Court Opinion

ID: 9945597
Source: CourtListenerOpinion
Date Created: 2024-02-27 22:05:45.391857+00
Date Added: 2024-06-11T14:25:34.055498
License: Public Domain

Filed 2/27/24 Simmons v. Leissner CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

RUSSELL SIMMONS,                                                     B322160

         Plaintiff and Respondent,                                   (Los Angeles County
                                                                     Super. Ct. No. 21STCV18852)
         v.

TIM LEISSNER et al.,

         Defendants and Appellants.

     APPEAL from orders of the Superior Court of Los Angeles
County, Teresa A. Beaudet, Judge. Affirmed.
     Law Offices of Kirk Edward Schenck and Kirk Edward
Schenck for Defendant and Appellant Tim Leissner.
      King & Spalding, David K. Willingham, Michael D. Roth,
Kelly Perigoe and Blythe G. Kochsiek for Defendant and
Appellant Kimora Lee Simmons-Leissner.
     Pryor Cashman, Michael J. Niborski and Benjamin S.
Akley for Plaintiff and Respondent.
                                    _________________________
                       INTRODUCTION
        Appellants Tim Leissner (Leissner) and Kimora Lee
Simmons-Leissner (Lee) ask us to reverse the orders denying
their respective special motions to strike the fraud claims in
respondent Russell Simmons’s (Simmons) complaint as a
strategic lawsuit against public participation under the anti-
SLAPP statute, Code of Civil Procedure section 425.16.
        Leissner and Lee argue Simmons’s fraud claims are “mixed
causes of action” that include allegations of protected activity—
i.e., two letters they wrote in connection with an ongoing federal
case against Leissner—as well as nonprotected activity.
        We disagree and find that the complaint alleges the two
letters are merely incidental to and constitute evidence of the
fraud claims. They are not the bases of the causes of action
themselves.
        We affirm the trial court’s denial of both anti-SLAPP
motions.

      FACTUAL AND PROCEDURAL BACKGROUND
I.    Relevant Background Information
      Simmons is a famous music record producer and founder of
Def Jam Records. Simmons and Lee were married from 1998 to
2009; they appeared in television shows together. Simmons
“enjoyed a special confidential relationship of trust and
confidence” with Lee, who is “his ex-wife, mother of his children,
business associate and advisor.”
      In 2011, Simmons formed Nu Horizons Investment Group,
LLC (Nu Horizons) and was its sole member and manager. Nu
Horizons is a limited liability company that provides its members
with the opportunity to realize long-term appreciation from

                                2
investments in securities selected by the managers and approved
by the investment board.
       In 2014, Lee married Leissner, a “superstar investment
banker” and managing director at Goldman Sachs Group, Inc.
(Goldman Sachs). Simmons “enjoyed a special confidential
relationship of trust and confidence” with Leissner, who is “his
fiduciary, step-father to his children and . . . trusted business
associate and advisor.”
       In 2016, Simmons and Leissner executed an operating
agreement for Nu Horizons, by which Leissner also became a
manager of Nu Horizons; Leissner’s alter-ego vehicle—Cuscaden
Capital Limited (Cuscaden)—became a 51 percent member of Nu
Horizons; Simmons maintained a 49 percent interest of Nu
Horizons; and Lee became an advisor to and member of Nu
Horizons’s investment board. As part of Nu Horizons’s first
investment, Simmons identified publicly-traded company Celsius
Holdings, Inc. (Celsius); Nu Horizons made considerable
investments of tens of millions of dollars.
       According to the operating agreement, each member’s
ownership interest in Nu Horizons was set by the amount of their
capital contributions. In the event of a distribution by Nu
Horizons, each member was entitled to reimbursement of their
initial capital contribution as well as a pro rata share of the
remainder based on their ownership percentage. Also, section 8.1
of the operating agreement provides, “All acts, decisions and
consents of the Managers shall require unanimous approval of
the Managers.”
       In 2017, federal criminal charges were filed against
Leissner arising out of his role in the Malaysian Development
Bank (1MDB) fraud while he was managing director at Goldman

