[CERTIFIED FOR PARTIAL PUBLICATION*]

OPINION

JONES, P. J. —

Chiropractor Anthony K. Hui sued defendant Beth Sturbaum for defamation, claiming Sturbaum — then an insurance company claims investigator — made false statements to California's Department of Insurance (DOI) and to Winne Yu, an assistant to personal injury lawyer Frank Kim. The trial court granted Sturbaum's anti-SLAPP motion, concluding Dr. Hui's claims arose from protected activity (Code Civ. Proc., § 425.16, subd. (e)).1 It also determined Dr. Hui could not show a probability of prevailing because Sturbaum's statements to the DOI were absolutely privileged under Civil Code section 47 (section 47) and her statements to Yu were protected by the qualified common interest privilege in that statute.2

Dr. Hui appeals. He does not challenge the court's findings with respect to Sturbaum's communications with the DOI. Instead, he contends the court erred by granting the anti-SLAPP motion because Sturbaum's statements to Yu did not arise from protected activity under section 425.16, subdivision (e) and because the common interest privilege articulated in Civil Code section 47 does not protect Sturbaum's statements to Yu.

(1) We requested supplemental briefing on whether the protected conduct alleged in Dr. Hui's slander cause of action was merely incidental to any unprotected conduct alleged in that claim. We now affirm. In the unpublished portion of the opinion, we conclude Sturbaum's communications with Yu are protected under section 425.16, subdivision (e)(4) as speech made "in connection with ... an issue of public interest." In the published portion of the opinion, we conclude Dr. Hui has not established a probability of prevailing because the common interest privilege codified in Civil Code section 47, subdivision (c) protects Sturbaum's statements to Yu.

FACTUAL AND PROCEDURAL BACKGROUND

Dr. Hui graduated from chiropractic school in 1997. In 1998, he founded Pine Street Chiropractic (Pine Street). A "considerable volume" of Pine Street's business came from "referrals of personal injury clients from numerous local law firms." National Legal Associates — a firm run by Attorney Frank Kim — referred personal injury clients to Pine Street for treatment.

In 2003, Dr. Hui settled a civil case brought by a former patient claiming he "mishandled" her. Dr. Hui received a 30-day suspension of his chiropractic license and five years' probation. During that time, he could not treat female patients without a third party present. Dr. Hui's chiropractic license was "fully restored" in March 2008.

In 2008, Sturbaum was a claims representative for Federated Mutual Insurance Company (Federated). She handled liability claims submitted to Federated; she also read "`Alerts'" posted by the National Insurance Crime Bureau (NICB) "regarding potential fraudulent claims practices." Sturbaum reviewed a liability claim involving services performed by Dr. Hui at Pine Street for two women (claimants) who had been in a car accident (the claim). As she reviewed the billing invoices for the claim, she noted "services described on the invoices" that she believed violated the Business and Professions Code and "California Regulations governing chiropractors." Around that same time, Sturbaum learned the NICB was investing Kim, claimants' attorney. Sturbaum researched Dr. Hui with the State Board of Chiropractic Examiners and "found that he had had prior suspensions and a prior license revocation." During an August 2008 telephone conversation with Dr. Hui, Sturbaum "expressed some concern that the automobile collision in which the [claimants] had been injured was relatively minor." In response, Dr. Hui explained claimants had preexisting medical conditions aggravated by the car accident. He offered to "use apportionment in billing for these patients' treatments."

In 2009, Sturbaum saw an NICB Task Force "Alert" concerning Kim and Dr. Hui. In 2010, the DOI informed Sturbaum it was "investigating Pine Street for potential fraudulent activity" and asked her to provide information. Sturbaum cooperated with the investigation and provided the requested information. In June 2010, Winne Yu, Attorney Kim's assistant, called Sturbaum to settle the claim. Yu and Sturbaum discussed Federated's position on the claim. Shortly thereafter, Dr. Hui learned about the DOI investigation.

