MOLLINS vs RELIANCE, INC., et al.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with

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a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING

Defendants Reliance, Inc. (“Reliance”), American Metals Corporation (“AMC”), and Karla Lewis’s (collectively, “Defendants”) Demurrer to Plaintiffs Ryan Mollins and Talia Mollins’ (“Plaintiffs”) Third Amended Complaint (“TAC”) is ruled upon as follows.

Factual Background

This case arises out of Plaintiff Ryan Mollins’ employment with Defendants Reliance, Inc. and American Metals Corporation. Plaintiffs allege causes of action for: (1) defamation; (2) violation of Labor Code section 1050, et seq.; (3) violation of Labor Code section 1102.5; (4) violation of Labor Code sections 6310 and 6311; (5) wrongful termination; and (6) loss of consortium. On June 6, 2025, the Loss of Consortium Cause of Action as to Defendant Karla Lewis was dismissed.

The TAC alleges that despite Plaintiff’s complaints about his subordinate’s conduct, Defendants refused to investigate, permitted the subordinate to engage in defamatory claims against Plaintiff, and retaliated against Plaintiff by terminating his employment. With respect to the first cause of action for defamation alleged against all Defendants, Plaintiff alleges:

The publications associated with Plaintiff’s termination were particularly defamatory, including but not limited to: (a) (a) Tulley alleging Plaintiff was unprofessional, abusive, and harassing to Lewis, who then republicized it to other persons including but not limited to managing agents as well as Koch; (b) the termination letter which publicized Plaintiff was unprofessional in his behavior and management and disrespectful to multiple employees and subordinates (Exhibit A); (c) the publication of negative feedback regarding Plaintiff’s relationship with subordinates which led to Plaintiff being confronted with false allegations in his subsequent search for employment, which he only discovered through an inadvertent internal email among his prospective employer (Exhibit B); and (d) that Plaintiff was inappropriate, abusive, offensive, unprofessional, disrespectful, and at times physically violent to employees, customers, and suppliers, which was used as a basis to terminate Plaintiff from his employment.

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(TAC ¶ 105.) Similarly, with respect to the second cause of action for violation of Labor Code section 1050, et seq., Plaintiff alleges that Defendants Reliance and AMC “have worked to spread false information to Plaintiff’s prospective employers, interfering with his ability to obtain employment within his industry.” (TAC ¶ 133.

Defendants now demur on the grounds that Plaintiff’s first and second causes of action are uncertain and fail to sufficiently state a claim. Plaintiff opposes.

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.)

A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ. Proc. §452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v.

Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.) In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111- 1112.) A general demurrer does not admit contentions, deductions, or conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice. (Blank, supra, 39 Cal.3d at p. 318; William S.

Hart Union High School Dist. v. Regional Planning Com. (1991) 226 Cal.App.3d 1612, 1616, fn. 2.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . . we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action –

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not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Discussion

First Cause of Action for Defamation

Defendants argue that Plaintiff’s TAC fails to allege a claim for defamation, because the allegations of defamatory speech are privileged, the TAC fails to allege malice, and the TAC does not sufficiently allege a claim against Defendant Lewis.

“Defamation is an invasion of the interest in reputation. The tort involves the intentional publication of a statement of fact that is false, unprivileged, and has a natural tendency to injure or which causes special damage.” (Smith v. Maldonado (1999) 72 Cal.App.4th 637, 645.) The elements of a claim for defamation include: (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage. (J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal.App.4th 87, 97.)

Plaintiff’s claim for defamation relies upon allegations that: (1) Defendant Lewis made or republished statements leading up to his termination (TAC ¶¶ 68, 105); (2) his termination letter contained defamatory statements regarding the reasons for Plaintiff’s termination following his termination (TAC, ¶¶ 97-100, 105); and (3) Defendants shared false information in communicating with potential employers (TAC, ¶¶ 92-96, 105).

