Highlands Wellmont Health Network, Inc. v. John Deere Health Plan, Inc.

1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0416P (6th Cir.)
File Name: 03a0416p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
HIGHLANDS WELLMONT
HEALTH NETWORK, INC.;
WELLMONT HEALTH
SYSTEMS, INC., doing
business as Wellmont Bristol
Regional Medical Center,
doing business as Wellmont
Holston Valley Medical
Center,
Plaintiffs-Appellees,
v.
JOHN DEERE HEALTH PLAN,
INC.,
Defendant-Appellant.
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No. 02-6078
Appeal from the United States District Court
for the Eastern District of Tennessee at Greeneville.
No. 02-00032—Thomas G. Hull, District Court.
Submitted: September 17, 2003
Decided and Filed: November 25, 2003
2 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
*The Honorable Danny C. Reeves, United States District Judge for
the Eastern District of Kentucky, sitting by designation.
Before: GUY, and GILMAN, Circuit Judges; REEVES,
District Judge.*
_________________
COUNSEL
ON BRIEF: James S. Chase, HUNTON & WILLIAMS,
Knoxville, Tennessee, for Appellant. William C. Bovender,
Jimmie C. Miller, HUNTER, SMITH & DAVIS, Kingsport,
Tennessee, for Appellees.
_________________
OPINION
_________________
RALPH B. GUY, JR., Circuit Judge. Defendant, John
Deere Health Plan, Inc. (JDHP), appeals from the denial of its
motion under the Federal Arbitration Act (FAA), 9 U.S.C.
§ 4, to compel arbitration of the claims asserted by plaintiffs,
Highlands Wellmont Health Network, Inc. and Wellmont
Health System (collectively “Wellmont”). JDHP argues that
the district court erred in finding that JDHP had waived its
rights under the arbitration clause in the parties’ medical
services agreement. After review of the record, the applicable
law, and the arguments presented on appeal, we reverse.
I.
JDHP is a qualified health maintenance organization.
Wellmont Health Systems owns and operates the Bristol
Regional Medical Center and Wellmont Holston Valley
Medical Center in East Tennessee. Each of these hospitals is
a member of the Highland Wellmont Health Network, Inc.

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No. 02-6078 Highlands Wellmont Health Network
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In 1997, Wellmont and JDHP entered into a medical
services agreement (1997 Contract) under which Wellmont
provided medical services to JDHP members. The 1997
Contract did not contain an arbitration clause. It had an initial
term of two years and automatically renewed annually
thereafter.
In early 2001, the parties entered into a second contract
(2001 Contract) that contained the following arbitration
clause:
29. DISPUTE RESOLUTION
Contracting Hospital agrees that any dispute arising out
of this Agreement shall be resolved in accordance with
JDHP’s written policies and procedures for dispute
resolution, which include mandatory, binding arbitration.
The parties waive their right to seek remedies in court,
including their right to jury trial. If policies and
procedures are inconsistent with this provision, then this
provision shall prevail.
Arbitration in regard to benefit determination, utilization,
and quality of care matters shall be conducted in
accordance with the Employee Benefit Plans Claims
Arbitration Rules of the American Arbitration
Association. Arbitration in regard to all other matters
arising out of this Agreement including, but not limited
to, credentialing/recredentialing, participation, and
termination, including termination for quality of care
concerns, shall be conducted in accordance with the
Commercial Arbitration Rules of the American
Arbitration Association.
With respect to benefit determination, which includes but
is not limited to authorization of coverage for medical
services and the determination of availability and extent
of coverage for services provided to a particular Member,
4 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
the question for the arbitrator will be whether the
decision being arbitrated should be set aside because the
decision was arbitrary and capricious.
Each party will bear its own costs and attorney fees. The
expenses associated with the arbitration will be shared
equally by both parties. Arbitration shall be final and
binding on all parties.
The arbitrator shall have no authority to award exemplary
or punitive damages, and the parties waive their right to
such damages.
Judgment upon the decision of the arbitrator may be
entered in any court having jurisdiction, and the court
may enforce the decision of the arbitrator.
