Chen Din-Hwa

In a win for lawyers at Gibson, Dunn & Crutcher, a California appeals court has upheld a $1.4 million appellate cost award for one of the daughters of a Hong Kong industrial tycoon.

The Second District Court of Appeal on Monday held that Angela Sabella, daughter of deceased billionaire Chen Din-Hwa, was entitled to costs she incurred securing a letter of credit to post bond while pursuing an appeal in her dispute with one of the many companies her father owned, Rostack Investments Inc.

The company’s lawyers at Mayer Brown had argued that Sabella wasn’t entitled to the appellate costs because cheaper alternatives for posting bond, including putting up more than $77 million of her own cash as collateral, were available. They also argued that the appellate fee judgment was entered prematurely since a trial in the underlying dispute remains pending.

But, in a 17-page opinion authored by Justice Larry Rubin, the court turned back both of Rostack’s arguments. In particular, the court found that “the mere fact that an alternative procedure, which would have been less expensive, was available does not mandate that the option chosen was unreasonable or unnecessary.”

The court, in an issue of first impression, found that it was appropriate to consider Sabella’s “opportunity costs” when assessing the costs she incurred in securing the bond.

“It is reasonable for the appellant to choose the method that is cost-effective based on its own financial situation; not to be forced to choose what might be best for the respondent,” Rubin wrote.

Gibson Dunn’s Julian Poon, who argued the appeal for Sabella at the Court of Appeal, said in an email statement that the ruling “clarifies the law in significant ways, including underscoring that appellants need not select the absolute least expensive means of posting an appeals bond and making clear that appellate awards of costs on appeal are final and immediately enforceable once entered and before further proceedings in the trial court (e.g., a trial) have taken place.”

Mayer Brown’s Neil Soltman and John Nadolenco, who represent Rostack Investments in the case, didn’t respond to email messages seeking comment.

The underlying dispute centers on a loan Rostack made to Sabella to purchase a ranch in Utah as an investment property in the 1990s. Sabella and her lawyers have claimed that her father forgave the loan in 2005 before his death in 2012.

Rostack, however, filed suit against Sabella in 2009, well prior to Chen’s death. Sabella and her legal team have argued that the suit was filed as retribution by her sister, Vivien Chen, an executor of their father’s estate. (Gibson Dunn’s Poon called Monday’s ruling the “latest phase of the contentious, cross-border litigation brought by shell companies and other instrumentalities controlled by her younger sister, Vivien, and those allied with her.”) Sabella contends her sister was upset with her for initiating a Hong Kong court proceeding that led to their father being declared mentally incompetent in 2008.

Rostack initially secured summary judgment against Sabella in 2014 for $51.9 million plus $6.5 million in attorney fees. But in the decision that led to the appellate cost award, the Court of Appeal in 2016 reversed that judgment and ruled that Sabell could raise her loan forgiveness defense at trial.