Can an ebay buyer file a complaint?

Okay so i was selling this item (iphone 4s) i put it in great condition and works well and everything. But then i went to the beach and kind of water damage it and there's now a crack on the screen too. I went back to ebay knowing that i cancelled the item. Then log in a week later find out the item was not cancelled on the listing at all so the auction was over, then i private msg the bidding winner and told him what happened to the iphone. He was upset and said would file a complaint and everything. Can he do that? I mean i'm trying to give him a refund and he refused and said he wants be to buy a new phone and send him that(since the one i posted works well and no damage at all) or else he would file a complaint or something since its going against the ebay policy and everything. And i actually forgot i have moved to another state and posted the iphone to my old location in it. Is this a big deal? Should i worry? Please help

Added (1). Thank you guys so much for your answers! I was worried for nothing then! Thank you all i really appreciate it.
ps: he already paid yet he would not accept my cancellation notice. So how i'm gonna refund him? He paid through paypal.

He can file a complaint but it won't go very far.

he lost no money so there are no damages

He can file a complaint with e-bay but so what?

You will get some negative ratings, but that's about it. As long as you refund the money, he really has not big beef. It's a violation of eBay's rules, they MIGHT cancel your account, but it's doubtful.

He can file a complaint and it will show up under your name but as long as you have a good score overall then it shouldn't affect you too bad. Accidents but happen. Sounds like he is trying to get a better deal out of you. As long as he gets his money back, there's nothing else you have to do. Just update your info so you have the right location because some people only buy close to them.

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