Add Art 7-A §§170 & 171, Lien L; amd §399-xx, Gen Bus L; amd §20-509, NYC Ad Cd; amd §6201, CPLR; add §631,
BC L; amd §609, Lim Lil L
Authorizes a lien against personal and real property of the owner of a commercial towing company for illegal and improper practices; creates personal liability for members of an LLC and certain corporate shareholders.
STATE OF NEW YORK
________________________________________________________________________
1227
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
___________
Introduced by M. of A. DINOWITZ, BENEDETTO, SEAWRIGHT, GLICK, COOK,
COLTON, McDONOUGH -- read once and referred to the Committee on Judi-
ciary
AN ACT to amend the lien law, the general business law and the adminis-
trative code of the city of New York, in relation to liens against
commercial towing companies for illegal and improper towing practices;
to amend the civil practice law and rules, in relation to grounds for
attachment; to amend the business corporation law, in relation to
holding shareholders of non-publicly traded corporations personally
liable for certain judgments; and to amend the limited liability
company law, in relation to holding the ten members with the largest
ownership interests in a company personally liable for certain judg-
ments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The lien law is amended by adding a new article 7-A to read
2 as follows:
3 ARTICLE 7-A
4 LIEN ON COMMERCIAL TOWING COMPANIES FOR IMPROPER PRACTICES
5 Section 170. Lien for violations associated with illegal or improper
6 practices relating to the towing of motor vehicles.
7 171. Enforcement of lien.
8 § 170. Lien for violations associated with illegal or improper prac-
9 tices relating to the towing of motor vehicles. 1. A person shall have a
10 lien against any interest in property of a commercial towing company
11 arising out of any claim of illegal or improper practices relating to
12 the towing of motor vehicles, as defined in section one hundred seven-b
13 of the vehicle and traffic law, including by not limited to section
14 19-169.1 of the administrative code of the city of New York, for the
15 agreed price of such towing or, if the towing was without the prior
16 consent or authorization of such motor vehicle owner, the amount charged
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01717-01-5
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1 for the service, from the time of filing a notice of such lien as
2 prescribed in this chapter. In a city with a population of one million
3 or more, charges for towing and associated storage shall not exceed the
4 amounts set forth in section 20-509 of the administrative code of the
5 city of New York. A lien under this section may be had for any amount
6 over the limits set forth in such section. A lien under this article may
7 be had against an interest in real property and against an interest in
8 personal property that can be sufficiently described within the meaning
9 of section 9-108 of the uniform commercial code, except that a lien
10 under this article shall not extend to deposit accounts or goods as
11 those terms are defined in section 9-102 of the uniform commercial
12 code.
13 2. Notice of a lien under this section may be filed at any time not
14 later than three years following violation giving rise to the claim. A
15 notice of lien on personal property must be filed, together with a
16 financing statement, in the filing office as set forth in section 9-501
17 of the uniform commercial code.
18 3. Within five days before or thirty days after filing the notice of a
19 lien authorized pursuant to this article, the lienor shall serve a copy
20 of such notice upon the owner of the commercial towing company, if a
21 natural person, (a) by delivering the same to such owner personally, or
22 if the owner cannot be found, to their agent or attorney, or (b) by
23 leaving it as the owner's last known place of residence or business,
24 with a person of suitable age and discretion, or (c) by registered or
25 certified mail addressed to the owner's last known place of residence or
26 business, or (d) if such person owns real property, by affixing a copy
27 thereof conspicuously on such property, between the hours of nine
28 o'clock in the forenoon and four o'clock in the afternoon. The lienor
29 also shall, within thirty days after filing the notice of lien, affix a
30 copy thereof conspicuously on the real property identified in the notice
31 of lien, between the hours of nine o'clock in the forenoon and four
32 o'clock in the afternoon. If the commercial towing company be a corpo-
33 ration, said service shall be made (i) by delivering such copy to and
34 leaving the same with the president, vice-president, secretary or clerk
35 to the corporation, the cashier, treasurer or a director or managing
36 agent thereof, personally, within the state, or (ii) if such officer
37 cannot be found within the state, by affixing a copy thereof conspicu-
38 ously on such property between the hours of nine o'clock in the forenoon
39 and four o'clock in the afternoon, or (iii) by registered or certified
40 mail addressed to its last known place of business, or (iv) by delivery
41 to the secretary of the department of state in the same manner as
42 required by subparagraph one of paragraph (b) of section three hundred
43 six of the business corporation law. Failure to file proof of such a
44 service with the county clerk within thirty-five days after the notice
45 of lien is filed shall terminate the notice as a lien. Until service of
46 the notice has been made, as above provided, an owner, without knowledge
47 of the lien, shall be protected in payment made in good faith to any
48 other person claiming a lien.