Some of these issues were previously considered by the Court on Defendant’s motion for judgment on the pleadings relating to Plaintiff’s cause of action for defamation. As noted in the Court’s August 4, 2025 Minute Order, “where the complaint shows that the communication or publication is one within the classes of qualifiedly privileged, it is necessary for the plaintiff to go further and plead and prove that the privilege is not available in the particular case, e.g., because of malice.” (Smith v. Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 630-631.)

In the Court’s August 4, 2025 Minute Order, the Court found that the statements contained in Plaintiff’s termination letter were sufficient to give rise to a claim for defamation at the pleading stage, but that Plaintiff had not sufficiently overcome the common interest privilege in relation to the defamatory statements made in the termination letter or post termination. (See August 4, 2025 Minute Order, pp. 4-6.) Specifically, the Court held that Plaintiff had not sufficiently alleged malice, as required to overcome the common interest privilege.

Civil Code section 47(c) provides:

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In a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information. This subdivision applies to and includes a communication concerning the job performance or qualifications of an applicant for employment, based upon credible evidence, made without malice, by a current or former employer of the applicant to, and upon request of, one whom the employer reasonably believes is a prospective employer of the applicant.

This subdivision applies to and includes a complaint of sexual harassment by an employee, without malice, to an employer based upon credible evidence and communications between the employer and interested persons, without malice, regarding a complaint of sexual harassment. This subdivision authorizes a current or former employer, or the employer’s agent, to answer, without malice, whether or not the employer would rehire a current or former employee and whether the decision to not rehire is based upon the employer’s determination that the former employee engaged in sexual harassment.

This subdivision does not apply to a communication concerning the speech or activities of an applicant for employment if the speech or activities are constitutionally protected, or otherwise protected by Section 527.3 of the Code of Civil Procedure or any other provision of law.

(Emphasis added.)

The common-interest privilege set forth in section 47 has been applied to communications relating to employee conduct to another interested party. (See Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180 Cal.App.3d 985, 995 [“Communications made in a commercial setting relating to the conduct of an employee have been held to fall squarely within the qualified privilege for communications to interested persons.”]; see also McGrory v. Applied Signal Technology, Inc. (2013) 212 Cal.App.4th 1510, 1538 [“an employer is privileged in pursuing its own economic interests and that of its employees to ascertain whether an employee has breached his responsibilities of employment and if so, to communicate, in good faith, that fact to others within its employ so that (1) appropriate action may be taken against the employee; (2) the danger of such breaches occurring in the future may be minimized; and (3) present employees may not develop misconceptions that affect their employment with respect to certain conduct that was undertaken in the past.”].)

“The general rule is that a privilege must be pleaded as an affirmative defense. But where the existence of a privilege is revealed on the face of the complaint, it may be asserted in a demurrer.” (Tschirsky v. Superior Court (1981) 124 Cal.App.3d 534, 538.)

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Indeed, “where the complaint shows that the communication or publication is one within the classes of qualifiedly privileged, it is necessary for the plaintiff to go further and plead and prove that the privilege is not available in the particular case, e.g., because of malice.” (Smith v. Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 630- 631.)

In order to plead malice, a plaintiff must plead “more than general allegations of malice are required. Actual facts of malice must be alleged or be apparent from the communications themselves.” (Martin v. Kearney (1975) 51 Cal.App.3d 309, 312.)

Plaintiff contends that the allegations of TAC are sufficient to constitute malice based on the negative and disparaging statements made by Defendants and a “failure to investigate thoroughly and verify the facts of the defamatory statement.” Plaintiff cites to Antonovich v. Sup. Ct. (1991) 234 Cal.App.3d 1041, 1048-1049 for the proposition that “purposeful avoidance of the truth,” or “inaction” can serve to show malice. The court in Antonovich found that a failure to investigate alone is insufficient to support a finding of malice. In order to show malice, a plaintiff must show that “inaction was a product of a deliberate decision not to acquire knowledge of facts that might confirm the probable falsity of [the subject] charges.” (Id., at p. 1053.)

Based on the allegations of the TAC, the Court finds that Plaintiff has now sufficiently alleged malice to overcome the common interest privilege for the purposes of the pleading stage.

