Opinion
D081843 D082318
04-15-2024
HISTOGEN, INC., Plaintiff, Cross-defendant and Appellant, v. CONNIE HARRELL, Defendant, Cross-complainant, and Respondent.
Frank E. Noble for Plaintiff, Cross-defendant, and Appellant. Godes &Preis, Joseph M. Preis, and Joshua R. Mino for Defendant, Cross-complainant, and Respondent.
NOT TO BE PUBLISHED
CONSOLIDATED APPEALS from orders of the Superior Court of San Diego County, Super. Ct. No. 37-2018-00042139-CU-BC-CTL, Gregory W. Pollack, Judge.
Frank E. Noble for Plaintiff, Cross-defendant, and Appellant.
Godes &Preis, Joseph M. Preis, and Joshua R. Mino for Defendant, Cross-complainant, and Respondent.
McCONNELL, P. J.
I
INTRODUCTION
Business consultant Connie Harrell brought conversion, fraudulent misrepresentation, and fraudulent concealment causes of action against Histogen, Inc. (Histogen), after Histogen allegedly failed to compensate her in full for consulting services she provided to Histogen. Histogen filed special motions to strike the causes of action under the anti-SLAPP statute (Code Civ. Proc., § 425.16). The trial court found Harrell's causes of action do not arise from protected conduct and denied the anti-SLAPP motions. In this consolidated appeal, Histogen challenges the denial of its motions and its related requests for the attorney's fees and costs it incurred in connection with the filing of its motions.
SLAPP is an acronym that refers to a Strategic Lawsuit Against Public Participation. (Geiser v. Kuhns (2022) 13 Cal.5th 1238, 1242.)
We agree with the trial court that none of the causes of action arise from conduct protected by the anti-SLAPP statute. Therefore, we affirm.
II
BACKGROUND
A. The Parties
The following background is drawn from the pleadings and the evidence submitted in connection with the anti-SLAPP motions. (Miller v. Zurich American Ins. Co. (2019) 41 Cal.App.5th 247, 250.)
Histogen is a regenerative medicine company that researches, develops, and manufactures therapeutic products. At all times relevant to the case, Dr. Gail Naughton was Histogen's chief executive officer. Harrell is a consultant who specializes in corporate debt reduction and fundraising.
In late 2015 or early 2016, Dr. Naughton and Harrell met one another and discussed the possibility of Harrell consulting for Histogen. In March 2016, Dr. Naughton emailed Harrell a proposal for the consultancy arrangement. Harrell did not accept the proposal, but agreed to start work immediately and expressed hope the parties would "come to terms" and "work things out." A few days later, Harrell started to consult for Histogen.
Two months passed and the parties had not yet come to an agreement regarding the consultancy arrangement. On May 17, 2016, Harrell emailed Dr. Naughton a proposed consulting agreement. Dr. Naughton presented the proposal to her company's board of directors, but the board rejected it on May 18, 2016.
In June 2016, Harrell and Dr. Naughton, acting on behalf of Histogen, finally executed a written consulting agreement. The agreement had an effective date of March 15, 2016, and a termination date of March 15, 2017. It required Harrell to provide consulting services to Histogen on resource management, investor relations, marketing, corporate development, contract, and licensing agreement matters. It obligated Histogen, in exchange, to pay Harrell a monthly consulting fee of $6,000, with payment deferred until Histogen received at least $100,000 in investments. Further, it required Histogen to issue Harrell 250,000 warrants for its common stock shares at a strike price of $0.075 per share, "with one-fourth of the warrants issued upon the Effective Date and the balance vested quarterly over a one year period."
Harrell provided consulting services to Histogen for the full term of the agreement. Histogen paid her $11,400 in consulting fees, but it did not pay her any other fees despite receiving invoices for them. Histogen also did not provide her with stock warrants during the term of the agreement. However, in April 2017 (one month after the termination date of the agreement), Histogen issued her 250,000 vested warrants for its common stock shares at the agreed-upon strike price of $0.075 per share. Harrell did not timely exercise the warrants.
