Miami Beach condo association sues over alleged defective glass

Suit surrounds performance bonds of $4.15 million and $689k

Aug.August 15, 2016 04:30 PM

UPDATED Aug. 15, 5:25 p.m.: Eight years after the MEI Condominium in Miami Beach was completed, the building’s owners are looking to collect $4.8 million in insurance bond funds from a subcontractor that allegedly didn’t finish the job.

In a lawsuit filed in Miami-Dade Circuit Court last month, the MEI Condominium Association accuses Miami-based RC Aluminum Industries and its insurance carrier, Liberty Mutual Insurance Company, of breach of contract by not paying the bond.

“We look forward to working with Liberty Mutual to get the problems fixed and resolved as soon as possible,” said Stevan Pardo, the association’s lawyer told The Real Deal. Representatives for RC Aluminum did not return a phone message seeking comment.

According to the lawsuit, MEI developer PMG Collins, a company owned by Property Markets Group, terminated Telesource Group, the project’s original general contractor, and its subcontractors, including RC, in 2008. The building, at 5875 Collins Avenue in Miami Beach, was finished by Gryphon Construction. Since Telesource and RC had not fully completed the work, neither firm was paid in full, the lawsuit states. The 22-story MEI tower has 134 units including eight penthouses.

Shortly after PMG turned over control of the project to the association, an engineer conducted inspections of the building that discovered “latent defects” in the windows and sliding glass doors that are not easily recognizable or are hidden by finishes.

In 2012, the association reached out to PMG to correct the defects, the lawsuit states. Miami-Dade County court records also show the association sued PMG the same year, but that lawsuit was voluntarily dismissed in 2013.

Two years ago, PMG and Telesource agreed to transfer the rights for two performance bonds issued by Liberty Mutual to cover the work to be performed by RC as part of a settlement with the association, the lawsuit states. One bond was for $4.15 million and the second bond was for $689,475.  

The association claims RC and Liberty Mutual have breached the contract requiring the bonds be paid to the homeowners’ group.

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