The Complaint

In November 2010, Dr. Hui filed the operative first amended complaint suing Doe defendants for trade libel, libel per se, and slander.3 In September 2011 — and before serving Sturbaum with the complaint — Dr. Hui's attorney deposed Yu. Shortly thereafter, Dr. Hui substituted Sturbaum for Doe 1. In the "factual background" allegations of the operative first amended complaint, Dr. Hui alleged he learned he had become "the target of a DOI investigation `pursuant to false reports'" submitted by defendants who claimed he "was running a fraudulent chiropractic business, conducted intentional overcharges for services, engaged in fraudulent or improper billing, and conducted unnecessary and/or unauthorized treatments." Dr. Hui also alleged defendants told personal injury attorneys in the area "not to send their clients to [him] because various insurance companies and/or the DOI were going to put [him] out of business for the improper acts falsely ascribed to [him]. Personal injury attorneys also learned independently of the false accusations ascribed to [Dr. Hui] and subsequent inquiries by the DOI into [Dr. Hui's] business practices."

Dr. Hui's cause of action for trade libel alleged the reports submitted by defendants to the DOI were false and "libelous on their face" because they charged him with "committing fraud and dishonesty." Similarly, the libel per se claim alleged the DOI reports were false and that defendants knew they "would be viewed or heard by persons who were existing clients or potential clients." Dr. Hui's slander cause of action alleged defendants "conspired to make repeated defamatory and false oral statements regarding [Dr. Hui] to the DOI, insurance companies and personal injury attorneys in the area." According to the complaint, "[t]hese oral statements" were false and unprivileged and "have been seen and heard ... by the DOI, insurance companies and personal injury attorneys in the area. In addition, Defendants made defamatory oral statements to individuals with personal, business and professional relationships with [Dr. Hui]." Dr. Hui sought compensatory and punitive damages.

The Anti-SLAPP Motion, Opposition, and Reply

Sturbaum moved to strike the operative complaint pursuant to section 425.16.4 She argued her "[c]ommunications designed to curb insurance fraud" were "speech `in connection with a public issue'" under section 425.16, subdivision (e)(3); she claimed any statements made to third parties about Dr. Hui "would have been made for the purpose of alerting potential victims and participants of [Dr. Hui's] suspected fraudulent activities. Thus, they are statements made in connection with a public issue."

Sturbaum also argued Dr. Hui could not establish a probability of prevailing on the merits because, among other things, her statements to the DOI were absolutely privileged under Civil Code section 47 and because her statements to any third parties were privileged under subdivision (c) of that statute, which provides a conditional privilege for "communications to interested persons" made without malice. Sturbaum contended there was no evidence her statements were "motivated by hatred or ill will toward" Dr. Hui because she "had a very limited connection with [him], on a purely professional level, and thus had no reason to form hatred or ill will toward him." Finally, she claimed her statements were based on a reasonable belief in their truth.

Sturbaum submitted a declaration in support of the motion averring she believed the billing invoices submitted by Dr. Hui for claimants' treatment violated California regulations and the Business and Professions Code. She also stated she learned Kim was being investigated by the NICB and that Dr. Hui's license had been suspended and revoked in 2008. Sturbaum averred she cooperated with the NICB and DOI investigation of Kim and Dr. Hui. Finally, she testified she never "told any personal injury attorney not to send ... clients to [Dr. Hui]."

In opposition to the motion, Dr. Hui argued Sturbaum's statements to third parties were not protected under section 425.16, subdivision (e)(3) because they were not made in a public forum and because the "general topic of insurance fraud" is not an issue of public interest. As Dr. Hui explained, "[t]he false statements about Dr. Hui's billing being fraudulent and improper, false allegations of sexual misconduct, and damaging instructions to avoid doing business with him are more accurately seen as matters of concern to a few people rather than the public at large, and the defamatory statements are not sufficiently close to the general topic of combatting insurance fraud."

Dr. Hui also argued he had a probability of prevailing because neither Sturbaum's communications with the DOI, nor her statements to Yu, were privileged under Civil Code section 47. Dr. Hui argued the qualified common interest privilege in section 47, subdivision (c) did not apply to Sturbaum's conversation with Yu because Sturbaum acted with malice and because Dr. Hui and "the third party personal injury attorneys are not interested in Dr. Hui in the same manner, are not interested in any DOI investigation of Dr. Hui in the same manner, are not mutually interested in allegations of sexual misconduct by Dr. Hui, and are not mutually interested in assertions that they should avoid doing any business with Dr. Hui."

