F I L E D

United States Court of Appeals

Tenth Circuit

JUN 3 2003

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

WILLIAM J. SPAHR, by and through

his co-conservators Steven D. Spahr

and Barbara J. Spahr,

Plaintiff - Appellee,

v.

MELISSA CATHERINE SECCO,

a/k/a Melissa Radtke, a/k/a Melissa

Fisher, a/k/a Melissa Ball, a/k/a

Melissa Sweeney, a/k/a Melissa

Simms; U.S. BANCORP

INVESTMENTS, INC., a Minnesota

corporation f/k/a FBS Investment

Services, Inc.,

Defendants - Appellants.

Nos. 00-1132 & 00-1152

Appeal from the United States District Court

for the District of Colorado

(D.C. No. 99-M-1646)

Dale A. Gaar, Denver, Colorado, for Plaintiff-Appellee.

Stephen D. Bell, Dorsey & Whitney LLP (Brian E. Casey, with him on the

opening and reply briefs; William D. Nelson and Gilbert M. Roman of

Rothgerber, Johnson & Lyons, L.L.P. on the supplemental brief), Denver,

Colorado, for Defendant-Appellant U.S. Bancorp Investments, Inc.

Francis V. Cristiano, Denver, Colorado, for Defendant-Appellant Melissa

Catherine Secco. 
*

 The Honorable Thomas M. Reavley, United States Court of Appeals for

the Fifth Circuit, sitting by designation.

-2-

Before LUCERO , McWILLIAMS , and REAVLEY ,

*

 Circuit Judges.

LUCERO , Circuit Judge. 

In August 1999, William J. Spahr, through the co-conservators of his estate,

brought suit in state court against U.S. Bancorp Investments, Inc., and Melissa

Catherine Secco, alleging breach of fiduciary duty, fraud, constructive trust, and

negligence. Defendants removed the case to federal court and then filed a motion

to stay the proceedings and order arbitration, pursuant to an agreement signed by

Spahr in 1995. On the basis that the parties’ agreement, which contained an

arbitration provision, was unenforceable due to Spahr’s mental incapacity, the

district court denied the motion. This appeal presents the question, not yet

considered in this circuit, whether the Federal Arbitration Act (“FAA”), 9 U.S.C.

§ 4, dictates that an arbitrator, rather than the court, decide a mental capacity

challenge to a contract providing for arbitration of all disputes relating to that

contract. Exercising jurisdiction under 9 U.S.C. § 16, we conclude that it does

not and affirm the district court’s order denying arbitration.
-3-

I

According to the complaint, Spahr “is an adult and unable to manage his

property and financial affairs effectively because he suffers from dementia and

Alzheimer’s disease.” (U.S. Bancorp’s App. at 8 ¶ 2.) On June 6, 1995, he

opened an investment account at U.S. Bancorp, formerly known as FBS

Investment Services, Inc., through Secco, its employee. In doing so, Spahr signed

a Cash Account Agreement promising to submit any controversy arising out of the

account to arbitration:

I agree that any controversy arising out of or relating to my account,

to transactions with or for me or to this agreement or the breach

thereof, whether executed or to be executed within or outside of the

United States, and whether asserted against broker-dealer and/or its

present or former agents or employees, will be settled by arbitration

before and in accordance with the then current rules of the National

Association of Securities Dealers, Inc. [(“NASD”)].

(Id. at 82 ¶ 24.) 

During the following year, Secco exploited Spahr’s mental deficiencies and

finagled him out of large sums of money and real estate. In doing so, Spahr

claims, Secco breached her fiduciary duties as Spahr’s broker, investment advisor,

and trustee. Spahr also alleges that Secco defrauded and exercised undue

influence over him.

