Court Opinion

ID: 4693005
Source: CourtListenerOpinion
Date Created: 2021-06-04 18:03:58.013674+00
Date Added: 2024-06-11T08:05:19.938665
License: Public Domain

Filed 6/4/21 Richmond v. Mikkelson 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                   NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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                  COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                   DIVISION ONE

                                           STATE OF CALIFORNIA

 CHRISTOPHER RICHMOND et al.,                                        D076375

           Plaintiffs, Cross-defendants and                          (Super. Ct. Nos. 37-2017-
           Appellants,                                               00016311-CU-BC-CTL;
                                                                     37-2018-00004335-CU-
           v.                                                        MC-CTL)

 DAVID MIKKELSON

           Defendant, Cross-complainant
           and Respondent.

         APPEAL from an order and judgment of the Superior Court of San
Diego County, Richard S. Whitney, Judge. Motion to dismiss appeal denied.
Judgment affirmed.

         Hrutkay Law, Matthew J. Hrutkay; Tencer Sherman, Philip C. Tencer
and Jessica L. Mulvaney for Plaintiffs, Cross-defendants and Appellants
Christopher Richmond and Drew Schoentrup.
         Gordon Rees Scully Mansukhani, Richard P. Sybert, Kimberly D.
Howatt, and Holly L.K. Heffner for Defendant, Cross-complainant and
Respondent, David Mikkelson.
                                      I.
                              INTRODUCTION
      This consolidated action is a business dispute over ownership and control
of the company that owns the fact-checking internet website “Snopes.com”
(Snopes). Plaintiffs Christopher Richmond and Drew Schoentrup (appellants)
appeal from a May 29, 2019 judgment in favor of defendant and respondent
David Mikkelson and against appellants on Mikkelson’s declaratory relief cross-
claim alleging that appellants’ purchase of a stock share is void and appellants
have no right to the stock share. Mikkelson moved to dismiss this portion of the
appeal on the ground that the May 29, 2019 judgment is not appealable. As we
shall explain, we conclude that the May 29, 2019 judgment is an appealable
collateral order that resolved all issues between appellants and Mikkelson.
However, we reject the merits of appellants’ challenge to the May 29, 2019
judgment and affirm.
      Appellants also appeal from the trial court’s order granting Mikkelson’s
motion under the statute prohibiting strategic lawsuits against public
participation (anti-SLAPP statute), Code of Civil Procedure1 section 425.16. We
conclude that Mikkelson met his burden of establishing that the challenged
conduct arose out of protected activity and that appellants failed to demonstrate
a probability of prevailing on the merits. Accordingly, we affirm the order
granting the anti-SLAPP motion.

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

                                       2
                                       II.
              FACTUAL AND PROCEDURAL BACKGROUND2
      In 1994, Mikkelson founded the Snopes website. In 2003, Bardav, Inc.
(Bardav) was formed as a California corporation to operate Snopes, at which
time two shares of stock in Bardav were issued: one each to Mikkelson and
his then-spouse, Barbara Mikkelson (Barbara).3 In 2014, Mikkelson and
Barbara commenced marital dissolution proceedings (the dissolution case).
In January 2016, a family law court in Los Angeles entered judgment in the
dissolution case (the dissolution judgment). The dissolution judgment
incorporated the terms of the couple’s marital settlement agreement (MSA).
Section 8 of the MSA addressed the couple’s Bardav stock. The MSA
provided:
         “[I]f either Shareholder seeks to sell all or part of his or her
         share(s), the other shall be given a ten (10) day right of first
         refusal to match the exact terms of that offer.” (Italics
         added.)

         “Either party shall be able to block the sale of all or part of
         the sale of the company’s shares . . . if it can be reasonably
         concluded . . . that the prospective buyer is antithetical to
         the health of [ ] [Snopes.com] [web]site or to its
         purpose. . . .”

         “Neither party shall take any actions to diminish the other
         shareholder’s authority as contained in this settlement
         and/or judgment. . . .”

2      This section provides general background regarding the parties and the
litigation. The facts related to the specific claims at issue in this appeal will
be discussed in each discussion section.

3    During the litigation, Bardav changed its name to Snopes Media
Group, Inc. We refer to the company throughout the opinion as Bardav.

                                        3
      Proper Media, LLC (Proper) is an internet media company that
manages web properties. Bardav retained Proper under a general services
agreement (GSA) to manage Snopes. Appellants are two of the original five
members of Proper. The other members were Tyler Dunn, Vincent Green,
and Ryan Miller.
      In July 2016, Barbara sold her 50 percent interest in Bardav (the
Barbara share) to the five individual Proper principals—appellants, Dunn,
Green, and Miller (collectively the five buyers)—through a stock purchase
agreement (SPA). The SPA specifies that the Barbara share was sold to
these individuals in specific, varying percentages.4 Mikkelson does not
dispute that Barbara lawfully sold the Barbara share to the five buyers.
      The five buyers financed the purchase of Barbara’s 50 percent
ownership interest in Bardav, in part, with a $1.75 million promissory note
between Barbara and Proper (the Note). Each of the five buyers personally
guaranteed the Note (the guarantee). The guarantee contains an automatic
reversion interest in the Barbara share in the circumstance that Proper
defaults on the Note, the default is uncured, Barbara demands that the
guarantors satisfy the Note, and the guarantors fail to do so. Specifically, the
guarantee states:
         “In the event of a default by [Proper] under any of the
         terms or provisions of the Note and expiration of any
         applicable cure period, should [Barbara] make a direct
         demand to the [appellants, Dunn, Green, and Miller] for
         fulfillment of any of [Proper’s] remaining obligations and
         should [appellants, Dunn, Green, and Miller] fail to satisfy
         such obligations within fifteen days of the demand,

4     Mikkelson remains the president of Bardav, a director on its board, and
a 50 percent shareholder of Bardav stock.

                                       4
         ownership of the Shares shall automatically revert to
         [Barbara].” (Italics added.)5

      In March 2017, Bardav terminated the GSA. In May 2017, appellants
and Proper filed suit against Bardav and Mikkelson alleging, among other
things, that Mikkelson caused Bardav to breach the GSA (the lead case, case
no. 37-2017-00016311-CU-BC-CTL). Appellants later amended their
complaint to add causes of action against Green and Miller. Among other
things, appellants alleged that Green and Miller conspired with Mikkelson to
effectuate Mikkelson’s scheme to gain control of Bardav.
      Appellants and Proper sought a preliminary injunction to enjoin
Bardav from terminating the GSA, remove Mikkelson from the Bardav board
of directors (the Board), and inspect Bardav’s records. In response, Bardav
sought injunctive relief to require Proper and appellants to release withheld
advertising revenues, Snopes’s only source of income. The trial court granted
Bardav’s motion, requiring Proper to release the withheld monies and denied
appellants’ motion, finding that Bardav had properly terminated the GSA.
      In May 2017, Bardav searched for an independent director to fill the
seat on the Board vacated by Barbara. Bardav appointed Brad Westbrook,
an individual experienced with social news organizations and media
technology. Thereafter, Mikkelson and Westbrook increased the number of
Bardav directors to three, but left the third position vacant.
      In July 2017, Mikkelson and Snopes launched a crowdfunding
campaign on GoFundMe called “Save Snopes,” seeking public donations to
pay Snopes’s operating expenses, payroll, and legal fees. The GoFundMe
campaign met its initial fundraising goal of $500,000 in a single day. The

