Filed 11/18/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

BLIZZARD ENERGY, INC.,

 Plaintiff and Respondent,

v.

BERND SCHAEFERS et al.,

 Defendants and Appellants.

2d Civil No. B305774

(Super. Ct. No. 17CVP-0266)

(San Luis Obispo County)

It all started with the idea of turning old tires into fuel 

through pyrolysis. Whether this will work is not the issue. It did 

not work for respondent Blizzard Energy, Inc., which invested in 

a tire pyrolysis project in Kansas. A Kansas jury returned a 

$3.825 million fraud judgment in favor of respondent and against 

appellant Bernd Schaefers (Schaefers). We are not in Kansas 

anymore. The fraud judgment was entered in California. The 

instant appeal flows from the California trial court’s decision to 

add a judgment debtor pursuant to the “outside reverse veil 

piercing” doctrine.

Outside reverse veil piercing differs from traditional veil 

piercing, which is permitted pursuant to the well-known alter ego 

doctrine. “‘The alter ego doctrine prevents individuals or other 
2

corporations from misusing the corporate laws by the device of a 

sham corporate entity . . . .’” (Curci Investments, LLC v. Baldwin 

(2017) 14 Cal.App.5th 214, 221 (Curci).) In appropriate 

circumstances, traditional veil piercing permits a party to pierce 

the corporate or limited liability company (LLC) veil “so that an 

individual shareholder [or LLC member] may be held personally 

liable for claims against the corporation [or LLC].” (Postal

Instant Press, Inc. v. Kaswa Corp. (2008) 162 Cal.App.4th 1510, 

1513 (Postal Instant Press).) “Rather than seeking to hold an 

individual responsible for the acts of an entity, reverse veil 

piercing seeks to satisfy the debt of an individual through the 

assets of an entity of which the individual is an insider.” (Curci, 

supra, at p. 221.) “Outside reverse veil piercing arises when the 

request for piercing comes from a third party outside the targeted 

business entity.” (Ibid.)

Here, the targeted entity was BKS Cambria, LLC (BKS 

Cambria). Schaefers owns a 50 percent interest in the LLC. 

Schaefers’ wife, Karin Schaefers (wife), owns the other 50 

percent. Neither wife nor BKS Cambria was a defendant in the 

Kansas action. The California trial court found that BKS 

Cambria is Schaefers’ alter ego. Pursuant to the outside reverse 

veil-piercing doctrine, the court modified the Kansas judgment to 

add BKS Cambria as a judgment debtor. Schaefers and BKS 

Cambria appeal from the order modifying the judgment.1 

We agree with respondent that the evidence is sufficient to 

support the trial court’s finding that BKS Cambria is Schaefers’ 

alter ego. But we reverse and remand for further proceedings so 

1 BKS Cambria is represented by counsel; Schaefers 

represents himself. Each has filed a separate brief. Schaefers 

states that he joins in the BKS opening brief. 
3

that the trial court may weigh competing equities that bear on 

the veil-piercing issue. Respondent is entitled to recover the 

damages awarded by the Kansas judgment, but wife may be an 

innocent third party who would suffer substantial harm if 

respondent’s recovery is accomplished through the reverse veil 

piercing of BKS Cambria. Wife has a 50 percent ownership 

interest in the LLC, but there is no indication that she was 

involved in the fraud committed against respondent by Schaefers. 

As we shall explain, she may be an innocent spouse. And she 

may not be responsible for debts incurred by him after their

separation in 1996. (See pp. 18-24, post.) On remand, “the court 

should weigh the competing equities and grant or deny relief 

depending on the balance of those equities.” (Kapner v.

Meadowlark Ranch Assn. (2004) 116 Cal.App.4th 1182, 1190.)

Factual and Procedural Background

Schaefers and wife married in 1981. In March 1996 they 

signed a separation agreement. In 2001 they formed BKS 

Cambria and BKS Energy, LLC (BKS Energy), hereafter 

collectively referred to as “the BKS entities.”2 Both LLCs have 

two members – Schaefers and wife. Each owns a 50 percent 

interest in the LLCs. Wife lives in New Jersey. In May 2019, she 

filed a complaint in New Jersey seeking the dissolution of her 

marriage to Schaefers. 

BKS Cambria owns approximately 34 acres of land in 

Cambria, California. It allegedly purchased the property for $2 

million in 2005. Schaefers is the manager of the LLC. He and 

his son reside on the property, which has been leased to wireless 

2 Appellants note that “BKS stands for Bernd [Schaefers’ 

first name] Karin [wife’s first name] Schaefers.” 
4

carriers for the use of cell phone towers. In 2014 BKS Cambria 

sold several leases for approximately $2 million. 

In September 2017 a Kansas jury awarded respondent 

damages of $3.825 million in a fraud action against Schaefers 

and other defendants. In October 2017 the Kansas judgment was 

entered in California pursuant to the Sister State Money 

Judgments Act (Code Civ. Proc., § 1710.10 et seq.), hereafter “the 

Act.”3 In a published opinion, we affirmed an order denying 

Schaefers’ motion to vacate the Kansas judgment. (Blizzard 

Energy, Inc. v. Schaefers (2020) 44 Cal.App.5th 295.)

In June 2019, and pursuant to section 187, respondent 

moved in the California trial court to amend the Kansas 

judgment to add the BKS entities “as judgment debtors under the 

reverse piercing doctrine.” Respondent claimed that the BKS 

entities “are the alter egos of Schaefers and that recognition of 

the privilege of separate existence would promote injustice.” 

In July 2019 Schaefers filed a voluntary Chapter 11 

bankruptcy petition. In September 2019 the bankruptcy court 

ordered that the trial court “may hear and decide . . . the Motion 

to Amend Judgment to add BKS Cambria, LLC and BKS Energy, 

LLC as Judgment Debtors without violation of the Automatic 

Stay in this Chapter 11 case.” 

In February 2020 the trial court granted respondent’s 

motion. It concluded that “the BKS Entities are the alter egos of 

Schaefers and that failing to add them to the judgment will 

create an unjust result.” The court amended the judgment to add 

the BKS entities as judgment debtors. Schaefers and BKS 

Cambria appealed. 