49 4. (a) No lien on real property under this section shall be a lien for
50 a longer period than one year after the notice of lien has been filed,
51 unless an extension to such lien is filed with the county clerk of the
52 county in which the notice of lien is filed within one year from the
53 filing of the original notice of lien, continuing such lien and such
54 lien shall be redocketed as of the date of filing such extension. Such
55 extension shall contain the names of the lienor and the owner of the
56 real property against whose interest therein such lien is claimed, a
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1 brief description of the property affected by such lien, the amount of
2 such lien, and the date of filing the notice of lien. No lien shall be
3 continued by such extension for more than one year from the filing ther-
4 eof. In the event an action is not commenced to obtain judgment on the
5 claim or to foreclose the lien within such extended period, such lien
6 shall be extinguished unless an order be granted by a court of record or
7 a judge or justice thereof, continuing such lien, and such lien shall
8 be redocketed as of the date of granting such order and a statement made
9 that such lien is continued by virtue of such order.
10 (b) No lien on personal property under this section shall be a lien
11 for a longer period than one year after the financing statement has been
12 recorded, unless an extension to such lien, is filed with the filing
13 office in which the financing statement is required to be filed pursuant
14 to section 9-501 of the uniform commercial code within one year from the
15 filing of the original financing statement, continuing such lien. Such
16 extension shall contain the names of the lienor and the owner of the
17 property against whose interest therein such lien is claimed, a brief
18 description of the prior financing statement to be extended, and the
19 date of filing the prior financing statement. No lien shall be continued
20 by such extension for more than one year from the filing thereof. In the
21 event an action is not commenced to obtain judgement on the claim or to
22 foreclose the lien within such extended period, such lien shall be
23 extinguished unless an order be granted by a court of record or a judge
24 or justice thereof, continuing such lien, and such lien shall be refiled
25 as of the date of granting such order and a statement made that such
26 lien is continued by virtue of such order.
27 (c) If a lienor is made a party defendant in an action to enforce
28 another lien, and the plaintiff or such defendant has filed a notice of
29 the pendency of the action within the time prescribed in this section,
30 the lien of such defendant is thereby continued. Such action shall be
31 deemed an action to enforce the lien of such defendant lienor. The fail-
32 ure to file a notice of pendency of action shall not abate the action as
33 to any person liable for the payment of the debt specified in the notice
34 of lien, and the action may be prosecuted to judgment against such
35 person. The provisions of this section in regard to continuing liens
36 shall apply to liens discharged by deposit or by order on the filing of
37 an undertaking. Where a lien is discharged by deposit or by order, a
38 notice of pendency of action shall not be filed.
39 (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
40 action or an action to obtain a judgment on the claim within one year
41 from the filing of the notice of lien on real property or the recording
42 of the financing statement creating lien on personal property, the lien
43 shall be extended during the pendency of the action and for one hundred
44 twenty days following the entry of final judgment in such action, unless
45 the action results in a final judgment or administrative order in the
46 lienor's favor on the claims and the lienor commences a foreclosure
47 action, in which instance the lien shall be valid during the pendency of
48 the foreclosure action. If a lien is extended due to the pendency of a
49 foreclosure action or an action to obtain a judgment on the claim, the
50 lienor shall file a notice of such pendency and extension with the coun-
51 ty clerk of the county in which the notice of lien is filed, containing
52 the names of the parties to the action, the object of the action, a
53 brief description of the property affected thereby, and the time of
54 filing the notice of lien, or in the case of a lien on personal property
55 shall file such notice with the office authorized to accept financing
56 statements pursuant to section 9-501 of the uniform commercial code.