5     We refer to this provision in the guarantee as the “reversionary
interest.”

                                       5
GoFundMe campaign has since raised its fundraising goal to $2 million and
receives donations on a daily or near-daily basis.
      In October 2017, the Board adopted a new set of corporate bylaws.
Section 6.3 of the Bylaws mirrors section 317 of the Corporations Code by
authorizing Bardav to advance legal fees incurred by an agent “in defending
any proceeding . . ., or any particular claim(s) within such proceeding (as
determined by the Board)” prior to the final disposition of the proceeding and
conditioned upon receipt of an undertaking. After the new bylaws were
adopted, Mikkelson, Green, and Miller sought an advance of their reasonable
attorney fees and costs in defending against the lead case. The Board
executed a unanimous written consent authorizing these advances, and
Mikkelson, Green, and Miller each submitted the requisite undertakings.
      In October 2017, Mikkelson filed a cross-complaint in the lead case for

declaratory relief and a hearing under Corporations Code section 709.6
Mikkelson sought a declaration that the five buyers had voting rights
independent of each other as the purchasers of Barbara’s 50 percent interest
in Bardav. He also sought the trial court’s determination under Corporations

6      In relevant part, Corporations Code section 709 provides: “(a) Upon the
filing of an action therefor by any shareholder or by any person who claims to
have been denied the right to vote, the superior court of the proper county
shall try and determine the validity of any election or appointment of any
director of any domestic corporation. . . . [¶] (b) Upon the filing of the
complaint, and before any further proceedings are had, the court shall enter
an order fixing a date for the hearing, which shall be within five days unless
for good cause shown a later date is fixed. . . . [¶] (c) The court may
determine the person entitled to the office of director or may order a new
election to be held or appointment to be made, may determine the validity,
effectiveness and construction of voting agreements and voting trusts, the
validity of the issuance of shares and the right of persons to vote and may
direct such other relief as may be just and proper.”

                                       6
Code section 709 regarding the validity of Westbrook’s appointment and
subsequent election to the Board. Mikkelson also alleged that appellants and
Proper had committed fraud and interfered with his prospective economic
relations. The trial court granted Mikkelson’s claim for relief under
Corporations Code section 709 concluding: (1) Westbrook’s election to the
Board was valid; (2) the new bylaws were properly ratified; and (3) each of
the five buyers individually owned fractional interests in the Barbara share.
      In the meantime, appellants entered into a side agreement with
Barbara to purchase Barbara’s security interest in the Note and guarantee
(the assignment contract). Under the assignment contract, appellants
stepped into Barbara’s shoes, holding all of Barbara’s previously held rights
and obligations under the Note and guarantee, including Barbara’s
reversionary interest which gave appellants the ability to demand payment of
the outstanding balance and, in the event of an uncured default, to foreclose
on the Barbara share. Proper then defaulted on the Note, and the cure
period expired. Under the terms of the Note, appellants accelerated the
outstanding balance due and demanded that Green and Miller cure the
default. When Green and Miller did not pay the outstanding balance,
appellants claimed ownership of the entirety of the Barbara share, pursuant
to the reversionary interest contained in the guarantee, which they had
purchased via the assignment contract.
      Appellants notified Bardav of their ownership claim to the entirety of
the Barbara share. Green and Miller objected to appellants’ claim.
Mikkelson also objected, asserting that the assignment contract violated the
dissolution judgment and that appellants’ claim was based on an illegal, and
thus void, contract. In January 2018, Bardav filed a complaint to interplead
the five stock certificates reflecting the fractionalized Barbara share owned

                                       7
by the five buyers (the interpleader case; case no. 37-2018-00004335-CU-MC-
CTL). In May 2018, the parties stipulated to consolidate the interpleader
case with the lead case.
      Mikkelson filed a cross-complaint in the interpleader case asserting a
single cause of action for declaratory relief against appellants. Mikkelson
sought a judicial determination that the assignment contract between
Barbara and appellants was unlawful because it violated the terms of the
dissolution judgment, and was thus void, resulting in appellants’ inability to
claim ownership of the entirety of the Barbara share thereunder. The trial
court subsequently granted summary judgment in favor of Mikkelson on his
cross-complaint in the interpleader action, concluding that the assignment
contract was void.
      In early 2019, appellants and Proper filed their third amended
complaint (TAC) in the lead case against Bardav, Mikkelson, Green, Miller
and Dunn, alleging 18 causes of action. The TAC added claims criticizing
Bardav’s corporate operations during the litigation, including the GoFundMe
campaign and advances to cover legal fees incurred by Mikkelson, Green, and
Miller. These allegations prompted Mikkelson and Bardav to file anti-
SLAPP motions seeking identical relief, which the trial court granted.
      Appellants appeal from the May 29, 2019 judgment in Mikkelson’s
favor on his declaratory relief cross-claim against them. Mikkelson moved to
dismiss this portion of the appeal, arguing that the May 29, 2019 judgment is
not an appealable order. Appellants also appeal from the trial court’s order
granting Mikkelson’s anti-SLAPP motion. Although appellants also appealed

                                       8
from the granting of Bardav’s anti-SLAPP motion, they later dismissed that
appeal.7
                                      III.
                                 DISCUSSION
A. Mikkelson’s Motion to Dismiss the Appeal
      1. The Parties’ Contentions
      Mikkelson moved to dismiss appellants’ appeal from the May 29, 2019
judgment in the interpleader component of this consolidated case on the
ground that this judgment is interlocutory because it did not resolve all
claims in the case or all claims between Mikkelson and appellants, but
instead, adjudicated only his affirmative cross-claim for declaratory relief.
Mikkelson concedes that the summary judgment order and the subsequent
May 29, 2019 judgment effectively vitiates appellants’ pending cause of
action for declaratory relief by adjudicating the validity of the assignment
contract. Nonetheless, he contends that dismissal is appropriate because the
May 29, 2019 judgment is not a final judgment as described in section 904.1.
Specifically, he notes the existence of numerous active claims, including:
appellants’ cross-complaint; the interpleader complaint; the Green/Miller
cross-complaint in the interpleader case; and lead case and its related cross-
complaints.
      Appellants argue that dismissal of the appeal is inappropriate,
asserting that: (1) their cross-claim against Mikkelson in the interpleader

7      Mikkelson requests judicial notice of documents that were before the
trial court, or documents that were judicially noticed by the trial court.
Appellants request judicial notice of Los Angeles County Superior Court
records pertaining to Mikkelson’s divorce that were presented to the trial
court. The unopposed requests for judicial notice are granted. (Evid. Code,
§§ 452, subd. (d) & 459, subd. (a).)

                                       9
case cannot succeed in light of the May 29, 2019 judgment; and (2) this court
can amend the May 29, 2019 judgment to reflect this reality and create a
final judgment. We requested supplemental briefing from the parties
addressing how the trial court’s order consolidating the lead case and the
interpleader case impacts Mikkelson’s dismissal motion. We directed the
parties to the following two cases: Hamilton v. Asbestos Corp. (2000) 22
Cal.4th 1127, 1147 (Hamilton) and Stubblefield Construction Co. v. City of
San Bernardino (1995) 32 Cal.App.4th 687, 701-703 (Stubblefield).
      We received submissions from both parties. Mikkelson argues that
although the trial court was silent as to the precise nature of the
consolidation, the record reflects that the consolidation was for all purposes.
Because unresolved claims remain in both the lead and interpleader cases,
Mikkelson asserts that the May 29, 2019 judgment is not appealable.
Appellants argue that the record supports a conclusion that the consolidation
was for purposes of trial only, and that even if the cases were consolidated for
all purposes, the May 29, 2019 judgment is nonetheless appealable as a final
determination on a collateral matter, under a well-recognized exception to
the “one final judgment” rule.
      As we shall explain, the record supports the conclusion that the trial
court consolidated the cases for all purposes. Nonetheless, we conclude that
the May 29, 2019 judgment is appealable as a collateral order because it
effectively disposed of the entire interpleader portion of this consolidated case
between appellants and Mikkelson.
      2. Analysis
      “The appealability of [a] judgment or order is jurisdictional and an
attempt to appeal from a nonappealable judgment or order will ordinarily be
dismissed.” (Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289,

