Breaking Ground or Breaking Promises: Dispute Over $1.075 Million Construction Claim

By: Jeffrey M. Haber

In today’s article, we examine Kingdom Assoc., Inc. v. WBC Servs. Inc., 2026 N.Y. Slip Op. 03070 (1st Dept. May 14, 2026), a case arising from a proposed subcontract for excavation and foundation work on a New York City project. Plaintiff alleged that defendant accepted its $8.28 million proposal and that it procured materials, obtained insurance, and prepared shop drawings in reliance thereon. Defendant argued that no binding contract existed because the proposal was never executed and required owner approval. After defendant stated the owner had not authorized the work, plaintiff filed a $1.075 million lien and sued. The Appellate Division, First Department held that plaintiff adequately stated claims for, among others, breach of contract and promissory estoppel, reversing the motion court’s dismissal of the causes of action.

Kingdom Assoc., Inc. v. WBC Servs. Inc.

Kingdom Associates arose from a proposed subcontract for excavation and foundation work at a New York City project.[1] Plaintiff alleged that defendant accepted its $8.28 million proposal in July 2024, creating a binding agreement, and that plaintiff began performance by procuring materials, obtaining insurance, and preparing shop drawings. Defendant maintained that no contract was formed because the proposal was never formally executed and required owner approval. Plaintiff alleged that defendant breached the contract and, alternatively, repudiated a clear promise on which it reasonably relied, causing damages of $1.075 million.

The dispute began in April 2024, when plaintiff solicited bids for a portion of the project, including excavation, waterproofing, and foundation concrete. In response, defendant submitted a proposal and engaged in a series of email communications with plaintiff throughout July 2024.

During these exchanges, the parties discussed project specifications, including drawings and scope changes. Plaintiff submitted a revised proposal on July 18, 2024, incorporating updated plans. That same day, defendant requested further details in the form of an itemized breakdown and also asked whether plaintiff could lower its price by $100,000. Plaintiff agreed and, shortly thereafter, submitted a revised proposal to defendant.

On August 16, 2024, nearly a month after the final proposal was submitted, defendant informed plaintiff that the project owner had not authorized it to award the subcontract work and was still evaluating its options. Defendant thus took the position that no subcontract could be awarded at that time.

Plaintiff argued that this communication was a unilateral termination of the agreement. It maintained that defendant never indicated during negotiations that owner approval was a prerequisite to contract formation and that it had already undertaken significant efforts in reliance on defendant’s representations.

Thereafter, on August 23, 2024, plaintiff filed a mechanic’s lien against the project in the amount of $1,075,000. The lien was based on several categories of alleged costs, including insurance premiums, materials such as pipes and steel bars, shop drawings, and preconstruction services.

Plaintiff subsequently commenced the action, asserting multiple causes of action. Those included: breach of contract, on the theory that an agreement existed and was wrongfully terminated; quantum meruit, seeking recovery for the value of services provided; promissory estoppel, based on alleged reliance on a clear promise of award; and unjust enrichment, alleging that the contractor benefited from plaintiff’s work without compensation.

Defendant moved to dismiss. The motion court denied the motion. On appeal, the First Department reversed.

The Court held that plaintiff stated a breach of contract claim.[2] 

To state a claim for breach of contract, a plaintiff must allege the “existence of a contract, the plaintiff's performance thereunder, the defendant’s breach thereof, and resulting damages.”[3]  The Court found that plaintiff satisfied the elements of the claim by alleging that plaintiff: (1) “entered into an agreement with [defendant] to provide construction services,” (2) “performed under the agreement by providing labor and materials until [defendant] breached by unilaterally rescinding its agreement,” and (3) “suffered $1.075 million in expenses.”[4] Based on the foregoing, the Court concluded that “plaintiff stated the cause of action.”[5]

The Court also held that plaintiff stated a claim for promissory estoppel.[6] 

“The elements of a claim for promissory estoppel are: (1) a promise that is sufficiently clear and unambiguous; (2) reasonable reliance on the promise by a party; and (3) injury caused by the reliance.”[7] The Court found that plaintiff satisfied the elements of the claim by pleading that: (1) “[defendant] made a clear and unambiguous promise that it was awarding the [subcontract] to” plaintiff; (2) “it was reasonable and foreseeable that [p]laintiff would rely on this unambiguous promise by [defendant] and commence work”; (3) “[defendant] violated its unambiguous promise to award the work” to plaintiff; and (4) “[d]ue to its detrimental reliance on [defendant’s] unambiguous promise, [p]laintiff [had] been damaged in the sum of [$1.075 million].”[8] The Court also noted that “[w]hile the email chain submitted by [defendant did] not contain a clear promise to award plaintiff the subcontract, it at least suggest[ed] the possibility that [defendant] made the promise to plaintiff in another manner.”[9] Based on the foregoing, the Court concluded that plaintiff stated a claim for promissory estoppel.

Takeaway

Kingdom Associates reaffirms the principle that, at the pleading stage, a plaintiff need not prove contract formation to survive dismissal. Allegations that the parties reached an agreement through negotiations, that performance began, and that the defendant repudiated the arrangement can suffice to state a breach of contract claim, even where there is no executed written agreement.

Equally important, Kingdom Associates highlights the vitality of promissory estoppel as an alternative theory of liability. The Court recognized that a plaintiff’s allegations of a clear promise, coupled with reasonable reliance through performance, can support a claim for relief independent of a formal contract. In fact, the Court was willing to allow that a promise might be inferred from communications or proven through evidence beyond the written record.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions or litigation releases and not on matters handled by the firm.

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[1] The background facts and party assertions are taken from the briefing on appeal.

[2] Slip Op. at *1.

[3] Heijung Park v. Nam Yong Kim, 205 A.D.3d 429, 430 (1st Dept. 2022).

[4] Slip Op. at *1.

[5] Id.

[6] Id. at *2.

[7] Id. (quoting MatlinPatterson ATA Holdings LLC v. Federal Express Corp., 87 A.D.3d 836, 841-842 (1st Dept. 2011), lv. denied, 21 N.Y.3d 853 (2013)). 

[8] Id. (internal quotation marks omitted)

[9] Id.