Spahr seeks recovery from U.S. Bancorp under vicarious liability and

negligence theories. Although much of the challenged conduct occurred after
1

 Three months after Spahr signed the Cash Account Agreement, he

executed the William G. Spahr Trust, transferring a large amount of his assets,

including his account at U.S. Bancorp, into this trust. Spahr named himself and

Julius Wall as co-trustees. In this capacity, they signed a new Customer

Agreement with U.S. Bancorp that contained an arbitration provision substantially

identical to the one in Spahr’s initial Cash Account Agreement. In January and

February of 2000, Spahr’s co-conservators, Barbara and Steven Spahr, invalidated

the Spahr Trust and signed another Customer Agreement with U.S. Bancorp

containing an identical arbitration agreement.

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U.S. Bancorp discharged Secco for violating NASD broker-dealer ethical

guidelines, the complaint alleges that as an employee, Secco was “‘legendary’ in

the stock brokerage community for convincing elderly men to loan her money in

exchange for sex.” ( Id. at 9 ¶ 13.) Spahr claims that U.S. Bancorp was negligent

in employing her for “[a] . . . position that involved close contact with the clients

of [U.S. Bancorp], handling funds of the clients of [U.S. Bancorp] and making

investment recommendations for clients.” ( Id. at 16 ¶ 78.) After the suit was

filed, U.S. Bancorp filed a motion—which Secco sought to join—to stay the

district court proceedings and compel arbitration based on the Cash Account

Agreement signed by Spahr and subsequent customer agreements signed on his

behalf. 1

After a two-day evidentiary hearing on U.S. Bancorp’s motion to compel

arbitration, the district court concluded that the 1995 Cash Account Agreement 

“is not an enforceable agreement under the law [for] failure of [Spahr] to have

sufficient mental capacity to understand the nature and effect of this contract.” 
2

 We abated this appeal pending the Supreme Court’s decision in Howsam

v. Dean Witter Reynolds, Inc. , 123 S. Ct. 588 (2002). That case has now been

decided and the parties have filed supplemental briefs addressing its effect, if any,

on the present appeal .

-5-

(Id. at 211.) On this basis, the court denied U.S. Bancorp’s motion to compel

arbitration. In response to U.S. Bancorp’s argument that subsequent customer

agreements signed by co-trustees of the Spahr Trust and Spahr’s co-conservators

require arbitration, the court concluded that “[t]he matter of later ratification has

nothing to do with this case.” ( Id. at 210.) Denying Secco’s request to join U.S.

Bancorp’s motion, the district court determined that the “allegations here deal

with things that had nothing to do with . . . [Secco] being the customer’s

representative for [U.S. Bancorp].” (Secco’s App. at 82.) 

On appeal, U.S. Bancorp and Secco challenge the district court’s rulings on

the ground that Spahr’s mental incompetence claim must be submitted to

arbitration under the parties’ agreement. Defendants also challenge the district

court’s decision that Spahr was not obligated to arbitrate this dispute based on the

subsequent customer agreements signed on his behalf. Secco further contends

that the district court misconstrued the arbitration provision to exclude the claims

against her. 2

II

We review de novo trial court denials of motions to compel arbitration. 
3

 U.S. Bancorp’s motion to stay the district court proceedings and compel

arbitration is governed by the FAA. The coverage section of the FAA, 9 U.S.C. 

§ 2, provides:

A written provision in any maritime transaction or a contract evidencing a

transaction involving commerce to settle by arbitration a controversy

thereafter arising out of such contract or transaction, or the refusal to

perform the whole or any part thereof, or an agreement in writing to submit

to arbitration an existing controversy arising out of such a contract,

transaction, or refusal, shall be valid, irrevocable, and enforceable, save

upon any grounds as exist at law or in equity for the revocation of any

contract.

4

 Section 4 further provides that, except where the dispute is within

admiralty jurisdiction, either party may request a jury trial on the issue of whether

an arbitration agreement has been made. In the instant case, the record reflects

that all parties waived a jury trial. 

