MAY HUANG v. XIAOTANG HUANG

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

MAY HUANG,

Plaintiff-Respondent,

v.

XIAOTANG HUANG,

Defendant-Appellant.

________________________________________________

April 20, 2016

Submitted March 15, 2016 Decided

Before Judges Yannotti, Guadagno, and Vernoia.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-1649-04.

Weinberger Law Group, LLC, attorneys for appellant (Jessica Ragno Sprague, on the brief).

May Huang, respondent pro se.

PER CURIAM

Defendant Xiaotang Huang appeals from a Family Part order entered on October 20, 2014, granting plaintiff May Huang's motion to dismiss defendant's motion for modification of alimony payments. Defendant also appeals from an order entered on December 15, 2014, denying his motion for reconsideration. We reverse.

The parties were married and had two sons before divorcing in 2005. Their property settlement agreement required defendant to pay plaintiff $1,800 per month in alimony, pay $1,700 per month in child support, and provide full college expenses for the parties' children. Plaintiff was permitted to keep the marital home, valued at $400,000, while defendant kept his stock option plan, valued at $167,000, and his 401k, valued at approximately $240,000. Defendant remarried in 2006 and had two children in 2009. His wife works as a manager for a pharmaceutical company.

Defendant began working as a chemist at Barr Pharmaceuticals in 1993. In 2008, Barr was acquired by TEVA Pharmaceuticals. Defendant had a 401k with TEVA and, from May 2005 until November 2010, he contributed approximately four or five percent of his annual income to his 401k, which the company matched. In November 2010, defendant was laid off. By that time, defendant had become the director of analytical research and development for TEVA and was earning $224,000 annually. After his layoff, defendant stopped paying alimony.

In January 2011, plaintiff moved to compel defendant to pay child support and equitable distribution arrears. After mediation, the parties entered into two consent orders dated August 5, 2011 and September 9, 2011.

Defendant had difficulty finding a job in the United States and at the end of September 2011, he accepted a position with a start-up company, PharmaMax, in China, earning approximately $18,000 annually. Defendant's wife, who remained in the United States with their children, was earning $110,000 annually.

On September 28, 2011, defendant filed a motion to modify his alimony obligations because of a change in circumstances. Defendant's motion was denied, and he appealed. We affirmed, holding that defendant failed to demonstrate a prima facie case of changed circumstances because defendant "accepted the low-paying position in China, which is presumably a temporary situation, with the expectation of a higher-paying position in the future." Huang v. Huang, Nos. A-1738-11, A-2305-11, A-2307-11 (App. Div. July 26, 2013) (slip op. at 9). We found that defendant's lower-paying position "might include other forms of remuneration," and noted that defendant did not "represent that his salary was his only compensation" and that the record did not disclose an "affirmative statement by the defendant that these types of incentives do not exist." Ibid.

On November 12, 2013, defendant filed his current application to terminate alimony payments. On December 20, 2013, the trial court granted a plenary hearing on defendant's application. The court specifically noted that the parties presented a "factual dispute" that required a hearing, and noted six questions that it sought to answer

1) How did the defendant's investment assets [in his 401k] grow from $327,869 in 2010 to $838,225 in 2013 while he has only been able to earn about $20,000.00 per year?

2) How is he supporting his twins on his salary?

3) How can he afford to eat and keep a roof over his head with his salary?

4) Does he receive any other financial benefit from his present position?

5) Is his income being deferred pending the success of the company where he works and is he an employee or an owner?

6) How much money is necessary for the plaintiff's support?

The hearing began on June 19, 2014, and continued on September 11, 2014 and October 16, 2014. Defendant testified and presented documents from the president and CEO of PharmaMax indicating that defendant was hired in November 2011 as a senior vice president with a monthly salary equivalent to approximately $1,500 per month. Defendant does not receive health insurance, medical or dental benefits, life or disability insurance, stock options, or reimbursement for business expenses. The company did provide defendant with travel reimbursement between China and the United States to see his family.

The CEO also certified that he did not expect the company to be profitable for approximately four years, when he expects a new drug to be approved. Until then, there would be no salary increases, no stock options for upper-level management, and bonuses would be capped at $1,500.

Defendant's contract with PharmaMax ended on October 31, 2014, but it was renewed and he was rehired by the company. At the time of the hearing in this case, he was in negotiations with PharmaMax regarding his new contract and benefits.

