Chao Liu v. Junhua Chang ( 2020 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
CHAO LIU, ) No. 78999-6-I
Respondent, ) DIVISION ONE
v. ) UNPUBLISHED OPINION
)
JUNHUACHANG,
)
Appellant. )
PER CURIAM. — Junhua Chang appeals a decree of dissolution. He challenges
the trial court’s property distribution, consideration of Bitcoin assets, and maintenance
award. Because Chang fails to comply with the Rules of Appellate Procedure and, in
any event, does not demonstrate an abuse of discretion, we affirm.
FACTS
In 2002, Junhua Chang married Chao Liu in Beijing, China. They lived in a
condominium provided by Chang’s employer. They subsequently moved to the United
States, purchased a house in Bellevue, and had two children.
Chang is currently a software engineer with two master’s degrees and earns
between $15,000 and $17,500 per month. Chang also started four companies (General
Computer Inc., General Group, Lightening Network LLC, and Lightening Express LLC),
none of which are profitable. Liu works for the Seattle School District as a payroll
technician earning $3,400 per month.
No. 78999-6-112
In 2012, Chang left Liu and their children in Bellevue to start a company in
Beijing. Chang and Liu discussed dissolving their marriage at that time, but reconciled
when he returned to the United States in 2013 after his start-up failed.
Since 2012, Chang has had at least three extramarital romantic relationships.
He used community income to support his girlfriends, giving one $4,000 per month. He
also used community income to purchase gifts and to rent hotel rooms and apartments
for his girlfriends. He spent up to $174,698 on these relationships.
In June 2017, Liu filed a petition for dissolution. The assets before the court
included the Bellevue house, four motor vehicles, Chang’s four businesses, Chang’s
Bitcoin account, and the parties’ retirement accounts. Chang claimed Liu also received
rental income from the condominium. Liu asked the court to award her the Bellevue
house and to award Chang the Bitcoin account.
At the time of trial, the house was valued at $863,895, but had $297,246 in liens
against it. The parties disputed ownership of the Beijing condominium. Liu testified that
Chang’s former employer, the Beijing Institute of Technology, owned it, but that she and
Chang leased it to students and family members for a number of years. Chang, on the
other hand, testified that he purchased the condominium and that Liu receives rental
income from it.
Much of the trial focused on Chang’s acquisition of Bitcoins during the marriage.
In November 2017, Liu took a photograph of Chang’s computer screen showing his
MultiBit Classic Bitcoin Wallet with 53.21 Bitcoin valued at $504,766. A May 2018 email
from Chang contained screenshots of transactions for the Bitcoin wallet and showed the
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same number of Bitcoins but with a lower value.1 Chang testified that he sold all of the
Bitcoin by 2015 and that the Wallet’s balance was actually zero at the time of trial. He
claimed the screens hots Liu provided were from obsolete software that stopped working
before he transferred and sold his Bitcoin.
The court found that, ‘overall,” Chang was not credible and that it could not
determine “to what extent he was lying or delusional.” The court found that Liu
presented compelling evidence that Chang had 53+ Bitcoin as of May 2018 and Chang
provided no evidence to support his claim that he had no Bitcoin. The court valued the
Bitcoin at $328,903 as of June 24, 2018, and awarded it to Chang “because the court
has no viable way to transfer it to the wife.” The court declined to rule on the ownership
of the Bejing condominium or past rents for the condominium. The court found that
neither party had an equity interest in the condominium and that there was no proof that
Liu receives income from it.
The court further found that Chang’s use of community income in his extramarital
relationships constituted “waste” of community assets in the amount of $174,698.
Accordingly, the court put that amount “on his side of the ledger,” finding that Chang
“got the entire benefit of that, because he got the benefit of spending time with his
girlfriends.”
After considering the disparity in the parties’ current and potential earnings, the
court concluded that “an unequal division of assets is warranted in this case.” Noting
the parties had very few assets, the court found:
While this is a no-fault state, and the court cannot award money based on
the husband’s bad behavior, the court does note that giving the wife more
than half of the community assets will help to make up in some way for the
1 The May 2018 emails were admitted as Exhibit 57, but the exhibit has not been designated on appeal.
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husband’s having spent community assets on unproductive projects or
simply on girlfriends.
The court then awarded the Bellevue house to Liu, explaining:
The court cannot go back and award the money the husband spent on
girlfriends, or took out in cash, to the wife. That money is simply gone. It
cannot award the Bitcoins, because their nature is that they are
untraceable, and the court has no way to reach them. The court will
therefore award the house to the wife.
The court also awarded Lui one of the parties’ cars and her retirement accounts.