-6-

Williams v. Imhoff, 203 F.3d 758, 762 (10th Cir. 2000). Motions to compel

arbitration are governed by 9 U.S.C. § 4,3

 which provides:

The court shall hear the parties, and upon being satisfied that the

making of the agreement for arbitration or the failure to comply

therewith is not in issue, the court shall make an order directing the

parties to proceed to arbitration in accordance with the terms of the

agreement. . . . If the making of the arbitration agreement or the

failure, neglect, or refusal to perform the same be in issue, the court

shall proceed summarily to the trial thereof.4

9 U.S.C. § 4 (emphasis added). This provision requires judicial resolution of

issues that go to the “making” of an agreement for arbitration. Prima Paint Corp.

v. Flood & Conklin Mfg., 388 U.S. 395, 403–04 (1967). It has long been a tenet

of federal arbitration law that “arbitration is a matter of contract and a party

cannot be required to submit to arbitration any dispute which he has not agreed so
-7-

to submit.” AT&T Techs. v. Communications Workers of Am., 475 U.S. 643, 648

(1986). It follows that “[t]he question whether the parties have submitted a

particular dispute to arbitration, i.e., the ‘question of arbitrability,’ is an issue for

judicial determination unless the parties clearly and unmistakably provide

otherwise.” Howsam, 123 S. Ct. at 591. Although “doubts concerning the scope

of arbitrable issues should be resolved in favor of arbitration,” Moses H. Cone

Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983), a court may

compel arbitration of a particular dispute under § 4 of the FAA only when

satisfied that the “making” of the agreement to arbitrate is not at issue, Prima

Paint, 388 U.S. at 404.

In denying U.S. Bancorp’s motion to compel arbitration, the district court

concluded that Spahr’s June 6, 1995, Cash Account Agreement was “not an

enforceable agreement under the law.” (U.S. Bancorp’s App. at 211.) On appeal,

U.S. Bancorp advances two arguments in support of its position that Spahr’s

mental capacity challenge should have been decided by arbitrators: It argues that

the parties agreed to arbitrate arbitrability, and asserts that Spahr’s mental

capacity challenge goes to the validity of the entire contract, rather than merely

the arbitration clause itself. For the latter reason, U.S. Bancorp contends that the

Supreme Court’s decision in Prima Paint dictates arbitration of Spahr’s mental
5

 U.S. Bancorp also argues, in its supplemental brief, that Spahr’s mental

capacity challenge is not a “question of arbitrability” for the court to decide under

the Supreme Court’s recent decision in Howsam. In Howsam, the Supreme Court

analyzed whether the court or arbitrator should construe an arbitration rule of the

National Association of Securities Dealers (“NASD”) providing that “no dispute

shall be eligible for submission to arbitration . . . where six (6) years have elapsed

from the occurrence or event giving rise to the . . . dispute.” 123 S.Ct. at 590. 

Holding that the arbitrators should apply this rule to the underlying controversy

because it was not a “question of arbitrability” for the court to decide, the Court

explained that questions of arbitrability have a “far more limited scope,” id. at

592, and not every “potentially dispositive gateway question” is a “question of

arbitrability,” id. Howsam, however, did not address the precise question in the

instant case, namely, when a challenge to a contract containing an arbitration

clause puts the “making” of an agreement to arbitrate in issue under § 4 of the

FAA. The Court’s previous decision in Prima Paint squarely dealt with that

question. Because Howsam is not controlling here, we analyze whether Spahr’s

mental capacity challenge puts the “making” of an agreement to arbitrate in issue

under § 4 within the framework set forth in Prima Paint. 

