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
                                       B263721
KINKA USHER,                           (Los Angeles County
                                       Super. Ct. No. BD491961)
       Respondent,

       v.

FREDERIQUE BENHAMOU
USHER,

       Appellant.

     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.
      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



                              2
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




                              3
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.)



                              4
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.)




                                5
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.



                               6
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 one-
half 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.)




                                7
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.



                              8
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.



                              9
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.




                             10
      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.



                              11
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.



                               12
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.




                              13
      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 Ostler-
Smith 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.



                             14
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



                               15
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”].)




                              16
      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



                              17
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



                              18
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 extra-
curricular 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



                              19
$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



                             20
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



                              21
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



                              22
“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



                              23
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



                               24
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



                              25
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.



                             26
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.



                             27
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



                              28
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.




                              29
                      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.




                             30
