In re the Marriage of: Kurtis Lee Manley, petitioner, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1436

In re the Marriage of:
Kurtis Lee Manley, petitioner,
Appellant,

vs.

Sara Anne Manley,
Respondent

Filed August 20, 2018
Affirmed
Worke, Judge

Dakota County District Court
File No. 19AV-FA-16-774

Suzanne M. Remington, Edina, Minnesota (for appellant)

Sara Anne Manley, Eagan, Minnesota (pro se respondent)

Considered and decided by Reyes, Presiding Judge; Worke, Judge; and Johnson,
Judge.
U N P U B L I S H E D O P I N I O N
WORKE, Judge
Appellant-husband argues that the district court overstated his income for purposes
of calculating spousal-maintenance and child-support awards. We affirm.

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FACTS
Appellant-husband Kurt is Lee Manley and respondent -wife Sara Anne Manley
married in 1996 and separated in 2014. Prior to 2008, husband operated several companies
that generated millions of dollars in revenue. Around 2008, these companies “completely
crashed.” After the businesses collapsed, husband and wife paid their bills using savings,
retirement accounts, and liquidated assets. Husband has approximately $11 million in
judgments against him.
Wife has not been employed outside of the home or earned income since 2010.
Around 2011, husband started Hunter Homes, LLC, through which he constructed homes.
Hunter Homes was “in [wife’s] name” because of the judgments against husband. Wife
was not an employee of Hunter Homes, but “offered [her] advice if [husband] needed
something.” Hunter Homes started generating income between 2011 and 2013, but not at
the same level as husband’s previous companies. Wife does not know whether Hunter
Homes still exists, but she believes that it has not conducted business since 2016.
In March 2016, husband filed a petition for dissolution of marriage. The district
court held a court trial at which wife was represented by counsel and husband proceeded
pro se. Wife offered evidence of bank statements from 2015 and 2016 for a checking
account associated with Hunter Homes. Based on these bank statements, wife calculated
that Hunter Homes generated $465,937.13 in income for husband in 2015 and $402,158.37
in 2016. Husband testified that his businesses suffered losses from 2013 to 2016 and that
he has not generated any income since 2014. Husband testified that a majority of the

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deposits into the Hunter Homes checking account were loans from his brother t o help get
the business “back on track,” including a $70,000 deposit.
Husband testified that the account statements reflect a $272,827.46 deposit in June
2016 that was the result of a sale. He explained that he was a one -third owner of that
project and that Hunter Homes received $107,500 for that sale and then distributed the rest
to other parties. The account statements reflect a withdrawal of $182,500 on June 15, 2016.
In addition, a 2016 1099 -MISC form indicates that The Lincoln Group, Inc. paid Hunter
Homes $107,500.
In its dissolution decree, the district court noted that husband “failed to provide any
evidence of his 2014 income” and had testified that he had not filed a 2014 tax return. The
district court addressed a 2015 draft tax return for husband, but noted that husband “failed
to provide any underlying documents supporting the 2015 tax returns.” The district court
also observed that the 2015 draft tax return indicated a prior year net operating loss of
$590,214, which was inconsistent with husband’s testimony concerning his 2014 tax
return. The district court discounted husband’s testimony that many of the deposits into
the Hunter Homes account in 2015 were reimbursements for business expenses, concluding
that his testimony was not credible “in light of the 2015 Hunter Homes, LLC bank
statements reflecting actual deposits totaling $465,937.13 and the 2015 draft income tax
return showing $0 in gross receipt s.” The district court noted that although “each deposit
may not be a gross receipt, . . . [h]usband, with the burden of proof, failed to reconcile such
deposits and provide the [c]ourt with the necessary evidence” to find that $465,937.13 was
not his gross income.

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With regard to husband’s 2016 income, the district court acknowledged husband’s
assertions that many of the deposits were reimbursements for business expenses and loans,
but noted that husband “failed to provide any documentation” and “failed to provide any
evidence supporting business gross receipts.” The district court concluded that the only
evidence of 2016 gross receipts was the Hunter Homes account statements refl ecting total
deposits of $402,158, and the district court adopted that number as husband’s 2016 gross
income.
The district court took $402,158 and divided it by 12 to calculate husband’s gross
monthly income as $33,513. Based on that calculation, the dis trict court awarded wife
$15,000 per month in permanent spousal maintenance and $1,842 per month in child
support. Husband appeals.
D E C I S I O N
Husband argues that the district court erroneously determined that his gross monthly
income is $33,513.1 “A district court’s determination of income for maintenance purposes
is a finding of fact and is not set aside unless clearly erroneous.” Peterka v. Peterka, 675
N.W.2d 353, 357 (Minn. App. 2004). “A finding is clearly erroneous if the reviewing court
is left with the definite and firm conviction that a mistake has been made.” Vangsness v.
Vangsness, 607 N.W.2d 468, 472 (Minn. App. 2000) (quotations omitted). We view the

1 Husband also argues that the district court erred in awarding wife permanent spousal
maintenance of $15,000 per month and child support of $1,842 per month. Because these
arguments are based entirely on the district court’s calculation of husband’s gross monthly
income, the sole issue in this case is whether the district court erroneously determined
husband’s gross monthly income.

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record in the light most favorable to the district court’s findings and defer to its credibility
determinations. Id.
For purposes of establishing child support, Minn. Stat. § 518A.29(a) (2016) defines
“gross income” as including, but not limited to:
[S]alaries, wages, commissions, self -employment income
under section 518A.30, workers’ compensation,
unemployment benefits, annuity payments, military and naval
retirement, pension and disability payments, spousal
maintenance received under a previous order or the current
proceeding, Social Security or veterans benefits provided for a
joint child under section 518A.31, and potential income under
section 518A.32.

Further, section 518A.30 (2016) defines “income from self -employment or operation of a
business” as including:
[G]ross receipts minus costs of goods sold minus ordinary and
necessary expenses required for self -employment or business
operation. Specifically excluded from ordinary and necessary
expenses are amounts allowable by the Internal Revenue
Service for the accelerat ed component of depreciation
expenses, investment tax credits, or any other business
expenses determined by the court to be inappropriate or
excessive for determining gross income for purposes of
calculating child support.

Here, the district court concl uded that husband’s gross monthly income is $33,513
based on Hunter Homes’s bank statements. Admittedly, husband testified that he had no
income in 2016 and that many of the deposits reflected in the statements were
reimbursements for business expenses an d loans, but the district court noted that husband
failed to provide any documentation to support his testimony. Additionally, the district
court found husband’s assertion that he had no documents concerning the relevant deposits

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not credible. We defer to the district court’s credibility determinations. Vangsness, 607
N.W.2d at 472.
As the party seeking to deduct business expenses from this income total, husband
bore the burden of demonstrating that the business expenses were ordinary and necessary.
See Minn. Stat. § 518A.30 (“ The person seeking to deduct an expense, including
depreciation, has the burden of proving, if challenged, that the expense is ordinary and
necessary.”). Because husband provided no documentation to support his testimony
concerning his income and the district court determined that his denial of access to
documentation was not credible, we conclude that husband has not met his burden of
demonstrating that the district court clearly erred by relying solely upon the Hunter Homes
checking-account statements to determine his gross income for 2016. Therefore, we must
also conclude that t he district court did not clearly err in calculating husband’s gross
monthly income.
Affirmed.