Sometimes even a 60 percent drop in income isn’t enough. In In re Marriage of Usher (2016) 6 Cal.App.5th 347, the Second District Court of Appeal held that the reduced monthly income of Kinka Usher (“Kinka”) from approximately $350,000 to $140,141 was not a material change of circumstances justifying a child support reduction from the stipulated monthly amount of $17,500.
Kinka and Frederique Benhamou Usher (“Frederique”) separated in 2008. They had one son, Roman. Kinka was a successful director and producer (mostly commercials). During marriage, he earned approximately $350,000 per month from his production company and owned over $67 million in assets.
In October 2009, the Ushers stipulated to a dissolution of their marriage. Kinka would pay $12,500 per month in child support. Frederique and Roman were permitted to live at Kinka’s Pacific Palisades home until 2010, after which they would move out and Kinka would pay an additional $5,000 per month in child support. The stipulation stated that Kinka was a “high earner” and that the amount of child support was in the child’s best interests.
In 2013, business decreased “significantly.” Kinka shuttered his production company and began working for another company. He filed a request to reduce his support payments, claiming his monthly income decreased from $350,000 to $70,106.
The trial court calculated Kinka’s combined employment and investment income to be $140,141 per month and imputed $3,343 per month to Frederique. Based on Kinka’s reduced income, the court found that Kinka had shown a material change of circumstances justifying modification of support. The court reduced child support to $9,842 per month, plus a percentage of annual income earned above $1,681,692.
Frederique appealed, arguing that Kinka failed to show a material change in circumstances. The appellate court agreed. The court rejected Kinka’s argument that a reduction in income “standing alone” may warrant modification. Instead, the appellate court relied on In re Marriage of McCann (1996) 41 Cal.App.4th 978 for the rule that, in determining whether a material change has occurred, the focus is generally on whether the change resulted in “a reduction or increase in the supporting spouse’s ability to pay” or “an increase or decrease in the supported [party’s] needs.” Kinka failed to present any evidence of a substantial change in his ability to pay the stipulated child support amount. To the contrary, the evidence showed he could continue paying support without “materially impact[ing] his net worth” or suffering a “cutback in his own lifestyle.” Further, the uncontested evidence showed that reducing support would lower Roman’s standard of living by requiring him to move to a less desirable neighborhood.
The court also held that the trial court’s imputation of income was “inadequate” and “unreasonably low,” given the alternative investment strategy proposed by Frederique’s accountant that contemplated higher returns, while also satisfying Kinka’s desire to follow a conservative investment strategy.
For Supported Spouses
Marriage of Usher is useful to advocates of supported spouses. Its holding rejects the notion that an income decrease alone—even if dramatic—is sufficient to reduce support, at least in cases of high earners. Usher also suggests that appellate courts may scrutinize the reasonableness of an imputed rate of return.
For Supporting Spouses
Marriage of Usher teaches that supporting spouses should present evidence showing how a change has actually affected their ability to pay, changed their lifestyle, or decreased the needs of their child or supported spouse. If an imputed rate of return is at issue, it may not be enough to show evidence of past, actual returns. Working in conjunction with an accounting expert, supporting spouses should present evidence establishing a clear, reasonable basis for a proposed rate of return.