3 Unless otherwise stated, all statutory references are to 

the Code of Civil Procedure.
5

Trial Court’s Order Modifying Judgment Is

Not Void for Lack of Subject Matter Jurisdiction

In the prior appeal from the order denying Schaefer’s 

motion to vacate entry of the Kansas judgment (B290492), the 

remittitur issued on April 27, 2020. More than two months 

before the issuance of the remittitur, the trial court ordered that 

BKS Cambria be added as a judgment debtor to the Kansas 

judgment. “Generally the filing of a notice of appeal deprives the 

trial court of jurisdiction of the cause and vests jurisdiction with 

the appellate court until the reviewing court issues a remittitur.” 

(In re Anna S. (2010) 180 Cal.App.4th 1489, 1499.)

Appellants contend that, because the order amending the 

judgment preceded the issuance of the remittitur, the order is 

void for lack of subject matter jurisdiction. They rely on the 

automatic stay of section 916, subdivision (a), which provides, 

“[T]he perfecting of an appeal stays proceedings in the trial court 

upon the judgment or order appealed from or upon the matters 

embraced therein or affected thereby, including enforcement of 

the judgment or order, but the trial court may proceed upon any 

other matter embraced in the action and not affected by the 

judgment or order.” “[S]ection 916 . . . divests the trial court of 

jurisdiction over the subject matter on appeal—i.e., jurisdiction in 

its fundamental sense.” (Varian Medical Systems, Inc. v. Delfino

(2005) 35 Cal.4th 180, 198 (Delfino).)4

4 “Essentially, the § 916(a) ‘stay’ means that, upon timely

filing of a notice of appeal, . . . [j]urisdiction over the appealed 

matters shifts to the court of appeal and is terminated in the trial

court; and the trial court's power to enforce, vacate or modify the 

appealed judgment or order is suspended while the appeal is 

pending.” (J. Eisenberg et al., Cal. Practice Guide: Civil Appeals 

and Writs (The Rutter Group 2020) ¶ 7:2, p. 7-1.)
6

Section 916 is inapplicable because it applies only to civil 

actions. Proceedings under the Act are special proceedings, not 

civil actions. Section 916 is in part 2 of the Code of Civil 

Procedure. Our Supreme Court “long ago held that Part 2 of the 

Code of Civil Procedure extends generally only to civil ‘actions,’ 

and not to ‘special proceedings.’” (Agricultural Labor Relations

Bd. v. Tex-Cal Land Management, Inc. (1987) 43 Cal.3d 696, 707 

(Tex-Cal).) Unlike section 916, the Act is in part 3 of the Code of 

Civil Procedure. Part 3 is entitled, “Of Special Proceedings of a 

Civil Nature.” 

That the Act is in Part 3 is not determinative of whether a 

proceeding under the Act is a special proceeding. (See Hyundai

Securities Co., Ltd. v. Lee (2013) 215 Cal.App.4th 682, 691-693 

(Hyundai Securities) [California’s Uniform Foreign-Country 

Money Judgment Recognition Act (§§ 1713–1725) is subject to 

procedures applicable to actions, not special proceedings, even 

though it is in Part 3 of the Code of Civil Procedure].) The 

determinative issue is whether a proceeding under the Act is a 

civil action. 

“The terms ‘action’ and ‘special proceeding’ have been 

distinguished loosely in a number of contexts. However, for 

purposes of applicability of Part 2 of the Code of Civil Procedure, 

the definitions are those set forth in Code of Civil Procedure 

sections 22 and 23.” (Tex-Cal, supra, 43 Cal.3d at p. 707.) 

Section 22 provides, “An action is an ordinary proceeding in a 

court of justice by which one party prosecutes another for the 

declaration, enforcement, or protection of a right, the redress or 

prevention of a wrong, or the punishment of a public offense.” 

Section 23 provides, “Every other remedy is a special proceeding.” 

(§ 23.) “As a general rule, a special proceeding is confined to the 
7

type of case which was not, under the common law or equity 

practice, either an action at law or a suit in equity.” (Tide Water

Associated Oil Co. v. Superior Court of Los Angeles County (1955)

43 Cal.2d 815, 822 (Tide Water).)

A pre-Act proceeding to enforce a sister state judgment was 

an action within the meaning of section 22. “Prior to the 1974 

enactment of the [Act] . . . , ‘[t]he exclusive way to enforce a sister 

state money judgment in California [was] to bring an action on

the judgment; when a California judgment [was] obtained, the 

execution may issue. This traditional manner of enforcing 

judgments of sister states require[d] all the normal trappings of 

an original action.’” (Renoir v. Redstar Corp. (2004) 123 

Cal.App.4th 1145, 1150-1151, bracketed material in original.) 

A proceeding under the Act is a speedy alternative to the 

traditional procedure. It cannot be characterized as an “action at 

law” under the common law or a “suit in equity” under equity 

practice. (Tide Water, supra, 43 Cal.2d at p. 822.) Unlike the 

traditional procedure, a party seeking to enforce a sister state 

judgment under the Act does not file an action. “In California, 

pursuant to the [Act], in a special proceeding ‘[a] judgment 

creditor may apply for the entry of a judgment based on a sister 

state judgment by filing an application pursuant to Section 

1710.20.’” (Conseco Marketing, LLC v. IFA & Ins. Services, Inc.

(2013) 221 Cal.App.4th 831, 838, italics added.) “Upon simple 

application in conformance with the Act [citations], entry by the 

clerk of a judgment based upon the application is mandatory (§ 

1710.25), constituting a ministerial act of the clerk and not a 
8

judicial act of the court [citations].”5 (Aspen International Capital

Corp. v. Marsch (1991) 235 Cal.App.3d 1199, 1203 (Aspen)).

Thus, in applying for the entry of a sister state money 

judgment under the Act, the judgment creditor is not 

“prosecut[ing] another for the declaration, enforcement, or 

protection of a right, the redress or prevention of a wrong, or the 

punishment of a public offense.” (§ 22.) No action is filed in the 

California trial court. The entry of the sister state money 

judgment is automatic if the judgment creditor’s application 

complies with the requirements of the Act. (§ 1710.25, subd. (a).)

