A New York appellate court has reversed a lower court's decision in a breach of contract case, reinstating a judgment for $300,000 against Jhong Kim. The ruling affects 710 E Elizabeth Ave, LLC, which had loaned the money for a construction project that was never repaid. This case highlights the importance of clear contract terms and personal liability in business agreements.
The Appellate Division of the Supreme Court of the State of New York made its decision on October 7, 2026, in the case 710 E Elizabeth Ave, LLC v. Jhong Kim, docket number 2025-08704. The ruling comes after a nonjury trial in which the lower court had dismissed the plaintiffs' amended complaint. The case centers on a loan made in November 2020 for a construction project at 1719 Hylan Boulevard in Staten Island.
The plaintiffs, 710 E Elizabeth Ave, LLC, are a group of investors who provided a loan of $300,000 to Mammoth Construction, Inc., which was the contractor for the construction project. Jhong Kim, the defendant, is the principal of 1719 Hylan, LLC, the entity that owned the property at the time of the loan. After the plaintiffs demanded repayment in September 2022 and received no response, they filed a lawsuit against Kim for breach of contract.
The case progressed to a nonjury trial, where the Supreme Court of Richmond County, presided over by Judge Catherine M. DiDomenico, ruled in favor of Kim, dismissing the plaintiffs' complaint. The plaintiffs appealed the decision, arguing that they had indeed established a breach of contract.
In its ruling, the appellate court found that the plaintiffs had met their burden of proof. The judges, including Lara J. Genovesi, Barry E. Warhit, Donna-Marie E. Golia, and Phillip Hom, stated, "The plaintiffs established the existence of a contract, performance of their obligations under the contract, the defendant's breach of his contractual obligation to repay, and damages." The court noted that the defendant had admitted the loan was his obligation to repay, and there was no evidence presented that the plaintiffs were aware that Kim was acting on behalf of 1719 Hylan, LLC.
The judges emphasized that for an agent to avoid personal liability, there must be clear evidence that the agency relationship was disclosed to the other party. In this case, the court found no such evidence. The plaintiffs' principal testified that Kim represented himself as the owner of the property and did not indicate that the loan was for a company.
As a result, the appellate court reversed the lower court's judgment and reinstated the plaintiffs' amended complaint. They ordered the case to be sent back to the Supreme Court for the entry of an appropriate amended judgment in favor of the plaintiffs for the principal sum of $300,000.
This ruling has significant implications for future cases involving breach of contract and personal liability. It underscores the necessity for clear communication and documentation in business transactions. The decision clarifies that individuals may be held personally liable for debts incurred if they do not clearly disclose their agency status at the time of the agreement.
The outcome of this case could set a precedent for similar disputes in the future, particularly in construction and real estate transactions where loans and contracts are common. It serves as a reminder for both lenders and borrowers to ensure that all parties understand their obligations and liabilities before entering into agreements.
As for what happens next, the case is now remitted back to the Supreme Court for the entry of the amended judgment. There is no indication in the court filing that the defendant plans to appeal this decision. However, if he chooses to do so, it could lead to further legal proceedings.