March 20, 2019

Chabad claim denied

A California appeals court has affirmed a lower court’s ruling denying a claim from Chabad of California Inc. of an $18-million pledge the local Jewish nonprofit group said was promised to it by philanthropist Roland Arnall.

Chabad said Arnall promised to donate the money before his death in 2008. 

The unanimous ruling by the Second District Court of Appeal was issued on Jan. 25, the latest step in a years-long effort by Chabad to collect from the estate of the founder of the subprime lender Ameriquest Mortgage. 

In a lawsuit first filed in October 2009, Chabad alleged Arnall made an oral pledge to give at least $18 million to Chabad in 2004. That money, according to papers filed in court by Chabad’s attorney, was to be used to build an educational facility on Pico Boulevard, near Chabad’s current headquarters. 

Arnall made three payments of $180,000 each to Chabad before dying of cancer in March 2008; after his death, Chabad sought payment for what it said was the balance of his pledge. Arnall’s widow, Dawn Arnall, denied that the payments made by her late husband had been part of a pledge. 

In 2011, after a trial that included testimony from Chabad of California President Rabbi Boruch Shlomo Cunin and others, a California Superior Court judge rejected Chabad’s claim, saying the group had “failed to prove by a preponderance of evidence” that the pledge had been made. 

The recent unanimous decision by the court of appeal affirmed the lower court’s decision in full. Only the California Supreme Court can overturn such a ruling. 

In a statement sent to the Journal on Jan. 28, Marshall Grossman, the attorney who represented Chabad in both the initial trial and on appeal, called it  “regrettable” that Chabad had to resort to litigation in this case, when Roland Arnall, whom he called “a generous supporter of Chabad” and other causes, frequently made pledges, he said, “on a handshake,” and fulfilled all such pledges during his lifetime. 

“In any event,” Grossman said in the statement, “the many charities which Roland supported in life will remain indebted to him and cherish his memory for years to come.”

Attorney John S. Gordon, who represented Dawn Arnall in the lower court case, said his client had no comment on the recent decision.