Filed 12/2/16

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

In re Marriage of KINKA USHER 

and FREDERIQUE BENHAMOU 

USHER

KINKA USHER,

Respondent,

v.

FREDERIQUE BENHAMOU 

USHER,

Appellant.

 B263721

 (Los Angeles County

 Super. Ct. No. BD491961)

APPEAL from an order of the Superior Court of Los 

Angeles County. Superior Court of Los Angeles County, No. 

BD491961, John W. Ouderkirk, Temporary Judge. 

(Pursuant to Cal. Const., art. VI, §21.) Reversed.
2

Law Offices of Marjorie G. Fuller, Marjorie G. Fuller; 

Freid & Goldsman, Melvin S. Goldsman and Jon Summers 

for Appellant.

Honey Kessler Amado and James A. Karagianides for 

Respondent.

____________________________________

Pursuant to an agreement entered into at the time of 

dissolution, respondent Kinka Usher paid his ex-wife, 

appellant Frederique Benhamou Usher, child support of 

$17,500 per month, an amount commensurate with their 

wealth and lifestyle during the marriage, and the lifestyle 

respondent continued to live. In March 2015, the trial court 

granted respondent’s request to reduce the monthly child 

support payment to $9,842, finding a material change in 

circumstances based on a decline in respondent’s

employment income. Appellant contends that the court 

abused its discretion in making that determination because

respondent’s reduced income did not constitute a material 

change in circumstances in light of his extreme wealth. 

Appellant further contends the court imputed an 

unreasonably low rate of return to respondent’s substantial 

assets, valued at over $67 million. 

We agree. We conclude that substantial evidence did 

not support the trial court’s finding of a material change in 

respondent’s circumstances for purposes of meeting his child 

support obligation. Specifically, we conclude that in light of 

respondent’s overall wealth, the reduction in his employment 
3

income did not materially impair his ability to pay the 

agreed upon child support. We further conclude that the 

trial court imputed an unreasonably low rate of return to 

respondent’s tens of millions of dollars in assets.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant and respondent were married in 2006 and 

separated in 2008. Their child, Roman, was born in 

February 2006. Respondent was a successful director and 

producer during the marriage, earning approximately $4.25 

million per year, and owned substantial assets, including 

cash, investment funds, and real and personal property. 

A. Stipulated Judgment

The marriage was formally dissolved in October 2009 

by stipulated judgment of dissolution (the Stipulated 

Judgment). The Stipulated Judgment provided for spousal 

support of $15,329 per month for two years (October 2009 to 

September 2011). Appellant waived all further right to 

spousal support. 

The Stipulated Judgment also provided that 

respondent was to pay child support of $12,500 per month

and permit appellant and Roman to live in respondent’s 

Pacific Palisades home until June 2010. At the end of that 

period, appellant and Roman would vacate the house, and 
4

respondent would pay an additional $5,000 in child support.1

The Stipulated Judgment acknowledged: (1) that 

respondent was a “‘high earner’” within the meaning of

Family Code section 4057, subdivision (b)(3);

2 (2) that “the 

child support arrangement set forth . . . was not arrived at 

pursuant to the California Guidelines provided for in Family 

Code §§ 4055-4065”; (3) that the deviation from the child 

 

1 Under the child support heading of the stipulated 

judgment, respondent also agreed to pay Roman’s private 

school tuition of approximately $20,000 per year, to maintain 

a medical insurance policy for Roman, to pay one-half the 

cost of Roman’s extra-curricular activities, and to make 

appellant’s monthly automobile lease payments. 

2 Section 4057, subdivision (a) provides that the amount 

of child support established by the complex formula of 

section 4055 -- a formula that relies heavily on the parents’ 

monthly disposable income -- is presumed correct. (See 

Mejia v. Reed (2003) 31 Cal.4th 657, 670.) Under subdivision 

(b)(3) of section 4057, a parent with an “extraordinarily high 

income” need not pay child support commensurate with the 

formula if he or she establishes “the amount determined 

under the formula would exceed the needs of the children.” 

Under subdivision (b)(5), the parent may be required to pay 

more than the formula if its application “would be unjust or 

inappropriate due to special circumstances in the particular 

case.” A court may deem a party’s substantial non-income 

producing assets “a ‘special circumstance’ [citation] that may 

justify a departure from the guideline figure for support 

payments.” (Mejia v. Reed, supra, at p. 671.) (Undesignated 

statutory references are to the Family Code.)
5

support guidelines was “in the best interest of [Roman],”

whose his needs would be “adequately met” by the parties’ 

agreement; and (4) that each party “had the opportunity to 

analyze (with his/her respective accountants and attorneys)

the expenses and needs of their minor child.” The parties 

“waive[d] the right to seek modification of a non-guideline 

child support order without making a showing of a material 

change of circumstances . . . .” 