-8-

capacity challenge. We reject both arguments.5

A

We first consider whether the agreement signed by Spahr in 1995 contains

“clear and unmistakable evidence” that the parties agreed to submit the question

of arbitrability to arbitration. In First Options of Chicago, Inc. v. Kaplan, the

Supreme Court held that “[j]ust as the arbitrability of the merits of a dispute

depends on whether the parties agreed to arbitrate that dispute, so the question

‘who has the primary power to decide arbitrability’ turns upon what the parties

agreed about that matter.” 514 U.S. 938, 943 (1995) (citation omitted). First

Options concludes that we “should not assume that the parties agreed to arbitrate
-9-

arbitrability unless there is clear and unmistakable evidence that they did so.” Id.

at 944. On this authority, this court has held that broad provisions to arbitrate all

disputes arising out of or relating to the overall contract, like the one at issue

here, do not provide the requisite clear and unmistakable evidence “within the

four corners of the . . . [a]greement that the parties intended to submit the

question of whether an agreement to arbitrate exists to an arbitrator.” Riley Mfg.

Co. v. Anchor Glass Container Corp., 157 F.3d 775, 780 (10th Cir. 1998); see

also McLaughlin Gormley King Co. v. Terminix Int’l Co., 105 F.3d 1192, 1194

(8th Cir. 1997) (concluding that the arbitration clause in question did not clearly

and unmistakably evidence the parties’ intent to give the arbitrator power to

determine arbitrability where the clause did not mention a “controversy over

arbitrability”); cf. PaineWebber, Inc. v. Bybyk, 81 F.3d 1193, 1199–1200 (2d Cir.

1996) (holding that a provision requiring arbitration of “any and all

controversies” indicates the parties’ intent to submit to arbitration the very

question of arbitrability). We thus conclude that the district court properly set out

to determine the arbitrability of Spahr’s underlying claims, all of which fall

within the scope of the arbitration clause if that provision proves to be

enforceable. 

B

 This leads to our next inquiry: Does Spahr’s mental capacity challenge to
6

 Whereas the party in Prima Paint brought suit to rescind the contract, in

the instant case, we find nothing in the record that indicates a formal election by

Spahr to rescind the 1995 Cash Account Agreement in its entirety. In litigating

the matter in the courts, however, Spahr has implicitly elected to rescind the

arbitration clause of the contract.

-10-

the Cash Account Agreement place the “making” of the agreement to arbitrate at

issue under § 4 of the FAA? If Spahr’s challenge did not place the “making” of

the arbitration provision at issue within the meaning of § 4, the district court

erred in denying U.S. Bancorp’s otherwise valid motion to compel arbitration. On

the other hand, if Spahr’s challenge did place the “making” of the arbitration

agreement at issue, the district court acted properly in determining that the

arbitration clause was unenforceable on the basis that Spahr lacked the mental

capacity to enter into a contract.

 In Prima Paint, the Supreme Court held that, in the context of a fraud in

the inducement challenge, the “making” of an agreement for arbitration is at issue

when there is an independent challenge to the arbitration clause itself. 388 U.S.

at 403–04. In that case, the parties entered into a consulting contract that

included a promise to arbitrate any controversy arising out of the contract. When

one party sued to have the overall contract rescinded, alleging fraud in the

inducement, the other party brought a motion in district court to stay the

proceedings and compel arbitration.6 Affirming the district court’s grant of a stay

pending arbitration, the Second Circuit held that the “claim of fraud in the
-11-

inducement of the contract generally—as opposed to the arbitration clause

itself—is for the arbitrators and not the courts.” Id. at 400. “[E]xcept where the

parties otherwise intend[,] arbitration clauses as a matter of law are ‘separable’

from the contracts in which they are embedded, and . . . where no claim is made

that fraud was directed to the arbitration clause itself, a broad arbitration clause

will be held to encompass arbitration of the claim that the contract itself was

induced by fraud,” held the Second Circuit. Id. at 402.

