Opinion
NOT TO BE PUBLISHED
City and County of San Francisco Super. Ct. No. CGC-08-477107
Lambden, J.
Plaintiffs and respondents Burlingame Investment Corporation (BIC), Burlingame Investment (Barbados) Inc. (BIB), BIC Properties, Inc. (BIC properties), NDC, Inc. (NDC), Burlingame Limen Corporation (Burlingame Limen), and Vintage Associates (collectively, plaintiff entities or plaintiff corporate entities), as well as Jackie Lam, and Lai Ming Chan Meyer filed a first amended complaint against defendants and appellants Herman Kwai, Chinin Tana, Jeffrey Chang, Rafael Pacquing, and Michael Choy (collectively, defendants). Lam, Meyer, and plaintiff entities (collectively, plaintiffs) filed a first amended complaint against defendants for declaratory and injunctive relief as well as for publication of injurious falsehood, slander of title, breach of fiduciary duty, interference with contract, and interference with prospective economic advantage. Defendants filed a special motion to strike five of the seven causes of action pursuant to Code of Civil Procedure section 425.16, known as the anti-SLAPP (strategic lawsuit against public participation) statute. The court denied the motion. Defendants appeal and contend that plaintiffs’ claims arose from an act in furtherance of defendants’ right of petition or free speech and that plaintiffs failed to establish a probability of prevailing on the merits on their claims. We are not persuaded by their arguments and affirm the order.
All further unspecified code sections refer to the Code of Civil Procedure.
BACKGROUND
In the late 1980s, Chan Dang, and a group of 11 other investors in Hong Kong (the investors) formed several different companies for the purpose of investing in various real estate projects in California. Among those companies were BIC, a California corporation; BIB, the 90 percent owner of BIC; and NDC, a wholly owned subsidiary of BIC. BIB is a corporation organized and existing under the law of Barbados. BIC, BIC Properties, NDC, and Burlingame Limen are California corporations with their principal place of business in Oakland, California. Vintage Associates is a California General Partnership with its principal place of business in Oakland, California.
Dang, who is now deceased, was the largest shareholder in BIB. He had a share of approximately 30 percent. In 1990, Meyer, the daughter of Dang, became the director of BIC and NDC. In 1993, she became the president of BIC, NDC, Burlingame Limen, and Burlingame Properties. Lam is a shareholder in BIB, and a director of each plaintiff entity except Vintage Associates.
In 1996, seven of the original 12 investors formed a new British Virgin Islands corporation named Starble International, Ltd. (Starble). The investors transferred their equity shares in BIB to Starble and Starble held a combined 50 percent interest in BIB. Seven shareholders received a loan of $5 million from Dang and executed a $5 million promissory note in favor of Dang and a concurrent loan and pledge agreement. The loan went into default.
Defendants––Kwai, Tana, Chang, Pacquing, and Choy––are according to plaintiffs, individuals involved in an unlawful conspiracy to take ostensible control of the plaintiff entities. Kwai is a resident of Hong Kong and has a company named Global Reach Investment Corporation (Global Reach), a Panama Corporation. Choy lives in Marin County. The other defendants live in San Francisco.
Defendants assert that Global Reach loaned one of the original investors in BIB the equivalent of $8 million. They further maintain that when this investor could not repay the loan, he arranged for various promissory notes to be assigned to Global Reach and also arranged for the company to have a power of attorney to act for Starble.
In December 2005, Kwai’s company, Global Reach, sued BIC in Alameda County Superior Court (Alameda litigation), seeking a money judgment on eight promissory notes (notes). Global Reach alleged that BIC executed and delivered a series of notes in May 1992. Global Reach sought to recover the principal and interest on the eight notes.
BIC responded that Kwai obtained the notes by fraud. BIC asked the court to require Global Reach to post a bond for costs and attorney fees, and the court granted this request. Global Reach failed to post a bond and the court dismissed its action. BIC, as the prevailing party, obtained a judgment of $810,000 in attorney fees.
In early 2007, Kwai presented himself as “present representative director” of Starble. Kwai demanded that a BIB shareholders meeting be convened. According to defendant Tana, BIB had not held a shareholder meeting since 1996. Plaintiffs maintain that Kwai and Global Reach failed to provide adequate evidence of authority to act for Starble and, consequently, BIB declined Kwai’s demand that a shareholders’ meeting be convened.
Kwai issued notice of a BIB special shareholders’ meeting to be convened in Barbados in March 2008. Tana claimed that he received a proxy from Starble to act for Starble at the Barbados shareholder meeting.
On March 25, 2008, counsel for BIB filed an “Originating Summons and Certificate of Urgency in the Barbados High Court of Justice.” On March 25, BIB secured a temporary injunction from the Barbados court to bar the shareholder meeting pending resolution of the underlying issues of authority and ownership (Barbados temporary injunction action).