B. The Complaint and First Amended Cross-Complaint
On August 21, 2018, Histogen filed a complaint against Harrell for breach of contract, common count (money had and received), and declaratory relief. The complaint asserted that, while the parties' contract negotiations were ongoing, Dr. Naughton gave Harrell a form consulting agreement it had used with a prior consultant and it instructed her to prepare an identical one to govern the parties' relationship. Unbeknownst to Dr. Naughton, Harrell modified the form agreement in ways that benefitted her at Histogen's expense-most notably, by increasing her equity compensation. According to Histogen, Harrell told Dr. Naughton the consulting agreement was identical to the form agreement and Dr. Naughton executed it in reliance on this misstatement.
Harrell filed a cross-complaint against Histogen on May 9, 2019, and a first amended cross-complaint (FACC) on June 3, 2022.
The case was delayed significantly due to the COVID-19 pandemic and multiple stipulations from the parties to postpone the trial date.
In the FACC, Harrell asserted breach of contract, declaratory relief, and conversion causes of action against Histogen. In a section of the FACC that was incorporated into the conversion cause of action, Harrell alleged she "performed the [c]onsulting services throughout the [t]erm as agreed by coordinating debt relief and through her networking efforts," but Histogen "failed to pay fully the $72,000 [c]onsulting [f]ee" or "to issue her a warrant for 250,000 shares of its common stock during the [t]erm pursuant to the [consulting] [a]greement." She claimed she was "entitled to possession of the unpaid [c]onsulting [f]ee totaling $60,600, and 250,000 warrants for shares of [Histogen's] common stock," which the company "converted" for its own use. She also alleged Dr. Naughton told her she had authority from the board to approve the consulting agreement, even though she did not, or alternatively, the board "approved the [a]greement," but "improperly claimed that the [a]greement [was] invalid to improperly convert the property of Mrs. Harrell."
Histogen demurred to the conversion cause of action. It also filed an anti-SLAPP motion challenging the conversion cause of action (hereafter, the first anti-SLAPP motion). Histogen requested an award of attorney's fees and costs in connection with its anti-SLAPP motion.
On September 22, 2022, the trial court sustained the demurrer on grounds that the conversion cause of action failed as a matter of law. Relying on Voris v. Lampert (2019) 7 Cal.5th 1141, the court found, "money earned as compensation for performing a service is insufficient to satisfy the requisites for a conversion cause of action." It found Harrell's conversion cause of action failed because, "[b]oiled to its essence, it amount[ed] to nothing more than a [claim of a] broken promise to pay in exchange for the rendition of services." The court stated its demurrer ruling did "not necessarily preclude potential recovery under a tort other than conversion," and it granted Harrell leave to file an amended cross-complaint with a fraud cause of action, "if supporting facts [did], indeed, exist for such a claim."
C. The First Anti-SLAPP Motion
Although the trial court sustained the demurrer, it nonetheless considered the merits of the first anti-SLAPP motion to determine whether Histogen was entitled to recover the attorney's fees and costs it incurred in connection with the filing of its motion.
In its anti-SLAPP motion, Histogen argued the conversion cause of action arose from prelitigation communications between the parties that were protected under the anti-SLAPP statute. Specifically, Histogen claimed the parties tried to renegotiate the consulting agreement in late 2016 and early 2017 in anticipation of litigation. It also stated it offered the 250,000 stock warrants to Harrell in April 2017 as a prelitigation settlement offer. According to Histogen, its statements during the purported renegotiation and settlement processes formed the basis for the conversion cause of action. Histogen maintained that the cause of action lacked minimal merit because, among other reasons, its statements did not constitute conversion as a matter of law and, in any event, they were subject to the litigation privilege.
Together with the anti-SLAPP motion, Histogen filed a declaration from Dr. Naughton in which she described the circumstances under which the parties executed the consulting agreement. She stated that a Histogen executive gave Harrell a form agreement it had used with a prior consultant and, after the board rejected Harrell's consulting proposal on May 18, 2016, she advised Harrell the board would only approve a contract modeled after the form agreement. Subsequently, Harrell provided her the consulting agreement and said it conformed to the form agreement. Dr. Naughton signed the consulting agreement-without reading it-in reliance on this statement. In truth, the consulting agreement was not the same as the form agreement; rather, the consulting agreement granted Harrell greater equity compensation than the prior consultant had received under the form agreement and it limited the scope of the consulting services Harrell was required to provide to Histogen.