The court awarded Chang the value of the Bitcoin account and the other three cars.2
This resulted in a property distribution of 55.41% to Liu and 44.59% to Chang. In
making this determination, the court stated, “This is actually a lower ratio [for Liu] than
the court would otherwise find appropriate, but there are no other assets to award her.”
The court awarded Liu maintenance of $3,000 per month for five years “based on
the wife’s needs and husband’s ability to pay.” Chang appeals.
DECISION
RAP Violations
Initially, we address Chang’s noncompliance with our Rules of Appellate
Procedure (RAP). “[P]ro se litigants are bound by the same rules of procedure and
substantive law as attorneys.” Westberq v. All-Purpose Structures Inc., 86 Wn. App.
405, 411, 936 P.2d 1175 (1997). Failure to comply with the RAP and related case law
may preclude review. State v. Marintorres, 93 Wn.App. 442, 452, 969 P.2d 501 (1999).
For example, arguments unsupported by references to the record or citation to
authority need not be considered. Cowiche Canyon Conservancy v. Bosley, 118
Wn.2d 801, 809, 828 P.2d 549 (1992). Appellate courts are not required to search
2 The court also awarded Chang his four businesses but noted they do not seem to make any
money or have any assets.
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No. 78999-6-115
the record to locate portions relevant to a litigant’s arguments. Mills v. Park, 67
Wn.2. 717, 721, 409 P.2d 646 (1966). And conclusory claims presented without
meaningful argument also need not be considered. State v. Rafay, 168 Wn.App. 734,
843, 285 P.3d 83 (2012). Chang’s opening and reply briefs violate several of these
principles.
RAP 1 0.3(a)(5) requires the appellant’s brief to include “[a] fair statement of the
facts and procedure relevant to the issues presented for review, without argument.
Reference to the record must be included for each factual statement.” Chang’s
statement of the case contains no references to the record. And with few exceptions,
the argument section of his briefs violate RAP 10.3(a)(6), which requires ‘argument in
support of the issues presented for review, together with citations to legal authority and
references to relevant parts of the record.” Finally, Chang has failed provide portions of
the record necessary for review. Taken together, these omissions are fatal to Chang’s
appeal. Moreover, as discussed below, his arguments on appeal lack merit.
Property Distribution
Chang challenges the trial court’s property distribution, arguing that the court
abused its discretion by awarding Liu the majority of the assets, giving her the family
home, and leaving him with an empty Bitcoin account.
We review a trial court’s property division following a dissolution for manifest
abuse of discretion. In re Marriacie of Muhammad, 153 Wn.2d 795, 803, 108 P.3d 779(2005). “A trial court abuses its discretion if its decision is manifestly unreasonable or
based on untenable grounds or untenable reasons.” In re Marriacie of Littlefield, 133
Wn.2d 39, 46-47, 940 P.2d 1362 (1997).
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No. 78999-6-1/6
In dissolution proceedings, a trial court has broad discretion to make “just and
equitable distribution of property based on the factors enumerated in RCW 26.09.080.”
In re Marriage of Wright, 179 Wn. App. 257, 261, 319 P.3d 45 (2013). These factors
include, but are not limited to: “(1) The nature and extent of the community property; (2)
The nature and extent of the separate property; (3) The duration of the marriage or
domestic partnership; and (4) The economic circumstances of each spouse or domestic
partner at the time the division of property is to become effective.” RCW 26.09.080.
“Just and equitable distribution does not mean that the court must make an equal
distribution.” In re Marriage of DewBerry, 115 Wn. App. 351, 366, 62 P.3d 525 (2003).
“A just and equitable division ‘does not require mathematical precision, but rather
fairness, based upon a consideration of all the circumstances of the marriage, both past
and present, and an evaluation of the future needs of parties.” In re Marriage of Larson
and Calhoun, 178 Wn. App. 133, 138, 313 P.3d 1228 (2013), rev, denied, 180 Wn.2d
1011, 325 P.3d 913 (2014). “A trial court is not required to place the parties in precisely
equal financial positions at the moment of dissolution.” In re Marriage of Wright, 179
Wn. App. 257, 262, 319 P.3d 45 (2013).
The record demonstrates the court considered and weighed the relevant
statutory factors. The court considered the nature and extent of the community and
separate property, finding that
the parties have very few assets, other than the money the wife [ha]s
managed to save, and the house, and the husband’s Bitcoin account,
because the husband seems to have either spent the money on various
startup businesses which did not work out, or on girlfriends.
The court found it could not award Liu the Bitcoins because ‘their nature is that they are
untraceable, and the court has no way to reach them.”