Tana claimed that the Barbados counsel for Starble reported that the restraining order was no longer in effect. Tana, as putative proxy for Kwai and Starble, and as the only shareholder present, reconvened the shareholder meeting on June 18, 2008, without notice to BIB’s shareholders. At the meeting, Tana, Kwai, Choy, and another person were elected to replace BIB’s existing directors. They also revoked the prior BIB resolution, which had established a priority in the distribution of any assets of BIB or its affiliated companies to repay Dang’s loan. The new directors, along with Chang and Pacquing, elected Tana as BIB’s president and Pacquing as secretary and treasurer. The directors then resolved to dismiss BIB’s pending action in Barbados against Kwai; to fire BIB’s Barbados counsel in that litigation; to reorganize the boards of directors, officers, and management of BIB’s California affiliate entities; and to relocate BIB’s headquarters to the San Francisco office. These acts were published in corporate minutes.
Additionally, the minutes and written consent forms indicated that defendants undertook other actions. Tana, as the president of BIB, executed a written consent of BIC to replace its existing directors with Choy and Chang. Chang and Choy authorized themselves to make withdrawals from BIC’s bank accounts and directed the acquisition of books and records from predecessor officers.
On June 20, 2008, Tana filed a notice with the Barbados Registrar of Companies, stating that, on June 19, 2008, Kwai, Choy, and a relative of Kwai had become the new directors of BIB. On this same date of June 20, Pacquing filed a statement of information with the California Secretary of State, certifying that Chang, Choy, and he were the officers and directors of the California-based plaintiff entities, and that Chang was the agent for service of process.
Defendants also contacted the counsel representing BIB and BIC in California. Tana wrote a letter attempting to terminate California counsel’s authority to represent BIB in the Barbados temporary injunction action. He also instructed counsel to forward copies of all communications between the corporation and the corporation’s Barbados counsel and to cease communicating with the corporation and Barbados counsel. Chang wrote BIC’s California counsel and directed counsel to withdraw BIC’s pending motion for additional attorney fees against Global Reach in the Alameda litigation, to give up BIC’s judgment against Global Reach in exchange for mutual releases, to forward all of Meyer’s communications with counsel, and to cease communication with anyone but Chang.
Counsel for BIB and BIC questioned defendants’ authority to act for the corporations and requested documentation. Defendants supplied notices, minutes, and written consents relating to their meetings and repeated that they would treat any act by counsel that was inconsistent with their prior directives as a breach of the fiduciary duties that counsel owed them.
On June 28, 2008, the Barbados counsel applied for further immediate relief on behalf of Meyer, Lam, and Chan Dang Investment Co. Ltd. (Barbados litigation). The court issued an injunction against Starble, Kwai, Tana, and Pacquing that, among other things, restrained them from acting or holding themselves out as directors or officers of BIB or any affiliated entities, and from otherwise intermeddling in the business or management of the affairs of BIB or its related entities.
Defendants refused to agree not to interfere in the affairs of the plaintiff entities in California during the pendency of the Barbados litigation. On December 5, 2008, plaintiffs filed a complaint for declaratory and injunctive relief against defendants in the San Francisco City and County Superior Court. In the first cause of action for declaratory relief, plaintiffs sought a judicial declaration “that (1) at no relevant time has Kwai had authority to act on behalf of Starble; (2) at no relevant time has Starble been entitled to vote or otherwise exercise the rights of a shareholder with respect to BIB; (3) the actions taken by defendants and their agents, servants or associates... with respect to BIB and any other actions then or thereafter by them with respect to any of the plaintiff entities were null and void and of no force or effect; and (4) the defendants are not now and never have been directors, officers or managers of any [of] the entities they have claimed to be.”
On July 7, 2008, plaintiffs filed a verified first amended complaint. In addition to the first and second causes of action for declaratory and injunctive relief, plaintiffs alleged a third cause of action for publication of injurious falsehood, a fourth cause of action for slander of title, a fifth cause of action for breach of fiduciary duty, a sixth cause of action for interference with contract, and a seventh cause of action for interference with prospective economic advantage. Plaintiffs summarized their lawsuit as seeking damages to prevent defendants “from consummating in California an unlawful conspiracy to take ostensible control of the interrelated plaintiff entities... in violation of the governing documents of those entities, the governing laws of Barbados... and California..., and restraining Orders duly issued by the High Court of Barbados.”