In June 2010, appellant and Roman vacated 

respondent’s Pacific Palisades house and rented a new

residence in the same area at a cost of $7,500 per month. 

Pursuant to the Stipulated Judgment, child support 

increased to $17,500 per month. Spousal support 

terminated in September 2011. 

B. Request to Reduce Child Support Payment

In June 2014, when Roman was eight, respondent filed 

a request for an order reducing his monthly child support

payment to $5,184, plus a percentage of any income he 

earned above $841,272 annually.

3 The sole basis for his 

 

3 As explained in In re Marriage of Kerr (1999) 77 

Cal.App.4th 87, 95, the family court may award as spousal 

or child support “a percentage of uncertain earnings” in 

order to avoid “an indefinite number of future hearings at 

which the details of income, expenses, investment success or 

failure, tax consequences and fairness must be reevaluated.” 

These awards are referred to as “Ostler-Smith” payments 

after In re Marriage of Ostler & Smith (1990) 223 Cal.App.3d 

(Fn. continued on next page.) 
6

request was that he was then “earn[ing] significantly less 

than when [the] Stipulated Judgment was negotiated in 

2009.” He stated that his monthly income had decreased

from approximately $350,000 when the parties entered into 

the Stipulated Judgment to $70,106.

4 The proposed reduced 

monthly child support figure was obtained by use of the 

DissoMaster program, inputting $70,106 as respondent’s

monthly income, deducting for health insurance and 

 

33, 42, the first appellate decision to recognize the family 

court’s discretion to make such awards. 

4 According to the income and expenses statement 

prepared at the time of the dissolution, respondent’s 2009 

income included $144,831 per month in salary and over 

$200,000 per month in other income (dividends, interest, 

location fees, residuals, profit from his production company, 

pension contributions and perquisites). In 2014, respondent 

reported a salary of $41,666 per month and other income 

(dividends, interest and K-1 income) of $28,440 per month, 

which he later revised upward to $34,791. Respondent’s 

attached declaration explained that he had shut down his 

production company at the end of 2013 and was working as 

an employee for another company. Respondent later 

explained that he closed his company in 2013 because 

business and profit had fallen significantly, and asserted 

that he was earning approximately the same amount 

working for a third party in 2014 as he had in 2013 from 

operating his business. 
7

property tax on his primary residence, and presuming 

custodial time of 30 percent.5

Appellant filed opposition, contending that the 

decrease in respondent’s income from employment was not a 

material change of circumstances warranting modification of 

the existing child support payment, and that respondent had 

numerous alternative sources of income and assets from 

which to pay the agreed upon child support.

6 Her expert,

 

5 “The DissoMaster is a privately developed computer 

program used to calculate guideline child support under the 

algebraic formula required by section 4055.” (In re Marriage 

of Williams (2007) 150 Cal.App.4th 1221, 1227, fn. 5 

(Williams).) Respondent attributed zero income to appellant 

who, although possessing a realtor’s license and working ten 

to 40 hours per week, had reported no income in 2013 or 

2014. 

6 Appellant explained that child support funds were used 

to pay, among other things, Roman’s travel expenses when 

she took him to Europe in the summer to visit his maternal 

grandparents and to drop him off at respondent’s home in 

Italy. Appellant estimated that Roman’s travel expenses 

averaged $3,300 per month, and that total expenses for the 

boy were more than $21,000 per month, excluding her onehalf share of rent and utilities for their residence. Her 

estimate included 100 percent of the cost of Roman’s 

extracurricular activities and private school tuition, as she 

claimed respondent had not paid anything toward the tuition 

since 2010 and had “consistently failed” to make the 

stipulated contributions toward extra-curricular activities. 

Respondent filed a reply declaration criticizing appellant for 

(Fn. continued on next page.) 
8

Michael T. Miskei, a certified public accountant, pointed out 

that according to respondent’s income and expense 

statement, he had assets of over $67 million -- approximately 

$37.5 million in liquid assets, and nearly $30 million in real 

and personal property.7 After deducting approximately $2.1 

million from respondent’s assets to account for the value of 

the Santa Barbara home Miskei believed to be respondent’s 

primary residence, Miskei opined that conservatively 

invested in a blend of treasury notes, triple A bonds, and 

bond funds, respondent’s assets could generate income at a

rate of 4.5 percent and provide him a monthly cash flow of 

$260,826, including his salary. Miskei prepared a 

DissoMaster calculation based on this income, expenses 

similar to those deducted by respondent, and an estimated 

 

continuing to employ a nanny, but acknowledging that 

historically the family had spent the summers in Europe and 

that since the divorce, appellant had borne the expense of 

bringing Roman to meet respondent there. 

7 Respondent owned a home in Montecito valued at 

approximately $19.2 million, a Santa Barbara home on two 

lots valued at approximately $2.1 million, another Santa 

Barbara property valued at $528,000, and a home on the 

island of Capri, Italy valued at over $6.6 million. 

