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Case Law Alerts

3rd District Analyzes Liquidated Damages Provision, Contingency Risk Multiplier in Context of Construction Contract

Alan Kent Little v. Bath & Kitchen Boutique, LLC, 51 Fla. L. Weekly D1073 (Fla. 3rd DCA, May 27, 2026)

July 21, 2026

by Nathan R. Woods

Alan Little and Bath & Kitchen Boutique, LLC (BKB) entered into an agreement wherein BKB would design and renovate Little’s master bathroom. A portion of BKB’s work failed to pass city inspections, after which the parties executed a contract amendment giving BKB additional time to pass final inspection and establishing that BKB would owe Little $1,000 per day for each day it went beyond this additional time. The amendment also contained a provision requiring BKB to pay 100% of Little’s legal fees for preparing the amendment and enforcing it. BKB’s work ultimately passed final inspection 67 days beyond the amendment’s completion date.

Little then filed suit against BKB alleging breach of contract and seeking $67,000 in liquidated damages. BKB filed countersuit alleging it was entitled to a judgment declaring the $1,000 per day fine to be an unenforceable penalty, and that Little had breached the agreement by failing to pay BKB for its work. Both parties alleged entitlement to attorneys’ fees based on the fee provision in the amendment, with BKB alleging the provision was reciprocal pursuant to Fla. Stat. 57.105(7).

Little obtained the issuance of a $35,000 prejudgment writ of garnishment. BKB moved to dissolve the writ. Two hearings were held on BKB’s motion, but the court never issued final adjudication. Little then filed a notice extending the writ for an additional six months.

BKB filed a petition for writ of certiorari challenging the lower court’s discovery order, which was granted. Both parties filed motions for appellate level fees based on the fee provision, and the appeals court then denied Little’s appellate fees motion and conditionally granted BKB’s, provided BKB prevailed in the trial court action and the trial court found the fee provision valid.

Both parties then filed competing summary judgment motions in the lower court, which entered partial summary judgment in BKB’s favor, concluding the daily fine was unenforceable. The parties entered a settlement agreement as to BKB’s remaining counterclaim seeking payment for its work, with Little stipulating to BKB’s entitlement to attorney’s fees and costs and requesting an evidentiary hearing to set the amount of fees and costs.

A two-day evidentiary hearing was held with the court considering live testimony from BKB’s owner, trial attorney, and fees expert. The court then awarded BKB attorney’s fees for the time spent litigating issues relating to the prejudgment writ of garnishment, at both trial and appellate levels, pursuant to Fla. Stat. 77.032(3) and 57.105(7). It applied a 1.5 contingency risk multiplier. Little then appealed.

On appeal, the court analyzed Fla. Stat. 57.105(7), and specifically its use of the language “with respect to the contract,” through the lens of the FL Supreme Court’s opinion in Ham v. Portfolio Recovery Associates, LLC. The Ham court found that even actions that are not “based on” or “pursuant to” the underlying contract may still have a clear and direct relationship so as to fit the statute’s language. Here, the court similarly found there was a clear and direct relationship between the proceedings on Little’s writ and the parties’ contract litigation.

However, as to the contingency risk multiplier, the court found that BKB did not offer any direct evidence that, absent availability of a contingency risk multiplier, BKB would have faced substantial difficulty finding an attorney to represent it. BKB merely argued that construction attorneys in the relevant market rarely took on breach of contract actions under a contingency fee. As such, the contingency fee instituted by the trial court was not supported by the requisite evidence and thus improper.

The court therefore affirmed the award of costs and fees to BKB, but reversed the application of the contingency risk multiplier to the fees award and remanded for amended judgment consistent with this opinion.

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Pennsylvania Supreme Court to Review Whether Legal Malpractice Claims May Be Recast as Breach of Contract Claims

The Pennsylvania Supreme Court recently granted allowance of appeal to consider whether a plaintiff may pursue a breach of contract claim against an attorney based on allegations that the attorney failed to provide competent legal services. The issue is significant in professional liability litigation because it concerns whether a plaintiff may avoid the statute of limitations applicable to professional negligence claims by characterizing the alleged misconduct as a breach of contract. Antoine Poteat retained attorneys Gary Asteak and Nino V. Tinari to represent him in a criminal matter. After his conviction was subsequently overturned through a Post Conviction Relief Act proceeding, Poteat filed suit against his former attorneys alleging that they breached their retainer agreements by failing to provide competent legal services. The attorneys argued that the claims sounded in professional negligence, rather than breach of contract, and were therefore time-barred. The trial court dismissed Poteat’s complaint, but the Superior Court, sitting en banc, reversed. The Superior Court held that the gist-of-the-action doctrine did not bar Poteat’s breach of contract claim because the alleged failure to provide competent legal services could constitute a breach of the parties’ agreement. The Court further held that a legal-services agreement contains an implied duty requiring an attorney to provide competent legal services, even where the agreement does not contain an express provision requiring such services. The Pennsylvania Supreme Court granted review in July 2026 and will consider whether the Superior Court’s decision conflicts with Pennsylvania precedent distinguishing contract and tort claims, including Bruno v. Erie Insurance Co. The Supreme Court will also address whether a plaintiff may maintain a breach of contract claim based on an implied duty to provide competent legal services without identifying a specific contractual provision that was breached. The Supreme Court’s decision could have significant implications for professional liability litigation in Pennsylvania, particularly where plaintiffs seek to characterize claims arising from alleged professional negligence as contractual claims.

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In Beatty v. Gardner, No. 25-2860 (3d Cir. Sept. 16, 2026), Kyle Beatty sued police officers Clinton Gardner and Calvin Irvin under 42 U.S.C. § 1983 after they stopped, arrested, and searched him three times during a drug investigation in Williamsport, Pennsylvania. The officers initially smelled marijuana coming from the car in which Beatty was sitting and observed marijuana residue, giving them probable cause to arrest him. Beatty consented to the first pat-down, and the second search was conducted incident to his lawful arrest; neither search uncovered weapons or contraband. The officers then transported Beatty to the police station solely to strip-search him, but the strip search also revealed nothing. The District Court granted the officers summary judgment, concluding that the initial stop, arrest, and first two searches were reasonable and that qualified immunity protected the officers from liability for the strip search. The Third Circuit affirmed, but held that the strip search itself violated the Fourth Amendment. The court concluded that the search-incident-to-arrest doctrine does not automatically permit officers to strip-search an arrestee outside the jail or prison setting. Because strip searches are highly intrusive and the traditional justifications for searches incident to arrest (officer safety and preservation of evidence) did not justify the search of Beatty, the officers generally needed either the arrestee’s consent, exigent circumstances, or a warrant supported by probable cause to believe that a search beneath the clothing would reveal weapons, contraband, or evidence. Here, the officers had none of those justifications. Nevertheless, the court held that qualified immunity barred damages liability because, at the time of the search, the right against a warrantless strip search of an arrestee outside the institutional setting was not clearly established by Supreme Court or Third Circuit precedent. The court likewise upheld qualified immunity on Beatty’s First Amendment retaliation claim and affirmed summary judgment for the officers.

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Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

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