NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

MOSK, J.

INTRODUCTION

Defendant and respondent Alex Choi (Choi), an attorney, formed Choice Property Management & Investment, LLC (Choice Property), a real estate limited liability company for which company Choi served as vice president and performed legal work. Choice Property's managing members included Choi's mother, Sue Kyong Choi (Mrs. Choi); Seoung Sook Lee (Lee); and Eun Hoi Kim (Kim). Plaintiff and appellant GEK, Inc. (GEK), Kim's wholly owned corporation, had a 33 percent interest in a property owned by Choice Property. After Choi resigned his position with Choice Property, a dispute arose and Kim and GEK sued Mrs. Choi and Lee concerning, in part, their activities within the company. Defendant and respondent Allen Matkins Leck Gamble Mallory & Natsis (Allen Matkins), a law firm in which Choi was a partner, defended Mrs. Choi and Lee in that action and filed a cross-complaint against Kim and GEK.

Kim and GEK moved to disqualify Allen Matkins as counsel for Mrs. Choi and Lee on the ground that Choi and his law firm had a conflict of interest in representing managing members of the limited liability company against another managing member. At the same time, GEK brought an action against Choi and Allen Matkins (defendants) for breach of fiduciary duty based on Allen Matkins's representation of Mrs. Choi against Kim and GEK.

Allen Matkins withdrew as counsel for Mrs. Choi and Lee, and Choi and Allen Matkins moved to strike GEK's action under Code of Civil Procedure section 425.16 (section 425.16) asserting it was a SLAPP action—a strategic lawsuit against public participation. The trial court granted the anti-SLAPP motion and GEK appeals. Because GEK's action against defendants was an action against an attorney and law firm concerning a breach of fiduciary duty, and thus did not concern activity that was protected under the anti-SLAPP statute, we reverse.

BACKGROUND1

In September 2004, at his mother's request, Choi formed Choice Property with Mrs. Choi as managing member. According to Choi, his mother intended to use the company to invest in, manage, and develop real estate with others. Choi, as vice president of Choice Property, signed the company's Articles of Organization and Statement of Information. The Articles of Organization were filed with the Secretary of State on September 27, 2004, and identify Choi as organizer at his Allen Matkins address. The Statement of Information was filed on December 15, 2004, and identifies Choi as Choice Property's vice president. In his declaration submitted in support of defendants' anti-SLAPP motion, Choi stated that he held the position of vice president of Choice Property as an accommodation to his mother. According to Choi, his duties as vice president were limited to forming the company. On April 12, 2005, Choi resigned his position as vice president of Choice Property.

At some point, Kim and Lee became managing members of Choice Property. On April 7, 2009, Kim and GEK brought an action against Mrs. Choi, Lee, and others entitled Eun Hoi Kim and GEK, Inc. v. Su Kyong Choi, et al. (Los Angeles Superior Court Case No. BC411379) (Kim v. Choi). In the first amended complaint in Kim v. Choi, Kim asserted causes of action for fraud, breach of fiduciary duty, elder abuse, and an accounting. Kim's causes of action concerned, in part, Mrs. Choi's and Lee's actions with respect to a condominium complex on Westmoreland Avenue in Los Angeles that was developed through Choice Property. GEK also asserted a cause of action for breach of fiduciary duty concerning Mrs. Choi's role as GEK's real estate broker with respect to a car wash and motel on Beach Boulevard in Anaheim. The Beach Boulevard properties had no apparent connection to Choice Property.

Mrs. Choi and Lee retained Allen Matkins to represent them in Kim v. Choi. In addition to other Allen Matkins attorneys, Choi rendered "legal services" on behalf of Mrs. Choi and Lee in Kim v. Choi. On November 3, 2009, Mrs. Choi and Lee filed a cross-complaint in Kim v. Choi against Kim and GEK that asserted causes of action for breach of promissory note, contribution, and breach of contract.