Respondent’s brief refers to these values as his “equity,” but 

the record reflects the properties were evaluated by the court

and the parties at their cost or “book” value, not their 

possibly higher market value. Nothing in the record 

indicates that any of the properties was mortgaged.
9

custodial time share of 20 percent.8 This generated a

monthly child support payment of $17,244, nearly identical 

to the amount appellant was paying under the Stipulated 

Judgment. 

Prior to the hearing on the request for modification, 

respondent filed a reply, conceding that some income should 

be attributed to his assets. In separate declarations, 

respondent and his expert, Lawrence Goodfriend, a certified 

public accountant and respondent’s business manager, 

stated that respondent was a cautious investor who did not 

wish to tie up his assets in long term notes or bonds. 

Goodfriend opined that the 4.5 percent return estimated by 

Miskei was “excessive,” and that the “assumed rate of return 

should be 1%,” an amount Goodfriend described as 

“achievable in the current investment world . . . .” Although 

neither respondent nor Goodfriend disputed that treasury 

bonds would be “relatively safe[],” they contended investing 

in bonds would require respondent to “tie up” his money for 

decades. Respondent stated Miskei was mistaken in

concluding his primary residence was the $2.1 million Santa 

Barbara home on two lots, and that he was in fact residing 

in the $19.2 million Montecito home, while making plans to 

sell the $2.1 million Santa Barbara property. In addition, 

respondent took the position that before attributing any 

income to his retirement account or his real property, the 

 

8 Miskei also presumed zero income for appellant. 
10

cost of cashing in those assets should be deducted.9 Taking 

deductions for the cost of cashing in assets and the value of 

the Montecito home left respondent with investable assets of 

just under $42.7 million. Applying a one percent return to 

this amount resulted in imputed investment income of

$35,583 per month, and increased respondent’s total 

monthly income (employment income plus investment 

income) to $91,609. Respondent further contended that 

assets owned by appellant should be expected to generate a 

similar return and that she should be contributing a share of 

the imputed income to Roman’s support.

10 Utilizing $91,609 

for respondent’s income, $1,023 for appellant’s income, and 

continuing to assume respondent had custody 30 percent of 

the time and the same deductible expenses, respondent

generated a revised DissoMaster child support amount of 

$6,926. 

 

9 For example, cashing in respondent’s retirement 

account would have incurred early termination expenses as 

well as state and federal taxes. Cashing in his real property 

would have incurred selling costs. 

10 Appellant’s assets, which included cash, investments 

and an $800,000 apartment in Paris, were valued at $1.227 

million. Respondent imputed income of $1,023 per month to 

respondent based on a one percent return. 
11

C. Hearing

At the January 2015 hearing, Miskei testified that 

after reviewing updated financial records, he had concluded 

respondent’s income from his employment was higher than 

originally estimated by the parties, viz., approximately 

$65,000 per month. He imputed income to appellant of 

$3,455 per month based on the value of her assets. Miskei 

continued to believe a 4.5 percent return was reasonable and 

that no more than $2.1 million should be deducted from 

respondent’s assets to account for his personal residence.

11 

Inputting the new figures for employment income into the 

DissoMaster, Miskei calculated monthly guideline child 

support at $19,099.12 Miskei denied that his proposed 

 

11 As a general rule, “a supporting parent’s home equity . 

. . may not be considered for the purpose of calculating child 

support . . . .” (Williams, supra, 150 Cal.App.4th at p. 1244.) 

The rule may be overcome by “a showing of special 

circumstances under section 4057, subdivision (b), that 

render guideline support unjust or inappropriate” (ibid.), 

such as a showing that the supporting spouse’s residence is a 

mansion located on substantial acreage. (In re Marriage of 

de Guigne (2002) 97 Cal.App.4th 1353, 1362-1364 (de 

Guigne).) Respondent moved into the $19.2 million 

Montecito residence the month before the hearing. 

12 Appellant presented this calculation solely to 

demonstrate that the stipulated child support would be 

within or close to the guideline, even taking into account 

respondent’s reduced salary. She did not seek a change in 

child support payments. 
12

investment strategy was risky or would tie up respondent’s 

investment funds, as the investments could be laddered by 

buying bonds and notes with different maturity dates.13 In 

addition, Miskei reviewed respondent’s investment accounts 

for three years and found that although the majority of the 

currently invested funds were in cash and money markets 

earning less than one percent, approximately $14 million 

(out of $34.7 million) were in Charles Schwab accounts,

returning from 5.5 to 7 percent. For 2013, Miskei prepared a

chart which showed that respondent had $35,060,966 in 

investment funds on which he earned $861,817, an overall 

rate of return of 2.46 percent. 

Goodfriend testified that respondent had employed a 

conservative investment strategy, which included having 

“[$]12 of [$]35 million of his capital in stocks and bonds,” and 

that this strategy had been in place for at least five years. 

