Zhu v. Deng

• Decision Date: 06 December 2016
• Docket Number: No. COA16-53,COA16-53
• Citation: 250 N.C.App. 803,794 S.E.2d 808
• Court: North Carolina Court of Appeals
• Parties: Rui Dong ZHU, Plaintiff, v. Lingling DENG, Chang Zhu & Ping Li, Defendants.

250 N.C.App. 803

794 S.E.2d 808

Rui Dong ZHU, Plaintiff,

v.Lingling DENG, Chang Zhu & Ping Li, Defendants.

No. COA16-53

Court of Appeals of North Carolina.

Filed: December 6, 2016

Yuanyue Mu PLLC, by Yuanyue Mu, for defendant-appellants Chang Zhu and Ping Li.

Nicholls & Crampton, P.A., Raleigh, by Nicholas J. Dombalis, II, for defendant cross-appellant Lingling Deng.

BRYANT, Judge.

Where defendant-parents indicated they understood the contract they were signing and were not misled, defendant-parents are bound by the terms of the Form I-864 Affidavit of Support in which they agreed to provide support for defendant-wife. Further, where defendant-parents have not offered proof of either procedural or substantive unconscionability, we affirm the order of the trial court. Where the trial court's determination that the disputed $150,000.00 is marital property is supported by competent evidence, we affirm. Lastly, where the trial court erred in concluding as a matter of law that defendant-wife has a continuing duty to mitigate her damages under the Form I-864 affidavit, we reverse.

Defendant Lingling Deng ("Lingling"), a Chinese citizen, married plaintiff Rui Dong Zhu ("plaintiff-husband"), a U.S. citizen, on 17 January 2012 in Wake County, North Carolina. Lingling is twenty-eight years old and lived in China prior to coming to the United States to live in January 2012. Lingling and plaintiff-husband dated for several years before Lingling moved to the U.S. Chang Zhu and Ping Li (collectively "defendant-parents," individually, "defendant-father" and "defendant-mother", respectively) are the parents of plaintiff-husband.

In December 2011 and January 2012, plaintiff-husband and Lingling had two wedding parties in their respective hometowns in China. Many guests gave cash gifts, and in February 2012, $150,000.00 was transferred in three separate transactions from Lingling's father, mother, and younger brother in China into a joint account in the United States in the name of Lingling and plaintiff-husband.

Lingling came to the United States on a K-1 visa. Defendant-parents and plaintiff-husband were the sponsors for Lingling when she immigrated to the United States. In order for Lingling to be admitted to the U.S. and become a permanent resident, plaintiff-husband and defendant-parents executed a Form I-864 Affidavit of Support ("Form I-864A").¹

On 17 May 2012, $110,239.89 of the $150,000.00 in the joint account was transferred to defendant-parents to pay off the mortgage on their Raleigh home, where defendant-parents, plaintiff-husband, and Lingling all lived. Also from the $150,000.00, $25,000.00 was used to contribute to the purchase of a tailor shop located in Raleigh. The tailor shop, known as Lulu's Tailor Shop, was purchased in September 2012.

Less than a year and a half after being married, on 31 July 2013, defendant-mother forced Lingling to leave the Raleigh home. The two had argued when Lingling asked that the $150,000.00 be repaid. Thereafter, Lingling moved in with a friend and has not lived with plaintiff-husband or his parents since that time.

In September 2013, Lingling spoke with defendant-father, who indicated that they would sell the Raleigh home and the tailor shop and repay her. He also told her they would pay for her living expenses. Defendant-parents paid Lingling two months’ worth of support, $1,000.00 in August and $1,200.00 in September 2013. They paid no support after those dates. When the tailor shop sold for $40,000.00 in September 2013, Lingling received no portion of the proceeds from the sale.

On 13 September 2013, Lingling filed a complaint in Wake County Superior Court for money owed and a temporary restraining order ("TRO") against defendant-parents. Plaintiff-husband moved to intervene and stay the matter filed by Lingling in Superior Court, and both motions were granted. Meanwhile, plaintiff-husband also filed a complaint in Wake County District Court on 7 October 2013 for equitable distribution of the marital property which he claimed belonged to him and Lingling, i.e. , the $150,000.00 which Lingling claimed was owed to her by defendant-parents. On 31 December 2013, Lingling answered and counterclaimed for support and cross-claimed against defendant-parents for support and money owed. Defendant-parents cross-claimed for declaratory judgment.

