Visalia Ceramic Tile, Inc. vs. De Anza Tile Co., Inc.

| Approved Enhancement Payment to Plaintiff: | $5,000.00 | Approved Settlement Administrator Costs | $3,750.00 | Approved PAGA Payment (LWDA and Aggrieved Employees) | $20,000.00 | Approved Net Settlement Amount | $60,293.56 | Therefore, the Court grants the motion.

The Court sets the hearing as to compliance with the settlement agreement as to distribution for April 5, 2027, 8:30 am, Dept.

9.

If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.

Re: Visalia Ceramic Tile, Inc. vs. De Anza Tile Co., Inc. Case No.: VCU327154 Date: August 31, 2026 Time: 8:30 A.M. Dept. 9-Honorable Nathan D. Ide Motion: Motion for Leave to File Third Amended Complaint Tentative Ruling: The motion is granted.

Visalia Ceramic Tile, Inc. (VCT) moves to file a third amended complaint newly asserting a "defamation/slander per se" claim against recently dismissed defendant Jordon Mondragon. Mondragon opposes VCT's motion.

A.

Background

Since commencing this action, VCT has maintained two narrative accounts of wrongdoing on the part of Richard Papapietro, De Anza Tile Co., Inc. (De Anza), and former defendant Jordon Mondragon. First, VCT alleges Mondragon--acting as an agent of Papapietro and De Anza (of which Papapietro is allegedly CEO, CFO and an owner)--attempted to solicit non-party Steve Halliwell to infiltrate VCT as a purported employee, while acting as a spy for De Anza (the Halliwell spy gambit allegations). Second, VCT alleges Papapietro engaged in subsequent efforts to disrupt VCT's relationship with a supplier (or multiple suppliers) (the supplier disruption allegations).

Pertinent, here, are the Halliwell spy gambit allegations. Previously submitted as a basis of claims for, inter alia, interference with prospective economic relations and violation of the Unfair Competition Law (Bus. & Prof. Code, Sec. 17200) (UCL), VCT now seeks leave to file a third amended complaint recasting such allegations as the basis of a new "defamation/slander per se" against Mondragon. The court notes, in prior instances of these allegations, and the current proposed third amended complaint, VCT alleged Mondragon told Halliwell VCT had committed OSHA and Labor Code wage and hour violations.

VCT has faced two rounds of prior demurrers, and, pertinent from that background is that this court recently determined, in ruling on the latter round directed at VCT's first amended complaint, that VCT's Halliwell spy gambit allegations failed to support a UCL claim against any named defendant. Further, this court determined there was no reasonable possibility VCT could sufficiently plead a UCL claim based on these allegations in a further amended complaint. The court sustained De Anza's demurrer with leave to amend, but solely incident to its determination that a reasonable possibility remained that VCT could plead its UCL claim based on a curative account of its supplier disruption allegations (the court expressly determined VCT presented no other reasonable possibility of cure by further amendment). Mondragon's demurrer was sustained without leave.

Following the court's ruling, Mondragon moved to dismiss the first amended complaint, as to himself, under Code of Civil Procedure section 581, subdivision (f)(1). That motion was later granted on June 22, 2026. Prior to the granting of Mondragon's dismissal motion, VCT initially filed a second amended complaint asserting, again, its interference and UCL violation claims, but, this time, solely against De Anza and Papapietro and solely based on an augmented account of its supplier disruption allegations.

Shortly after, however, and still prior to the granting of Mondragon's dismissal motion, VCT filed the instant motion for leave to file a third amended complaint wherein it seeks to assert a version of the Halliwell spy gambit allegations as the basis of a separate "defamation/slander per se" claim against Mondragon (Mondragon remains left out of two separate claims based on interference with contractual relations and violation of the UCL).

