Filed 9/3/26 BioCorRx v. Calista Therapeutics CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
BIOCORRX INC. et al.,
Plaintiffs and Respondents, G065885
v. (Super. Ct. No. 30-2024-01420208)
CALISTA THERAPEUTICS, INC., OPINION
et al.,
Defendants and Appellants.
Appeal from a prejudgment order of the Superior Court of Orange
County, Andre Manssourian, Judge. Affirmed.
Reich Radcliffe & Hoover, Richard J. Radcliffe and Marc G. Reich
for Defendants and Appellants.
Katz Ruby & Carle, Michael I. Katz and Byron H. Ruby for
Plaintiffs and Respondents.
* * *
Defendants Calista Therapeutics, Inc. (Calista) and Dr. Andrew
Mallon (collectively, defendants) appeal from an order denying their motion
to strike the complaint of plaintiffs BioCorRx, Inc. (BioCorRx) and Lourdes
Felix (collectively, plaintiffs) under California’s anti-SLAPP statute, Code of
Civil Procedure1 section 425.16. Plaintiffs brought an action for intrusion into
private affairs, recording of confidential information (Pen. Code, §§ 632,
637.2), and unfair business practices (Bus. & Prof. Code, § 17200 et seq.)
against defendants based on Mallon’s secret recording of a BioCorRx board
meeting and a separate meeting with Felix. The trial court denied
defendants’ motion to strike, concluding that, although plaintiffs’ claims
arose from defendants’ protected activity under the first prong of the anti-
SLAPP statute, plaintiffs demonstrated a likelihood of success on the merits
under the second prong.
We conclude on our de novo review of the matter that plaintiffs’
claims regarding Mallon’s recording of the board meeting and his
conversation with Felix did not arise from any protected activity.2 We further
conclude that plaintiffs have demonstrated a likelihood of success on the
merits of their third and fourth causes of action for recording confidential
1 All further statutory references are to the Code of Civil
Procedure unless otherwise noted.
2 It appears that defendants only appeal the trial court’s denial
of their anti-SLAPP motion as to the third and fourth causes of action for
recording of secret information because neither their opening nor reply
briefs challenge the denial of their motion as to any of the other causes of
action. (See Cruz v. Tapestry, Inc. (2025) 113 Cal.App.5th 943, 953–954
[“‘“Even when our review on appeal ‘is de novo, it is limited to issues which
have been adequately raised and supported in [the appellant’s opening]
brief. [Citations.] Issues not raised in an appellant’s brief are deemed waived
or abandoned”’”].)
2
information. Accordingly, we affirm the prejudgment order denying
defendants’ anti-SLAPP motion.
FACTS
A. Factual Background
Mallon and his consulting firm Calista entered into a consulting
agreement with BioCorRx. The underlying lawsuit centers around two secret
recordings made by Mallon on March 15, 2023, one of a BioCorRx confidential
board meeting and the other of a conversation with Felix, BioCorRx’s chief
executive officer and chief financial officer, which occurred in her office
directly after the board meeting’s conclusion.
After the board meeting, Felix requested to speak with Mallon in
her office to ask him to follow up with BioCorRx’s private sector auditor,
Marcum LLP (Marcum), so that Marcum could finalize its 2022 financial
audit. Mallon had not yet responded to Marcum’s audit confirmation letter
regarding his invoices, which were needed as part of the audit. Mallon stated
he had not responded to the confirmation letter because he thought some of
its wording was inaccurate. After some discussion, Mallon eventually sent an
e-mail to Marcum on March 18, 2023, that clarified the confirmation letter.
Mallon conceded the following facts in his deposition: he made
the two recordings; he was paid to do so by Calista; he did not notify any of
the participants he was recording the conversations; he did not seek
authorization from the other parties to record the conversations; and Calista
had a policy of recording conversations for the benefit of the company.