                                3
Sachs.1 The court documents alleged that more than $200
million were disbursed to Leissner and another alleged co-
conspirator as part of their involvement in the 1MDB scheme.
       On June 10, 2018, Leissner was arrested in the 1MDB
federal case. On November 1, 2018, he entered a guilty plea to
criminal conspiracy to violate the federal Foreign Corrupt
Practices Act and conspiracy to commit money laundering. As
part of his plea agreement, he agreed to repay $44 million.
       In July 2019, Simmons’s accountants were conducting a
review of tax documents related to Celsius and discovered “a
substantial unexplained change” in Simmons’s interests in Nu
Horizons and Celsius. While Celsius paperwork dated December
31, 2017 showed Simmons as the beneficial owner of 3,972,659
Celsius shares, paperwork dated December 31, 2018 identified
Lee as the purported owner of those 3,972,659 Celsius shares
with full voting and investment power over them.
       Simmons discovered that Lee and Leissner, “knowing full
well that [Leissner] would need tens of millions of dollars to avoid
jail time, stay out on bail and forfeit monies for victim
compensation” in the 1MDB federal case, had conspired and/or
aided and abetted a fraudulent transaction, whereby they
unlawfully transferred the Celsius shares owned by Nu Horizons
and Simmons to themselves, without consideration to or consent
by Simmons. Leissner and Lee “entered into an unlawful
agreement [on May 21, 2018], reported on a SEC Schedule 13G
for Celsius, [which reflected] a series of transactions unknown to,

1    U.S. v. Leissner (E.D.N.Y., June 7, 2018, No. 1:18-cr-
00439.)

                                 4
and not consented by Simmons, either in his individual capacity
or as Manager of [Nu Horizons].”2
      Since July 2019, Simmons has unsuccessfully reached out
to Leissner and Lee “in an effort to avoid this very litigation by
amicable non-litigious means.”
II.   Civil Complaint
      On May 18, 2021, Simmons, individually and on behalf of
Nu Horizons, filed a complaint against Leissner, Lee, and others,
asserting 22 causes of action, of which only five are at issue on
appeal.
      The fifth and seventh causes of action for fraudulent
concealment against Lee and Leissner alleged that Nu Horizons
and Simmons were harmed by Lee’s and Leissner’s May 21, 2018
“wrongful concealment of and failure to disclose material facts
and information” that 3,972,659 Celsius shares were wrongfully
transferred from Nu Horizons to Lee/Leissner “without
Simmons’s knowledge or approval and without consideration.”
Lee and Leissner also “wrongfully concealed and failed to disclose
to Simmons that ownership of [Nu Horizons] itself—including
Simmons’s ownership interest—was improperly and secretly
transferred.” Because Leissner is a manager and member of Nu
Horizons via his alter-ego vehicle Cuscaden, and because Lee is
Leissner’s wife, Simmons’s ex-wife and mother of his children,

2      We grant appellants’ joint request for judicial notice filed
April 25, 2023 as it relates to exhibit no. 5 (Celsius’s Schedule
13G filed with the SEC on May 21, 2018). (Evid. Code, §§ 452,
subd. (h) & 459, subd. (a).) The request is denied as to the other
exhibits. We also deny appellants’ joint request for judicial notice
filed August 4, 2023.