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1 (e) A lien, the duration of which has been extended by the filing of a
2 notice of the pendency of an action as above provided, shall neverthe-
3 less terminate as a lien after such notice has been canceled as provided
4 in section sixty-five hundred fourteen of the civil practice law and
5 rules or has ceased to be effective as constructive notice as provided
6 in section sixty-five hundred thirteen of the civil practice law and
7 rules.
8 § 171. Enforcement of lien. 1. A lien on real property authorized
9 under this article may be enforced against such property, and against a
10 person liable for the judgment upon which the lien is founded, by an
11 action, by the lienor, their assignee or legal representative, in the
12 supreme court or in a county court otherwise having jurisdiction,
13 regardless of the amount of such judgment, or in a court which has
14 jurisdiction in an action founded on a contract for a sum of money
15 equivalent to the amount of such judgment, in the same manner as
16 prescribed in article three of this chapter.
17 2. A lien on personal property specified in this article may imme-
18 diately be enforced against the property through a foreclosure as
19 prescribed in article nine of the uniform commercial code, or upon judg-
20 ment obtained by the owner of the motor vehicle, or the attorney general
21 of the state of New York, and may be enforced in any manner available to
22 the judgment creditor pursuant to article nine of the uniform commercial
23 code or other applicable laws.
24 3. A lien, where notice has been filed on real property or a bond
25 given to discharge the same, may be vacated and cancelled or a deposit
26 made to discharge a lien pursuant to section twenty of this chapter may
27 be returned, by an order of a court of record. Before such order shall
28 be granted, a notice shall be served upon the lienor, either personally
29 or by leaving it at the lienor's last known place of residence or attor-
30 ney's place of business, with a person of suitable age, with directions
31 to deliver it to the lienor. Such notice shall require the lienor to
32 commence an action to enforce the lien, or to commence an action to
33 obtain judgment on the claim upon which the lien was established, within
34 a time specified in the notice, not less than ninety days from the time
35 of service, or show cause at a special term of a court of record, or at
36 a county court, in a county in which the property is situated, at a time
37 and place specified therein, why the notice of lien filed or the bond
38 given should not be vacated and cancelled, or the deposit returned, as
39 the case may be. Proof of such service and that the lienor has not
40 commenced the action to foreclose such lien or an action to obtain judg-
41 ment on the claim upon which the lien was established, as directed in
42 the notice, shall be made by affidavit, at the time of applying for such
43 order.
44 § 2. Subdivision 2 of section 399-xx of the general business law, as
45 added by chapter 690 of the laws of 2004, is amended to read as follows:
46 2. Requirements. A commercial tower who responds to a call for assist-
47 ance from an owner or operator of a vehicle that is inoperable or cannot
48 be safely operated or who offers to transport, repair, or render safely
49 operable such a vehicle shall, in compliance with any reasonable request
50 of an owner or operator of such vehicle, repair the vehicle or transport
51 the vehicle and its occupants to a reasonably safe location where
52 repairs can be made. The commercial tower shall not be required to
53 transport all vehicle occupants if the number of occupants exceeds the
54 number of passengers that can be safely transported. The owner or opera-
55 tor of the vehicle shall be liable to the commercial tower for the cost
56 of towing and repair services provided. A written invoice stating the
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1 cost of the towing and/or services, signed by both the commercial tower
2 and the owner or authorized user of the motor vehicle, shall be provided
3 prior to any towing or services being performed. The commercial tower
4 shall accept cash and all other forms of payment that such commercial
5 tower accepts in the ordinary course of business, including credit and
6 debit cards as those terms are defined in section five hundred eleven of
7 this chapter as payment for all or part of the charges for towing and
8 repair services accepted and provided. The commercial tower may require
9 such proof of identification from persons making payments in forms other
10 than cash as the commercial tower requires for such payments in the
11 ordinary course of business. If the owner or operator of a vehicle
12 declines services of the commercial tower or cannot or will not provide
13 payment and identification for towing or repair services, a commercial
14 tower shall notify law enforcement about the location and identification
15 of the vehicle and its occupants. The provisions of this section do not
16 apply to a vehicle which is lawfully parked at the home of the vehicle's
17 owner or operator.