                                       10
297.) “[A]n appeal cannot be taken from a judgment that fails to complete
the disposition of all the causes of action between the parties even if the
causes of action disposed of by the judgment have been ordered to be tried
separately, or may be characterized as ‘separate and independent’ from those
remaining.” (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725,
743.) “[A] judgment is final, and therefore appealable, ‘ “ ‘when it terminates
the litigation between the parties on the merits of the case and leaves
nothing to be done but to enforce by execution what has been determined.’ ” ’
[Citation.] ‘ “It is not the form of the decree but the substance and effect of
the adjudication which is determinative. As a general test, . . . where no
issue is left for future consideration except the fact of compliance or
noncompliance with the terms of the first decree, that decree is final, but
where anything further in the nature of judicial action on the part of the
court is essential to a final determination of the rights of the parties, the
decree is interlocutory.” ’ ” (Dhillon v. John Muir Health (2017) 2 Cal.5th
1109, 1115.)
      “[S]ection 1048, subdivision (a), authorizes the trial court, when
appropriate, to ‘order a joint hearing or trial’ or to ‘order all the actions
consolidated.’ Under the statute and the case law, there are thus two types of
consolidation: a consolidation for purposes of trial only, where the two
actions remain otherwise separate; and a complete consolidation or
consolidation for all purposes, where the two actions are merged into a single
proceeding under one case number and result in only one verdict or set of
findings and one judgment.” (Hamilton, supra, 22 Cal.4th at p. 1147.) Where
actions are consolidated for trial only, the judgment following the trial of one
of the actions is final and appealable. (Stubblefield, supra, 32 Cal.App.4th at
pp. 701-703.)

                                         11
      On May 25, 2018, the parties stipulated to consolidate the lead case
and the interpleader case, noting that the same parties are involved in both
cases. The stipulation included a proposed order for the judge’s signature
that stated: “1. The Interpleader Case shall be consolidated with this Case
with this Case being the lead case and the consolidated matter to remain
pending before this Court; [¶] 2. The pre-trial and trial [dates] for this Case
and the Interpleader Case shall be continued and set as follows: . . . .” Here,
as in Hamilton, supra, 22 Cal.4th 1127, the stipulation and order are silent
as to the type of consolidation ordered. (Id. at pp. 1147-1149.) Thus,
resolution of this issue requires examination of the record to determine the
type of consolidation ordered. (Ibid.)
      First, review of the stipulation and order lead to different inferences.
The stipulation and accompanying order do not state that the order is limited
to consolidation for trial, a point the Hamilton court considered significant.
(Hamilton, supra, 22 Cal.4th at p. 1148 [“More important, the court’s order
granting the motion was not limited to a consolidation for trial: rather the
court declared that ‘It Is Ordered that Action[s] Nos. 955576 and 975884 are
consolidated as Action No. 955576. (Italics added.)’ ”].) However, that part of
the order stating that “[t]he pre-trial and trial [dates] for this Case and the
Interpleader Case shall be continued” could be understood to suggest
consolidation for trial only. Accordingly, we must examine how the trial
court subsequently treated the action.
      After entry of the consolidation order, the clerk’s minutes designated
the consolidated proceeding by one title and the lead case number, suggesting
the consolidation was for all purposes. (Hamilton, supra, 22 Cal.4th at
p. 1148.) Significantly, the register of actions for the interpleader case ends
on May 25, 2018—the date the trial court entered the consolidation order.

                                         12
Additionally, during the pendency of this appeal, all parties stipulated that
the trial court proceedings in both matters (referred to as the “entire Action”)
should be stayed pending the appeal of the anti-SLAPP rulings. The trial
court granted this stipulation and stayed the entire action with the exception
of a pending demurrer filed by Dunn. The stipulation provided that any
cross-claims surviving the demurrer would then automatically be
encompassed by the stay. This record supports a conclusion that the lead
case and interpleader case were consolidated for all purposes. (Hamilton, at
p. 1147.)
      Appellants argue that even if the lead case and the interpleader case
were consolidated for all purposes, the May 29, 2019 judgment effectively
decided all remaining issues between appellants and Mikkelson in the
interpleader action and constitutes a final judgment on a collateral issue. We
agree.
      “ ‘[O]ne exception to the “one final judgment” rule . . . is the so-called
collateral order doctrine. Where the trial court’s ruling on a collateral issue
“is substantially the same as a final judgment in an independent proceeding”
[citation], in that it leaves the court no further action to take on “a matter
which . . . is severable from the general subject of the litigation” [citation], an
appeal will lie from that collateral order even though other matters in the
case remain to be determined. . . . [¶] In determining whether an order is
collateral, “the test is whether an order is ‘important and essential to the
correct determination of the main issue.’ If the order is ‘a necessary step to
that end,’ it is not collateral.” ’ ” (Smith v. Smith (2012) 208 Cal.App.4th
1074, 1084.)
      “[T]he essence of the collateral order doctrine is that the matter
concluded by the order should be truly ‘distinct and severable from the

                                        13
general subject of the litigation,’ . . . It is only then that a piecemeal
disposition and multiple appeals in a single action will be avoided.” (Muller
v. Fresno Community Hospital & Medical Center (2009) 172 Cal.App.4th 887,
904 (Muller).) As the Muller court explained, “[t]he interest that is served by
the collateral order doctrine is the expeditious completion of appellate review,
when that can be accomplished without implicating the merits of the
underlying controversy.” (Ibid.)
      The issue presented in the interpleader action is entitlement to the
interpleaded Barbara share. Appellants argue, and we agree, that the
interpleader portion of the consolidated action is collateral to the subject
matter of the lead case. Mikkelson also appears to acknowledge that the
interpleader action is collateral to the subject matter of the lead action.
      The May 29, 2019 judgment decided Mikkelson’s cross-complaint
against appellants in the interpleader action; the trial court determined that
the assignment contract between Barbara and appellants is an illegal
contract and void. Based on this conclusion, the trial court held that
appellants had no right to the Barbara share and that Mikkelson was
entitled to his costs from appellants. Mikkelson essentially concedes that the
May 29, 2019 judgment decided appellants’ pending declaratory relief claim
against him regarding ownership of the Barbara share. Additionally, the
May 29, 2019 judgment resolved the interpleader complaint as between
appellants and Mikkelson.
      Thus, the May 29, 2019 judgment effectively disposed of the
interpleader case as between appellants and Mikkelson. (See California
Assn. of Psychology Providers v. Rank (1990) 51 Cal.3d 1, 9 [summary
judgment solely as to one cause of action effectively disposed of remaining six
causes of action and resulted in an appealable judgment], Belio v. Panorama

                                         14
Optics, Inc. (1995) 33 Cal.App.4th 1096, 1101 [appeal from “the trial court’s
order granting summary adjudication as to the first cause of action” was
properly before the court because the order “ ‘effectively disposed of the
case.’ ”].) “ ‘It is well settled that where . . . there is a judgment resolving all
issues between a plaintiff and one defendant, then either party may appeal
from an adverse judgment, even though the action remains pending between
the plaintiff and other defendants.’ ” (Oakland Raiders v. NFL (2001) 93
Cal.App.4th 572, 578.) Accordingly, it is irrelevant that a portion of the
interpleader action remains pending between Green, Miller, and appellants.
      For these reasons, we deny Mikkelson’s motion to dismiss the appeal
from the May 29, 2019 judgment and proceed to the merits of the appeal.
B. The Trial Court Properly Granted Mikkelson’s Summary Judgment
   Motion

      1. General Legal Principles
      We independently review an order granting summary judgment,
viewing the evidence in the light most favorable to the nonmoving party.
(Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) We first
identify the issues framed by the pleadings because it is those issues that the
papers must address. (Clark v. Baxter Healthcare Corp. (2000) 83
Cal.App.4th 1048, 1054.) Second, we determine whether the moving party’s
evidence demonstrates that the opponent cannot establish its claim and
justifies a judgment in the moving party’s favor. (Ibid.) Finally, we
determine whether the opposing party’s evidence demonstrates the existence
of a triable issue of material fact. (Ibid.)
      In determining whether there are triable issues of fact, we consider all
of the evidence set forth by the parties, except that to which objections have
been made and properly sustained. (§ 437c, subd. (c); Guz v. Bechtel