                                 5
and a member of Nu Horizons’s investment board, Leissner and
Lee had a fiduciary “duty to disclose” this transaction “in their
capacity as business partners with and close personal confidants”
of Nu Horizons and Simmons. Leissner and Lee “intentionally
failed to disclose” and “intentionally prevented” discovery of the
transfer of the Celsius shares because they were “aware that [Nu
Horizons] and Simmons would not consent and would prevent the
transfer of the shares if they had knowledge of the wrongful
intent to do so.”
       The sixth and eighth causes of action for aiding and
abetting fraudulent concealment against Lee alleged in the
alternative that if Lee is not “held directly liable” to Nu Horizons
and Simmons for fraudulent concealment and failure to disclose
the wrongful transfer of Celsius shares, she is “liable for aiding
and abetting that wrongful concealment and failure to disclose.”
Lee knew that Leissner “intended to and did wrongfully and
secretly transfer . . . the Celsius shares . . . and gave substantial
assistance and encouragement to Leissner in his wrongful
concealment of the same, including by secreting accepting
possession, custody, dominion, control and/or ownership of those
Celsius shares and/or [Nu Horizons’s and Simmons’s] interests.”
       The 20th cause of action for breach of confidential
relations/constructive fraud against Lee by Simmons individually
alleged Simmons “justifiably and reasonably placed his trust and
confidence in Lee’s integrity and fidelity, creating a confidential
relationship between the two.” Lee breached her confidential
relationship with Simmons when she transferred and exercised
control of the Celsius shares and/or interests in Nu Horizons to
herself and her husband Leissner without consideration and
without Simmons’s knowledge or consent (in violation of the

                                 6
operating agreement). Lee’s breach constituted “a constructive
fraud in that it gained an advantage to Lee by misleading
Simmons to [his] prejudice.”
III.   The Letters
       As to the activity purportedly protected by the anti-SLAPP
statute, the complaint alleged the following:
       On May 21, 2018, Lee and Leissner engaged, conspired
and/or aided and abetted in a fraudulent transaction by which
they purported to cause the unlawful transfer of Nu Horizons’s
and Simmons’s interests in Celsius shares to themselves without
consideration or consent.
       “Knowing full well that criminal acts require the burden of
proving mens rea, [Leissner and Lee] decided to create a new spin
for the conspiracy and fraud they had effectuated. Therefore, by a
document purported to be dated June 26, 2018 and written on
[Nu Horizons’] letterhead, [Lee and Leissner] conspired with each
other and wrote, and together signed, a letter stating as
follows:
       “ ‘TO WHOM IT MAY CONCERN:
       “ ‘The undersigned, [Leissner], as Manager of [Nu
Horizons], and [Lee], in her personal capacity, confirm that
3,972,659 million shares in [Celsius] have been temporarily
loaned to [Lee] for purposes of the bond in connection with Federal
Case 1:18-cr-00439 and will be returned when such collateral is
no longer required.’ ” (Second and third italics added.) We refer
to this document as the June 26, 2018 letter.
       By yet another document, purportedly dated February 5,
2020, Lee and Leissner “continued with their cover-up, by
continuing to try and convert this unlawful fraud, conversion and

                                7
breach of fiduciary duty into some innocent ‘loan,’ and thus wrote
and signed another letter as follows:
       “ ‘TO WHOM IT MAY CONCERN:
       “ ‘[Leissner], as Manager of [Nu Horizons], confirm[s] that
[Simmons] is the beneficial owner of 49% of the 3.9 million shares
that Nu Horizons acquired in 2015 net of any capital
contributions made by other Members of Nu Horizons, in
accordance with the Operating Agreement dated January 1,
2016. I further confirm that these shares have been temporarily
loaned to [Lee] for the purposes of the bond in connection with
Federal Case 1:18-cr-00439 and will be returned when such
collateral is no longer required.’ ” We refer to this letter as the
February 5, 2020 letter.
       According to the complaint, these two letters “do not reflect
any legitimate loans but rather are further evidence of [Lee and
Leissner’s] fraudulent scheme . . . by which they converted and
misappropriated assets from both Simmons and [Nu Horizons].”
(Italics added.)
IV.   Special Motions to Strike the Complaint
      Lee and Leissner filed parallel special motions to strike
Simmons’s complaint as a strategic lawsuit against public
participation under the anti-SLAPP statute, Code of Civil
Procedure section 425.16.3 Both special motions to strike
principally attack the complaint’s allegations about the letters
under the same legal theories.

