Sapp v. Clark Wilson, Inc., 2022 NY Slip Op 04184 (2022)

Citation: Sapp v. Clark Wilson, Inc., 2022 NY Slip Op 04184 (2022)
Parent Document: Sapp v. Clark Wilson, Inc., 2022 NY Slip Op 04184 (2022)
Jurisdiction: New York (state)
Effective Date: 2022-06-29
Original Source: https://www.courtlistener.com/opinion/6620002/sapp-v-clark-wilson-inc/ ↗

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Significantly, even if the owners established their prima facie entitlement to summary judgment on these issues, which, I submit, they have not, the plaintiffs have raised material issues of fact regarding the identity of the relationship between the owners and the We Care companies and, specifically, whether the We Care companies are actually shell entities of the owners. Here, the prime tenants in this case were We All and We Care. The evidence in the record suggests that the owners were primarily involved in the contract negotiations between We Always and DHS despite the fact that the owners were not named parties to the proposed agreement. The documents submitted by the plaintiffs in opposition to the owners' motion show that, in September 2014, Barry Hersko, the chief executive officer of the owners and brother to Isaac Hersko, who was the president of We All and We Care, forwarded "a Proposal for the operation of We Always Care Cluster Shelter" to DHS, and DHS referred to Barry Hersko as the executive director of We Always in a letter dated June 10, 2015, in which DHS confirmed it was in the process of entering into an agreement with his organization, We Always, to utilize 300 apartments for shelter at a rate of $90 per day. These documents alone raise material issues of fact as to the relationship between the owners and the We Care companies, which is a key factor in determining whether the tenancies are illusory. Notably, as indicated by the related appeal decided herewith (see Sapp v Clark Wilson, Inc., _____ AD3d _____ [Appellate Division Docket No. 2019-04141; decided herewith]), the agreement between DHS and We Always was never approved by the Office of the New York City Comptroller (hereinafter the Comptroller). Indeed, DHS withdrew the agreement from consideration for approval by the Comptroller, as required pursuant to New York City Charter § 328, after the Comptroller raised concerns about a potential conflict of interest on the part of We Always due to its apparent relationship with the owners (see id.).

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