In re Gokey

Memorandum of Decision

California Code of Civil Procedure section 704.070 permits a debtor to exempt seventy-five percent of paid earnings that were paid to an employee within 30 days of levy. Section 706.011(a) defines such earnings as “compensation payable by an employer to an employee for personal services performed by such employee, whether denominated as wages, salary, commission, bonus, or otherwise.”

The debtor provided occupational therapy services to a hospital under a written *751 agreement called an “Independent Contraetor Agreement.” She has claimed seventy-five percent of $34,000.00 paid pursuant to this agreement as exempt pursuant to section 704.070. The trustee has filed a timely objection. For the reasons stated below, the objection will be sustained.

The court agrees with the debtor that the title of the agreement between the debtor and the hospital is not conclusive; both principles of equity and the statute itself provide that substance must dominate over form. However, an analysis of the substance does not result in a finding that the funds in question were paid earnings.

The primary factor which the debtor points to as establishing the funds as earnings…