Dr. Naughton also stated in her declaration that, from October 2016 to February 2017, the parties tried to renegotiate the consulting agreement to "conform to the agreement terms [Dr. Naughton] believed [she] had signed," and to "avoid[] a lawsuit." At one point in the process, Histogen sent a proposed contract to Harrell, who said she would "run [it] by [her] attorney." Ultimately, the parties did not agree to a renegotiated contract.
Harrell opposed the first anti-SLAPP motion. She argued Histogen failed to show the conversion cause of action arose from protected activity. She emphasized that the FACC did not mention any contract renegotiation or settlement efforts. She also claimed Histogen's statements regarding the invalidity of the agreement were not made in anticipation of an imminent lawsuit. In particular, she suggested Histogen did not contemplate litigation until more than a year later, on June 12, 2018, when one of its executives sent an internal email to Dr. Naughton and others that said, "[p]erhaps if we just sue her for [f]raud it will end." (Bolding and italics omitted.) Finally, Harrell asserted the factual claims underpinning her conversion cause of action had minimal merit, notwithstanding the demurrer ruling, because the court granted her leave to file a fraud cause of action based on the factual claims.
Histogen filed a reply, which restated, without significant elaboration, its claim that the conversion cause of action arose from protected conduct.
On December 2, 2022, the trial court issued an order denying the first anti-SLAPP motion as moot (in light of the demurrer ruling) and finding Histogen was not entitled to fees or costs because the court would have denied the motion on the merits if it had overruled the demurrer. With respect to the first anti-SLAPP prong, the court found the conversion cause of action did not arise from protected activity because it was merely a "claim for breach of an express contract improperly seeking tort damages under the guise of ... a conversion cause of action." In essence, it alleged that "Histogen breached the [consulting] [a]greement by failing to pay Harrell for consulting services rendered by Harrell to Histogen pursuant to their written agreement." According to the court, "Histogen's decision to 'stiff' ... [Harrell] after ... [she] ha[d] fully performed under the contract [did] not constitute the exercise of, or arise out of, protected activity." Because the cause of action did not arise from protected conduct, the court did not decide whether it had minimal merit under the second anti-SLAPP prong.
Histogen appeals the order denying the first anti-SLAPP motion. That order is the subject of appeal No. D081843.
In the opening brief filed in appeal No. D082318, Histogen asks us to "take judicial notice of Case No. D081843." We deny the request because we have consolidated appeal Nos. D081843 and D082318.
D. The Second Amended Cross-Complaint
On October 21, 2022, Harrell filed a second amended cross-complaint (SACC) adding new fraudulent misrepresentation and fraudulent concealment causes of action against Histogen.
For the fraudulent misrepresentation cause of action, Harrell alleged that, on March 10, 2016, she and Dr. Naughton had a meeting at which Dr. Naughton "described the general terms of [the] monthly payment and stock" Harrell would receive, and falsely stated that "a contract for her consulting services would be forthcoming." According to Harrell, she started to work for Histogen "[o]n the basis of that promise" and because Dr. Naughton "verbally assured her that any contract between the parties would reflect services already rendered." Harrell further alleged that, in early June 2016, Dr. Naughton falsely stated she had the board's approval to execute the consulting agreement, when in fact she "never even read the [a]greement, never showed it to the [b]oard, and knew that the [b]oard never took a formal vote to approve the agreement." Thereafter, the board refused to "honor the terms of the [a]greement, and did nothing to inform [Harrell] that [it] would not honor the terms of the [a]greement, upon which [she] continued to rely to her detriment."
For the fraudulent concealment cause of action, Harrell alleged Dr. Naughton "intentionally concealed" material facts from her, including the fact Dr. Naughton never had board approval to execute the consulting agreement, the board did not approve the agreement, and Histogen "never intended to honor" the agreement. She alleged the board learned about the agreement in August or September 2016. The board was purportedly "stunned to learn the nature of [Histogen's] obligations" under the agreement and it instructed its secretary to get the company "out of this mess." However, Histogen waited until March 16, 2017-one day after the termination date of the agreement-to tell Harrell that the board had never "approved or reviewed the [a]greement" and that the board must "approve all equity grants for them to be valid." Histogen allegedly "conceal[ed] this information until the day after ... the [a]greement expired in order to induce Mrs. Harrell's continued and complete performance thereunder."
