.t"'\.""-"(.,;L-_?<>=....p!~====------­
      ,........._ &>k'?


9. AbilitY to Attend Court Hearing
   DYES ti'No ----The Proposed Ward would be able to attend, understand, and participate in the hearing.
   12!'YES [J NO ----Because of the Proposed Ward's incapacities, I recommend that the Proposed Ward~ appear
                     at a Court hearing.
  Jlfves 0 NO--- Does any current medication taken by the Proposed Ward affect the demeanor of the Proposed
                     Ward or his or her ability to participate fully in a court proceeding?

10. What is the least restrictive placement that you consider is appropriate for the Proposed Ward:
        1:¥-'- Nursing home level of care
        D--- Memory care unit
         £!'--Other      'f>'1&\,.;~<- ~~
11. Additional Information of Benefit to the Court: If you have additional information concerning the Proposed
    Ward that you believe the Court should be aware of or other concerns about the Proposed Ward that are not
    included above,                 n an additional page.



        Phy                                                                  Date

       ~d I.AA1e\\ 'f-lf\?..\Ju.b
                                                                             Ucense Number
                                                        PAGE40F4




              me ·oN                                               l~VJh1lVl~       NOllS
APPENDIX TAB D
03/23/2009   01:09   5755224434                     ~1ANSFIELD                   F'AGE   02/03




      State of New Mexico                   §
                                           §
      Lincoln County                            §


                      AFFIDAVIT OF DAVID E. MANSFIELQ. M.P.

            Before me, the undersigned authority, did personally appear the
      affiant David E. Mansfield, M.D., who upon being by me duly sworn, upon
      oath states the following:

                                  '
          "My name is David E. Mansfield, M.D., I am over 18 years of age and
      ccmpetent to provide this affidavit.

            I am a Medical Doctor who is Board Certified in Family Practice and
      Wound Care. I have extensive experience in these areas, as well as extensive
      experience in nursing home I skilled nursing facility protocols, procedures,
      and patient care. I have worked with patients and residents of all types,
      including many patients with significant mental illnesses. A copy of my
      Curriculum Vitae is attached hereto as Exhibit A, and incorporated herein by
      reference.

            I am familiar with the facts and circumstances made the basis of
      Shawn Frank's claims against Oak Crest Manor, et al. I have reviewed the
      records of:

               · 1) Oakcrest Manor Nursing Home
                2) Seton Shoal Creek Hospital
                3) University Medical Center Brackenridge

            To reach my opinion herein I relied on my knowledge gained from
      over 40 years of practicing medicine as well as my continuing research,
      regulat· practice of keeping up-to-date on relevant medical knowledge and
      developments; any relevant medical texts, and the records of Plaintiff Shawn
      Frank, as noted above.

            Shawn Frank is a diagnosed schizophrenic, bipolar and depressive
      person. Schizophrenia is a serious disorder which affects how a person
      thinks, feels and acts. Someone with schizophrenia, particularly in Shawn
      Frank's case, would have difficulty distinguishing between what is real and
      what is imaginary. Specifically, Shawn Frank has schizoaffective disorder, in
      which a person has symptoms of both sclllzophrenia and a major mood
03/23/2009   01:09   5756224434                         HANSFIELD                                               PAGE   03/03
      disorder such as depression. In this case, he is also bipolar and depressive.
      The result of this is manifested in Shawn Frank as a person who likely
      cannot distinguish what is real and what is false, may have delusions,
      hallucinations and I or disordered thinking as well as depression and
      suicidal tendencies. Persons with Shawn Frank's conditions can even appear
      lucid, responsive and as if they have full capacity whe:t:V in fact, they do not.

             As such. it is my opinion, to a reasonable degree of medical
      probability, based on Shawn Frank's condition, he would lack sufficient
      capacity to contract and would require a guardian. It is further my opinion
      that, to a reasonable degree of medical probability, Shawn Frank was totally
      lm;i:\p<tW.laleJ vu Du~l!l.\},.l!f lJ, :lOU, tho d:1y ha Wili Mimittrrl tn OilK~ilt
      Manor, as he was prior to his admission, and as he continues to be.

             Affiant Further Sayeth Not,




                                   "dE. Mansfield, M.D., Affiant


     This instrument was acknowledged before me on the                         ~day of July 2016.

                                        /"/

                                  ~·~,~aA--
                                     Notary Public, State of leus                    ,..v.t. w /1'-r"')(('<t"
                                                                         (f!t:Yw r>T'f c.,P   .J_,·,,. .,;,.,
                                               OFFICIAL SEAL
                                                  Ci"dy t. Oakes
                                        NOTARY l'IJBUC.Sfllle ofNewMIIilo
                                N¥.,.,...,_1bp!Jw ~1        2w     ..Zo I 1:
     1
APPENDIX TAB E
State: Texas
Date Received: 11 December, 2015
Date Approved: 8 January 2016
Date Effective: 1 October, 2015
Transmittal Number: TX 15-0035



   15-0035                         1/08/16   10/01/15
              13-0057MM4
        ORGANIZATION AND FUNCTIONS OF THE       AGENCY AND
                  ORGANIZATION        OF THE AGENCY

                                                     {HHSC) is the state :::~n•:::.nr'\1
                                     the
                  i'"\\/ClrC"<:>C>!FlM            state health    human
                                    Commissioner of Health and Human


                  Legislature, Regular Session, 2003, the
                          into four new departments
      departments         the Department of State Health ....:or\/1/"'t:>~
Aging and         Services (DADS),       Department
(OARS), and    Department of Family and l-lrntol"'~tl\ta ... aru•r•""'
                      operations          four

Section     .021    the Texas Government
   administering federal medical
assistance        are granted to
                    agency, HHSC       final authority over the Medicaid
                 HHSC or          out by the other nruar"'''n"
           Within            State Medicaid

                                          as             state

   •
   •
   •
   •
   •
   •
   •
   •
   •
      TEXAS l\fEDICAID OPERATING DEPARTl\IENTS




                              Governor




                         Single State Agency

                         Health and Human
                        Services Commission




     Department of                             Department of Assistive and
    and Disability Services                      Rehabilitative




     Department                                      Department
Family ,l'utedi                                        Health