Defendant testified that between 2010 and 2014, he searched for jobs every month, sometimes "more than three [or] four times" per month. While he received some interviews, he was not given any job offers. Initially, defendant did not apply for short-term contract jobs because he did not "want to lose a job again," but, at the time of the hearing, he was willing to take any job in the United States, including those outside the pharmaceutical field.

Defendant admitted that he misrepresented his educational background on his resume, falsely claiming that he graduated in June 1980 from Guangzhou Chemical Engineer College in China with a Bachelor of Science degree in analytical chemistry, when he received only a diploma in analytical chemistry after attending a two-year program at the school.

Defendant testified that he believes his current situation is a "permanent" change in circumstances due to the fact that, after continuously searching and applying for jobs for the last four years, he was only able to get a job in China paying approximately $18,000 per year.

Defendant produced his 2009 W2, which lists his gross income as $207,842.38 and a 401k contribution of $16,500. In 2010, his income increased to $224,336.75 with a 401k contribution of $19,721.42. In 2011, defendant received severance pay after his layoff. His W2 for that year lists his income as $195,770.74, but does not indicate any 401k contribution. After defendant began to work at PharmaMax in China, his 2012 tax return lists a foreign earned income credit (FEC) of $17,400. In 2013, defendant's FEC was $19,453, and he reported a similar salary in 2014.

Defendant and his wife took out a $219,000 mortgage on their home in 2009. Defendant testified that the mortgage was in his wife's name and she paid off the mortgage in 2012 without contribution from him. On cross examination, defendant conceded that during his deposition testimony, he indicated that some of his severance money from 2011 went into a joint account with his current wife and the money that she used to pay the mortgage came from that account.

Defendant testified that he used previously-acquired stock options with TEVA to pay his children's tuition and expenses, and had no stock options remaining. His employee stock purchase plan with TEVA was liquidated in December 2012.

Finally, defendant submitted a compilation of quarterly statements from his 401k account with TEVA. Although he testified that he made no contributions to the account between his layoff from TEVA and the time of the hearing, the balance rose steadily from $544,389 in October 2011 to $821,448 in September 2013. Defendant explained that the increase was due to "market performance." At the time of the hearing, the value of the account continued to exceed $800,000.

At the conclusion of defendant's testimony, plaintiff moved for involuntary dismissal of defendant's application for modification of alimony payments. On October 20, 2014, the judge entered an order granting plaintiff's motion. The court relied heavily on defendant's 401k statements, and found that the statements indicated that defendant received "employer match" contributions from 2011 through 2013. Because of these contributions, the judge found that defendant failed to make a prima facie showing of changed circumstances. The judge found no reason to continue the hearing and have the plaintiff put on her case.

Defendant filed a motion for reconsideration and submitted a letter from Fidelity Investments indicating that there had been no contributions to the TEVA 401k account since Fidelity began managing the plan on December 31, 2010.

On December 15, 2014, the judge denied defendant's motion for reconsideration and again relied on his interpretation of defendant's 401k statements, which he understood to confirm defendant's receipt of "employer match" contributions. The court refused to consider the letter from Fidelity, holding that it did not meet the requirements of Rule 1:6-6. The judge ruled "defendant did not explain how his 401k more than doubled in value over three years[.]" The court again noted that his 401k "erase[d] the prima facie showing" of changed circumstances. In a footnote to his statement of reasons, the judge noted that defendant acquired his position with TEVA "by falsifying his educational accomplishments" and suggested that he might "make false statements in furtherance of his own financial gain."

Finally, the judge noted that, in plaintiff's response to defendant's motion for reconsideration, plaintiff produced evidence that defendant's wife moved to a house in California worth almost $1 million. The judge commented that defendant "obviously has not been trying to replace his employment here in New Jersey."

On appeal, defendant claims the trial judge erred in granting plaintiff's motion for an involuntary dismissal and improperly considered plaintiff's allegations raised in her reply certification on his motion for reconsideration.