E. The Second Anti-SLAPP Motion
Histogen filed an anti-SLAPP motion targeting the fraudulent misrepresentation and concealment causes of action (hereafter, the second anti-SLAPP motion). Its first-prong arguments are not easy to discern, but Histogen seemed to identify two acts giving rise to the causes of action: (1) Dr. Naughton's statements to Harrell that she had board approval to execute the agreement; and (2) the board's instructions to its secretary to get Histogen "out of this mess." Without identifying any categories of protected speech within which these acts might fall, Histogen broadly claimed the acts are "protected as petitioning activity." In similarly vague terms, it argued the instructions to the board secretary were "communicative acts." Under the second prong, Histogen claimed the causes of action lack minimal merit for several reasons not pertinent to this appeal.
Together with the second anti-SLAPP motion, Histogen filed another declaration from Dr. Naughton. She alleged she met with Harrell on March 10, 2016, and they discussed the possibility of Harrell consulting under the same terms as Histogen's arrangement with its prior consultant, but Dr. Naughton did not tell her a consulting contract would be forthcoming. Dr. Naughton denied making any false representation to Harrell and denied that the Histogen board never intended to honor the consulting agreement.
Harrell opposed the second anti-SLAPP motion. She argued her fraudulent misrepresentation cause of action arises from Dr. Naughton's statement that the board approved the consulting agreement, while her fraudulent concealment cause of action arises from the board's failure to disclose that it did not authorize the agreement and would not honor it- conduct that was not protected under the anti-SLAPP statute. Harrell asserted her causes of action have minimal merit, as established by the facts set forth in her declaration filed in support of her opposition.
In her declaration, Harrell alleged that, at the meeting on March 10, 2016, Dr. Naughton stated "the general terms" of the expected consulting arrangement, a contract would be "forthcoming," and the contract "would reflect services already rendered"-statements that induced Harrell to start consulting for Histogen. Harrell averred that Dr. Naughton said "she had obtained the necessary [b]oard approval" for the consulting agreement and, "[b]ased thereon, [Harrell] continued to perform as agreed." Harrell also alleged that, in the fall of 2016, the board secretary told her Histogen "wanted to negotiate a new agreement" and the parties "worked cooperatively for months to negotiate a new agreement" that would have changed her payment structure, but they "could not come to a[n] ... agreement." According to Harrell, "Histogen never informed [her] during these discussions that the [b]oard had never authorized [her] [a]greement," and she "would not have continued to work" if she had known this fact.
On February 17, 2023, the court issued an order denying the second anti-SLAPP motion. It found the fraud causes of action "do not approach the status of a 'SLAPP suit' any more than would the garden variety personal injury automobile accident case." The court noted that Histogen's motion did not focus on the conduct giving rise to the fraud causes of action; rather, it improperly fixated on acts and statements that "merely provide context" for the fraud causes of action (like the instruction given to the board secretary to" 'get Histogen out of this mess' "). Although it was unnecessary to reach the second step of the anti-SLAPP inquiry, the court also found the fraud causes of action "easily satisfied any Prong 2 burden."
In the same order, the court awarded $17,120 in attorney's fees and costs to Harrell for prevailing on the first anti-SLAPP motion, which the court found to be a frivolous motion that a reasonable attorney would not have filed. The court found the cause of action targeted in the motion, though labelled a conversion cause of action, was essentially a "breach of contract claim" that "did not in any way implicate a protected activity." The court added that Histogen evidently filed the motion "to cause unnecessary delay and harassment."
Histogen appeals the order denying the second anti-SLAPP motion. That order is the subject of appeal No. D082318.
III
DISCUSSION
A. The Anti-SLAPP Statute
"Enacted by the Legislature in 1992, the anti-SLAPP statute is designed to protect defendants from meritless lawsuits that might chill the exercise of their rights to speak and petition on matters of public concern. [Citations.] To that end, the statute authorizes a special motion to strike a claim '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.'" (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 883-884 (Wilson).)