Under their third cause of action for publication of injurious falsehood, plaintiffs alleged that defendants published false and unprivileged statements to the California Secretary of State that falsely stated that the individual plaintiffs involved in the lawsuit were not directors, officers, managers or agents for service of process of the plaintiff entities harmful to the interests of plaintiffs. They also alleged that Tana signed and attempted to file with the Barbados Registrar of Corporate Affairs an official “Notice of Change of Directors” and he falsely disclaimed plaintiffs’ status, authority and control vis-à-vis BIB, by stating that plaintiffs were not the directors of BIB and stating that Tan, Kwai, and Choy were the sole directors of BIB. Plaintiffs alleged that defendants expected and intended these falsehoods to be repeated to other parties. These falsehoods were repeated, according to the pleading, in letters sent to counsel. Other published false information alleged was the publication of minutes and written consents that, according to plaintiffs, falsely disclaimed the status and authority of the individual plaintiffs with respect to the plaintiff entities.
With regard to the fourth cause of action, slander of title, plaintiffs alleged that defendants published false and unprivileged statements and letters harmful to plaintiffs’ interest in, title to, and possession of tangible and intangible assets of pecuniary value, including corporate bank accounts, company books and records, company shares, and significant pending claims against third parties. Plaintiffs alleged: “By virtue of [Tana’s] letters and other correspondence with counsel for BIC, ..., and the purported company minutes and written consents appended to the correspondence, defendant Tana published false and unprivileged statements concerning title and access to plaintiff entities’ bank accounts, and to the use of funds therein. Defendant Tana also falsely stated to third parties that he and defendant Chang were entitled to keep plaintiff entities’ books and accounts. Moreover, by their June 23 letters to BIC’s counsel, defendants Tana and Chang falsely negated plaintiff BIC’s entitlement to, or interest in pursuing, a money judgment of $810,000, along with other pending claims against defendant Kwai’s company, Global Reach. By his June 24 letter to BIB’s California counsel, defendant Tana also gave false instructions that BIB’s attorneys should immediately stop all work on a pending action against defendant Kwai in Barbados.”
In their fifth cause of action for breach of fiduciary duty, plaintiffs claimed that defendants assumed a position of trust and confidence by assuming roles as officers and directors of the plaintiff entities. They further maintained that Kwai assumed a fiduciary duty to BIB’s shareholders by holding himself out as the sole director and representative of Starble and purporting to represent a 50 percent ownership interest in BIB. Plaintiffs alleged that defendants breached their fiduciary duty by directing BIC to forego a substantial money judgment from Global reach, instructing the attorneys for BIC and BIB to stop work on pending claims, resolving to overturn valid BIB corporate resolutions, and filing or seeking to file false official statements with the Barbados Registrar of Corporate Affairs and the California Secretary of State when these filings were in pursuit of their own interests and adverse to plaintiffs.
On August 8, 2008, the superior court granted the plaintiffs’ request for a preliminary injunction and reissued a temporary restraining order. Defendants filed a special motion under the anti-SLAPP statute to strike plaintiffs’ third through seventh causes of action.
On April 29, 2009, after holding a hearing, the trial court denied defendants’ anti-SLAPP motion. The court found that defendants failed to make the threshold showing that the third, fourth, and fifth causes of action arose from an act in furtherance of defendants’ right of petition or free speech. The court ruled that plaintiffs had established a probability of prevailing on the merits on their sixth and seventh causes of action. The court entered its order on July 7, 2009, and defendants filed a timely notice of appeal.
DISCUSSION
I. The Anti-SLAPP Statute
Section 425.16, commonly referred to as the anti-SLAPP law, provides in relevant part: “(a) The Legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, this section shall be construed broadly. [¶] (b)(1) A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim. [¶] (2) In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based. [¶] (3) If the court determines that the plaintiff has established a probability that he or she will prevail on the claim, neither that determination nor the fact of that determination shall be admissible in evidence at any later stage of the case, ... and no burden of proof or degree of proof otherwise applicable shall be affected by that determination.... [¶]... [¶] (e) As used in this section, ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.”
Under the statute, the court makes a two-step determination: “First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. (§ 425.16, subd. (b)(1).) ‘A defendant meets this burden by demonstrating that the act underlying the plaintiff’s cause fits one of the categories spelled out in section 425.16, subdivision (e)’ [citation]. If the court finds that such a showing has been made, it must then determine whether the plaintiff has demonstrated a probability of prevailing on the claim. (§ 425.16, subd. (b)(1)....)” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88; see also Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67; City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.) To establish the probability of prevailing, the plaintiff “need only have ‘ “stated and substantiated a legally sufficient claim.” ’ [Citation.] ‘Put another way, the plaintiff “must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.” ’ [Citation.]” (Navellier, supra, at pp. 88-89.) “Only a cause of action that satisfies both prongs of the anti-SLAPP statute––i.e., that arises from protected speech or petitioning and lacks even minimal merit––is a SLAPP, subject to being stricken under the statute.” (Navellier, supra, at p. 89.)
