Hong Sang Mkt., Inc. v. Peng, 229 Cal. Rptr. 3d 99

Background

Hong Sang owned a commercial building; Peng occupied a sublet unit and became Hong Sang's tenant by operation of law in Sept. 2009 at $4,725/month. Peng failed to pay rent Sept. 2009–Feb. 2011.
Hong Sang filed an unlawful detainer (UD) action and obtained possession and a judgment for one month's back rent ($4,725) in Sept. 2011; that UD judgment became final and Hong Sang did not appeal it.
Separately, Hong Sang filed a breach of contract action seeking $85,050 for back-due rent from Sept. 2009–Feb. 2011 (the civil action at issue here).
Peng raised res judicata / collateral estoppel defenses (amended her answer shortly before trial); the trial court allowed the amendment and tried the case on stipulated facts.
The trial court awarded Hong Sang the full $85,050 plus prejudgment interest and later awarded contractual attorney fees; the court of appeal affirmed the damages judgment but reversed/reduced the attorney fee award and remanded for a corrected fee amount.

Issues

Issue	Plaintiff's Argument (Hong Sang)	Defendant's Argument (Peng)	Held
Whether the prior UD judgment for one month’s rent precludes Hong Sang’s civil suit for other months’ back rent (res judicata / claim-splitting)	UD judgment does not bar additional rent claims because UD is a summary proceeding limited in damages; Civil Code §1952(b) permits separate suit for damages not determined in UD	The UD judgment awarded back rent and thus precludes splitting the rent cause of action into two suits	Held: UD judgment limited to May 2011; it did not preclude recovery of additional back-due rent for other periods in a civil action (statutory scheme and UD limits permit separate non-duplicative suits)
Whether Peng waived the res judicata defense by not pleading it earlier	Allowing amendment was unnecessary and prejudiced Hong Sang	Peng could not have pleaded res judicata before UD judgment; amendment was timely and not prejudicial	Held: No abuse of discretion in allowing amendment; defense properly considered
Scope of issue preclusion (collateral estoppel) from UD judgment	Any issue resolved in UD should bind later suit	UD did not actually litigate or decide rent for periods other than May 2011	Held: Issue preclusion does not apply because UD did not actually litigate other months’ rent
Entitlement to contractual attorney fees for work defending Peng’s cross-complaint, including anti‑SLAPP-related work and work predating the fee clause	Contractual fee clause covers "any action...arising out of the tenancy" — fees are recoverable; parties agreed to small reduction for pre-effective-date work	Fees for defending cross-complaint (including anti‑SLAPP work) fall outside the clause because much work related to events before the clause; court should not award fees tied to statutory anti‑SLAPP award that was vacated on appeal	Held: Trial court erred in awarding full contractual fees; appellate court reduced award substantially (remanded to enter corrected fee total of $49,912.83)

Key Cases Cited

People v. Barragan, 32 Cal.4th 236 (Cal. 2004) (elements and scope of res judicata and collateral estoppel)
Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888 (Cal. 2002) (primary-right theory; a primary right gives rise to a single cause of action)
Vella v. Hudgins, 20 Cal.3d 251 (Cal. 1977) (unlawful detainer is a summary proceeding with limited res judicata effect)
Northrop Corp. v. Chaparral Energy, Inc., 168 Cal.App.3d 725 (Cal. Ct. App. 1985) (landlord may obtain possession via UD and reserve monetary rent claims for separate civil action; §1952(b) context)
Hernandez v. City of Pomona, 46 Cal.4th 501 (Cal. 2009) (issue preclusion requires the issue to have been actually litigated and necessarily decided)
Lekse v. Municipal Court, 138 Cal.App.3d 188 (Cal. Ct. App. 1982) (one cause of action for past rent cannot be split across collaterally related small claims actions)
McCaffrey v. Wiley, 103 Cal.App.2d 621 (Cal. Ct. App. 1951) (ordinary ejectment/damages splitting — discussed as inapposite to UD context)