Miami hospitality executives Jared Galbut
and Keith Menin are facing a $4 million lawsuit tied to the
Bentley Hotel on Ocean Drive. A unit owner in the
condo-hotel is accusing the Menin Hospitality principals —
the same management firm that oversees the Shelborne and
Mondrian hotels in South Beach — of fraud.
Eleventh Circuit Judge William Thomas approved a request by
Colleen Bennett, who has owned in the building located at
510 Ocean Drive since 2005, to seek punitive damages from
the Bentley Condominium Association, Galbut and Menin.
According to court filings, Galbut, Menin and their
associates became directors of the Bentley Condominium
Association after JKR Bentley Properties LLC started buying
units in 2010; by 2018, it was the majority owner.
The lawsuit accuses Galbut and Menin of misleading unit
owners about the need for a special assessment and diverting
association funds to benefit JKR Bentley interests. It also
claims that the JKR-led association inappropriately excluded
units owned by Galbut and Menin entities from assessments
and took action against unit owners whose fees were in
arrears but excluded their own units from similar actions.
JKR Bentley Properties owed about $14,000 in association
fees, but never filed delinquent reports against itself,
according to court documents.
A $2.7 million special assessment fund designated for
upgrades was neither used for construction — which was
stopped by the court in December 2015 following a complaint
by Bennett and others — nor was it returned to condo owners,
the lawsuit claims. New owners who paid $28 million for JKR
Bentley’s 39 condos and four commercial units in 2019 found
the building in disrepair and essentially broke, according
to the suit. The building has a total of 57 condo units.
The lawsuit is seeking $4 million in compensation, including
$2.7 million in special assessments for upgrades that were
never completed and about $1.1 million for assessment
waivers and improper expenses.
“As litigation is ongoing, we will not comment on meritless
claims filed by just one unit owner, purporting to bring
claims on behalf of the association’s other unit owners,
none if which have joined her cause, out of fifty-seven unit
owners that we believe will ultimately fail,” Galbut wrote
by email.
Galbut and Menin have until March 15th to file a legal
response to Thomas’ decision. The case is expected to go to
trial in May, said Josh Migdal, Bennett’s attorney. Migdal
is a partner at the Brickell-based law firm Mark Migdal &
Hayden.
“It is important that Florida law goes through great pains
to protect unit owners from the misgivings of a fraudulent
board,” Migdal said. “As a result, anybody from out of state
who is looking to invest in a condominium should know that
if Florida law is correctly applied and argued, a board
cannot get away with fraud.”
The Riviera Hotel Company built the 3-story Art Deco Bentley
Hotel in 1939 with $103,000, or about $2 million today. John
and Coulton Skinner designed the hotel. It is not related to
the Hilton Bentley Hotel at 101 Ocean Drive.