“Where the judgment debtor fails to challenge the matter 

[by moving to vacate the judgment (§ 1710.30, subd. (a))], the 

judgment will be entered and the application will have served 

its purpose, all without any judicial act having been performed by 

the court.” (Aspen, supra, 235 Cal.App.3d at p. 1203.) Here, 

appellant moved to vacate the judgment. This required the court 

to perform a judicial act. The motion did not convert the special 

proceeding into an “action” within the meaning of section 22. The 

motion was an authorized step in the special proceeding. (See 16 

C.J.S. (Oct. 2021 update) Motions and Orders, § 9, bold omitted 

[“A motion is not an action, special proceeding, or independent 

right or remedy but implies the pendency of a suit and is confined 

to incidental matters arising in it”].) 

In contrast to the Act, a person seeking enforcement of a 

foreign-country money judgment under California’s Uniform 

Foreign-Country Money Judgment Recognition Act (Foreign5 Section 1710.25, subdivision (a) provides: “Upon the filing 

of the application, the clerk shall enter a judgment based upon 

the application . . . .”
9

Country Money Judgment Act) must “fil[e] an action seeking 

recognition of the foreign-country judgment.” (§ 1718, subd. (a).) 

Therefore, even though the Foreign-Country Money Judgment 

Act is in Part 3 of the Code of Civil Procedure, it is governed by 

procedures applicable to actions, not special proceedings: 

“Generally, with respect to special proceedings, the Legislature 

has set forth specific procedures, but the only procedure specified 

for recognition of a foreign-country money judgment is that it be 

raised by filing an action. Thus, . . . we believe the Legislature 

intended the procedures for actions to be applicable to 

proceedings to obtain such recognition.” (Hyundai Securities,

supra, 215 Cal.App.4th at p. 691.) 

Unlike the Foreign Country Money Judgment Act, the Act 

to enforce sister state money judgments does not require the 

filing of an action to obtain recognition of the judgment. 

Accordingly, the legislature did not intend that the procedures for 

actions be applicable to proceedings to enforce a sister state 

money judgment under the Act.

“Unless the statutes establishing a ‘special proceeding’ 

expressly incorporate the appellate-stay provisions of Part 2, they 

are inapplicable, and a final order in the ‘special proceeding’ is 

not automatically stayed pending appeal.” (Tex-Cal, supra, 43 

Cal.3d at p. 707.) “Nothing in [the Act] expressly incorporates 

[the appellate-stay provisions of] [P]art 2 of the Code of Civil 

Procedure . . . . Thus, the trial court [order amending the 

judgment to add an alter ego judgment debtor] is not 

automatically stayed [by Schaefer’s appeal from the denial of his 

motion to vacate the judgment pursuant to the Act].” (Veyna v.

Orange County Nursery, Inc. (2009) 170 Cal.App.4th 146, 155.) 

“The rule is clear: there is no automatic stay unless the statute 
10

establishing the special proceeding expressly incorporates [the 

stay provisions of] [P]art 2.”6 (Ibid.)

The Act Does Not Preclude Addition of

Nonparty Alter Ego as Judgment Debtor

Respondent could have brought an action in California to 

enforce the Kansas judgment. (§ 1710.60, subd. (a).) Instead, it 

applied for entry of the judgment pursuant to the Act. 

Appellants argue, “Since [respondent] elected to proceed with the 

summary proceedings [under the Act] of having the clerk enter 

the sister state judgment, its right to amend the sister state 

judgment to add a judgment debtor not named in the original 

sister state judgment was eliminated unless it sought to do so in 

Kansas.” 

6 We need not consider respondent’s alternative argument

that, because Schaefers failed to post an undertaking to stay

enforcement of the judgment pending appeal, “the court had 

plenary jurisdiction to amend the judgment” to add BKS Cambria 

as a judgment debtor. (See Oyakawa v. Gillett (1992) 8 

Cal.App.4th 628, 630, fn. 2 [“subdivision (a) of section 917.1 . . . 

provides that ‘[t]he perfecting of an appeal shall not stay 

enforcement of the judgment . . . in the trial court if the judgment 

. . . is for money . . . unless an undertaking is given.’ . . . [N]o 

undertaking was given and, arguably, the amendment adding a 

judgment debtor is simply a matter of enforcement”]; but see also 

Highland Springs Conference & Training Center v. City of

Banning (2019) 42 Cal.App.5th 416, 425-426 [“Although 

the EJL [Enforcement of Judgments Law (§ 680.010 et seq.)] does 

not define ‘enforcement’ [citation], the EJL nowhere suggests that 

the filing and pursuit of an alter ego motion to amend a judgment

to add an additional judgment debtor, under section 187, 

constitutes the enforcement of the judgment the movant seeks to 

amend”].) 
11

We disagree. Section 1710.35 provides that “a judgment 

entered pursuant to [the Act] shall have the same effect as an 

original money judgment of the court . . . .” “[S]ection 187 

authorizes a trial court to amend a judgment to add a judgment 

debtor who is found to be an alter ego of a corporate defendant.” 

(Misik v. D'Arco (2011) 197 Cal.App.4th 1065, 1069 (Misik).) The 

alter-ego doctrine was extended to LLCs by Corporations Code 

section 17703.04, subdivision (b) [“A member of a limited liability 

company shall be subject to liability under the common law 

governing alter ego liability”].

Moreover, the trial court did not, as appellants claim, 

“amend the sister state judgment to add a judgment debtor not 

named in the original sister state judgment.” Instead, the court 

“add[ed] a nonparty alter ego as a judgment debtor. [Citations.] 

‘This is an equitable procedure based on the theory that the court 

is not amending the judgment to add a new defendant but is 

merely inserting the correct name of the real defendant.’” (Leek

v. Cooper (2011) 194 Cal.App.4th 399, 419; see also Butler

America, LLC v. Aviation Assurance Co., LLC (2020) 55 

Cal.App.5th 136, 145; Misik, supra, 197 Cal.App.4th at p. 1072.) 

