LAWFUND MANAGEMENT GROUP LLC v. JEFF BOHBOT

Reset A A Font size: Print

Court of Appeal, Second District, California.

LAWFUND MANAGEMENT GROUP, LLC et al., Plaintiffs and Appellants, v. JEFF BOHBOT et al., Defendants and Respondents.

B209910

Decided: June 23, 2010

David B. Parker, Gina A. Leago and Gerald J. Miller, for Plaintiffs and Appellants. Nigel Burns for Defendants and Respondents Jeff Bohbot aka Jeff Hamilton, Mercedes Bohbot and Jeff Hamilton Industries, Inc. Gordon J. Calhoun and Steve C. Chiu, for Defendants and Respondents Tom Lallas, Tom Lallas, P.C. and Levy, Small, and Lallas.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

INTRODUCTION

Appellant Lawfund Management Group LLC (LFMG) entered into a litigation agreement with Respondents Jeff Hamilton, Mercedes Bohbot and Jeff Hamilton Industries (collectively the Hamiltons) to fund and manage a lawsuit brought against the Hamiltons by Action Performance Companies, Inc. In exchange for its services, LFMG was to receive a portion of any recovery in the suit along with a percentage of its litigation costs and attorneys' fees.   After an unfavorable result at trial, the Hamiltons obtained new counsel and entered into a settlement with Action Performance.   LFMG subsequently filed this action, alleging that the Hamiltons breached the litigation agreement and committed fraud by settling the underlying action without LFMG's consent.   In addition, LFMG alleged that Respondent Tom Lallas, who represented the Hamiltons in the settlement negotiations, intentionally interfered with LFMG's contractual rights by inducing the Hamiltons to breach the litigation agreement.

In the proceedings below, the Hamiltons and Lallas each filed a special motion to strike LFMG's complaint pursuant to Code of Civil Procedure section 425.16.   The court granted both motions and dismissed LFMG's complaint with prejudice.   LFMG now appeals the grant of each Motion to Strike.   We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Summary of Events Preceding the Filing of Appellants' Complaint

In the spring of 2002, Respondents Jeff Hamilton (Jeff), Jeff Hamilton Industries (JHI) and Mercedes Bohbot (Mercedes),1 who was Hamilton's mother (collectively “the Hamiltons”), sold several federally-registered “Jeff Hamilton” trademarks to Action Performance Companies.   As part of the sales agreement, Action Performance agreed to hire Jeff as the president of “Jeff Hamilton Collection.”   Approximately two and a half years later, Action Performance sued the Hamiltons, alleging that they had breached the sales agreement by failing to disclose that Jeff's ex-wife claimed an ownership interest in the Jeff Hamilton trademarks.   In addition, Action Performance alleged that Jeff had breached his employment agreement and various fiduciary duties by accepting illegal kickbacks from a third-party supplier.   The Hamiltons, in turn, filed counterclaims alleging that Action Performance had wrongfully terminated Jeff and failed to pay Mercedes certain trademark royalties.

The Hamiltons initially retained Altschuler, Grossman & Stein to represent them in the litigation.   During the course of the lawsuit, however, the Hamiltons became unable to pay Altschuler's fees and the firm withdrew as counsel.   Shortly thereafter, the Hamiltons entered into discussions with Appellant Lawfund Management Group (LFMG), who is in the business of “managing and funding meritorious litigation.”   LFMG and the Hamiltons eventually entered into a “Deal Memorandum” in which LFMG agreed to pay for the fees and costs of the litigation, subject to a $50,000 guarantee from the Hamiltons.   In exchange for funding the suit, LFMG was entitled to recoup its litigation costs from any recovery 2 along with 40 percent of the remaining proceeds.   If the recovery exceeded $900,000, LFMG was also entitled to recoup a portion of its attorneys' fees.   The Deal provided that LFMG and Herbert Dodell, who was designated as lead counsel,3 had the sole authority to “control and ․ manage the suit, including the making of any decision regarding settlement or other resolution․”

Before formally entering into the Deal Memorandum, the Hamiltons retained Tom Lallas to review the terms and conditions of the agreement.   After requesting certain modifications, Lallas approved the Memorandum and the parties signed the agreement.   Although Lallas continued to participate in aspects of the Action Performance matter, Dodell managed the litigation on a day-to-day basis.

The case proceeded to trial and, on March 8, 2007, the jury entered a verdict.   The jury awarded Action Performance $1.5 million on its claims against Jeff for breach of the employment agreement, breach of fiduciary duty and fraud.   In addition, the jury awarded Mercedes $450,000 against Action Performance for unpaid trademark royalties.   The court subsequently reduced Mercedes' award to $115,000 to offset attorneys' fees Action Performance had incurred while litigating its trademark rights against Jeff's ex-wife.4

Following the entry of final judgment, Dodell informed the Hamiltons that, as a result of the jury's split judgment, he was ethically obligated to withdraw as Jeff's counsel but intended to appeal Mercedes' counterclaims and represent her in the appeal.   The Hamiltons, however, preferred to pursue a global settlement with Action Performance that would relieve Jeff of the $1.5 million judgment.   The Hamiltons further contended that the Deal Memorandum was only binding on the parties through the entry of final judgment and, as a result, they were free to pursue a settlement of the verdict without LFMG's consent.   LFMG disagreed, arguing that it retained the authority to control Mercedes' claims on appeal.   Dodell thereafter appealed Mercedes' claims without her consent.

The Hamiltons subsequently hired Lallas to negotiate a settlement with Action Performance, which resolved all claims asserted in the Action Performance litigation.   The settlement also extinguished the judgments entered in favor of Action Performance and Mercedes.   After the settlement was completed, the Hamiltons filed an emergency motion with the Ninth Circuit to dismiss Mercedes' appeal with prejudice.   LFMG attempted to intervene in the motion, arguing that it had not consented to the settlement.   The Ninth Circuit approved the dismissal.

B. Summary of Appellants' Complaint and Proceedings Below

On August 7, 2007, LFMG filed the current lawsuit,5 alleging that the Hamiltons had breached the Deal Memorandum by settling the Action Performance litigation without LFMG's consent.   The Complaint, which was amended in March of 2008, also included a fraud claim alleging that the Hamiltons entered into the Deal Memorandum without any intention of abiding by its terms.   The Complaint further alleged that Lallas had interfered with LFMG's contractual rights by advising the Hamiltons to settle the Action Performance litigation.6  LFMG contended that, as a result of the defendants' wrongful conduct, LFMG had lost its ability to appeal and retry Mercedes' counterclaims, which “would have resulted in a verdict in favor of MERCEDES of at least $2 million.”