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No. 78999-6-117
The court also found that Chang wasted community funds and that giving Liu
more than half the community assets “will help to make up in some way for the
husband’s having spent community assets on unproductive projects or simply on
girlfriends.” Because Chang does not assign error to these findings, we accept them as
verities on appeal. Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 808, 828
P.2d 549 (1992).
The court also considered the parties’ economic circumstances, finding that
Chang “makes anywhere from 4 to 5 times what the wife does, and in future years will
have a vastly greater income earning ability.” The court found Chang “has the ability
and history of making $17,500 per month” as a “talented and skilled software engineer,”
whereas Liu was just starting out as a payroll technician, earning $3400 per month, and
would not likely “earn a great deal more than this in the future.” Again, Chang does not
assign error to these findings, so we accept them as verities.
The court’s unchallenged findings demonstrate that its property division was
based on fairness and “upon a consideration of all the circumstances of the marriage,
both past and present, and an evaluation of the future needs of parties.” Larson, 178
Wn. App. at 138. Chang fails to show the trial court abused its discretion.
Bitcoin Account
Chang claims the court erred in finding he owned 53+ Bitcoins, arguing there was
no evidence showing he owned Bitcoin at the time of trial. Chang points to his
testimony that he sold all the Bitcoins by December 2015 to support himself. He also
notes that the screenshot taken on his computer in November 2017 shows the Bitcoin
Wallet software “synchronizing,” and asserts this was not the final balance. Chang
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No. 78999-6-1/8
further asserts that the transaction and ledger information he provided “clearly show the
balance of his personal Bitcoin Wallet as 0 at trial.’3
We will not overturn findings of fact if they are supported by substantial evidence
in the record. In re Marriage of Katare, 175 Wn.2d 23, 35, 283 P.3d 546 (2012).
Substantial evidence is “evidence sufficient to persuade a fair-minded person of the
truth of the matter asserted.” In re Marriage of Chandola, 180 Wn.2d 632, 642, 327
P.3d 644 (2014). We will not disturb credibility determinations or weigh evidence on
appeal. In re Marriage of Fahey, 164 Wn. App. 42, 62, 262 P.3d 128 (2011). We defer
to the trial court’s finding if it is within the range of credible evidence. Marriage of
Rockwell, 141 Wn. App. 235, 248, 170 P.3d 572 (2007).
The trial court found that Liu presented “compelling evidence” that Chang had
53+ Bitcoins in his control. Substantial evidence supports this finding. The account
information Chang provided in May 2018 showed he had that amount of Bitcoin about a
month before trial. Chang did not provide any evidence showing different current
account values. Nor did he provide credible evidence that he no longer had the Bitcoins
or that the word “synchronizing” on the screenshots meant the balances were not
current. The trial court expressly found Chang’s explanations about what happened to
the Bitcoins not credible, stating in part:
The transaction register [Chang] provided show transfers into his personal
wallet and no transfers out. The transaction register he provided for his.
2nd Bitcoin account in a company called client base, show unique link
identifiers between his 2 personal accounts, which did not exist for all of
the other transactions. He provided no actual account statements for
either of his 2, accounts: In cross-examination, he agreed that if he took
his computer [] to the court it would show that he still had 53+ Bitcoins in
his account. Mr. Chang told a very complicated story about how we cannot
possibly rely on this information because he no longer has that wallet due
~ This evidence was admitted as Exhibit 57, which was not designated on appeaL
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to the demise of a computer program. Because of the nature of
cryptocurrency, it is very difficult for anyone but the owner of the Bitcoin to
establish how many Bitcoin are owned by whom at what time and at what
value. The upshot is that Mr. Chang never provided any documentary
evidence that he does not continue to own 53 Bitcoin if not more (his
Closing suggested it was actually 60 Bitcoin).
The court does not find Mr. Chang credible when he testified he no
longer has the Bitcoins, when his own printouts, and screenshots, from his
own computer, which he had complete control of, says he still has the
Bitcoins. The court also notes that the photograph the wife took, shows
the wallet actively “synchronizing with network”, which indicates it was
being run in November 2017, and again in May 2018. It is impossible to
see why he would be actively running a program which he now claims was
defective.
• •[T}he court gave him every chance to show what had actually
.
happened to the Bitcoins. This included him having the chance to bring
his PC into court and show the court what had happened to the Bitcoins.
He failed to do this. The court therefore finds that as of November 2017
and again in May 2018, he had 53+ Bitcoins.
The trial court’s finding that Chang owned 53+ Bitcoin at the time of trial was within the
acceptable range of credible evidence. See Rockwell, 141 Wn. App at 248.