3    Undesignated statutory references are to the Code of Civil
Procedure.

                                 8
      On November 24, 2021, Simmons filed his opposition to
Lee’s special motion to strike. On May 13, 2022, he filed his
opposition to Leissner’s special motion to strike.
V.    Trial Court’s Ruling
         The hearings on the two special motions to strike took place
on January 10, 2022, February 24, 2022, and May 26, 2022.
         Of note, Simmons argued during the hearings: “[T]he
distinction that [Lee’s] counsel is attempting to draw between
concealment and nondisclosure, I would submit is illusionary
. . . . [¶] The act that underlies the claims that are at issue on this
motion was the failure to disclose. Perhaps we have used
concealment and nondisclosure synonymously in the complaint,
but it’s very clear that that is the act that underlies the claims
that are at issue on this motion. And the letters, which are not
referenced in the claims themselves are . . . evidence of the facts
of that [non]disclosure, but they’re not the act itself, which is the
failure to disclosure where there was a duty to do so.” [¶] . . .
“[T]he letters do not form the substance or basis of the claims at
issue. They are not referenced in the claims at issue. [¶] And
throughout counsel’s papers . . . , the attempt to draw some
distinction between concealment and nondisclosure and somehow
loop the letters in as an essential element, or even any element to
the claims themselves, I would say is . . . baseless and doesn't
really go anywhere.” “[T]he description of the letters is that these
are a cover up of a fraud that already occurred. [¶] I’ll also note
that the idea here seems a little absurd to me, that somebody
could commit a fraud and then engage in some form of speech
about the fraud, and turn that claim for fraud into a SLAPP-able
claim merely by having spoken about it after the fact. [¶] What
we’ve showed on here is a fraud that already existed at the time

                                  9
these letters occurred, which is why . . . the letter[s] [are] not
referenced in or necessary to the claims themselves. [¶] They are
evidence, and we did plead them as evidence, of the effort to cover
up the fraud that had already occurred.” “[W]e have made it very
clear in our papers that the act sued upon is the transfer of the
shares that was not disclosed.” “So to the extent that counsel is
worried that somehow [we will sue on the letters] at some later
point, they can claim that we are judicially estopped from taking
that position.”
       After lengthy argument and supplemental briefing, the
trial court denied both special motions to strike on May 26, 2022.
       Lee and Leissner timely appealed.

                         DISCUSSION
I.    Standard of Review
       We review a trial court’s ruling on a special motion to
strike pursuant to section 425.16 under the de novo standard. (Li
v. Jenkins (2023) 95 Cal.App.5th 493, 499; Monster Energy Co. v.
Schechter (2019) 7 Cal.5th 781, 788; Park v. Board of Trustees of
California State University (2017) 2 Cal.5th 1057, 1067 (Park).)
“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.)
       In making our determination, we consider “the pleadings,
and supporting and opposing affidavits stating the facts upon
which the liability or defense is based.” (§ 425.16, subd. (b)(2).)
In considering the pleadings and declarations, we do not make
credibility determinations or compare the weight of the evidence;
instead, we accept the opposing party’s evidence as true and

                                10
evaluate the moving party’s evidence only to determine if it has
defeated the opposing party’s evidence as a matter of law.
(Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260,
269, fn. 3.)
II.   The Anti-SLAPP Statute
       Section 425.16 provides: “A cause of action against a person
arising from any act of that person in furtherance of the person’s
right of petition or free speech . . . in connection with a public
issue shall be subject to a special motion to strike, unless the
court determines that the plaintiff has established that there is a
probability that the plaintiff will prevail on the claim.” (§ 425.16,
subd. (b)(1).) An “ ‘act in furtherance of a person’s right of
petition or free speech . . . in connection with a public issue’ ” is
defined in section 425.16 to include: (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,” or; 4) “any other
conduct in furtherance of the exercise of the constitutional right
of petition or . . . free speech in connection with a public issue or
an issue of public interest.” (Id., subd. (e).)
       The Legislature enacted section 425.16 to prevent and
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).) The purpose of the
anti-SLAPP law is “not [to] insulate defendants from any liability