Mallon continued to work with BioCorRx for another year until
the company terminated him in March 2024. He was terminated for alleged
poor performance and suspicious behavior, which included taking special
3
implantable pellets to deliver to another researcher and requesting access to
manufacturing blueprints for BioCorRx’s top addiction treatment, which was
codenamed “BICX104.” Shortly after he was terminated, BioCorRx allegedly
learned Mallon had stolen trade secret clinical data. BioCorRx also
purportedly determined that Mallon was planning to compete with BioCorRx.
B. Federal Court Litigation
After Mallon refused to return the trade secret data and other
confidential information, BioCorRx sued him in federal district court for
misappropriation of trade secrets and other causes of action. (BioCorRx Inc.
v. Calista Therapeutics, Inc. (C.D.Cal., July 1, 2024, No. 8:24-cv-00640-JVS
(JDE)) 2024 U.S.Dist. Lexis 123268.) Mallon filed an anti-SLAPP motion in
federal court, similar to the instant motion, in which he claimed there was an
ongoing federal investigation of BioCorRx, and he was therefore entitled to
protection from liability pursuant to the litigation privilege. In support of the
motion, he submitted a declaration in which he admitted he recorded Felix.
The district court denied the anti-SLAPP motion, concluding Mallon had
failed to submit any admissible evidence of a federal investigation.
(BioCorRx, Inc., 2024 U.S.Dist. Lexis 123268, p. *19.) Learning of the
existence of the recordings for the first time, plaintiffs sought discovery of the
recordings. However, before providing the recordings in discovery, Mallon
appealed the denial of the anti-SLAPP motion, which stayed the federal court
action.
C. The Complaint
Plaintiffs filed the instant case, alleging the following causes of
action: two claims for intrusion into private affairs, one brought by BioCorRx
against defendants based on the recording of the board meeting and the other
brought by Felix against defendants based on the recording of the Felix
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meeting (first and second claims for relief); two claims for recording of
confidential information (Pen. Code, §§ 632, 637.2), one brought by BioCorRx
against defendants based on the recording of the board meeting and the other
brought by Felix against defendants based on the recording of the Felix
meeting (third and fourth claims for relief); and one claim for unfair business
practices (Bus. & Prof. Code, § 17200 et seq.) brought by plaintiffs against
defendants (fifth claim for relief). The complaint alleged that Mallon made
secret recordings of the board meeting and individual meeting with Felix to
unfairly compete with BioCorRx’s business, in particular, its addiction
treatments. During discovery, plaintiffs sought copies of any recordings of
BioCorRx employees or directors.
D. The Anti-SLAPP Motion
Defendants filed an anti-SLAPP motion. In support of the motion,
Mallon filed a declaration in which he claimed he secretly recorded Felix
because he believed she was going to extort and blackmail him into
concealing a fraudulent administrative fee scheme. Mallon alleged that the
financial audit of BioCorRx by Marcum was actually “an official US
Government financial audit/investigation.” In his declaration, Mallon
contended he relied on information he received regarding an alleged
administrative fee scheme from Robert Knutson, who was a friend of
BioCorRx’s president Louis Lucido, but who had never been an employee,
director, or officer of BioCorRx. Defendants also sought to invoke the
litigation privilege on the ground that BioCorRx learned of Mallon’s secret
recordings from the prior litigation. Plaintiffs filed an opposition to the anti-
SLAPP motion, together with supporting declarations and evidentiary
objections.
5
The trial court granted plaintiffs’ motion to temporarily lift the
stay of discovery to take Mallon’s deposition. Mallon was also compelled to
turn over a copy of his recordings.
The trial court, relying on Mallon’s declaration that the Felix
recording was made in connection with a potential investigation by the
federal government into BioCorRx’s accounting practices, concluded the
defendants provided sufficient evidence to show that the recording of Mallon’s
meeting with Felix was protected activity under section 425.16, subdivision
(e)(2) [protected conduct includes “any written or oral statement or writing
made in connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official proceeding
authorized by law”].) In particular, the court found that the recording of Felix
“was made in connection with an investigation, or potential investigation, by
the federal government into BioCorRx’s accounting practices, specifically its
accounting of administrative fees, as well as to defend against potential
‘extortion’ by Felix.”
