Ayala v. Dawson

On his motion to quash service of summons in an unlawful detainer action against him, plaintiff fully litigated his claim that he was fraudulently induced to sign a lease rather than a loan agreement, so the unlawful detainer judgment collaterally estopped him from pursuing his parallel civil action.  The holder of record title, Dawson, sued to evict Ayala, claiming he was a tenant who had defaulted on his lease.  Ayala moved to quash service of summons in the unlawful detainer action, arguing he was not a tenant but that Dawson had fraudulently induced him to sign a lease (which contained an option to purchase) when the two had orally agreed that Ayala would be the owner and just get a loan from Dawson.  Ayala also filed a civil suit making the same allegations.  He did not move to consolidate the two proceedings.  In the unlawful detainer proceeding, he was allowed discovery on his fraud defense and a lengthy hearing was held on his motion to quash at which both he and Dawson testified.  The unlawful detainer court held that Ayala was a tenant, thus rejecting his fraud defense.  Ayala sought, but was denied writ review on the merits by the superior court’s appellate division.  This decision holds that the trial court did not err in granting the unlawful detainer judgment collateral estoppel effect barring Ayala civil suit for fraud.  While unlawful detainer judgments generally are given limited collateral estoppel effect, here the issue of fraud was fully tried in the unlawful detainer action and so the finding against Ayala on that issue was binding on Ayala, nixing his civil suit on the same fraud claim.

California Court of Appeal, First District, Division 4 (Streeter, J.); August 4, 2017; 2017 WL 3326712


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