                                 11
for claims arising from the protected rights of petition or speech.
It only provides a procedure for weeding out, at an early stage,
meritless claims arising from protected activity.” (Baral v.
Schnitt (2016) 1 Cal.5th 376, 384 (Baral).) To accomplish this
purpose, the Legislature expressly specifies the statute “be
construed broadly.” (§ 425.16, subd. (a).)
       When a party moves to strike a cause of action under the
anti-SLAPP law, a trial court evaluates the special motion to
strike using a two-prong test: (1) has the moving party “made a
threshold showing that the challenged cause of action arises from
protected activity” (Rusheen v. Cohen (2006) 37 Cal.4th 1048,
1056); and if it has, (2) has the non-moving party demonstrated
that the challenged cause of action has “minimal merit” by
making “a prima facie factual showing sufficient to sustain” a
judgment in its favor. (Baral, supra, 1 Cal.5th at pp. 384–385;
Navellier v. Sletten (2002) 29 Cal.4th 82, 93–94; see also § 425.16,
subd. (b)(1)). After the first prong is satisfied by the moving
party, “the burden [then] shifts to the [non-moving party] to
demonstrate that each challenged claim based on protected
activity is legally sufficient and factually substantiated.” (Baral,
at p. 396.)
III.   Prong 1: The Claims Do Not Arise from Protected
       Activity
      The sole inquiry under the first prong of the anti-SLAPP
statute is whether the plaintiff’s claims arise from protected
speech or petitioning activity. (Castleman v. Sagaser (2013)
216 Cal.App.4th 481, 490 (Castleman).)
      Lee and Leissner contend Simmons’s fraud claims are
“mixed causes of action containing claims for fraudulent
nondisclosure and claims for fraudulent concealment, and that

                                12
the fraudulent concealment arises out of allegations that
[appellants] wrote two letters concerning the bond issue under
consideration in the 1MDB Matter to ‘cover their tracks.’ ” They
argue Simmons’s claims “alleg[ed] that [appellants] prevented
him from discovering the stock transfer by using the two letters
to falsely characterize the transfer as a legitimate loan.” They
argue Simmons’s claims based upon those letters is protected
conduct, triggering the application of the anti-SLAPP statute.
They contend the discussion and holdings in Baral, Bonni v. St.
Joseph Health System (2021) 11 Cal.5th 995 (Bonni), and Musero
v. Creative Artists Agency, LLC (2021) 72 Cal.App.5th 802
(Musero) require us to “strike the concealment fraud claims to the
extent they relate in any way to [the] speech conduct in creating
the [two] letters.”
       We conduct our review de novo.
       “At this first step, courts are to ‘consider the elements of
the challenged claim and what actions by the [appellants] supply
those elements and consequently form the basis for liability.’ ”
(Bonni, supra, 11 Cal.5th at p. 1009.) Appellants’ burden is to
identify “what acts each challenged claim rests on and to show
how those acts are protected under a statutorily defined category
of protected activity.” (Ibid.) “A claim arises from protected
activity when that activity underlies or forms the basis for the
claim.” (Park, supra, 2 Cal.5th at p. 1062.) Phrased another
way, the relevant question for anti-SLAPP purposes is whether
the core injury-producing conduct upon which the claim is
premised arises out of protected activity. (Starr v. Ashbrook
(2023) 87 Cal.App.5th 999, 1020; Area 51 Productions, Inc. v. City
of Alameda (2018) 20 Cal.App.5th 581, 594 (Area 51).) We review
the parties’ pleadings, declarations, and other supporting

