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
________________________________________________________________________
9787
IN SENATE
April 6, 2026
___________
Introduced by Sen. SEPULVEDA -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary
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
17 for the service, from the time of filing a notice of such lien as
18 prescribed in this chapter. In a city with a population of one million
19 or more, charges for towing and associated storage shall not exceed the
20 amounts set forth in section 20-509 of the administrative code of the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01717-01-5
S. 9787 2
1 city of New York. A lien under this section may be had for any amount
2 over the limits set forth in such section. A lien under this article may
3 be had against an interest in real property and against an interest in
4 personal property that can be sufficiently described within the meaning
5 of section 9-108 of the uniform commercial code, except that a lien
6 under this article shall not extend to deposit accounts or goods as
7 those terms are defined in section 9-102 of the uniform commercial
8 code.
9 2. Notice of a lien under this section may be filed at any time not
10 later than three years following violation giving rise to the claim. A
11 notice of lien on personal property must be filed, together with a
12 financing statement, in the filing office as set forth in section 9-501
13 of the uniform commercial code.
14 3. Within five days before or thirty days after filing the notice of a
15 lien authorized pursuant to this article, the lienor shall serve a copy
16 of such notice upon the owner of the commercial towing company, if a
17 natural person, (a) by delivering the same to such owner personally, or
18 if the owner cannot be found, to their agent or attorney, or (b) by
19 leaving it as the owner's last known place of residence or business,
20 with a person of suitable age and discretion, or (c) by registered or
21 certified mail addressed to the owner's last known place of residence or
22 business, or (d) if such person owns real property, by affixing a copy
23 thereof conspicuously on such property, between the hours of nine
24 o'clock in the forenoon and four o'clock in the afternoon. The lienor
25 also shall, within thirty days after filing the notice of lien, affix a
26 copy thereof conspicuously on the real property identified in the notice
27 of lien, between the hours of nine o'clock in the forenoon and four
28 o'clock in the afternoon. If the commercial towing company be a corpo-
29 ration, said service shall be made (i) by delivering such copy to and
30 leaving the same with the president, vice-president, secretary or clerk
31 to the corporation, the cashier, treasurer or a director or managing
32 agent thereof, personally, within the state, or (ii) if such officer
33 cannot be found within the state, by affixing a copy thereof conspicu-
34 ously on such property between the hours of nine o'clock in the forenoon
35 and four o'clock in the afternoon, or (iii) by registered or certified
36 mail addressed to its last known place of business, or (iv) by delivery
37 to the secretary of the department of state in the same manner as
38 required by subparagraph one of paragraph (b) of section three hundred
39 six of the business corporation law. Failure to file proof of such a
40 service with the county clerk within thirty-five days after the notice
41 of lien is filed shall terminate the notice as a lien. Until service of
42 the notice has been made, as above provided, an owner, without knowledge
43 of the lien, shall be protected in payment made in good faith to any
44 other person claiming a lien.
45 4. (a) No lien on real property under this section shall be a lien for
46 a longer period than one year after the notice of lien has been filed,
47 unless an extension to such lien is filed with the county clerk of the
48 county in which the notice of lien is filed within one year from the
49 filing of the original notice of lien, continuing such lien and such
50 lien shall be redocketed as of the date of filing such extension. Such
51 extension shall contain the names of the lienor and the owner of the
52 real property against whose interest therein such lien is claimed, a
53 brief description of the property affected by such lien, the amount of
54 such lien, and the date of filing the notice of lien. No lien shall be
55 continued by such extension for more than one year from the filing ther-
56 eof. In the event an action is not commenced to obtain judgment on the
S. 9787 3
1 claim or to foreclose the lien within such extended period, such lien
2 shall be extinguished unless an order be granted by a court of record or
3 a judge or justice thereof, continuing such lien, and such lien shall
4 be redocketed as of the date of granting such order and a statement made
5 that such lien is continued by virtue of such order.
6 (b) No lien on personal property under this section shall be a lien
7 for a longer period than one year after the financing statement has been
8 recorded, unless an extension to such lien, is filed with the filing
9 office in which the financing statement is required to be filed pursuant
10 to section 9-501 of the uniform commercial code within one year from the
11 filing of the original financing statement, continuing such lien. Such
12 extension shall contain the names of the lienor and the owner of the
13 property against whose interest therein such lien is claimed, a brief
14 description of the prior financing statement to be extended, and the
15 date of filing the prior financing statement. No lien shall be continued
16 by such extension for more than one year from the filing thereof. In the
17 event an action is not commenced to obtain judgement on the claim or to
18 foreclose the lien within such extended period, such lien shall be
19 extinguished unless an order be granted by a court of record or a judge
20 or justice thereof, continuing such lien, and such lien shall be refiled
21 as of the date of granting such order and a statement made that such
22 lien is continued by virtue of such order.