Resolving a split among circuits, the Supreme Court held that a fraudulent

inducement claim that goes to the entire contract must be resolved by an

arbitrator. It concluded that § 4 of the FAA, which divests the court of

jurisdiction “upon being satisfied that the making of the agreement for arbitration

. . . is not in issue,” provided the answer. Id. at 403. “[I]f the claim is fraud in

the inducement of the arbitration clause itself—an issue which goes to the

‘making’ of the agreement to arbitrate—the federal court may proceed to

adjudicate it. But the statutory language does not permit the federal court to

consider claims of fraud in the inducement of the contract generally.” Id. at 404. 

U.S. Bancorp argues that because Spahr’s mental incompetence claim

challenges the Cash Account Agreement generally, rather than the arbitration

provision in particular, the district court should have stayed its proceedings and

directed arbitration of that dispute under Prima Paint. While we have not
7

 U.S. Bancorp argues that the Prima Paint rule should apply here because

mental incapacity, like fraud in the inducement, is a contractual defense that

merely renders a contract voidable. “Unlike a void contract, a voidable contract

is an agreement that unless rescinded imposes on the parties the same obligations

as if it were not voidable.” Sphere Drake Ins. Ltd. v. Clarendon Nat’l Ins. Co.,

263 F.3d 26, 31 (2d Cir. 2001). It is true that many circuits have applied Prima

Paint to voidable contracts—i.e., those where the contract was induced by fraud,

mistake, or duress—but not to void contracts. See id. at 32 (holding that a party

is not entitled to a trial on the arbitrability of a voidable contract unless the party

alleges that the arbitration clause itself is voidable, yet if a party alleges that the

contract is void, it need not specifically allege that the arbitration clause itself is

void); Sphere Drake Ins. Ltd. v. All Am. Ins. Co., 256 F.3d 587, 591 (7th Cir.

2001) (concluding that “as arbitration depends on a valid contract an argument

that the contract does not exist can’t logically be resolved by the arbitrator”);

Sandvick AB v. Advent Int’l Corp., 220 F.3d 99, 107 (3d Cir. 2000) (drawing a

distinction for purposes of applying Prima Paint “between contracts that are

asserted to be void or non-existent . . . and those that are merely voidable”);

Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1140–41

(9th Cir. 1991)(“We read Prima Paint as limited to challenges seeking to avoid or

rescind a contract—not to challenges going to the very existence of a contract that

a party claims never have agreed to.”). As explained in further detail below, this

distinction is not dispositive where, as here, a party challenges a contract

containing an arbitration clause on the basis of mental incapacity.

-12-

considered the scope of Prima Paint’s applicability beyond claims of fraud in the

inducement, other circuits have had occasion to do so.7

 See, e.g., Primerica Life

Ins. Co. v. Brown, 304 F.3d 469, 472–73 (5th Cir. 2002) (holding that the

arbitrator is to decide a mental capacity defense that does not specifically relate to

the arbitration agreement ); Jeske v. Brooks, 875 F.2d 71, 75 (4th Cir. 1989)

(holding that unconscionability and lack-of-consideration defenses challenging

the entire contract, rather than the arbitration clause itself, are for the arbitrator to

decide); Unionmutual Stock Life Ins. Co. v. Beneficial Life Ins. Co., 774 F.2d
-13-

524, 529 (1st Cir. 1985) (same with mutual mistake and frustration of purpose);

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 637 F.2d 391, 398 (5th Cir.

1981) (same with duress and unconscionability); Commonwealth Edison Co. v.

Gulf Oil Corp., 541 F.2d 1263, 1271 (7th Cir. 1976) (same with frustration of

performance). In Unionmutual, the First Circuit concluded that “[t]he teaching of

Prima Paint is that a federal court must not remove from the arbitrators

consideration of a substantive challenge to a contract unless there has been an

independent challenge to the making of the arbitration clause itself. The basis of

the underlying challenge to the contract does not alter the . . . principle.” 774

F.2d at 529.