In response to LFMG's Complaint, the Hamiltons and Lallas each filed a demurrer and a motion to strike under Code of Civil Procedure section 425.16.7  On June 11, 2008, the court heard Lallas' motion to strike and applied the two-pronged test required under Section 425.16.   The court granted the motion, concluding that that LFGM's single claim against Lallas was predicated on legal advice and representation that he provided to the Hamiltons, which was “ ‘in furtherance of ․ [the] right to petition.’ ”   The court further held that LFMG could not demonstrate a probability of success on the merits because Lallas' actions were “protected by the ‘litigation privilege.’ ” 8

A week later, the trial court heard argument on the Hamiltons' motion to strike.   In a written order dated June 23, 2008, the court granted the motion, ruling that “the gravamen” of LFMG's breach of contract and fraud claims was the “hiring of new counsel and settling the case,” which arose from a protected activity within the meaning of the statute.   The court further ruled that LFMG had “h[ad] failed to meet their burden of introducing competent and relevant evidence to show the probability of prevailing at trial.”

LFMG now appeals both rulings, arguing that:  (1) none of its claims fall within section 425.16 and, (2) it introduced sufficient evidence to demonstrate a probability of prevailing on its claims at trial.

DISCUSSION

A. Governing Legal Principles and Standard of Review

Section 425.16 is intended “to provide for the early dismissal of unmeritorious claims filed to interfere with the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.”  (Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4th 309, 315.)   The section authorizes the filing of a special motion that requires a court to strike claims brought “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 ․ unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).)

Section 425.16 “ ‘requires the court to engage in a two-step process when determining whether a defendant's anti-SLAPP motion should be granted.   First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one “arising from” protected activity.   [Citation.]  If the court finds such a showing has been made, it then must consider whether the plaintiff has demonstrated a probability of prevailing on the claim.’  [Citation.]”  (Episcopal Church Cases (2009) 45 Cal.4th 467, 477.)

“An appellate court reviews an order granting an anti-SLAPP motion under a de novo standard.   In other words, [we employ] the same two-pronged procedure as the trial court in determining whether the anti-SLAPP motion was properly granted.”  (Mendoza v. ADP Screening & Selection Services, Inc. (2010) 182 Cal.App.4th 1644, 1652-1653.)

B. The Trial Court Properly Granted the Respondents' Section 425.16 Motions

1. LFMG's claims arise from a protected activity

Under the first prong of the statutory test, the “defendant who files a special motion to strike bears the initial burden of demonstrating that the challenged cause of action arises from protected activity.[ 9 ]  ․ A cause of action does not ‘arise from’ protected activity simply because it is filed after protected activity took place.   Nor does the fact ‘[t]hat a cause of action arguably may have been triggered by protected activity’ necessarily entail that it arises from such activity.  [Citation.]  The trial court must instead focus on the substance of the plaintiff's lawsuit in analyzing the first prong of a special motion to strike.”  (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 669-670.)   In performing the analysis, “the critical point is whether the plaintiff's cause of action itself was based on an act in furtherance of the defendant's right of petition or free speech.”  (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.)   Stated differently, “it is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies.”  (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188 (Martinez ).)

“In deciding whether the initial ‘arising from’ requirement is met, a court considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’  [Citation.]”  (Martinez, supra, at p. 186.)

(a) LFMG's claim against Lallas arose from a protected activity

Lallas argues that LFMG's cause of action for intentional interference with a contractual relationship is predicated on the fact that he negotiated and executed a settlement of the Action Performance litigation on behalf of the Hamiltons, which is itself a protected activity.   For the reasons explained below, we agree.

The single claim filed against Lallas, which is captioned “Intentional Interference with Contractual Relationship,” alleges that “[Lallas] ․ purported to represent [the Hamiltons] in connection with settlement discussions of the [Action Performance litigation] and effectuated a purported settlement agreement knowing that any settlement agreement was not enforceable since [the Hamiltons] had assigned its right to the [Action Performance litigation] to Plaintiffs ․” The complaint continues:  “[Lallas] knew that by virtue of the Deal Memorandum, Plaintiffs had the sole right to appeal the [Action Performance litigation] and [Lallas] intentionally interfered with that contractual right by causing the appeal to be dismissed.”   A declaration submitted by LFMG's counsel further alleges that “Lallas began secretly negotiating with counsel for Action Performance to settle around plaintiffs, even though he knew the defendants had no right to do so.”   Therefore, LFMG's filings demonstrate that its intentional interference claim is based on Lallas' settlement of the Action Performance suit, which extinguished LFMG's ability to appeal Mercedes' claims.

Numerous decisions have held that engaging in settlement negotiations “falls squarely within the plain language of the anti-SLAPP statute.”  (Navellier v. Sletten (2002) 29 Cal.4th 82, 90 (Navellier ).)   For example, in GeneThera, Inc. v. Troy & Gould Professional Corp., (2009) 171 Cal.App.4th 901, this District held that “[a]n attorney's communication with opposing counsel on behalf of a client regarding pending litigation directly implicates the right to petition and thus is subject to a special motion to strike.”   (Id. at p. 908.)   Similarly, in Taheri Law Group v. Evans (2008) 160 Cal.App.4th 482, an appellate court ruled that Section 425.16 applied where the plaintiff's claim for intentional interference with contractual relations arose from “[defendant's] communications with [his clients] about pending litigation, and from [defendant's] conduct in enforcing the settlement agreement on [his clients'] behalf.”  (Id. at p. 489.)   Most recently, in Seltzer v. Barnes (2010) 182 Cal.App.4th 953 (Seltzer ), the appellate court cited numerous cases for the proposition “that settlement negotiations are an exercise of the right to petition and statements made as part of such negotiations are in connection with the underlying lawsuit for purposes of section 425.16, subdivision (e)(2).”  (Id. at p. 963;  see also Navellier, supra, 29 Cal.4th at p. 90 [defendant's “negotiation and execution of a Release ․ involved ‘statements or writing made in connection with an issued under consideration or review by a ․ judicial body’ ”].)

LFMG attempts to circumvent those holdings by arguing that section 425.16 does not apply to “economic dispute[s]” “based on the improper conduct of attorneys.”   In support, LFMG first cites Jesperson v. Zubiate-Beauchamp, (2003) 114 Cal.App.4th 624, in which the plaintiff asserted a malpractice action against the defendants for failing to serve timely discovery responses.   The appellate court concluded that the claims were not subject to section 425.16 because “the alleged attorney malpractice did not consist of any act in furtherance of anyone's right of petition or free speech, but appellants' negligent failure to do so on behalf of their clients.”  (Id. at p. 631.)   A subsequent case applying Jesperson, which LFMG also cites, explained that “Jesperson implies that an attorney may invoke the protection of the anti-SLAPP statute against a malpractice claim where the alleged malpractice was committed in connection with petitioning activity, such as the filing of a pleading, but not when the attorney fails to act, such as failing to respond to discovery or court orders.”  (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1539.)   In this case, however, LFMG's complaint alleges that Lallas engaged in tortious conduct by negotiating a settlement, which, like filing a pleading, is itself a protected activity.   Accordingly, Jesperson and other cases involving instances where an attorney failed to act are not applicable to the situation presented here.