Goodfriend explained that “tying up” capital in long term 

notes and bonds could lead to a loss if the investor needed to 

liquidate assets prior to the maturity dates of the notes and 

 

13 On cross-examination, Miskei acknowledged that the 

return on 10-year treasury notes had decreased from 2.49 

percent when he initially performed his calculations to 1.76 

percent as of the date of the hearing, and that the return 30-

year treasury notes had decreased from 3.26 percent to 2.32 

percent. He said he would “probably” not use that same 

overall rate were he to perform the calculations at the time 

of the hearing. 
13

bonds, but only if interest rates had risen substantially

between the time of purchase and the time of sale. 

D. Order

The court found a “material change in circumstances”

warranting a modification of the monthly child support 

amount, despite respondent’s “substantial wealth” and 

“assets totaling over $67 million.” The court concluded

respondent’s employment-related income was $58,471 per 

month. The court performed its own calculation for the 

income to be imputed to respondent’s substantial assets. It 

first took account of the cost of liquidating the real

properties on which respondent did not reside (the two lots 

in Santa Barbara and the vacation home in Italy), deducting 

five percent for the “cost of a hypothetical sale . . . .” This 

left $8,807,604 to be invested. The court utilized Miskei’s 4.5 

percent to impute a rate of return on these funds based on 

the rationale that “these properties ha[d] not been previously 

treated as investment property under [respondent’s] 

conservative investment strategy . . . .” This resulted in 

imputed monthly income of $33,028. To respondent’s 

remaining assets -- $55,971,226 after deducting the value of 

the non-residential properties and the costs associated with 

early withdrawal of retirement funds -- the court imputed a 

one percent rate of return, which the court described as 

“[respondent’s] average” for “at least the last five years,”

resulting in additional imputed monthly income of $46,642. 
14

The court input respondent’s actual and imputed 

income ($140,141/month, according to the court’s calculation)

and income it imputed to appellant ($3,343/month), and 

deducted property taxes for respondent’s Montecito

residence ($6,765/month). This generated a child support 

amount of $9,842 per month.14 The court modified 

respondent’s child support to this amount, retroactive to

July 2014, when his original request was filed, plus OstlerSmith child support on any income he earned above 

$1,681,692 per year ($140,141 x 12). The court also ordered 

appellant to pay all of Roman’s tuition, all of his medical 

insurance premiums, and 85 percent of all mutually agreed 

upon extracurricular activities and medical expenses not 

covered by insurance.15 This appeal followed.

DISCUSSION

A. Basic Principles Underlying Child Support and the 

Applicable Standard of Review for Child Support Orders

“California has a strong public policy in favor of 

adequate child support.” (In re Marriage of Cheriton (2001) 

92 Cal.App.4th 269, 283 (Cheriton).) The policy is expressed 

 

14 The court found in favor of appellant on the disputed 

issue of custody time, finding that respondent had Roman 20 

percent of the time, not 30 percent as he had claimed. 

15 The court permitted respondent to deduct 10 percent 

from his monthly child support payments to recover the 

“overpayment[s]” since July 2014. 
15

in the statutes embodying the statewide uniform child 

support guideline, sections 4050 through 4076. The 

guideline “seeks to place the interests of children as the 

state’s top priority.” (§ 4053, subd. (e).) Section 4053 

provides that “[a] parent’s first and principal obligation is to 

support his or her minor children according to the parent’s 

circumstances and station in life,” that “[e]ach parent should 

pay for the support of the children according to his or her 

ability,” and that “[c]hildren should share in the standard of 

living of both parents.” (Id., subd. (a), (d) & (f).) The 

Legislature deems it “appropriate[]” that child support be 

used to “improve the standard of living of the custodial 

household” because this “improve[s] the lives of the 

children.” (Id., subd. (f).) Thus, courts have “consistently 

recognize[d]” that “‘where the supporting parent enjoys a 

lifestyle that far exceeds that of the custodial parent, child 

support must to some degree reflect the more opulent 

lifestyle even though this may, as a practical matter, 

produce a benefit for the custodial parent.’” (In re Marriage 

of Hubner (1988) 205 Cal.App.3d 660, 668 (Hubner).) The 

complex statutory formula used to calculate guideline child 

support relies heavily on parental income and net monthly 

disposable income. (§ 4055; see Mejia v. Reed, supra, 31 

Cal.4th at p. 670.) The guideline “is presumed to be the 

correct amount,” but the presumption “may be rebutted by 

admissible evidence showing that application of the formula 

would be unjust or inappropriate” under the “principles set 

forth in Section 4053 . . . .” (§ 4057, subd. (b).) It is clear 
16

from the inclusion of “the broader concepts of station in life, 

ability to pay, and standard of living” in section 4053 that 

the Legislature did not intend trial courts to limit their focus

“simply to parental income,” whether from “salary, return on 

investment, or any [other] particular source.” (de Guigne,

supra, 97 Cal.App.4th at p. 1366.)