The 2001 Contract “superceded” the 1997 Contract “to the
extent [it applied] to inpatient and outpatient hospital
services.” All other terms and conditions of the 1997
Contract remained in full force and effect. The 2001 Contract
was signed by Wellmont on January 24, 2001, and by JDHP
on February 27, 2001. The term of the 2001 Contract for
Medicare + Choice Product (which includes the services
subject to the billing dispute in this case) was made
retroactive to October 23, 2000 through December 31, 2003.
In November 2000, prior to the signing of the 2001
Contract, JDHP conducted an audit of Wellmont’s billings
under the 1997 Contract. JDHP determined that Wellmont
had billed rehabilitation services under the rate code called
DRG 462, which JDHP believed was inappropriate because,
among other things, the rehabilitation services were provided
in a hospital skilled nursing unit rather than in a licensed

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No. 02-6078 Highlands Wellmont Health Network
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1The reimbursement schedules under both the 1997 Contract and the
2001 Contract reference DRG code which is a standardized coding system
used for billing and reimbursement within the health care industry.
rehabilitation facility as required under the Medicare
regulations.1
Wellmont did not learn that JDHP objected to the
rehabilitation services billings until Wellmont was contacted
by the FBI on March 9, 2001—after the 2001 Contract was
signed. The FBI was investigating allegations made by JDHP
to the Office of the Inspector General of the Department of
Health and Human Services regarding Wellmont’s billing
practices. Also on March 9, 2001, JDHP informed Wellmont
that it was seeking in excess of $1 million for the alleged
overpayments for rehabilitation services, and that after March
2001 JDHP would prospectively reimburse Wellmont at a
lower rate applicable to a skilled nursing facility (SNF) for
the rehabilitation services performed in Wellmont’s skilled
nursing units.
On April 13, 2001, Wellmont sent a letter to JDHP
regarding the alleged overpayments for rehabilitation
services. The letter cited section 12.b of the 1997 Contract in
outlining Wellmont’s position on the billing dispute. The
letter concluded with the following:
Finally, we would like to set a date to discuss
alternatives for dispute resolution. As I mentioned,
Wellmont would be open to discussion of a range of
options, including mediation, possible arbitration, or a
possible declaratory judgment action before the Federal
court. After we have received your analysis and you
have had a chance to review our enclosed documentation,
we will be in a better position to have that discussion.
6 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
2The July 13 JD HP letter references a May 23 letter from W ellmont,
which is not part of the record.
Several months later, on July 13, 2001, JDHP sent a letter
to Wellmont referencing both the disputed overpayments and
the intervening disputed underpayments.2 With respect to
Wellmont’s proposed resolution methods, JDHP stated:
For the reasons stated above, we cannot agree with the
assertions made in your May 23 letter that
underpayments have occurred. On the contrary, John
Deere Health maintains its position that the services were
billed inappropriately, resulting in overpayment on John
Deere Health’s part.
While we appreciate Wellmont’s interest in resolving
what Wellmont wishes to portray as a contract dispute
quietly and expeditiously, we do not at this point agree to
arbitration or other alternative dispute resolution. Rather,
John Deere Health reiterates its demand for full payment
of all amounts overpaid, totaling in excess of $1.3
million before upward adjustment for interest and
previously returned withhold.
We also expect that Wellmont [sic] take immediate steps
to correct its billing practice to avoid future
overpayments.
On February 8, 2002, Wellmont filed a complaint in this
action asking for a declaration that it was entitled to
reimbursement under the higher DRG 462 rate and asking for
damages equal to the difference between the DRG 462 and
the SNF rates for rehabilitation services provided after March
2001. The complaint referenced and attached only the 1997
Contract.

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After JDHP informed Wellmont that its claims were
governed by the 2001 contract, Wellmont filed an amended
complaint. The amended complaint alleged that JDHP
fraudulently induced Wellmont to enter into the 2001
Contract. Wellmont also asked for damages for JDHP’s
alleged breach of the implied duty of good faith and fair
dealing in negotiating the 2001 Contract and for JDHP’s
alleged breach of the 2001 Contract in paying the lower SNF
rate for the rehabilitation services.
JDHP immediately filed a motion to compel arbitration and
stay proceedings. On August 7, 2002, the district court
denied the motion. It found that the 2001 Contract contained
a binding arbitration clause but concluded that JDHP had
waived its right to compel arbitration in the July 13, 2001
letter. This appeal followed.