Proposed third amended complaint VCT casts the most recent version of the Halliwell spy gambit allegations, intended to support its "defamation/slander per se" claim, in paragraphs 25 through 36 of the proposed third amended complaint. Mentioned as instances of defamation/slander are: (1) an October 16, 2023, telephone conversation with Halliwell in which Mondragon allegedly, "with knowing intent, falsely and maliciously told Halliwell that Plaintiff had been engaging in OSHA and prevailing wage violations, ... which Defendant Mondragon knew [was] untrue, and [in which Mondragon also] proposed that Halliwell secretly obtain employment with Plaintiff while acting as a paid spy for Defendants De Anza Tile and Papapietro"; and (2) that "after October 16, 2023, including within the one-year period preceding the filing of this Third Amended Complaint, Defendant Mondragon ... repeatedly made the same or substantially similar statements as those made by him to Halliwell to additional third persons in the construction, tile, labor, and public works industries" and "Defendant Mondragon's willful, malicious and false statements about Plaintiff as detailed hereinabove has not stopped."

B. ANALYSIS

"A trial court may allow the amendment of a pleading at any time up to and including trial." (Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 354 [112 Cal.Rptr.3d 455], citing Code Civ. Proc., Sec.Sec. 576, 473, subd. (a)(1).) "That trial courts are to liberally permit such amendments, at any stage of the proceeding, has been established policy in this state since 1901. [Citations.]" (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489 [173 Cal.Rptr. 418].) "Where no prejudice is shown to the adverse party, the liberal rule of allowance prevails." (Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564 [176 Cal.Rptr. 704].) These principles reflect "the fundamental policy that 'cases should be decided on their merits.' [Citation.]" (Hirsa v. Superior Court, supra, 118 Cal.App.3d at p. 489; see also, Higgins v. Del Faro, supra, 123 Cal.App.3d at p. 564-565.)

Preliminarily, the court finds that VCT's request for leave to file its third amended complaint presents no meaningful prejudice to Mondragon. Mondragon contends solely that he would be prejudiced because he "has already been dismissed from this action with prejudice" and, thus, "[t]his is not the normal situation involving just another party to the action." The fact that Mondragon has faced a claim by VCT before and defeated it, however, does not, by itself, establish his entitlement to be free from future claims of VCT, as beyond what "another party" would properly be required to face in "the normal situation." What matters, instead, and is addressed further below, is whether Mondragon faced the same claim by VCT before and defeated it.

1. Effect of Judgment under Code Civ. Proc., Sec. 581d

VCT's motion begins by anticipating and responding to a Mondragon argument that the court is without power to grant VCT leave to amend its complaint because it ordered Mondragon's dismissal pursuant to Code of Civil Procedure section 581, subdivision (f)(1), after sustaining a demurrer to the UCL cause of action without leave. VCT contends "[t]he Court retains authority to permit amendment because no signed dismissal has yet been entered as to Defendant Mondragon." After VCT filed its motion, however, this court entered a signed order of dismissal on June 22, 2026, which was effective as a judgment for Mondragon and against VCT on VCT's UCL cause of action. (Code Civ. Proc., 581d.)

Mondragon argues, as indicated above, that, incident to entry of judgment in his favor (which had occurred as of the time of his opposition), "the litigation between Plaintiff and Defendant Mondragon is terminated 'and leaves nothing in the nature of judicial action to be done other than questions of enforcement or compliance.' " (Opp., p. 3, citing APRI Ins. Co. S.A. v. Superior Court (1999) 76 Cal.App.4th 176, 181 [90 Cal.Rptr.2d 171].) As VCT notes, however, "the Court's ruling on Defendant Mondragon's Demurrer to the UCL claim pled in Plaintiff's First Amended Complaint did not adjudicate any defamation claim."

Mondragon recognizes and expressly disputes this contention, as indicated in a later section of his opposition brief where he asserts "res judicata applies to bar the proposed TAC." This is the heart of the matter at issue in Mondragon's argument that an order permitting VCT leave to file its proposed third amended complaint would be violative of the finality of the order dismissing him from this litigation.

2. Res judicata

"Res judicata, or claim preclusion, precludes the relitigation of a cause of action that was litigated in a prior proceeding if three requirements are satisfied: (1) the present action is on the same cause of action as the prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the parties in the present action or parties in privity with them were parties to the prior proceeding." (Bullock v. Philip Morris USA, Inc. (2011) 198 Cal.App.4th 543, 557 [131 Cal.Rptr.3d 382].) There is no dispute that the second two requirements are satisfied (e.g., final judgment; same parties). The sole issue in dispute is whether "the present action is on the same cause of action as the prior proceeding." (Ibid.)