"A court evaluates an anti-SLAPP motion in two steps. 'Initially, the moving defendant bears the burden of establishing that the challenged allegations or claims "aris[e] from" protected [speech or petitioning] activity in which the defendant has engaged. [Citations.] If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least "minimal merit."' [Citation.] If the plaintiff fails to meet that burden, the court will strike the claim. Subject to certain exceptions not relevant here, a defendant that prevails on a special motion to strike is entitled to attorney fees and costs. (§ 425.16, subd. (c).)" (Wilson, supra, 7 Cal.5th at p. 884.)
The trial court denied both of the anti-SLAPP motions because, in its view, Histogen failed to satisfy its first-step burden for either motion. "The defendant's first-step burden is to identify the activity each challenged claim rests on and demonstrate that that activity is protected by the anti-SLAPP statute. A 'claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.' [Citation.] To determine whether a claim arises from protected activity, courts 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.] Courts then must evaluate whether the defendant has shown any of these actions fall within one or more of the four categories of' "act[s]"' protected by the anti-SLAPP statute." (Wilson, supra, 7 Cal.5th at p. 884.)
Histogen invokes two categories of protected acts relevant to this case. The first applies to "any written or oral statement or writing made before ... [an] official proceeding authorized by law." (§ 425.16, subd. (e)(1).) The second encompasses "any written or oral statement or writing made in connection with an issue under consideration or review by . [an] official proceeding authorized by law." (Id., subd. (e)(2).) Thus, our initial task is to determine whether the conversion, fraudulent misrepresentation, or fraudulent concealment causes of action arise from acts included within either or both of these categories of protected conduct.
If, and only if, Histogen carries its first-step burden, we will proceed to the second step of the analysis and determine whether Harrell established that her causes of action have a probability of success. (Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 788.) The second step has been described" 'as a "summary-judgment-like procedure." [Citation.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It 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." '" (Ibid.)
B. The Conversion Cause of Action Did Not Arise from Protected Conduct
Histogen argues the trial court erred in finding the conversion cause of action did not arise from conduct protected by the anti-SLAPP law. For reasons we shall explain, we discern no error in the trial court's ruling.
We begin with an overview of the elements of the conversion cause of action Harrell asserted in the FACC."' "Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages." '" (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208.) Here, our focus is on the second element. We must decide whether the alleged wrongful act (or acts) giving rise to the conversion cause of action is (or are) subject to protection under the anti-SLAPP statute.
Based on our review of the FACC and the parties' submissions, it is clear the wrongful act giving rise to the conversion cause of action is not protected. In the general allegations of the FACC, which were incorporated into the conversion cause of action, Harrell averred that she "performed the [c]onsulting [s]ervices throughout the Term as agreed," but Histogen "failed to pay fully the $72,000.00 [c]onsulting [f]ee to Mrs. Harrell and failed to issue her a warrant for 250,000 shares of its common stock during the Term pursuant to the Agreement." Based on these averments, Harrell-under the conversion cause of action heading-alleged she "was, and still is entitled to possession of the unpaid Consulting Fee totaling $60,600, and 250,000 warrants for shares of [Histogen's] common stock," but Histogen "failed and continues to fail ... to return the property to Mrs. Harrell." Thus, the alleged wrongful act forming the basis of the conversion cause of action is Histogen's alleged failure to provide Harrell the consulting fees and warrants to which she is contractually entitled. Critically, Histogen makes no claim that this conduct constitutes protected activity under the anti-SLAPP law.
Instead, Histogen argues that conduct other than its alleged failure to compensate Harrell supplies the wrongful act element of the conversion cause of action. According to Histogen, the following conduct forms the basis of the wrongful act element-(1) Histogen's efforts to renegotiate the consulting agreement with Harrell in late 2016 and early 2017; (2) Histogen's issuance of 250,000 warrants to Harrell in April 2017, which Histogen describes as a settlement offer; and (3) Histogen's statements to Harrell that the consulting agreement (or at minimum, the equity grant promised thereunder) was not valid. Histogen claims this was "prelitigation activity ... in connection with litigation contemplated seriously and in good faith," and, therefore, it was protected under section 425.16, subdivision (e)(1) and (2).
