Zhu v. DengÂ
250 N.C. App. 803
| N.C. Ct. App. | 2016Background
- Plaintiff Rui Dong Zhu (husband), a U.S. citizen, and defendant Lingling Deng (wife), a Chinese citizen, married in January 2012; defendant-parents Chang Zhu and Ping Li (husband’s parents) acted as sponsors for Deng’s immigration and signed Form I-864A (Affidavit of Support).
- After wedding celebrations in China, $150,000 was wired in three transfers from Deng’s relatives into a joint U.S. bank account in the names of Zhu and Deng; portions were later used to pay off the parents’ mortgage ($110,239.89) and to contribute $25,000 toward purchase of a tailor shop.
- Deng was forced out of the family home in July 2013; defendant-parents paid two months of support in Aug–Sept 2013 and later sold the tailor shop without giving Deng proceeds.
- Deng sued for support and repayment; cross-claims and equitable distribution claims were litigated in Wake County District Court; Judge Worley awarded Deng constructive trusts, money judgments against defendant-parents, and periodic support from husband and parents.
- Defendants (parents) appealed raising enforceability and unconscionability of the I-864A, mitigation, and distribution of tailor-shop proceeds; Deng cross-appealed characterization of the $150,000 as marital property and the trial court’s imposition of a duty to mitigate under I-864A.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Form I-864A against defendant-parents | Forms are a binding contract and sponsors are liable for support; parents signed and understood the affidavit | I-864A is unconscionable / contract of adhesion and therefore unenforceable | Enforceable; parents are bound (no proof of procedural or substantive unconscionability) |
| Duty to mitigate damages under Form I-864A | Deng argued no continuing duty to mitigate; sponsors remain liable unless statutory excusing conditions apply | Parents argued Deng failed to mitigate (so reduce award) | Reversed on duty-to-mitigate: court erred to impose a continuing mitigation duty as matter of law; no such duty read into I-864A |
| Classification of $150,000 (marital vs. separate) | Deng argued funds were her separate funds (gifts/loans from her family) | Zhu/parents argued funds were treated and used as marital money | Affirmed: trial court’s finding that $150,000 was marital property is supported by competent evidence; classification stands |
| Tailor-shop proceeds and equitable relief | Deng sought constructive trust / half-share of amounts she and husband contributed | Parents argued Deng as 25% owner gets only pro rata net proceeds after winding up; appealed award of constructive trust for $12,500 | Affirmed: parents’ argument deemed abandoned for lack of cited authority; award of constructive trust upheld |
Key Cases Cited
- Martin v. Vance, 133 N.C. App. 116 (1999) (signer of a writing is bound to its terms absent willful misrepresentation)
- Brenner v. Little Red School House Ltd., 302 N.C. 207 (1981) (standard for finding a contract unconscionable under NC law)
- Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93 (2008) (burden on party claiming unconscionability; need proof of procedural and substantive unconscionability)
- Wenfang Liu v. Mund, 686 F.3d 418 (7th Cir. 2012) (no federal common-law duty for a sponsored immigrant to mitigate damages under I-864)
- Younis v. Farooqi, 597 F. Supp. 2d 552 (D. Md. 2009) (Form I-864A is an enforceable contract; sponsor submits to jurisdiction and remains liable despite divorce)
- Brackney v. Brackney, 199 N.C. App. 375 (2009) (standard of review for classification of property in equitable distribution)
- Manes v. Harrison-Manes, 79 N.C. App. 170 (1986) (deposit into joint account alone does not necessarily transmute separate property to marital property)