Dr. Hui submitted a transcript of Yu's deposition, taken before Sturbaum was named as a defendant and served with the complaint. At her deposition, Yu testified Kim asked her in June 2010 to call Federated to "settle the case and obtain the necessary documents to resolve [the claim]." During a conversation with Yu, Sturbaum said "the case was not worth money because ... this was a small impact matter. So she ... questioned ... the medical treatment." Sturbaum also "may have" mentioned "that the billing could have been fraudulently billed. [¶] She mentioned that [Dr.] Hui ... had misconduct or some sort of complaint ... that [he] should have stopped seeing female patient[s]."5 Sturbaum also stated the billings were "excessive because of the type of impact" in the car accident and that the billings "could be fraudulent." Yu assumed Sturbaum thought claimants should not have been injured because the property damage to the vehicle was "minimal." Finally, Sturbaum "mentioned that she ... made a complaint or [was] going to make a complaint [about] Dr. Hui." Yu thought Sturbaum "may have suggested that we shouldn't have any business to do with Dr. Hui."

Yu thought the conversation was "unusual" because Yu's "purpose was to hopefully resolve this matter with her. [¶] But on the other hand, [Sturbaum] was saying a lot of things that may not be relevant to the case." Yu told Dr. Hui that "an adjuster [was] making these allegations about his practice...." After her conversation with Sturbaum, Yu initially was "hesitant" to refer patients to Dr. Hui but she eventually decided Sturbaum's statements were "probably false," which "stopped" her from reconsidering referrals to Dr. Hui. Yu could not remember whether she declined to provide a referral to Dr. Hui after talking with Sturbaum. She explained it was Kim's practice to only "[o]ccasionally" refer clients to specific doctors; instead, his office "gives names of doctors for clients to choose, and clients may pick one that may be close to their work or residence."

Dr. Hui offered a declaration in opposition to the motion averring he was surprised to learn the DOI was investigating Pine Street "apparently based on one or more reports that claimed [he] was running a fraudulent chiropractic practice, creating intentional overcharges for services, engaging in fraudulent or improper billing, or performing unnecessary and unauthorized treatments." Dr. Hui stated he learned an insurance company adjuster "had told personal injury attorneys that [his] billing was fraudulent and that they should not send [him] any business." According to Dr. Hui, the adjuster told National Legal Associates "not to continue doing business with [his] practice and to stop sending referrals to Pine Street ... because of fraudulent billing and sexual misconduct." Dr. Hui further averred he experienced a "sudden downturn" in his business beginning in June 2010, including "dramatically fewer client referrals from National Legal Associates after June 2010." The "drastic decrease in new business ... forced" him to stop making mortgage payments on his house, to file for bankruptcy, and to close Pine Street.

In reply, Sturbaum argued her communications with the DOI and "with an interested party concerning [Dr. Hui's] billing practices and his prior sexual misconduct" were protected under section 425.16, subdivision (e)(1), (2), and (4) and were privileged under Civil Code section 47. She also claimed Dr. Hui could not establish a probability of prevailing on the merits because (1) her statements to Yu were privileged; (2) the statements were true and made without malice; and (3) Dr. Hui could not establish her statements damaged him because Yu testified she continued to refer patients to Dr. Hui after the conversation.

The Order Granting the Anti-SLAPP Motion

Following a hearing, the court granted the motion. The court concluded Dr. Hui's claims were "based on non-incidental allegations arising from protected activity covered by the anti-SLAPP statute.... To the extent Dr. Hui's claims are based on communications between Ms. Sturbaum and the Department of Insurance, those claims are barred by the absolute litigation privilege." The court also determined Dr. Hui could not demonstrate a probability of prevailing on the merits "through the deposition testimony of Ms. Yu that Ms. Sturbaum spoke to Ms. Yu about Dr. Hui."6 It explained Yu's deposition testimony was "insufficient to show that there is any merit to any of Dr. Hui's claims" because the conversation was covered by the qualified common interest privilege set forth in Civil Code section 47, subdivision (c). According to the court, Yu's deposition testimony would not allow a reasonable juror to conclude Sturbaum said anything to Yu "with malice such as to defeat the qualified [section] 47(c) privilege." The court awarded attorney fees to Sturbaum and took Sturbaum's demurrer and motion to strike portions of the operative complaint off calendar.

DISCUSSION

(2) "In ruling on a special motion to strike, the trial court follows a two-step analysis that involves shifting burdens. [Citation.] The moving defendant carries the initial burden to show the challenged cause of action arises from protected free speech or petitioning activity. [Citation.] The burden is satisfied by demonstrating that the conduct underlying the plaintiff's claim fits into a category of protected activity set forth in section 425.16, subdivision (e). [Citation.]" (Castleman v. Sagaser (2013) 216 Cal.App.4th 481, 489 [156 Cal.Rptr.3d 492], fn. omitted (Castleman).)

