11-year battle for $30M ends (for now) with $70M win

Ending for now an 11-year legal battle over a $30 million loan, Rostack Investments Inc. won a judgment of almost $70 million after a judge found the investment company's deceased founder's daughter was less than credible when she said her father forgave the loan.

The case involved a $30 million loan the late Hong Kong billionaire Chen Din-Hwa made to his daughter Angela Chen Sabella through his investment company Rostack. For nearly 11 years, Sabella claimed Chen gave her the loan note at a family meeting on Feb. 8, 2005, when he made an annotation with the word "got" on a document, allegedly indicating the loan was forgiven. Sabella said her sister Vivien was present.

However, following a nine-day bench trial in a Los Angeles court, post-trial briefing, and post-trial arguments in February, Superior Court Judge Holly J. Fujie found there were major contradictions in Sabella's testimony regarding the circumstances in which Chen wrote the annotation. A key witness presented evidence showing Chen's annotation had been present on the document in 2003, years before the alleged family meeting.

"As this issue was a significant part of her entire case, her contradictory testimony thereon revealed serious problems with her entire version of the facts as well as with her prior sworn statements in this court," Fujie wrote in her ruling. "As such, the court finds that Angela lacks credibility as a witness."

Sabella's recounting of events further unraveled when Rostack's legal team from Mayer Brown LLP presented records demonstrating that her sister Vivien had traveled out of the country during the time of the alleged family meeting, according to a source familiar with the case. Mayer Brown partner John Nadolenco described the revelation as a "Perry Mason moment."

"This was a hard fought case for over a decade," Nadolenco said Wednesday. "Rostack was pleased to finally get a trial on the merits and the court's ultimate ruling."

Rostack's claims of breach of contract, book account, and money lent arise from Sabella's alleged failure to pay money owed pursuant to a promissory note. Rostack Investment Inc. v. Angela C. Sabella, BC428298. (L.A. Sup. Ct., filed Dec. 18, 2009).

Now representing Sabella is Louis "Skip" Miller of Miller Barondess LLP. He said he and Sabella are already working on an appeal.

"We won the first appeal and plan to win the second," Miller said Wednesday.

Rostack first won summary judgment in 2014 and was awarded $57.5 million including attorney fees. However with the help of Miller and attorneys at Gibson, Dunn & Crutcher LLP, Sabella successfully persuaded the 2nd District Court of Appeal to reverse the judgment in 2016.

The appellate court found a triable issue of fact existed as to whether Chen forgave the loan on behalf of Rostack. However after the case was sent to Fujie, she found major discrepancies between the facts as recited by the appellate court in its decision and the new evidence presented at trial.

Fujie entered an order determining that Rostack had prevailed on each of the three causes of action in its first amended complaint and had defeated each of the six affirmative defenses in Sabella's second amended answer, which among them included a gift and estoppel defense.

Sabella's defense attorneys from Gibson Dunn were unavailable for comment Wednesday.