II.
The FAA provides that arbitration clauses in commercial
contracts are “valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of
any contract.” 9 U.S.C. § 2. If a court determines that a
claim is covered by an arbitration clause, it must stay the
proceedings until the arbitration process is complete.
9 U.S.C. § 3.
When faced with a motion to compel arbitration, a district
court must follow the procedure set forth in section 4 of the
FAA:
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
8 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
in issue, the court shall proceed summarily to the trial
thereof.
9 U.S.C. § 4.
It is well established that any doubts regarding arbitrability
must be resolved in favor of arbitration. Fazio v. Lehman
Bros., Inc., 340 F.3d 386, 392 (6th Cir. 2003). We review a
district court’s ruling on a motion to compel arbitration de
novo. Great Earth Cos. v. Simons, 288 F.3d 878, 888 (6th
Cir. 2002).
A. Waiver
An agreement to arbitration may be “waived by the actions
of a party which are completely inconsistent with any reliance
thereon.” Gen. Star Nat’l Ins. Co. v. Administratia
Asigurarilor de Stat, 289 F.3d 434, 438 (6th Cir. 2002)
(quoting Germany v. River Terminal Ry. Co., 477 F.2d 546,
547 (6th Cir. 1973)). There is a strong presumption in favor
of arbitration under the FAA. O.J. Distrib., Inc. v. Hornell
Brewing Co., 340 F.3d 345, 355 (6th Cir. 2003). Because of
the strong presumption in favor of arbitration, waiver of the
right to arbitration is not to be lightly inferred. Id.
JDHP argues that it could not have waived its right to
invoke arbitration in the July 2001 letter because Wellmont
did not raise the fraudulent inducement or bad faith claims, or
assert other claims under the 2001 Contract, until it filed its
amended complaint in 2002. JDHP also argues that the July
2001 letter applied only to claims under the 1997 Contract;
and thus, there could be no waiver of arbitration under the
2001 Contract.
Wellmont argues that JDHP waived its right to invoke
arbitration because the July 2001 letter (1) made no
distinction between disputed overpayments under the 1997
Contract and disputed underpayments under the 2001

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No. 02-6078 Highlands Wellmont Health Network
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Contract; and (2) categorically denied arbitration without
referring to either contract.
The July 2001 letter clearly declined alternative dispute
resolution of JDHP’s claim for the overpayments made under
the 1997 Contract. It also, however, referenced Wellmont’s
claim for underpayments. JDHP did not start reimbursing at
the lower SNF rate until March 2001, after the 2001 Contract
was signed and became effective. Thus, in the July 2001
letter, JDHP was declining to engage in alternative dispute
resolution of claims made under both the 1997 and the 2001
Contracts.
When JDHP sent the letter in July 2001, the parties were in
a discussion stage about their respective claims and their
positions on the proper billing code for rehabilitation services.
JDHP made the decision to stand firm on its position. It
declined “at [that] point” to agree to arbitration or other
alternative dispute resolution. When faced with the growing
underpayments under the 2001 Contract and JDHP’s decision
to stand firm on its position, Wellmont had the choice of
either initiating a lawsuit or commencing arbitration
proceedings. If JDHP had not immediately invoked the
arbitration clause upon the commencement of litigation, or if
JDHP had frustrated the arbitration process upon
commencement by Wellmont, Wellmont may have had a
better argument for waiver. Indeed, most arbitration waiver
cases involve these types of scenarios. See, e.g., Gen. Star
Nat’l Ins. Co., 289 F.3d at 438. But that is not what happened
in this case. JDHP’s July 2001 letter was sent during pre-
commencement negotiations. It really amounts to nothing
more than the typical posturing that may occur where one
party is attempting to “stare down” the other party in the hope
that the other party will simply give up. See Enviro
Petroleum Inc. v. Kondur Petroleum, 91 F. Supp.2d 1031,
1033-34 (S.D. Tex. 2000).
10 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
3W e focus o n the April letter, because Wellmont itself argues that
JDHP was responding to its suggestion for alternative dispute resolution
contained in its April 2001 letter.
