SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-1515- 22 XUAN LI, Plaintiff-Respondent,

v. XIAOWEI LIU, Defendant-Appellant.

_______________________

Submitted February 6, 2024

– Decided April 3, 202 4 Before Judges Haas and Natali. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM- 14

- 1022 -14. Xiaowei Liu, appellant pro se. Respondent has not filed a brief.
PER CURIAM Defendant appeals from certain provisions in a Nove mber 30, 2022 Final Judgment of Divorce (FJOD), which the Family Part j udge entered following a NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court. " Although it is posted on the internet, this opinion is binding only on the parti es in the case and its use in other cases is limite d. R. 1:36- 3.2 A- 1515

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multi-day trial. Defendant argues the judge erred by: (1) under-calculating the amount of income imputed to plaintiff and thereby a scribing an incorrect figure to the judge's alimony and child support determinat ions; (2) ordering equitable distribution of the marital home ; (3) requiring the parties' retirement accounts distributed pursuant to a Qualified Domestic Relati ons Order (QDRO); (4) ordering defendant to pay plaintiff $700 per month in alimony for twelve months and $215 per week in child support; (5 ) designating plaintiff the parent of primary residence for the parties' minor son; and ( 6 ) failing to report plaintiff's

non -payment of taxes to appropriate state and federal authorities. In addition, defendant argues the judge mistakenly refused to rec use himself due a conflict of interest and fail ed to distribute funds held in trust by plaintiff's f ormer counsel. After analyzing the trial transcripts, reviewing t he exhibits in the record , and considering defendant's arguments, with respect to issues (1) through (6), we affirm substantially for the reasons stated by t he judge in his written decision issued on November 30 , 2022, and his supplemental statement of reasons issued on February 10, 2023. We also reject defendant's contentions that the jud ge erred in failing to recuse himself.3 A- 1515

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We are constrained, however, to remand for the judge to address the distribution of funds remaining in the parties' tru st account and to clarify if plaintiff's failure to report her income triggered h is obligation under Sheridan v. Sheridan, 247 N.J. Super. 552 (Ch. Div. 1990).
I. The parties were married in 2000 and have one mino r child and another in college. In 2014, the parties filed for divorce du e to irreconcilable differences. The y continued to live in the marital residence, and t he court ordered defendant to pay plaintiff pendente lite support, which he ha s done since 2014. Although initially represented by counsel, the parties repre sented themselves at the 2022 trial. Plaintiff filed Case Information Statements (CIS) i n 2014, 2015, and 2019, but did not file an updated CIS prior to trial. In each CIS, plaintiff reported she was a homemaker with no income but indicated she re ceived child support and Social Security payments for her child from a previ ous marriage. In 2016, the last year plaintiff filed a tax return, plaintiff r eported $4,219 in taxable income.
The judge noted plaintiff was evasive in her testimony. With respect to her employment, the judge found plaintiff was not forthcoming regarding her alleged ownership interest in several massage parlo rs and any related income.4 A- 1515

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On this point, plaintiff initially testified she op erat ed a massage parlor in Millburn since 2019 , and previously operated a massage parlor in Massa chusetts from 2020 to 2022. The monthly rent for those busi nesses w as $2,000 and $1,702, respectively. Plaintiff testified she did not file state or feder al taxes for the business es , pay wages, pay employment tax es , maintain workers' compensation insurance, or provide employees with 1099 forms. Plaintiff stated the Millburn massage parlor was no t register ed with the State "because it doesn't even make any money." When asked about each location's average weekly revenue, plaintiff stated she could not provide an exact or approximate figure because "sometimes we c an go a day without a client, [and] sometimes on a day we can get four cl ients." Plaintiff later testified she operated since-closed massage parlors in East Brunswick, Denville, Madison, and second locations in both Millburn and Massachusetts dating back to 2015, contrary to her previous testimony and representations to the court. The record does not indicate how plaintiff came to operate the businesses, or for how long she operated them. Plaintiff maintained the businesses were not lucrative, but did not prov ide exact or approximate income or expense figures.5 A- 1515

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When plaintiff stated the address of a building in which she rented space to operate one of her former massage parlors, the j udge asked about "police involvement" in the building and plaintiff stated s he hired a woman who had "trouble." The judge then informed the parties of the following:

