rejecting Butler’s foreseeability standard as an “aberrant viewpoint”
How later courts described this case
- rejecting Butler’s foreseeability standard as an “aberrant viewpoint”
- “The proper measure of tort damages is the ‘out-of-pocket’ measure; successful tort plaintiffs are not entitled to have damages computed on a contract or ‘benefit-of-the-bargain,’ theory.” (citation omitted)
- real estate appraiser not liable to lender for negligent appraisal absent privity of contract where appraiser hired by borrower
Written by the judges who cited it.
Later courts went against this
Overruled by Bily v. Arthur Young & Co., 3 Cal. 4th 370 (1992)
Christiansen has been overruled by Bily.
The opinion
VARTABEDIAN, J. *
On October 30 and November 4,1986, respondents and appellant Roddy filed petitions for rehearing. The requests challenge this court’s determination that appellant Files, an appraiser, was not liable to respondents for negligent misrepresentation. In support thereof, petitioners for the first time cite International Mortgage Co. v. John P. Butler Accountancy Corp. (1986) 177 Cal.App.3d 806 [ 223 Cal.Rptr. 218 ] and Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104 [ 128 Cal.Rptr. 901 ], Each is readily distinguishable from the instant case.
International essentially held that the certified public report of an independent auditor is necessarily intended for public consideration and reliance. (177 Cal.App.3d at pp. 817-820.) Additionally, International involved the physical delivery of the actual audited financial statements to the plaintiff. Plaintiff presumably relied not only on the representations but also on the qualifications of the auditor-accountant.
The Roberts court found that an attorney may be liable for negligence to a specific person intended to benefit by his performance. (57 Cal.App.3d at pp. 110-111.)
In the instant case, Files’s appraised value of $230,000 was placed on the sales brochure with no mention of Files, and no mention that the figure was arrived at by an assertedly qualified real estate appraiser. Not only did Files not know of the investors, but the investors likewise knew nothing of Files. While they relied on the appraised value which Files *792 negligently provided to Sierra and Roddy, the investors did not rely on it as being Files’s work product. On the other hand, regardless of where the investors thought that the $230,000 figure came from, they could reasonably have presumed that Sierra (and Roddy, the preparer of the loan brochure) had taken some steps to verify the figure. The investors’ reliance would have been on Sierra and implicitly on Roddy, but not on an appraiser whose contribution to the loan brochure was unknown to them.
Woolpert, Acting P. J., and Martin, J., concurred.
Petitions for a rehearing were denied November 14, 1986.
Assigned by the Chairperson of the Judicial Council.