We review the ruling whether section 425.16 applies and whether the plaintiff has shown a probability of prevailing de novo. (See, e.g., Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123, fn. 10.) “The process the court uses in determining the merits of the motion is similar to the process used in approaching summary judgment motions. The evidence presented must be admissible [citation] and the trial court does not weigh the evidence. [Citation.] Rather, a probability of prevailing is established if the plaintiff presents evidence establishing a prima facie case which, if believed by the trier of fact, will result in a judgment for the plaintiff. [Citation.]” (Mattel, Inc. v. Luce, Forward, Hamilton & Scripps (2002) 99 Cal.App.4th 1179, 1188.)
II. Protected Activity
Defendants filed a special motion to strike plaintiffs’ third through seventh causes of action. The trial court denied the motion as to the third, fourth, and fifth causes of action on the basis that defendants failed to show that these causes of action arose from an act in furtherance of defendants’ right of petition or free speech.
At oral argument and in the introduction section in their reply brief in this court, defendants stated that they were withdrawing their appeal from the trial court’s ruling on the third and fourth causes of action. Thus, they were limiting their objections to the court’s ruling on the fifth, sixth, and seventh causes of action. Since defendants’ arguments have undergone significant change in both the trial court and in this court and, at times, defendants seem to be challenging issues they claim they have abandoned, we will decide the merits of their objections to the trial court’s ruling on the third and fourth causes of action.
A. Deciding Whether A Claim Arises from Protected Activity
Section 425.16 “ ‘encompasses any cause of action against a person arising from any statement or writing made in, or in connection with an issue under consideration or review by, an official proceeding or body.’ ” (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 734.) “ ‘[A]ll that matters is that the First Amendment activity take place in an official proceeding or be made in connection with an issue being reviewed by an official proceeding.’ ” (Briggs v. Eden Council for Hope & Opportunity, supra, 19 Cal.4th at p. 1116, citing Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1047.)
In considering whether the action “arises from” actions in furtherance of the right to petition, the court considers “the pleadings, and supporting and opposing affidavits... upon which the liability or defense is based.” (§ 425.16, subd. (b)(2); see also Navellier v. Sletten, supra, 29 Cal.4th at p. 89.) “[W]e analyze the gravamen of the actionable conduct to determine whether” the alleged conduct arises from “protected conduct within the meaning of the anti-SLAPP statute.” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 189-190.) The plaintiff, however, cannot “frustrate the purposes of the SLAPP statute through a pleading tactic of combining allegations of protected and nonprotected activity under the label of one ‘cause of action.’ ” (Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 308.)
The “mere fact that an action was filed after protected activity took place does not mean that it arose from that activity.” (City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 76-77.) The defendants’ act underlying the plaintiffs’ cause of action “must itself have been an act in furtherance of the right of petition or free speech. [Citation.] In the anti-SLAPP context, the critical point is whether the plaintiff’s cause of action itself was based on act in furtherance of the defendant’s right of petition or free speech. [Citation.] ‘A defendant meets this burden by demonstrating that the act underlying the plaintiff’s cause fits one of the categories spelled out in section 425.16, subdivision (e)....’ ” (Id. at p. 78; see also Santa Monica Rent Control Bd. v. Pearl Street, LLC (2003) 109 Cal.App.4th 1308, 1318.)
B. Plaintiffs’ Third, Fourth, and Fifth Causes of Action
We must first decide whether the challenged claims arise from acts in furtherance of the defendants’ right of free speech or right of petition under one of the four categories set forth in section 425.16, subdivision (e). (Braun v. Chronicle Publishing Co., supra, 52 Cal.App.4th at p. 1043.) Defendants contend that plaintiffs’ causes of action were based on corporate filings and letters to counsel and that this conduct was protected under section 425.16 because the corporate filings arose from the Barbados litigation and/or the Alameda litigation.
The categories under section 425.16, subdivision (e) relevant to defendants’ arguments and the facts of this case are “(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; [or] (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law....” (§ 425.16, subds. (e)(1) & (e)(2).)
1. Corporate Filings
a. Allegations in the Pleading
The corporate filings alleged in plaintiffs’ first amended complaint involved defendants’ filings with the California Secretary of State and the Barbados Registrar of Corporate Affairs. In their first amended complaint, plaintiffs generally alleged that Pacquing signed and filed with the California Secretary of State new public statements of information for the plaintiff corporate entities that falsely certified that Chang was the chief executive officer and agent, that Pacquing was the secretary and chief financial officer, and that Chang and Choy were the directors of each corporation. Additionally, plaintiffs alleged that Tana executed a purported notice of change of directors for BIB, which he filed with the Barbados Registrar of corporate Affairs and this notice, according to plaintiffs, falsely stated that Kwai, Choy, and Tana, and another person were the sole directors of BIB and, as of June 19, 2008, Meyer and Lam were no longer directors.
