Compulsory Arbitration Agreement Negated by Mental Incapacity

Spahr v. Secco, 330 F.3d 1266 (10th Cir. 2003); 71(48) U.S. Law Week 1763-64 (June 17, 2003)

An investor filed a lawsuit against his brokerage firm and alleged the firm was negligent in allowing the broker with whom he dealt to handle his account because she was "legendary" in the brokerage community for convincing elderly men to loan her money in exchange for sex.  The brokerage firm responded that the investor's investment account agreement contained an arbitration clause covering all related disputes and asserted that as a result the claim must be resolved by an arbitrator and not a court.  In reply, the investor alleged that he was incapable of managing his financial affairs because he has dementia and Alzheimer's disease and thus the account agreement and its arbitration clause were unenforceable...

Found in DMHL Volume 23 Issue 1