                                         15
National, Inc. (2000) 24 Cal.4th 317, 334.) To create a triable issue of
material fact, a party opposing a summary judgment motion must present
admissible evidence. (§ 437c, subd. (d).) Thus, we consider and construe
liberally only admissible evidence in deciding whether there is a triable issue
of fact. (Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761.) In
performing our review, we are not bound by the trial court’s stated rationale,
but independently determine whether the record supports the trial court’s
conclusion that plaintiff's claims failed as a matter of law. (Prilliman v.
United Air Lines, Inc. (1997) 53 Cal.App.4th 935, 951.)
      2. Additional Background
      As we previously noted—and appellants do not dispute—the dissolution
judgment attached and incorporated the terms of Mikkelson and Barbara’s
MSA. Thus, the MSA is not merely a contract between Mikkelson and
Barbara, but part of the dissolution judgment issued by the family court. The
MSA addressed the couple’s disposition of their Bardav stock and required
that if either party sought to sell “all or part of” his or her share, the other
party shall be given a 10-day right of first refusal. Inherent in receiving a 10-
day right of first refusal is notice of any proposed sale.
      Mikkelson does not dispute that Barbara lawfully sold the Barbara
share to the five buyers. As part of that sale, the guarantee signed by
appellants provided that in the event of an uncured default of the Note and a
demand by Barbara, ownership of the Barbara share would “automatically
revert” to her. Through the assignment contract, appellants purported to
purchase Barbara’s security interest in the Note and guarantee. Appellants
do not dispute that Barbara failed to notify Mikkelson of the assignment
contract prior to executing it and that Mikkelson did not receive a 10-day
right of first refusal, as required by the dissolution judgment.

                                        16
      Mikkelson moved for summary judgment of his cross-complaint in the
interpleader case on the ground that the assignment contract was void
because its object—selling Barbara’s reversion interest in the Barbara
share—violated the terms of the dissolution judgment in four independent
ways. Specifically, Mikkelson claimed that the assignment contract violated
the dissolution judgment because Barbara entered into the assignment
contract (1) without providing notice to him, (2) without giving him the
required right of first refusal or opportunity to match the terms of the offer,
(3) without affording him the required opportunity to object to buyers who
are “antithetical to the health” of Snopes, and that she did so (4) in an
attempt to diminish his authority as provided in the dissolution judgment.
      The trial court found that the question whether the assignment
contract violated the dissolution judgment required that the court interpret
the dissolution judgment in the context of this case. The court granted the
summary judgment motion, concluding that the assignment contract between
appellants and Barbara was an illegal contract and void. The court explained
that under section 8 of the MSA, which was incorporated into the dissolution
judgment, Mikkelson and Barbara intended to prevent each of them from
being able to transfer control of their respective Bardav share without
allowing the other an opportunity to prevent the transfer. The trial court
also found that Mikkelson and Barbara had agreed that: (1) one of them
could block the other from selling all or part of “ ‘the company’s shares, or
substantially all of its assets, if it can be reasonably concluded by the arbiter
that the prospective buyer is antithetical to the health of the site or to its
purpose. . .’ ”; (2) each of them would have the right to prevent a change of
control; and (3) neither of them was permitted to “ ‘take any actions to
diminish the other shareholder’s authority.’ ” The court stated that

                                        17
permitting the assignment of a reversionary interest without notice to the
other party, as Barbara purported to accomplish by entering into the
assignment contract, would allow one party to circumvent the MSA.
      3. Analysis
      “ ‘Whether a contract is illegal or contrary to public policy is a question
of law to be determined from the circumstances of each particular case.’ ”
(Dunkin v. Boskey (2000) 82 Cal.App.4th 171, 183 (Dunkin).) California law
requires that a contract have “[a] lawful object.” (Civ. Code, § 1550, subd.
(3).) “The object of a contract is the thing which it is agreed, on the part of
the party receiving the consideration, to do or not to do.” (Id., § 1595.) A
contract with an unlawful object is void. (Id., § 1598.) Civil Code section
1667 defines “unlawful” as “1. Contrary to an express provision of law; [¶]
2. Contrary to the policy of express law, though not expressly prohibited; or,
[¶] 3. Otherwise contrary to good morals.” “For purposes of illegality, the
‘law’ is a broad term.” (Kashani v. Tsann Kuen China Enterprise Co. (2004)
118 Cal.App.4th 531, 542.)
      Appellants do not dispute that the MSA, which became part of the
dissolution judgment, required that if either Mikkelson or Barbara sought to
sell “all or part of” his or her share, the other shall be given a 10-day right of
first refusal. Nor do appellants challenge the trial court’s conclusion that the
assignment contract constituted an illegal contract, based on the provisions of
the dissolution judgment.8 Instead, appellants contend that the trial court

8      In their opening brief, appellants appear to have conceded that the
assignment contract was illegal by arguing that the trial court erred by
failing “to sever the problematic elements of the [assignment contract] from
the lawful aspects.” Appellants challenge the trial court’s finding of illegality
for the first time in their reply brief. Points raised for the first time in the
reply brief will not be considered, unless the appellant demonstrates good
reason for his failure to present them before. (Reichardt v. Hoffman (1997)

                                        18
erred in granting summary judgment by finding, as a matter of law, that
through the assignment contract, appellants purchased “part of” a Snopes
share.
      Appellants claim that whether their purchase of the Note and
guarantee through the assignment contract conveyed to them an interest in
“part of” a Snopes share presents a disputed factual issue. They claim that a
triable issue of fact exists as to whether the MSA provided Mikkelson with a
right of first refusal over the sale of Barbara’s security interest in the Note
and guarantee, citing inconsistencies in Mikkelson’s prior sworn testimony to
the family court in the dissolution case regarding the proper interpretation of
the MSA. Appellants also contend that Mikkelson’s arguments in the
dissolution case create a triable issue of fact regarding whether the MSA is
enforceable against them. We disagree.
      Where no extrinsic evidence is offered to interpret an agreement, it is
solely a judicial function to interpret a written instrument. (City of Chino v.
Jackson (2002) 97 Cal.App.4th 377, 382-383.) Additionally, the legality of a
contract is a question of law to be determined from the circumstances of each
case. (Dunkin, supra, 82 Cal.App.4th at p. 183.) Because interpretation of
the assignment contract and dissolution judgment presented questions of
law, we reject appellants’ argument that Mikkelson was required to present
evidence regarding whether he and Barbara intended that the MSA be
enforceable against third parties.

52 Cal.App.4th 754, 764.) Appellants have made no effort to explain why
they did not challenge the trial court’s illegality finding in their opening brief.
Accordingly, out of fairness to Mikkelson, this argument must be deemed
forfeited on appeal. (Ibid.)

                                        19
      Review of the contracts refutes appellants’ argument that the
reversionary interest contained in the guarantee was not part of the Barbara
share held by Barbara at the time of the dissolution judgment. The SPA and
accompanying Note and guarantee memorialized Barbara’s sale of the
Barbara share to the five buyers. The guarantee states that “part of the
material consideration for allowing Guarantors to purchase said [Barbara]
shares from seller is the conditions and agreement by each Guarantor to
guarantee all terms and provisions and obligations of Debtor to Seller
pursuant of the Note.” Thus, Barbara retained a reversionary interest in the
Barbara share after the sale of the Barbara share to appellants and the other
buyers. Accordingly, appellants’ subsequent purchase of the Note and
guarantee through the assignment contract necessarily included Barbara’s
reversionary interest. Appellants later took advantage of this reversionary

interest to claim ownership of the entire Barbara share.9
      The trial court concluded that the portion of the MSA requiring that
Barbara provide notice to Mikkelson if she sought to sell “part of” a share
applied to Barbara’s reversionary interest in the Barbara share. As the trial

9      Subdivision (a) of Commercial Code section 8302 provides that “[e]xcept
as otherwise provided in subdivisions (b) and (c), a purchaser of a certificated
or uncertificated security acquires all rights in the security that the
transferor had or had power to transfer.” Citing Commercial Code section
8302, appellants assert in a one-paragraph argument that Barbara could not
have retained a “part of” her share when she delivered the certificated
security to the five buyers. This argument ignores the exception listed in
subdivision (b) of Commercial Code section 8302 that “[a] purchaser of a
limited interest acquires rights only to the extent of the interest purchased.”
(Italics added.) When appellants and the other buyers purchased the
Barbara share, Barbara retained a reversionary interest in the share,
pursuant to the terms of the SPA. Appellants later purchased Barbara’s
reversionary interest with the assignment contract.

