Jeff Bezos’ former neighbor said his broker cheated him out of millions when the Amazon founder bought his house in Miami’s “Billionaire Bunker”—and legal experts say he has a case.
Although the $79 million that Bezos paid last year for his neighbor’s Indian Creek Island house was no pittance, it was $6 million below the asking price of his neighbor, Leo Kryss. Having seen the news that Bezos had bought the house next door, Kryss asked agents for his broker Douglas Elliman if Bezos was the one trying to buy his house anonymously, according to a lawsuit filed in the 11th Judicial Circuit in Miami-Dade County.
Bezos bought his first house on the exclusive Indian Creek Island in June 2023 for $68 million after announcing that he would move to Miami from his long-time home in Seattle, where Amazon’s HQ is based. He later bought Kryss’ house next door, and earlier this year, the second-richest man bought a third adjacent property for $90 million.
Kryss, the cofounder of Brazilian toy and electronics company Tectoy, said he would’ve charged more if Jay Parker, the CEO of Douglas Elliman’s Florida region, hadn’t directly told him that Bezos was not behind the sale and that the “potential buyer,” who Parker assured him was not Bezos, would pay no more than $79 million, according to the lawsuit.
The fact that Douglas Elliman’s CEO of the Florida region called Kryss to tell him directly that it was not Bezos making the $79 million offer gives his case good standing, New York-based corporate lawyer Alton Harmon told Fortune.
“The problem comes when you actually say something along the lines of this is not Bezos, that broker never should have said that, because at that point, there is the possibility for negligent misrepresentation,” Harmon said.
Douglas Elliman declined to comment to Fortune.
Adding another wrinkle to the case, Parker told Kryss that the mayor of Indian Creek, Benny Klepach, had said someone in his family made the offer on Kryss’ house, according to an email attached to the lawsuit. Klepach’s daughter, Celine Klepach, had joined Douglas Elliman as a sales associate just weeks before the sale went through and received a commission for the sale. She no longer works for the broker, the Wall Street Journal reported.
Because Douglas Elliman was working as a transaction broker, it had no fiduciary duty to Kryss; under Florida law, the broker still had to use “skill, care, and diligence in the transaction,” and disclose any and all facts that materially affect the value of the property and are not readily observable to the buyer.
Parker had a responsibility to check whether what he was allegedly told by Klepach was correct or not, said Harmon.
Although the responsibility to disclose material facts usually applies to things having to do with the property, such as whether there was recent flooding that affected the home, by asking directly about whether Bezos was behind the offer, Harmon said it could be argued that his involvement was material.
“By asking that very, very specific question, 'Is this Jeff Bezos, because I know he bought the property next door?' I do believe it became a material fact that affected the value of the property. So I think that it's a creative way to approach this,” he said.
Anat Alon-Beck, a law professor who teaches corporate law and contracts at Case Western Reserve University, told Fortune that knowing Bezos was behind the sale could have led Kryss to offer the property at a higher price, because the Amazon founder valued it more.
“A price is always what it means to the buyer—how much are you willing to pay for something? But the seller, not having full disclosure on who the buyer is, didn't really get to fully negotiate that,” said Alon-Beck.
Kryss is suing Douglas Elliman for damages in excess of $750,000, claiming the broker breached its contractual duties and duties under Florida law. Kryss also wants Douglas Elliman to forfeit the $3.16 million commission it received as part of the deal. Bezos was not named as a defendant in the suit.
While Kryss is asking for a jury trial, Douglas Elliman has filed a motion to dismiss the suit. Ultimately, Alon-Beck said that the parties are likely to settle the lawsuit out of court.
“Douglas Elliman failed to fulfill their duties to our client. The facts, as set forth in our complaint, speak for themselves; they knew or should have known who the ultimate beneficial purchaser was and misrepresented that very important fact to our client. We have no further comments beyond what is set forth in the complaint that we filed on behalf of our client,” Kryss’ lawyer said in a statement.
This story was originally featured on Fortune.com