Ironic divorce

In July 2008, hotelier and developer Doug Manchester donated $125,000 to help gather signatures for a proposition that would ban same-sex marriage in California. The early money was crucial to getting the initiative—which ultimately passed—on the ballot. At the time, he told The New York Times that he made the donation because of “my Catholic faith and longtime affiliation with the Catholic Church,” which preferred that marriage remain between a man and a woman. Indeed, the Catholic Church has vehemently opposed gay marriage. Then again, it’s also not too keen on divorce.

On Oct. 9, 2008, Manchester ended 43 years, eight months and nine days of marriage to Elizabeth Manchester by moving out of their La Jolla abode. The couple spent the next several months trying to reach a quiet settlement on how best to distribute millions of dollars in cash and other assets. In July, those talks totally broke down, and Doug started playing financial hardball with Elizabeth, allegedly draining the couple’s shared accounts and stealing her mail. On Aug. 6, Elizabeth filed a petition for redress in family court. All of the information in this story comes from those petitions. CityBeat contacted attorneys for both parties, but neither returned calls by press time.

The court records say Doug pushed very hard for a speedy divorce agreement after he moved out, but Elizabeth would have none of it. She insisted on hiring lawyers and forensic accountants to fully assess Doug’s assets. Doug controls the Grand Del Mar Resort, the Manchester Hyatt, the Torrey Executive Center and the Manchester Financial Building. He also has $56.9 million divided among nine bank accounts, though the papers make clear that her accountants believe there’s far more holdings to be assessed. Elizabeth’s petition alleges that Doug has withheld some of the documents needed to make a full accounting. As negotiations dragged on, Doug apparently became impatient.

In March, Doug told Elizabeth he’d no longer maintain the bank account the two shared to pay her expenses, and that she should submit her bills to his office. She followed this procedure, but was surprised to get a call from AT&T saying her bill was past due.

“Doug began dragging his feet on paying my expenses,” she writes, “refusing to pay certain expenses until I accepted his demands regarding our property division. I believe Doug did this to squeeze me financially.”

She also alleges that Doug received an $8.2-million tax refund check from the IRS that was made out to both of them, and that Doug deposited the money and refused to split it with her. She has requested a copy of the check to see if someone forged her name to the endorsement, as is usually required to deposit a check made out to two people.
On July 25, Doug ran out of patience. He sent an “angry e-mail” to Elizabeth that said he “wish[es] to pursue all rights to protect all of [his] separate property and wish[es] also to litigate vigorously any and all spousal support.” (Brackets quoted from the petition).

That day, Doug wired $100,000 out of the ac-count the couple shared, leaving a $17,000 balance. Elizabeth argues in her petition that the account balance will be negative when outstanding checks come due. She also learned that day that Doug had spent the previous six months taking $9.3 million out of their joint bank accounts and putting it into his separate account.

Elizabeth writes that she believes all of these tactics—the mail, the financial restrictions, submitting bills to Doug’s office—are attempts to “squeeze” her.

“Respondent was attempting to compel me to settle on his terms by impeding my access to funds for living expenses,” she writes in her petition.

On the weekend of July 30, Elizabeth was at their house in Sun Valley, Utah—one of six vacation residences the couple owns together. She alleges that Doug went into the La Jolla house, which he had not lived in for months, and took several pieces of mail belonging to her, including a letter from her attorneys at the law firm of Seltzer Caplan McMahon Vitek. The letter included a detailed invoice of what the firm had done for her and discussed a strategy for her case. An attorney with Hervey and Wood, representing Doug, eventually returned the letter saying Doug “had opened it by mistake.”

Elizabeth petitioned the court to guarantee that she have sole use of the La Jolla residence, that he return the mail (which was returned) and that he restore the $100,000 so she can meet her monthly expenses of $131,625. These include nearly $20,000 on clothing and jewelry, $7,000 in electric bills, $1,700 in groceries, $4,901 in household supplies, tuition at three private schools for some of the couple’s 10 grand children, $7,500 in salary for the full-time groundskeeper and housekeeper, $1,200 in membership dues for the La Jolla Country Club and money toward the hundreds of thousands of dollars in travel expenses the couple was accustomed to spending.

The Manchesters will next meet in court on Sept. 17, 2009. 

Write to ericw@sdcitybeat.com and editor@sdcitybeat.com.