LFMG next cites Bensara v. Mitchell Silbergber & Knupp LLP, (2004) 123 Cal.App.4th 1179, which held that Section 425.16 did not apply to a claim alleging breach of the duty of loyalty.  (State Bar Rules Prof. Conduct, rules 3-310(c) & 3-310(E).)   The plaintiffs in Bensara sued their former attorneys for undertaking representation of a rival company and sharing the plaintiffs' confidential information during the course of that representation.   The court ruled that the statute did not cover the claims, explaining that

the breach [of loyalty] occurs not when the attorney steps into court to represent the new client, but when he or she abandons the old client․  In other words, once the attorney accepts a representation in which confidences disclosed by a former client may benefit the new client due to the relationship between the new matter and the old, he or she has breached a duty of loyalty.   The breach of fiduciary duty lawsuit may follow litigation pursued against the former client, but does not arise from it.

(Bensara, supra, at p. 1189;  see also Freeman v. Schack (2007) 154 Cal.App.4th 719, 730-732 [interpreting and applying Bensara ].)   LFMG's complaint plainly alleges that Lallas interfered with its contractual rights by representing the Hamiltons in the negotiation of a settlement agreement, which is itself a protected activity.   The Complaint does not allege that Lallas breached a duty to LFMG prior to engaging in a protected activity nor is it based on any other wrongful conduct that was not itself a protected activity.11  Accordingly, LFMG's claim against Lallas falls within the purview of Section 425.16.

(b) LFMG's claims against the Hamilton's arise from protected activity

i. LFMG's claim for breach of contract

The Hamiltons argue that the “principal thrust” of LFMG's breach of contract claim is that they violated the Deal Memorandum by negotiating and executing a settlement of the Action Performance litigation without LFMG's consent.   LFMG's complaint alleges that the Hamiltons “breached the [Deal Memorandum] by ․ [¶] ․ [¶] (c) Engaging in settlement negotiations of the ACTION ․ and excluding LFMG from those negotiations ․;  (d) Entering into a settlement agreement of the ACTION ․;  (e) Denying LFMG the right to exercise sole discretion over the terms and conditions of settlement․”  The complaint further alleges that the Hamiltons breached the Memorandum by dismissing the Action Performance action, dismissing the subsequent appeal and filing an Acknowledgment of Satisfaction of Judgment, all of which were done pursuant to the settlement.   Therefore, it is apparent that LFMG's breach of contract claim, like its interference claim against Lallas, is predicated directly on the settlement of the Action Performance litigation.

As discussed above, it is well-established that engaging in settlement negotiations constitutes an exercise of the right to petition and is therefore a protected activity subject to Section 425.16.  (See, ante, at pp. 8-9.)   LFMG, however, argues that Section 425.16 does not apply to “garden variety contract” cases where “the performance of the agreement ․ necessarily involved the relinquishment of rights pertaining to litigation.”   Alternatively, LFMG contends that the relevant “act” giving rise to its claim was not the Hamiltons' settlement of the Action Performance matter, but rather their failure to abide by the terms of the Deal Memorandum.   The California Supreme Court rejected these exact arguments in Navellier v. Sletten, supra, 29 Cal.4th 82.   The plaintiffs in Navellier filed a suit in state court asserting that the defendant had breached a release agreement by filing counterclaims in an underlying federal action.   In opposition to an anti-SLAPP motion brought by defendant, plaintiffs argued that Section 425.16 did not apply to “ ‘a garden variety breach of contract ․ claim’ ” that was based not on a protected activity, but rather on the “formation or performance of the contractual obligation.”  (Id. at pp.   90-92) Plaintiffs further argued that the statute “was not enacted to or intended to protect someone from being sued for breaching his/her agreement not to sue.”  (Id. at p. 91.)

The Court disagreed with plaintiffs, explaining that:

Nothing in the statute itself categorically excludes any particular type of action from its operation, and no court has the “ ‘power to rewrite the statute so as to make it conform to a presumed intention which is not expressed.” ’   [Citation.]  ․ [¶] The logical flaw in plaintiffs' argument is its false dichotomy between actions that target ‘the formation or performance of contractual obligations' and those that target “the exercise of the right of free speech.”  [Citation.]  A given action, or cause of action, may indeed target both.   As the facts in this lawsuit illustrate, conduct alleged to constitute breach of contract may also come within constitutionally protected speech or petitioning.   The anti-SLAPP statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability-and whether that activity constitutes protected speech or petitioning.

(Id. at pp. 92-93).   The Court concluded that the plaintiffs' breach claim was subject to Section 425.16, explaining that “[Defendant] is being sued because of the affirmative counterclaims he filed in federal court.   In fact, but for the federal lawsuit and [defendant's] alleged actions taken in connection with that litigation, plaintiffs' present claims would have no basis.   This action therefore falls squarely within the ambit of the anti-SLAPP statute's ‘arising from’ prong.”  (Id. at p. 90.)

This case is indistinguishable from Navellier : 12  LFGM alleges that the Hamiltons entered into a contract in which they agreed to refrain from settling a lawsuit, which is itself a protected activity.   LFMG further alleges that the Hamiltons then breached the contract by engaging in that protected activity.  Navellier makes clear that where, as here, a plaintiff is alleged to have breached a contract by engaging in a protected activity, the claim is subject to Section 425.16.13

ii. LFMG's fraud claim

Finally, LFMG's fraud claim alleges that the Hamiltons entered into the Deal Memorandum without any intention of allowing LFMG to recoup its litigation costs or abiding by any other terms in the agreement.   LFMG's claim is more accurately described as “promissory fraud,” which “consists of making a promise without the present intention to perform it, i.e., misrepresenting the speaker's then-present intentions.”  (Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 575;  see also Civil Code, § 1710, subd. (4) [stating that, deceit, within the meaning of California's fraud statute, may consist of “[a] promise, made without any intention of performing it”].)   LFMG argues that because its claim is predicated on the Hamiltons' wrongful intent at the time they entered into the Deal Memorandum, rather than their subsequent settlement of the Action Performance litigation (which it contends is simply evidence of their fraudulent intent), the claim is not subject to Section 425.16.   The Supreme Court considered and rejected a similar argument in Navellier, supra, (2002) 29 Cal.4th 82.

