Zuckerberg’s Neighbors Join Backyard Brawl With Developer

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Mark Zuckerberg
Facebook CEO Mark Zuckerberg. Photographer: Udit Kulshrestha/Bloomberg

Mark Zuckerberg’s former neighbors have an ax to grind with the developer who got the rights to their property and then extracted a payment from the Facebook Inc. founder to not build a mansion overlooking his house.

The couple who lived directly behind the 31-year-old billionaire contend that if anyone deserved an extra $1.7 million from the sale of their home, it was them.

As developer Mircea Voskerician advances toward a trial over claims Zuckerberg reneged on a promise to introduce him to Silicon Valley’s tech elites as part of their deal for the land, he’s now accused of cheating the couple who owned the property. A Nov. 9 trial date for the case against Zuckerberg was set Tuesday by a state judge in San Jose, California, over an objection from his lawyer who wanted to delay it.

Moris Kori and Betty Frayman-Kori claim in a separate lawsuit that Voskerician secretly conspired with their real estate agent to acquire rights to their home and sell to Zuckerberg in 2012 -- even though they had been trying since the year before to get Zuckerberg to buy them out.

The Koris contend the fair market value of their property in Palo Alto, California, was significantly more than the $4.8 million they agreed to take from Voskerician. Saying they were duped, they want the developer to hand over the $1.7 million he collected from Zuckerberg to drop plans to build a 9,600-square-foot home with a view into the Facebook chief executive officer’s master bedroom.

Law Professors

Two law school professors who have followed Zuckerberg’s fight with Voskerician voiced doubt that the Koris have a strong case.

Miriam Cherry at Saint Louis University law school said that while the lawsuit “thickens the plot,” Voskerician had no responsibility to look after the Koris’ interests and that his transfer of the property rights to Zuckerberg is irrelevant as long as he paid the Koris what he promised.

David Min, who teaches at the University of California at Irvine, said there is no basis for a court to unwind the deal between the Koris and Voskerician, even if the couple is able to prove fraud and win monetary damages.

“Given that Voskerician actually carried out his obligations, I’m not sure there’s any cause of action there,” he said.

Min said that Voskerician may have gained leverage against Zuckerberg Tuesday with the judge setting a trial date.

‘Quicker Resolution’

“This would lead to a quicker resolution of the dispute, which could increase the pressure to settle,” Min said.

In their lawsuit, the Koris claim that while they were in final negotiations with Voskerician, their agent at Alain Pinel Realtors Inc. prodded them to quickly sign a contract even though the developer hadn’t put down a deposit, giving him more time to negotiate behind the scenes with Zuckerberg.

The Koris said in their complaint that they agreed to their contract with Voskerician being passed along to what they were led to believe was an entity controlled by his development company. That entity, SFRP LLC, was actually owned by Zuckerberg, they said.

The couple alleges they didn’t learn Zuckerberg was the intended and ultimate buyer of their home until his lawyers told them in May 2014, the month that Zuckerberg was sued by Voskerician over the alleged broken promise to help him network with tech executives.

Voskerician “falsely represented his intent to purchase the property,” according to the complaint. “In reality, he never intended to perform and instead intended to market the contract” to Zuckerberg.

‘Sour Grapes’

Voskerician’s lawyer, David Draper, called the lawsuit “sour grapes.” He said the Koris weren’t able to close a deal with Zuckerberg because he initially wasn’t interested.

When the Koris signed a contract with Voskerician in 2012, they got $400,000 more than their asking price.

In 2013, a firm that handles Zuckerberg’s finances, Iconiq Capital LLC, snapped up three other properties surrounding his home, buying one for $10.5 million, another for $14 million and a third for $14.5 million, according to the Santa Clara County tax assessor’s office.

“The Koris bring this lawsuit because they are unhappy that they sold their property a year before the Zuckerbergs paid three of their old neighbors $38.5 million for the neighborhood,” Draper said in a phone interview. “We have documented evidence that shows that what they are saying about Mr. Voskerician is not true and they know it.”

Alain Pinel

Derk Brill, a real estate agent at Alain Pinel who represented the Koris and is named as a defendant in their lawsuit, didn’t respond to a phone call Monday seeking comment on it.

Zuckerberg’s lawyer, Patrick Gunn, didn’t immediately respond to an e-mail seeking comment on the Kori lawsuit.

Zuckerberg’s attorneys have said in court filings that the developer employed “extortive” tactics to profit from the billionaire’s desire for privacy. Zuckerberg has denied claims that he broke his word on introducing Voskerician to contacts in Silicon Valley.

A lawyer for the Koris didn’t immediately respond to phone and e-mail messages seeking confirmation that Moris Kori was the chief executive officer of Palo Alto-based Luminescent Technologies Inc., which was acquired by KLA-Tencor Corp.

The Koris’ case is Kori v. Alain Pinel Realtors Inc., 115cv279192, California Superior Court, Santa Clara County (San Jose). The Zuckerberg case is Voskerician v. Zuckerberg, 114CV264667, Superior Court of the California, County of Santa Clara (San Jose).

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