On March 9, 2010, 13 days before the date set for trial in Kim v. Choi, Kim and GEK filed a motion to disqualify Choi and Allen Matkins from continuing to represent Mrs. Choi and Lee. Kim and GEK alleged that Choi owed a fiduciary duty to Kim and GEK because he was an officer in and the organizer of Choice Property, an entity in which GEK had a 33 percent interest. Kim and GEK argued that Choi violated his fiduciary duty by representing Mrs. Choi and Lee in Kim v. Choi and in the related cross-complaint.

In his declaration in support of defendants' anti-SLAPP motion, Choi stated that when Kim and GEK filed the motion to disqualify Choi and Allen Matkins, he "strongly disagreed" with the motion's premise, but when presented with the motion on the eve of trial, "we decided it was more prudent to withdraw as counsel in the underlying action instead of incurring the expense and delay of contesting the motion." On April 13, 2010, Mrs. Choi and Lee filed a substitution of attorney in Kim v. Choi.

At the same time that Kim and GEK filed their motion to disqualify Choi and Allen Matkins, GEK filed the instant action against Choi and Allen Matkins. In the complaint, GEK alleged that Choice Property was created as a vehicle for Mrs. Choi and Kim to invest in real estate ventures. According to the complaint, Choice Property developed a condominium complex on Westmoreland Avenue in which GEK had a 33 percent interest. Without GEK's knowledge, Mrs. Choi established a $1.9 million revolving line of credit using GEK's interest in the condominiums as collateral and GEK and Kim brought an action against Mrs. Choi (Kim v. Choi) to recover their share of the credit line proceeds. In the instant action, GEK alleged that Choi, as vice president of Choice Property, owed GEK a fiduciary duty that Choi abandoned when he directed Allen Matkins to defend Mrs. Choi in Kim v. Choi and to file the cross-complaint. On the eve of that trial, Allen Matkins also brought an action against Mrs. Choi's accountant who discovered Mrs. Choi's fraud, causing the accountant to refuse to appear at trial. GEK sought damages against Choi for breach of fiduciary duty, damages against Allen Matkins for aiding and abetting Choi's breach of fiduciary duty, a declaration that Choi and Allen Matkins had a conflict of interest that prevented them from continuing to defend or prosecute any action against Kim and GEK, and injunctive relief preventing Choi and Allen Matkins from representing Mrs. Choi in any action against Kim or GEK "arising out of Choice LLC."

On May 7, 2010, defendants filed a special motion to strike GEK's complaint pursuant to section 425.16. The trial court sustained and overruled certain objections to evidence submitted in support of and opposition to defendants' anti-SLAPP motion and granted the motion.

DISCUSSION

GEK contends that the trial court erred in granting defendant's anti-SLAPP motion because its action against defendants concerned defendants' alleged breach of a fiduciary duty, conduct that is not covered by the anti-SLAPP statute. Even if defendants engaged in protected petitioning activity, GEK contends, it demonstrated a probability of prevailing in its action. Because GEK's action against defendants was an action against an attorney and a law firm concerning a breach of fiduciary duty, and thus did not concern activity that was protected under the anti-SLAPP statute, we reverse the trial court's order striking GEK's complaint. In light of our holding that defendants did not engage in protected petitioning activity in the first instance, we need not address whether GEK demonstrated a probability of prevailing in its action.

A. Standard of Review

We review de novo a trial court's ruling on a motion to strike under the anti-SLAPP statutes. (Rohde v. Wolf (2007) 154 Cal.App.4th 28, 35.) We do not weigh the evidence; rather, we accept as true evidence favorable to the plaintiff, and evaluate evidence favorable to the defendant to determine whether it defeats the plaintiff's claim as a matter of law. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3.)

B. Relevant Legal Principles

"A SLAPP suit—a strategic lawsuit against public participation—seeks to chill or punish a party's exercise of constitutional rights to free speech and to petition the government for redress of grievances. [Citation.] The Legislature enacted Code of Civil Procedure section 425.16—known as the anti-SLAPP statute—to provide a procedural remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional rights. [Citation.]" (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055-1056.) As stated in section 425.16, subdivision (b)(1), a litigant may move to strike "[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 under the United States or California Constitution in connection with a public issue . . . ."