An in-law of mine owns that building, and if you ha d told me this at any time before this, I probably wo uld not have heard this case. But you didn't tell me a bout that. You said you haven't worked outside the hous e, except for these last two years. And now you are t elling me that you have this massage [parlor] in that building, which I understand was not what the rental was to. I don't feel that that in any way affects my judgment on the case, but I am disclosing it to both of you tod ay. A news article from 2017 included in the record bef ore us states an individual was arrested at the massage parlor and charged with pro moting prostitution. The following day, the judge again addressed the is sue:

One of [the massage parlors], as I indicated yester day, and again, just so we are clear, was in a building owned by one of my in-laws. Which has no effect, other t han if I had known that, perhaps . . . I would have not sat on the case, but as I indicated yesterday, if either o ne of you have a problem with that, you may make the appropriate application. I personally feel it does not impact my decision one bit. I have no interest in any of that real estate business, and I don't have any oth er knowledge, other than what was being told in court through [defendant]. And you know, which otherwise might have been public knowledge at that time. Non e of which . . . has [plaintiff's] name on it. As fa r as the6 A- 1515

- 22 articles that [defendant] presented. So, that is my disclosure again, you know, in case anybody has any issue with that, nobody raised any objection, we ar e going to continue with the case. The judge also noted, "[i]f I find out that there is illegal activity going on, whether that be [an] illegal massage parlor or tax non[-]reporting, not paying employment taxes . . . I have to report that." During trial, defendant attempted to establish plai ntiff owned real estate in China , but could not identify the property. Defendant also alleged plaintiff had an interest in her deceased father's Chinese co mpany, which plaintiff denied

. On this point, the judge stated, "I don't have any proof in front of me tha t [plaintiff] has received any financial money from h er father, or this estate . . . or from anybody else in the family." Further, defendant confronted plaintiff with a bank statement from 2016 showing $92,879 in deposits . Plaintiff stated approximately $40,000 was from her ex-husband in overdue support, $23,000 was from defendant in support, and also stated she deposited the income from her busin ess into the account. With respect to childcare, plaintiff stated she car ed for parties' teenage son and was responsible for transporting him to school and his various after-school activities. Plaintiff also testified she communica ted with their son's school regarding his educational needs and Individualized Education Program (IEP).7 A- 1515

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The trial record reveals the parties deposited money in a trust account at the law firm of Pashman Stein Walder Hayden PC , but the details of the account are not entirely clear. As best we can discern, the trust appears to have b een funded in 2013, and used to pay for legal services and a custody evaluation, but it is unclear if it was funded with marital assets or premarital assets of either party. According to a ledger from Pashman Stein, approxima tely $60,000
remain ed in the account at the time of trial. As noted, on November 30, 2022, the judge entered a FJOD and issued a n accompanying written statement of reasons. The judge subse quently issued a supplemental statement of reasons on February 10, 2 023, in response to defendant's request he address plaintiff's imputed income and the parties ' trust

account.
In his November 30, 2022 statement of reasons, the judge found both parties made financial contributions to the purchas e of the home and continued to live in the home since the filing for divorce in 2014, contrary to prior court orders. As such, in the FJOD , the judge ordered the parties' marital home be sold and for each party to receive their initial in vestment and thereafter equally divide the net proceeds. The judge also ordered all retirement assets distributed pursuant to a QDRO.8 A- 1515

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The judge ordered the parties share joint legal custody of t he ir two children and to equally split parenting time of the ir minor son. The judge also designated plaintiff the parent of primary residence as he found plaintiff was responsible for transporting their son to activitie s and communicating with his school regarding educational needs

. Addressing child support and alimony, the judge found defendant earned $130,000 annually and stated plaintiff was not fort hcoming about her income and refused to file a completed CIS. The judge found plaintiff recently operat ed two massage parlors and paid approximately $40,000 in rent , and therefore considered plaintiff to be "a manager of a small sh op." As such, the judge , "utilizing sources like the Department of Labor web site," imputed an annual salary of $52,000 to plaintiff.
The judge noted neither party produced expert testimony with respect to employability or plaintiff's imputed income. Accor dingly, considering the parties' income and the factors set forth in N.J.S. A. 2A:34-23(a) , the judge ordered defendant pay $215 per week in child suppor t until the parties' eldest child graduates college or turns twenty-three. Wit h respect to alimony, the judge considered the parties' income, the equitable distr ibution of the home, the limited duration of the marriage, defendant's pende nte lite support, and9 A- 1515