A Charging Order Is Not Respondent’s Exclusive Remedy

A judgment against an LLC member may be enforced by 

the issuance of “a charging order against the transferable 

interest of the judgment debtor for the unsatisfied amount of the 

judgment. A charging order constitutes a lien on a judgment 

debtor’s transferable interest and requires the limited liability 

company to pay over to the person to which the charging order 

was issued any distribution that would otherwise be paid to the 

judgment debtor.” (Corp. Code, § 17705.03, subd. (a).) 

Appellants claim that “a charging order is the exclusive remedy 
12

for [respondent] to enforce its judgment against Appellant 

Schaefers.” Therefore, “the trial court acted in excess of its 

jurisdiction conferred by the Legislature” when it “add[ed] BKS 

Cambria as a judgment debtor to the sister state judgment.” 

A contrary conclusion was reached in Curci, supra, 14 

Cal.App.5th 214. After obtaining a judgment against Baldwin, 

Curci sought to add Baldwin’s LLC as a judgment debtor under 

the alter ego doctrine. Baldwin argued that a charging order 

under “Corporations Code section 17705.03 provides the sole 

remedy available to Curci . . . .” (Id. at p. 220.) The court held 

that section 17705.03 does not preclude reverse veil piercing to 

add the LLC as a judgment debtor. “[T]he key is whether the 

ends of justice require disregarding the separate nature of [the 

LLC] under the circumstances. [Citation.] In making that 

determination, the trial court should, at minimum, evaluate the 

same factors as are employed in a traditional veil piercing case, 

as well as whether Curci has any plain, speedy, and adequate 

remedy at law.” (Curci, supra, at p. 224.) 

Nine years before Curci, the same court that decided Curci 

(Fourth District, Division 3) had decided Postal Instant Press,

supra, 162 Cal.App.4th 1510. Curci noted that in Postal Instant 

Press it had held, “‘[A] third party creditor may not [reverse] 

pierce the corporate veil to reach corporate assets to satisfy a 

shareholder’s personal liability.’” (Curci, supra, 14 Cal.App.5th 

at p. 222.) Curci concluded, “[T]he different facts before us, as 

well as the nature of LLCs, do not present the concerns identified 

in Postal Instant Press.” (Ibid.)

Appellants contend that Curci was wrongly decided. We 

disagree. There is no reason to depart from its sound analysis.
13

Appellants Have Not Shown that

Respondent Had an Adequate Legal Remedy 

“Amendment of a judgment to add an alter ego is an 

equitable procedure [citation], and before applying outside 

reverse piercing, ‘the availability of alternative, adequate 

remedies must be considered by the trial court’ [citation].” 

(Postal Instant Press, supra, 162 Cal.App.4th at p. 1524.) “‘When 

a less invasive, adequate remedy is available, outside reverse 

piercing is discouraged.’” (Id. at pp. 1523-1524; see also Curci, 

supra, 14 Cal.App.5th at p. 223 [“Although legal remedies–e.g., 

conversion, fraudulent transfer—may be available in many cases, 

thereby precluding reverse veil piercing, it is precisely the rare 

situations in which they are not that reverse piercing should 

deliver justice”].) 

Appellants maintain that respondent “had available 

multiple legal remedies under, among others, the [Act], the 

CRULLCA [California Revised Uniform Limited Liability 

Company Act], and the UVTA [Uniform Voidable Transactions 

Act].” But appellants do not explain how these acts provided an 

adequate legal remedy. The judgment creditor of a member of an 

LLC has limited options. Unlike the creditor of a shareholder of 

a corporation, the creditor of a member of an LLC may not “step 

straight into the shoes of the debtor. . . . [¶] . . . [T]he creditor 

may only obtain a charging order against distributions made to 

the member. (Corp. Code, § 17705.03.) The debtor remains a 

member of the LLC with all the same rights to manage and 

control the LLC, including . . . the right to decide when 

distributions to members are made, if ever.” (Curci, supra, 14 

Cal.App.5th 214, 223; see In re Shapow (Bankr. C.D. Cal. 2019) 

599 B.R. 51, 73, fn. 17 [Curci “concluded that outside reverse 
14

piercing is permissible in the context of a limited liability 

company because, unlike a corporation, a limited liability 

company does not issue shares on which a creditor may levy and 

creditors do not have sufficient alternative remedies at law”].)

Respondent did not have an adequate legal remedy. 

Schaefers had filed for bankruptcy protection, and he intended to 

make it as difficult as possible for respondent to collect on the 

Kansas judgment. In a letter to his accountant dated August 5, 

2018, Schaefers wrote: “[T]he only asset I have at this moment is 

my 50% interest in the 2 BKS companies [BKS Cambria and BKS 

Energy]. [¶] . . . In case we lose in the Kansas appeal, the worst 

thing that can happen [is] that they get a charging order for my 

interests. . . . [T]hey will get nothing, because the LLCs will not 

make distributions for a long time and I will stay on as manager 

and I will then appoint my successor as manager.” The trial 

court found that “that there is in fact evidence of bad faith and 

attempts to avoid paying this judgment, including the letter to 

Schaefers’ accountant.” 

Amendment of Judgment to Add BKS Cambria

as Judgment Debtor under Alter Ego Doctrine

“Under Code of Civil Procedure section 187, ‘the trial court 

has jurisdiction to modify a judgment to add additional judgment 

debtors.’ [Citation.] The decision to modify the judgment is 

consigned to the trial court's discretion. [Citation.] To the extent 

the exercise of that discretion relies on factual findings, we 

review those findings for the existence of substantial evidence.” 

(Wolf Metals Inc. v. Rand Pacific Sales Inc. (2016) 4 Cal.App.5th 

698, 703.) 

“In reviewing a finding of alter ego liability, we must 

consider whether the trial court's findings are supported 
15

by substantial evidence.” (Baize v. Eastridge Companies, LLC

(2006) 142 Cal.App.4th 293, 302.) “‘Substantial evidence is 

evidence that a rational trier of fact could find to be reasonable, 

credible, and of solid value. We view the evidence in the light 

most favorable to the [decision] and accept as true all evidence 

tending to support the [decision], including all facts that 

reasonably can be deduced from the evidence. . . .’” (San Diegans

for Open Government v. City of San Diego (2016) 245 Cal.App.4th 

736, 740, bracketed material in original.) 