                                       20
court correctly noted, the clear purpose of the provision in the MSA requiring
notice of a sale was to allow Mikkelson and Barbara the option of preventing
the other from transferring control of the shares without giving the other the
opportunity to block the transfer. Through the assignment contract,
appellants purchased Barbara’s security interest in the Note and guarantee.
The assignment contract transferring Barbara’s reversionary interest in the
Barbara share to appellants, without notice to Mikkelson, circumvented the
clear purpose of the MSA by giving appellants control over the Barbara share
without notice to Mikkelson, as required by the dissolution judgment.
      Appellants cite Mikkelson’s statements in the dissolution case to
attempt to create a factual issue regarding the proper interpretation of the
MSA. Specifically, Mikkelson, acting in propria persona, filed a request with
the family court in the dissolution action for an order stating that Barbara
lacked standing to invoke paragraph 8 of the MSA because she had sold her
“entire” interest in Bardav when she sold her share to the five buyers. In a
sworn declaration filed in connection with this request, Mikkelson stated that
Barbara had “sold her entire share of Bardav. . . .” (Italics added.)
Appellants argue that this evidence creates a triable issue of fact as to
whether Barbara had any interest in the Barbara share to sell via the
assignment contract.
      The trial court rejected appellants’ contention that this evidence
constituted “legally binding admissions,” noting that Mikkelson was not an
attorney, that he did not make the statements in the context of whether a
reversionary interest could constitute part of Barbara’s share under the
terms of the dissolution judgment, and Mikkelson could not unilaterally
decide the proper interpretation of the dissolution judgment. We agree that

                                       21
appellants’ reliance on Mikkelson’s interpretation of the SPA pursuant to
which Barbara sold the Barbara share to the five buyers is misplaced.
      Mikkelson was not a party to the SPA and his understanding of what
Barbara sold by the SPA is irrelevant. (Evid. Code, §§ 210 & 350.) Moreover,
Mikkelson’s opinion of what Barbara sold by the SPA is inadmissible because
“a witness is incompetent to give an opinion on the meaning of the contract
language.” (DVD Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009) 176
Cal.App.4th 697, 715; Kasem v. Dion-Kindem (2014) 230 Cal.App.4th 1395,
1401 [“expert opinion is generally not admissible on the legal interpretation
of contracts”].)
      Even if we could consider Mikkelson’s statements, the documents and
arguments that Mikkelson made in the dissolution case pertain to a portion
of the MSA addressing the couple’s obligation to have an arbiter resolve
corporate disputes. In this context, Mikkelson argued that because Barbara
had sold her entire share, she no longer had an ownership interest in Bardav.
Mikkelson did not argue that the notice requirement in the MSA for sale of
Bardav stock was no longer effective. In any event, the family court denied
Mikkelson’s requested order, impliedly holding that the dissolution judgment
and MSA remained in effect. Mikkelson’s summary judgment argument that
the couple’s dissolution judgment remained effective comports with the
family court’s order. Accordingly, we reject appellants’ argument that a
triable issue of material fact exists regarding whether the MSA allowed
Mikkelson to block Barbara’s sale of the Note and guarantee.
      Appellants presented no admissible evidence creating a triable issue of
material fact regarding interpretation of the assignment contract. Where, as
here, interpretation does not turn on the credibility of extrinsic evidence, we
interpret a contract de novo. (City of Manhattan Beach v. Superior Court

                                       22
(1996) 13 Cal.4th 232, 238.) The assignment contract violated the terms of
the dissolution judgment because it purported to sell Barbara’s reversion
interest in the Barbara share without affording notice or a right of first
refusal to Mikkelson. Thus, the trial court correctly granted Mikkelson’s
motion for summary judgment on his cross-complaint for declaratory relief in
the interpleader case, establishing that the assignment contract is unlawful,
and therefore void as a matter of law. Based on this conclusion, we need not
address appellants’ remaining arguments that the May 29, 2019 judgment
should be reversed because a triable issue of fact exists as to whether (1) the
MSA provided Mikkelson with a right to block the sale of the Note on the
basis that appellants’ ownership would be antithetical to Snopes; and (2) the
assignment of the Note deprived Mikkelson of authority.
      To avoid summary judgment, appellants contend for the first time on
appeal that even if the security interest in the Note is “part of” the Barbara
share, it can be severed from other elements of the assignment contract. We
reject appellants’ argument that severance presents a change in legal theory
and a question of law on undisputed facts that they may raise for the first
time on appeal. The rule that an argument or theory will not be considered if
raised for the first time on appeal applies to the appellate review of summary
judgments; therefore, “ ‘possible theories that were not fully developed or
factually presented to the trial court cannot create a “triable issue” on
appeal.’ ” (DiCola v. White Brothers Performance Products, Inc. (2008) 158
Cal.App.4th 666, 676.)
      In any event, the assignment contract does not contain a severability
clause. Generally, severability clauses within a contract “evidence the
parties’ intent that, to the extent possible, the valid provisions of the contract
be given effect, even if some provision is found to be invalid or unlawful.”

                                        23
(Baeza v. Superior Court (2011) 201 Cal.App.4th 1214, 1230.) Even if we
could consider this argument, appellants presented no evidence of the parties’
intent regarding severability.
      In sum, the trial court properly granted summary judgment on
Mikkelson’s cross-complaint for declaratory relief and we affirm the
May 29, 2019 judgment.
C. The Trial Court Properly Granted Mikkelson’s Anti-SLAPP Motion
      1. Additional Background
      Mikkelson filed a special motion to strike from the TAC appellants’
claims for: (1) defamation and unfair competition (fourteenth through
sixteenth causes of action) concerning the GoFundMe campaign; and (2)
rescission and declaratory relief (seventeenth and eighteenth causes of
action) concerning the legal fee advances. Mikkelson also sought to eliminate
allegations within the body of the TAC relating to the propriety of the legal
fee advances,10 and allegations within appellants’ direct claim against him
for breach of fiduciary duty.11
      Mikkelson argued that the GoFundMe campaign postings were
protected acts in furtherance of his right to free speech. He also asserted that
his litigation funding activities were protected as acts in furtherance of his
right to petition. Appellants opposed the motion, asserting that the
allegations concerning the advancement of legal funds were not protected
under the anti-SLAPP statute. They also argued that even if the allegations
constituted protected activity, striking them was not warranted because

10    The parties refer to these allegations as the “advancement allegations”
in their briefing. For convenience, we do the same.

11   Bardav filed an identical motion, which the trial court also granted.
Appellants appealed this order, but later dismissed the appeal.

                                       24
appellants were likely to prevail on the merits of their unfair competition
claims. The trial court granted Mikkelson’s motion in its entirety.
      Appellants do not challenge the order striking their fourteenth,
fifteenth, sixteenth, seventeenth, and eighteenth causes of action. Appellants
challenge the order to the extent that the trial court struck the advancement
allegations within the body of the TAC and within their sixth cause of action
for breach of fiduciary duty and ninth cause of action for removal of director.
Specifically, appellants argue that this court should reverse the order
granting Mikkelson’s motion to the extent the order strikes the following
advancement allegations from the TAC: (1) paragraphs 14-16, 119, 122-134,
220(1), (2), and (10), and 254(1)-(3); and (2) section heading at TAC page 23,
lines 7-8.
      2. Basic Anti-SLAPP Principles
      The anti-SLAPP statute authorizes a special motion to strike meritless
claims early in the litigation if the claims “aris[e] 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.”12 (§ 425.16, subd. (b)(1).) Anti-SLAPP motions are
“ ‘intended to resolve quickly and relatively inexpensively meritless lawsuits
that threaten free speech on matters of public interest.’ ” (Rand Resources,
LLC v. City of Carson (2019) 6 Cal.5th 610, 619 (Rand).)

