In re Marriage of Usher
6 Cal. App. 5th 347
| Cal. Ct. App. | 2016Background
- Parties divorced by stipulated judgment in 2009: respondent (Kinka Usher) agreed to pay child support that ultimately became $17,500/month; appellant is the child’s mother.
- At dissolution respondent was a high earner and owned substantial assets (book value > $67 million including ~$37.5M liquid and ~ $30M in real/personal property).
- In June 2014 respondent sought modification to reduce child support, citing a large decline in employment income; he proposed using a low imputed return on assets (1%) to generate investment income for support calculations.
- Appellant argued respondent’s overall wealth and liquid assets showed no material impairment of ability to pay the stipulated support and that a higher imputed return was appropriate.
- Trial court found a material change in circumstances, imputed income using 4.5% for some properties and 1% for most assets, and reduced child support to $9,842/month (retroactive to July 2014); mother appealed.
- Court of Appeal reversed: held respondent’s reduced employment income did not materially impair his ability to pay given his wealth, and the 1% imputed return lacked substantial evidentiary support and was unreasonably low.
Issues
| Issue | Appellant's Argument | Respondent's Argument | Held |
|---|---|---|---|
| Whether respondent’s reduced employment income alone constituted a material change of circumstances justifying downward modification of stipulated child support | The 2009 stipulation reflected the parties’ allocation of child needs and station in life; respondent’s wealth and liquid assets show no material impairment in ability to pay, so no modification | The drop in employment income is a material change; imputed asset income can be low (1%) because respondent chooses a conservative/liquid investment strategy | Reversed: reduced salary alone, in light of respondent’s tens of millions in assets and unchanged lifestyle, was not a material change permitting reduction of the agreed child support |
| Whether the trial court’s imputed rate of return (1% for most assets) was reasonable | The court should impute a realistic return on non-income producing assets (higher than 1%), because child support must consider ability to pay from assets | Respondent/manager: 1% is achievable and reflects his conservative, liquid investment approach; costs of liquidating or tying-up assets justify low imputation | Reversed: 1% lacked evidentiary foundation and was unreasonably low; court must impute a reasonable return supported by evidence and may not allow a parent to shelter assets to avoid support |
Key Cases Cited
- Mejia v. Reed, 31 Cal.4th 657 (explains guideline formula and presumption for child support)
- In re Marriage of Cheriton, 92 Cal.App.4th 269 (courts must consider supporting parent’s substantial assets and station in life when setting support)
- In re Marriage of de Guigne, 97 Cal.App.4th 1353 (assets and lifestyle can justify departure from guideline)
- In re Marriage of Mosley, 165 Cal.App.4th 1375 (reduction in income may justify modification where supporting parent lacks assets to make up difference)
- In re Marriage of Pearlstein, 137 Cal.App.4th 1361 (imputed return must be reasonable and supported by evidence)
- In re Marriage of Dacumos, 76 Cal.App.4th 150 (parent cannot underutilize income-producing assets to avoid support)