“Before the alter ego doctrine will be invoked in California 

[under traditional veil piercing], two conditions generally must be 

met. [¶] ‘First, there must be such a unity of interest and 

ownership between the corporation [or LLC] and its equitable 

owner that the separate personalities of the corporation [or LLC] 

and the shareholder [or member] do not in reality exist. Second, 

there must be an inequitable result if the acts in question are 

treated as those of the corporation [or LLC] alone.’” (Curci, 

supra, 14 Cal.App.5th at p. 221.)

First Condition: Unity of Interest and Ownership

As to the first condition – unity of interest and ownership –

relevant factors include “‘“‘[1] [c]ommingling of funds and other 

assets, failure to segregate funds of the separate entities, and the 

unauthorized diversion of corporate funds or assets to other than 

corporate uses . . . ; [2] the treatment by an individual of the 

assets of the corporation as his own . . . ; . . . [[3]] the disregard of 

legal formalities and the failure to maintain arm's length 

relationships among related entities . . . .’”’” (Greenspan v. LADT

LLC (2010) 191 Cal.App.4th 486, 512-513 (Greenspan).) “‘No 

single factor is determinative, and instead a court must examine 

all the circumstances to determine whether to apply the [alter 
16

ego] doctrine. . . . ’” (Zoran Corp. v. Chen (2010) 185 Cal.App.4th 

799, 812.)

“There is [substantial] evidence of a unity of interest and 

ownership such that the separate personalities of [BKS Cambria] 

and [Schaefers] do not exist.” (Triyar Hospitality Management,

LLC v. WSI (II) - HWP, LLC (2020) 57 Cal.App.5th 636, 642.) 

Schaefers owns 50 percent of the LLC and is its manager. The 

trial court could reasonably conclude that Schaefers used BKS 

Cambria’s bank accounts as if they were his own personal 

accounts. Appellants claim that Schaefers “was entitled to 

approximately $2500 per month as a stipend for managing and 

taking care of the BKS Property. . . . There is no evidence that he 

took that salary plus money beyond the salary.” We disagree. In 

June 2014 he wrote a $5,000 check drawn on BKS Cambria’s 

bank account. The check was payable to an attorney retained to 

respond to a Notice of Deficiency concerning the personal federal 

income tax return jointly filed by Schaefers and wife. In the 

same month he wrote four checks transferring $80,000 from BKS 

Cambria’s bank account to his personal bank account. The 

checks show that their purpose was to fund a loan to Valentin 

Alexandrov, a co-judgment debtor in the Kansas action. In June 

2014 Schaefers wired the funds to Alexandrov. In September 

2014 Alexandrov wired the $80,000 back to Schaefers. Schaefers 

did not return the $80,000 to BKS Cambria. Appellants assert, 

“The $80,000 was what was left for [Schaefers’] share of the 

profits” from the sale of “cell leases.” If this were true, why on 

each of the four checks did Schaefers write “Val loan” instead of 

“distribution of profits?” 

Schaefers transferred funds from BKS Cambria to BKS 

Energy without specifying the reason for the transfer. In 
17

February 2014 he wrote two checks totaling $10,000 drawn on 

BKS Cambria’s bank account and payable to BKS Energy. The 

“memo” portion of both checks simply states “transfer.” 

Schaefers admitted that he lives rent free on BKS 

Cambria’s property and that he receives “around $1200 per 

month as a loan from” the LLC. He did not specify the interest 

rate or repayment schedule for the loan.

The trial court noted that respondent had listed additional 

“facts” showing that BKS Cambria is Schaefers’ alter ego: 

“Schaefers makes cash withdrawals from the BKS Entities, . . . 

fails to maintain any documentation for when and why funds are 

distributed from the BKS Entities, . . . uses BKS Cambria, LLC 

funds to pay the expenses of other entities,[7] . . . [and] paid 

attorneys and litigation expenses in . . . the Kansas action 

. . . from the BKS Entities [even though they were not parties to 

the Kansas action] . . . .”8 The court determined that “Schaefers 

treats the BKS Entities as his own personal property.” 

7 For example, in October 2015 Schaefers used a BKS 

Cambria check to pay $6,000 to the Franchise Tax Board on 

behalf of BKS Energy. In November 2014 he used a BKS 

Cambria check to pay the property taxes on land owned by CSS 

Realty Corp., which was owned by Schaefers and wife. In 

February 2014 he used BKS Cambria funds to pay accounting 

fees for CSS Realty Corp.; Big Cats, Inc.; BKS Sunset, LLC; and 

BKS Energy. Big Cats, Inc., was owned by wife and Schaefers’ 

daughter. BKS Sunset, LLC, was owned by Schaefers and wife. 

8 In a declaration under penalty of perjury executed in 

January 2020, Schaefers admitted “that expenses that I incurred 

in defending myself in Kansas were paid in part by BKS Cambria 

on my behalf.” In its opening brief BKS Cambria admits that it 

paid $22,852 of appellant’s Kansas litigation expenses. BKS 
18

Second Condition: Inequitable Result and 

Whether Wife is an Innocent Third Party

The trial court concluded that “failing to add [BKS 

Cambria] to the judgment will create an unjust result.” 

Appellants contend that “an inequitable result will follow if the 

trial court order [adding BKS Cambria as a judgment debtor] 

stands” because wife “has a 50% membership interest” in BKS 

Cambria and the Kansas judgment “is against . . . Schaefers 

individually,” not against wife. 

Pursuant to section 387, wife moved to intervene in 

respondent’s motion to amend the judgment. She claimed that 

she “is an innocent party who would be inequitably and adversely 

affected if BKS Cambria . . . [is] brought in as judgment debtor[].” 

