Opinion
A23-0111
07-25-2023
In re the Marriage of: Deepika Appana, petitioner, Respondent, v. Anil Kumar Konkimalla, Appellant.
Filed Date: July 31, 2023
Hennepin County District Court File No. 27-FA-20-5080
Considered and decided by Reyes, Presiding Judge; Ross, Judge; and Bjorkman, Judge.
ORDER OPINION
Louise Dovre Bjorkman, Judge
BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND BECAUSE:
1. In December 2022, the district court dissolved the 25-year marriage of appellant-husband Anil Kumar Konkimalla and respondent-wife Deepika Appana. In dividing the parties' marital property, the court: (1) awarded wife the marital home, one of the parties' four rental properties, and all accounts in her name; (2) awarded husband the other three rental properties and all accounts in his name; (3) assigned a $0 value to the parties' marital interest in StoreWorks Technologies Ltd., where husband is chief executive officer and part owner, and to the marital interest in another active business in which husband has an ownership interest, both of which are in Chapter 11 bankruptcy proceedings; (4) awarded each party half of those zero-value business interests; and (5) assigned to husband credit-card debt in his name, a $50,000 debt for money he borrowed from his 401(k) to pay attorney fees for this matter, and approximately $285,000 in tax liability. This division results in wife receiving 71% of the net marital assets and husband receiving 29% of the net marital assets. Husband appeals from the dissolution judgment, challenging this property division.
2. Upon dissolution of marriage, a district court "shall make a just and equitable division" of the parties' marital property. Minn. Stat. § 518.58, subd. 1 (2022). The district court has "broad discretion" in evaluating and dividing the parties' property and debts in a marital dissolution. Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002); Justis v. Justis, 384 N.W.2d 885, 888 (Minn.App. 1986), rev. denied (Minn. May 29, 1986). In exercising that discretion, the court is not required to make detailed findings. See Vinnes v. Vinnes, 384 N.W.2d 589, 592 (Minn.App. 1986). But its findings must reflect that it considered "all relevant factors." Minn. Stat. § 518.58, subd. 1. And they must be sufficient "to allow appellate review." Vinnes, 384 N.W.2d at 592; see also Dick v. Dick, 438 N.W.2d 435, 437 (Minn.App. 1989) (stating that Minn. Stat. § 518.58 (1988) requires "findings which indicate the rationale of the [district] court in making its award").
3. Husband contends the district court's findings are insufficient because they (1) do not explain why it is equitable to divide the net assets so disproportionately, and (2) do not explain why the court did not allocate between the parties more than $3.5 million in personal guarantees that husband signed as security for StoreWorks' debt. We agree in both respects.
4. We begin by observing that a property division need not be equal to be equitable. Sirek v. Sirek, 693 N.W.2d 896, 900 (Minn.App. 2005). But Minnesota law presumes that an equal division of assets after a long-term marriage, such as this one, is equitable. Miller v. Miller, 352 N.W.2d 738, 742 (Minn. 1984); see also Minn. Stat. § 518.58, subd. 1 (stating presumption that both spouses substantially contribute to the acquisition of property). The district court ordered a substantially unequal property division with little explanation. At most, we discern from the findings in the dissolution judgment and in prior court orders that the court (1) assigned to husband the 401(k) debt because he incurred it to pay his own attorney fees, (2) assigned to husband the tax liability because he claimed the parties owe it but wife demonstrated that she satisfied her own tax obligations, and (3) intended for the property division, which it described as "equal," to address the moderate gap between wife's income and expenses, supporting the denial of spousal maintenance. Even if these explanations justify the disproportionate debt allocation, the division of all other net assets remains approximately 64% in wife's favor. We cannot discern the reason for this award without further findings.
5. The district court's reasoning regarding the personal guarantees is similarly opaque. Husband testified that he personally guaranteed more than $3.5 million of StoreWorks' debt, and wife testified that only husband signed the personal guarantees, apparently agreeing that, despite a lack of documentation, they exist. The parties also agreed that, absent a default, StoreWorks' bankruptcy plan protects them from liability on the personal guarantees. In posttrial submissions, wife emphasized this protection and urged the district court not to allocate the guarantees as marital debt, while husband asked the district court to allocate it to the parties equally. In short, the parties squarely presented the issue of the personal guarantees to the district court. But the dissolution judgment is entirely silent on the subject-it does not determine whether the guarantees exist, recognize the parties' dispute, address whether a personal guarantee for corporate debt should be allocated as personal debt, or analyze how, if at all, the bankruptcy influences the property division. Without such findings, we cannot review the decision not to allocate the guarantees as marital debt.
6. Because insufficient findings prevent us from meaningfully reviewing the challenged aspects of the property division, we remand to the district court to make additional findings on the existing record. In doing so, we offer no opinion as to the propriety of the current property division or whether additional findings will warrant modification of that division.
IT IS HEREBY ORDERED:
1. The district court's judgment is remanded.
2. Pursuant to Minn. R. Civ. App. P. 136.01, subd. 1(c), this order opinion is nonprecedential, except as law of the case, res judicata, or collateral estoppel.