Ayala v. Dawson, A142830

Ayala lived on a five-unit property from 1999–2012 after signing documents supplied by Dawson; Ayala claims an oral installment-sale agreement gave him equitable title and that the written papers were fraudulent.
The written document signed in 1999 was a “Residential Lease with Option to Purchase”; Ayala paid monthly sums (called rent) and made substantial improvements while claiming he believed the transaction was an installment sale.
Dawson sued Ayala for unlawful detainer in 2012; Ayala contested service/jurisdiction by arguing he was a vendee-in-possession and the lease was fraudulently induced.
After a multi-hour evidentiary hearing, Judge Daniels found a landlord-tenant relationship and rejected Ayala’s fraud-in-the-inducement/broker fiduciary theory; the appellate division denied Ayala’s writ.
Ayala pursued a separate civil action asserting fraud, specific performance, quiet title, and related claims. Dawson moved for summary judgment arguing collateral estoppel based on the unlawful detainer findings; the court granted summary judgment and later awarded Dawson attorney fees under the lease.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Ayala can relitigate fraud-in-the-inducement/title in the civil action after the unlawful detainer ruling	Ayala: the UD proceeding was limited to possession; title/fraud remain open in the separate action	Dawson: Judge Daniels fully adjudicated the fraud/title issue in UD; collateral estoppel bars relitigation	Court: Collateral estoppel applies — UD hearing was extensive, issue actually litigated and decided; summary judgment affirmed
Whether the UD decision was a final adjudication on the merits for issue preclusion	Ayala: UD ended in clerk’s default judgment, so no merits decision	Dawson: Ayala appeared specially, litigated fraud at hearing, and lost on the merits	Court: The evidentiary hearing findings are sufficiently final for issue preclusion
Whether due process or limited UD procedures preclude collateral estoppel here	Ayala: expedited UD denied full and fair opportunity to litigate title/fraud	Dawson: long evidentiary hearing, discovery, and written findings show full and fair opportunity	Court: The UD was atypical and comprehensive (transcript, exhibits, findings), so due process satisfied
Whether attorney fees award tied to the lease should be reversed if judgment reversed	Ayala: fee award depends on judgment reversal	Dawson: fee clause entitles prevailing party to fees	Court: Because judgment affirmed, attorney fees award affirmed

Wood v. Herson, 39 Cal.App.3d 737 (court applied collateral estoppel where UD involved extensive evidence and findings)
Vella v. Hudgins, 20 Cal.3d 251 (UD ordinarily too summary to preclude later fraud claims absent full and fair litigation)
Lucido v. Superior Court, 51 Cal.3d 335 (explains elements and requirements of collateral estoppel)