Wife declared under penalty of perjury that, pursuant to a 1996 

“Separation and Property Settlement Agreement,” she has “lived 

apart” from Schaefers since March 1996. In 2001 she and 

Schaefers “formed [BKS Cambria] for the purpose of real estate 

investment and management.” That same year, BKS Cambria 

purchased an apartment building in Los Angeles. “All of the 

money used to purchase the property . . . came from proceeds 

from the sale of my personal separate property located in New 

Jersey.” In 2003 or 2004 BKS Cambria sold the apartment 

building and the proceeds from the sale were used to purchase 

Cambria claims that the payment “was merely reimbursement 

for the $2,500 per month salary [Schaefers] received from BKS 

Cambria since its inception.” But in his January 2020 

declaration Schaefers did not present this justification for the 

payment. Schaefers declared that BKS Cambria made the 

payment “since it was in the interest of the LLC to see that I was 

properly able to defend myself.” Schaefers did not say that the 

litigation expenses were paid in lieu of his monthly salary.
19

the 34-acre property that it presently owns. Wife further 

declared: “I am 75 years old and retired. . . . [¶] I had no 

involvement with Bernd Schaefers’ business dealings with 

[respondent]. I only recently became aware of the people 

involved, the nature of the business, and the underlying lawsuit 

in this matter.” 

The trial court denied wife’s motion to intervene reasoning 

her 50 percent membership interest is “presumptively community 

property” and her claim that it is separate property “is a 

proceeding within the jurisdiction of the Bankruptcy Court, not 

this Court.” The trial court concluded: “[B]ecause the BKS 

Entities are community property, and [wife] has not gone to the 

Bankruptcy Court and established that her membership interests 

in the BKS Entities are in fact separate property, the Court finds 

that [wife] lacks sufficient interest in the action to intervene.”9

9 Wife did not appeal the trial court’s order denying her 

motion to intervene. “‘An order denying a motion for leave to 

intervene is directly appealable because it finally and adversely 

determines the moving party’s right to proceed in the action.’” 

(Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1515.) 

Because wife did not appeal, we cannot review the trial court’s 

order denying her motion to intervene. (see § 906 [“The 

provisions of this section do not authorize the reviewing court to 

review any decision or order from which an appeal might have 

been taken”]; Van Sickle, supra, at p. 1515, fn. 14 [“Since the 

order denying the motion to intervene was separately appealable 

[and the moving party did not file a timely appeal], we . . . cannot 

consider here [on appeal from the final judgment] whether the 

trial court erred in its ruling on that motion”].)
20

In its subsequent ruling granting respondent’s motion to 

amend the judgment to add the BKS entities as judgment 

debtors, the court stated, “[I]f [wife’s] interest [in the BKS 

entities] is community property and therefore may be reached to 

satisfy the judgment, there would be no innocent third party 

harmed by the reverse veil piercing.” The court was apparently 

relying on Family Code section 910, subdivision (a), which 

provides, “[T]he community estate is liable for a debt incurred by 

either spouse before or during marriage, regardless of which 

spouse has the management and control of the property and 

regardless of whether one or both spouses are parties to the debt 

or to a judgment for the debt.” 

The trial court continued: “The general presumption is 

that all property acquired during marriage is community 

property. (Fam. Code, § 760.) Schaefers has produced a 

Separation Agreement entered into over 20 years ago showing 

that [he and wife] intended to keep their property separate, 

however [respondent] has shown that Schaefers and his wife 

have, in recent years, treated the BKS Entities as disregarded 

entities and community property for tax purposes (IRS Revenue 

Procedure 2002-69), which is inconsistent with sentiments set 

forth in the 20 year old Separation Agreement. . . . [¶] Schaefers 

has failed to explain or rebut the treatment of the BKS Entities 

on the tax returns, or establish that the characterization of the 

BKS Entities in the returns is consistent with an intent to treat 

them as the separate property of Schaefers and his wife.” 

The tax returns referred to by the trial court are California 

Limited Liability Company Return of Income forms (Form 568) 

filed by BKS Cambria for the tax years 2013 through 2017. The 

forms show that the LLC was disregarded for federal tax 
21

purposes and that Schaefers was the sole member of the LLC. 

BKS Cambria would qualify as a disregarded entity only if it 

were wholly owned by Schaefers and wife as community property. 

“[I]f spouses file joint income tax returns, . . . LLCs owned 

entirely as community property are disregarded for federal 

income tax purposes. Thus, the . . . LLC would not be required to 

file separate [federal] income tax returns[, i.e., separate from the 

spouses’ joint federal income tax returns]. In contrast, if the . . . 

LLC is owned as separate property, the . . . LLC would not be 

a disregarded entity and would be required to file separate 

[federal] income tax returns.” (Ware & Orr, Oh, What a Relief It 

Is: Curing Estate Plans That No Longer Make Sense in Light of 

the American Taxpayer Relief Act of 2012, 2016 ABATAX-CLE 

0506048, italics added.) 

The trial court erroneously assumed that wife is bound by 

BKS Cambria’s filing of California tax returns stating that it is a 

disregarded entity. Only Schaefers’ name appears on the tax 

returns, which were prepared by BKS Cambria’s accountant. 

Schaefers was the manager of the LLC. Respondent has not 

referred us to evidence in the record showing that wife reviewed 

the LLC’s tax returns before they were filed or that she 

understood the significance of the designation of the LLC as a 

disregarded entity. The tax returns answer “yes” to the question, 

“[I]s this LLC a business entity disregarded for tax purposes?” 

The returns do not explain that an LLC owned by a husband and 

wife qualifies as a disregarded entity only if it is wholly owned as 

community property.

Furthermore, the trial court erred in invoking “[t]he 

general presumption . . . that all property acquired during 

marriage is community property. (Fam. Code, § 760.)” Wife 
22

acquired her 50 percent interest in BKS Cambria years after her 

March 1996 separation from Schaefers. Family Code section 771 

provides, “The earnings and accumulations of a spouse . . . after 

the date of separation of the spouses, are the separate property of 

the spouse.” “The term accumulation ‘applies “to any property 

which a person acquires or retains” except for property obtained 

in exchange for community property or community funds.’” (In re

Marriage of Stephenson (1984) 162 Cal.App.3d 1057, 1085.) Wife 

declared that the funds used to purchase BKS Cambria’s real 

property “came from proceeds from the sale” of her separate 

property in New Jersey. 