Mondragon contends the "defamation/slander per se" cause of action in the proposed third amended complaint is the same as the UCL cause of action, as against Mondragon, in the first amended complaint because it is "substantively premised on the same substance" of the same alleged conversation(s) between Mondragon and Halliwell that was alleged to have occurred in the first amended complaint as part of the facts alleged in support of VCT's prior UCL claim. Mondragon further argues that "the FAC and TAC concern the same primary rights and harms purportedly derived from the oral dissemination of the same accusations, [and, therefore] res judicata applies to bar what would be the re-litigation of the same cause of action."

The fact that two claims are based on the same or similar facts, however, is not necessarily determinative of whether they involve the same primary right. (See Rothschild v. Tyco Internat. (US), Inc. (2000) 83 Cal.App.4th 488, 499 [99 Cal.Rptr.2d 721] [primary right theory did not bar action for violation of unfair competition law based on same facts as existing action under False Claims Act].) In Bullock v. Philip Morris USA, Inc. (2011) 198 Cal.App.4th 543, 557 [131 Cal.Rptr.3d 382], cited by both parties, the Court of Appeal explains: "For purposes of res judicata, a cause of action consists of the plaintiff's primary right to be free from a particular injury, the defendant's corresponding primary duty and the defendant's wrongful act in breach of that duty.

The violation of a primary right gives rise to only a single cause of action. The plaintiff's indivisible primary right must be distinguished from both the legal theory on which the plaintiff seeks relief and the remedy sought. The plaintiff may seek various remedies based on different legal theories, all arising from a single cause of action. " ' "[T]he 'cause of action' is based upon the harm suffered, as opposed to the particular theory asserted by the litigant. Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief. 'Hence a judgment for the defendant is a bar to a subsequent action by the plaintiff based on the same injury to the same right, even though he presents a different legal ground for relief.'" Thus, under the primary rights theory, the determinative factor is the harm suffered.

When two actions involving the same parties seek compensation for the same harm, they generally involve the same primary right.'" (Bullock v. Philip Morris USA, Inc. (2011) 198 Cal.App.4th 543, 557 [131 Cal.Rptr.3d 382], citations omitted.)

The primary right VCT seeks to vindicate in this action by way of its proposed "defamation/slander per se" claim is based on injury of its interest in its reputation. (See Smith v. Maldonado (1999) 72 Cal.App.4th 637, 645 [85 Cal.Rptr.2d 397].) In the UCL cause of action from its first amended complaint, however, VCT sought to vindicate different primary rights, albeit based on allegations this court deemed insufficient to support the claims asserted under that cause of action. The UCL defines unfair competition as "any unlawful, unfair or fraudulent business act or practice ... ." (Bus. & Prof.

Code, Sec. 17200.) " 'Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition--acts or practices which are unlawful, or unfair, or fraudulent.' In other words, a practice is prohibited as 'unfair' or 'deceptive' even if not 'unlawful' and vice versa.' [Citation.]" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 [83 Cal. Rptr. 2d 548, 973 P.2d 527] (Cel-Tech.)

In the first amended complaint, with respect to the "unlawful" prong of the UCL, VCT solely alleged its supplier disruption allegations as a basis of the claim, and it is clear such allegations, not premised on any conduct by Mondragon, did not involve the same primary right VCT seeks to vindicate by way of its "defamation/slander per se" claim VCT also, however, cast a version of the Halliwell spy gambit allegations in support of its prior UCL claims based both (i) on the "unfair" prong of the UCL, which requires "any finding of unfairness to competitors under section 17200 [must] be tethered to some legislatively declared policy or proof of some actual or threatened impact on competition" (Cel- Tech, supra, 20 Cal.4th at pp. 186-187); and (ii) on the "fraudulent" prong, which in the UCL context, requires fraudulent acts that deceive members of the public, i.e., consumers (Morgan v.

AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1257 [99 Cal.Rptr.3d 768]). In the above respects, VCT's UCL cause of action was based on injuries to competition and to the public's interest in accurate consumer information, which are primary rights distinct and different from than the primary right VCT seeks to vindicate by way of its proposed "defamation/slander per se" cause of action based on injury of its interest in its reputation. Accordingly, the court disagrees that res judicata applies as a bar to VCT's proposed "defamation/slander per se" claim.

3. Timeliness "in relation to the court's orders"

Mondragon's additionally argues that the third amended complaint is "untimely in relation to the court's orders." Mondragon asserts that VCT was given 10 days from notice of this court's ruling "granting Defendant Mondragon's demurrer" to file an amended complaint, and that VCT failed to file an amended complaint asserting any claim against Mondragon within that 10-day period. As a threshold matter, the court notes the obvious fact that VCT was not given 10 days from notice of the court's ruling on the demurrers to the first amended complaint to file an amended complaint as to Mondragon. Mondragon's demurrer, rather, was sustained without leave. The court, in ruling on De Anza's demurrer, granted VCT leave to amend, within 10 days, but that 10-day period, of course, is irrelevant to the timeliness of the instant motion for leave to amend.

3. Statute of limitations

Mondragon additionally asserts VCT's proposed "defamation/slander per se" claim is time-barred. Defamation claims are subject to a one-year statute of limitations. (Code Civ. Proc., Sec. 340, subd. (c).) VCT argues, somewhat ambiguously, that "relation-back" principles might be relevant to the determination of whether its proposed "defamation/slander per se" claim, to the extent premised on the statements Mondragon made to Halliwell on October 16, 2023, is time barred, but it "is not asking the Court to use relation back to revive a publication already time-barred before suit was filed."

To get this first matter out of the way, the court, first, notes, as is evidently conceded, that VCT did not commence this action until October 20, 2025, after the one-year period ostensibly elapsed, and, second, that any possibile determination that VCT's proposed "defamation/slander per se" claim relates back to its prior UCL claims is vitiated by this court's determination that those claims involve different primary rights. (See Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1276-1278 & 1276, fn. 25 [45 Cal.Rptr.3d 222].)

VCT also argues, however, that its proposed claim is not time-barred to the extent of its allegations that "after October 16, 2023, including within the one-year period preceding the filing of this Third Amended Complaint, Defendant Mondragon ... repeatedly made the same or substantially similar statements as those made by him to Halliwell to additional third persons in the construction, tile, labor, and public works industries" and "Defendant Mondragon's willful, malicious and false statements about Plaintiff as detailed hereinabove has not stopped."

Mondragon argues that, notwithstanding these subsequent alleged instances of defamation, VCT's "defamation/slander per se" claim accrued on October 16, 2023, based on the "[t]he single-publication rule, codified in Cal. Civ. Code Sec. 3425.3." Section 3425.3 states, in pertinent part: "No person shall have more than one cause of action for damages for libel or slander ... founded upon any single publication or exhibition or utterance, such as ... any one presentation to an audience ... ."

Mondragon's argument is that because VCT alleges "after October 16, 2023, including within the one-year period preceding the filing of this Third Amended Complaint, Defendant Mondragon ... repeatedly made the same or substantially similar statements as those made by him to Halliwell," which statements were made "to additional third persons in the construction, tile, labor, and public works industries "--persons characterized, by Mondragon, as "in the same general audience"--VCT's "defamation/slander per se" claim accrued, based on the single publication rule, on October 16, 2023, when the original alleged falsehoods were allegedly stated to Halliwell. Based on these arguments, it is clear Mondragon misapprehends the single publication rule and the proper context in which it applies.

First, for the tort of defamation, one of the elements of which is " 'publication,' " "each time the defamatory statement is communicated to a third person who understands its defamatory meaning as applied to the plaintiff, the statement is said to have been 'published,' " and "[e]ach publication ordinarily gives rise to a new cause of action for defamation. [Citations.]" (Shively v. Bozanich (2003) 31 Cal.4th 1230, 1242 [7 Cal.Rptr.3d 576, 80 P.3d 676].) "The rule that each publication of a defamatory statement gives rise to a new cause of action for defamation applies when the original defamer repeats or recirculates his or her original remarks to a new audience." (Id., at p. 1243.) This rule is not vitiated by the single publication rule. Rather, it remains the generally applicable rule to repeated instances of defamation, as alleged in the proposed third amended complaint.

