Lieberman

When Fred Lieberman reached 65 years of age, he sold his business. The buyer agreed, in part, to pay him $13,600 per calendar quarter over a ten-year period for his three-year covenant not to compete. When the sale closed, Lieberman retired.

Several years later, the Liebermans filed a Chapter 7 bankruptcy petition. They contended the quarterly payments were exempt from claims of their creditors, pursuant to California Code of Civil Procedure (Cal.Civ.Proc.Code) § 704.115(a)(1), which provides an exemption for “private retirement plans.” The bankruptcy court denied the exemption claim, the district court affirmed, and this appeal followed.

We have jurisdiction pursuant to 28 U.S.C. § 158 (d), and we affirm. We conclude the California legislature intended the exemption provided by Cal.Civ.Proc. Code § 704.115(a)(1) to apply to a retirement plan created by a private employer or employee organization, as opposed to an arrangement by an individual to use specified assets for retirement purposes. Accordingly, we agree with the bankruptcy and district courts, and hold that the quarterly payments are not exempt as a “private retirement plan” under Cal.Civ.Proc. Code §…