Even if wife’s membership interest in BKS Cambria were 

community property, this would not necessarily mean that her 

interest would be liable for Schaefers’ judgment debt to 

respondent. The summary of the facts in the Kansas Court of 

Appeals’ opinion shows that respondent’s fraud action was based 

on Schaefers’ conduct beginning in 2011, 15 years after the 

spouses had separated. Family Code section 910, subdivision (a) 

provides, “[T]he community estate is liable for a debt incurred by 

either spouse before or during the marriage . . . .” But the 

community’s liability “does not include [a debt incurred during] 

‘the period after the date of separation . . . and before a judgment 

of dissolution of marriage or legal separation of the parties.’ 

[Fam.C. § 910(b)] [¶] Thus, debts incurred by either spouse after

separation are the debtor spouse's separate obligation, neither 

chargeable against nor reimbursable from the community estate. 

[Citations.]” (Hogoboom & King, Cal. Practice Guide: Family 

Law (The Rutter Group June 2021 update) ch. 8-D, ¶ 8:746.) “In 

the case of a tort, [a debt is incurred] at the time the tort occurs.” 
23

(Fam. Code, § 903, subd. (b).) The fraud tort in the Kansas action 

occurred no earlier than 2011.

Thus, the trial court’s determination that it would be 

inequitable not to add BKS Cambria as a judgment debtor was 

based in part on mistakes of law and findings unsupported by the 

record. The court concluded that wife is not an innocent third 

party who would be harmed by reverse veil piercing because her 

membership interest in the LLC is presumptively community 

property and the LLC’s California tax returns manifested wife’s 

intent to treat her 50 percent interest as community property. 

But the presumption of community property is inapplicable. If 

wife’s interest in the LLC were community property, her interest 

would not be liable for Schaefer’s debt to respondent because the 

debt was incurred long after the date of separation. Moreover, 

the court failed to consider that wife may not have been aware of 

the significance of the tax returns’ designation of BKS Cambria 

as a disregarded entity. The trial court’s legal mistakes and 

unsupported factual findings irretrievably flaw its ruling.

As to whether the reverse veil piercing would be 

inequitable to wife, Curci, supra, 14 Cal.App.5th 214, is 

distinguishable. (See the discussion of Curci at page 12, ante.) 

Curci observed: “Baldwin, the judgment debtor, holds a 99 

percent interest in [the LLC]. His wife holds the remaining 1 

percent interest, but she is also liable for the debt owed to Curci. 

(See Family Code, § 910 [community estate generally liable for 

debt incurred by either spouse before or during marriage].) 

There simply is no ‘innocent’ member of [the LLC] that could be 

affected by reverse piercing here.” (Id. at p. 222, second 

bracketed material in original.) In contrast to Curci, in the 
24

present case there may be an innocent member (wife) of BKS 

Cambria who would be adversely affected by reverse piercing.

“The essence of the alter ego doctrine is that justice be 

done. ‘What the formula comes down to . . . is that liability is 

imposed to reach an equitable result.’ [Citation.] Thus the 

corporate form will be disregarded . . . only when the ends of 

justice so require.” (Mesler v. Bragg Management Co. (1985) 39 

Cal.3d 290, 301; see also Estate of Bielec (1972) 8 Cal.3d 213, 219, 

fn. 5 [“We may look through a corporation to its alter ego if the 

preservation of the corporate fiction of a distinct entity would 

have an inequitable result or promote injustice”].)

We must remand the matter to the trial court for further 

proceedings on the equitable issue consistent with the views 

expressed in this opinion. We do not suggest that wife is, or is 

not, an innocent third party. Nor do we suggest that the court 

should deny respondent’s motion if on remand it finds that wife is 

an innocent third party who would be harmed by the addition of 

BKS Cambria as a judgment debtor. Whether the motion should 

be granted or denied is within the trial court’s sound discretion. 

The court must “weigh the equities to ‘“‘accomplish ultimate 

justice.’”’” (Hartford Casualty Ins. Co. v. Travelers Indemnity Co.

(2003) 110 Cal.App.4th 710, 724.)

Alleged Violation of Due Process

Appellants argue: “BKS Cambria was denied its due 

process rights because its property was taken away without an 

opportunity to be heard in the Kansas action.” (Bold and 

capitalization omitted.) The argument is forfeited because 

appellants failed to raise it below. (Fourth La Costa Condo.

Owners Assn. v. Seith (2008) 159 Cal.App.4th 563, 585.) 
25

The argument is also forfeited because it is not supported 

by meaningful analysis with citation to authority. (Gunn v.

Mariners Church, Inc. (2008) 167 Cal.App.4th 206, 217-218.) The 

argument is set forth in a single paragraph at page 71 of BKS 

Cambria’s opening brief. The paragraph contains the following 

conclusionary statement: “The ultimate effect of the trial court’s 

order . . . is to strip BKS Cambria of its significant real property 

holdings without due process of the law as required by the due 

process clauses of the United States and California Constitutions 

for all the reasons stated above in its previous arguments.” 

(Italics added.) There are no citations to the “previous 

arguments.” BKS Cambria cannot expect us to search through 

its brief in an attempt to find these arguments.

Respondent states, “The crux of Appellants’ [due process 

argument] is that the trial court’s order is erroneous because 

BKS [Cambria] did not control the Kansas litigation that led to 

the judgment against Schaefers.” The argument lacks merit 

because under the alter ego doctrine “the original party 

[Schaefers] and the new party [BKS Cambria] were one and the 

same. Adding the alter ego entity after judgment, therefore, 

amounted to little more than correcting a misnomer in naming 

the defendant.” (Triplett v. Farmers Ins. Exchange (1994) 24 

Cal.App.4th 1415, 1420; see also Greenspan, supra, 191 

Cal.App.4th at p. 509 [“Simply put, section 187 [authorizing 

amendment to add alter ego as judgment debtor] recognizes ‘the 

inherent authority of a court to make its records speak the 

truth’”].) 

Respondent asserts, “Schaefers also appears to contend 

that his due process rights were violated because the court did 

not hold a full evidentiary hearing on the motion to amend the 
26

judgment.” This contention is also without merit. “Code of Civil 

Procedure section 187 contemplates a noticed motion. The trial 

court is not required to hold an evidentiary hearing. [Citation.] 

Evidence in the form of declarations or deposition testimony is 

sufficient.” (Wells Fargo Bank, N.A. v. Weinberg (2014) 227 

Cal.App.4th 1, 9.)

