Judge slaps Don Peebles’ Bath Club Entertainment with $1M in sanctions

Developer violated order to provide outdoor food and beverage service and to maintain cabanas in a “first-class condition,” according to ruling

Miami /
Feb.February 25, 2021 08:15 AM
Don Peebles and the Bath Club (Getty, Peebles Corp.)

Don Peebles and the Bath Club (Getty, Peebles Corp.)

Don Peebles’ Bath Club Entertainment is on the hook for $1 million in court sanctions after a Miami-Dade judge ruled the developer failed to maintain first-class cabanas and outdoor food and beverage service at the historic private Miami Beach club.

Judge Michael Hanzman on Tuesday granted a motion for contempt filed by the Residences at the Bath Club maintenance and condominium associations against Bath Club Entertainment. The Peebles Corp. affiliate owns a majority of the 5-acre property at 5937 Collins Avenue, including a fitness center, a commercial kitchen, 60 cabanas, on-site parking, a courtyard and the 15,000-square-foot clubhouse built in 1937. The property also includes the 118-unit oceanfront condominium Residences at the Bath Club, whose individual owners have access to the Bath Club amenities.

As part of his order, Hanzman hit Bath Club Entertainment with a $1,000 per day penalty from Dec. 20, 2017 to Dec. 10, 2020, which equates to about $1.08 million.

The company’s attorney Glen Waldman said his client will appeal the order, and that Bath Club Entertainment recently completed a major renovation of the Bath Club, including refurbishing the cabanas and opening a new restaurant to provide food and beverage services.

“Obviously, we are very disappointed with the ruling and we believed we proved that we were not in violation,” Waldman said. “In the overall scheme of things, the impact [of the judge’s order] is very relatively negligible. The Bath Club is moving forward and taking new memberships. The launch party took place a couple of weeks ago.”

In a statement sent by text, Peebles said Bath Club Entertainment has gone out of its way to work with the association’s three-member board of directors. “This is one filing in a series of continuous litigation with a very litigious board over the past 15 years which has only served to depress values in the building,” Peebles said. “Our company built an amazing building.”

Todd Legon, the lawyer representing the associations, said his clients are pleased with Hanzman’s court order. “We hope these sanctions will stop Bath Club Entertainment’s stubborn noncompliance,” Legon said. “My clients just want to enjoy the amenities.”

The dispute between Bath Club Entertainment and the associations dates back to 2010 when the developer allegedly did not live up to terms of a settlement agreement, Hanzman’s order states. Both sides went to arbitration and a panel ruled on Nov. 12, 2013 that Bath Club Entertainment was required to provide cabana rentals and food and beverage service to individual unit owners. Bath Club Entertainment still failed to meet its obligations, according to the ruling.

“The court finds that Bath Club Entertainment has been in continuous violation of
the sanctions order with respect to its obligation to provide outdoor food and
beverage service and snack bar service during regular hours; its obligation to
provide provide outdoor food and beverage service; and its obligation to complete all repairs
on all cabanas and maintain all cabanas in a first-class condition,” Hanzman wrote.

Meanwhile, Bath Club Entertainment has a separate pending lawsuit against the two associations, alleging both engaged in tortious interference when the developer attempted to sell the property in 2017. “That is a case for multi-millions of dollars in damages,” Waldman said. “The numbers end up on the plus side for us when all these issues are resolved.”

Legon said that the complaint is “complete nonsense” and that his clients will seek attorney fees for having to defend against it.


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