12    A “claim” refers to a set of facts allegedly giving rise to relief that
constitutes a “proper subject of a special motion to strike.” (Baral v. Schnitt
(2016) 1 Cal.5th 376, 382 (Baral); see also id. at p. 395 [anti-SLAPP motion is
directed to “alleged acts giving rise to a claim for relief”].) A “cause of action”
refers to the separate counts as pleaded by the plaintiffs. (Id. at p. 382.) A
single cause of action can incorporate more than one claim and a single claim
can sometimes form the basis for more than one cause of action.

                                        25
       In considering a special motion to strike, courts employ a two-step
process. (Park v. Board of Trustees of California State University (2017)
2 Cal.5th 1057, 1061 (Park).) In the first step, the moving defendants must
show that the challenged claims are based on conduct “aris[ing] from” an act
that furthers their speech or petition rights in connection with a public issue.
(§ 425.16, subd. (b)(1).) This includes, “any written or oral statement or
writing made before a legislative, executive, or judicial proceeding, or any
other official proceeding authorized by law,” (§ 425.16, subd. (e)(1)), “any
written or oral statement or writing made in connection with an issue under
consideration or review” by a judicial body (§ 425.16, subd. (e)(2)), “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” (§ 425.16, subd.
(e)(3)) 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)(4).)
       To make a showing under the first step, the defendant need only
establish a prima facie case that its alleged actions fell into one of the
categories listed in section 425.16, subdivision (e). (See Flatley v. Mauro
(2006) 39 Cal.4th 299, 314.) If defendant can make this initial showing, the
burden shifts to the plaintiff to demonstrate that “there is a probability that
the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1); Baral, supra,
1 Cal.5th at p. 384.)
       The second step of the anti-SLAPP analysis consists of “a ‘summary-
judgment-like procedure.’ ” (Baral, supra, 1 Cal.5th at p. 384.) Plaintiffs
need to show only “minimal merit” to defeat the special motion to strike.
(Navellier v. Sletten (2002) 29 Cal.4th 82, 94.) At this stage, “[t]he court does

                                        26
not weigh evidence or resolve conflicting factual claims . . . [but rather]
accepts the plaintiff’s evidence as true, and evaluates the defendant’s
showing only to determine if it defeats the plaintiff’s claim as a matter of
law.” (Baral, at pp. 384-385.) The court “must determine whether the
plaintiff's showing, if accepted by the trier of fact, would be sufficient to
sustain a favorable judgment. If not, the claim is stricken. Allegations of
protected activity supporting the stricken claim are eliminated from the
complaint, unless they also support a distinct claim on which the plaintiff has
shown a probability of prevailing.” (Baral, at p. 396.) We review de novo a
court’s rulings on whether the parties met their respective burdens. (Park,
supra, 2 Cal.5th at p. 1067.)
      3. Analysis
             a. Mikkelson Made a Prima Facie Showing that the
                Advancement Allegations Arose From Protected Activity

                i. The parties’ contentions
      The trial court struck the advancement allegations under subdivision
(e)(4) of section 425.16, which protects “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.”
The trial court concluded that “[t]he board authorizations were conduct that
furthered the exercise of the constitutional right of petition—litigation
funding. The litigation funding would not have occurred without the board’s
authorization.” The trial court further explained that, “the board
authorizations were a necessary step to facilitate the protected activity.
Plaintiffs seek to rescind the board’s authorization to fund ongoing litigation,
which would directly affect the protected activity—litigation funding. The

                                        27
board authorizations shaped the litigation funding as the purpose of the
board authorizations was to provide litigation funding.”
      Mikkelson asserts that the advancement allegations qualify for
protection under subdivision (e)(2) of section 425.16 because his litigation
funding actions form the basis of appellants’ claims against him for breach of
fiduciary duty and removal of director, and litigation funding is protected
petitioning activity. He also contends that the advancement allegations are
also protected under subdivision (e)(4) of section 425.16 as conduct in
furtherance of the exercise of the constitutional right of petition in connection
with a public issue or an issue of public interest. Appellants contend that
subdivision (e)(2) of section 425.16 does not apply because Mikkelson’s
approval of the legal fee advances were acts, not statements “made in
connection with an issue under consideration or review” by a judicial body as
required by subdivision (e)(2) of section 425.16. Appellants further contend
that subdivision (e)(4) does not apply because the litigation funding at issue
does not involve a public issue or a matter of public interest.
      Appellants argue that Mikkelson’s approvals of litigation funding are
not entitled to protection under section 425.16, subdivision (e)(4), because the
litigation funding furthered by the approvals related only to Mikkelson’s
personal business dispute with shareholders of two privately held companies,
not speech or discourse concerning a public issue. Specifically, they contend
that the trial court erred in striking the advancement allegations in the
context of their breach of fiduciary duty and removal of director claims
because the allegations (1) were not protected under subdivision (e)(4) as acts
in furtherance of a public issue or issue of public interest and (2) merely
provided examples of Mikkelson’s breach of fiduciary duty and why he should
be removed as a Bardav director.

                                       28
      Mikkelson responds that appellants failed to oppose his motion with
respect to the advancement allegations and claims that we may affirm the
order on this basis alone. He also notes that appellants did not argue in the
trial court that the advancement allegations provided mere context for their
sixth and ninth causes of action, nor did they argue that the conduct
underlying these allegations, i.e., the litigation funding, did not involve a
matter of public interest. In addition, Mikkelson contends that we should
affirm the order because the trial court struck the same allegations from the
TAC on Bardav’s anti-SLAPP motion, that this order is final and not
appealable and that the allegations cannot be resurrected. As to the merits
of appellants’ contentions, Mikkelson argues that the advancement
allegations are protected petitioning activity under either subdivision (e)(2)
or (e)(4) of section 425.16.
      Generally, “arguments not asserted below are waived and will not be
considered for the first time on appeal.” (Ochoa v. Pacific Gas & Electric Co.
(1998) 61 Cal.App.4th 1480, 1488, fn. 3.) However, a new theory raising a
pure question of law on undisputed facts may be raised for the first time on
appeal. (Ward v. Taggart (1959) 51 Cal.2d 736, 742.) We exercise
independent judgment in determining whether challenged claims arise from
protected activity. (Park, supra, 2 Cal.5th at p. 1067.) Accordingly, to the
extent that appellants failed to raise an argument in the trial court, we
conclude that the argument is not waived.13

13     Mikkelson notes that the trial court struck the same allegations from
the TAC on Bardav’s anti-SLAPP motion and that this order is final. Based
on this order, Mikkelson argues that the allegations cannot be “resurrected.”
Mikkelson cited no authority to support his contention that this ruling binds
appellants as to their claims against him. Hence, we deem the argument
forfeited. (Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691,
699-700 [“When an issue is unsupported by pertinent or cognizable legal

                                       29
                      ii. Application
      “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 . . . shall be
subject to a special motion to strike. . . .” (§ 425.16, subd. (b)(1), italics
added.) “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.) “ ‘The
only means specified in section 425.16 by which a moving defendant can
satisfy the [“arising from”] requirement is to demonstrate that the
defendant’s conduct by which plaintiff claims to have been injured falls within
one of the four categories described in subdivision (e). . . .’ ” (Park, at
p. 1063.) Accordingly, in ruling on an anti-SLAPP motion, courts should
consider the elements of the challenged claim and what actions by the
defendant supply those elements and consequently form the basis for
liability.” (Ibid.)
      As noted, the anti-SLAPP statute broadly protects “any act . . . in
furtherance of a person’s right of petition or free speech under the United
States Constitution or the California Constitution in connection with a public
issue. (§ 425.16, subd. (b)(1).) In determining whether the advancement
allegations arise from protected conduct, we must first determine the conduct
that gives rise to Mikkelson’s asserted liability, and then ascertain whether
that conduct constitutes protected speech or petitioning. (Park, supra, 2
Cal.5th at p. 1063.) A claim arises from protected activity when that activity
underlies or forms the basis for the claim. (Id. at p. 1062.)
      Under subdivision (e)(2) of section 425.16, the anti-SLAPP statute
protects all petitioning-related activity made in connection with an issue

argument it may be deemed abandoned and discussion by the reviewing court
is unnecessary.”].)

