Frayman v. Douglas Elliman Realty, LLC

• Decision Date: 25 January 2021
• Docket Number: CASE NO. 20-23393-CIV-ALTONAGA/Torres
• Citation: 515 F.Supp.3d 1262
• Court: U.S. District Court — Southern District of Florida
• Parties: Alexander FRAYMAN, Plaintiff, v. DOUGLAS ELLIMAN REALTY, LLC; et al., Defendants.

515 F.Supp.3d 1262

Alexander FRAYMAN, Plaintiff,

v.DOUGLAS ELLIMAN REALTY, LLC; et al., Defendants.

CASE NO. 20-23393-CIV-ALTONAGA/Torres

United States District Court, S.D. Florida.

Signed January 25, 2021

Jeremy L. Kahn, Leon Cosgrove, LLP, Miami, FL, Andrew Benjamin Boese, Leon Cosgrove LLC, Coral Gables, FL, for Plaintiff.

Alexander Esteban, Jorge Alejandro Perez, Armando Rosquete, Bell Rosquete Reyes Esteban, PLLC, Coral Gables, FL, for Defendants Douglas Elliman Realty, LLC, Douglas Elliman Florida LLC, Darin Tansey, Raphael Avigdor.

Jonathan Smulevich, Lowy and Cook, P.A., Miami, FL, Robert L. Switkes, Switkes & Zappala, P.A., Miami Beach, FL, for Defendants Gregory Mirmelli, Miami Luxury Concierge LLC.

ORDER

CECILIA M. ALTONAGA, UNITED STATES DISTRICT JUDGE

THIS CAUSE came before the Court on Defendants’¹ Motion to Dismiss Plaintiff's Amended Complaint [ECF No. 51], filed on November 30, 2020. Plaintiff, Alexander Frayman, filed a Response to Defendants’ Motion to Dismiss [ECF No. 52] on December 14, 2020. On December 21, 2020, the DE Defendants filed a Reply [ECF No. 53], and the Mirmelli Defendants filed a separate Reply [ECF No. 54]. The Court has carefully considered the Amended Complaint [ECF No. 47], the parties’ written submissions, the record, and applicable law.

I. BACKGROUND

This action arises from a dispute involving the rental of luxury residential property in Miami Beach. (See generally Am. Compl.). Frayman is a citizen of Cyprus and Russia. (See id. ¶ 2). Defendant DE Realty is a New York limited liability company with its principal place of business in New York, New York. (See id. ¶ 3). Defendant DE Florida, owned by DE Realty, is a Florida limited liability company with its principal place of business in Miami Beach, Florida. (See id. ¶ 4). "DE Realty is the largest residential real estate brokerage firm in the New York metropolitan area and the fourth largest in the United States[,]" and it "conducts residential real estate brokerage operations in South Florida through DE Florida." (Id. ¶ 24 (alteration added)). Both entities generate revenue through commissions and service fees. (See id. ).

Defendant Avigdor, a citizen of New York, is a licensed associate real estate broker (including in Florida) at DE Realty. (See id. ¶¶ 6, 23). Defendant Tansey, a citizen of Florida and resident of Miami-Dade County, is one of DE Florida's realtor associates. (See id. ¶¶ 5, 31). Defendant Mirmelli, a citizen of Florida and resident of Miami-Dade County, is the owner of the subject rental property. (See id. ¶¶ 7, 45, 59). Defendant Miami Luxury is a Florida limited liability company with its principal place of business in Miami Beach Florida; Mirmelli is its sole member. (See id. ¶ 8).

During the COVID-19 pandemic, Frayman found himself in Philadelphia visiting his son and daughter and was unable to return to his home in Cyprus because Europe was largely closed for travel. (See id. ¶¶ 15–16). Frayman was also concerned about the wellbeing of his other daughter, who was 12 years old and was to return with him to Cyprus, due to the heightened health risks associated with international travel and a mandatory quarantine upon return to Cyprus. (See id. ¶ 17). After staying in hotels in New Jersey and Philadelphia from March 7 to May 29, 2020, "Frayman sought accommodations for himself and his family in Florida to be together with all of his children in a safe, clean, and secure environment and to enjoy time with his family while being largely isolated from third parties during the COVID-19 pandemic." (Id. ¶ 18). Specifically, "Frayman desired to rent an isolated, large, high-quality villa in Miami, Florida for himself and his family." (Id. ¶ 21).

As Frayman is from a foreign country, lacked specific knowledge of the rental market in the Miami area, and had a short time frame in which to find accommodations, he "sought to work with an experienced and knowledgeable broker who could help him find a property that met his specifications." (Id. ¶ 22). Frayman was introduced to Avigdor, the DE Realty broker, through a contact. (See id. ¶ 23).

DE Realty and DE Florida feature luxury property listings for rent in South Florida on the Douglas Elliman website. (See id. ¶ 25). The entities "boast that their ‘agents are relentless advocates for our clients’ and that their ‘team is the top in the industry — they have access to the best and most reliable information and education, allowing them to expertly advise at every stage.’ " (Id. ). On the website, Avigdor made several representations about his experience, knowledge, capabilities, and ethical standards. (See id. ¶¶ 26–28).