More importantly, JDHP was responding to a suggestion
for alternative dispute resolution made by Wellmont in its
April 2001 letter.3 That letter did not reference the 2001
Contract even though at that point the 2001 Contract was in
effect, and Wellmont had been informed that beginning in
March JDHP would pay for rehabilitation services at the
lower SNF rate. Instead, Wellmont’s letter referenced only
the 1997 Contract, which did not contain arbitration language,
and suggested different means of alternative dispute
resolution, only one of which was arbitration. Wellmont
offered no evidence that it ever attempted to invoke, let alone
suggest, arbitration under the 2001 Contract. Thus, there is
no evidence that JDHP expressly waived arbitration under the
2001 Contract. Given the strong preference in favor of
arbitration and against waiver, we cannot infer a waiver of
arbitration under the 2001 Contract based solely on the
parties’conduct at this stage of their dispute.
B. Applicability of Arbitration Clause
Wellmont argues that we should affirm the denial of the
motion to compel arbitration because the arbitration provision
in the 2001 Contract is “repugnant” and should be
disregarded. Wellmont points to that portion of paragraph 1
of the 2001 Contract stating that all other terms and
provisions of the 1997 Contract continue in full force and
effect. It argues that because the 1997 Contract did not
contain an arbitration clause, while the 2001 Contract did,
there is a conflict over dispute resolution mechanisms, and
under Tennessee law, the first method, i.e., no alternative
dispute resolution, should prevail. See Bartlett v. Philip-
Carey Mfg. Co., 392 S.W.2d 325, 327 (Tenn. 1965) (if two
clauses of a contract are so repugnant to each other that they

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No. 02-6078 Highlands Wellmont Health Network
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4Mo reover, complete silence regarding alternative dispute resolution
does not conflict with a clause requiring arbitration. T herefo re, even if
portions of the 1997 Contract were applicable to hospital services, we
would not find that there was a repugnancy.
cannot stand together, the first shall be received and the latter
rejected).
The fatal flaw in Wellmont’s reasoning is that the 1997
Contract did not remain in full force and effect with respect
to hospital services. Paragraph 1 of the 2001 Contract states
in pertinent part:
This Agreement supersedes the contracts, HNHPHO
98/12 KPMP98 961, and HNH POA/PHO 12/96
COPYRIGHT 1996 KPMP96 446, to the extent these
contracts apply to inpatient and outpatient hospital
services. All other terms and conditions of those
contracts and any amendments remain in full force and
effect.
Contract KPMP96 446 is the 1997 Contract. The
rehabilitation services are hospital services. They are
provided in the skilled nursing units of the Wellmont
hospitals. Thus, the 2001 Contract, including the section
requiring arbitration, completely supercedes the 1997
Contract for those services. There can, therefore, be no
repugnancy and the arbitration clause is part of the contract
applying to hospital services.4
C. Fraudulent Inducement
Wellmont argues that if we remand this case, the district
court should be allowed to adjudicate whether the arbitration
clause was fraudulently induced. The Supreme Court has
held that a “claim of fraud in the inducement of the entire
contract” is a matter to be resolved by the arbitrators, not the
federal courts. Prima Paint Corp. v. Flood & Conklin Mfg.
12 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
Co., 388 U.S. 395, 402-04 (1967). However, if there was a
fraud that “goes to the ‘making’ of the agreement to
arbitrate,” then a federal court may adjudicate:
Under § 4, with respect to a matter within the jurisdiction
of the federal courts save for the existence of an
arbitration clause, the federal court is instructed to order
arbitration to proceed once it is satisfied that “the making
of the agreement for arbitration or the failure to comply
(with the arbitration agreement) is not in issue.”
Accordingly, if 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. . . . We hold, therefore, that
in passing upon a [section] 3 application for a stay while
the parties arbitrate, a federal court may consider only
issues relating to the making and performance of the
agreement to arbitrate.
Id. at 403-04 (footnotes omitted). See also Ferro Corp. v.
Garrison Indus., Inc., 142 F.3d 926, 933 (6th Cir.1998) (once
a court determines that the agreement to arbitrate has not been
fraudulently induced, all other issues falling within that
agreement are to be sent to arbitration).