We are not persuaded. With respect to the first and second categories of conduct, the FACC did not even mention-let alone predicate liability on- the parties' efforts to renegotiate the consulting agreement or Histogen's issuance of warrants in April 2017 (or any other supposed settlement efforts between the parties). In order to rule that the conversion cause of action arose from such conduct, we would need to rewrite the FACC and insert entirely different factual allegations into it. "It would be inappropriate for us to insert into a pleading [a] claim[] for relief based on allegations of activities that [Harrell] simply ha[s] not identified .... It is not our role to engage in what would amount to a redrafting of the first amended [cross-]complaint in order to read that document as alleging conduct that supports a claim that has not in fact been specifically alleged, and then assess whether the pleading that we have essentially drafted could survive the anti-SLAPP motion directed at it." (Medical Marijuana, Inc. v. ProjectCBD.com (2016) 6 Cal.App.5th 602, 621 (Medical Marijuana); see also Oakland Bulk &Oversized Terminal, LLC v. City of Oakland (2020) 54 Cal.App.5th 738, 755 (Oakland Bulk) [trial court properly denied anti-SLAPP motion where movant "simply ignore[d] plaintiffs' substantiated allegations, and replace[d] those allegations with its own version of facts to attempt to show the claims arise out of protected activity"]; Central Valley Hospitals v. Dignity Health (2018) 19 Cal.App.5th 203, 217-218 [anti-SLAPP movant cannot "[i]gnore what was pleaded" and insert its own allegations into the pleading].)
The FACC at least mentioned the third category of conduct highlighted by Histogen-i.e., its statement that the consulting agreement was not valid. Indeed, after the FACC discussed Histogen's failure to provide Harrell her consulting fees and warrants, it stated that the Histogen board "improperly claimed ... the Agreement [was] invalid." However, the board's statement about the agreement's alleged invalidity is not itself the wrongful act forming the basis of the conversion cause of action. Rather, the statement provides context for, or perhaps evidence of, the conversion cause of action-which, as noted, was based on Harrell's claim that Histogen failed to provide her the consulting fees and warrants to which she was entitled. "Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute." (Baral v. Schnitt (2016) 1 Cal.5th 376, 394; Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1060 ["a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted"]; Alfaro v. Waterhouse Management Corp. (2022) 82 Cal.App.5th 26, 35 [trial court properly denied anti-SLAPP motion where the targeted cause of action included allegations of protected conduct that" 'merely provide[d] context, without supporting a claim for recovery' "].)
In short, Histogen's alleged failure to provide Harrell all of the consulting fees and warrants required by the consulting agreement was the wrongful act from which the conversion cause of action arose. But Histogen makes no argument that this conduct was protected under the anti-SLAPP law. Because Histogen makes no such claim, we conclude the trial court properly found that Histogen failed to carry its first-step burden as to the conversion cause of action. Therefore, Histogen was not entitled to recover its attorney's fees and costs related to the filing of its anti-SLAPP motion.
Because Histogen fails to show the conversion cause of action arose from protected activity, it is unnecessary for us to assess whether the cause of action had minimal merit. (See Public Employees' Retirement System v. Moody's Investors Service, Inc. (2014) 226 Cal.App.4th 643, 658 (Moody's Investors) ["Failure to meet [the] initial prong renders the anti-SLAPP statute inapplicable, thereby making unnecessary any determination under the second prong whether [the non-movant] made a prima facie showing"].)
C. The Fraudulent Misrepresentation and Fraudulent Concealment Causes of Action Do Not Arise from Protected Conduct
Histogen also claims the trial court erred in finding that it failed to satisfy its prong one burden of demonstrating that Harrell's fraudulent misrepresentation and fraudulent concealment causes of action arise from protected conduct. Once again, we disagree with Histogen.
"The elements of the tort of fraudulent misrepresentation are:
(1) representation; (2) falsity; (3) knowledge of falsity; (4) intent to deceive; and (5) reliance and resulting damages (causation)." (Cooper v. Equity Gen. Insurance (1990) 219 Cal.App.3d 1252, 1262.)" 'The required elements for fraudulent concealment are: (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact.'" (Thomas v. Regents of University of California (2023) 97 Cal.App.5th 587, 638.) At the first step of the anti-SLAPP analysis, we must assess what actions by Histogen supply these elements. (Wilson, supra, 7 Cal.5th at p. 884.) Thus, we must determine what specific representations (in the case of the fraudulent misrepresentation cause of action) and concealments (in the case of the fraudulent concealment cause of action) form the basis for liability.
