.

Case Law Alerts

Contractor Prevails on Contractual Risk of Loss Provision

Berman Construction & Development, Inc. v. Carnaval Home, LLC, et al., Case No. 4D2024-2174 (4th Dist., April 22, 2026)

July 21, 2026

by Nathan R. Woods

Carnaval Home hired Berman Construction to renovate an existing home owned by Carnaval. Their contract set the date of substantial completion at September 4, 2019, and included a risk of loss provision placing risk predominantly on Carnaval. Berman hired subcontractors, including an electrician and project supervisor, to carry out the renovations.

On July 29, 2019, with renovation 90% complete, a fire destroyed the home. Carnaval then sued Berman for breach of contract, negligence, and violation of Florida building code. Carnaval based its breach of contract theory primarily on Berman failing to deliver the renovated property by substantial completion. At trial, Carnaval presented evidence that faulty attic wiring caused the fire, while Berman claimed it was caused by arson or another cause beyond its control. During the charge conference, Berman requested a question on the verdict form regarding the risk of loss provision and its other defenses of impossibility of performance and frustration of purpose.

The trial court granted a directed verdict on impossibility of performance and frustration of purpose, holding the risk of loss provision eliminated those defenses, and also denied Berman’s request for the risk of loss question on the verdict form. The verdict form ultimately included questions regarding the breach, negligence, and code violation claims. Its questions regarding the breach claim included the following: whether Carnaval did what was required by contract; whether Carnaval was excused from doing what was required by contract; whether Berman failed to do what was required by contract; and whether Carnaval was damaged by Berman’s failure to perform. The jury found Berman was not negligent but did violate the building code and breach its contract, though the code violation did not cause Carnaval’s damages. Carnaval was awarded $928,850 pursuant to the breach claim. The trial court denied Berman’s post-trial motions and granted Carnaval’s motion for attorneys fees.

On appeal, the 4th DCA noted that Carnaval presented evidence that the fire occurred the day electrical work was completed and power was restored to the house for the first time since construction began, when the home was under the exclusive control of Berman and its subcontractors. It presented testimony from the carpenter that the kitchen and family room lights went out while he was at the property that evening, which was also corroborated by Carnaval principal Luis Ormo. It presented expert testimony that the fire likely started in the attic and was not a result of arson. Berman offered testimony that traces of gas were detected along with unusual burn patterns and heat deformation at the bottom of door frames. Its expert testified that the fire had multiple points of origin. Berman established the home was engulfed in flames emanating from the roof within twenty minutes of Carnaval leaving the property and argued the fire could not have moved so fast absent arson. It further suggested the electrician and Ormo had separate dealings in violation of their subcontract, thus some of the electrician’s conduct was beyond Berman’s control.

The 4th DCA held Berman’s claim of inconsistency between the negligence, building code violation, and breach jury verdicts was to be remedied by a new trial, not directed verdict, and further held that it did not have to decide whether the verdict was truly inconsistent as Berman did not raise this issue before the jury was discharged and did not seek the appropriate remedy of a new trial. As such, it held the trial court was correct in denying Berman’s motion for directed verdict.

However, the court held that the trial court erred in denying Berman’s special interrogatory request as to the risk of loss provision. It explained that, where interrogatory verdict forms are used, it should include questions on both the plaintiff’s claims and any affirmative defenses. Without allowing a question regarding whether the risk of loss provision excused Berman from performance, the trial court did not resolve “the major question in the case.” The jury, having found Berman not negligent, made Berman’s defense, and the verdict form question, particularly significant. The court rejected Carnaval’s argument that Berman had waived its demand for arson-specific instructions and that Berman bore the risk of loss from non-arson-induced fires. It also held that Carnaval incorrectly applied the negative-implication canon, wherein the express mention of one thing implies the exclusion of another, stating not every positive statement of rights or obligations carries a negative implication. Further, the risk of loss provision’s clause including “perils beyond contractor’s reasonable control” amounted to a catch-all, to which the negative-implication canon cannot be applied. When read in totality, the provision clearly places risk of loss on Carnaval for perils such as arson. Berman was therefore entitled to have the jury decide whether the loss was caused by arson or another peril beyond its control.

Final judgment in favor of Carnaval was reversed, as was the trial court’s order denying Berman’s motion for attorneys fees, and the matter was remanded for a new trial.

Firm Highlights

Thought Leadership

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.

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

News

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

Thought Leadership

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.

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

Marshall Dennehey Shareholders Recognized as Florida Trend Legal Elite Notable Women Leaders in Law

News

Marshall Dennehey Shareholders Recognized as Florida Trend Legal Elite Notable Women Leaders in Law

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

Thought Leadership

The Search-Incident-to-Arrest Doctrine Does Not License Strip Searches

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.

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

News

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department