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In Morrissey v. Chequered Flag Int’l, B188032, 2006 WL 2748224 (Cal. App. 2 Dist. Sept. 27, 2006), a California Court of Appeal upheld an arbitration award over the losing party’s objections to the arbitrator’s damage calculations.
Morrissey purchased a vintage automobile from Chequered Flag International (CFI), but brought suit after discovering safety problems and that the vehicle’s engine size and features had been misrepresented to him. The parties agreed to arbitrate their claims and Morrissey prevailed, obtaining attorney’s fees nearly three times the value of the automobile itself.
CFI complained that the arbitrator’s award of attorney’s fees indicated that he had exceeded his powers in contravention of California Code of Civil Procedure §1286.2(4). The Court disagreed, since the arbitration clause the parties agreed to was “broad and sweeping” in scope, and binding “with no claims reserved.” CFI cited no authority supporting its assertion that the attorney’s fees were punitive damages “in disguise.”
Furthermore, the Court found CFI’s contentions that it should be entitled to de novo review of the award in both trial and appellate court to be “plainly and simply wrong.” The arbitrator found CFI’s misrepresentations sufficient to support the damages awarded, all of which were within the scope of the broad arbitration agreement.
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