Child support awards and a trial court’s determination 

of a request for modification of child support are reviewed for 

abuse of discretion. (Cheriton, supra, 92 Cal.App.4th at 

p. 282; Williams, supra, 150 Cal.App.4th at pp. 1233-1234.) 

However, in reviewing a child support order, courts

recognize that “‘determination of a child support obligation is 

a highly regulated area of the law, and the only discretion a 

trial court possesses is the discretion provided by statute or 

rule. [Citations.]’ [Citation.]” (Cheriton, supra, at p. 283; 

accord, Williams, supra, at p. 1234.) “‘[T]he trial court has 

“a duty to exercise an informed and considered discretion 

with respect to the [parent’s child] support obligation . . . ”

[citation],’” and its “‘discretion is not so broad that it “may 

ignore or contravene the purposes of the law. . . . 

[Citations.]” [Citation.]’” (Williams, supra, at p. 1234; see In 

re Marriage of McTiernan & Dubrow (2005) 133 Cal.App.4th 

1090, 1106 [appellate courts review support awards for 

abuse of discretion “with the understanding that a 

sustainable exercise of discretion requires that the trial 

court have considered and applied all relevant [statutory] 

factors”].)
17

B. Material Change of Circumstances

As a general rule, courts will not modify child or

spousal support unless there has been a material change of 

circumstances following the previous determination. (In re 

Marriage of Cryer (2011) 198 Cal.App.4th 1039, 1048 (Cryer);

In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 47.) 

“‘[T]he reason for the change of circumstances rule is to 

preclude relitigation of the same facts’ and to bring finality 

to determinations concerning financial support.” (In re 

Marriage of Rosenfeld & Gross (2014) 225 Cal.App.4th 478, 

490, quoting In re Marriage of Baker (1992) 3 Cal.App.4th 

491, 501.) “‘Without a changed circumstances rule, 

“‘dissolution cases would have no finality and unhappy 

former spouses could bring repeated actions for modification 

with no burden of showing a justification to change the 

order. Litigants “‘are entitled to attempt, with some degree 

of certainty, to reorder their finances and life style [sic] in 

reliance upon the finality of the decree.’” [Citation.] Absent 

a change of circumstances, a motion for modification is 

nothing more than an impermissible collateral attack on a 

prior final order.’”’” (Rosenfeld & Gross, supra, at p. 490, 

quoting In re Marriage of Stanton (2010) 190 Cal.App.4th 

547, 553-554.)

The burden of proof to establish changed circumstances 

sufficiently material to support an adjustment in child 

support rests with the party seeking modification. 

(Williams, supra, 150 Cal.App.4th at p. 1234; Cryer, supra,

198 Cal.App.4th at p. 1054.) “The ultimate determination of 
18

whether the individual facts of the case warrant modification 

of support is within the discretion of the trial court. 

[Citation.]” (In re Marriage of Leonard (2004) 119 

Cal.App.4th 546, 556 (Leonard).) “[A]n abuse [of discretion] 

occurs when a court modifies a support order without 

substantial evidence of a material change of circumstances.” 

(In re Marriage of McCann (1996) 41 Cal.App.4th 978, 983 

(McCann); accord, In re Marriage of Dietz (2009) 176 

Cal.App.4th 387, 398 (Dietz); In re Marriage of Brinkman

(2003) 111 Cal.App.4th 1281, 1292.) 

“There are no rigid guidelines for evaluating whether

circumstances have sufficiently changed to warrant a child 

support modification.” (Hogoboom and King, Cal. Practice 

Guide: Family Law (The Rutter Group 2016) ¶ 17:40, p. 17-

15.) However, in evaluating a request for modification of an 

existing support order, the focus is generally on whether 

there has been “a reduction or increase in the supporting 

spouse’s ability to pay and/or an increase or decrease in the 

supported [party’s] needs.” (McCann, supra, 41 Cal.App.4th 

at p. 982; accord, Dietz, supra, 176 Cal.App.4th at p. 396.) 

“Each case stands or falls on its own facts, but the overriding 

issue is whether a change has affected either party’s 

financial status.” (In re Marriage of Laudeman (2001) 92 

Cal.App.4th 1009, 1015; see Leonard, supra, 119 Cal.App.4th 

at p. 556 [determination of request for modification of child 

support may properly rest on “‘ability to pay’”]; Hogoboom 

and King, supra, ¶ 17:26, p. 17-12 [“Ordinarily, a factual 

change of circumstances is required [to support a 
19

modification of child support] (e.g., increase or decrease in 

either party’s income available to pay child support)” (Italics 

omitted)].) Moreover, when the existing support payment 

was the result of a marital settlement agreement, in

determining whether a material change of circumstances has 

occurred, the trial court is required “‘to give effect to [the 

couple’s] intent and reasonable expectations . . . as expressed 

in the agreement.’” (Dietz, supra, at p. 399.) 