Under plaintiffs’ third cause of action for publication of injurious falsehood, plaintiffs alleged that defendants published false and unprivileged statements to the California Secretary of State that falsely stated that plaintiffs were not directors, officers, managers or agents for service of process of the plaintiff entities harmful to the interests of plaintiffs. They also alleged that Tana signed and attempted to file with the Barbados Registrar of Corporate Affairs an official “Notice of Change of Directors” and that he falsely disclaimed plaintiffs’ status, authority and control vis-à-vis BIB, by stating that plaintiffs were not the directors of BIB and stating that Tan, Kwai, and Choy were the sole directors of BIB. Plaintiffs alleged that defendants expected and intended these falsehoods to be repeated to other parties. These falsehoods were repeated, according to the pleading, in letters sent to counsel, publication of minutes, and other documents.
The foregoing paragraphs in plaintiffs’ pleading were incorporated by reference into the remaining causes of action, including the fourth cause of action for slander of title and the fifth cause of action for breach of fiduciary duty. Defendants argue all of the filings related to whether they could hold a shareholder meeting and were therefore connected to the Barbados litigation and protected under section 425.16, subdivision (e)(2).
b. Waiver
In the trial court, defendants argued that the anti-SLAPP statute protected the corporate filings in Barbados and California because they were part of an official proceeding before the agencies with which the filings were made. This argument was not raised in their opening brief in this court and plaintiffs maintain that they have waived raising this issue on appeal. We agree that defendants have abandoned their original argument that the corporate filings were protected because they were part of an official proceeding before the agencies with which the filings were made, because this issue was not raised in defendants’ briefs filed in this court. (See Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6 [“Issues not raised in an appellant’s brief are deemed waived or abandoned”].)
Plaintiffs also contend that defendants’ cannot raise on appeal their argument that the corporate filings were related to litigation. This particular claim was not made in the trial court until defendants’ reply memorandum for their anti-SLAPP motion; defendants raised the issue again at the hearing on the motion. Plaintiffs argue that this was too late and the trial court had discretion not to consider this new argument. (See Alliant Ins. Services, Inc. v. Gaddy (2008) 159 Cal.App.4th 1292, 1308.) Since the trial court did not discuss this issue in its ruling, plaintiffs maintain that the court disregarded this argument.
We do not agree that defendants have forfeited this issue. It is not clear from the trial court’s order that it found defendants’ argument untimely. Accordingly, we address the merits of this argument.
c. The Corporate Filings and the Barbados Litigation
Defendants held a special shareholders meeting on June 18, 2008, and over the next few days they attempted to replace the officers of BIB and the directors and officers of BIC. On June 20, 2008, defendants filed notices of this change of directors with the California Secretary of State and the Barbados Registrar of Corporate Affairs. Following these corporate filings, on June 30, 2008, plaintiffs filed a summons in the Barbados court on behalf of Meyer, Lam, Chan Dang Investment Co., Ltd., and directors and/or shareholders of BIB requesting an injunction against Starble, Kwai, Tana, and Pacquing to restrain them from acting or holding themselves out as directors or officers of BIB or any affiliated entities, and from otherwise intermeddling in the business or management of the affairs of BIB or its related entities. Thus, the corporate filings were not made in connection with the Barbados litigation, but the litigation arose as a result of the corporate filings.
Furthermore, even if the corporate filings were connected to the Barbados litigation, they are still not protected under section 425.16, subdivision (e)(2), because foreign petitioning is not protected under this provision. (Guessous v. Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1185-1186 (Guessous).) As the Guessous court noted, the express language of the anti-SLAPP statute limits motions to strike to causes of action arising from any act “ ‘in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue.’ ” (Guessous, supra, at p. 1185, citing § 425.16, subd. (b)(1), and adding italics.) As the Guessous court emphasized, “This language is plain and unambiguous. It clearly limits the petitioning or free speech activity to that made pursuant to rights granted by the United States or California Constitutions, and neither Constitution grants a United States citizen the right to petition a foreign government.” (Guessous, supra, at p. 1185.)
The Guessous court’s examination of the legislative history provided further support for its conclusion that the anti-SLAPP statute did not apply to lawsuits in foreign courts. (Guessous, supra, 179 Cal.App.4that p. 1185.) The court set forth the pertinent legislative history as follows: “ ‘ “[SLAPP suits] are lawsuits designed to silence ordinary citizens from trying to influence their government. In a democratic society with the right to petition government being one of the fundamental liberties, we want to encourage participation.” ’ (Sen. Com. on Judiciary, Com. on Sen. Bill No. 1264 (1991-1992 Reg. Sess.) ch. 726, italics added.) Additionally, the comments section in Assembly Bill No. 1158... pertaining to section 425.18, involving SLAPP back actions, states: ‘According to the author, this bill clarifies the protections of California’s anti-SLAPP law, which protects the public’s First Amendment rights by prohibiting SLAPP’s, lawsuits pursued solely to prevent members of the public from participating in their government or speaking out on public issues.’ (Sen. Conc. Amends. to Assem. Bill No. 1158 (2005)... p. 2, italics added.)” (Guessous, supra, at pp. 1185-1186.)
