Hit with foreclosure complaints from two separate lenders, the owner of a Miami Beach hotel is suing one of them for alleged fraud, unjust enrichment and breach of contract.
On Aug. 1, an entity managed by investor Luis Taic sued Wells Fargo Bank in Miami-Dade Circuit Court. Taic’s entity owns Z Ocean Hotel, which consists of the common areas, a ground-floor cafe, a parking deck and 22 units at the 88-key condo-hotel at 1437 Collins Avenue. The remaining units, of which 51 are managed by Sonesta Hotels, are owned by individuals and entities not affiliated with Taic, records show.
Five days after Taic filed, Wells Fargo, as trustee for a commercial mortgage-backed securities trust, filed a foreclosure complaint against Taic’s entity, alleging it defaulted on a $12.2 million mortgage issued in 2019. Taic’s entity allegedly failed to maintain adequate insurance coverage, failed to pay property taxes on time, failed to make monthly payments since April and other alleged breaches of the mortgage, the Wells Fargo complaint states. The bank is seeking a court-appointed receiver to take over management of Taic’s entity.
David Geller, the lawyer for Taic’s entity, and Merrick Gross, the attorney for Wells Fargo, did not respond to requests for comment.
In its complaint, Taic’s entity accused Wells Fargo of violating federal law against deceptive and unfair trade practices by allegedly engaging in a predatory lending scheme designed to block Z Ocean Hotel’s owner from being in compliance with the loan terms.
Wells Fargo did so with the “ultimate goal of foreclosing and taking [Z Ocean Hotel,]” according to the complaint. Specifically, Wells Fargo played hardball when Taic’s entity had trouble securing insurance for Z Ocean Hotel, the lawsuit alleges. The bank allegedly refused to provide a waiver when Taic’s entity was unable to secure a new policy for the hotel due to “extremely difficult and unreasonable market forces.”
Wells Fargo allegedly obtained an insurance policy for Z Ocean Hotel, paying for it by withdrawing more than $800,000 from the Taic entity’s mortgage escrow account, the lawsuit alleges. When Taic’s entity sought proof of the insurance policy’s cost, the loan servicer allegedly refused. Wells Fargo subsequently placed back $1 million into the escrow account in July with no explanation, Taic’s entity alleges.
Meanwhile, Taic’s entity is fending off another foreclosure complaint. In July, Z-Hotel Holdings sued Taic’s entity, alleging that it defaulted on a $4.9 million mortgage. That lender claims that it holds first position over the Wells Fargo loan, the Z-Hotel Holdings complaint states.
In 2020, after a seven-year legal fight, Taic won a $8.2 million judgment against the developers of Z Ocean Hotel who sold him their ownership interest in Z Ocean Hotel. Two years later, the sellers lost an appeal. Taic alleged that the developers — Gene Grabarnick, Pauline Grabarnick, Garett Grabarnick and Ronald Molko – misrepresented the financial viability of the condo-hotel project when he bought a majority interest in Z Ocean Hotel in 2008.