Appellant contends the trial court abused its discretion 

in modifying the monthly child support respondent 

stipulated to at the time of the dissolution, because 

respondent failed to meet his burden of showing a material 

change in circumstances. We agree. The Stipulated 

Judgment represented the parties’ mutual agreement 

concerning the amount necessary to meet Roman’s financial 

needs and to support him in accordance with his parents’ 

circumstances, station in life and standard of living. The 

agreed amount ($12,500, increased to $17,500 after the sale 

of the Pacific Palisades house) was a small fraction of 

respondent’s then $350,000 per month income, but permitted

Roman to continue to live in the neighborhood with which he 

was familiar, to attend a private school, to enjoy the extracurricular activities of his peers, and to travel to Europe for 

his summer vacation as the family had done when it was 

intact. In moving for modification, respondent presented no 

evidence of a substantial change in his financial ability to 

pay the agreed support. His salary continued to place him in 

the top one percent of earners. His liquid assets exceeded 
20

$34 million, not including his retirement accounts or the 

value of the multi-million home on two lots in Santa Barbara 

he was preparing to sell. As appellant noted, were 

respondent to continue to pay the agreed upon $17,500 from 

June 2014, when he filed the request for modification, until 

February 2024, when Roman turns 18, he would have paid a 

total of less than $2 million toward his son’s support. 

Payment of this amount will not materially impact his net 

worth. Moreover, despite the reduction in respondent’s 

employment income, he presented no evidence of a cutback 

in his own lifestyle. Rather, the evidence established that 

six months after respondent requested a downward

modification of child support, he moved from a $2.1 million 

residence in Santa Barbara to a $19.2 million home in 

Montecito, while continuing to maintain his $6.6 million 

Italian vacation home. 

Respondent contends -- and the court apparently 

agreed -- that the reduction in his income, standing alone, 

constituted a sufficient change in circumstances to warrant a 

reduction in child support. We disagree. It is 

“inappropriate” for child support to be based on income alone 

where the supporting parent “shelter[s] and benefit[s] from 

substantial assets that produce[] no income . . . .” (de 

Guigne, supra, 97 Cal.App.4th at p. 1362.) The cases on 

which respondent relies do not support his contrary 

contention. In In re Marriage of Mosley (2008) 165 

Cal.App.4th 1375, the husband was terminated from a 

position paying $447,150 per year and accepted another that 
21

reduced his net salary to approximately $10,000 per month, 

an amount that nearly equaled his support obligation. (Id. 

at pp. 1384-1385.) The appellate court specifically found 

there were no assets from which he could make up the 

difference (ibid.), and that “it exceeded the bounds of reason 

to require [him] to pay nearly 100 percent of his take-home 

pay in support payments . . . .” (Id. at p. 1386.) Similarly in 

In re Marriage of Milch (1975) 47 Cal.App.3d 666, the 

husband’s already modest income was reduced to $604 per 

month, insufficient to make support payments of $343. (Id. 

at p. 670.) There was no evidence of any assets other than a 

parcel of property he had already quitclaimed to his former 

wife to settle support arrearages. (Id. at p. 668.) Here, 

respondent’s child support obligation of $17,500 did not come 

close to exhausting his monthly income ($91,609, according 

to respondent, $140,141, according to the court), and 

respondent had substantial liquid assets from which to pay 

any necessary expenses not covered by that monthly income. 