As discussed above, the parties in Navellier negotiated a release agreement during the course of a federal lawsuit.   Shortly thereafter, the plaintiff filed a counterclaim in the federal suit and, in response, the defendant asserted various counterclaims.   The plaintiffs then filed a state action alleging, in relevant part, that the defendant committed fraud because he never intended to abide by the terms of the release.14  The Supreme Court ruled that the claim was subject to Section 425.16, explaining that “[t]o the extent Navellier's fraud claim ․ arose ․ from the alleged deception that occurred in July 1997, when [defendant] signed the release, it is based on a statement or writing made in connection with issues under consideration or review by a judicial body - i.e., the issues under consideration in Navellier's federal action.”  (Navellier, supra, 29 Cal.4th at p. 90, fn. 6. See also Navarro v. IHOP Properties, Inc. (2005) 134 Cal.App.4th 834, 842 [claims “concerning allegedly fraudulent statements within the context of negotiating the stipulated judgment” were subject to section 425.16].) In other words, the Supreme Court concluded that because the parties had negotiated the release in the context of the federal action, and the release pertained to issues under consideration in the federal suit, claims arising from statements made in connection with release were necessarily subject to Section 425.16.  (See § 425.16, subd. (e) [“an ‘act in furtherance of a person's right of petition’ ․ includes ․ any written or oral statement or writing made in connection with an issue under consideration or review by a ․ judicial body”].)  Navellier's reasoning is directly applicable here.   The parties' Deal Memorandum was an agreement about who had the authority to fund and litigate the claims at issue in the then-pending Action Performance matter.15  Thus the Memorandum was itself a “writing made in connection with issues under consideration by a judicial body” - i.e., the issues under consideration in the Action Performance litigation.   As a result, claims arising from statements made in connection with that Memorandum, including the Hamiltons signing of the agreement, are subject to Section 425.16.

2. LFMG failed to establish a probability of prevailing at trial

Having concluded that all of LFMG's claims are covered by Section 425.16, we next consider whether LFMG demonstrated a probability that it would prevail on its claims.  “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.’ ” '   [Citation.]”  (ComputerXpress, Inc. v. Jackson (2001) 93 Cal,App.4th 993, 1010.)  “ ‘The plaintiff ‘cannot simply rely on the allegations in the complaint’ [citations]․' ”  (Ibid.) Rather, “ ‘[t]he plaintiff's showing of facts must consist of evidence that would be admissible at trial’ [citation].”  (Stewart v. Rolling Stone LLC (2010) 181 Cal.App.4th 664, 679.)  “This standard is ‘similar to the standard used in determining motions for nonsuit, directed verdict, or summary judgment,’ in that the court cannot weigh the evidence.”  (ComputerXpress, supra, 93 Cal.App.4th at p. 1010.)

(a) LFMG has failed to establish a probability of prevailing against Lallas

In granting Lallas's Motion to Strike, the trial court ruled that LFMG had failed to establish a probability of prevailing on its claim against Lallas because his alleged misconduct was protected under the litigation privilege, codified at Civil Code section 47, subdivision (b).  We agree with the trial court's conclusion.

“The section 47(b) privilege precludes civil liability ․ for ‘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.  [Citations.]’  [Citations.]”  (Cabral v. Martins (2009) 177 Cal.App.4th 471, 485.)  “The principal purpose of the Civil Code section 47 litigation privilege ‘ “is to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions ․ Although originally enacted with reference to defamation actions alone [citation], the privilege has been extended to any communication, whether or not it is a publication, and to all torts other than malicious prosecution.  [Citations.]  Thus, the privilege has been applied to suits for fraud [citations], negligence and negligent misrepresentation [citation], and interference with contract [citation]” ’ [Citation.]”  (Seltzer, supra, 182 Cal.App.4th at pp. 969-970.)   Moreover, the privilege is not limited to statements made in an actual judicial proceeding;  rather, the “ ‘privilege attaches to any publication that has any reasonable relation to the action and is made to achieve the objects of the litigation, even though published outside the courtroom and no function of the court or its officers is involved.’  [Citations.]”  (Rosenthal v. Irell & Manella (1982) 135 Cal.App.3d 121, 126.)

As discussed above, LFMG's claim against Lallas is predicated on the fact that he negotiated a settlement of the Action Performance matter, thereby inducing the Hamiltons to breach the Deal Memorandum.   Numerous cases have held that the litigation privilege attaches “ ‘to statements made by counsel during settlement negotiations' “ regardless of whether the statements “ ‘were made outside a courtroom.’ ”  (Seltzer, supra, 182 Cal.App.4th at p. 970 [citing and quoting Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 24.)   In Rosenthal v. Irell & Manella, supra, 135 Cal.App.3d 121, which the trial court discussed at length in the proceedings below, an appellate court upheld the application of the litigation privilege under a set of facts highly analogous to those presented here.   The plaintiff in Rosenthal, Jerome Rosenthal, was an attorney who was sued by a former client.   Rosenthal was represented in the suit by counsel provided by several insurance companies and his former client was represented by Irell & Manella.   Following a trial, the jury entered a judgment against Rosenthal in the amount of $26 million.   Thereafter, Irell entered into discussions with the insurance companies, which culminated in a settlement.   Rosenthal, however, objected to the settlement, arguing that the insurers had not obtained his consent to settle the case.   Rosenthal also filed a state claim against Irell, alleging that firm had “induc [ed] his insurance carriers to breach their contract with [Rosenthal] by settling his financial liability and withdrawing from their representation of him in the appeal all without his consent.”  (Id. at p. 124.)

The Court concluded that Irell was protected under the litigation privilege, explaining that:

Reduced to its simplest terms, Rosenthal's complaint alleges that defendants published certain undescribed statements to the Insurer Group, which induced that group to breach its contract with Rosenthal by settling without his consent.   Patently those publications were closely related to judicial proceedings and the insurer[s] were persons with a direct interest in the action.   Further, these publications clearly were in the interest of achieving the objects of the underlying litigation.  [¶] ․ [W]e have no trouble in concluding that defendants' conduct as alleged in the complaint is within the purview of Civil Code section 47.

(Id. at p. 126.)   The similarities between Rosenthal and this case are obvious:  LFMG's complaint, reduced to its simplest terms, alleges that Lallas made certain statements to the Hamiltons that induced them to settle the Action Performance litigation without LFMG's consent.   We agree with the trial court's conclusion that there is no meaningful basis for distinguishing Rosenthal and its reasoning is directly applicable here.

LFMG, disagrees, arguing that “this is not a situation, as in the case of [Rosenthal ], in which the damage to the plaintiffs resulted from the content of ․ protected speech.”   Rather, LFMG asserts that “Lallas acts of interference,” which it describes as “unauthorized settlement of the underlying action,” “taking over the ․ settlement negotiations,” and “excluding appellants from settlement negotiations,” constituted “conduct” rather than mere speech.   In other words, LFMG contends that Lallas' alleged conduct was “noncommunicative” in nature and therefore not subject to the privilege.   The California Supreme Court has explained that “ ‘[b]ecause the litigation privilege protects only publications and communications, a “ ‘threshold issue in determining the applicability” of the privilege is whether the defendant's conduct was communicative or noncommunicative.  [Citation.]  The distinction between communicative and noncommunicative conduct hinges on the gravamen of the action.  [Citations.]  That is, the key in determining whether the privilege applies is whether the injury allegedly resulted from an act that was communicative in its essential nature.’  [Citations.]”  (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1058.)   We have already determined that the “gravamen” of LFMG's claim against Lallas is that he negotiated a settlement of the Action Performance action on behalf of the Hamiltons.   Moreover, the case law discussed above demonstrates that settlement negotiations undertaken by counsel are communications protected by the litigation privilege.   Therefore, the privilege applies.16