Defendants fail to even cite the Guessous decision and have presented no argument that challenges this court’s holding. We agree with the reasoning of the Guessous court. Thus, even if we were to presume that plaintiffs’ claims arose from or were connected to the Barbados litigation, defendants’ anti-SLAPP motion was properly denied because section 425.16, subdivision (e)(1) and (2) does not apply.
2. Letters to Counsel
Defendants contend that plaintiffs’ claims are based on letters defendants sent to counsel shortly after they filed the statements of information with the California Secretary of State and the notice of change of directors with the Barbados Registrar of Corporate Affairs. Plaintiffs’ first amended complaint alleged that defendants wrote to counsel for BIC, terminating counsel’s representation of the plaintiff entities and claiming that Chang and Tana were the new presidents of BIC and BIB, respectively. Defendants maintain that this correspondence specifically referred to demands about pending litigation and these letters were therefore protected speech under section 425.16, subdivisions (e)(1) and (e)(2). (See Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 918-920 [demand letter sent before litigation arises or to avoid litigation is protected activity under Civil Code section 47, subdivision (b)].)
Defendants assert that plaintiffs’ claims were based on three letters sent to counsel. However, the record contains only two letters. The record does not contain a letter to BIB’s Barbados counsel, although the minutes of the directors’ meeting indicate that defendants resolved to terminate the employment of the Barbados counsel.
The first letter was sent to BIC’s counsel from Chang and was dated June 23, 2008. Chang stated that he was the new president of BIC. This letter terminated counsel’s representation in the Alameda lawsuit involving Global Reach. It told counsel to, among other things, withdraw BIC’s pending motion for attorney fees, enter into an agreement with Global Reach foregoing BIC’s rights to the prior attorney fee award of $810,000, and send Chang “all copies of all communications between [the law firm] and anyone employed by [BIC] or its affiliates.”
The following day, on June 24, 2008, California counsel for BIB received a letter from Tana. Tana stated that he was the new president of BIB. Tana wrote that defendants were terminating the authority of the law firm to act on behalf of BIB in the Barbados temporary injunction action. The letter demanded that the attorney “cease all work” in this action and to forward to them all copies of all communications between the firm and anyone employed by BIB, the Barbados law firm, and other persons contacted to obtain affidavits in the Barbados temporary injunction action.
Defendants attempt to characterize these letters to California counsel for BIC and BIB as demand letters. The letters, however, were not attempting to resolve between two adverse parties a claim that was otherwise going to be litigated. Rather, the letters were sent by defendants to terminate the employment of their own counsel and telling their own counsel what they wanted them to do in pending litigation. Letters that terminate employment are not protected. (See, e.g., McConnell v. Innovative Artists Talent & Literary Agency, Inc. (2009) 175 Cal.App.4th 169, 181 [a writing that terminates employment is not protected under the anti-SLAPP statute].) “Not all attorney conduct in connection with litigation, or in the course of representing clients, is protected by section 425.16.” (California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032, 1037.)
The letters did demand that the attorneys withdraw pending motions in litigation, but the letters did not involve a demand to settle a claim between adverse parties, did not involve a litigation update, and did not relate to an issue under review in a judicial proceeding. Accordingly, we conclude that these letters did not involve protected activity.
3. No Threshold Showing
Defendants failed to meet the threshold burden of showing that the alleged conduct underlying the third, fourth, and fifth causes of action was protected activity under section 425.16, and the lower court properly denied defendants’ special motion to strike these causes of action. The sole remaining issue is whether plaintiffs can satisfy the second prong of the anti-SLAPP statute test for their sixth and seventh causes of action.
Plaintiffs contend that, even if defendants’ corporate filings and letters to their counsel could be construed as petitioning activity subject to the anti-SLAPP statute, these actions were not the gravamen of plaintiffs’ claims. They maintain that the thrust of all of their claims was that defendants illegally attempted to assert ownership and control over plaintiff entities and their assets. We need not address this argument as it relates to the third, fourth, and fifth causes of action because we conclude that the filings and letters were not protected activity under section 425.16. We also do not address this argument as it pertains to the sixth and seventh causes of action because, as discussed below, we conclude that plaintiffs showed a probability of prevailing on these claims.