                                13
documents at this stage of the analysis “only ‘to determine what
conduct is actually being challenged, not to determine whether
the conduct is actionable.’ ” (Castleman, supra, 216 Cal.App.4th
at p. 491.)
        “As with all fraud claims, the necessary elements of a
concealment/suppression claim consist of ‘ “(1) misrepresentation
(false representation, concealment, or nondisclosure);
(2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to
induce reliance); (4) justifiable reliance; and (5) resulting
damage.” ’ ” (Hoffman v. 162 North Wolfe LLC (2014)
228 Cal.App.4th 1178, 1185–1186.)
        It is evident on the face of the complaint that Simmons’s
fraud claims are not mixed4, meaning they do not arise from two
separate incidents of nondisclosure and concealment. Moreover,
the three cases relied upon by appellants (Baral, Bonni, and
Musero) do not support their argument and interpretation of the
causes of action under review.
        The complaint provides the fraud claims arise from the
“fraudulent transaction by which [appellants] purported to cause
. . . the unlawful transfer of . . . [Nu Horizons’s] and/or Simmons’s
interests in Celsius shares to [themselves] without consideration
[to] or the consent [by Simmons]” to satisfy Leissner’s bail and
victim compensation obligations in connection with the 1MDB
federal case. The complaint specifies that appellants “entered

4      An anti-SLAPP motion can be brought in response to a
“mixed cause of action”—that is, a cause of action that rests on
allegations of multiple acts, some of which constitute protected
activity and some of which do not. (Bonni, supra, 11 Cal.5th at
p. 1010; see also Baral, supra, 1 Cal.5th at p. 393.)

                                 14
into an unlawful agreement [on May 21, 2018], reported on a
SEC Schedule 13G for Celsius, [which reflected] a series of
transactions unknown to, and not consented by Simmons, either
in his individual capacity or as Manager of [Nu Horizons].” The
complaint also specifies that the transactions were fraudulent
and unlawful because appellants “had no right, without first
obtaining the approval of [Simmons] (and which approval was
neither sought nor obtained) to make any transfer, loan, sale,
hypothecation, encumbrance, or assignment, of any assets of [Nu
Horizons]” pursuant to the operating agreement. It is appellants’
failure to disclose to or notify Simmons of their
transaction/transfer of Celsius shares that is the issue, not the
two letters written after-the-fact.
       The June 26, 2018 and February 5, 2020 letters written by
appellants do not form the bases of Simmons’s fraud claims;
rather they are evidence in support of his fraud claims. While
Simmons’s complaint quotes and describes the two letters written
by appellants after their fraudulent transfer of shares, the
complaint expressly describes the two letters as “further evidence
of [appellants’] fraudulent scheme” and that the letters added “a
new spin” on the fraud that was already committed. Courts have
noted that “[t]here is a ‘distinction between activities that form
the basis for a claim and those that merely lead to the liability-
creating activity or provide evidentiary support for the claim.’ ”
(Crossroads Investors, L.P. v. Federal National Mortgage Assn.
(2017) 13 Cal.App.5th 757, 776.) “A ‘claim may be struck only if
the speech or petitioning activity itself is the wrong complained of,
and not just evidence of liability or a step leading to some
different act for which liability is asserted.’ ” (Wilson v. Cable
News Network, Inc. (2019) 7 Cal.5th 871, 884, italics added;

                                 15
Musero, supra, 72 Cal.App.5th at p. 815; Park, supra, 2 Cal.5th at
p. 1060; Bonni, supra, 11 Cal.5th at p. 1014.) Furthermore, the
allegations in the complaint differentiate the letters from the
fraudulent transfer/act itself—“[appellants] decided to create a
new spin for the conspiracy and fraud they had committed” via
the June 26, 2018 letter and “continu[ed] to try and convert this
unlawful fraud, conversion and breach of fiduciary duty into
some innocent ‘loan’ ” via the February 5, 2020 letter. (Italics
added.)
       The two letters are not specified in the five causes of action
themselves, but rather, are included in the “Facts Common to All
Claims” section, the entirety of which is incorporated by reference
into the enumerated causes of action. The five causes of action
each specify and refer to the underlying wrong complained of, i.e.,
appellants’ fraudulent transfer of Celsius shares and failure to
disclose the transfer. Conversely, the causes of action do not
specify or identify appellants’ letters as the underlying bases of
the fraud claims.
       Lee and Leissner argue that even though the two letters
are not specified in the five causes of action themselves, because
they are incorporated by reference, we are to interpret the causes
of action as including that allegation and read the term
“concealment” as impliedly referring to the two letters. Relying
on Baral, appellants argue we must disregard the unprotected
activity, i.e., the nondisclosure of the fraudulent transfer, and
move forward to the second prong of the anti-SLAPP analysis due
to the “concealment” of the fraudulent transfer via the two
letters. (See Baral, supra, 1 Cal.5th at p. 396 [“At the first step,
the moving defendant bears the burden of identifying all
allegations of protected activity, and the claims for relief