 In Primerica, the Fifth Circuit recently concluded that a mental capacity

defense to a contract that contains an arbitration clause is “part of the underlying

dispute between the parties,” and must be submitted to the arbitrator. 304 F.3d at

472. Relying on Prima Paint, the court held that “unless a defense relates

specifically to the arbitration agreement, it must be submitted to the arbitrator as

part of the underlying dispute.” Id. We disagree, and hold that the rule

announced in Prima Paint does not extend to a case where a party challenges a

contract on the basis that the party lacked the mental capacity to enter into a

contract. 

As noted, Prima Paint submits to arbitrators the resolution of a claim of
8

 Commentators have explained the distinction between challenging a

contract on the basis of status (i.e., mental incapacity) and challenging a contract

on the basis of the conduct of the bargaining parties (i.e., fraudulent inducement). 

See, e.g., E. Allan Farnsworth, Farnsworth on Contracts § 4.1 at 419–20 (2d ed.

1998). Farnsworth explains that courts “police” agreements against unfairness by

placing limits on their enforceability, and that there are two established

(continued...)

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fraud in the inducement of the entire contract, as contrasted with a claim of fraud

in the inducement of the arbitration agreement itself. Because the latter claim

involves the “making” of an agreement to arbitrate under § 4, it is for the court to

resolve. 388 U.S. at 403–04. Courts may apply this rule with ease when a party

challenges a contract on the basis that it was induced by fraud because it is

conceivable either that (1) he or she was fraudulently induced to agree to a

contract containing an arbitration agreement; or (2) he or she was fraudulently

induced to agree to the arbitration provision in particular. We cannot say the

same when a party raises a mental capacity challenge, as it would be odd indeed if

a party claimed that its mental incapacity specifically affected the agreement to

arbitrate. We conclude, therefore, that the analytical formula developed in Prima

Paint cannot be applied with precision when a party contends that an entire

contract containing an arbitration provision is unenforceable because he or she

lacked the mental capacity to enter into the contract. Unlike a claim of fraud in

the inducement, which can be directed at individual provisions in a contract, a

mental capacity challenge can logically be directed only at the entire contract.8 
8

(...continued)

perspectives for policing contractual agreements: (1) status, and (2) behavior. 

Status focuses on the characteristics of the party involved. Classic examples of

the status perspective include restrictions on the capacity of a specified class of

persons, such as minors and the mentally incompetent, whose power to contract

has been limited in order to shield them from the consequences of unwise

bargains. In contrast, the behavior perspective focuses on how the parties acted

during the bargaining process; a classic example is the rule that allows a party to

avoid a contract on the ground that the party has been induced to make the

contract by misrepresentation. Id.

9

 Given this conclusion, we do not address Secco’s argument that the

district court erred in denying her request to join U.S. Bancorp’s motion to stay

the proceedings and compel arbitration.

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In the present case, although Spahr signed the Cash Account Agreement,

which contains a promise to arbitrate “any controversy arising out of or relating

to” the agreement, he contended below and continues to argue here that the

overall agreement is unenforceable because he was mentally incompetent when he

entered into the contract. We hold that Spahr’s mental incapacity defense

naturally goes to both the entire contract and the specific agreement to arbitrate in

the contract. Therefore, Spahr’s claim that he lacked the mental capacity to enter

into an enforceable contract placed the “making” of an agreement to arbitrate at

issue under § 4 of the FAA. In determining that the June 5, 1995, Cash Account

Agreement was unenforceable, the district court acted within its authority under

§ 4.9

III

U.S. Bancorp argues that, even if the court properly determined that Spahr
-16-

lacked the mental capacity to enter into the 1995 Agreement, it erred in refusing

to consider whether Spahr’s representatives subsequently ratified the agreement to

arbitrate. Alternatively, U.S. Bancorp asserts that the subsequent agreements

signed by Spahr’s representatives constituted a new and independent obligation

for Spahr to arbitrate the present dispute. Specifically, U.S. Bancorp contends

that subsequent Customer Agreements signed by Julius Wall, as co-trustee of the

William G. Spahr Trust, and Steven and Barbara Spahr, as Spahr’s coconservators, require Spahr to arbitrate the present dispute. These agreements

contained arbitration provisions identical to the one signed by Spahr when he

opened his account at U.S. Bank, and require arbitration of “any controversy

arising out of or relating to [Spahr’s] account, to transactions with or for [him] or

to this agreement. . . .” (U.S. Bancorp’s App. at 85, 236.) The district court

concluded that “[t]he matter of later ratification has nothing to do with this case.”

