Indiana-based Law Firm Evades Some Malpractice Claims on Appeal

Barnes & Thornburg LLP and one of its partners are free from part of a malpractice suit after a California appeals court ruled that certain claims stemmed from protected litigation activity.

Kim Peterson and Kim Funding LLC sued the law firm and its attorney, Ali Mojdehi, after it was discovered that the liquor license lending platform for which Kim Funding was created was a scam. After that discovery, Mojdehi represented multiple petitioners who loaned money to Kim Funding and filed involuntary petitions against it in bankruptcy court.

Peterson and Kim Funding sued Mojdehi and his firm in 2020, saying Mojdehi wrongly used confidential information he had learned while representing Peterson for his own financial benefit.

Mojdehi filed an anti-SLAPP (strategic lawsuits against public participation) motion seeking an end to the entire complaint. He argued that the claims for professional negligence and breach of fiduciary duty stemmed from constitutionally protected petitioning activity.

The trial court denied that motion, finding that the petitions themselves weren’t the primary source of the complaint.

That decision was partially reversed by the Court of Appeal, Fourth Appellate District. The appeals court affirmed the judgment regarding certain claims, including that he accepted representation of new clients with interests adverse to Peterson’s, but reached a different conclusion on the alleged harm caused by the involuntary bankruptcy proceedings.

“Conduct by an attorney in judicial proceedings is petitioning activity protected by the anti-SLAPP statute,” the Tuesday unpublished opinion says. “Hence, allegations an attorney maliciously filed a frivolous judicial proceeding against the plaintiff are subject to an anti-SLAPP motion.”

The plaintiffs are represented by TencerSherman. Barnes & Thornburg is represented by Pettit Kohn Ingrassia Lutz & Dolin. Mojdehi is represented by White & Amundson.

Counsel for Mojdehi didn’t immediately return Bloomberg Law’s request for comment Tuesday.

The case is Peterson v. Mojdehi, Cal. Ct. App., 4th Dist., No. D078461, unpublished 9/27/22.