Republished Statements from Joe Tulley

Plaintiff alleges that on or around July 6, 2023, his subordinate, Joe Tulley informed Plaintiff’s superior, Defendant Karla Lewis, that Plaintiff “was unprofessional, abusive, and harassing in his management style. Tulley went on to claim that Mr. Mollins created a hostile workplace. Soon thereafter, Lewis supposedly instructed managing agents to investigate Mr. Mollins’ conduct as alleged by Tulley.” (TAC, ¶ 68.)

Defendants argue that the republication is not actionable, citing Bierbower v. FHP, Inc. (1999) 70 Cal.App.4th 1, 7. In Bierbower, the Court of Appeal upheld the trial court’s grant of nonsuit based, in part, on republication of a sexual harassment complaint to an investigator. The Court noted:

Given the difficulty faced by the employer in the face of a sexual harassment allegation, an employer certainly acts reasonably by having a mechanism for forwarding complaints on for an investigation even where there is something suspicious about the complaint. To hold an employer liable for defamation because one employee must pass on a defamatory

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allegation of sexual harassment to another for investigation flies in the face of all sexual harassment law. The idea that the formal investigation should be conducted by a firm's human relations or personnel departments rather than the supervisor who first receives the complaint is an eminently reasonable one, if only because it promotes neutrality in any investigation.

(Id. at pp. 6-7.) The Bierbower Court held that the evidence showed that the defendant’s role was “simply to pass on information as part of an overall anti-sexual harassment policy, not adjudicate the bona fides of any given claim” and that “it would be totally unreasonable to conclude [the defendant] harbored any malice in writing it.” (Id. at pp. 7-8.)

In this case, the allegations in the TAC are distinguishable from those before the Bierbower Court in adjudicating the appeal from the nonsuit. Specifically, Plaintiff alleges that facts that the republication was not part of an overall anti-harassment policy, but rather that Defendants deviated from the normal investigation policy to follow through on previous threats to find a way to terminate Plaintiff’s employment and in response to Plaintiff’s criticism about an allegedly favored employee. (TAC ¶¶ 27, 28, 38, 39, 49, 68, 72, 80, 81.) Plaintiff further alleges that Defendant Lewis specifically selected a managing agent to investigate who was part of previous conversations disparaging Plaintiff. (TAC ¶ 68.) As such the republication of the statement is not alleged to be simply the passing on of information pursuant to policy.

Accordingly, Plaintiff sufficiently alleges republication of a false and defamatory statement for purposes that ultimately damaged him for purposes of the pleading stage.

Defendants also argue that any republication by Lewis falls under the common-interest privilege and that Plaintiff cannot allege facts showing malice.

Plaintiff alleges that malice is shown because Defendants engaged in a “reckless and inadequate investigation” (TAC, ¶¶ 78-80, 87-89, 92-96, 99, 100); the individual initiating the investigation (Tulley) showed hostility towards Plaintiff and had been known to “badmouth” Plaintiff to leadership (TAC, ¶¶ 25-29); Defendants had knowledge of Tulley’s hostility towards Plaintiff (TAC, ¶ 72); Defendants never informed Plaintiff that an investigation was being performed (TAC, ¶¶ 72, 75, 81); Defendants failed to interview witnesses who “would have provided essential information to Defendants’ investigators to evaluate the biases of the source of the complaint” (TAC ¶¶ 69-70); and Defendants failed to provide Plaintiff with exculpatory evidence which was uncovered during the course of their investigation. (TAC, ¶¶ 99, 100.)

Plaintiff argues that Defendants did not have a reasonable ground to believe that the allegedly defamatory statements were true, thus also showing malice pursuant to Agarwal v. Johnson (1979)

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25 Cal.3d 932, 944-945.