Chang further contends the court erred by admitting evidence of the May 2018
email and screenshot despite his objection. Chang objected below as follows:
THE COURT: Any objection to 57?
THE RESPONDENT: Yes. So I want to clarify the original screenshot that
my wife took. She used a defunct bitcoin wallet. That software has been
abandoned three years ago. It doesn’t show the latest balance because
the company has bought by another company because they abandoned
the software. So the 53 bitcoin has already been sold. It had all the
transactions that will be presented.
THE COURT: Okay. But we know that we at least had -- you had 53 here
when you sent the e-mail. Right?
THE RESPONDENT: Pardon me?
THE COURT: Looks like you still had 53 bitcoin when you sent this e-mail
in May of 2018.
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No. 78999-6-1/10
THE RESPONDENT: No, Your Honor. So it shows another that on May --
1st, 2015, it has 53 bitcoin. It’s on the exhibit, this exhibit. I think it’s 57,
page four. There’s a clear date. It says May 1st, 2015. There is 53 bitcoins
there. So —
MR. HANSEN: If I may continue, Your Honor.
THE COURT: You may. I don’t see that this is an objection to the
admissibility of it. You may certainly raise questions about it later.
We review a trial court’s evidentiary rulings for abuse of discretion. State v.
Powell, 126 Wn.2d 244, 258, 893 P.2d 615 (1995). The trial court correctly concluded
that Chang’s objection went to the weight, not the admissibility, of the evidence.
Maintenance
Chang challenges the maintenance award of $3,000 per month for 72 months.
We review a trial court’s award of maintenance for abuse of discretion. In re Marriage
of Zahm, 138 Wn.2d 213, 226, 978 P.2d 498 (1999). In re Marriage of Booth, 114
Wn.2d 772, 776, 791 P.2d 519 (1990). “The only limitation on the amount and duration
of maintenance under RCW 26.09.090 is that the award must be ‘just.” In re Marriage
of Wright, 179 Wn. App. 257, 269, 319 P.3d 45 (2013) (citing In re Marriage of Bulicek,
59 Wn. App. 630, 633, 800 P.2d 394 (1990)). “Maintenance is ‘a flexible tool’ for
equalizing the parties’ standard of living for an ‘appropriate period of time.” Wright, 179
Wn. App. at 269 (quoting In re Marriage of Washburn, 101 Wn.2d 168, 179, 677 P.2d
152 (1984)).
Chang fails to demonstrate an abuse of discretion in the court’s maintenance
award. The court awarded maintenance “based on the wife’s needs, and the husband’s
ability to pay,” noting Chang’s monthly income of $17,500 and Liu’s monthly income of
$3,400. The court considered the length of the marriage (15 years), finding that “a ratio
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of one year of maintenance to every 3 years of marriage is fair.” The court also found
that “at a 15 year point [in the marriage it] is appropriate to factor in the standard of
living the parties could enjoy at $150,000-$200,000 per year, as well as solely the
needs of the mother.” The court found that Liu should be able to stay in the family
home with the children, that she has a mortgage of $2400, and that she “needs $5730
per month, at minimum, which the court finds is a reasonable amount for her and the
children.” After considering the mortgage, Liu’s net income and child support, the court
determined $3000 per month was “appropriate given the disparity in incomes.”
Chang contends the court failed to consider Liu’s financial resources, specifically
her child support and rental incomes.4 As discussed above, the court considered all of
Liu’s sources of income, including child support. While Chang contends the court failed
to consider the rental income from the Bejing condominium, the court found neither
Chang nor Liu “have a property right [in the Beijing condominium] that can be bought
and sold,” and “there is no proof” that Liu receives “income derived from the
condominium.” We accept these unchallenged findings as verities on appeal.
Chang also claims the court failed to consider rental income from the Bellevue
home, arguing that Liu can rent out extra rooms in that house. But the trial court made
no findings about such income and Chang points to no support in the record for this
claim.
Chang raises additional arguments in his reply brief that were not raised in his
opening brief. We will not consider arguments raised for the first time in a reply brief.
Chang asserts that she receives $2300 in monthly child support, though the court’s findings indicate that
~‘
amount is $1505 per month. The child support order has not been designated on appeal.
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Cowiche Canyon, 118 Wn.2d at 809 (“An issue raised and argued for the first time in a
reply brief is too late to warrant consideration.”).
Liu requests enforcement of the trial court’s orders, claiming that Chang has,
among other things, failed to pay attorney fees, maintenance, and child support.
Enforcement matters are the province of the trial court.
Affirmed.
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