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plaintiff's concealment of income, and ordered defe ndant to pay $700 per month in alimony for twelve months.
As to the parties ' trust account, the judge declined to distribute the funds

to either party. In his supplemental statement of reasons, the judge stated the parties were previously ordered to deposit funds in to the trust account, but noted "the status of the money in that trust is unclear a t this time," as some of the funds may have been used for expert expenses and it was u nknown if the trust was originally funded with marital or premarital money. As such, the judge ordered Pashman Stein to produce a ledger for evaluation and sta ted he would thereafter distr ibute the funds appropriately.
II. As noted, defendant challenges several potions of t he FJOD. Defendant argues the judge erred in ordering various provisions of the FJOD because plaintiff was not forthcoming with respect to her i ncome and financial holdings, as well as her non-payment of taxes, which defendan t asserts the judge wa s obligated to report under Sheridan. Additionally, defendant maintains the judge should have imputed at least $208,000 of income to plaintiff and argues she operated four, rather than two, massage parlors and owns undisclosed financial and real estate assets. Defendant further contends the judge abused his10 A- 1515

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discretion in ordering equitable distribution of th e parties' home and distributing their retirement accounts. He maintains the judge failed to consider plaintiff's untruthfulness and secrecy with respect to her inco me, and did not correctly account for the income and earning capacity of each party and their relevant contributions. Defendant also argues the judge erred in ordering him to pay alimony and asserts the judge did not consider properly the statutory factors se t forth in
N.J.S.A. 2A: 34 -23(b), and similarly maintains plaintiff's refusal to disclose her income should disqualify her from receiving alimony. Further, de fendant asserts the judge erred in designating plaintiff the parent of the p rimary residence and in ordering defendant to pay $215 per week in child support because the judge failed to consider plaintiff's frequent travel, and well as her failure to provide financial information. Additionally, defendant contends the judge erred in failing to distribute the funds held in trust by plaintiff's former attor neys. Defendant argues the remaining funds in the trust account represent his premarital assets and he is therefore entitled to any distribution. Finally, defendant maintains the judge should have recused himself due to the conflict of interest related to the judge's11 A- 1515

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brother- in -law owning the building in which plaintiff operated a mas sage parlor where an individual was arrested.
III. The scope of our review of the Family Part's order is limited. We owe substantial deference to the Family Part's findings of fact because of that court's special expertise in family matters. Cesare v. Ces are, 154 N.J. 394, 411- 12 (1998). Thus, "[a] reviewing court should uphold t he factual findings undergirding the trial court's decision if they are supported by adequate, substantial and credible evidence on the record." MacKinnon v. MacKinnon , 191 N.J. 240, 253-54 (2007) (alteration in original ) (quoti ng N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279 (2007)). We owe no deference to the judge's legal conclusion s. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). However, we will not interfere with "'the factual findings and legal conclusions of the trial judge unless . . . convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credibl e evidence as to offend the interests of justice' or when we determine the cour t has palpably abused its discretion." Parish v. Parish, 412 N.J. Super. 39, 47 (App. Div. 2010) (alteration in original) (quoting Cesare, 154 N.J. at 412). We will reverse the Family Part's12 A- 1515

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decision "[o]nly when the trial court's conclusions are so 'clearly mistaken' or 'wide of the mark' . . . to ensure that there is no t a denial of justice." N.J. Div. of Youth & Family Servs. v. E.P., 196 N.J. 88, 104 (2008) (q uoting N.J. Div. of Youth & Family Servs. v. G.L., 191 N.J. 596, 605 (2 007)). Applying these principles, we reject all of defendant's arguments, with the exception of the two issues subject to our remand. The judge's November 30 , 2022 FJOD reveals nothing "so wide of the mark" that we could reasonably conclude he made a clear mistake. We are satisfied the judge's factual findings suppo rt ing his order that the marital home should be subject to equitable distribution are amply supported by the record. Specifically , after considering the factors detailed in N.J.S.A.
2A:34 -23.1, the judge found both parties financially cont ributed to the purchase of the home and continued to live in the home after filing for divorce while fail ing to comply with previous court orders to sell the h ome. A dditionally, because equitable distribution considers both monet ary and non-monetary contributions, see Carr v. Carr, 120 N.J. 336, 346- 47 (1990), we discern no abuse of the judge's discretion in ordering the parties' marital home be subject to equitable division with each party receiving the re turn of their initial investment and fifty percent of the net proceeds.13 A- 1515