18 § 3. Section 20-509 of the administrative code of the city of New York
19 is amended by adding a new subdivision e to read as follows:
20 e. A written invoice stating the cost of the towing and/or repair
21 services, signed by both the commercial tower and the owner or author-
22 ized user of the motor vehicle, shall be provided prior to any towing or
23 repair services being performed, except where the towing was without the
24 prior consent or authorization of such motor vehicle owner. Upon the
25 release of a towed motor vehicle the owner shall receive an invoice
26 stating the amount charged and the amount paid.
27 § 4. Subdivision 5 of section 6201 of the civil practice law and
28 rules, as amended by chapter 860 of the laws of 1977 and as renumbered
29 by chapter 618 of the laws of 1992, is amended and a new subdivision 6
30 is added to read as follows:
31 5. the cause of action is based on a judgment, decree or order of a
32 court of the United States or of any other court which is entitled to
33 full faith and credit in this state, or on a judgment which qualifies
34 for recognition under the provisions of article 53[.] of this chapter;
35 or
36 6. the cause of action is based on claims of illegal or improper prac-
37 tices relating to the towing of motor vehicles, including but not limit-
38 ed to violations of section 19-169.1 of the administrative code of the
39 city of New York.
40 § 5. The business corporation law is amended by adding a new section
41 631 to read as follows:
42 § 631. Liability of shareholders of commercial towing companies for
43 claims of illegal or improper towing practices.
44 (a) The ten largest shareholders, as determined by the fair value of
45 their beneficial interest in every domestic corporation or of any
46 foreign corporation, no shares of which are listed on a national securi-
47 ties exchange or regularly quoted in an over-the-counter market by one
48 or more members of a national or an affiliated securities association,
49 shall jointly and severally be personally liable for all claims due and
50 owing to any person as a result of an action to recover damages for
51 violations associated with illegal or improper practices relating to the
52 towing of motor vehicles, including but not limited to violations of
53 section 19-169.1 of the administrative code of the city of New York.
54 (b) A shareholder who has paid more than their pro rata share under
55 this section shall be entitled to contribution pro rata from the other
56 shareholders liable under this section with respect to the excess so
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1 paid, over and above their pro rata share, and may sue them jointly or
2 severally or any number of them to recover the amount due from them.
3 Such recovery may be had in a separate action. As used in this para-
4 graph, "pro rata" means in proportion to beneficial share interest.
5 Before a shareholder may claim contribution from other shareholders
6 under this paragraph, such shareholder shall give them notice in writing
7 that the shareholder intends to hold them so liable. Such notice shall
8 be given by such shareholder within twenty days after the date that
9 notice was given under paragraph (a) of this section.
10 § 6. Section 609 of the limited liability company law is amended by
11 adding a new subdivision (e) to read as follows:
12 (e) Notwithstanding the provisions of subdivisions (a) and (b) of this
13 section, the ten members with the largest percentage ownership interest
14 of every limited liability company, shall jointly and severally be
15 personally liable for all claims due and owing to any person as a result
16 of an action to recover damages for violations associated with illegal
17 or improper practices relating to the towing of motor vehicles, includ-
18 ing but not limited to violations of section 19-169.1 of the administra-
19 tive code of the city of New York.
20 § 7. This act shall take effect on the thirtieth day after it shall
21 have become a law.
