Appellate Court Finds Oral Assurances Sufficient To Keep Contractor's Claims Alive

Sufficient to Keep Contractor's Claims Alive

In Best Work Holdings (New York), LLC v. Ma, a recent decision from the New York Appellate Division, First Department, the court examines how promissory‑estoppel and unjust‑enrichment claims are evaluated when construction work is performed without a written contract.

Plaintiff building owner accused defendants of participating in a fraudulent contracting scheme. Defendant Li responded with counterclaims, asserting that he performed legitimate preparation work for the building's renovation because he was told he would be reimbursed. Li alleged that the head of asset management for the owner's parent company promised him that "if Li performed preparation work... he would be reimbursed the costs for material, labor, equipment, and services." Li also claimed that he relied on this assurance because of his prior working relationship with the project manager, noting that he had previously managed projects "without a written contract."

The court held that these allegations were enough to state a claim for promissory estoppel. At the pleading stage, the question is not whether Li will ultimately prove his reliance was reasonable, but whether the allegations, taken as true, are plausible. The court emphasized that the reasonableness of reliance "is an issue for the trier of fact" and that Li is entitled to favorable inferences because his reliance was not "patently unreasonable on its face."

The court also reinstated Li's unjust enrichment claim. Li alleged that he spent $200,000 on preparation work and that the building owner benefited from that work without paying for it. The court found these allegations sufficient, explaining that Li claimed the owner "was enriched by Li's preparation work" and that it would be "against equity and good conscience" for the owner to retain that benefit without payment.

Although the counterclaims lacked detail, the court concluded that they were sufficiently specific to withstand a motion to dismiss. The decision underscores that quasi‑contract claims may proceed even without a formal agreement when a contractor alleges a pattern of similar prior dealings and significant out‑of‑pocket expenditures.

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