III. Probability of Prevailing
The trial court found that plaintiffs’ sixth and seventh causes of action for interference with contract and interference with prospective economic advantage, respectively, were based on protected conduct but defendants could not prevail on their special motion to strike because plaintiffs showed a probability of prevailing on these claims.
A. Deciding whether there is a Probability of Prevailing
“To show a probability of prevailing for purposes of section 425.16, a plaintiff must ‘ “ ‘make a prima facie showing of facts which would, if proved at trial, support a judgment in plaintiff’s favor.’ ” ’ ” (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1010.) “The plaintiff need only establish that his or her claim has minimal merit to avoid being stricken as a SLAPP.” (Hailstone v. Martinez (2008) 169 Cal.App.4th 728, 735.)
To establish interference with contract, a plaintiff must establish “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) The elements for interference with prospective economic advantage are the same except that, rather than a contract, there must be “ ‘an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff.’ ” (Id. at p. 1126 & fn. 2.) The remaining elements are that the defendant must have knowledge of this relationship, the defendant must intentionally act to disrupt the relationship, and there must be an actual disruption of the relationship resulting in damages. (Ibid.)
B. Evidence in Support of the Claims
Plaintiffs presented evidence that they had a contractual relationship with outside counsel in California and Barbados. According to the plaintiffs’ evidence, these contracts provided BIB and BIC with economic benefits that included achieving a monetary judgment against Kwai’s company and protecting plaintiffs’ interests against attacks by defendants. Since defendants were involved in this litigation, this established that defendants knew about these contracts and economic relationships between plaintiffs and counsel. Plaintiffs submitted the letters from Chang and Tana, which attempted to terminate the employment of plaintiffs’ counsel and directed the attorneys not to pursue the judgment in plaintiffs’ favor in the Alameda litigation. A prima facie case for damages was also established because plaintiffs presented evidence that they incurred additional attorney fees when counsel had to respond to defendants’ letters, assess defendants’ claims, and spend time dealing with outside counsel.
Defendants do not challenge the abovementioned evidence or argue that plaintiffs failed to present sufficient evidence to prevail on their claims. Rather, defendants argue that plaintiffs cannot prevail on these claims because the sixth and seventh causes of action are inconsistent with other causes of action in plaintiffs’ first amended complaint and the sixth and seventh causes of action are barred by the litigation privilege defense. For the reasons discussed below, we reject defendants’ arguments.
C. Inconsistent Allegations
Defendants claim that plaintiffs alleged in their fifth cause of action for breach of a fiduciary duty that defendants breached that duty as directors and officers of the plaintiff corporate entities. Defendants maintain that under Manti v. Gunari (1970) 5 Cal.App.3d 442, 449-450, these allegations that they are officers of the plaintiff corporate entities must be taken as true, and they therefore cannot be liable for interference with contract or prospective advantage because the duty not to interfere falls upon strangers, people who have no interest in the relationship in question. (See Shoemaker v. Myers (1990) 52 Cal.3d 1, 24 [corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation’s contract].)
Plaintiffs, however, did not allege in their breach of fiduciary claim that defendants were the lawful directors or officers of the plaintiff entities. Rather, plaintiffs alleged that defendants, “[b]y virtue of their purported assumption of roles as officers and/or directors of plaintiff entities, ... voluntarily assumed a position of trust and confidence vis-à-vis plaintiff entities and plaintiff entities’ shareholders.” They further alleged that Kwai assumed a fiduciary duty by “holding himself out as the sole director and representative of Starble..., and purporting thereby to represent a fifty percent ownership interest in BIB....” Subsequently, plaintiffs alleged that defendants “misused their assumed position of trust and confidence, and breached their fiduciary duties to plaintiff entities.”
Nowhere do plaintiffs allege in their first amended complaint that defendants had lawfully become the officers and directors of the plaintiff corporate entities. Plaintiffs’ allegations taken as true simply assert that defendants assumed the position of officers and/or directors. Thus, even if we were to presume that interference of contract or prospective advantage cannot be alleged against an officer or director of the plaintiff corporation, the allegations in plaintiffs’ first amended complaint do not allege that defendants are the lawful officers or directors of the plaintiff entities.
To the extent that defendants are arguing that plaintiffs’ sixth and seventh causes of action fail because they are inconsistent with other causes of action, this argument is without merit. Even if the breach of the fiduciary duty is inconsistent with the sixth and seventh causes of action, this is of no significance because a plaintiff may plead inconsistent or alternative counts. (See, e.g., Skelly v. Richman (1970) 10 Cal.App.3d 844, 856.)
D. The Litigation Privilege
Defendants contend that plaintiffs cannot prevail on their sixth and seventh cause of action because these claims were based on the letters defendants sent to counsel for BIC and BIB and they maintain that these letters were absolutely privileged under Civil Code section 47, subdivision (b).