However, the trial court found that “plaintiffs have presented
sufficient . . . evidence to show a probability of prevailing on the merits of
their claims.” The court also concluded that plaintiffs “provided sufficient
evidence to rebut defendants’ Penal Code[ section] 633.5 defense, by
presenting evidence that there was no actual or pending governmental
investigation, but rather, the administrative fee dispute was in connection
with an internal audit by BioCorRx’s retained accounting firm.” It also found
that plaintiffs presented sufficient evidence to show that “any reliance by
Mallon on information received from Robert Knutson was not reasonable,
given that Knutson had no knowledge of, nor access to, any of BioCorRx’s
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financial or accounting information, nor any knowledge of the company’s
internal operations.”
Finally, the court found that plaintiffs “presented sufficient
evidence to show that the litigation privilege [did] not apply” because there
was “no actual or pending governmental investigation” and there was “no
evidence that defendants initiated litigation based on [the] recordings.”
DISCUSSION
I.
ANTI-SLAPP LEGAL PRINCIPLES AND STANDARD OF REVIEW
Section 425.16, subdivision (b)(1) provides, “A cause of action
against a person arising from any act of that person in furtherance of the
person’s right of petition or free speech under the United States Constitution
or the California Constitution in connection with a public issue shall be
subject to a special motion to strike, unless the court determines that the
plaintiff has established that there is a probability that the plaintiff will
prevail on the claim.” This statute provides “‘a procedure for the early
dismissal of what are commonly known as SLAPP suits . . .—litigation of a
harassing nature, brought to challenge the exercise of protected free speech
rights.’ [Citation.] A SLAPP suit is generally brought to obtain an economic
advantage over the defendant, not to vindicate a legally cognizable right of
the plaintiff.” (Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 40.) The
Legislature has mandated that courts construe this statute “broadly” in favor
of the moving party. (§ 425.16, subd. (a).)
“Litigation of an anti-SLAPP motion involves a two-step process.
First, ‘the moving defendant bears the burden of establishing that the
challenged allegations or claims “aris[e] from” protected activity in which the
7
defendant has engaged.’” (Bonni v. St. Joseph Health System (2021)
11 Cal.5th 995, 1009 (Bonni).)
“Second, for each claim that does arise from protected activity,
the plaintiff must show the claim has ‘at least “minimal merit.”’” (Bonni,
supra, 11 Cal.5th at p. 1009.) This step of the anti-SLAPP analysis “has been
described as a summary-judgment-like procedure. [Citation.] The court
determines whether ‘“the plaintiff has stated a legally sufficient claim and
made a prima facie factual showing sufficient to sustain a favorable
judgment.”’ [Citation.] The plaintiff ‘“may not rely solely on its complaint,
even if verified; instead, its proof must be made upon competent admissible
evidence.”’ [Citation.] The defendant may submit evidence in support of its
motion. [Citation.] However, ‘“[t]he court does not weigh evidence or resolve
conflicting factual claims.”’ [Citation.] Rather, the court ‘“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. [Citation.]
‘[C]laims with the requisite minimal merit may proceed.’”’” (Billauer v.
Escobar-Eck (2023) 88 Cal.App.5th 953, 962 (Billauer).) Conversely, “[i]f the
plaintiff cannot make this showing, the court will strike the claim.” (Bonni, at
p. 1009.)
“On appeal, we review [an anti-SLAPP] motion de novo and
independently determine whether the parties have met their respective
burdens.” (Cross v. Cooper (2011) 197 Cal.App.4th 357, 371.) We employ the
same two-step process used by the trial court. (Billauer, supra,
88 Cal.App.5th at p. 962.) “‘Only a [claim] 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.’” (Ibid.)
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II.
THE CHALLENGED CLAIMS DO NOT ARISE FROM PROTECTED ACTIVITY
Under step one, we first consider whether defendants made a
threshold showing that the challenged claims in the complaint arise from an
act in furtherance of defendants’ right of petition or free speech in connection
with a public issue. (§ 425.16, subd. (b)(1).)
