Gray

Defendant and appellant Real Estate Commissioner of the State of California (Commissioner) appeals from an order directing payment to plaintiffs and respondents Dallas H. Gray III and Susan L. Gray (the Grays) of money from the Real Estate Fund for purposes of education, research and recovery (Fund).

Since the Grays sustained their burden of proving they were defrauded by Stephen Hobbs (Hobbs), a licensed real estate broker, acting in the course of a licensed real estate transaction, the judgment is affirmed.

Procedural and Factual Background

On February 6, 1980, the Grays filed a complaint in the Los Angeles Superior Court for fraud, deceit, negligent misrepresentation, and breach of contract against Hobbs. The complaint identified Hobbs as a licensed real estate broker acting as a broker in a fiduciary relationship with the Grays. The breach of contract count alleged that the Grays owned certain real property; that Hobbs executed an agreement to purchase the property; and that Hobbs failed to consummate the purchase.

The fraud and deceit and negligent misrepresentation counts averred that Hobbs fraudulently induced the Grays to sell the property to him, and that…