Civil Code section 47, subdivision (b) defines a “privileged publication or broadcast” as including one made “[i]n any... judicial proceeding....” “The privilege ‘applies to any publication required or permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is involved.’ [Citations.] ‘The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.’ ” (Jacob B. v. County of Shasta (2007) 40 Cal.4th 948, 955.) The privilege bars all tort causes of action except malicious prosecution. (Id. at p. 960.)
Plaintiffs respond that defendants cannot rely on this privilege as to these causes of action because they did not raise the litigation privilege as an affirmative defense in their answer except as to the third and fourth causes of action. (See California Academy of Sciences v. County of Fresno (1987) 192 Cal.App.3d 1436, 1442 [a party who fails to plead affirmative defenses waives them].) The general rule is that a privilege must be pleaded as an affirmative defense. (Locke v. Mitchell (1936) 7 Cal.2d 599, 602.) We need not decide whether defendants sufficiently raised legal privilege to provide plaintiffs with notice of this defense for the fifth and sixth causes of action because, as explained below, we conclude that defendants have not shown that this privilege applies.
The litigation privilege promotes several goals important to our system of justice, including “ensuring free access to the courts, promoting complete and truthful testimony, encouraging zealous advocacy, giving finality to judgments, and avoiding unending litigation, ” and thus has been called “ ‘the backbone to an effective and smoothly operating judicial system.’ [Citation.]” (Silberg v. Anderson (1990) 50 Cal.3d 205, 214, 215.) The “ ‘connection or logical relation’ which a communication must bear to litigation in order for the privilege to apply, is a functional connection. That is to say, the communicative act––be it a document filed with the court, a letter between counsel or an oral statement––must function as a necessary or useful step in the litigation process and must serve its purposes.” (Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1146.)
At oral argument, defendants relied heavily on Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467. Defendants seized on the language in this decision that states that the litigation privilege requires the communication to have “ ‘ “some connection or logical relation to the action” ’ ” (id. at p. 1485), and then conclude that the litigation privilege applies in the present case because the letters have some connection to litigation. Defendants ignore that we made it clear in Feldman that a connection to the action was not sufficient to satisfy the litigation privilege. Rather, we pointed out that “ ‘ “[t]he usual formulation is that the privilege applies to any communication[s] (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” ’ ” (Ibid., italics added.)
Here, the letters to counsel were not sent to achieve the objects of any pending or anticipated litigation and they did not address any issues under review in pending or anticipated litigation. (See McConnell v. Innovative Artists Talent & Literary Agency, Inc., supra, 175 Cal.App.4th at p. 180 [“no one would suggest that a statement or writing firing an employee is protected First Amendment activity”].) Instead, the letters attempted to terminate the services of counsel and to have counsel withdraw pending motions.
Furthermore, even if the litigation privilege applies to these letters to counsel, plaintiffs’ claims do not depend exclusively on the letters to counsel. Plaintiffs showed a probability of prevailing without the evidence of these letters. Plaintiffs’ interference claims were supported by the documents related to the corporate meetings, as these documents make it clear that defendants resolved to terminate the relationships with counsel at these meetings. A document entitled, “Minutes of Directors’ Meeting, ” for BIB states that Tana was elected president and Pacquing was elected secretary and treasurer. The document provides that the “officers” at this meeting voted to dismiss the Barbados lawsuit involving Kwai. The minutes further stated: “RESOLVED FURTHER, that the officers of [BIB] inform Elliott D. Mottley & Co., lawyers representing [BIB] in the Barbados lawsuit, that their services are no longer needed and they should promptly sign and deliver to [BIB] a withdrawal from the representation that [BIB] can use to dismiss the lawsuit after the lawsuit is dismissed that they promptly withdraw from representation....” Plaintiffs also provided the “Written Consent of Directors of” BIB, which stated the following: “RESOLVED, the Corporation will end all litigation in which it is involved, including without limitation, lawsuits with Global Reach investment Inc. and Global Reach Collection Inc. in the Alameda Superior Court, appeals in the California Court of Appeals; [¶] RESOLVED FURTHER, that the officers of the Corporation are directed to take all steps necessary and proper to end the litigation promptly, including without limitation notifying lawyers representing the Corporation in the litigation that their services are no longer required and that the lawyers need to look to Ms. Lai Ming Chan Meyer for payment for services rendered in the litigation starting the date of the notice.” Thus, plaintiffs can establish a probability of prevailing on their interference claims without relying on the evidence of the letters to counsel.
Accordingly, we conclude that the lower court correctly found that plaintiffs established a probability of prevailing on their sixth and seventh causes of action and the court properly denied defendants’ special motion to strike these claims.
DISPOSITION
The order appealed from is affirmed. Defendants are to pay the costs of appeal.
We concur: Kline, P.J.Haerle, J.