In determining whether a claim arises from protected activity, a
court must “‘consider the elements of the challenged claim and what actions
by the defendant supply those elements and consequently form the basis for
liability.’” (Bonni, supra, 11 Cal.5th at p. 1009.) A claim “arises from”
protected activity if any protected act supplies one or more elements of a
claim. (Id. at p. 1010.) However, “a claim does not ‘arise from’ protected
activity simply because it was filed after, or because of, protected activity, or
when protected activity merely provides evidentiary support or context for
the claim.” (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 621.)
“Rather, a claim may be struck only if the speech or petitioning activity itself
is the wrong complained of.” (Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1060.) “In deciding whether the initial
‘arising from’ requirement is met, a court considers ‘the pleadings, and
supporting and opposing affidavits stating the facts upon which the liability
or defense is based.’” (Navellier v. Sletten (2002) 29 Cal.4th 82, 89
(Navellier).)
As noted, defendants only appeal the denial of their anti-SLAPP
motion as to the third and fourth causes of action for recording of secret
information in violation of Penal Code sections 633.5 and 637.2 based on
Mallon’s recordings of the board meeting and his conversation with Felix.
9
Thus, we must determine whether any of the elements of plaintiffs’ claims for
recording of secret information rely upon defendants’ protected activity.
The anti-SLAPP statute lists four categories of conduct that
constitute protected activity: “(1) any written or oral statement or writing
made before a legislative, executive, or judicial proceeding, or any other
official proceeding authorized by law, (2) any written or oral statement or
writing made in connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official proceeding
authorized by law, (3) any written or oral statement or writing made in a
place open to the public or a public forum in connection with an issue of
public interest, or (4) any other conduct in furtherance of the exercise of the
constitutional right of petition or the constitutional right of free speech in
connection with a public issue or an issue of public interest.” (§ 425.16,
subd. (e).)
As noted, the trial court held that defendants made a sufficient
showing under section 425.16, subdivision (e)(2), which protects “any written
or oral statement or writing made in connection with an issue under
consideration or review by a legislative, executive, or judicial body, or any
other official proceeding authorized by law.”
We disagree with the trial court’s finding. Mallon’s act of secretly
recording the board meeting and his conversation with Felix is clearly not a
“written or oral statement or writing.” Mallon’s recording of the board
meeting or of Felix might constitute “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”
10
under section 425.16, subdivision (e)(4).3 (Italics added.) (See Old Republic
Construction Program Group v. The Boccardo Law Firm, Inc. (2014)
230 Cal.App.4th 859, 874 [“‘only one of the four categories of protected
activity covers [noncommunicative] conduct (§ 425.16, subd. (e)(4) . . .)’”].)
However, plaintiffs’ third and fourth causes of action for recording of secret
information arise, not from the presentation of the contents of Mallon’s secret
recordings, which, depending on the circumstances, might be a
communicative act, but solely from the activity of making the audio
recordings, which is noncommunicative conduct.
The California Supreme Court has recognized the distinction
between communicative acts and noncommunicative conduct in the context of
the litigation privilege under Civil Code section 47, subdivision (b) (formerly
subdivision (2)), which applies to a “publication or broadcast” made in the
course of a judicial proceeding. (See Kimmel v. Goland (1990) 51 Cal.3d 202,
209–212 (Kimmel).) In Kimmel, the Supreme Court distinguished making a
surreptitious recording, which is not protected by the litigation privilege, and
publishing, broadcasting, or otherwise disclosing the contents of that
recording, which may be protected. (Id. at pp. 209–212.) The Supreme Court
stated that the distinction between “communicative acts” and
“noncommunicative conduct” has “traditionally served as a threshold issue”
in determining whether the litigation privilege applies. (Id. at p. 211.)
Because the Supreme Court has analyzed the scope of section 425.16,
subdivision (e)(1) and (2), by referring to the litigation privilege in Civil Code
3 We note that defendants’ opening and reply briefs cite
section 425.16, subdivision (e)(4), but do not explicitly argue it applies to
Mallon’s recordings.
