Florida jury awards damages of $47.8M in buyer broker agreement dispute

In 2020, well before the real estate industry began debating the enforcement of buyer broker agreements — which became the norm after the National Association of Realtors‘ (NAR) commission lawsuit settlement agreement — the leader of a Florida-based brokerage filed a lawsuit against a client for backing out of a deal and not reimbursing the broker-owner for his work.

Last month, the six-year legal battle came to an end after a jury in Miami-Dade County found Reuben Ezekiel; his business partner, Roman Diakiwski; and his sister, Irene Ezekiel Ishay, liable for fraud, tortious interference, conspiracy to defraud and conspiracy to interfere in a business relationship,

The jury awarded Alexander Goldstein of Miles Goldstein Real Estate $47.8 million in damages, which included compensatory and punitive damages. The court has yet to issue its final judgment. 

The lawsuit stems from Ezekiel’s and Diakiwski’s purchase of a $2.8 million waterfront property in Golden Beach, Florida, through their investment firm R&R GB Investment Group, which the court characterized as a “fictitious company” during the lawsuit.

According to the suit, the business partners began working with Goldstein in 2018 to find an investment property. In court filings, Goldstein said he spent more than a year searching for homes and submitting offers on properties with Ezekiel and Diakiwski. 

Case details, attorneys’ responses

After finding the Golden Beach property, which was listed at $2.9 million, Goldstein said he worked to negotiate with the sellers on behalf of his clients. He found out through the process that $2.8 million was the price the sellers were after.

According to the filings, Goldstein relayed this information to his clients, who then told him that they were no longer interested in the property. But less than two hours later, Ishay — Ezekiel’s sister — submitted an offer on the property for $2.8 million while acting as the buyer’s broker for Ezekiel and Diakiwski. This allegedly caused Goldstein to lose out on what would have been an $84,000 commission.

Filings show that Ishay was paid $5,000 for the deal. The rest of the buyer broker’s commission offered by the listing agent was credited back to Ezekiel and Diakiwski, who worked directly with the seller’s agent after the contract was executed. 

In filings, Goldstein alleged that when he asked Ezekiel and Diakiwski about his commission, they “taunted him and told him to sue them demonstrating no remorse, no care, and no actual acknowledgement their behavior is morally broken.” 

In a statement given to HousingWire, plaintiff’s counsel Josef Timlichman of Josef Timlichman Law PLLC said the suit was “about righting a wrong and sending a message.” 

“South Florida is a serious place, doing serious business at the highest levels. For too long, Florida has carried a stigma as a sunny place for shady people,” Timlichman said in a statement. “We are not that. Brokers like Alex Goldstein, who built his career by playing it straight, should not have to watch their commission stolen through a fictitious LLC and a sister paid to pose as their replacement, or watch a defendant try to shape public opinion against them on local television during the case.

“The Court ruled in our favor twice. The jury saw it for what it was. The investors who finance these arrangements should take notice.”

Peter Solnik, the defendants’ attorney, also issued a statement to HousingWire in which he said the tort claims should not have proceeded to the jury because the case involved “nothing more than a breach of contract — a non-payment of a commission.”

“Additionally, the record proves that the record lacked any evidence of reputational harm or lost profits, and therefore, the verdict bore no reasonable relationship to the lack of damages proven at trial,” Solnik’s statement read in part. “Furthermore, the punitive damage award was also grossly excessive.  Pursuant to Fla. Stat. 768.73, punitive damages are capped at an award of punitive damages to the compensatory damages at a ratio of 3:1.  Therefore, the most amount that could have been awarded was approximately $240,000.  

“I am cautiously optimistic that the Presiding Judge will either 1) order a new trial 2) substantially reduce the verdict, and/or grant my clients a Judgment Notwithstanding the Verdict. I look forward to arguing my clients’ Post Trial Motion.”

Larger meaning for the industry

With buyer broker agreements that outline an agent’s compensation having become the norm across the country, real estate professionals are now pondering what to do when a buyer violates their contract. 

Jonathan Lickstein, the broker-owner of LoKation Real Estate, is one broker who has decided to enforce the agreements in court. 

“A first-time homebuyer who’s bringing together money to do an FHA loan, we’re not going to go after that person. But if we have an exclusive agreement with somebody, and they turn around and they go with their cousin, sister, uncle or nephew, then we’re going to enforce that agreement because they took advantage,” Lickstein told attendees in April at HousingWire’s The Gathering.

Lickstein said he is aware of the optics presented to the consumer in choosing to enforce these agreements in court, but he noted that if a company is large enough, people are always going to complain about something.

“You’ll get negative complaints about how somebody showed a house or the way they advertised a rental, but as far as filing a suit about enforcing an agreement, we have yet to receive one negative complaint,” Lickstein said.