White v. Alex Brown Management Services

Filed 2/7/08 White v. Alex Brown Management Services CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, Ronald S. Prager, Judge. Affirmed.

Harvey P. White, a limited partner in an investment fund, brought an action against the fund, and various entities associated with the fund, after the fund sustained substantial losses.^[1] In his initial complaint, White alleged contract and tort claims, asserting that defendants made numerous misrepresentations to induce White's participation in the fund, and then defendants substantially mismanaged the fund.

In a second amended complaint, White added allegations claiming damages after defendants entered into a settlement agreement with other fund investors in a Texas lawsuit. White alleged defendants breached their contractual and tort duties by refusing to disclose the terms of the settlement agreement, and by purchasing the Texas investors' holdings in the fund and refusing to offer him a similar opportunity.

Based solely on these new allegations, defendants moved to strike the complaint, arguing the allegations challenge the prior settlement agreement and therefore arise from protected petitioning activity governed by the anti-SLAPP statute. (Code Civ. Proc.,  425.16, subd. (e)(2).) The court denied the motion on the ground that the anti-SLAPP statute was inapplicable. The court thus did not reach the issue whether White proved a probability of prevailing on the merits.

Defendants appeal. We affirm. The allegations regarding the Texas settlement do not arise from protected petitioning activity because the gravamen of these newly asserted claims is based on defendants' conduct in purchasing the Texas investors' limited partnership interests, and not on written or oral statements made by the defendants in negotiating or executing the settlement agreement.

FACTUAL BACKGROUND^[2]

White is one of the original founders and a former president of Qualcomm, Inc. In 1997, White owned highly appreciated Qualcomm stock, and was solicited by Alex Brown Management Services (Management Services) to contribute these securities into an investment fund (DB Alexander Brown Exchange Fund I (the Fund)), in exchange for a limited partnership interest in the Fund. The Fund was established to offer diversification and professional investment management to individuals who have substantial security holdings with relatively large unrealized capital appreciation. The Fund's investment objective was to achieve long-term appreciation in the value of the Fund's assets, while minimizing the recognition of capital gains for the contributed securities.

Relying on Management Services' representations, White entered into the Fund's limited partnership agreement in June 1997 and executed a subscription agreement with Management Services. White contributed more than $1 million worth of Qualcomm stock, and received approximately 9,160 Fund units in exchange. When the Fund closed to new investors, the Fund had 88 limited partners who contributed more than 90 securities valued at approximately $152.5 million.

Several years later, the Fund's net value dropped substantially. Numerous investors brought lawsuits throughout the country, including in Delaware, Maryland and Texas. In 2005, White filed this action against the Fund and several associated entities, including: (1) Management Services (the Fund's general partner); (2) DC Investment Partners (the entity providing day-to-day management and administrative services to the Fund and limited partnership); and (3) Deutsche Bank Securities, Inc. and Deutsche Bank (collectively Deutsche Bank), which allegedly exercised managerial control over the Fund and allegedly was the "actual, de facto, general partner in the Fund through their complete domination and control over [Management Services]."

The first amended complaint alleged numerous contract and tort claims. In the Overview section, the complaint states the "essence" of White's claims is defendants' "fraud and deceit in the nondisclosure and concealment of material information which precluded Plaintiff from evaluating its investment in the Fund at times when Plaintiff could have protected its Capital Account and could have withdrawn its Capital Account from the Fund." The 104-page complaint then describes the specific statements and actions by defendants alleged to be wrongful, and explains in detail the factual basis for each of these assertions of improper conduct.

Defendants demurred to the first amended complaint on various grounds. In responding to the demurrer, White noted that his complaint was "patterned after and most similar to the allegations filed in the Texas Litigation" and that the Texas court had rejected identical statute of limitations and derivative arguments asserted by defendants. After substantial briefing in White's case, the court overruled the demurrer on most causes of action, but found that certain claims did not state a cause of action or did not state a cause of action against certain parties.

In the meantime, in April 2005, the parties settled the Texas lawsuit that had been brought by two limited partners of the Fund (the Texas investors). The settlement agreement required the parties to maintain confidentiality of the agreement. White moved in this action to compel production of the settlement agreement. Although defendants initially opposed the motion on the basis that the settlement agreement was irrelevant to this lawsuit, they later agreed to produce the settlement agreement with certain redactions.