To apply the anti-SLAPP statute, courts engage in a two-step process. "`First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. . . . If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.'" (Taus v. Loftus (2007) 40 Cal.4th 683, 703, quoting Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) The defendant has the burden on the first issue, the plaintiff has the burden on the second issue. (Rohde v. Wolf, supra, 154 Cal.App.4th at p. 35.) In analyzing whether the moving party has met its burden of showing that the suit arises from protected activity, the court considers "the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) "[`]"Only a cause of action that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to being stricken under the statute." [Citation.]' [Citation.]" (Rohde v. Wolf, supra, 154 Cal.App.4th at p. 35.)

"In the first step of the anti-SLAPP analysis, the court decides only whether the claims arise from protected activity." (Coretronic Corporation v. Cozen O'Connor (2011) 192 Cal.App.4th 1381, 1389.) "Arguments about the merits of the claims are irrelevant to the first step of the anti-SLAPP analysis." (Id. at p. 1388; Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal.App.4th 1264, 1268, fn. 3 [evidence that contradicts a plaintiff's claims is "irrelevant to the first step in evaluating an anti-SLAPP motion"].) "The court reviews the potential merit of the complaint only after the court has concluded the complaint challenges defendants' exercise of free speech or petitioning activity. If, and only if, such a showing has been made, does the court then consider whether the plaintiff demonstrated a probability of prevailing on the claims. If the substance, or gravamen, of the complaint does not challenge defendant's acts in furtherance of the right of free speech or petition, the court does not consider whether the complaint alleges a cognizable wrong or whether the plaintiff can prove damages." (Coretronic Corp. v. Cozen O'Connor, supra, 192 Cal.App.4th at pp. 1389-1390.)

"[S]tatements, writings and pleadings in connection with civil litigation are covered by the anti-SLAPP statute, and that statute does not require any showing that the litigated matter concerns a matter of public interest. [Citations.]" (Rohde v. Wolf, supra, 154 Cal.App.4th at p. 35.) However, "[n]ot all attorney conduct in connection with litigation, or in the course of representing clients, is protected by section 425.16." (California Back Specialists Medical Group v. Rand (2008) 160 Cal.App.4th 1032, 1037.) It is well-established that section 425.16 does not apply to litigation that is based on an attorney's undertaking of representation of a client with interests adverse to a current or former client. (Coretronic Corp. v. Cozen O'Connor, supra, 192 Cal.App.4th at pp. 1392-1393; PrediWave Corp. v. Simpson Thacher & Bartlett LLP (2009) 179 Cal.App.4th 1204, 1228; Hylton v. Frank E. Rogozienski, Inc., supra, 177 Cal.App.4th at pp. 1272-1274; Freeman v. Schack (2007) 154 Cal.App.4th 719, 732;Benasra v. Mitchell, Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, 1189; United States Fire Ins. Co. v. Sheppard, Mullin, Richter & Hampton LLP (2009) 171 Cal.App.4th 1617, 1627-1628; but see Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658.)

When, as here, "a pleading contains allegations regarding both protected and unprotected activity, `it is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies [citation] . . . .' [Citation.] Incidental allegations regarding protected activity do not `subject the cause of action to the anti-SLAPP statute.' [Citation.]" (PrediWave Corp. v. Simpson Thacher & Bartlett LLP, supra, 179 Cal.App.4th at pp. 1219-1220.) In determining the "principal thrust or gravamen" of an action, a court may look to the allegations in the complaint. (Freeman v. Schack, supra, 154 Cal.App.4th at p. 728.)

In its complaint, GEK alleged that Choice Property was created as a vehicle for Mrs. Choi and Kim to invest in real estate ventures; Choice Property developed the condominium complex on Westmoreland Avenue; without GEK's knowledge, Mrs. Choi established a $1.9 million revolving line of credit using GEK's interest in the Westmoreland condominiums as collateral; and when GEK and Kim brought an action against Mrs. Choi to recover their share of the credit line proceeds, Choi, a vice president of Choice Property, directed Allen Matkins to defend Mrs. Choi and to file a cross-complaint against Kim and GEK. GEK further alleged that such conduct by Choi, which was aided and abetted by Allen Matkins, violated Choi's fiduciary duty to GEK.