                                 16
supported by them. When relief is sought based on allegations of
both protected and unprotected activity, the unprotected activity
is disregarded at this stage. If the court determines that relief is
sought based on allegations arising from activity protected by the
statute, the second step is reached.”].)
       Appellants’ argument is a stretch. Relief is not sought
because of any “concealment” accomplished by the two letters. In
fact, the letters are not “concealing” the fraudulent transfer of the
Celsius shares from Simmons in any way; they actually disclose
that the transfer of shares took place. More specifically, the
letters provide information about Leissner’s and Lee’s states of
mind as to the purpose of the transfer—“for the purposes of the
bond in connection with Federal Case 1:18-cr-00439 and will be
returned when such collateral is no longer required.” The
allegations regarding the protected activity, here—the two
letters—are “merely incidental” to the unprotected causes of
action. (Area 51, supra, 20 Cal.App.5th at pp. 594–601; Baral,
supra, 1 Cal.5th at p. 394; Bonni, supra, 11 Cal.5th at p. 1012.)
The California Supreme Court has confirmed that “[a]ssertions
that are ‘merely incidental’ or ‘collateral’ are not subject to
section 425.16.” (Baral, at p. 394.) Courts should not simply
parse a complaint claim-by-claim under the anti-SLAPP statute;
instead, courts must analyze each element of the claim to see if it
is based on protected activity; those allegations based on
protected activity may be stricken. (Bonni, at pp. 1009–1012;
Musero, supra, 72 Cal.App.5th at p. 819.)
       Nowhere in the complaint does Simmons allege that the
two letters were sent to him or received by him, nor does the
complaint allege that the two letters actually concealed the
fraudulent transfer of Celsius shares from him. In fact, the

                                 17
allegations in the complaint provide that Simmons discovered
appellants’ fraudulent transfer of Celsius shares independently
in July 2019 when his accountants conducted a review of tax
documents related to Celsius dated December 31, 2018. The
complaint also alleges that Simmons was aware of the fraudulent
transfer of shares in July 2019 and reached out to appellants “in
an effort to avoid this very litigation by amicable non-litigious
means” since then, which is seven months before the second
letter dated February 5, 2020 was even written.
       Because the fraud claims are based upon appellants’
fraudulent transfer of the Celsius shares without notifying
Simmons and are not based upon appellants’ alleged protected
activity of writing the two letters, Simmons’s claims do not arise
from protected conduct.
       We conclude appellants have not made the threshold
showing that the fifth, sixth, seventh, eighth, and 20th causes of
action in Simmons’s complaint arise from protected activity
within the meaning of the anti-SLAPP statute. We affirm the
trial court’s orders denying Lee’s and Leissner’s anti-SLAPP
motions without considering whether Simmons would prevail on
the merits of his causes of action. (Du Charme v. International
Brotherhood of Electrical Workers (2003) 110 Cal.App.4th
107, 119.)

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                         DISPOSITION
      The trial court’s order denying appellant Lee’s anti-SLAPP
motion as to the fifth, sixth, seventh, eighth, and 20th causes of
action in the complaint is affirmed. The trial court’s order
denying appellant Leissner’s anti-SLAPP motion as to the fifth
and seventh causes of action in the complaint is affirmed.
      Respondent Simmons shall recover his costs on appeal.
(Cal. Rules of Court, rule 8.278(a)(1).)

      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                          STRATTON, P. J.

We concur:

             WILEY, J.

             VIRAMONTES, J.

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