When taken as a whole, the Court finds that Plaintiff’s allegations are sufficient to overcome the common-interest privilege. Specifically, Plaintiff alleges numerous occasions where Defendant Lewis and other managing agents of Defendants made disparaging remarks about Plaintiff, including comments that could reasonably be inferred as threats or negative intentions when relating to Plaintiff’s employment, despite previous positive performance reviews and bonuses. Plaintiff alleges facts to support that there was favoritism toward another employer, for whom Plaintiff was required to issue criticism and recommend.

Plaintiff alleges facts that soon after documenting these types of issue, the favored employee complained about Plaintiff to Defendant Lewis, who then assigned someone who may have been biased against Plaintiff to the investigation. Plaintiff alleges that, contrary to company practice, Plaintiff was never interviewed (and indeed was unaware of the investigation) and Plaintiff’s direct supervisors were also not interviewed. (See, inter alia, TAC, ¶¶ 27 [Tulley made negative and disparaging remarks about Plaintiff in front of colleagues]; 28 [Tulley was known to express distain about Plaintiff]; 38 [Plaintiff feared retaliation given Tulley’s frequent disparaging remarks about him]; 41 [Lewis made statements to the effect that Plaintiff should watch every move he makes]; 68 [Tulley contacted Lewis to state that Plaintiff was creating a hostile work environment, which was shortly followed by Lewis initiating an investigation of Plaintiff]; 69 [Defendants’ executives had knowledge of Tulley and Lewis’ behavior towards Plaintiff].)

Considering all these facts, taken together and drawing reasonable inferences therefrom, the Court finds that Plaintiff has sufficiently alleged facts constituting malice as to all Defendants.

Therefore, for purposes of demurrer, Plaintiff has overcome the common-interest privilege.

Communications with Triple-S

Plaintiff alleges defamation as the result of communications between Defendants and a potential employer Plaintiff had contacted, Triple-S Steel Holdings (“Triple-S”). (See TAC, ¶¶ 92-96.) Plaintiff alleges that he learned that false information about him had been shared from Defendant to the Triple-S management. (TAC, ¶ 94.) Specifically, Plaintiff was copied on an email amend Triple-S, in which one person noted that ““[T]here is some negative feedback on [Plaintiff] regarding dealing with subordinates that I addressed with him directly.” (TAC, ¶ 95.) Triple-S went on to offer Plaintiff a job, but not one in a managerial position. (TAC, ¶ 96.)

Defendant argues that any communications with Triple-S were privileged pursuant to Civil Code section 47(c). Plaintiff opposes, arguing that it can be inferred that Defendants made defamatory statements to Triple-S, as “[t]he impact of the ‘negative

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feedback’ combined with the previous known defamatory statements gives rise to a reasonable inference that it was defamatory. (See TAC ¶¶ 95-96, Exh. C; See Okun, supra, 29 Cal.3d at 458.) It is reasonable to infer that the ‘negative feedback’ was defamatory ala Cameron because of how it effected [sic] Marks’ evaluation of Plaintiff after a successful visit and tour of their facility, interview, dinner, and meeting with Triple-S leadership. (See Id. at ¶¶ 92-93.)” (Opp., p. 17:13-17.) Plaintiff argues that because of this defamation, he was not offered a management position with Triple-S.

Plaintiff further argues that as he has worked solely for Defendants for the past 17 years, Defendants are the only plausible source of negative feedback Triple-S could have received regarding Plaintiff’s treatment of subordinates.

The TAC alleges:

In or around mid to late February 2024, Mr. Mollins visited Houston, Texas, with the purpose of meeting Triple-S’s leaders and personnel, as well as visit their Houston facility. During his visit, Mr. Mollins was accompanied by Triple-S Owner, Gary Stein (“Stein”), Triple-S President, Nataly Marks (“Ms. Marks”), and corporate development associate, Logan Baucum (“Ms. Baucum”). Mr. Mollins was informally interviewed throughout the day by Ms. Marks and the Triple-S team. After they went to dinner, their meeting concluded positively, and Mr. Mollins was hopeful of working at Triple-S in a similar executive capacity as he had for AMC.

