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.