## Facts

- Curci Investments, LLC held an approximately $7.2 million money judgment against James P. Baldwin individually arising from his default on a $5.5 million promissory note.
- Baldwin formed JPB Investments, LLC (JPBI) to hold and invest cash balances for himself and his wife.
- JPBI had two members: Baldwin (99%) and Baldwin’s wife (1%); Baldwin also served as manager/CEO and controlled when distributions were made.
- Curci alleged JPBI made large distributions to Baldwin and his wife while Curci received nothing through ordinary collection efforts, and that Baldwin used JPBI to avoid paying the judgment.
- Curci sought to reach JPBI’s assets to satisfy Baldwin’s personal judgment by adding JPBI as a judgment debtor under California Code of Civil Procedure § 187 (outside reverse veil piercing).

## Issues

1. Whether California law categorically bars outside reverse veil piercing to add an LLC as a judgment debtor on a member’s personal judgment.
2. Whether the refusal to allow reverse veil piercing in a corporate case precludes the remedy for an LLC with a dominant member and minimal risk of harm to innocent owners or entity creditors.
3. Whether statutory charging-order remedies for LLC member interests displace equitable remedies where the debtor allegedly abuses the LLC form to frustrate collection.

## Decision

- The Court of Appeal reversed the order denying Curci’s motion.
- It held outside reverse veil piercing is not categorically unavailable against an LLC and may be applied where equity warrants it.
- It distinguished prior authority rejecting the remedy in the corporate context as driven by policy concerns (harm to innocent shareholders and corporate creditors) that were absent or reduced on these alleged facts.
- It rejected the argument that LLC charging-order provisions are an exclusive remedy that foreclose equitable relief.
- The case was remanded for the trial court to make factual findings and conduct an equitable, alter-ego-type analysis, including potential prejudice to third parties, to determine whether JPBI should be added as a judgment debtor.

## Legal Principles

- Outside reverse veil piercing may be available in California against an LLC to satisfy a member’s personal judgment when application of the entity form would sanction misuse and leave the creditor without an effective remedy.
- Prior rejection of outside reverse veil piercing for corporations does not necessarily control in the LLC context; courts must evaluate entity form, ownership structure, and risk of prejudice to innocent members and creditors.
- The charging order remedy addresses a creditor’s access to a member’s transferable interest (distributions) and does not, by itself, eliminate equitable remedies aimed at abuse of the entity form.
- Reverse veil piercing remains fact-dependent and requires findings analogous to traditional alter-ego doctrine, including unity of interest and whether respecting separateness would promote injustice, with attention to third-party impacts.

## Conclusion

The court held that a judgment creditor may seek to add an LLC as a judgment debtor through outside reverse veil piercing where the debtor’s control and alleged misuse of the LLC render ordinary collection remedies ineffective, and it remanded for a fact-driven equitable determination of whether JPBI’s veil should be pierced.


Curci Invs., LLC v. Baldwin, 14 Cal. App. 5th 214 (Cal. Ct. App. 2017)