The Texas settlement agreement was entitled "Purchase, Settlement and Release Agreement." The defendants were the same defendants as in this action, except the Fund was not a party in the Texas action. In the settlement agreement, Deutsche Bank Securities, Inc. agreed to purchase from the Texas investors all of their limited partnership units. Management Services, as the Fund's general partner, consented to the sale. In exchange, the Texas plaintiffs agreed to dismiss the Texas action and release each of the defendants from all claims relating to the Fund and their management of the Fund.

Shortly thereafter, White filed a second amended complaint, which was substantially similar to the first amended complaint except that he: (1) eliminated certain claims and certain parties on certain claims based on the court's ruling on the demurrer; and (2) added factual allegations pertaining to the purchase transaction reflected in the Texas settlement agreement. With respect to the new allegations, White alleged that defendants breached their duties by not disclosing the terms of the purchase agreement with the Texas investors, and not offering or permitting White an opportunity to participate in the transaction. White claimed the terms of the Texas transaction were "inherently unfair to Plaintiff in that . . . two of the [Fund's] limited partners . . . have been permitted . . . to withdraw from the Fund and have been paid the value of their Capital Accounts during the time when defendants have barred redemption of [White's] interest in the Fund." The new factual allegations concerning the Texas purchase/settlement agreement consisted of four pages of the 116-page complaint, and were incorporated in each of the existing causes of action.^[3]

Shortly thereafter, defendants brought an anti-SLAPP motion to strike the entire complaint, arguing that the added factual allegations arose from protected petitioning activity (the negotiation and execution of the Texas settlement agreement) and pertained to each cause of action, and therefore White must prove a probability of prevailing on each of his claims.

In opposing the motion, White countered that the anti-SLAPP statute did not apply because his new allegations concerned the purchase transaction between the Texas investors and Deutsche Bank, and did not challenge defendants' negotiation or execution of the settlement agreement. White argued that the claims added in his "Second Amended Complaint are because Defendants breached their fiduciary and other duties owed to Plaintiff when they secretly arranged in April 2005 the confidential purchase by Deutsche Bank Securities of the limited partnership interests of only two of the limited partners . . . to the exclusion of Plaintiff, and at the time when Plaintiff was barred by Defendants from having its interest in the Partnership redeemed." White thus asserted that the basis of the new allegations "is not that Defendants settled the Texas litigation (i.e., protected conduct), but rather, that Defendants arranged and Deutsche Bank Securities purchased only selected partnership interests in a secret transaction to the exclusion of Plaintiff and the other limited partners whom Defendants did not favor (i.e., not protected conduct)." White also maintained that the gravamen of each cause of action arose from the misrepresentations and other improper conduct alleged in the previous complaints, and the new allegations were merely incidental to these allegations.

White alternatively argued that the court should deny the motion because his causes of action were factually and legally supported. In support, White presented his own declaration, an expert's declaration, and numerous documentary exhibits, asserting that this evidence satisfied his minimal burden to show a probability that he would prevail on his claims.

After a hearing, the court found the anti-SLAPP statute did not apply. The court explained its reasoning as follows: "[T]he Court notes that the plaintiffs had viable causes of action before the Second Amended Complaint added allegations regarding the Texas settlement, and that those allegations serve to bolster the previous allegations against defendants. [] Here, the reference to the settlement of the Texas litigation does not mean that any of the causes of action contained in the [second amended complaint] arise from the fact of the settlement. The allegations are based on the conduct of defendants that lead to the settlement agreement, not the act of settling. Thus, reference to the settlement is merely incidental to the allegations the defendants engaged in actionable conduct leading to the settlement. For this reason, the defendants have not shown that the [second amended compliant] arises from their protected activity . . . ." The court thus did not reach the issue whether White showed a probability of prevailing on the merits of his claims.

Defendants appeal.

DISCUSSION

I. Generally Applicable Legal Principles

The anti-SLAPP statute provides a procedural mechanism to obtain early dismissal of certain nonmeritorious claims. (Code Civ. Proc.,  425.16 ( 425.16).) The Legislature enacted the law to deter lawsuits "brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." ( 425.16, subd. (a).)"Because these meritless lawsuits seek to deplete 'the defendant's energy' and drain 'his or her resources' . . . , the Legislature sought ' "to prevent SLAPPs by ending them early and without great cost to the SLAPP target." ' " (Flatley v. Mauro (2006) 39 Cal.4th 299, 312.) To encourage participation in matters of public significance, courts must construe the statute "broadly." ( 425.16, subd. (a); Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1119.)