Multiple courts have held that where the supporting 

parent has substantial wealth, a trial court abuses its 

discretion in failing to adequately consider his or her assets 

before assessing child support. (See e.g., Cheriton, supra, 92 

Cal.App.4th at pp. 284-292 [trial court abused its discretion 

in excluding from consideration father’s considerable assets, 

including stocks and options worth tens of millions of 

dollars]; Hubner, supra, 205 Cal.App.3d at pp. 664, 667 [trial 

court abused its discretion in awarding $2,215 per month in 

child support where father was wealthy, enjoyed a standard 
22

of living that greatly exceeded mother’s and child’s, and 

stipulated he could pay “any reasonable amount of child 

support”]; McGinley v. Herman (1996) 50 Cal.App.4th 936, 

945 [child support order reversed as abuse of discretion 

where trial court “did not give sufficient consideration to the 

child’s right to share in the standard of living of his 

extraordinarily high earning father”]; In re Marriage of 

Catalano (1988) 204 Cal.App.3d 543, 555-556 [trial court 

abused its discretion in setting child support that failed to 

take into account father’s conceded wealth and assets, 

including a Rolls Royce and two residences]; County of Kern 

v. Castle (1999) 75 Cal.App.4th 1442, 1454-1456 [trial court 

failed to adequately consider father’s improved standard of 

living resulting from his inheritance of a million dollars, 

used to pay off his mortgage]; see also Cryer, supra, 198 

Cal.App.4th at pp. 1049-1051 [affirming above-guideline 

child support award to mother temporarily deprived of 

custody where amount awarded had no significant 

detrimental impact on wealthy father’s financial situation, 

and mother was in danger of losing child’s longtime home 

while custodial issues were being resolved]; de Guigne, 

supra, 97 Cal.App.4th at p. 1357 [affirming order awarding 

child support three times greater than guideline, where 

family lived on income from securities and family trusts 

during the marriage, and father inherited and lived in 

16,000 square foot family home set on 47.5 acres].) As the 

court stated in Cheriton, a refusal to consider supporting 

parents’ substantial wealth in setting child support 
23

“effectively permits [them] to avoid [their] obligation[s] to 

support [their] children according to [their] ‘ability, [their] 

circumstances and station in life,’ and [their] ‘standard of 

living,’” and “offends the statutory policies of this state.” 

(Cheriton, supra, at p. 292, quoting § 4053, subds. (d), (a) & 

(f).)

Finally, respondent suggests that the reduced child 

support awarded by the court was adequate because 

appellant failed to substantiate that it would require Roman 

to live “at a . . . reduced level.” The parties agreed in 2009 

that Roman’s needs required support from respondent at a 

level of $12,500 per month as long as he and appellant were 

living in a home owned by respondent and $17,500 per 

month thereafter. As the party moving for modification, 

respondent bore the burden of proving that Roman’s 

financial needs had diminished. He failed to do so. 

Moreover, the statutory provisions do not require that “each 

dollar above guideline must in all cases be earmarked for a 

specific purpose,” particularly where the court is attempting 

to mitigate “an overall decline in the child[]’s standard of 

living.” (de Guigne, 97 Cal.App.4th at pp. 1364-1365.) The 

assumption that a child’s “historic expenses” define his or 

her needs “is erroneous in the case of wealthy parents, 

because it ignores the well-established principle that the 

‘child’s need is measured by the parents’ current station in 

life.’” (Cheriton, supra, 92 Cal.App.4th at p. 293, quoting In 

re Marriage of Kerr, supra, 77 Cal.App.4th at p. 96.) 

“‘Clearly where the child has a wealthy parent, that child is 
24

entitled to, and therefore “needs” something more than the 

bare necessities of life.’ [Citation.]” (Cheriton, supra, at 

p. 293, quoting White v. Marciano (1987) 190 Cal.App.3d 

1026, 1032.) In any event, it is clear from the evidence 

presented by appellant and not disputed by respondent that 

the reduced support will result in a reduction in Roman’s 

standard of living. The cost of rent and travel alone will 

consume the support provided, disrupting Roman’s life by 

requiring him to move from the neighborhood in which he 

has lived at least since the separation. (See Cryer, supra, 

198 Cal.App.4th at p. 1050 [support order that would result 

in child’s “spending time with his father in an opulent abode 

and time with his mother in a low-rent apartment” would 

“conflict[] with the principles of section 4053”].) In short, the 

court reduced child support without substantial evidence of a 

material change in respondent’s ability to pay, his standard 

of living, or the amount needed for Roman to maintain a 

lifestyle commensurate with his own, and which respondent 

had agreed was “in [Roman’s] best interest.” This was an 

abuse of discretion.

C. Imputation of Income

Even were we not convinced that the evidence below 

failed to demonstrate that respondent’s financial 

circumstances had changed sufficiently to warrant 

modification of his child support obligations, we would 

nevertheless find the court’s imputation of income to 

respondent’s assets inadequate. A court’s decision to impute 
25

income at a particular rate of return is reviewed for abuse of 

discretion, but the figure for imputed return must be 

“reasonable” (In re Marriage of Pearlstein (2006) 137 

Cal.App.4th 1361, 1373-1374) and “‘have some tangible 

evidentiary foundation’”; it “‘cannot be drawn from thin air.’” 

(In re Marriage of Schlafly (2007) 149 Cal.App.4th 747, 756.) 

Here, the court’s imputation of a one percent return to the 

bulk of respondent’s assets was not supported by substantial 

evidence.

The court’s ability to impute income from assets 

derives from section 4058, which defines “annual gross 

income” as “income from whatever source derived,” and 

states that “[t]he court may, in its discretion, consider the 

earning capacity of a parent in lieu of the parent’s income . . 

. .” (Id. at subds. (a) & (b).) The provision has been 

consistently interpreted to include the parent’s ability to 

earn income from non-income producing or underperforming 

assets. (Perlstein, supra, 137 Cal.App.4th at pp. 1373-1374; 

In re Marriage of Sorge (2012) 202 Cal.App.4th 626, 644

(Sorge); In re Marriage of Destein (2001) 91 Cal.App.4th 

1385, 1391-1395 (Destein); In re Marriage of Dacumos (1999) 

76 Cal.App.4th 150, 154-155 (Dacumos); see In re Marriage 

of Scheppers (2001) 86 Cal.App.4th 646, 650 [“The 

traditional understanding of ‘income’ is the gain or recurrent 

benefit that is derived from labor, business, or property 

[citation] or from any other investment of capital”].) 