23 (c) If a lienor is made a party defendant in an action to enforce
24 another lien, and the plaintiff or such defendant has filed a notice of
25 the pendency of the action within the time prescribed in this section,
26 the lien of such defendant is thereby continued. Such action shall be
27 deemed an action to enforce the lien of such defendant lienor. The fail-
28 ure to file a notice of pendency of action shall not abate the action as
29 to any person liable for the payment of the debt specified in the notice
30 of lien, and the action may be prosecuted to judgment against such
31 person. The provisions of this section in regard to continuing liens
32 shall apply to liens discharged by deposit or by order on the filing of
33 an undertaking. Where a lien is discharged by deposit or by order, a
34 notice of pendency of action shall not be filed.
35 (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
36 action or an action to obtain a judgment on the claim within one year
37 from the filing of the notice of lien on real property or the recording
38 of the financing statement creating lien on personal property, the lien
39 shall be extended during the pendency of the action and for one hundred
40 twenty days following the entry of final judgment in such action, unless
41 the action results in a final judgment or administrative order in the
42 lienor's favor on the claims and the lienor commences a foreclosure
43 action, in which instance the lien shall be valid during the pendency of
44 the foreclosure action. If a lien is extended due to the pendency of a
45 foreclosure action or an action to obtain a judgment on the claim, the
46 lienor shall file a notice of such pendency and extension with the coun-
47 ty clerk of the county in which the notice of lien is filed, containing
48 the names of the parties to the action, the object of the action, a
49 brief description of the property affected thereby, and the time of
50 filing the notice of lien, or in the case of a lien on personal property
51 shall file such notice with the office authorized to accept financing
52 statements pursuant to section 9-501 of the uniform commercial code.
53 (e) A lien, the duration of which has been extended by the filing of a
54 notice of the pendency of an action as above provided, shall neverthe-
55 less terminate as a lien after such notice has been canceled as provided
56 in section sixty-five hundred fourteen of the civil practice law and
S. 9787 4
1 rules or has ceased to be effective as constructive notice as provided
2 in section sixty-five hundred thirteen of the civil practice law and
3 rules.
4 § 171. Enforcement of lien. 1. A lien on real property authorized
5 under this article may be enforced against such property, and against a
6 person liable for the judgment upon which the lien is founded, by an
7 action, by the lienor, their assignee or legal representative, in the
8 supreme court or in a county court otherwise having jurisdiction,
9 regardless of the amount of such judgment, or in a court which has
10 jurisdiction in an action founded on a contract for a sum of money
11 equivalent to the amount of such judgment, in the same manner as
12 prescribed in article three of this chapter.
13 2. A lien on personal property specified in this article may imme-
14 diately be enforced against the property through a foreclosure as
15 prescribed in article nine of the uniform commercial code, or upon judg-
16 ment obtained by the owner of the motor vehicle, or the attorney general
17 of the state of New York, and may be enforced in any manner available to
18 the judgment creditor pursuant to article nine of the uniform commercial
19 code or other applicable laws.
20 3. A lien, where notice has been filed on real property or a bond
21 given to discharge the same, may be vacated and cancelled or a deposit
22 made to discharge a lien pursuant to section twenty of this chapter may
23 be returned, by an order of a court of record. Before such order shall
24 be granted, a notice shall be served upon the lienor, either personally
25 or by leaving it at the lienor's last known place of residence or attor-
26 ney's place of business, with a person of suitable age, with directions
27 to deliver it to the lienor. Such notice shall require the lienor to
28 commence an action to enforce the lien, or to commence an action to
29 obtain judgment on the claim upon which the lien was established, within
30 a time specified in the notice, not less than ninety days from the time
31 of service, or show cause at a special term of a court of record, or at
32 a county court, in a county in which the property is situated, at a time
33 and place specified therein, why the notice of lien filed or the bond
34 given should not be vacated and cancelled, or the deposit returned, as
35 the case may be. Proof of such service and that the lienor has not
36 commenced the action to foreclose such lien or an action to obtain judg-
37 ment on the claim upon which the lien was established, as directed in
38 the notice, shall be made by affidavit, at the time of applying for such
39 order.