(b) LFMG has failed to establish a probability of prevailing against the Hamilton

In the proceedings below, the trial court ruled that LFMG had failed “to meet their burden of introducing competent and relevant evidence to show the probability of prevailing” on its breach of contract and fraud claims.   LFMG's opposition to the Hamiltons' Motion to Strike contained only an abbreviated discussion regarding its probability of prevailing on its claims, stating that:

As set forth in the deal memorandum and in the Dodell declaration filed in connection with plaintiffs' opposition to the parallel motion brought by Lallas, [the Hamiltons] validly assigned their rights in the underlying action, including the right to settle that action, to plaintiffs in exchange for plaintiffs' agreement to manage and defend that action.   Under that arrangement, [the Hamiltons] received hundreds of thousand of dollars' worth of legal fees and costs, then sought to deprive plaintiffs of their ability to recoup their investment by purporting to settle claims that they no longer had, in express derogation of plaintiff's right under the deal memorandum.17

We are not convinced that this conclusory paragraph, which merely references the Deal Memorandum and a declaration filed in response to Lallas' Motion to Strike,18 was sufficient to make a prima facie showing that LFMG had a probability of prevailing at trial.   Even if we assume that the Deal Memorandum was a valid contract that the Hamiltons breached by settling the Action Performance matter,19 LFMG has failed to introduce evidence that it was actually damaged by the settlement, which is an essential element of both of its claims.  (See generally Greening v. General Air-Conditioning Corp. (1965) 233 Cal.App.2d 545, 549 [“The plaintiff [in a] a breach of contract action must prove that the breach was the cause of his damage”];  OCM Principal Opportunities Fund v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 870 [“Generally, to recover for fraud, the plaintiff must prove ‘ “ ‘detriment proximately caused’ by the defendant's tortious conduct.   Deception without resulting loss is not actionable fraud.” '  [Citation.]”].)

In its complaint, LFMG included a description of the damages it had allegedly suffered as the result of the Hamiltons' conduct:

Plaintiffs have incurred in excess of $1,300,000 in fees and costs in connection with the [Action Performance litigation], none of which fees has been paid by [the Hamiltons].   Plaintiff ․ owned the exclusive right to appeal the [Action Performance judgment].   A successful appeal and new trial would have resulted in a verdict in favor of MERCEDES of at least $2 million (gross recovery).   Pursuant to the terms of the Deal Memorandum, Plaintiff were entitled to recoup litigation costs (no less than $60,000) from the gross recovery and recover $500,000 in attorney fees from the remaining net proceeds (i.e., gross recovery minus costs.)   Plaintiffs were further entitled to an additional forty percent (40%) of the balance of the net proceeds.

In sum, LFMG claims it was damaged because it would have obtained a reversal of the judgment on appeal and then obtained a significantly larger recovery on Mercedes' claims at retrial.   Pursuant to the Deal Memorandum, it would have then been entitled to a portion of that enhanced recovery.

“[It] is fundamental that ‘damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.’   [Citations.]․  However, recovery is allowed if claimed benefits are reasonably certain to have been realized but for the wrongful act of the opposing party.”  (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989 [examining damages in fraud claim];  see also Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454, 473 [“ ‘ “contract damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery” ’ ”];  Caminetti v. Pacific Mut. Life Ins. Co. (1943) 23 Cal.2d 94, 103 [holding that, in context of claim for breach of contract, “the proof must establish with reasonable certainty and probability that damages will result in the future to the person wronged”];  Cf., Viner v. Sweet (2003) 30 Cal.4th 1232, 1241 [“In a litigation malpractice action, the plaintiff must establish that but for the alleged negligence of the defendant attorney, the plaintiff would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred”].)   As a result, in order to prevail at trial, LFMG would have had to show with reasonable certainty that, but for the settlement, it would have successfully appealed the Action Performance judgment and secured a better result at retrial.

LFMG, however, failed to introduce any evidence demonstrating how it would actually succeed on appeal or at retrial.   Its opposition to Hamiltons' Motion to Strike and an accompanying declaration merely allege that LFMG

expected to argue, among other things, that:  (1) the district court erred in granting summary judgment on the wrongful termination claim, which affected both Jeff and Mercedes because the amount of royalties depended upon whether Jeff was terminated for cause;  (2) the district court improperly allowed an offset of attorneys fees and reduced the judgment in favor of Mercedes (3) there was insufficient evidence to support the jury verdict regarding a $1 million target payment for [Jeff], and (4) the district court erred in denying over $60,000 in costs to Mercedes as prevailing party.   Reversal of the judgment would have resulted in a new trial, and enabled plaintiffs to emphasize evidence regarding royalties that would have resulted in a verdict of at least $2 million for Mercedes, rather than the $450,000 actually awarded.

The paragraph above is not a sufficient “prima facie showing of facts” to establish that LFMG had a probability of proving its damages at trial.   We need not decide whether the declaration of a properly qualified appellate expert, setting forth an opinion that the appeal would be successful, and setting forth the basis for that opinion, would suffice.   This was not such a declaration, but was instead the declaration of the trial lawyer, setting out the nature of the appeal and his bare opinion, without any support.   LFMG has provided no evidence in any context in support of its contentions that it had meritorious arguments on appeal.   Nor has it described any of the evidence that would purportedly result in a $2 million recovery at retrial.   Thus, on the record before us, LFMG has not shown a probability that it would be able to prove its damages with “reasonable certainty.”  (See, e.g., Smith v. Superior Court (1984) 151 Cal.App.3d 491, 500 [“a plaintiff must ․ establish the fact of damages with reasonable certainty”] [disapproved on other grounds, Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 15 fn. 3].) Accordingly, we affirm the trial court's grant of the Hamiltons' Motion to Strike.20

DISPOSITION

The judgment is affirmed.   Respondents shall recover their costs on appeal.

We concur:

FOOTNOTES

FN1. We refer to the Jeff Hamilton and Mercedes Bohbot by their first names for the sake of clarity only.   No disrespect is intended..  FN1. We refer to the Jeff Hamilton and Mercedes Bohbot by their first names for the sake of clarity only.   No disrespect is intended.

FN2. The Hamiltons were also entitled to recover any litigation costs they incurred, including their $50,000 guarantee..  FN2. The Hamiltons were also entitled to recover any litigation costs they incurred, including their $50,000 guarantee.

FN3. The Deal Memorandum required that Dodell serve as lead counsel.   The Memorandum also disclosed that Dodell was to “receive [ ] compensation from LFMG unrelated to his function as lead counsel in the suit.”.  FN3. The Deal Memorandum required that Dodell serve as lead counsel.   The Memorandum also disclosed that Dodell was to “receive [ ] compensation from LFMG unrelated to his function as lead counsel in the suit.”