The court concluded that imputing a one percent 

return to the bulk of respondent’s assets was reasonable 
26

because it represented “his average [return]” on actual

invested funds for the preceding five years. The evidence 

does not support that finding. Goodfriend and Miskei both 

testified that at the time of the hearing, respondent had 

between $34 and $35 million in savings, money market 

accounts or various investment funds.16 Respondent 

presented no evidence of his actual return on these assets. 

Respondent protested that Miskei’s proposed strategy, 

although “relatively safe[],” would tie up his assets “to 

produce a 2% or 3% return,” without specifying the return he 

was attaining with his own strategy. Goodfriend said one 

percent was “achievable in the current investment world” 

and that respondent had employed a “conservative

investment strategy” for the prior five years which involved

having “[$]12 of [$]35 million of his capital in stocks and 

bonds” and the remaining amount in “cash and money 

markets.” But Goodfriend did not provide a figure for 

respondent’s average returns on this mixed portfolio. The 

only evidence in the record on this point was (1) Miskei’s

testimony that the one-third of respondent’s portfolio not in

money markets or cash returned between 5 and 7 percent,

and (2) Miskei’s chart of respondent’s 2013 investment 

accounts showing an average return of 2.46 percent. The 

 

16 This amount did not include the over $4 million 

respondent maintained in retirement funds. 
27

one percent respondent espoused was apparently “drawn 

from thin air.”17

Moreover, even had respondent substantiated that his 

mixed investment portfolio returned only one percent, it 

would have been an abuse of discretion to limit child support 

based on that figure. “Just as a parent cannot shirk his 

parental obligations by reducing his earning capacity 

through unemployment or underemployment, he cannot 

shirk the obligation to support his child by under-utilizing 

income-producing assets” (Dacumos, supra, 76 Cal.App.4th 

at p. 155), or “‘place . . . a possible source of income “off 

limits”’” through his or her choice of investment. (Destein, 

 

17 We observe that respondent reported actual income 

from investments (interest and dividends, not including the 

K-1 income from his business) of $28,208 per month at the 

time of the request for modification. Respondent 

acknowledged in his reply brief that some amount of income 

should be imputed to his considerable book of non-income 

producing assets. But because Goodfriend imputed a one 

percent return across the board, rather than limiting that 

minimal return to the portion of respondent’s assets that 

were not then producing income, Goodfriend’s proposed 

figure for respondent’s investment income barely rose, to 

$35,582. Although the court mitigated this by attributing a 

4.5 percent rate of return to respondent’s non-residential 

real estate holdings, because those properties represented a 

minor part of respondent’s assets, the calculation barely 

moved the overall rate of return on respondent’s assets to 

between 1.4 and 1.5 percent. 
28

supra, 91 Cal.App.4th at p. 1395.) A parent cannot 

“unilaterally, and voluntarily, arrange his business affairs in 

such a way as to effectively preclude his children from 

sharing in the benefits of his current standard of living” (In 

re Marriage of Berger (2009) 170 Cal.App.4th 1070, 1082), or 

“‘take a break’” from his or her child support obligations in 

order to favor non-income producing business investments. 

(Sorge, supra, 202 Cal.App.4th at pp. 647-648, italics 

omitted.) Respondent and Goodfriend did not dispute that 

Miskei’s proposal represented a conservative investment 

strategy. They stated respondent did not follow it because 

he did not wish to tie up his assets in case he needed 

immediate access to his funds. But respondent had 

sufficient assets to allow him to keep a significant portion in 

cash or money market funds for emergencies while still 

earning more than a one percent return. Imputing an

unreasonably low rate of return to appellant’s substantial 

assets, and using that figure to calculate child support would

have deprived Roman of funds needed to maintain the 

lifestyle respondent had agreed was appropriate and which 

he remained fully capable of providing.

D. Conclusion

We conclude that substantial evidence did not support 

a finding that respondent’s reduction in employment income 

constituted a material change in his ability to provide the 

level of child support he had agreed was “in [the] best 

interest” of his son. The undisputed evidence established 
29

that respondent, with assets in the tens of millions of 

dollars, had ample resources to continue to support his son 

in a lifestyle commensurate with his own, and that the 

reduction in respondent’s employment income did not 

materially affect his ability to provide for his child. We 

further conclude that the court’s utilization of a one percent 

rate of return on respondent’s non-real estate investments 

was unreasonably low. Accordingly, we reverse the order 

granting respondent’s request.
30

DISPOSITION

The order modifying child support is reversed. 

Appellant is awarded costs.

CERTIFIED FOR PUBLICATION

MANELLA, J.

We concur:

WILLHITE, Acting P. J.

COLLINS, J.