40 § 2. Subdivision 2 of section 399-xx of the general business law, as
41 added by chapter 690 of the laws of 2004, is amended to read as follows:
42 2. Requirements. A commercial tower who responds to a call for assist-
43 ance from an owner or operator of a vehicle that is inoperable or cannot
44 be safely operated or who offers to transport, repair, or render safely
45 operable such a vehicle shall, in compliance with any reasonable request
46 of an owner or operator of such vehicle, repair the vehicle or transport
47 the vehicle and its occupants to a reasonably safe location where
48 repairs can be made. The commercial tower shall not be required to
49 transport all vehicle occupants if the number of occupants exceeds the
50 number of passengers that can be safely transported. The owner or opera-
51 tor of the vehicle shall be liable to the commercial tower for the cost
52 of towing and repair services provided. A written invoice stating the
53 cost of the towing and/or services, signed by both the commercial tower
54 and the owner or authorized user of the motor vehicle, shall be provided
55 prior to any towing or services being performed. The commercial tower
56 shall accept cash and all other forms of payment that such commercial
S. 9787 5
1 tower accepts in the ordinary course of business, including credit and
2 debit cards as those terms are defined in section five hundred eleven of
3 this chapter as payment for all or part of the charges for towing and
4 repair services accepted and provided. The commercial tower may require
5 such proof of identification from persons making payments in forms other
6 than cash as the commercial tower requires for such payments in the
7 ordinary course of business. If the owner or operator of a vehicle
8 declines services of the commercial tower or cannot or will not provide
9 payment and identification for towing or repair services, a commercial
10 tower shall notify law enforcement about the location and identification
11 of the vehicle and its occupants. The provisions of this section do not
12 apply to a vehicle which is lawfully parked at the home of the vehicle's
13 owner or operator.
14 § 3. Section 20-509 of the administrative code of the city of New York
15 is amended by adding a new subdivision e to read as follows:
16 e. A written invoice stating the cost of the towing and/or repair
17 services, signed by both the commercial tower and the owner or author-
18 ized user of the motor vehicle, shall be provided prior to any towing or
19 repair services being performed, except where the towing was without the
20 prior consent or authorization of such motor vehicle owner. Upon the
21 release of a towed motor vehicle the owner shall receive an invoice
22 stating the amount charged and the amount paid.
23 § 4. Subdivision 5 of section 6201 of the civil practice law and
24 rules, as amended by chapter 860 of the laws of 1977 and as renumbered
25 by chapter 618 of the laws of 1992, is amended and a new subdivision 6
26 is added to read as follows:
27 5. the cause of action is based on a judgment, decree or order of a
28 court of the United States or of any other court which is entitled to
29 full faith and credit in this state, or on a judgment which qualifies
30 for recognition under the provisions of article 53[.] of this chapter;
31 or
32 6. the cause of action is based on claims of illegal or improper prac-
33 tices relating to the towing of motor vehicles, including but not limit-
34 ed to violations of section 19-169.1 of the administrative code of the
35 city of New York.
36 § 5. The business corporation law is amended by adding a new section
37 631 to read as follows:
38 § 631. Liability of shareholders of commercial towing companies for
39 claims of illegal or improper towing practices.
40 (a) The ten largest shareholders, as determined by the fair value of
41 their beneficial interest in every domestic corporation or of any
42 foreign corporation, no shares of which are listed on a national securi-
43 ties exchange or regularly quoted in an over-the-counter market by one
44 or more members of a national or an affiliated securities association,
45 shall jointly and severally be personally liable for all claims due and
46 owing to any person as a result of an action to recover damages for
47 violations associated with illegal or improper practices relating to the
48 towing of motor vehicles, including but not limited to violations of
49 section 19-169.1 of the administrative code of the city of New York.
50 (b) A shareholder who has paid more than their pro rata share under
51 this section shall be entitled to contribution pro rata from the other
52 shareholders liable under this section with respect to the excess so
53 paid, over and above their pro rata share, and may sue them jointly or
54 severally or any number of them to recover the amount due from them.
55 Such recovery may be had in a separate action. As used in this para-
56 graph, "pro rata" means in proportion to beneficial share interest.
S. 9787 6
1 Before a shareholder may claim contribution from other shareholders
2 under this paragraph, such shareholder shall give them notice in writing
3 that the shareholder intends to hold them so liable. Such notice shall
4 be given by such shareholder within twenty days after the date that
5 notice was given under paragraph (a) of this section.
6 § 6. Section 609 of the limited liability company law is amended by
7 adding a new subdivision (e) to read as follows:
8 (e) Notwithstanding the provisions of subdivisions (a) and (b) of this
9 section, the ten members with the largest percentage ownership interest
10 of every limited liability company, shall jointly and severally be
11 personally liable for all claims due and owing to any person as a result
12 of an action to recover damages for violations associated with illegal
13 or improper practices relating to the towing of motor vehicles, includ-
14 ing but not limited to violations of section 19-169.1 of the administra-
15 tive code of the city of New York.
16 § 7. This act shall take effect on the thirtieth day after it shall
17 have become a law.
