BKM Capital Partners, the Newport Beach industrial real estate firm founded by Brian Malliet, was sued by two former employees in California in 2020. Both cases were dismissed with prejudice before reaching trial, and no verdict or settlement terms appear in the public record. One suit named Malliet personally; the other did not.
Michael Hernstad’s Wrongful Termination Suit
Michael Hernstad filed suit against BKM Capital Partners and Brian K. Malliet individually on June 5, 2020, in the Los Angeles County Superior Court (Case No. 20STCV21301).1Trellis.law. Civil Case Cover Sheet Filed by Michael Hernstad, Plaintiff The docket classifies the action as wrongful termination but does not lay out the specific factual allegations.
On August 24, 2020, the court stayed the case and sent the dispute to binding arbitration under a stipulation from the parties. Arbitration proceedings are private, and what was said or decided there is not part of the public court file. Nearly ten months later, Hernstad requested dismissal, and on June 11, 2021, the court dismissed the entire action with prejudice.2UniCourt. Michael Hernstad vs BKM Capital Partners, L.P., et al. That bar prevents him from refiling the same claims. No settlement amount was disclosed.
Lindsey Sherman’s Employment Suit
Lindsey Sherman filed her own employment case against BKM Capital Partners, L.P. on May 26, 2020, in Orange County Superior Court at the Central Justice Center.3UniCourt. Lindsey Sherman vs BKM Capital Partners, L.P. Malliet was not named as an individual defendant. The court records classify the matter generically as “other labor matters” and do not describe the specific claims.
The case closed quickly. Sherman filed a request for dismissal with prejudice on September 14, 2020, and the court entered the dismissal the same day.3UniCourt. Lindsey Sherman vs BKM Capital Partners, L.P. As with the Hernstad case, no verdict or settlement terms are in the public record.
What the Outcomes Mean
Both plaintiffs voluntarily dismissed their own cases with prejudice. In employment disputes, that pattern often reflects a private settlement, and settlement agreements typically include confidentiality terms that keep dollar figures and other conditions off the docket. It can also mean a plaintiff decided not to press the claim further. Without disclosed terms or statements from either side, the public record does not support a firm conclusion either way.
The Hernstad arbitration stay adds to the opacity. Because arbitration is private and its results are not usually filed with the court, the substance of that proceeding is not publicly available. The timing of the dismissal, roughly ten months into the stay, is consistent with the matter having been resolved through arbitration.
Brian Malliet’s Earlier Litigation with Voit
A separate case sometimes turns up when searching Malliet’s litigation history and is worth distinguishing from the employment claims. Before founding BKM in 2013, Malliet co-owned Voit Real Estate Services with Robert D. Voit.4BKM Capital Partners. Team Voit sued Malliet in May 2013 (Case No. 30-2013-00652567-CU-CO-CJC) over a contractually required appraisal process that Malliet had allegedly refused to complete after a failed 2012 capital call. After a six-day trial, the court ruled for Voit on all issues. A 2019 appellate opinion largely affirmed that outcome but reversed one component involving a $5 million promissory note.5Fear Not Law. Malliet v. Voit That case was a partnership breakup between business co-owners, not an employment dispute, and it did not involve BKM Capital Partners.