Wellmont claims that, when read as a whole, the allegations
in the amended complaint show that not only was Wellmont
fraudulently induced to enter into the 2001 Contract, but also
that the arbitration provision itself was the product of
fraudulent inducement. It argues that the allegations support
a finding that JDHP inserted the arbitration clause knowing
that a major controversy was about to surface of which
Wellmont had no knowledge when it executed the 2001
Contract.
We have, however, held that in order to void an arbitration
clause, the complaint must contain a “‘well-founded claim of
fraud in the inducement of the arbitration clause itself,

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No. 02-6078 Highlands Wellmont Health Network
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standing apart from the whole agreement, that would provide
grounds for the revocation of the agreement to arbitrate.’”
Fazio, 340 F.3d at 394 (quoting Arnold v. Arnold
Corp.—Printed Communications For Bus., 920 F.2d 1269,
1278 (6th Cir. 1990)). Allegations of fraudulent schemes are
not sufficient to overcome the strong federal policy in favor
of arbitration. The central question is whether the plaintiff’s
claim of fraud as stated in the complaint relates to the making
of the arbitration agreement itself. Fazio, 340 F.3d at 394.
The amended complaint in this case alleges that JDHP
“fraudulently induced Wellmont to enter into the 2001
contract by fraudulently concealing that [JDHP] disagreed
with the manner in which Wellmont was billing for
rehabilitation services and for failing to disclose that [JDHP]
had reported Wellmont to the federal investigative agencies
for allegedly fraudulent billing practices.” Wellmont further
alleges that “[b]ut for said fraudulent concealment, Wellmont
would not have been induced to execute the 2001 contract and
continue its contractual relationship” with JDHP. The
amended complaint states that the 2001 Contract was entered
into as a result of fraud because JDHP signed the contract
after it had identified the dispute and wrongfully reported it
to the FBI. Wellmont alleges that JDHP fraudulently induced
Wellmont to sign the 2001 Contract by not disclosing that
JDHP would not continue to pay the higher rate for
rehabilitation services. For relief, Wellmont asks that the
district court declare the 2001 Contract void.
There are no separate allegations in the amended complaint
that JDHP fraudulently induced Wellmont to agree to an
arbitration clause. The alleged fraudulent scheme in this case
relates to the contract as a whole. Such a claim must be
brought before the arbitrator and not the district court in
deciding a motion to arbitrate. Fazio, 340 F.3d at 395.
14 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
D. Scope of the Arbitration Agreement
Wellmont finally maintains that its fraudulent inducement
claim does not fall within the scope of the arbitration clause
in the 2001 Contract, which requires arbitration of matters
“arising out of this Agreement.” Wellmont argues that this
clause is narrower than a clause requiring arbitration of
matters “relating to” the contract, and that its fraudulent
inducement claim “relates to” but does not “arise out of” the
2001 Contract.
District courts have the authority to decide whether an issue
is within the scope of an arbitration agreement. Fazio, 340
F.3d at 395. “A proper method of analysis here is to ask if an
action could be maintained without reference to the contract
or relationship at issue.” Id. If it could, then it may fall
outside the scope of the arbitration agreement.
When a contract contains an arbitration clause, there is a
general presumption of arbitrability, and any doubts are to be
resolved in favor of arbitration “unless it may be said with
positive assurance that the arbitration clause is not susceptible
of an interpretation that covers the asserted dispute.” AT&T
Techs., Inc. v. Communications Workers of Am., 475 U.S.
643, 650 (1986). Where the arbitration clause is broad, only
an express provision excluding a specific dispute, or “the
most forceful evidence of a purpose to exclude the claim from
arbitration,” will remove the dispute from consideration by
the arbitrators. Id.
In an early case, the Second Circuit stated that the phrase
“‘any dispute or difference [arising] under this Charter’” was
not broad enough to reach a claim of fraudulent inducement.

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5The Ninth Circuit reached a similar result in Mediterranean
Enterp rises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464 (9th Cir. 1983)
(phrase “arising hereunder” covers a much narrower range of disputes
than the phrase “arising out of or relating to”).