On May 19, 2020, Frayman contacted Avigdor to assist him in finding a one-month rental that would meet his specifications — including four to five bedrooms, significant garden territory of 30,000 to 50,000 square feet, a large swimming pool, a gym, and a tennis court — in Miami. (See id. ¶¶ 29, 36). Frayman "told Avigdor that all in-house equipment should be ‘new, ready to use’ and that a cleaning service was ‘highly desirable.’ " (Id. ¶ 29). He "advised that he could go as high as $30,000 to $40,000 for the rental, but he ‘expect[ed] value for this type of money.’ " (Id. (alteration in original)). Avigdor recommended Tansey, a member of his team, as someone who had local expertise and could find a property that fulfilled Frayman's requirements. (See id. ¶ 30). Avigdor advised that he conveyed Frayman's specifications to Tansey, and Tansey was copied on several emails setting out Frayman's specifications. (See id. ).

The Douglas Elliman website described Tansey as focusing on "an exclusive inventory of luxury waterfront properties" in Miami Beach and its surrounding areas; and it touted his high-net-worth clientele and "excellence" in "having the client experience some of the most desirable real estate available, all the while successful to match the perfect property to their needs." (Id. ¶ 31 (quotation marks omitted)). "In his email to Frayman introducing and copying Tansey, Avigdor represented: ‘Darin Tansey is one of the top and premier agents at Douglas Elliman's Miami office. If there is anyone to find this gem, it is him.... While I know the parameters established by [Frayman] will be a tough find, I am confident that [Tansey] will find something to fill the ticket." (Id. ¶ 32 (first alteration in original; other alterations added)). Tansey replied: "I have lived in Miami Beach [ ] for fifteen years now and have a strong sense of the market as well as nuisances [sic]." (Id. ¶ 33 (alteration added)).

According to Frayman, "Tansey and Avigdor knew that Frayman ... was relying on their stated expertise in the South Florida luxury-rental market. In multiple emails and text messages, Frayman made it clear to Tansey that both the cleanliness of the property and the legality of the rental were important to him." (Id. ¶ 34 (alteration added)).

Although Tansey knew Frayman's budget for the one-month rental was $40,000, "Tansey, who is compensated on a percentage commission basis, immediately sent Frayman links to properties that were well above this stated budget and not in line with [Frayman's] specifications. (Id. ¶ 36 (alteration added)). Frayman told Tansey to "kindly stay within the figures I supplied to you in the original email." (Id. (quotation marks omitted)). Tansey sought "to convince Frayman that Tansey's properties were fit for his purposes and of the highest quality" and insisted that Frayman "should only look at ‘A+ properties.’ " (Id. ¶ 38).

One of the properties Tansey originally presented to Frayman was a luxury waterfront villa on Sunset Island located at 2120 Bay Avenue, in Miami Beach, Florida (the "Property"). (See id. ¶ 39). The Property was listed for $85,000 per month, plus a $20,000 security deposit and $500 cleaning fee. (See id. ). Although Frayman rejected the Property at first because it was too expensive, Tansey continued to propose it after Frayman rejected other recommended properties. (See id. ).

"[T]o show off the supposed high-end quality of the Property, Tansey emailed and texted Frayman photographs and a video showcasing the Property." (Id. ¶ 40 (alteration added)). "These photographs and video were highly-polished marketing materials showing a well-landscaped exterior." (Id. ¶ 41). Tansey described the Property as having a "charming exterior[.]" (Id. ¶ 43 (alteration added; quotation marks omitted)). Moreover, "to induce Frayman to rent the Property rather than a different property within Frayman's stated budget, Tansey ensured Frayman that ‘[t]he owner Greg and his sister Sara [sic] [are] friends of mine’ and that the owner maintained the Property at extremely high standards." (Id. ¶ 44 (alterations in original)).

Tansey omitted to mention that Mirmelli, the owner, had recently been sued for a refund by a guest "because the Property was not as depicted in promotional materials and was ‘unclean, in disarray and unfit for her family.’ " (Id. ¶ 45; see also id. ¶¶ 55, 102). Tansey also did not reveal that since that lawsuit, Mirmelli was renting the Property through a new shell company, Miami Luxury. (See id. ¶ 45). "Frayman told Tansey on several occasions that it was critical to him that the rental be cleaned and disinfected due to the COVID-19 pandemic. Frayman relied on Tansey's alleged expertise to ensure that his rental would be fully compliant with all legal requirements both related to the COVID-19 pandemic and otherwise." (Id. ¶ 46).

Frayman advised Tansey he would take a charter flight the morning of May 29 and "made clear that ‘the place should be ready to have us’ and that ‘we will come between 11–13:00 on the 29th.’ " (Id. ¶ 47). Tansey relayed this information by text message to Andrea, the property manager, and noted that Mirmelli's sister Sarah would handle the check-in. (See id. ¶¶ 48–49). In his text message to Andrea, Tansey stated: "While there may be a slight crossover on checkout and maid service,...