The Third District Court of Appeal has upheld a lower court siding with a real estate agent accused of selling high-end condominium units in Miami’s Edgewater neighborhood behind her former boss’s back and cutting him out of commissions.
Miami Real Estate Invest LLC hired Beini Xu as an independent contractor to network with prospective Chinese buyers of Miami real estate and help with sales, according to their agreement.
Miami Real Estate Invest, led by David Landau, sued Xu and New York-based American Da Tang Group, which was created to help Chinese buyers with U.S. real estate deals, and affiliate American Da Tang Realty Inc.
In an Aug. 5, 2015, complaint, Landau alleged the defendants conspired to cut him out of the $20 million purchase of 16 units in One Paraiso and argued he was owed the $1 million brokers’ commissions from the deal.
One Paraiso is a 53-story, 276-unit condo tower in The Related Group’s luxury four-tower development on Biscayne Bay along Northeast 31st Street east of Biscayne Boulevard. The other towers are the 388-unit Paraiso Bayviews, 368-unit Paraiso Bay and the 317-unit Gran Paraiso.
Miami Real Estate Invest also sued affiliates of The Related Group and its broker, Fortune International Realty. They were later dropped in exchange for holding the commissions in escrow until the case ended.
Both Miami Real Estate Invest and American Da Tang Realty are claiming the money, according to court records.
Miami Real Estate Invest has argued in court filings it’s the one owed the commissions because it initially showed the Paraiso project to American Da Tang CEO Shan-Jie Li and made introductions to a Fortune Realtor and a Related Group official.
Li first reached out to Xu in October 2013 seeking help with buying Miami real estate. Xu was an agent with Miami Real Estate Invest and quit in January 2015. Landau helped Li close on two units in Paraiso Bay. This transaction isn’t in dispute since the commissions were split among Miami Real Estate Invest, American Da Tang Realty and Xu, according to the complaint.
When it came to the 16-unit deal, Xu testified at trial last year that she didn’t work as a real estate agent. Rather, she was a Mandarin translator and an assistant to Li and the units’ buyer, China City Construction Co., according to the Miami-Dade Circuit Court final judgment.
Li hired Xu as his assistant and regional manager for his American Da Tang Longevity Club, according to court filings. The Longevity Club offers health and wellness packages in Miami to wealthy Chinese, according to its website.
Xu testified she translated for Longevity Club clients and Li in real estate and other dealings and helped with other business affairs, like scheduling entertainment and appointments, and her work on the condo deal was part of her employment with Li, not Miami Real Estate Invest.
Miami-Dade Circuit Judge Jose Rodriguez agreed.
He also ruled against Miami Real Estate Invest on another point, concluding the brokerage didn’t prove it was the procuring cause for the One Paraiso sales.
Disputes over broker commissions often focus on credit for procuring the deal.
The Third DCA panel comprised of Judges Thomas Logue, Kevin Emas and Vance Salter on July 5 unanimously affirmed the lower court in a one-page opinion.
Landau said this doesn’t end his case and cited a motion for rehearing en banc filed July 19. He declined further comment.
His attorney, Simon, Schindler & Sandberg partner Roger Schindler in Miami, didn’t respond to a request for comment. The motion again argued Miami Real Estate Invest was the procuring cause and Xu was the agent in the deal.
“Miami Real Estate Invest earned its commission as the procuring cause of sale by introducing the representative of CCCC (China City Construction Co.), Shan-Jie Li, to the Paraiso Bay project generally and to the One Paraiso condominium specifically,” Schindler wrote.
Schindler said Landau introduced Li to the project and Fortune International’s Realtor-associate Carmen Casadella and Related’s condo division head Carlos Rosso. This supports the claim Landau was the procuring cause for the 16-unit deal, Schindler wrote.
Lydecker Diaz partner Joan Carlos Wizel in Miami, who together with managing partner Mark Hendricks represents all of the defendants, asked the appellate court to deny the motion for rehearing.
The Third DCA decision was a win for his clients as well as the Miami real estate market, he said.
If the case went the other way and credited Landau, it would have put a chill on Li and others like him who bring Chinese real estate buyers to Miami.
“The Chinese market has to be opened through relationships. They are very culturally based and very culturally guided companies, so you basically need someone who knows the culture who is willing to invest the time to develop relationships with Chinese investors to bring them over and create that interest in the real estate market here in Miami,” Wizel said.
A reversal would deter Li “from continuing to bring investors into the Miami real estate market and maybe focus elsewhere.”