In re Kinoshita & Co., 287 F.2d 951, 952 (2d Cir. 1961).5
The court held that this phrase applied only to claims relating
to the interpretation or performance of the contract. While
Kinoshita has not been formally overruled, the Second Circuit
has severely limited its application to its precise facts, i.e., to
the phrase “arising under.” See ACE Capital Re Overseas
Ltd. v. Cent. United Life, 307 F.3d 24, 33-34 (2d Cir. 2002)
(“any right of action hereunder” is broad enough to include
claim of fraudulent inducement of contract); Louis Dreyfus
Negoce S.A. v. Blystad Shipping & Trading Inc., 252 F.3d
218, 225 -26 (2d Cir. 2001) (the distinction between “arising
from” and Kinoshita’s language of “arising under” is more
than just a semantic one, and only the latter phrase limits
arbitration to a literal interpretation or performance of the
contract); Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840,
854 (2d Cir. 1987) (“all claims . . . of whatever nature arising
under this contract” was broad enough to reach claim of fraud
in the inducement); S.A. Mineracao Da Trindade-Samitri v.
Utah Int’l, Inc., 745 F.2d 190, 194 (2d Cir. 1984) (“any
question or dispute aris[ing] or occur[ring] under” the
agreement was sufficiently broad to reach fraudulent
inducement claim). The Second Circuit itself has recognized
that the authority of Kinoshita, therefore, is highly
questionable even in the Second Circuit. ACE Capital, 307
F.3d at 33.
Other circuits have declined to follow Kinoshita because of
the strong federal policy in favor of arbitration. See Battaglia
v. McKendry, 233 F.3d 720, 725 (3d Cir. 2000) (“arising
under” and “arising out of” are given broad construction and
encompass claims going to the formation of the underlying
agreement); Gregory v. Electro-Mech. Corp., 83 F.3d 382,
16 Highlands Wellmont Health Network
v. John Deere Health Plan
No. 02-6078
383-85 (11th Cir. 1996) (fraudulent inducement of contract
within scope of arbitration clause covering “any dispute . . .
which may arise hereunder”); Peoples Sec. Life Ins. Co. v.
Monumental Life Ins. Co, 867 F.2d 809, 813 (4th Cir. 1989)
(claim of fraudulent inducement fell within scope of
arbitration clause covering any issue “believed to constitute
a breach or violation” of the contract).
In Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress
International, Ltd., 1 F.3d 639, 641 (7th Cir. 1993), the
plaintiff alleged that the contract should be rescinded because
it violated Illinois law. The Seventh Circuit considered the
same language used in this case. The arbitration provision
covered disputes “arising out of” the contract. The Seventh
Circuit noted the narrow application of Kinoshita to its
precise facts and concluded that “arising out of” covers all
disputes “having their origin or genesis in the contract,
whether or not they implicate interpretation or performance of
the contract per se.” Id. at 642. The court held that:
Although Count I seeks to cancel the Agreement, it is
nonetheless a result of the Agreement and has its origins
in it. In that sense it “arises out of” the Agreement and
is subject to arbitration. In fact, any dispute between
contracting parties that is in any way connected with
their contract could be said to “arise out of” their
agreement and thus be subject to arbitration under a
provision employing this language. At the very least, an
“arising out of” arbitration clause would “arguably
cover[]” such disputes, and, under our cases, this is all
that is needed to trigger arbitration.
Id.

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6JDHP argues that Arnold, 920 F.2d at 1271, interprets “arising
under” to require arbitration of fraudulent inducement claims. The scope
or application of the arbitration clause to that type of claim, however, was
not an issue in Arnold.
This circuit has not yet decided whether a fraudulent
inducement of the contract claim “arises out of” the contract.6
We have previously held, however, that an arbitration clause
requiring arbitration of any dispute arising out of an
agreement is “extremely broad.” Cincinnati Gas & Elec. Co.
v. Benjamin F. Shaw Co., 706 F.2d 155, 160 (6th Cir.1983).
We agree with the reasoning of the Seventh Circuit in that a
claim that a contract is voidable because it was fraudulently
induced arises out of the contract. Resolution of Wellmont’s
claim will require reference to the 2001 Contract. In addition,
because all doubts are to be resolved in favor of arbitration,
consistent with every circuit that has addressed this issue, we
hold that “arising out of” is broad enough to include a claim
of fraudulent inducement of a contract.
III.
The decision of the district court is REVERSED, and this
case is REMANDED with instructions that the district court
enter an order to arbitrate.

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