In ruling on a defendant's anti-SLAPP motion, a court engages in a two-step analysis. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 (Navellier).) First, the court must determine "whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity." (Ibid.) Second, if the court finds this showing has been made, it must then dismiss the cause of action unless the plaintiff meets its burden to demonstrate a probability of prevailing on the claim. (Ibid.)

On appeal, we conduct a de novo review on each of these issues. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3; Sycamore Ridge Apartments LLC v. Naumann (2007) 157 Cal.App.4th 1385, 1396.) We review the trial court's ruling and not its rationale. (City of Santa Monica v. Stewart (2005) 126 Cal.App.4th 43, 80.)

With respect to the first step of the section 425.16 analysis, a cause of action is subject to a defendant's special motion to strike if the claim is one "arising from any act . . . in furtherance" of the defendant's "right of petition or free speech under the United States or California Constitution in connection with a public issue . . . ." ( 425.16, subd. (b)(1), italics added; see Gallimore v. State Farm Fire & Casualty Ins. Co. (2002) 102 Cal.App.4th 1388, 1396.) The statute identifies four categories of activities that are "in furtherance of" a defendant's free speech or petition rights: "(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." ( 425.16, subd. (e), italics added.) In the proceedings below, defendants relied solely on section 425.16, subdivision (e)(2) to assert the statute's applicability.

The " 'arising from' " statutory requirement "means simply that the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech." (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.) "[T]he critical consideration is whether the cause of action is based on the defendant's protected free speech or petitioning activity." (Navellier, supra, 29 Cal.4th at p. 89.) "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 liabilityand whether that activity constitutes protected speech or petitioning." (Id. at p. 92; see Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 676 (Peregrine Funding).) Thus, a court must look to the defendant's activities that are alleged to be wrongful and determine whether these activities are protected conduct within the meaning of the statute.

II. Analysis

In this case, defendants' alleged wrongful activities consisted primarily of defendants' representations concerning the manner in which the Fund would be structured and managed, and defendants' subsequent activities in allegedly mismanaging the Fund. As defendants recognize, these activities do not reflect protected conduct under the anti-SLAPP statute. They are communications between private parties concerning private issues, and/or conduct reflecting the management of a private business.

Defendants argue, however, that White alleged protected conduct when he added the new factual allegations pertaining to defendants' settlement of the Texas lawsuit brought by the Texas investors. Relying on Navellier, supra, 29 Cal.4th 82, defendants contend these allegations challenge the terms of their settlement agreement and therefore concern activities "in furtherance of" defendants' right to petition.

In Navellier, the California Supreme Court held that a cause of action based on a party's written or oral statements made while attempting to settle a litigation is governed by the anti-SLAPP statute. (Navellier, supra, 29 Cal.4th at pp. 89-94.) The court reasoned that statements leading to a settlement are, by definition, "made in connection with an issue under consideration or review by . . . a judicial body" within the meaning of section 425.16, subdivision (e)(2) and therefore trigger the statute's applicability. (Navellier, supra, at p. 90.)

This holding is inapplicable here. In this case, the essence of the allegedly wrongful acts was not a statement made in pursuit of a settlement agreement. Instead, the activity alleged to be wrongful was defendants' conduct in purchasing the limited partnership interests of the Texas investors and becoming limited partners of the Fund. White alleged that the partnership transaction was "inherently unfair" because "two of the limited partners . . . have been permitted by Defendants to withdraw from the Fund and have been paid the value of their Capital accounts during the time when Defendants have barred redemption of [White's] interests in the Fund." These acts of purchasing the shares, and not offering White a similar opportunity, were not "written or oral statements," nor were they statements made "in connection with an issue under consideration or review by a . . . judicial body." ( 425.16, subd. (e)(2).) Defendants' challenged conduct in purchasing the shares occurred after, and was independent of, the issues presented in the Texas judicial action.

The "critical point" is that White's new allegations did not challenge defendants' constitutionally protected right to settle the claims brought against them. (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 78.) Instead, White's allegations of wrongful conduct arose from the purchase itself. Although the purchase was a necessary result of the settlement agreement, the fact "[t]hat a cause of action arguably may have been triggered by protected activity does not entail that it is one arising from such." (Ibid.; City of Riverside v. Stansbury (2007) 155 Cal.App.4th 1582, 1590.) "The 'principal thrust or gravamen' of the claim determines whether section 425.16 applies." (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 103; see City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 78-79.) In this case, the "principal thrust or gravamen" of defendants' wrongful conduct was defendants' act of purchasing the Texas investors' limited partnership shares. This act was not constitutionally protected petitioning activity.^[4]

In this respect, this case is legally and factually distinguishable from those upon which defendants rely. (Navellier, supra, 29 Cal.4th 82; Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400 (Dowling); Navarro v. IHOP Properties, Inc. (2005) 134 Cal.App.4th 834 (Navarro).)