11
section 47, subdivision (b), the distinction between communicative and
noncommunicative acts is an appropriate consideration in determining
whether an activity is protected under subdivision (e)(4). (See Flatley v.
Mauro (2006) 39 Cal.4th 299, 322–323 (Flatley) [“[p]ast decisions of this court
and the Court of Appeal have looked to the litigation privilege as an aid in
construing the scope of section 425.16, subdivision (e)(1) and (2)”].)
Moreover, even if the recording were a “communicative act,” we
conclude that defendants have not shown that the recording was made “in
connection with a public issue or an issue of public interest,” as required by
section 425.16, subdivision (e)(4). “We are mindful that the definition of
‘public interest’ for purposes of the anti-SLAPP statute is to be, and has been,
‘broadly construed to include not only governmental matters, but also private
conduct that impacts a broad segment of society and/or that affects a
community in a manner similar to that of a governmental entity.’” (Dual
Diagnosis Treatment Center, Inc. v. Buschel (2016) 6 Cal.App.5th 1098, 1104.)
We have reviewed Mallon’s transcript of his taped conversation
with Felix. Even assuming the transcript is an accurate representation of the
conversation, an assertion which plaintiffs dispute, the conversation regards
Mallon’s failure to timely respond to Marcum’s audit confirmation letter
regarding his invoices, which was preventing Marcum from finalizing its
2022 financial audit of BioCorRx. Mallon eventually sent an email to Marcum
on March 18, 2023, that clarified the confirmation letter. There is nothing in
this conversation that is remotely a matter of public interest. Furthermore,
any claim that the recordings of the board meeting and the conversation with
Felix concerned a “public issue or issue of public interest” is undermined by
Mallon’s concession during his deposition that he “was in the habit of
12
recording all of [his] conversations” and that Calista had a corporate “policy”
of routinely recording conversations for the benefit of the company.
Furthermore, plaintiffs’ third and fourth causes of action do not
arise out of Mallon’s alleged use or misuse of any illegal recordings. Rather, it
arises entirely from Mallon’s act of allegedly illegally recording confidential
conversations without obtaining either the board’s or Felix’s consent.
Similarly, the complaint as a whole is narrowly pleaded and focused solely on
Mallon’s conduct of recording various conversations and not on any
subsequent possible expressive conduct related to the use of these recordings
that might be protected under section 425.16, subdivision (e)(4).
Accordingly, we conclude that Mallon’s secret recordings of the
board meeting and his conversation with Felix did not arise from any
protected activity in furtherance of either Mallon’s or Calista’s right of
petition or free speech under the California or United States constitutions.
III.
THE TRIAL COURT’S FINDING THAT DEFENDANTS’ CONDUCT AROSE FROM
PROTECTED ACTIVITY WAS NOT A FINDING THAT DEFENDANTS ACTED
LAWFULLY
Defendants assert that plaintiffs cannot demonstrate a
probability of prevailing because the trial court found that defendants made
the recordings in connection with an investigation and therefore the
recording was lawful.
Defendants rely on Timothy W. v. Julie W. (2022) 85 Cal.App.5th
648, 660–661 (Timothy W.) and Flatley, supra, 39 Cal.4th at pages 320–321,
to argue that their conduct was not illegal. Timothy W. concluded that a
defendant is not entitled to anti-SLAPP protection only where the conduct
relied upon is “criminal as a matter of law” or alternatively, “‘where either
13
the defendant concedes the illegality of its conduct or the illegality is
conclusively shown by the evidence.’” (Timothy W., supra, 85 Cal.App.5th at
p. 660.)
The trial court’s finding that the conduct arose from protected
activity under section 425.16, subdivision (e)(2), does not mean the court
found that Mallon lawfully made the recordings within the meaning of Penal
Code section 633.5. Based on the narrow exception acknowledged in
Timothy W., a finding that conduct constitutes protected activity under
section 425.16, subdivisions (b)(1) and (e), is not the equivalent of a finding
that Mallon acted lawfully in making the recordings.4 Therefore, the court
properly went to the second step of the analysis—whether plaintiffs had
shown a probability of prevailing.
