The death by suicide of 26-year-old Brandon Nelson, who descended into psychosis not long after graduating from UCLA, was a tragedy – compounded, his parents alleged, by the failure of the mental health facility housing Brandon to properly supervise him.

But were his parents barred from suing the Orange County facility in Superior Court because its admission agreement, electronically signed by him, required all disputes to be  resolved by binding arbitration rather than in court? That was the issue recently before the California Court of Appeal (Nelson v. Dual Diagnosis Treatment Center).

In January of 2018, Brandon suffered a sudden onset of psychosis. He asked a police officer for his gun so Brandon could shoot himself, saying he felt “evil” and “like an animal.” The officer alerted authorities, who got Brandon committed for psychiatric treatment.

Over the next six weeks, Brandon was certified as “gravely disabled” and “paranoid, delusional, fearful.” He was discharged in late February, only to be admitted again three days later after threatening to kill himself.

On February 27, Brandon gave his father a durable power of attorney over his financial, legal, and health matters.

On March 1, a hospital review board extended his involuntary stay for 14 days because of his ongoing serious mental issues.

According to court records, on the evening of March 6 a doctor determined that Brandon needed “continued inpatient care.” But the next day, a different doctor ordered him released to his parents so they could place him in “an appropriate facility with adequate licensing, services and qualifications.”

On March 7, Brandon arrived at Sovereign Health of San Clemente, also known as Dual Diagnosis Treatment Center, Inc., allegedly without his parent’s knowledge or consent. It was  unclear from court records how he got there.

The Sovereign employee who electronically signed his paperwork testified both that she did not recall meeting Brandon or doing his intake, yet also said “he seemed agitated when we did the intake” and that she “asked for a licensed professional to see him.”

Brandon told the clinical social worker who saw him on the day of his arrival that he hadn’t received his medications for almost 24 hours and was “going to relapse if I don’t get my medications.”

Brandon also said he believed people on TV were talking directly to him, that he was having auditory hallucinations, and that he was “acutely aware that his state of mind was impaired.”

The social worker said Brandon howled, yelled, curled up in a fetal position, and was unable to concentrate for more than 10 to 20 seconds at a time.

He wrote, “Brandon requires 24-hour supervision and support at this time. Without medications, Brandon is at high risk of further psychological decompensation and loss of independent functioning.”

The next day, according to his parents, Sovereign gave Brandon his medication at about 6:20 p.m., but he soon began screaming again and “exhibiting signs that he was a danger to himself.”

Despite this, Sovereign allowed Brandon to go to his room at around 7:45 p.m., unattended and unsupervised, according to court documents. He made a loop with the drawstring of his sweatpants and hanged himself from an overhead fire sprinkler.

When his parents sued Sovereign, the company asked the Orange County Superior Court to compel them to arbitrate the dispute, based on an arbitration clause in the documents used to admit Brandon.

The trial court declined, saying Sovereign failed to prove that Brandon’s signature was authentic. The court also said the arbitration provision was unconscionable, and therefore unenforceable. The company appealed.

The appellate court ruled against Sovereign on multiple points.

The arbitration clause, it noted, incorporated by reference the extensive and rather complex rules of the American Arbitration Association, but failed provide Brandon with a copy of those rules.

The justices also seemed skeptical that a patient in the midst of a psychotic crisis could be deemed capable of negotiating the terms of his admission to a mental health facility.

“The take-it-or-leave-it nature” of the contract handed to Brandon created at least “some degree of procedural unconscionability,” they said.

The document also exhibited “substantive unconscionability,” they said, meaning it was overly one-sided or oppressive in favor of Sovereign, which had drafted it.

While the trial court did not determine that Brandon was incompetent, “we cannot ignore on our independent review Brandon’s indisputably fragile mental state,” the justices said. Given his condition, they said, “The imbalance of bargaining power is apparent.”

The justices upheld the trial court’s order denying Sovereign’s motion to compel arbitration of the parent’s claims and awarded the Nelsons their costs on appeal.

This case is yet another example of the appellate court refusing to order parties to arbitrate under circumstances that demonstrate unconscionability, either procedural or substantive. Parties to contracts which include arbitration clauses should take notice. 

By Laurie Murphy