The SACC identifies two sets of statements giving rise to the fraudulent misrepresentation cause of action. First, it alleges that, on March 10, 2016, Dr. Naughton "described the general terms" of the forthcoming consulting agreement, she told Harrell "a contract for her consulting services would be forthcoming," and she "assured her that any contract between the parties would reflect services already rendered," which induced Harrell to start consulting for Histogen. Second, the SACC alleges that, "in early June of 2016 ... Dr. Naughton[] represent[ed] to Mrs. Harrell that she had [b]oard approval to enter into the Agreement on behalf of [Histogen]," and Harrell continued to provide consulting services to Histogen in reliance on this misstatement. Histogen makes no claim that these allegedly fraudulent representations fall within one of the four categories of acts protected by the anti-SLAPP statute.
With respect to the fraudulent concealment cause of action, the SACC states that Histogen intentionally concealed the following facts from Harrell: (1) Dr. Naughton did not have board approval to enter into the consulting agreement; (2) the board did not approve the consulting agreement before Dr. Naughton executed it on behalf of Histogen; and (3) Histogen never intended to honor the consulting agreement. These are the alleged concealments upon which liability is premised. In its opening brief, Histogen barely references these alleged concealments, nor does it make any cogent argument that they were protected acts.
Rather than making any claim that the anti-SLAPP statute affords protection to the alleged statements and concealments we have identified, Histogen broadly argues (without citation to the SACC) that the fraudulent misrepresentation and fraudulent concealment causes of action both arise from Histogen's efforts to renegotiate the consulting agreement, rescind the consulting agreement, and settle the company's dispute with Harrell. This argument finds no support in the SACC or any other aspect of the record. Indeed, Histogen seemingly ignores the SACC altogether and concocts its own factual allegations to fabricate a claim of protected conduct under the anti-SLAPP statute. As stated above, neither we nor Histogen may rewrite the operative pleading and determine whether a hypothetical rewritten pleading containing imagined allegations might survive prong one of the anti-SLAPP law. (Oakland Bulk, supra, 54 Cal.App.5th at p. 755; Medical Marijuana, supra, 6 Cal.App.5th at p. 621.)
For instance, Histogen broadly claims the misrepresentation and concealment causes of action arise from Histogen's "settlement proposals, attempts to amend the contract between the parties, and its decision to rescind" the consulting agreement. Similarly, it proclaims, "[a]ll of [Harrell's] complaints concern [Histogen's] communications in the pursuit of a settlement, or in anticipation of bringing its rescission cause of action if the Agreement was not amended."
As noted, Histogen does not argue that the representations and concealments described in the SACC-the ones that actually give rise to liability for purposes of the fraud causes of action-are protected. Thus, Histogen has not established error in the trial court's finding that Histogen failed to carry its burden under the first anti-SLAPP prong. In the absence of error, we must affirm the order denying the second anti-SLAPP motion.
Because the trial court properly found that Histogen did not satisfy its first-prong burden, we do not address whether the fraud causes of action have minimal merit under the second anti-SLAPP prong. (Moody's Investors, supra, 226 Cal.App.4th at p. 658.)
IV
DISPOSITION
The orders are affirmed. Harrell is entitled to her costs on appeal.
Harrell has not asked us to adjudicate her entitlement to attorney fees on appeal under the anti-SLAPP statute. (Code Civ. Proc., § 425.16, subd. (c)(1); Baharian-Mehr v. Smith (2010) 189 Cal.App.4th 265, 275-276 [awarding fees on appeal for frivolous anti-SLAPP appeal].) Although we express no opinion on the issue, nothing in our opinion precludes Harrell from requesting such an award on remand. (Cal. Rules of Court, rules 3.1702(c), 8.278(d)(2).)
WE CONCUR: O'ROURKE, J., BUCHANAN, J.