The activity that gave rise to Choi's and Allen Matkins's asserted liability in GEK's action was their acceptance of representation of Mrs. Choi and Lee—i.e. representation adverse to GEK, rather than the incidental litigation activities that they undertook on behalf of Mrs. Choi and Lee. Because the "principal thrust or gravamen" of GEK's action was defendants' asserted unprotected breach of their fiduciary duty to GEK, defendants failed to meet their burden on the first step of the anti-SLAPP analysis. (Coretronic Corp. v. Cozen O'Connor, supra, 192 Cal.App.4th at pp. 1392-1393; PrediWave Corp. v. Simpson Thacher & Bartlett LLP, supra, 179 Cal.App.4th at p. 1228; Hylton v. Frank E. Rogozienski, Inc., supra, 177 Cal.App.4th at pp. 1272-1274; Freeman v. Schack, supra, 154 Cal.App.4th at p. 732; Benasra v. Mitchell, Silberberg & Knupp LLP, supra, 123 Cal.App.4th at p. 1189; United States Fire Ins. Co. v. Sheppard, Mullin, Richter & Hampton LLP, supra, 171 Cal.App.4th at pp. 1227-1228.)

Defendants rely upon Wallace v. McCubbin (2011) 196 Cal.App.4th 1169, in which tenants sued defendants for, inter alia, wrongful eviction and retaliatory eviction, which included the serving of a three-day notice, the filing of an unlawful detainer action, and complaints to the Animal Control Agency. The court held that these acts constituted protected activity under section 425.16. The court said that these allegations were not incidental to unprotected conduct. This case has nothing to do with an attorney's representation, which is in issue here.

At oral argument, defendants contended that two cases decided after they filed their respondents' brief on appeal—Tuszynska v. Cunningham (2011) 199 Cal.App.4th 257 and Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153—support their position that GEK's action concerned protected activity. Defendants' reliance is misplaced.

In Tuszynska v. Cunningham, supra, 199 Cal.App.4th 257, an attorney who provided legal services to members of a sheriffs' association under a prepaid legal services plan brought an action for gender discrimination against the sheriffs' association, its prepaid legal services plan, and a former plan administrator contending that she received fewer case assignments than male attorneys with less experience. (Id. at p. 261.) The Court of Appeal held that the plaintiff's action was based on the defendants' protected speech and petitioning activities in connection with statements and writings in selecting attorneys and in deciding whether to fund, and to what extent the legal services plan should fund, litigation, which therefore involves "an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law . . . . (§ 425.16, subd. (e)(2).)" (Id. at pp. 267-268.) Whether or not we believe that decision to be correct, the case did not concern representation by an attorney in breach of a fiduciary duty.

In Fremont Reorganizing Corp. v. Faigin, supra, 198 Cal.App.4th 1153, the plaintiff, an in-house counsel, brought an action against his former employer related to the termination of his employment. (Id. at p. 1159.) The defendant employer filed a cross-complaint for breach of confidence, breach of fiduciary duty, violation of 3-310(C) of the Rules of Professional Conduct, and equitable indemnity based on the plaintiff's disclosure to the Insurance Commissioner, acting as liquidator of a company related to the defendant, that the defendant was planning to auction certain artworks the plaintiff claimed were owned by the company being liquidated. (Id. at pp. 1159, 1162.) The Court of Appeal noted that several cases have held that the anti-SLAPP statute was inapplicable in an action by a client against its own attorney when the "gravamen or principal thrust of the particular causes of action did not concern a statement made in connection with litigation, but instead concerned some other conduct allegedly constituting a breach of professional duty." (Id. at p. 1170.) The Court of Appeal distinguished that line of cases, holding that the gravamen of the defendant's action was based on the plaintiff's statements to the Insurance Commissioner rather than some "other conduct" and the statements were not "merely incidental to the cause of action." (Id. at pp. 1170-1171.) As stated above, the gravamen of GEK's action was defendants' acceptance of representation of Mrs. Choi and Lee—i.e. representation adverse to GEK, rather than the incidental litigation activities that they undertook on behalf of Mrs. Choi and Lee.