FN4. The Hamilton/Action Performance sales agreement contained an indemnity provision that required the Hamiltons to reimburse Action Performance for costs incurred as the result of defending any suits alleging an ownership interest in the trademarks..  FN4. The Hamilton/Action Performance sales agreement contained an indemnity provision that required the Hamiltons to reimburse Action Performance for costs incurred as the result of defending any suits alleging an ownership interest in the trademarks.

FN5. The Complaint was also brought by LFMG/JH, LLC, which was a limited liability corporation “formed for the sole purpose of managing and financing the [Action Performance] suit.”   We collectively refer to Plaintiffs/Appellants as “LFMG.”.  FN5. The Complaint was also brought by LFMG/JH, LLC, which was a limited liability corporation “formed for the sole purpose of managing and financing the [Action Performance] suit.”   We collectively refer to Plaintiffs/Appellants as “LFMG.”

FN6. The Complaint also named two corporate entities associated with Tom Lallas:  Tom Lallas, P.C., a professional corporation, and Levy, Small and Lallas, a partnership.   We collectively refer to these Defendants/Respondents as “Lallas.”.  FN6. The Complaint also named two corporate entities associated with Tom Lallas:  Tom Lallas, P.C., a professional corporation, and Levy, Small and Lallas, a partnership.   We collectively refer to these Defendants/Respondents as “Lallas.”

FN7. Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure..  FN7. Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure.

FN8. The court also sustained Lallas's demurrer without leave to amend, again concluding that the litigation privilege barred LFMG's interference claim.   Because we affirm the court's ruling on Lallas's motion to strike under Section 425.16, we need not review its order sustaining demurrer..  FN8. The court also sustained Lallas's demurrer without leave to amend, again concluding that the litigation privilege barred LFMG's interference claim.   Because we affirm the court's ruling on Lallas's motion to strike under Section 425.16, we need not review its order sustaining demurrer.

FN9. Section 425.16, subdivision (e) defines protected activity to include, in relevant part, “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;  ․ [and] any other conduct in furtherance of the exercise of the constitutional right of petition ․ in connection with a public issue or an issue of public interest.”.  FN9. Section 425.16, subdivision (e) defines protected activity to include, in relevant part, “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;  ․ [and] any other conduct in furtherance of the exercise of the constitutional right of petition ․ in connection with a public issue or an issue of public interest.”

FN11. LFMGs' complaint does assert that Lallas “solicited ․ and induced [the Hamiltons] to retain Lallas as its attorneys in place of [Dodell] even though Lallas knew that the contract between Plaintiff and [the Hamiltons] prohibited [the Hamiltons] from selecting counsel.”   To the extent LFMG is arguing that Section 425.16 does not apply because its claim is predicated on Lallas' solicitation of clients who were contractually engaged to LFMG, we reject that contention.   A similar argument was presented in Taheri Law Group v. Evans (2008) 160 Cal.App.4th 482, in which the plaintiff, who was an attorney, sued another attorney for tortiously interfering with plaintiff's contractual rights with a third-party client.   The plaintiff alleged it had a contract to represent a client in an underlying litigation and that the defendant induced the client to breach that contract by negotiating a resolution of the underlying litigation.   Plaintiff argued that the case was not subject to Section 425.16 because “its lawsuit arose from [defendant's] conduct soliciting a client, ‘not what [defendant] did when he got into the case.’ ”  (Id. at p. 489.)   The appeals court rejected the argument, noting that the complaint showed that plaintiffs' claims arose from “[defendant's] communications with [his clients] about pending litigation, and from [defendant's] conduct in enforcing the settlement agreement on [his clients] behalf.”  (Ibid.) The appellate court stated that “it is difficult to conjure a clearer scenario than the case before us of a lawsuit arising from protected activities.”  (Ibid.) As in Taheri, LFMG's complaint demonstrates that its claim against Lallas arose not from any wrongful solicitation but rather from Lallas' alleged conduct in aiding and encouraging the Hamiltons to enter into the settlement..  FN11. LFMGs' complaint does assert that Lallas “solicited ․ and induced [the Hamiltons] to retain Lallas as its attorneys in place of [Dodell] even though Lallas knew that the contract between Plaintiff and [the Hamiltons] prohibited [the Hamiltons] from selecting counsel.”   To the extent LFMG is arguing that Section 425.16 does not apply because its claim is predicated on Lallas' solicitation of clients who were contractually engaged to LFMG, we reject that contention.   A similar argument was presented in Taheri Law Group v. Evans (2008) 160 Cal.App.4th 482, in which the plaintiff, who was an attorney, sued another attorney for tortiously interfering with plaintiff's contractual rights with a third-party client.   The plaintiff alleged it had a contract to represent a client in an underlying litigation and that the defendant induced the client to breach that contract by negotiating a resolution of the underlying litigation.   Plaintiff argued that the case was not subject to Section 425.16 because “its lawsuit arose from [defendant's] conduct soliciting a client, ‘not what [defendant] did when he got into the case.’ ”  (Id. at p. 489.)   The appeals court rejected the argument, noting that the complaint showed that plaintiffs' claims arose from “[defendant's] communications with [his clients] about pending litigation, and from [defendant's] conduct in enforcing the settlement agreement on [his clients] behalf.”  (Ibid.) The appellate court stated that “it is difficult to conjure a clearer scenario than the case before us of a lawsuit arising from protected activities.”  (Ibid.) As in Taheri, LFMG's complaint demonstrates that its claim against Lallas arose not from any wrongful solicitation but rather from Lallas' alleged conduct in aiding and encouraging the Hamiltons to enter into the settlement.

FN12. A portion of LFMG's appellate brief appears to concede that Navellier controls this case, stating that “In Navellier [, supra,] 29 Cal.4th [at p.] 93[ ], the Supreme Court stated that, although such claims are not automatically immune from the anti-SLAPP statute, the fact that the breach consists of the filing of litigation or other privileged activity will normally require the denial of the anti-Slapp motion, under the ‘probability of success prong․  [¶] The above principles also apply where, as here the claimed breach of the contract involves a settlement agreement or other contract arising out of litigation.”   Accordingly, LFMG seems to concede that Section 425.16 applies to its claim for breach of contract and that this court should therefore apply the second prong..  FN12. A portion of LFMG's appellate brief appears to concede that Navellier controls this case, stating that “In Navellier [, supra,] 29 Cal.4th [at p.] 93[ ], the Supreme Court stated that, although such claims are not automatically immune from the anti-SLAPP statute, the fact that the breach consists of the filing of litigation or other privileged activity will normally require the denial of the anti-Slapp motion, under the ‘probability of success prong․  [¶] The above principles also apply where, as here the claimed breach of the contract involves a settlement agreement or other contract arising out of litigation.”   Accordingly, LFMG seems to concede that Section 425.16 applies to its claim for breach of contract and that this court should therefore apply the second prong.

