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"High-Low" Arbitration Agreement Enforceable

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The California Supreme Court held that a "high-low" arbitration agreement was enforceable in Horath v. Hess, issued on April 10, 2014. The plaintiff contended she suffered injuries when defendant's car struck the back of her vehicle. The parties agreed to submit their dispute to private binding arbitration. Plaintiff agreed to accept $100,000 or the amount of the arbitrator's award, whichever was LOWER, and defendant agreed to pay $44,000 or the amount of the arbitrator's award, whichever was HIGHER. The arbitrator awarded $366,527. The Court of Appeal, noting that arbitration agreements are interpreted as any other contracts, held that plaintiff could only receive the $100,000 she had agreed to accept in the arbitration agreement.

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