Defendants argue that GEK's action fails outside the ambit of the cases that hold that actions for a breach of an attorney's fiduciary duty do not concern protected petitioning activity within the meaning of the anti-SLAPP statute because Allen Matkins never represented GEK and there is no evidence or allegation that Choi or Allen Matkins obtained any confidential information from either GEK or Choice Property. Defendants also argue that Choi had resigned as an officer of Choice Property years before the representations. Defendants' arguments fail because they go to the merits of GEK's action—the second step under the anti-SLAPP analysis—and not to the principal thrust or gravamen of GEK's action—the first step under the anti-SLAPP analysis. (Coretronic Corp. v. Cozen O'Connor, supra, 192 Cal.App.4th at p. 1388 ["Arguments about the merits of the claims are irrelevant to the first step of the anti-SLAPP analysis"]; Hylton v. Frank E. Rogozienski, Inc., supra, 177 Cal.App.4th at p. 1268, fn. 3 [evidence that contradicts a plaintiff's claims is "irrelevant to the first step in evaluating an anti-SLAPP motion"].)

In Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, the Supreme Court held that the plaintiff satisfied the second prong of the SLAPP statute by showing that an attorney solicited signatories on a referendum petition to overturn a project on which the attorney had represented the former client. The court did not decide the first prong of the SLAPP statute. The concurring justices would have held that the soliciting signatories for a petition to overturn a local government's approval of a redevelopment project clearly is an "act in furtherance of a person's right of . . . free speech . . . in connection with a public issue." (§ 425.16, subd. (e); Oasis West Realty, LLC v. Goldman, supra, 51 Cal.4th at pp. 819-920.) The conduct here, the representation of a client is not remotely analogous to soliciting signatories on a petition.

If defendant's position were to prevail, most actions against an attorney for malpractice or breach of fiduciary duty would be covered by the SLAPP statute. The expansion of the SLAPP statute to cover practically everything is not consistent with the purpose of its enactment and adds a new and unnecessary layer of judicial action in many cases.

As one court said, "an exasperated Justice Armstrong observed: `Section 425.16 was enacted because the Legislature found that "it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process." Neither the public's nor defendant's right to participate was advanced by this motion.' (Moran v. Endres [(2006)] [135 Cal.App.4th 952,] 955.) A concurring Justice Mosk added this: `Code of Civil Procedure section 425.16 . . . has resulted in numerous appeals that involve various ambiguities and apparent unintended consequences.' (Id. at p. 956 (conc. opn. of Mosk, J.).)" (Grewal v. Jammu (2011) 191 Cal.App.4th 977, 997.)

That same court said, "What is germane to our discussion is the ways in which the anti-SLAPP procedure is being misused—and abused. Without attempting to describe all the ways, we offer two examples, one obvious, one not. [¶] The obvious example is found in the numerous cases that involve complaints that simply do not `arise from' protected activity, but generate anti-SLAPP motions nevertheless. Examples include actions against attorneys. (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1539 [52 Cal.Rptr.3d 712] [`"garden variety" attorney malpractice']; Benasra v. Mitchell Silberberg & Knupp LLP (2004) 123 Cal.App.4th 1179, 1187 [20 Cal.Rptr.3d 621] [duty of loyalty]; Jespersen v. Zubiate-Beauchamp (2003) 114 Cal.App.4th 624, 630 [7 Cal.Rptr.3d 715]; Moore v. Shaw [(2004)] 116 Cal.App.4th 182 [breach of trust]; Beach v. Harco National Ins. Co. (2003) 110 Cal.App.4th 82 [1 Cal.Rptr.3d 454] [failure to timely arbitrate].)" (Grewal v. Jammu, supra, 191 Cal.App.4th at p. 999.)

The trial court erred in striking GEK's action. Having determined that defendants failed to demonstrate that their conduct amounted to constitutionally protected free speech or petition, we need not consider whether GEK demonstrated a probability of prevailing on its claims. (Jespersen v. Zubiate-Beauchamp, supra, 114 Cal.App.4th at p. 632.)

DISPOSITION

The judgment is reversed. GEK is awarded its costs on appeal.

TURNER, P. J. and KRIEGLER, J., concurs.