FN13. LFMG also argues at length that “although the anti-SLAPP statute applies to speech or communication, it does not apply to conduct, which is not constitutionally protected.”   It further contends that its claims do not challenge the Hamiltons' protected communications, but rather their “conduct,” which included “excluding appellants from settlement negotiations[ ] and the unauthorized settlement of the underlying action.”   In support of its argument, LFMG cites Santa Monica Rent Control Bd. v. Pearl Street, (2003) 109 Cal.App.4th 1308, in which a local rent control board alleged that defendants had violated rent control ordinances.   The defendants' allegedly wrongful conduct came to the attention of the board “by way of information in documents that the defendants filed with an administrative agency.”  (Id. at p. 1317) Defendants subsequently “sought to have the complaint[ ] stricken [under the anti-SLAPP statute] by asserting that the causes of action against them arose from their having presented such documents to the administrative agenc[y].”  (Ibid.) The appellate court disagreed, explaining that, “while this suit may have been ‘triggered by’ defendants' submission of such documents to the Board, it is not true that this suit is based on the filing of such papers.   Rather ․ [t ]his suit is based on the Board's claim that defendants are charging an illegal rent.”  (Id. at p. 1318.)   Santa Monica Rent Control Board and other cases LFMG cites simply affirm the well-established principle that if a plaintiff's claim is based on unprotected activity, the statute does not apply regardless of whether the “cause of action arguably may have been triggered by a protected activity.”  (Peregrine Funding, supra, 133 Cal.App.4th at p. 670.)   In this case, however, the “conduct” that formed the basis for LFMG's breach of contract claim - negotiating a settlement of the Action Performance matter - was itself a protected activity.   Thus, Santa Monica Rent Control Board does not apply.   Nor is LFMG's position supported by the numerous decisions it cites in which Section 425.16 was found not to apply where the plaintiff's claim was based on an unprotected activity but “protected activity arguably lurk[ed] in the background.”   (Episcopal Church Cases, supra, 45 Cal.4th at pp. 473, 476-478 [holding that Episcopal Church's claim for recovery of property was not subject to section 425.16 despite the fact that defendant, a local parish, took possession of property in protest over plaintiff's ordaining of an openly gay man as bishop.];   see also Applied Business Software, Inc. v. Pacific Mortgage Exch., Inc. (2008) 164 Cal.App.4th 1108 [plaintiff's claim that defendant violated settlement agreement by continuing to sell plaintiff's software was not subject to 425.16 regardless of whether suit was brought in retaliation for defendant's filing of a declaration in an unrelated matter].)   The Hamiltons' protected activity in this case is not merely “lurking in the background.”   Rather, it is the basis for LFMG's claims..  FN13. LFMG also argues at length that “although the anti-SLAPP statute applies to speech or communication, it does not apply to conduct, which is not constitutionally protected.”   It further contends that its claims do not challenge the Hamiltons' protected communications, but rather their “conduct,” which included “excluding appellants from settlement negotiations[ ] and the unauthorized settlement of the underlying action.”   In support of its argument, LFMG cites Santa Monica Rent Control Bd. v. Pearl Street, (2003) 109 Cal.App.4th 1308, in which a local rent control board alleged that defendants had violated rent control ordinances.   The defendants' allegedly wrongful conduct came to the attention of the board “by way of information in documents that the defendants filed with an administrative agency.”  (Id. at p. 1317) Defendants subsequently “sought to have the complaint[ ] stricken [under the anti-SLAPP statute] by asserting that the causes of action against them arose from their having presented such documents to the administrative agenc[y].”  (Ibid.) The appellate court disagreed, explaining that, “while this suit may have been ‘triggered by’ defendants' submission of such documents to the Board, it is not true that this suit is based on the filing of such papers.   Rather ․ [t ]his suit is based on the Board's claim that defendants are charging an illegal rent.”  (Id. at p. 1318.)   Santa Monica Rent Control Board and other cases LFMG cites simply affirm the well-established principle that if a plaintiff's claim is based on unprotected activity, the statute does not apply regardless of whether the “cause of action arguably may have been triggered by a protected activity.”  (Peregrine Funding, supra, 133 Cal.App.4th at p. 670.)   In this case, however, the “conduct” that formed the basis for LFMG's breach of contract claim - negotiating a settlement of the Action Performance matter - was itself a protected activity.   Thus, Santa Monica Rent Control Board does not apply.   Nor is LFMG's position supported by the numerous decisions it cites in which Section 425.16 was found not to apply where the plaintiff's claim was based on an unprotected activity but “protected activity arguably lurk[ed] in the background.”   (Episcopal Church Cases, supra, 45 Cal.4th at pp. 473, 476-478 [holding that Episcopal Church's claim for recovery of property was not subject to section 425.16 despite the fact that defendant, a local parish, took possession of property in protest over plaintiff's ordaining of an openly gay man as bishop.];   see also Applied Business Software, Inc. v. Pacific Mortgage Exch., Inc. (2008) 164 Cal.App.4th 1108 [plaintiff's claim that defendant violated settlement agreement by continuing to sell plaintiff's software was not subject to 425.16 regardless of whether suit was brought in retaliation for defendant's filing of a declaration in an unrelated matter].)   The Hamiltons' protected activity in this case is not merely “lurking in the background.”   Rather, it is the basis for LFMG's claims.

FN14. As discussed earlier in this opinion, the plaintiffs in Navellier also alleged that defendant had breached the release by filing counterclaims in the federal suit.   The Supreme Court concluded that the breach claim was subject to Section 425.16.  (See discussion, ante, at pp. 12-13.).  FN14. As discussed earlier in this opinion, the plaintiffs in Navellier also alleged that defendant had breached the release by filing counterclaims in the federal suit.   The Supreme Court concluded that the breach claim was subject to Section 425.16.  (See discussion, ante, at pp. 12-13.)

FN15. It is well-established that “acts in furtherance of the right to petition” includes “communicative conduct such as the filing, funding, and prosecution of a civil action ․ [and] qualifying acts committed by attorneys in representing clients in litigation.”  (PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204, 1221.).  FN15. It is well-established that “acts in furtherance of the right to petition” includes “communicative conduct such as the filing, funding, and prosecution of a civil action ․ [and] qualifying acts committed by attorneys in representing clients in litigation.”  (PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204, 1221.)