"If the court finds the defendant's threshold showing has been made, the burden shifts to the plaintiff to produce evidence establishing a probability of prevailing on the cause of action. [Citation.] To meet this burden, the plaintiff must plead and substantiate a legally cognizable claim for relief. [Citation.] `"Put another way, the plaintiff `must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.'"' [Citation.]" (Castleman, supra, 216 Cal.App.4th at p. 490.)

"Only a `"minimum level of legal sufficiency and triability"' is needed to satisfy the second prong of the anti-SLAPP statute. [Citation.] The evidence favorable to the plaintiff is accepted as true, while the defendant's evidence is evaluated to determine if it defeats the plaintiff's claim as a matter of law, e.g., on grounds of privilege or immunity. [Citation.] The motion will not be granted unless both prongs of the statute are established; the plaintiff's cause of action must arise from protected speech or petitioning and lack even a minimal degree of merit. [Citation.]" (Castleman, supra, 216 Cal.App.4th at p. 490.) We review an order on an anti-SLAPP motion de novo: "we engage in the same two-step process as the trial court to determine if the parties have satisfied their respective burdens." (Ibid.)

I.

Sturbaum Met Her Burden of Demonstrating the Complaint Arises From Protected Activity*

II.

Dr. Hui Has Not Established a Probability of Prevailing Because the Common Interest Privilege in Civil Code Section 47 Protects Sturbaum's Statements to Yu

As noted above, the court determined Sturbaum's communications with the DOI were absolutely privileged. It also concluded Sturbaum's statements to Yu were protected by the common interest privilege codified in Civil Code section 47, subdivision (c). Dr. Hui does not challenge the court's findings with respect to Sturbaum's communications with the DOI. Instead, he contends Sturbaum's statements to "local personal injury attorneys and similar third parties" are not protected by the common interest privilege in section 47. Accordingly, we determine whether Dr. Hui has carried his burden to establish the probability of prevailing on his slander claim. (§ 425.16, subd. (b)(1).) "The tort of defamation `involves (a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that causes special damage.' [Citation.]" (Taus v. Loftus (2007) 40 Cal.4th 683, 720 [54 Cal.Rptr.3d 775, 151 P.3d 1185] (Taus).)

(3) Civil Code section 47 "extends a conditional privilege against defamation to statements made without malice on subjects of mutual interests. [Citation.] This privilege is `recognized where the communicator and the recipient have a common interest and the communication is of a kind reasonably calculated to protect or further that interest.' [Citation.] The `interest' must be something other than mere general or idle curiosity, such as where the parties to the communication share a contractual, business or similar relationship or the defendant is protecting his own pecuniary interest. [Citation.] Rather, it is restricted to `proprietary or narrow private interests.' [Citations.]" (Hawran v. Hixson (2012) 209 Cal.App.4th 256, 287 [147 Cal.Rptr.3d 88].) "`One authority explains the statutory interest as follows: (1) The "interest" applies to a defendant who "is protecting his own pecuniary or proprietary interest." (2) The required "relation" between the parties to the communication is a contractual, business or similar relationship .... (3) The "request" referred to must have been in the course of a business or professional relationship. [Citation].' [Citation.]" (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 914 [120 Cal.Rptr.2d 576] (Kashian).) "`The defendant has the initial burden of showing the allegedly defamatory statement was made on a privileged occasion, whereupon the burden shifts to the plaintiff to show the defendant made the statement with malice. [Citation.] The existence of the privilege is ordinarily a question of law for the court. [Citation.]'" (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 108 [15 Cal.Rptr.3d 215] (Mann).)

Dr. Hui contends the court erred by applying the common interest privilege to Sturbaum's statements to Yu. We disagree. Sturbaum's employer, Federated, shared a business relationship with Kim, the attorney retained by claimants. (King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 440 [60 Cal.Rptr.3d 359] ["[p]arties in a business or contractual relationship have the requisite `common interest' for the privilege to apply"].) In addition, Sturbaum's statements were "reasonably calculated to protect or further a common interest." (Williams v. Taylor (1982) 129 Cal.App.3d 745, 752 [181 Cal.Rptr. 423] (Williams).)