(Appellant’s App. at 210.) We agree with the district court.

Challenging the district court’s conclusion, U.S. Bancorp cites the

Restatement (Second) of Contracts § 15(2), cmt. d, for the proposition that

“[r]egardless of the other party’s knowledge or good faith and regardless of the

fairness of the terms, the incompetent person on regaining full capacity may

affirm or disaffirm the contract, or the power to affirm or disaffirm may be

exercised on his behalf by his guardian or after his death by his personal
-17-

representative.” U.S. Bancorp contends that “[e]ven if Spahr was initially unable

to agree to arbitrate, he essentially ‘became competent again’ when Wall as cotrustee and later the co-conservators (all of whom are unquestionably competent)

were given the authority to act on Spahr’s behalf with regard to the Spahr

Account and USBI.” (U.S. Bancorp’s Br. at 32.) U.S. Bancorp points us to

authority holding that one who regains mental capacity can ratify a contract. See

Brisacher v. Tracy-Collins Trust Co., 277 F.2d 519, 521 (10th Cir. 1960); Norfolk

S. Corp. v. Smith, 414 S.E.2d 485, 487 (Ga. 1992); Apfelblat v. Nat’l Bank

Wyandotte-Taylor, 404 N.W.2d 725, 727 (Mich. Ct. App. 1987). These cases are

not persuasive here as there is no allegation that Spahr has regained his capacity

since signing the 1995 Cash Account Agreement.

 As further support for its ratification argument, U.S. Bancorp highlights

the fact that both the Spahr Trust and the later account opened by Spahr’s coconservators remained at U.S. Bancorp, generating income on Spahr’s behalf. 

However, U.S. Bancorp does not identify case law or other authority to show how

these operative facts resulted in the ratification of the Customer Account

Agreement signed by Spahr in 1995. Moreover, we see no evidence in the record

that Wall (as co-trustee of the Spahr Trust) or Spahr’s co-conservators ratified the

arbitration provision in the 1995 Cash Account Agreement signed by Spahr while

he was mentally incompetent. In short, we agree with the district court that U.S.
-18-

Bancorp’s ratification argument lacks merit.

We further reject U.S. Bancorp’s alternative argument that the district court

erred because subsequent customer agreements, each of which contains an

arbitration provision identical to the one Spahr signed when he initially opened

his account, constitute an independent obligation for Spahr to arbitrate the instant

dispute. U.S. Bancorp argues that an arbitration agreement can cover matters that

arose prior to the signing of the agreement, citing R.M. Perez & Assoc., Inc. v.

Welch, 960 F.2d 534, 539 (5th Cir. 1992), Whisler v. H.J. Meyers & Co., 948 F.

Supp. 798, 802 (N.D. Ill. 1996), and Shotto v. Laub, 632 F. Supp. 516, 522 (D.

Md. 1986). While this proposition is not without support, the later customer

agreements signed by Wall and Spahr’s co-conservators do not cover the present

dispute. The Customer Agreement signed by Wall was in relation to the Spahr

Trust; none of Spahr’s claims are related to the Spahr Trust; the third agreement,

signed by Spahr’s co-conservators, involves a different account number, and none

of Spahr’s claims arise out of that specific account. In fact, Spahr’s coconservators had already filed the present suit in state court when they signed the

stated third account agreement. 

IV

For the foregoing reasons, we AFFIRM the district court’s order denying

U.S. Bancorp’s motion to compel arbitration.