A legal dispute between a Palm Beach condominium association and one of its residents has ended in a settlement that requires the association to hire a forensic accountant. The Halcyon of Palm Beach Condominium Association settled with Dr. Michael Montanaro, an orthodontist who owns a unit at the property, after he sued last October over a $2.5 million air conditioning project and $15 million in special assessment funds.
Montanaro’s lawsuit alleged that the association failed to let owners vote on the air conditioning project and sought court intervention to appoint a receiver for the association’s finances. Earlier this month, Palm Beach Circuit Court Judge Maxine Cheesman approved the appointment of a receiver, but under the settlement terms, the association will instead bring in a forensic auditor to review how $15 million was spent.
“Having a receiver would be much worse for them than having an accountant, as a receiver is in control of the association,” said Bill Pincus, Montanaro’s attorney. “Instead, the association will have a forensic accountant, agreeable to us, look through these books and figure out what happened with this money.”
The special assessments in question were collected in 2021—one for $6 million and another for $9 million. Previous investigations found gaps in accounting records. David Glickman, another attorney representing Montanaro, stated: “The main issue was that the association was simply unable to account for all of the $15 million it spent. Its effort to show what happened to all of that money was insufficient.” He added: “There wasn’t necessarily evidence of nefarious activity,” but noted that it “raises a lot of questions,” due to the large sums involved.
A spokesperson for Halcyon said they expect to hire an auditor by early September.
Halcyon is located at 3440 South Ocean Boulevard on Palm Beach’s South End and consists of two buildings with 104 units built in 1980. The building is among many older condominiums on Palm Beach Island dealing with Florida’s new condo safety regulations.
As part of the settlement agreement, Halcyon will pay Montanaro’s $250,000 legal fees and excuse him from any special assessments related both to his own fees and those incurred by the association during litigation. The agreement also calls for unit owners to vote on future major projects like the air conditioning upgrade.
“My client is very glad,” Pincus said. “I think ecstatic is a proper word.”