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We similarly conclude the judge acted within his discretion in imputing $52,000 of income to plaintiff as "the manager of a small shop," as the figure is based on the judge's finding plaintiff recent ly operated two massage parlors and paid $40,000 of rental payments while concealing he r income both from defendant and taxing authorities. Further, the judge acknowledged defendant's belief plaintiff owns property in China and received money from her family , but found "defendant could not identify the property," and therefore did not consider such property or income in his imputation. In light of the paucity of proofs of plaintiff's alleged financial assets, we are satisf ied the judge considered the evidence available to him and discern no error in his income imputation.
W e are also satisfied judge considered the child support factors enumerated in N.J.S.A. 2A:34-23(a), and his determination is amply supported by factual findings regarding the parties' incomes, actual and imputed, and the needs of their unemancipated children. With respec t to the judge designating plaintiff as the parent of primary residence for th e parties' minor son, he determined that designation was appropriate because he found plaintiff transported the son to various activities and commu nicated with his school regarding educational support, which is, again, a f inding supported by the record and entitled to our deference.14 A- 1515

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Additionally, we conclude the judge considered the factors detailed in N.J.S.A. 2A:34-23(b) , and acted within his discretion in ordering defendant pay $700 per month in alimony for twelve months as such was based on the limited duration of the marriage, defendant's pendente lite support since 2014 , the parties' earning capacity, and the equitable distri bution of the home. In sum, the record amply supports the judge's factual findings and, in light of those findings, his legal conclusions are unassailable.
IV. We now address defendant's argument, raised for the first time on appeal, that the judge should have recused himself due to an alleg ed conflict of interest. When a party fails to file a motion for recusal in the trial court, we review the issue under the plain error standard. State v. Med ina, 349 N.J. Super. 108, 129 (App. Div. 2002). Under that standard, we disregard any such error un less "clearly capable of producing an unjust result." R. 2:10

- 2. Judges are to "act at all times in a manner that pr omotes public confidence." Code of Jud. Conduct r. 2.1. Further, judges "must avoid all impropriety and appearance of impropriety and must expect to be the subject of constant public scrutiny." Code of Jud. Conduct r. 2.1 cmt . 1. As such, "judges15 A- 1515

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must avoid acting in a biased way or in a manner th at may be perceived as partial." DeNike v. Cupo, 196 N.J. 502, 514 (2008)

. "Any party, on motion made to the judge . . . stati ng the reasons therefor[e], may seek that judge's disqualification ." R. 1:12 -2. Additionally, a judge shall recuse themselves sua sponte "when ther e is any other reason which might preclude a fair and unbiased hearing and judg ment, or which might reasonably lead counsel or the parties to believe s o." R. 1:12-1(g). "' [I] t is not necessary to prove actual prejudice on the part of the court' to establish an appearance of impropriety; an 'objectively reasonab le' belief that the proceedings were unfair is sufficient." DeNike, 19 6 N.J. at 517 (quoting State v. Marshall, 148 N.J. 89, 279 , cert. denied, 522 U.S. 850, 118 (1997) ). Accordingly, the Supreme Court articulated the foll owing standard: "[w]ould a reasonable, fully informed person have doubts about the judge's impartiality?" Ibid. We are satisfied after a conscientious review of th e record that a reasonable person, aware of all the facts, would no t doubt the judge's impartiality. First, we note the judge himself made the parties a ware of the issue regarding the ownership of the building and stated if he had been previously aware, out of an abundance of caution, he may not h ave heard the matter.16 A- 1515

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Second, the judge also noted he had no interest in the ownership of the building, nor did he have knowledge of the incident beyond pu blic information and evidence presented during the trial. In sum, despi te the judge's initial cautionary

comments , we conclude the record is devoid of any evidence to suggest a reasonable person would conclude the judge could no t be fair and impartial and find no error in the judge's decision to preside ov er the matter.
V. We now turn to the discrete issues to be addressed on remand. The record indicates Pashman Stein retains certain trust funds as evidenced by the ledger produced in accordance with a prior court order. The record does not indicate, however, whether the judge took any further action with respect to the funds in the trust account. As such, on remand, we direct t he judge to address the issue related to any funds in the trust account, make nec essary factual findings regarding to whom the funds should be distributed a nd in what amount, and order the funds distributed. Finally, with respect to the judge's Sheridan obligation, we note in her testimony, plaintiff admitted she earned income whi ch she failed to report to any state or federal taxing authority. If the judge has not already done so, he should consider whether he is obligated to inform the appropriate taxing auth orities of17 A- 1515

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plaintiff's apparent failure to comply with her obl igation to file timely taxes on any earned income

. Affirmed in part and remanded in part. We do not retain jurisdiction.