Choice of Law

Kansas Law

Appellants claim that, instead of applying California law, 

the trial court should have applied “Kansas law . . . which does 

not recognize the outside reverse veil piercing doctrine.” In 

support of their claim that a conflict exists between Kansas and 

California law, appellants cite only one case: Floyd v. IRS (10th 

Cir. 1998) 151 F.3d 1295. There, the federal court was asked to 

determine whether reverse veil piercing should be applied to a 

Kansas corporation, not an LLC. The federal court noted that 

Kansas courts had not considered whether to permit reverse veil 

piercing of a corporation. (Id. at p. 1300.) The federal court 

concluded, “[I]n the absence of a clear statement of Kansas law by 

the Kansas courts, we will not assume that such a potentially 

problematic doctrine [reverse veil piercing of a corporation] 

already has application in that state.” (Ibid.) 

The parties have not cited, and we have not found, any 

Kansas case, published or unpublished, that discusses whether 

reverse veil piercing of an LLC is permissible under the alter ego 

doctrine. Accordingly, as to this issue there is a false conflict 

between California and Kansas law. “[I]f the laws and interests 

of the concerned states are not in conflict, the result is deemed a 

‘false conflict’ or no conflict at all. The court need not engage in 

any choice-of-law analysis where no conflict is established 
27

between laws of the states that are potentially applicable. . . . 

[¶] . . . [¶] . . . In a false-conflicts situation, the law of the forum 

jurisdiction will usually govern.” (15A C.J.S. (June 2021 update) 

False Conflicts, § 31, fns. omitted; see also Pereira v. Thompson

(2009) 230 Ore.App. 640, 670, fn. 6 [“our two-step process for 

determining what law applies in a case first requires us to 

determine whether there is a material difference between the 

substantive laws at issue; if there is no difference, it is a 

‘false conflict’ and Oregon law governs”].)

Because there is a false conflict between California and 

Kansas law, California law applies. Curci, supra, 14 Cal.App.5th 

214, permits reverse veil piercing of an LLC.

New Jersey Law

In May 2019 wife filed in New Jersey a “Complaint for 

Divorce/Dissolution.” Appellants argue that, in determining the 

nature of wife’s 50 percent interest in BKS Cambria, the trial 

court should have applied New Jersey law because “the divorce 

proceedings are in New Jersey where [wife] lives and where 

Appellant Schaefers has conceded jurisdiction.” Since New 

Jersey “is a non-community property state,” wife “would be 

significantly damaged by applying the alter ego doctrine and thus 

the motion to amend should have been denied.” 

Appellants’ argument is forfeited because they do not 

explain why the mere filing by wife of divorce proceedings in New 

Jersey required the California trial court to apply New Jersey 

law. BKS Cambria is a California LLC that does business and 

owns property in California, not New Jersey, and Schaefers is a 

resident of California. “It is the responsibility of the 

appellant . . . to support claims of error with meaningful 

argument and citation to authority. [Citations.] When[, as here, 
28

meaningful] legal argument with citation to authority is not 

furnished on a particular point, we may treat the point as 

forfeited . . . .” (Allen v. City of Sacramento (2015) 234 

Cal.App.4th 41, 52 (Allen).) 

In any event, there is no merit to appellants’ argument that 

New Jersey law on the division of property should prevail. Wife’s 

complaint for divorce requested only dissolution of the marriage. 

It did not request division of the parties’ property. Schaefers 

signed a consent to entry of a judgment of divorce in which he 

stated, “The Plaintiff and I are not seeking Equitable 

Distribution of property and/or assets . . . .” 

Arguments Personally Made by Schaefers Alone

Schaefers has filed his own opening brief in which he 

makes additional arguments. He contends that, pursuant to 

Evidence Code section 352, the trial court abused its discretion by 

permitting the admission of inflammatory, unduly prejudicial 

evidence. The contention is forfeited for failure to show that he 

objected on Evidence Code section 352 grounds in the trial court. 

(People v. Valdez (2012) 55 Cal.4th 82, 138-139.) If the 

contention were not forfeited, Schaefers would not prevail 

because he fails to establish an abuse of discretion or a 

miscarriage of justice. 

Schaefers claims that the trial court required him to 

disclose privileged income tax returns and that it erroneously 

relied upon them. The claims are forfeited because they are not 

supported by meaningful argument with citations to the record 

and authority. (Allen, supra, 234 Cal.App.4th at p. 52; Nwosu v.

Uba (2004) 122 Cal.App.4th 1229, 1246.) 

Finally, Schaefers maintains that the trial court ignored 

patents that, “[i]f professionally pursued, . . . could be worth tens 
29

of millions of dollars . . . .” He alleges that respondent has 

“unclean hands by patenting intellectual property belonging to 

Appellant Schaefers and hiding the fact from Appellant 

Schaefers, the Kansas judge and the jury in the Kansas 

proceedings.” This argument is also forfeited. We do not consider 

the underlying Kansas proceedings. In addition, this argument is 

not supported by meaningful analysis with citations to the record 

and authority.

Disposition

The order modifying the judgment by adding BKS Cambria 

as a judgment debtor is reversed. The matter is remanded to the 

trial court with directions to conduct a noticed hearing on 

whether it would be inequitable to add BKS Cambria as a 

judgment debtor because of wife’s 50 percent membership 

interest in the LLC. The court may receive additional evidence 

on this issue. It shall reconsider the issue in light of the views 

expressed in this opinion, weigh the equities, and determine 

whether to grant or deny respondent’s motion. We offer no 

opinion on how the trial court should rule. The parties shall bear 

their own costs on appeal.

CERTIFIED FOR PUBLICATION.

YEGAN, J.

We concur:

GILBERT, P. J.

TANGEMAN, J.
Linda D. Hurst, Judge

Superior Court County of San Luis Obispo

______________________________

Bernd Schaefers, in propria persona, for Defendant and 

Appellant.

Tardiff Law Offices and Neil S. Tardiff, for Defendant and 

Appellant, BKS Cambria. 

Rogers, Sheffield & Campbell, John H. Haan, Jr., Nathan 

C. Rogers, for Plaintiff and Respondent.