The parties’ claims came on for hearing before the Honorable Anna E. Worley during the 28 October 2014 civil session of Wake County District Court. Judge Worley entered an order and judgment on the parties’ competing claims dated 10 April 2015, ordering, in relevant part, that Lingling was entitled to: (1) a constructive trust in the Raleigh home in the amount of $55,120.00; (2) a constructive trust in the proceeds from the sale of the tailor shop in the amount of $12,500.00; (3) a judgment against defendant-parents, jointly and severally, in the amount of $67,620.00; (4) a judgment against plaintiff-husband and defendant-parents, jointly and severally, in the amount of $18,341.00 for support owed from August 2013 through November 2014; and (5) monthly support payments in the amount of $1,215.00 from plaintiff-husband and defendant-parents. Defendant-parents filed notice of appeal and Lingling filed and served a cross-appeal on 21 May 2016. Plaintiff-husband did not appeal.

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I. Defendant-Parents’ Appeal

On appeal, defendant-parents argue the trial court erred by (1) finding that the I-864A forms were an enforceable contract against defendant-parents; (2) finding Lingling was entitled to fifty percent of the proceeds from the sale of the tailor shop; and (3) dismissing defendant-parents’ counterclaim against Lingling for the living expenses defendant-parents spent on her.

1. Form I-864A

Defendant-parents first argue that the trial court erred in concluding that Lingling was entitled to ongoing support based on the Form I-864A defendant-parents executed and submitted to the United States Citizenship and Immigration Services ("USCIS"), as the contract is unconscionable and therefore unenforceable. In the alternative, even if the Form I-864A is enforceable, defendant-parents contend that Lingling is barred from claiming the full amount of support under the contract because she has unreasonably failed to mitigate her damages. Lastly, defendant-parents argue that even if the trial court correctly found Lingling was entitled to some support under the contract, the trial court erred by not setting off the award from support previously provided to Lingling. We disagree.

An immigrant who is likely to become a public charge is not eligible for admission into the United States unless her application for admission is accompanied by a Form I-864 Affidavit of Support. 8 U.S.C. § 1182(a)(4) (2015). Those persons petitioning for an immigrant to be admitted to the U.S. must sign a Form I-864A and, as signing sponsors, are obligated to provide the immigrant with whatever support is necessary to maintain the sponsored immigrant at an annual income that is at least 125% of the federal poverty level pursuant to the annual guideline. Younis v. Farooqi , 597 F.Supp.2d 552, 554 (D. Md. 2009). A Form I-864A "is considered a legally enforceable contract between the sponsor and the sponsored immigrant." Id. (citation omitted). "The signing sponsor submits himself to the personal jurisdiction of any federal or state court in which a civil lawsuit to enforce the affidavit has been brought." Id. (citing 8 U.S.C. § 1183a(a)(1)(C) (2015) ). "The sponsor's obligation under the affidavit does not terminate in the event of divorce." Id. (citation omitted).

Here, defendant-parents executed a Form I-864A which specifically states that, as signors, they "[p]romise to provide any and all financial support necessary to assist the sponsor [plaintiff-husband] in maintaining the sponsored immigrant(s) at or above [125 percent of the Federal Poverty Guidelines] during the period in which the affidavit of support is enforceable[,]" and "agree to be jointly and severally liable for payment of any and all obligations owed by the sponsor [plaintiff-husband] under the affidavit of support to the sponsored immigrant." Further, defendant-mother testified that she understood when she signed the contract that if Lingling could not support herself financially, defendant-mother would be obligated to help plaintiff-husband pay for Lingling's needs. Indeed, an accountant and an attorney both assisted with the preparation of the immigration documents, and the attorney spoke Mandarin Chinese. Even so, our North Carolina jurisprudence makes very clear that "one who signs a paper writing is under a duty to ascertain its contents, and in the absence of a showing that he was willfully misled or misinformed ... he is held to have signed with full knowledge and assent as to what is therein contained." Martin v. Vance , 133 N.C.App. 116, 121–22, 514 S.E.2d 306, 310 (1999) (quoting Gas House, Inc. v. S. Bell Telephone Co. , 289 N.C. 175, 180, 221 S.E.2d 499, 503 (1976) ). As defendant-parents make no argument that their son, plaintiff-husband, misled them in any way, defendant-parents are bound by the terms of the Form I-864A which they signed and in which they agreed to provide support for Lingling.

Further, claims that I-864A forms are unconscionable have been explicitly rejected. See, e.g. , Al–Mansour v. Shraim , Civil No. CCB–10–1729, 2011 WL 345876, at *3 (D. Md. Feb. 2, 2011) (unpublished) ("While the Form I-864 may be a contract of adhesion under Maryland law, it is not unconscionable."); Cheshire v. Cheshire , No. 3:05–cv–00453–TJC–MCR, 2006 WL 1208010, at *4 (M.D. Fla. May 4, 2006) (unpublished) ("[T]he Court fails to find evidence that the affidavit of support Form I-864 was an unconscionable or illusory contract...."). Under North Carolina law, a contract will be found to be unconscionable "only when the inequality of the bargain is so manifest as to shock the judgment of a person...