Gray v. Don Miller & Associates, Inc

In Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, the California Supreme Court considered the question whether the plaintiff buyer was "entitled to recover attorney fees on the basis of the 'tort of another' exception to the general rule because he was required to protect his interest by bringing an action against the sellers as the result of Fitch's the realtor's wrongdoing." (Id. at p. 507.) In Gray, a realtor falsely represented to the plaintiff that his offer to buy property had been accepted by the sellers and the plaintiff eventually brought an action against the sellers and the real estate brokerage for specific performance and damages. (Id. at p. 501.) Although the trial court denied relief against the sellers because they had not actually accepted the plaintiff's offer, the plaintiff recovered attorneys' fees as an element of the damages awarded against the brokerage. (Ibid.) The Supreme Court concluded: "We can see no escape from the validity of plaintiff's 'tort of another' claim in this regard. If Fitch had not first falsely notified plaintiff that his offer had been accepted and several months later told him that the sellers declined to sell the property, plaintiff would not have incurred attorney fees in seeking to obtain the property in a suit for specific performance against the sellers. Thus, Fitch's misrepresentation was the direct cause of plaintiff's action for specific performance against the sellers." (Gray v. Don Miller & Associates, Inc., supra, 35 Cal.3d at p. 507.) The court rejected the defendant's contention that the "tort of another" doctrine did not apply because the case lacked "exceptional circumstances" as seemingly required by Davis. (Id. at pp. 508-509.) It noted that "the 'tort of another' exception as embodied in the Restatement of Torts does not contain an 'exceptional circumstances' requirement (Rest.2d Torts, 914, subd. (2))" and no cases had been cited "from the many jurisdictions which apply this exception limiting its applicability to 'exceptional circumstances.'" (Id. at p. 509.) In Gray, the Supreme Court found that the plaintiff was entitled to an award of attorneys' fees incurred by him in bringing an action, albeit unsuccessful, against the sellers. (Ibid.)