In Navellier, an entity and an individual (collectively Navellier) brought a federal court action against the trustees of an investment fund. (Navellier, supra, 29 Cal.4th at pp. 85-86.) One of the trustees (Sletten) entered into a settlement agreement with Navellier. In the agreement, Sletten agreed to release Navellier from all claims known or unknown against Navellier, except for contribution and/or indemnity claims. (Id. at p. 86, fn. 4.) Sletten later violated this release by filing a counterclaim against Navellier in the federal court action, and then asserting arguments in court that he was not bound by the release. (Id. at p. 86.) Navellier then filed a state court action against Sletten, alleging Sletten: (1) committed fraud in misrepresenting his intention to be bound by the release agreement; and (2) breached the settlement/release agreement by filing counterclaims in the federal action. (Id. at p. 87.)

The California Supreme Court held Navellier's fraud and breach of contract claims were subject to the anti-SLAPP statute. (Navellier, supra, 29 Cal.4th at pp. 89-95.) On the breach of contract claim, the Navellier court found the alleged wrongful conduct was Sletten's filing of the counterclaim, which "indisputably is a 'statement or writing made before a . . . judicial proceeding' ( 425.16, subd. (e)(1))." (Id. at p. 90.) On the fraud claim, the court said that Navellier alleged "Sletten had committed fraud in misrepresenting his intention to be bound by the Release, so as to induce [Navellier] to incur various litigation costs in the federal action that [Navellier] would not have incurred had they known Sletten's true intentions." (Id. at p. 87.) Based on this allegation, the Navellier court found the claim was grounded "in Sletten's alleged misrepresentations and omissions 'in connection with the [R]elease' and on Sletten's 'actions in signing the [R]elease' " (id. at p. 89),which "involved 'statement[s] or writing[s] made in connection with an issue under consideration or review by a . . . judicial body' ( 425.16, subd. (e)(2)), i.e., the federal district court . . . ." (Id. at p. 90.) The Navellier court also found that Sletten's subsequent arguments in federal court "respecting the Release's validity" were governed by the anti-SLAPP statute because they were " 'statement[s] or writing[s] made before a . . . judicial proceeding.' [Citation.]" (Ibid.)

Following Navellier, the Dowling and Navarro courts similarly found claims subject to the anti-SLAPP statute based on allegations that the defendants misrepresented their intentions during settlement negotiations in a prior case. (Dowling, supra, 85 Cal.App.4th 1400; Navarro, supra, 134 Cal.App.4th 834.)

In Dowling, a condominium owner filed a defamation and fraud action against the attorney who represented his tenants in a prior unlawful detainer action. (Dowling, supra, 85 Cal.App.4th at pp.1406-1408.)The condominium owner's claims were based on the attorney's alleged false representations and concealment of material facts while negotiating a stipulated settlement of the pending unlawful detainer action, and the attorney's action in writing a letter to the property manager concerning the unlawful detainer action and "public issue[s] of residential safety and nuisance." (Id. at p. 1418.) Based on these allegations, this court held the action was subject to the anti-SLAPP statute because the action arose from statements the attorney made " 'in connection with an issue under consideration or review by a . . . judicial body' within the meaning of section 425.16, subdivision (e)(2)" and from "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' within the meaning of section 425.16, subd. (e)(4)." (Id. at p. 1420.)

In Navarro, a franchisor (IHOP) sued a franchisee because she had not paid her rent and refused to vacate the premises. (Navarro, supra, 134 Cal.App.4th at p. 837.) The parties then entered into a stipulated judgment, which gave IHOP a right to possess the premises, but IHOP agreed to stay execution if the franchisee met certain requirements, including selling the franchise. (Ibid.) After the franchisee failed to comply with these requirements, IHOP filed for a writ of possession. Thereafter, the franchisee filed a separate lawsuit, alleging that IHOP obtained the stipulated judgment through fraud because it had promised to review and approve qualified buyers for the franchise but it never intended to do so. (Id. at p. 838.) Relying on Navellier and Dowling, the Navarro court held that these allegations were protected statements within the anti-SLAPP statute because the franchisee's claim "concern[ed] allegedly fraudulent statements within the context of negotiating the stipulated judgment." (Id. at p. 842.)