                                          30
being considered or reviewed in an official proceeding, whether or not the
statements involve a public issue or a matter of public interest. (Briggs v.
Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1116 (Briggs).)
As the Briggs court noted, “Any matter pending before an official proceeding
possesses some measure of ‘public significance’ owing solely to the public
nature of the proceeding, and free discussion of such matters furthers
effective exercise of the petition rights section 425.16 was intended to protect.
The Legislature’s stated intent is best served, therefore, by a construction of
section 425.16 that broadly encompasses participation in official proceedings,
generally, whether or not such participation remains strictly focused on
‘public’ issues.” (Briggs, at p. 1118.)
      Appellants incorporated the advancement allegations into their sixth
and ninth causes of action for breach of fiduciary duty and removal of
director. On appeal, appellants assert that the advancement allegations do
not form a basis for liability as to these causes of action and instead, are
merely “incidental.” (Gaynor v. Bulen (2018) 19 Cal.App.5th 864, 887 [“The
critical point is that even assuming [the defendant] allegedly engaged in
protected activities by his litigation actions, he still has the burden to show
the [plaintiffs’] breach of fiduciary claim arose from these activities.”].)
      To address appellants’ assertion, we must “ ‘consider the elements of
the challenged claim and what actions by the defendant supply those
elements and consequently form the basis for liability.’ [Citation.] In so
doing, courts should be ‘attuned to and . . . respect the 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.’ ”
(Gaynor, supra, 19 Cal.App.5th at p. 878.) A “claim” properly subject to a
section 425.16 motion is defined as “allegations of protected activity that are

                                          31
asserted as grounds for relief.” (Baral, supra, 1 Cal.5th at p. 395, italics
deleted.)
      “The elements of a cause of action for breach of fiduciary duty are:
(1) the existence of a fiduciary duty; (2) the breach of that duty; and (3)
damage proximately caused by that breach.” (Mosier v. S. Cal. Physicians
Ins. Exch. (1998) 63 Cal.App.4th 1022, 1044.) Appellants alleged that
Mikkelson breached fiduciary duties owed to them by: “directing and causing
[Bardav] to improperly advance legal expenses” incurred in defending himself
against appellants’ claims and bring counterclaims against appellants;
executing written consents approving and authorizing Bardav to advance his
attorney fees and costs incurred in defending this action; providing his vote,
without which Bardav could not have approved advancement of attorney fees;
writing letters to Bardav requesting indemnification; and “directing or
otherwise causing [Bardav] to improperly advance personal legal expenses to
[him] in violation of the Corporations Code and Bylaws.”
      Appellants’ pleading demonstrates that the litigation funding actions
on which the advancement allegations are based form the basis for
Mikkelson’s alleged liability for breach of fiduciary duty. Appellants also
claimed in the operative complaint that they are entitled to damages based
on Mikkelson’s alleged breaches of fiduciary duty. Accordingly, the
advancement allegations are asserted as grounds for relief. The litigation
funding actions underlying the advancement allegations similarly form a
basis for appellants’ claim to remove Mikkelson as a Bardav director. Thus,
contrary to appellants’ contention, the advancement allegations are not
merely incidental to their claims against Mikkelson.
      We must therefore consider whether Mikkelson’s litigation funding
actions constitute protected conduct under the anti-SLAPP statute. Acts in

                                        32
furtherance of the person’s right to petition “include[ ] communicative
conduct such as the filing, funding, and prosecution of a civil action.
(Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056 (Rusheen), italics added;
Takhar v. People ex rel. Feather River Air Quality Management Dist. (2018)
27 Cal.App.5th 15, 28; Sheley v. Harrop (2017) 9 Cal.App.5th 1147, 1166
[“insofar as a cause of action is based on the payment of funds to maintain a
lawsuit, this constitutes protected activity that will be subject to a special
motion to strike pursuant to section 425.16 unless the opposing party can
demonstrate a probability of prevailing on the claim”].) This type of
communicative conduct in furtherance of the right to petition is protected
under section 425.16, subd. (e)(2) because it is essential to the exercise of the
constitutional right of petition.
      After reviewing the record de novo, we conclude that Mikkelson met his
burden to establish a prima facie case that his alleged actions come within
subdivision (e)(2) of section 425.16, because the conduct on which the
advancement allegations are based is litigation funding, which is protected
communicative conduct in furtherance of petitioning activity. (Rusheen,
supra, 37 Cal.App.4th at p. 1056; Bernardo v. Planned Parenthood Federation
of America (2004) 115 Cal.App.4th 322, 357 [appellate court decides
independently whether ruling on anti-SLAPP motion was correct, but need
not decide propriety of trial court’s reasoning].) Mikkelson’s approval and
expenditure of corporate funds to defend himself for actions he took in his
capacity as a corporate officer, and his bringing crossclaims on behalf of
Bardav, is similarly protected communicative conduct in furtherance of the
right to petition. Because the conduct at issue is protected under subdivision

                                        33
(e)(2), Mikkelson need not show that the statements involve a public issue or
a matter of public interest. (Briggs, supra, 19 Cal.4th at p. 1116).14
      Appellants do not challenge the well-established notion that litigation
funding constitutes protected petitioning activity. However, they maintain
that the litigation funding at issue in this case is not protected petitioning
activity because the advancement allegations are acts, not statements made
in connection with an issue under consideration by a judicial body. In
making this argument, appellants fail to recognize that section 425.16,
subdivision (e)(2) protects communicative conduct, such as litigation funding,
that is necessary to effectuate the right to petition. In addition, Mikkelson’s
actions with respect to litigation funding impliedly include oral and/or
written statements, and constitute protected communicative conduct within
the meaning of Rusheen, supra, 37 Cal.4th at p. 1056.

14     As the trial court concluded, the advancement allegations are also
protected under subdivision (e)(4) of section 425.16 as “conduct in furtherance
of the exercise of the constitutional right of petition . . . in connection with a
public issue or an issue of public interest.” The funding of this litigation
involves an entity in the public eye. (Rand, supra, 6 Cal.5th at p. 621.) The
popularity of the GoFundMe campaign as described in appellants’ TAC
presents direct evidence of the widespread public interest in the operation
and governance of Snopes. Appellants’ argument that their causes of action
against Mikkelson, and the advancement allegations, pertain to Mikkelson
only as a private individual in a private dispute with other Bardav
shareholders or another private company overlooks that Mikkelson is a
Bardav director and its majority shareholder. This argument also ignores
appellants’ own pleading.
       Appellants’ reliance on FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7
Cal.5th 133 (FilmOn.com) to further their argument that the advancement
allegations pertain to a private dispute is misplaced. The FilmOn.com test
does not apply here because the advancement allegations pertain to protected
petitioning activity, not the exercise of protected free speech.

