Ronald W. Reagan.
In The United States Court of Federal Claims
No. 01-669 C
(Filed: August 26, 2008)
BENJAMIN & SHAKI ALLI AND
THE UNITED STATES,
Trial; Breach of contract; Section 8 housing
program; Housing Assistant Payments
contracts and associated regulatory
agreements; Requirement that owner maintain
decent, safe and sanitary housing for tenants;
HUD properly determined that properties in
question were not maintained in a decent, safe
and sanitary fashion; HUD did not commit
contract breaches in suspending and
terminating HAP contracts and regulatory
agreements; HUD did not breach contract
provisions regarding transfer of property;
Counterclaim; Plaintiffs breached HAP
contracts and associated agreements;
Corporate veil pierced.
Eric Stempien, Northville, Michigan, for plaintiffs.
Marla Tun Conneely and Dawn Elyse Goodman, Civil Division, U.S. Department of
Justice, with whom was Peter D. Keisler, Assistant Attorney General, for defendant.
“One picture is worth 1,000 denials.”1
This contract action involves several apartment complexes in the Detroit, Michigan area.
Each of them participated, at one point, in a subsidized housing program run by the United States
Department of Housing and Urban Development (HUD). Under so-called Housing Assistance
Payments (HAP) contracts, the landlords of properties in the subsidized housing program are
required to maintain and operate them to provide decent, safe, and sanitary housing. Failure to
do so can be considered an event of default and result, inter alia, in the suspension of payments
or even the cancellation of the HAP contracts. The latter is what happened here when HUD,
Benjamin Alli and Shaki Alli are married and reside in Michigan. They are the sole
shareholders of BSA Corporation (BSA Corp.), a Michigan corporation do