Facts

Roland Arnall, the founder of Ameriquest Mortgage Company, was a Holocaust survivor, a billionaire businessman, philanthropist and U.S. Ambassador to The Netherlands. One of the charities that he supported for over 30 years was Chabad of California Inc., a not-for-profit Jewish charity headed by Rabbi Baruch Shlomo Cunin. Chabad provides various social and spiritual services to people in need. During Roland Arnall's lifetime, he contributed, either individually or jointly with his first and second wives, approximately $4.5 million to Chabad. He also contributed many millions of dollars to other charities.

In late 2007 and early 2008, he made three payments of $180,000 to Chabad following three separate meetings with Rabbi Cunin about a new Family Center.

On Feb. 27, 2008, Roland Arnall was diagnosed with cancer. He died on March 17, 2008.

Chabad alleged that, in 2004, at the time of the dedication by Roland Arnall of a Torah in memory of his parents, Mr. Arnall orally pledged $18 million to $40 million, and that the two $180,000 payments in late 2007 were payments on that pledge. Chabad further alleged that on Feb. 27, 2008, when he was diagnosed with cancer, Rabbi Cunin met with Roland Arnall at Mr. Arnall's request at which time he confirmed the final amount of the Family Center pledge at $18 million. Chabad alleged that the final $180,000 payment in early 2008 was also made towards Mr. Arnall's purported $18 million pledge.

Roland's widow, Dawn Arnall, the Arnalls' personal assistant and their accountant, and Roland's son denied knowing of the pledge or any payments on the pledge. Rabbi Cunin's son testified that his father told him contemporaneously in 2004 and then again in Feb. 2008 about Roland's pledges.

Chabad subpoenaed the records kept by the Arnalls' personal assistant and accountant which contained a listing of all pledges made by the Arnalls and their purpose. Those records were not produced in discovery or at trial.

Dawn Arnall refused to pay anything toward the $18 million pledge that Chabad claimed Roland Arnall had made before his death.

PLAINTIFF'S CONTENTIONS:
Chabad claimed that Roland Arnall promised in 2004 to donate at least $18 million and then in February 2008, to donate exactly $18 million to Chabad. Chabad alleged that Roland Arnall delayed payment on the pledge due to financial and personal problems, including the loss of a $1-2 billion oil and gas investment in Oklahoma and the payment of several hundred million dollars by Ameriquest to settle charges of predatory lending in the sub-prime mortgage market; Ameriquest was wholly owned by Mr. and Mrs. Arnall.

Chabad spent more than $658,426.65 on the project since 2004, and would not have spent these funds without Mr. Arnall's 2004 commitment of at least $18 million. Chabad contends that Dawn Arnall concealed and suppressed evidence of the pledge and payments thereon.

DEFENDANT'S CONTENTIONS:
Defendant claimed that Roland Arnall did not make any $18 million to $40 million pledge in 2004 or $18 million pledge in 2008 to Chabad.

Defendants contend that Rabbi Cunin's claim that Mr. Arnall told him in 2004 that Mr. Arnall could not pay the $18-$40 million pledge because of his financial condition was disproven by uncontested facts. Shortly after the alleged conversation in question, Mr. Arnall and his wife Dawn contributed approximately $32 million to a private charitable foundation they founded. During 2004 and 2005, Mr. Arnall and his wife contributed approximately $20 million to various charities, less than $2 million of which went to Chabad.

Defendants contend that Rabbi Cunin never told Chabad's controller before Mr. Arnall's death about any alleged pledge. They further contend that Mr. Arnall never told anyone before he died about any alleged pledge. Defendants argue that no documentation supported Chabad's claim and contend that the only supporting documentation was created after Mr. Arnall passed away. Moreover, defendants contend that there were numerous inconsistent and implausible statements made by Rabbi Cunin, and inconsistencies between his story and that told by his sons.

Dawn Arnall denies concealing or suppressing any evidence of the alleged pledge or payments thereon. Defendants contend that there was no evidence that Ms. Arnall knew of any alleged pledge or payments on such a pledge. Similarly, the Arnalls' personal assistant and their accountant both testified that they knew of no evidence of any alleged pledge or any evidence that the three payments in 2007 and 2008 were made toward any alleged pledge.

Result

Judgment for the defense. The Court's Statement of Decision provides, "It is not for the Court to decide whether Mr. Arnall actually promised $18 million to Chabad. It is for the Court to determine, based on the testimony of the witnesses and exhibits admitted in evidence, whether Chabad proved by a preponderance of evidence that Mr. Arnall promised Chabad $18 million." The Court found that "plaintiff has failed to prove by a preponderance of evidence that Mr. Arnall promised to pay Chabad or Rabbi Cunin $18 million or any amount other than what he actually paid during his lifetime, to fund the development or construction of the Project."

Other Information

FILING DATE: Oct. 1, 2009.