IV.
PLAINTIFFS HAVE SHOWN A PROBABILITY OF PREVAILING
AT TRIAL ON THEIR THIRD AND FOURTH CAUSES OF ACTION5
At step two of the anti-SLAPP analysis, the burden of proof shifts
to plaintiffs to prove a probability of prevailing on their cause of action at
trial. This requires plaintiffs to demonstrate that their cause of action is both
legally sufficient (Grewal v. Jammu (2011) 191 Cal.App.4th 977, 989
[“plaintiff needs to show only a ‘minimum level of legal sufficiency and
4 Moreover, a trial court cannot resolve factual disputes by way of
an anti-SLAPP motion.
5 We address the second prong for the sake of completeness even
though we acknowledge it is not strictly necessary given our finding on the
first prong. (Billauer, supra, 88 Cal.App.5th at p. 962 [“‘Only a [claim] that
satisfies both prongs of the anti-SLAPP statute . . . is a SLAPP, subject to
being stricken under the statute’”].)
14
triability’”]) and supported by a prima facie showing of facts sufficient to
support a favorable judgment if the evidence submitted by plaintiffs is
credited (Navellier, supra, 29 Cal.4th at pp. 88–89).
Penal Code “[s]ection 632, part of California’s Invasion of Privacy
Act . . ., prohibits the intentional recording of a ‘confidential communication’
without the consent of all parties to the communication.” (Hataishi v. First
American Home Buyers Protection Corp. (2014) 223 Cal.App.4th 1454, 1463.)
Penal Code section 632 imposes liability on “[a] person who, intentionally and
without the consent of all parties to a confidential communication, uses an
electronic amplifying or recording device to eavesdrop upon or record the
confidential communication, whether the communication is carried on among
the parties in the presence of one another or by means of a telegraph,
telephone, or other device, except a radio.” (Id., subd. (a), italics added.) Penal
Code section 632 defines the term “‘confidential communication’” to include
“any communication carried on in circumstances as may reasonably indicate
that any party to the communication desires it to be confined to the parties
thereto, but excludes a communication made in a public gathering or in any
legislative, judicial, executive, or administrative proceeding open to the
public, or in any other circumstance in which the parties to the
communication may reasonably expect that the communication may be
overheard or recorded.” (Id., subd. (c), italics added.)
Here, plaintiffs presented sufficient evidence to demonstrate a
probability of prevailing on the merits. Mallon conceded the following during
his deposition: he intentionally recorded the board meeting and conversation
with Felix; he never notified any of the participants, including Felix, that he
was recording them; he was not authorized by Felix or any other participant
15
to record the conversations; and he made the recording using his cellular
phone.
Additionally, plaintiffs submitted declarations in opposition to
defendants’ anti-SLAPP motion, explaining that they had a reasonable
expectation of privacy at BioCorRx’s headquarters, which is generally closed
to the public. The declarations also stated that BioCorRx’s board meetings
are private and that it was not normal for consultants like Mallon to attend
such meetings. Felix’s declaration stated that she was surprised to see
Mallon at the board meeting because these meetings are “normally reserved
only for BioCorRx’s officers and directors”; her discussion with Mallon after
the board meeting in her private office was not planned in advance; and she
did not realize that Mallon was recording their conversation.
Plaintiffs also submitted sufficient evidence to defeat defendants’
Penal Code section 633.5 defense. Defendants’ anti-SLAPP motion asserted
that they were justified in secretly recording the BioCorRx board meeting
and conversation with Felix because Mallon reasonably believed that Felix
intended to extort him.
Penal Code section 633.5 provides an exception to liability under
section 632 by providing that a “party to a confidential communication” is not
prohibited “from recording the communication for the purpose of obtaining
evidence reasonably believed to relate to the commission by another party to
the communication of the crime of extortion, kidnapping, bribery, any felony
involving violence against the person, [and] do[es] not render any evidence so
obtained inadmissible in a prosecution for extortion, kidnapping, bribery, . . .
or any crime in connection therewith.” (Pen. Code, § 633.5.)