During their conversation, Sturbaum "may have" told Yu the claim "could have been fraudulently billed" and "may have" mentioned the billing "could be fraudulent."9 She also "may have suggested that [Kim] shouldn't have any business to do with Dr. Hui." If Dr. Hui was engaging in fraudulent or unethical activity, it was important for Sturbaum to notify those with whom Dr. Hui did business and who were affected by the improprieties, particularly Kim. In addition, Sturbaum had a direct and immediate concern in protecting Federated's interest in settling meritorious claims. (See Williams, supra, 129 Cal.App.3d at p. 752 [privilege applied where defendant automobile shop made, to claims adjuster with whom body shop did business, statements concerning plaintiff body shop manager's termination for irregularities in records concerning work performed].) Assuming it occurred, Sturbaum's suggestion that Kim's firm "should stop doing business with Dr. Hui" was not extraneous or irrelevant to protecting Federated's pecuniary interests and its business relationship with National Legal Associates. (Kashian, supra, 98 Cal.App.4th at p. 914.) The same is true with respect to Sturbaum's purported comment that "[Dr.] Hui ... had misconduct or some sort of complaint ... that [he] should have stopped seeing female patient[s]." Yu was "not sure if [Sturbaum] actually said that ... specifically." Assuming it occurred, this statement was made in the course of Federated's business or professional relationship with National Legal Associates. (Ibid.)

We are not persuaded by Dr. Hui's reliance on a portion of the opinion in Mann, where the court determined the common interest privilege did not apply to statements defendants made to customers of a competing company, Water Systems Support Inc. (WSSI). (Mann, supra, 120 Cal.App.4th at p. 109.) The Mann court rejected the defendants' claim that their statements were privileged under Civil Code section 47, subdivision (c), explaining: "Defendants presented no evidence showing they had any type of relationship with WSSI's customers or that WSSI's customers requested the information. Because defendants and WSSI are business competitors, it is not reasonable to assume that the motive of the communication was innocent; rather, it appears defendants' only interest was to gain WSSI's customers as their own. If we were to accept defendants' unsupported argument, business competitors would be free to publish defamatory statements about the business practices of a rival to its rival's customers by merely contending the customers were `interested' in the subject matter of the communication." (120 Cal.App.4th at p. 109.)

Here and in contrast to Mann, Federated shared a business relationship with Kim. In addition, Yu testified her employer, Kim, directed her to call Sturbaum to "settle" the claim and "obtain the necessary documents to resolve" it, suggesting Yu asked for information about Federated's position on the claim and any impediments to securing payment of the outstanding bill. According to Yu, Sturbaum explained why the claim "was not worth money" and questioned the treatment Dr. Hui provided. This is not a situation like the one in Mann, where one company disparaged its competitor. Here, Sturbaum told Yu the claim "could have been fraudulently billed" and was "excessive" and "could be fraudulent." (Italics added.) Both Sturbaum and Kim shared a common interest in resolving the claim and Sturbaum's comments were reasonably calculated to further that interest.

(4) Having established the statements at issue are privileged, Dr. Hui bears the burden of showing the statements were made with malice. (Lundquist v. Reusser (1994) 7 Cal.4th 1193, 1208 [31 Cal.Rptr.2d 776, 875 P.2d 1279].) "[M]alice," within the meaning of Civil Code section 47, subdivision (c), is "`"established by a showing that the publication was motivated by hatred or ill will towards the plaintiff or by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiffs rights ...."'" (Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1370 [7 Cal.Rptr.3d 216], quoting Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 413 [134 Cal.Rptr. 402, 556 P.2d 764].) Dr. Hui has failed to present evidence of malice. Nothing in Dr. Hui's declaration or in Yu's deposition transcript remotely suggests Sturbaum's conversation with Yu was "motivated by hatred or ill will" or that she acted in "reckless disregard" of Dr. Hui's rights. A party's "bare assertion" that statements made are false does not make them so, "much less establish" they were made maliciously. (Kashian, supra, 98 Cal.App.4th at p. 932.)

DISPOSITION

The trial court's order granting the anti-SLAPP motion (Code Civ. Proc., § 425.16) is affirmed. Sturbaum is awarded costs on appeal. (Cal. Rules of Court, rule 8.278(a).)

Simons, J., and Needham, J., concurred.