The single publication rule arose in response to a completely different scenario, distinguishable from VCT's allegations. "Under the common law as it existed in the 19th century and early part of the 20th century, the principle that each communication of a defamatory remark to a new audience constitutes a separate 'publication,' giving rise to a separate cause of action, led to the conclusion that each sale or delivery of a copy of a newspaper or book containing a defamation also constitutes a separate publication of the defamation to a new audience, giving rise to a separate cause of action for defamation. [Citation.] This conclusion had the potential to subject the publishers of books and newspapers to lawsuits stating hundreds, thousands, or even millions of causes of action for a single issue of a periodical or edition of a book." (Id., at pp. 1243-1244.)

"Seeking to avoid both the multiplicity and the staleness of claims permitted by the rule applied [as just described above], courts fashioned what became known as the single-publication rule, holding that, for any single edition of a newspaper or book, there was but a single potential action for a defamatory statement contained in the newspaper or book, no matter how many copies of the newspaper or the book were distributed." (Id., at p. 1245.) The single-publication rule was later codified in Civil Code section 3425.3. (Id., at p. 1246.)

Following adoption of the single publication rule, it remains the case, of course, that "in defamation actions the general rule is that publication occurs when the defendant communicates the defamatory statement to a person other than the person being defamed," but "with respect to books and newspapers, publication occurs (and the cause of action accrues) when the book or newspaper is first generally distributed to the public." (Id., at p. 1247.)

It is true that Civil Code section 3425.3 refers to "any single publication or exhibition or utterance, such as ... any one presentation to an audience " (emphasis added), but that obviously does not render, as Mondragon suggests, successive statements, as alleged here, of "the same or substantially similar [false] statements" a single publication giving rise to a single cause of action just because the statements repeated the same falsehood or because the statements were repeatedly made to persons associated as those to whom the defamed person's reputation matters (i.e., because they are involved in the same industry as the defamed person, or a related industry).

This is an absurd interpretation of section 3425.3. Clearly the rule is not intended to forever immunize a person, one year after they defame another person, for continued separate instances of defamation based on the same or similar misrepresentations, so long as the defamatory statements are communicated solely to people in related industries such that the defamed person's reputation is sure to be harmed. The court finds, accordingly, that VCT's proposed "defamation/slander per se" claim does not facially disclose a statute of limitations defense based on the single publication rule.

4. Lack of specificity

Mondragon lastly argues, reaching his most persuasive point at the end of his brief, that VCT's "factual allegations beyond those pertaining to the October 2023 phone call to Mr. Halliwell are unquestionably vague." The court agrees these allegations are "unquestionably vague." VCT's allegations are only sufficiently specific as to the alleged defamatory statements communicated to Halliwell, and it is essentially conceded that a claim based on those allegations is not timely. The balance of the allegations, submitted as establishing timely claims, fail to identify the persons to whom the statements were made, or when they were made (except that they were made within the applicable one-year limitations period).

That said, while "the failure of a proposed amendment to state facts sufficient to constitute a cause of action ... may support an order denying a motion to amend," that rule finds "its most appropriate application ... where the insufficiency [cannot] not be cured by further appropriate amendment." (Cal. Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280-281 [218 Cal.Rptr. 817].) Accordingly, the court is disinclined to deny VCT's request for leave to amend on the basis of the vagueness of its allegations, but it also cautions that, were the court here faced with demurrer on the same grounds, it would be sustained. The court is prepared to grant VCT leave to file its third amended complaint because it believes, at this stage, there is a reasonable possibility of cure by further amendment.

Based on the foregoing, the court grants VCT's motion. The court further makes clear that it expects VCT to meet and confer with Mondragon regarding the evident defects in its third amended complaint, as currently constituted, and that it should anticipate the necessity of further amendment to specifically identify incidents of "the same or substantially similar statements as those made by [Mondragon] to Halliwell" by alleging what was said, to whom and when such statements were made.

If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.