As a preliminary matter, we note that Penal Code section 633.5
appears applicable only as a defense in criminal proceedings, not as an
16
affirmative defense in a civil action, as here. (See Geragos v. Abelyan (2023)
88 Cal.App.5th 1005, 1030–1031 [holding that Penal Code section 633.5 does
not apply as a defense to liability in a civil case].) Therefore, defendants are
likely not entitled to invoke Penal Code section 633.5 as an affirmative
defense in this civil matter.
Even if they were, however, we agree with the trial court that
plaintiffs submitted sufficient evidence to defeat defendants’ affirmative
defense. First, defendants presented no evidence to support Mallon’s claim he
secretly recorded his conversation with Felix because he objectively believed
she was going to extort him. Felix’s declaration states that she “did not
pressure intimidate, extort, blackmail, or coerce [Mallon] into making any
statements.” In fact, Mallon continued to work with BioCorRx for
approximately another year, despite his alleged fear of Felix’s extortion.
Furthermore, our review of Mallon’s transcript of his conversation with Felix
corroborates her declaration and provides no evidence of any attempt by Felix
to extort Mallon. As noted, their conversation solely relates to Felix’s request
that Mallon respond to Marcum’s letter regarding Calista’s invoices so that
Marcum could complete its yearly financial audit of BioCorRx.
Moreover, as found by the trial court, defendants failed to present
any evidence that there was an “actual or pending governmental
investigation” of BioCorRx. Instead, “the administrative fee dispute was in
connection with an internal audit by BioCorRx’s retained accounting firm.”
The court also found that Mallon’s alleged reliance on Robert Knutson that
there was a pending federal governmental investigation or audit of BioCorRx
“was not reasonable” because Knutson “had no knowledge of, nor access to,
any of BioCorRx’s financial or accounting information, nor any knowledge of
the company’s internal operations.”
17
Defendants also contend that plaintiffs cannot show a probability
of prevailing because the litigation privilege applies. (Civ. Code, § 47.) Silberg
v. Anderson (1990) 50 Cal.3d 205 states: “The usual formulation is that the
privilege applies to any communication (1) made in judicial or quasi-judicial
proceedings; (2) by litigants or other participants authorized by law; (3) to
achieve the objects of the litigation; and (4) that have some connection or
logical relation to the action.” (Id. at p. 212.) “Because the litigation privilege
protects only publications and communications, a ‘threshold issue in
determining the applicability’ of the privilege is whether the defendant’s
conduct was communicative or noncommunicative. [Citation.] The distinction
between communicative and noncommunicative conduct hinges on the
gravamen of the action.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1058.)
“The following acts have been deemed communicative and thus protected by
the litigation privilege: attorney prelitigation solicitations of potential clients
and subsequent filing of pleadings in the litigation [citation], and testimonial
use of the contents of illegally overheard conversation [citation]. The
following acts have been deemed noncommunicative and thus unprivileged:
prelitigation illegal recording of confidential telephone conversations
[citation]; eavesdropping on a telephone conversation [citation]; and
physician’s negligent examination of patient causing physical injury
[citation].” (Ibid.)
Here, the litigation privilege does not apply for two reasons.
First, Mallon’s recordings of the board meeting and his conversation with
Felix were “noncommunicative.” Second, the recordings were not “made in
judicial or quasi-judicial proceedings” because the recordings preceded the
federal litigation. Therefore, we conclude that the litigation privilege does not
bar plaintiffs’ third or fourth causes of action.
18
Accordingly, we conclude plaintiffs have met their burden to
demonstrate a probability of prevailing at trial on their third and fourth
causes of action.
DISPOSITION
The trial court’s prejudgment order is affirmed. Plaintiffs are
entitled to recover their costs on appeal.
SCHWARM, J.*
WE CONCUR:
DELANEY, ACTING P. J.
SCOTT, J.
*Judge of the Orange County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
19