The holdings and reasoning of Navellier, Dowling, and Navarro are sound. In each of these cases, the plaintiff was seeking to hold the defendant liable for statements made in pursuit of a settlement in a prior litigation. In Navellier, the trustee allegedly misrepresented his willingness to adhere to the settlement agreement. (Navellier, supra, 29 Cal.4th at p. 87.) In Dowling, the attorney allegedly misrepresented relevant facts in seeking a settlement on behalf of the attorney's clients. (Dowling, supra, 85 Cal.App.4th at pp. 1418-1420.) In Navarro, the franchisor allegedly misrepresented its willingness to be bound by its agreement to fairly consider the franchisee's proposed buyers before seeking to enforce the stipulated judgment. (Navarro, supra, 134 Cal.App.4th at pp. 841-842.)These alleged false statements formed the central thrust of the subsequent litigationthe Navellier, Dowling, and Navarro plaintiffs each alleged that he or she was induced to enter the settlement based on the defendant's false representationsin negotiating the settlement and that these misrepresentations resulted in damage to the plaintiffs. Based on such allegations, the complaint in the subsequent lawsuit alleged acts plainly protected by the anti-SLAPP statute under section 425.16, subdivision (e)(2), i.e., a "written or oral statement or writing made in connection with an issue under consideration or review by a . . . judicial body."

This case is different. Unlike the Navellier, Dowling, and Navarro plaintiffs, White is not seeking to hold defendants liable for alleged false statements made in negotiating or executing the settlement agreement. White's complaint does not refer to any statement or representation made by defendants in the context of the Texas lawsuit. Instead, the focus of White's allegations is on the alleged purchase transaction whereby one defendant is now a limited partner of the Fund, placing that defendant and the other related defendants in alleged positions of conflict and allegedly causing detriment and unfairness to White as an existing limited partner of the Fund. These allegations describe private transactional conductnot oral or written statements protected under section 425.16, subdivision (e)(2)which falls outside the scope of a party's constitutional right to petition the government. The fact that the purchase transaction was made pursuant to a settlement agreement does not reasonably serve to transform that conduct into constitutionally protected activity.^[5]

Defendants do not cite any authority supporting their broad view of their constitutional petitioning rights. Although the Navellier court stated that the SLAPP defendant's "negotiation and signing" of the release agreement was protected under section 425, subdivision (e)(2) (Navellier, supra, 29 Cal.4th at pp. 90-91, fn. 6), it did not suggest that conduct following the release agreement necessarily continues to be protected activity. In Navellier, the defendant's subsequent alleged wrongful acts were Sletten's statements in federal court that he was not bound by the release agreement. The court found these statements were governed by the anti-SLAPP statute under section 425.16, subdivision (b)(1) because they were "statement[s] or writing[s] made before a . . . judicial proceeding . . . ." (Navellier, supra, at p.90.)In this case, defendants' alleged wrongful activity was the act of purchasing the limited partnership shares of the Texas plaintiffs. This act does not fall within any category of the anti-SLAPP statute, and cannot fairly be considered as a petitioning activity.

Defendants contend that an attempt to separate the purchase agreement from the settlement agreement is improper because the purchase agreement is part of a single unified settlement agreement. The Texas settlement agreement is an integrated document reflecting an exchange of promises between the Texas investors and the Texas defendants. The Texas defendants agreed that Deutsch Bank would purchase the Texas investors' limited partner shares in exchange for the Texas investors' agreement to dismiss all claims against the Texas defendants. However, the essence of White's claims challenging defendants' actions did not allege the settlement agreement itself was improper or challenge defendants' right to settle the Texas litigation. Instead, White challenged the actual purchase transaction resulting from this settlement agreement, arguing that the transaction was unfair to him because it did not provide him with an equivalent opportunity and reflected defendants' self-dealing and "continued manipulation of the Fund to effect transactions which are in Defendants' self-interests."

We also find unhelpful defendants' reliance on judicial decisions holding that statements regarding settlement are protected under the litigation privilege. (Asia Investment Co. v. Borowski (1982) 133 Cal.App.3d 832, 843.) We agree that settlement discussions are usually made to achieve the objects of the litigation and thus are generally privileged. (Civ. Code,  47, subd. (b)(2).) Protecting the rights of parties and their counsel to make representations during settlement discussions "is necessary to promote the litigants securing free access to the courts." (Asia Investment Co., supra, 133 Cal.App.3d at p. 843.) However, in this case, White does not challenge statements made by defendants or their attorneys during settlement negotiations. Instead, his challenge is to the purchase itself of the Texas investors' limited partnership interests. This conduct is not a communication, and is thus not privileged under Civil Code section 47. Defendants do not argue otherwise.