FN16. We also reject LFMG's argument that Lallas was not protected by the privilege because his procurement of the settlement was but one act in a “tortious course of conduct.”   In LiMandri v. Judkins (1997) 52 Cal.App.4th 326, the appellate court held that the litigation privilege did not apply where the plaintiff had alleged that the attorney engaged in a series of tortious acts only one of which was communicative in nature.   (Id. at p. 345 [“While the isolated act of filing [a] notice of lien was communicative, it was only one act in the overall course of conduct alleged in [the complaint]”].)   To the extent LFMG's complaint alleges a “course of conduct,” the entire course of conduct directly involved negotiating and procuring a settlement and therefore fell within the privilege.   Indeed, LFMG's own brief describes Lallas' wrongful conduct as “[taking] over the settlement negotiations on Jeff's behalf,” “excluding [appellants] ․ from settlement negotiations,” “actively taking over the representation of Mercedes” and “unauthorized settlement of the underlying action.”   Even if we consider the complaint's additional allegation that Lallas “solicited ․ [the Hamiltons] as its attorneys ․ even though [Lallas] knew that the contract ․ prohibited [the Hamiltons] from selecting counsel,” that also constitutes a form of privileged activity.  (See Rusheen, supra, 37 Cal.4th at p. 1058 [“solicitations of potential clients” have been “deemed communicative and thus protected by the litigation privilege”].)   Thus, whether considered individually or as a “course of conduct,” all of Lallas' allegedly wrongful acts were protected by the privilege..  FN16. We also reject LFMG's argument that Lallas was not protected by the privilege because his procurement of the settlement was but one act in a “tortious course of conduct.”   In LiMandri v. Judkins (1997) 52 Cal.App.4th 326, the appellate court held that the litigation privilege did not apply where the plaintiff had alleged that the attorney engaged in a series of tortious acts only one of which was communicative in nature.   (Id. at p. 345 [“While the isolated act of filing [a] notice of lien was communicative, it was only one act in the overall course of conduct alleged in [the complaint]”].)   To the extent LFMG's complaint alleges a “course of conduct,” the entire course of conduct directly involved negotiating and procuring a settlement and therefore fell within the privilege.   Indeed, LFMG's own brief describes Lallas' wrongful conduct as “[taking] over the settlement negotiations on Jeff's behalf,” “excluding [appellants] ․ from settlement negotiations,” “actively taking over the representation of Mercedes” and “unauthorized settlement of the underlying action.”   Even if we consider the complaint's additional allegation that Lallas “solicited ․ [the Hamiltons] as its attorneys ․ even though [Lallas] knew that the contract ․ prohibited [the Hamiltons] from selecting counsel,” that also constitutes a form of privileged activity.  (See Rusheen, supra, 37 Cal.4th at p. 1058 [“solicitations of potential clients” have been “deemed communicative and thus protected by the litigation privilege”].)   Thus, whether considered individually or as a “course of conduct,” all of Lallas' allegedly wrongful acts were protected by the privilege.

FN17. In its appellate briefs, LFMG presented an even more truncated argument regarding the probability of prevailing at trial, stating only that “because respondents' actions were not covered by the ‘litigation privilege,’ appellants in any event established the probability of success on the merits, additionally requiring reversal of the orders.”   This argument overlooks the fact that the trial court only applied the litigation privilege to Lallas' Motion to Strike (which we upheld).   In regards to the Hamiltons' Motion to Strike, the court concluded that LFMG had simply failed to introduce competent evidence to demonstrate a probability of success on the merits..  FN17. In its appellate briefs, LFMG presented an even more truncated argument regarding the probability of prevailing at trial, stating only that “because respondents' actions were not covered by the ‘litigation privilege,’ appellants in any event established the probability of success on the merits, additionally requiring reversal of the orders.”   This argument overlooks the fact that the trial court only applied the litigation privilege to Lallas' Motion to Strike (which we upheld).   In regards to the Hamiltons' Motion to Strike, the court concluded that LFMG had simply failed to introduce competent evidence to demonstrate a probability of success on the merits.

FN18. The declaration filed in support of LFMG's opposition to Lallas' motion includes little information that is relevant to LFMG's probability of prevailing at trial.   The declaration details various acts that Lallas allegedly took in aiding LFMG in litigating the Action Performance matter.   We assume LFMG intended to cite a declaration it filed in support of a prior Temporary Restraining Order, which includes discussion of the events leading to this lawsuit and includes a copy of the Deal Memorandum.   The declaration in support of the TRO is referenced in the first paragraph of LFMG's opposition to the Hamilton's motion to strike..  FN18. The declaration filed in support of LFMG's opposition to Lallas' motion includes little information that is relevant to LFMG's probability of prevailing at trial.   The declaration details various acts that Lallas allegedly took in aiding LFMG in litigating the Action Performance matter.   We assume LFMG intended to cite a declaration it filed in support of a prior Temporary Restraining Order, which includes discussion of the events leading to this lawsuit and includes a copy of the Deal Memorandum.   The declaration in support of the TRO is referenced in the first paragraph of LFMG's opposition to the Hamilton's motion to strike.

FN19. The Hamiltons' argue at length that:  (1) the Deal Memorandum was no more than an agreement to agree and, therefore, not an enforceable contract, and (2) assuming the Deal Memorandum was a binding contract, they did not breach it because the agreement was only in effect through the entry of final judgment at trial.   Because we believe that there are other reasons for affirming the trial court's grant of the Hamiltons' Motion to Strike, we need not reach these arguments..  FN19. The Hamiltons' argue at length that:  (1) the Deal Memorandum was no more than an agreement to agree and, therefore, not an enforceable contract, and (2) assuming the Deal Memorandum was a binding contract, they did not breach it because the agreement was only in effect through the entry of final judgment at trial.   Because we believe that there are other reasons for affirming the trial court's grant of the Hamiltons' Motion to Strike, we need not reach these arguments.

FN20. LFMG's complaint also states that:Plaintiffs are informed and believe and on that basis allege that the settlement agreement with [Action Performance] resulted in [the Hamiltons] reacquiring trademark rights.   Pursuant to ․ the Deal Memorandum, revenues attributed to the trademark over the next seven (7) years were to be included in the gross recovery for the purpose of recoupment of litigation costs, hourly attorneys fees and the distribution of net proceeds;  therefore Plaintiffs are entitled to a portion of the revenues in accordance with ․ the Deal Memorandum.  [The Hamilton's] failure to disclose the reacquiring of the trademark right and any revenues generated therefrom is a violation of the Deal Memorandum.In the proceedings below, LFMG never argued that it was entitled to recover these trademark-related damages.   Moreover, LFMG did not introduce any admissible evidence that the Hamiltons actually re-acquired the trademarks in the settlement or that they had obtained revenue as a result of the trademark.   Accordingly, LMFG has not demonstrated a probability of proving this form of damages at trial..  FN20. LFMG's complaint also states that:Plaintiffs are informed and believe and on that basis allege that the settlement agreement with [Action Performance] resulted in [the Hamiltons] reacquiring trademark rights.   Pursuant to ․ the Deal Memorandum, revenues attributed to the trademark over the next seven (7) years were to be included in the gross recovery for the purpose of recoupment of litigation costs, hourly attorneys fees and the distribution of net proceeds;  therefore Plaintiffs are entitled to a portion of the revenues in accordance with ․ the Deal Memorandum.  [The Hamilton's] failure to disclose the reacquiring of the trademark right and any revenues generated therefrom is a violation of the Deal Memorandum.In the proceedings below, LFMG never argued that it was entitled to recover these trademark-related damages.   Moreover, LFMG did not introduce any admissible evidence that the Hamiltons actually re-acquired the trademarks in the settlement or that they had obtained revenue as a result of the trademark.   Accordingly, LMFG has not demonstrated a probability of proving this form of damages at trial.

PERLUSS, P. J. WOODS, J.