In Dominick Dunne's new novel The Two Mrs. Grenvilles, Billy Grenville, newly married in 1943 and scion of a staggeringly rich New York family, is about to go off to war. Anxious about being killed, he consults a fortuneteller. She predicts he will survive the European front only to die 12 years later on the fifth of May. Relieved, Billy ships out, wins a medal for valor and is delighted again in 1955 to find that he has survived the appointed day of doom. Then, within a year, it develops that the clairvoyant wasn't wrong, just off a little: Billy's wife blows his head off with a shotgun.

Nick Dunne, too, visited a fortuneteller before he went to fight in the war. The indulgence suits him better than it does his booming, aristocratic creation. Dunne, now gray-haired, is small, quick and just a little fey. Like Billy, he was granted a 15-year reprieve by his soothsayer; like Billy, he won a medal (a Bronze Star for heroism at the Battle of the Bulge) and survived his foreordained day of death. But whereas fortune caught up with Billy in one explosive coup de grace, in Dunne's case she has been more quixotic, bestowing a stunning kick in the teeth one day, a velvet kiss the next.

This is a good time. The Two Mrs. Grenvilles has just gone into its fourth printing in two months, made seven best-seller lists and is shaping up as one of the summer's compulsory beach reads. Dunne has already sold the miniseries rights for $250,000. Paperback rights have brought him at least another $100,000. Such satisfactions will never make up for a decade that saw a wrenching divorce, the suicide of the author's brother and the murder of his daughter—but they do throw all the bad luck in a surreal, otherworldly light. "Amazing, isn't it," muses Dunne, "what happens in your life? Holy cow!"

Nick Dunne's fortunes began 59 years ago when he was born the second of six children into a well-to-do, socially striving Hartford, Conn. Irish family. "We were like minor-league Kennedys," he says. "We belonged to the WASP clubs and schools but we were never a part of things. I felt I was always just looking in at the fancy life, an observer, not a participant."

Thus present and yet not present, Dunne graduated from Williams in 1949 and took the best job he could find: stage manager with the Howdy Doody Show. From there he went to Robert Montgomery Presents and later to work for producer-director Fred Coe. By the mid-'50s he was being handpicked to work on productions with Bogart, Bacall, Sinatra and Paul Newman. "How can I say this?" Dunne smiles. "The stars liked me." In 1957 he had moved to Hollywood, where he soon became executive producer of the hit TV series Adventures in Paradise. Dunne's brother is the writer John Gregory Dunne, his sister-in-law is Joan Didion. As the production company Dunne-Didion-Dunne, the three turned out such critically successful movies as Panic in Needle Park and the screen version of Didion's Play It as It Lays. And Nick Dunne was living as good a life as Hollywood in the go-go years had to offer.

"Look," he says now, making his way across his tiny Manhattan apartment to a stack of scrapbooks four feet high. He opens one at random. It is filled with hundreds of photographs, candid snaps of what seems to be every big name in Hollywood, circa 1964. There is Warren Beatty, grinning as he plays piano, and Natalie Wood, using her table knife as a mirror while applying lipstick. There is New man, there are Steve McQueen, Richard Harris, Dennis Hopper, and Truman Capote snapped in an extravagant Valentino tango with a ravishing Tuesday Weld. Rolling in money, married to the beautiful, socially prominent Ellen ("Lenny") Griffin, Nick the outsider had turned magically into Nick the insider, main player in the "fancy life," L.A. edition. Hence the scrapbooks. "I kept entering and recording everything," he says, "just to prove to myself that it really happened."

And then in 1965 that lingering sense of unreality turned out to be accurate: Dunne's 10-year Gatsby dream evaporated. Lenny, exasperated by the constant partying, asked for a divorce, and Nick went into a tailspin. "I drank a bit," he says. "I smoked marijuana a bit. Did I have blackouts? Yes, I did."

Dunne brought his problems to his work. In 1973, toiling—and drinking—with Liz Taylor, he produced the film Ash Wednesday. It bombed. He did some further, unsatisfying work for TV, and then in 1971 he left, dispirited, for what he thought would be a brief vacation in a phoneless, TV-less Oregon cabin. "I was," he says, "no longer in demand, either in my career or in my private life."

The vacation, scheduled for a week, lasted six months. When Dunne emerged, it was with a new purpose: He would become a writer. After auctioning off most of the contents of his L.A. bachelor pad ("It was huge—the sale lasted a week"), he moved to New York and in short order turned out a Hollywood-trash opus marketed under the dubious title The Winners: Part Two of Joyce Haber's the Users. The book was panned, but Dunne made money and felt liberated. "It made me know I could do it," he says. Within a few months, he received a sizable advance to do a new novel.

He has saved little from that period, but somewhere in storage, he says, is a letter that arrived in Oregon to him from Capote. "It ended, 'Remember this—when you get out of it what you went there to get, you must come back to the city. Because that [the wilderness] is not where you belong.' "

Back in New York by the mid-'70s, Dunne had finally found where he belonged—or so it seemed. But fortune, or fate, or plain bad luck was not through with him yet. In 1975 he learned that Lenny, with whom he remained close, had multiple sclerosis; a few years later his youngest brother, Stephen, committed suicide. On Halloween of 1982 he was awakened by a phone call at 5 a.m. His daughter and namesake, Dominique Dunne, had been strangled by her boyfriend John Sweeney, a chef at L.A.'s swank Ma Maison. Sweeney's trial made national news. Dunne reported the trial for Vanity Fair, including his own outburst at the judge when Sweeney was convicted on a lesser charge of voluntary manslaughter. He wrote of seeing Dominique on TV during those weeks, in one of her last roles: the teenage daughter in Poltergeist. "There was Dominique screaming, 'What's happening?' " he wrote. "I felt as if she were sending me a message. 'I don't know what's happening, my darling,' I screamed back at the television set." The article filled a need. "If I hadn't written that," Dunne says, "I never would have been able to go on writing."

And write he did, completing in 1983 the book he had begun before the murder: a dark tale of a beautiful outsider, a poor woman who gold-digs her way into her dream of glamour as Billy Grenville's wife, and eventually shoots him. The book is closely based on the story of socialite Ann Woodward, who killed her plutocrat husband in 1955. It is said that Woodward's own suicide, much later, was touched off by Truman Capote's retelling of her tale in his notorious La Côte Basque, 1965, a magazine excerpt from his unfinished "masterpiece" Answered Prayers, to be published in the spring of 1986. And sure enough, a Capote character appears in Dunne's book. Not the smiling Capote of the old snapshot, or the generous Capote of the letter, but the cruel, conniving Capote that prefigured the dissipated, dying writer of the '80s. "I think when Truman wrote that story, he never recovered from it," says Dunne. "He just didn't seem to want to pull himself together."

Despite his attraction to the Woodwards and the Capotes, the brilliant, doomed outsiders, Dunne seems resolved not to be one of them. John Sweeney will soon be out of jail. "That," says the writer, "is real unfinished business." But today, at least, Dunne's luck is good. His book is hot. His drinking is under control: "I go to meetings and that kind of thing," he says. His older son, Griffin, is a successful actor-producer (An American Werewolf in London, Almost You). Dunne is active in the group Parents of Murdered Children. Maybe, just maybe, fortune will smile on him now.

"After the war," says Dunne, "I went back to other psychics and fortunetellers. They used to always tell me, 'The most fulfilling part of your life is going to be the last quarter.' All those years in Hollywood I kept thinking that time is still going to come. I always believed that. And now it has."