                                       34
      In summary, Mikkelson met his burden under the first step of the anti-
SLAPP analysis. We therefore turn to the second step of the anti-SLAPP
analysis, in which appellants must demonstrate a probability of prevailing on
the challenged claim.
            b. Appellants Failed to Demonstrate a Probability of Prevailing
      Once the defendant has met the burden to demonstrate that the
relevant conduct arises from protected activity, “the burden shifts to the
plaintiff to demonstrate that each challenged claim based on protected
activity is legally sufficient and factually substantiated.” (Baral, supra,
1 Cal.5th at p. 396.) Appellants argue that the thrust of their claims against
Mikkelson relate to actions he took to benefit himself, not any actions that he
performed in his capacity as an employee, officer, or director of Bardav.
Accordingly, appellants assert that they can demonstrate a probability of
prevailing on the advancement allegations because they can show that
Mikkelson was not made a party to any proceeding based on his status as a
Bardav agent; thus, appellants claim that Mikkelson does not qualify for
legal fee advancements pursuant to Corporations Code section 317 or the
bylaws. In making this argument, appellants claim that Allergia, Inc. v.
Bouboulis (S.D. Cal. 2017) 229 F.Supp.3d 1150, 1157 (Allergia) is instructive
because, as in Allergia, their claims against Mikkelson relate to his actions in
furtherance of his personal interests.
      Allergia, supra, 229 F.Supp.3d 1150, involved claims for declaratory
relief, breach of fiduciary duty and fraud by a corporation against defendant,
its president, based on defendant’s act of secretly filing patent applications
“virtually identical” to the corporation’s pending patent applications. (Id. at
pp. 1151-1153.) Defendant sought advancement of legal expenses against
plaintiff’s suit under Corporations Code section 317 arguing that the

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corporation sued him in his capacity as a former corporate officer or
director.15 (Id. at p. 1153.)
      The Allergia court concluded that the defendant was not entitled to
advancement of his legal expenses because he was not sued “ ‘by reason of the
fact that’ ” he was a corporate agent, officer or director. (Allergia, supra, 229
F.Supp.3d at p. 1159.) In so holding, the court examined the causes of action
alleged against defendant and found that the corporation’s claims against
defendant implicated actions that “predominantly benefit Defendant, but do
not appear to be in furtherance of the corporate good or performed in
connection with Defendant’s corporate functions.” (Ibid.) The court
explained that the declaratory relief claim was a dispute regarding ownership
of the patents and that the “claim [was] not against Defendant at all, much
less “ ‘by reason of the fact’ ” that he was an officer or agent of the
corporation.” (Ibid.) Similarly, with respect to the causes of action for breach
of fiduciary duty and fraud, the court noted that these claims arose out of
defendant’s filing of secret and competing patent applications, which
implicated defendant’s personal motives to retain sole ownership of the
patents rather than to further the corporate good or his corporate functions.
(Id. at pp. 1158-1159.)
      The parties debate whether the Allergia court properly conditioned the
advancement of legal expenses on a requirement that the defendant was sued

15     Subdivision (f) of Corporations Code section 317 provides: “Expenses
incurred in defending any proceeding may be advanced by the corporation
prior to the final disposition of the proceeding upon receipt of an undertaking
by or on behalf of the agent to repay that amount if it shall be determined
ultimately that the agent is not entitled to be indemnified as authorized in
this section. The provisions of subdivision (a) of Section 315 do not apply to
advances made pursuant to this subdivision.”

                                        36
“ ‘by reason of the fact that’ ” he or she was a corporate agent, officer or
director. (Allergia, supra, 229 F.Supp.3d at p. 1159.) We need not address
this dispute. Rather, for purposes of analysis we will assume, without
deciding, that to obtain the advancement of legal expenses, the defendant
must show that he or she was sued “ ‘by reason of the fact that’ ” he or she
was a corporate agent, officer or director. To determine whether Mikkelson
satisfied this standard, we turn to the allegations of appellants’ operative
complaint.
      As to the sixth and ninth causes of action, appellants alleged that
Mikkelson “caused” Bardav to improperly advance attorney fees and that this
advancement of attorney fees violated Corporations Code section 317. Stated
differently, appellants alleged that Mikkelson, in his capacity as a Bardav
director, voted to advance legal expenses. Thus, appellants’ pleading shows
that Mikkelson was sued “ ‘by reason of the fact that’ ” he was a corporate
director.
      We next address whether appellants have shown a probability of
prevailing on their claim that Mikkelson did not incur legal fees in his
capacity as a Bardav director, but “for his personal legal representation in his
divorce proceeding with Barbara” as appellants alleged. To support this
allegation, appellants presented Richmond’s declaration, which stated: “In
the second half of 2016, Mikkelson’s purported business expenses included
tens of thousands of dollars in legal fees, which, on information and belief,
were not for [Bardav’s] benefit, but rather for personal legal representation in
his ongoing divorce proceeding with Barbara.” (Italics added.)
      To show a probability of prevailing, “the plaintiff cannot rely on the
allegations of the complaint, but must produce evidence that would be
admissible at trial.” (Integrated Healthcare Holdings, Inc. v. Fitzgibbons

                                        37
(2006) 140 Cal.App.4th 515, 527.) “ ‘Unverified allegations in the pleadings
or averments made on information and belief cannot make the showing.’ ”
(Contreras v. Dowling (2016) 5 Cal.App.5th 394, 405; Evans v. Unkow (1995)
38 Cal.App.4th 1490, 1497 [averments based on information and belief are
inadequate to show “ ‘a probability that the plaintiff will prevail on the
claim.’ ”].) Thus, appellants have not met their evidentiary burden of
presenting admissible evidence showing a probability of prevailing on the
advancement allegations as relevant to the sixth and ninth causes of action.
      In a one paragraph argument, appellants cite subdivision (a)(3) of
Corporations Code section 310 to assert that they can prevail on the
advancement allegations because Mikkelson had a personal interest in
advancing legal expenses and should have been excluded from voting on the
issue. Corporations Code section 310 provides, in part:
         “(a) No contract or other transaction between a corporation
         and one or more of its directors, or between a corporation
         and any corporation, firm or association in which one or
         more of its directors has a material financial interest, is
         either void or voidable because such director or directors or
         such other corporation, firm or association are parties or
         because such director or directors are present at the
         meeting of the board or a committee thereof which
         authorizes, approves or ratifies the contract or transaction,
         if

         “(1) The material facts as to the transaction and as to such
         director’s interest are fully disclosed or known to the
         shareholders and such contract or transaction is approved
         by the shareholders (Section 153) in good faith, with the
         shares owned by the interested director or directors not
         being entitled to vote thereon, or

         “(2) The material facts as to the transaction and as to such
         director’s interest are fully disclosed or known to the board
         or committee, and the board or committee authorizes,

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         approves or ratifies the contract or transaction in good faith
         by a vote sufficient without counting the vote of the
         interested director or directors and the contract or
         transaction is just and reasonable as to the corporation at
         the time it is authorized, approved or ratified, or

         “(3) As to contracts or transactions not approved as
         provided in paragraph (1) or (2) of this subdivision, the
         person asserting the validity of the contract or transaction
         sustains the burden of proving that the contract or
         transaction was just and reasonable as to the corporation
         at the time it was authorized, approved or ratified. . . .”

      Appellants argue that Mikkelson was an interested director and cannot
show that his “facially self-interested approval” of the legal expense
advancements “was just and reasonable to the corporation at the time it
[was] authorized, approved or ratified” as required by subdivision (a)(3) of
Corporations Code section 310. Mikkelson responds that subdivision (a)(3) of
Corporations Code section 310 does not apply and that the advancements
were just and reasonable.
      At this stage of the analysis, appellants must show a probability of
prevailing on the advancement allegations by presenting admissible evidence
that subdivision (a)(3) of Corporations Code section 310 applies, i.e.,
appellants must present admissible evidence demonstrating that the
transaction was “not approved as provided in paragraph (1) or (2) of this
subdivision” and that the transaction was not “just and reasonable as to the
corporation” at the time it was authorized. Appellants’ brief cites no evidence
showing that subdivision (a)(3) of Corporations Code section 310 applies.
Appellants have thus failed to meet their evidentiary burden.
      In summary, because appellants failed to demonstrate a probability of
prevailing on the advancement allegations, the trial court properly granted
the anti-SLAPP motion.

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                              DISPOSITION
     The order granting the anti-SLAPP motion is affirmed. Respondent’s
motion to dismiss the appeal from the May 29, 2019 judgment is denied. The
May 29, 2019 judgment is affirmed. Respondent shall recover his costs on
appeal.

                                                          AARON, Acting P. J.

WE CONCUR:

GUERRERO, J.

DO, J.

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