Subsequently, on or about February 22, 2024, Mr. Mollins was inadvertently sent an email from Ms. Marks which was meant to be between Ms. Marks and other Triple-S personnel including Stein, Western Region SVP, Kevin Dempsey (“Dempsey”), and HR Director, Sandra Sosa (“Ms. Sosa”). In the email, Mr. Mollins learned that Reliance had shared false information about him to Triple-S by claiming that Mr. Mollins mistreated his subordinates.

In her email, Ms. Marks communicated to Dempsey that Mr. Mollins “seems to have great experience and could add value in several areas,” and suggested a regional sales role. Ms. Marks continued by noting that, “[T]here is some negative feedback on him regarding dealing with subordinates that I addressed with him directly,” and concluded that, “I would not put him in a managerial role.” Mr. Mollins does not recall an instance wherein specific alleged prior negative feedback was addressed with him directly.

(TAC, ¶¶ 93-95.)

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Given his work history, the reference to the content of the alleged defamatory statements, and the context surrounding Plaintiff’s termination, the Court finds that Plaintiff has sufficiently alleged defamatory false statements were made to Triple-S, as referenced by the subsequent email. As set forth above, Plaintiff has also sufficiently alleged facts supporting malice with respect to the allegedly defamatory statements he believes were made by Defendants to Triple-S.

Based on the foregoing, the Court will OVERRULE Defendants’ demurrer as to Plaintiff’s claim for defamation.

Defendant Lewis

Defendants argue that Plaintiff fails to state a claim for defamation against Defendant Lewis, because the TAC does not allege any specific allegations as to defamatory statements made by Lewis, and relies only on claims that Lewis asked “managing agents” to investigate Plaintiff, following the report of improper conduct by Mr. Tulley. Plaintiff argues that he has alleged sufficient facts to bring a claim for defamation against Lewis.

As set forth above, the Court finds that the allegations in the TAC are sufficient to state a claim against Defendant Lewis. Defendants’ demurrer is OVERRULED as to Plaintiff’s claim for defamation against Lewis.

Second Cause of Action for Violation of Labor Code § 1050

Defendants demur to Plaintiff’s second cause of action for violation of Labor Code section 1050 as to Defendants Reliance and AMC because the common interest privilege applies, and because Plaintiff has not alleged sufficient facts to state a claim.

Labor Code section 1050 states, “Any person, or agent or officer thereof, who, after having discharged an employee from the service of such person or after an employee has voluntarily left such service, by any misrepresentation prevents or attempts to prevent the former employee from obtaining employment, is guilty of a misdemeanor.”

Plaintiff’s complaint alleges:

Immediately after Mr. Mollins’ termination on July 20, 2023, he began to earnestly seek employment to mitigate his losses and provide for his family. Mr. Mollins knowledge on how to manage multiple departments and operate within the tight-knit steel industry is extremely valuable. As a result, Mr. Mollins applied for positions commensurate with his experience level. While Mr. Mollins was in

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the midst of mitigating his losses, in February 2024, he received an email from a prospective employer wherein he learned that Reliance had shared false information that he engaged in mistreatment of his subordinates. In the email, the prospective employer’s President noted, “[T]here is some negative feedback on him regarding dealing with subordinates that I addressed with him directly,” and concluded that, “I would not put him in a managerial role.” (Exhibit B.)

(TAC, ¶ 131.)

As discussed in more detail above, the Court finds that Plaintiff has sufficiently alleged facts which support an inference that Defendants intentionally published false, defamatory statements regarding Plaintiff to Triple-S. The Court has further found that these allegations are sufficient to show malice for the purposes of demurrer. Likewise, the Court finds that these facts are sufficient to allege intent. Further, Plaintiff sufficiently alleges that he failed to receive the executive/managerial position that he sought because of the specific negative and allegedly false comments provided by Defendants.

Accordingly, Defendants’ demurrer is OVERRULED as to Plaintiff’s second cause of action.

Disposition

Based on the foregoing, Defendants’ demurrer is OVERRULED in its entirety.

The minute order is effective immediately. No formal order pursuant to California Rules of Court, rule 3.1312 or further notice is required.