A motion for involuntary dismissal is premised "on the ground that upon the facts and upon the law the [non-moving party] has shown no right to relief." R. 4:37-2(b). The motion shall be denied if "'the evidence, together with the legitimate inferences therefrom, could sustain a judgment in . . . favor' of the party opposing the motion." Dolson v. Anastasia, 55 N.J. 2, 5 (1969) (alteration in original) (quoting Rule 4:37-2(b)). If a court, "'accepting as true all the evidence which supports the position of the party defending against the motion and according him the benefit of all inferences which can reasonably and legitimately be deduced therefrom,' finds that 'reasonable minds could differ,' then 'the motion must be denied.'" ADS Assocs. Grp., Inc. v. Oritani Sav. Bank, 219 N.J. 496, 510-11 (2014) (quoting Verdicchio v. Ricca, 179 N.J. 1, 30 (2004)).

We apply the same standard as the trial court when we review a trial court's grant or denial of a Rule 4:37-2(b) motion. Id. at 511. Under this standard, we are "not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably to the party opposing the motion." Dolson, supra, 55 N.J. at 5-6. Ordinarily, a motion for involuntary dismissal should be denied if the case rests upon the credibility of a witness. Pressler & Verniero, Current N.J. Court Rules, comment 2.1 on R. 4:37-2(b) (2016).

A post-judgment proceeding to modify alimony may be based on a showing of changed circumstances. Lepis v. Lepis, 83 N.J. 139, 151 (1980). "The party seeking modification has the burden of showing such 'changed circumstances' as would warrant relief from the support or maintenance provisions involved." Id. at 157. "When the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself." Ibid.

In our prior opinion, we affirmed the denial of defendant's motion for modification of alimony because it was made at the same time he started working for PharmaMax in China. Huang, supra, slip op. at 9. We noted that his position was "presumably a temporary situation" and that there was not any evidence that his position in China did not include "other forms of remuneration." Ibid. Here, the motion judge determined that defendant made a prima facie showing of changed circumstances and ordered a plenary hearing on whether he was entitled to a modification.

Defendant established that his employment situation is more permanent than when we previously considered it. Defendant has been working in China for at least the past four years and he provided substantial evidence, including his tax returns and W2s, demonstrating that his only current compensation is the $1,500 per month that he receives from PharmaMax. Certifications from the company's president and CEO indicated that defendant does not receive any other benefits or bonuses, aside from travel reimbursement to see his family in the United States.

Defendant's gross income of $1,500 per month is less than his alimony obligation of $1,800 per month. His original alimony obligation was established when defendant was making approximately $132,000 per year. Huang, supra, slip op. at 2. Defendant has now established that, for the last four years, he has earned approximately $18,000 annually, less than 15% of what he used to make when his alimony was calculated.

However, the motion judge noted that defendant's TEVA 401k was valued at $327,869 on defendant's 2010 federal income tax return, and the account increased in value to $838,225, as per defendant's October 17, 2013 case information statement. Relying on defendant's TEVA 401k statements, the judge found that TEVA made "employer match" contributions to the account of $13,413 in 2011, $61,576 in 2012, and $54,015 in 2013.

However, a careful reading of these statements indicates that no such contributions were made and the fluctuation in value, including increases and decreases, is attributable solely to changes in market value of defendant's investments.

During the period in question, from the fourth quarter of 2011 through the third quarter of 2013, each statement has a section entitled "Your Contribution Summary." Within that section are subsections listing contributions for "Elective Deferral," "Employer Match," "Prior Employer Match," and "Prior [Employer] Contributions." There is no indication on any of these statements that TEVA made either deferred compensation or employer match contributions to defendant's account as the judge concluded. The judge appears to have relied on the figures listed in sections entitled "Total Account Balance" and "Total Vested Balance" in concluding that there had been employer contributions.

Each quarterly statement identifies the stock and bond funds the account was invested in and tracks the performance of each investment, including the beginning and ending price of each share and the number of shares held. While there were two quarters when the fund lost value, the fund generally gained between 2.1% and 14.3% during all other quarters.

The judge's conclusion that either defendant deposited his own funds into the account or TEVA provided him with "deferred income of $115,592.23" is untethered to any record evidence and is completely and conclusively contradicted by the 401k statements. The judge's finding that there were 401k contributions made in 2011, is contradicted by both defendant's 2011 W2 and fourth quarter statement that year clearly indicates that no contributions were made. Indeed, defendant's last paycheck from TEVA was in November 2010 and his W2 that year shows a 401k contribution.

Reversed and remanded for a plenary hearing. As we are reversing the judge's grant of involuntary dismissal, we need not address whether the judge erred in considering plaintiff's allegations on the motion for reconsideration. We do not retain jurisdiction.