Finally, defendants challenge the court's stated reasoning for denying the anti-SLAPP motion. They argue that the court's finding that the protected conduct was "incidental" to the unprotected conduct was unsupported by the factual record and is inconsistent with established legal principles. We need not reach these arguments because we review de novo a court's ruling on an anti-SLAPP motion. We thus must affirm the order if the court's conclusion was proper even if it was made on incorrect grounds. (See City of Santa Monica v. Stewart, supra, 126 Cal.App.4th at p. 80.)

In any event, we recognize that if a complaint alleges protected and unprotected conduct, "the cause of action will be subject to section 425.16 unless the protected conduct is 'merely incidental' to the unprotected conduct . . . ." (Mann, supra, 120 Cal.App.4th at p. 103; see Peregrine Funding, supra, 133 Cal.App.4th at p. 672.) This means that, where as here, a cause of action is based on several independent factual theories, section 425.16 will apply if one of those theories alleges protected conduct. (See Peregrine Funding, supra, 133 Cal.App.4th at p. 673.) However, these principles do not help defendants in this case because we have concluded that none of the challenged allegations assert protected conduct, and therefore the causes of action are not subject to the anti-SLAPP statute.

In reaching our conclusions, we do not intend to suggest any opinion as to the merit of the allegations challenging the purchase of the Texas investors' partnership interests. We conclude only that those allegations are insufficient to subject the entire complaint, or any cause of action within the complaint, to the anti-SLAPP statutory procedures.

DISPOSITION

Order affirmed. Appellants to bear respondent's costs on appeal.

HALLER, J.

WE CONCUR:

NARES, Acting P. J.

AARON, J.

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^[1] White brought this action as a trustee of his family trust.

^[2] We base our factual summary on the allegations of the amended complaint and the evidence presented in the anti-SLAPP motion proceedings. We view these facts in the light most favorable to White, who opposed the anti-SLAPP motion. Given the early stage of the litigation, these facts may not reflect what will be proved at trial.

^[3] In the new allegations, White first described the Texas litigation and the purchase transaction between defendants and the Texas investors. He then alleged that: "As a result of the partnership transaction with [the Texas investors], Deutche Bank Securities has emerged as a limited partner in the Fund. . . .  []  . . . Plaintiff was not given notice prior to the occurrence of this partnership transaction, was not asked to consent or given an opportunity to vote on this partnership transaction, and was not offered or given the opportunity to participate in the partnership transaction along with [the Texas plaintiffs]." Based on information and belief, White also alleged: (1) "Defendants secretly structured and entered into this partnership transaction on terms which best suited their own self-interests, to the exclusion and detriment of the rights and interests of [White] and the other limited partners in the Fund"; (2) "Defendants structured this partnership transaction to in effect redeem the Fund interests of [the Texas investors] during the time when Defendants barred redemption by [White] and the other limited partners in the Fund, thus favoring themselves . . . to the exclusion and detriment of [White] and the other limited partners"; (3) [t]he terms of the partnership transaction . . . are inherently unfair to [White] in that . . . two of the limited partners . . . in the Fund have been permitted by Defendants to withdraw from the Fund and have been paid the value of their Capital Accounts during the time when Defendants have barred redemption of [White's] interest in the Fund"; and (4) Defendants have refused to resign their positions with the fund, and have continued to dominate and control the Fund for their own self-interests and benefit to the detriment of [White] . . . ."

^[4] Similarly, defendants' failure to initially disclose the terms of the settlement agreement was not "petitioning" activity because this conduct arose after the lawsuit and did not occur "in connection with an issue under consideration by" the Texas court. ( 425.16, subds. (e)(1), (e)(2).) Defendants do not argue otherwise.

^[5] Although the record shows that only one defendant was the purchaser of the shares, the complaint alleged the other defendants were involved in this purchase through their agency and other relationships with Deutsche Bank. We also find unavailing defendants' focus on the fact that the Fund was not a defendant in the prior action and thus could not be held liable for any wrongful conduct in this regard. The issue here is whether the anti-SLAPP statute is triggered, and not the merits of the claims against each defendant.