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A00628 Summary:

BILL NOA00628
 
SAME ASSAME AS S00579
 
SPONSORRosenthal L
 
COSPNSRMosley, Gottfried, Otis, Weprin, Hooper, Ortiz, Perry, Davila, Dinowitz, Simon, Miller MG, Lifton, Barron, Seawright, Richardson, Benedetto, Steck, Bronson, Mayer, Crespo, Hunter, Jenne, Sepulveda, Rozic, Skoufis, Colton, Brindisi, Taylor, Pichardo
 
MLTSPNSRCook, De La Rosa, Hevesi, Kim, Lentol, Rivera, Skartados
 
Amd Lien L, generally; amd 199-a & 663, Lab L; amd 6201, 6210, 6211, 6223 & R6212, CPLR; amd 624 & 630, BC L; amd 609 & 1102, Lim Lil L
 
Relates to securing payment of wages for work already performed; creates a lien remedy for all employees; provides grounds for attachment; relates to procedures where employees may hold shareholders of non-publicly traded corporations personally liable for wage theft; relates to rights for victims of wage theft to hold the ten members with the largest ownership interests in a company personally liable for wage theft.
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A00628 Actions:

BILL NOA00628
 
01/09/2017referred to judiciary
01/17/2017reported referred to codes
01/24/2017reported
01/26/2017advanced to third reading cal.16
01/03/2018ordered to third reading cal.50
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A00628 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           628
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 9, 2017
                                       ___________
 
        Introduced by M. of A. ROSENTHAL, MOSLEY, GOTTFRIED, OTIS, MOYA, WEPRIN,
          HOOPER,  ORTIZ,  PERRY, DAVILA, DINOWITZ, SIMON, M. G. MILLER, LIFTON,
          BARRON, SEAWRIGHT, RICHARDSON, BENEDETTO, STECK, BRONSON, MAYER, CRES-
          PO, HUNTER, JENNE -- Multi-Sponsored by -- M. of A. COOK, HEVESI, KIM,
          LENTOL, RIVERA, SKARTADOS -- read once and referred to  the  Committee
          on Judiciary
 
        AN  ACT  to  amend the lien law, in relation to employee liens; to amend
          the labor law, in relation to employee complaints; to amend the  civil
          practice  law  and  rules,  in  relation to grounds for attachment; to
          amend the business corporation law, in relation to streamlining proce-
          dures where employees may hold  shareholders  of  non-publicly  traded
          corporations personally liable for wage theft; and to amend the limit-
          ed  liability company law, in relation to creating a right for victims
          of wage theft to hold the  ten  members  with  the  largest  ownership
          interests in a company personally liable for wage theft
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Section 2 of the lien law is amended by  adding  three  new
     2  subdivisions 21, 22 and 23 to read as follows:
     3    21.  Employee.  The  term "employee", when used in this chapter, shall
     4  have the same meaning as "employee" pursuant to articles one, six, nine-
     5  teen and nineteen-A of the labor law, as applicable, or the  Fair  Labor
     6  Standards Act, 29 U.S.C. § 201 et. seq., as applicable.
     7    22.  Employer.  The  term "employer", when used in this chapter, shall
     8  have the same meaning as "employer" pursuant to articles one, six, nine-
     9  teen and nineteen-A of the labor law, as applicable, or the  Fair  Labor
    10  Standards Act, 29 U.S.C. § 201 et. seq., as applicable.
    11    23.  Wage  claim.  The  term  "wage claim", when used in this chapter,
    12  means a claim that an employee has suffered a violation of sections  one
    13  hundred  seventy,  one hundred ninety-one, one hundred ninety-three, one
    14  hundred ninety-six-d, six hundred fifty-two or six hundred seventy-three
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00117-01-7

        A. 628                              2
 
     1  of the labor law or the related regulations and wage orders  promulgated
     2  by the commissioner, a claim for wages due to an employee pursuant to an
     3  employment contract that were unpaid in violation of that contract, or a
     4  claim  that  an  employee has suffered a violation of 29 U.S.C. § 206 or
     5  207.
     6    § 2. Section 3 of the lien law, as amended by chapter 137 of the  laws
     7  of 1985, is amended to read as follows:
     8    §  3.  Mechanic's  lien  and  employee's  lien  on [real] property. 1.
     9  Mechanic's lien.  A  contractor,  subcontractor,  laborer,  materialman,
    10  landscape gardener, nurseryman or person or corporation selling fruit or
    11  ornamental trees, roses, shrubbery, vines and small fruits, who performs
    12  labor  or  furnishes materials for the improvement of real property with
    13  the consent or at the request of the owner thereof,  or  of  his  agent,
    14  contractor  or  subcontractor,  and any trust fund to which benefits and
    15  wage supplements are due or payable for the benefit  of  such  laborers,
    16  shall  have  a lien for the principal and interest, of the value, or the
    17  agreed price, of such labor, including benefits and wage supplements due
    18  or payable for the benefit of any laborer, or materials  upon  the  real
    19  property  improved or to be improved and upon such improvement, from the
    20  time of filing a notice of such lien  as  prescribed  in  this  chapter.
    21  Where the contract for an improvement is made with a husband or wife and
    22  the property belongs to the other or both, the husband or wife contract-
    23  ing  shall  also  be  presumed to be the agent of the other, unless such
    24  other having knowledge of the improvement shall, within ten  days  after
    25  learning  of  the  contract give the contractor written notice of his or
    26  her refusal to consent to the improvement. Within  the  meaning  of  the
    27  provisions  of this chapter, materials actually manufactured for but not
    28  delivered to the real property, shall also be  deemed  to  be  materials
    29  furnished.
    30    2.  Employee's  lien. An employee who has a wage claim as that term is
    31  defined in subdivision twenty-three of section two of this chapter shall
    32  have a lien on his or her employer's interest in property for the  value
    33  of  the  wage  claim arising out of the employment, including liquidated
    34  damages pursuant to subdivision one-a of  section  one  hundred  ninety-
    35  eight, section six hundred sixty-three or section six hundred eighty-one
    36  of  the  labor  law,  or  29 U.S.C. § 216 (b), from the time of filing a
    37  notice of such lien as prescribed in this chapter.  An  employee's  lien
    38  based on a wage claim may be had against the employer's interest in real
    39  property  and  against the employer's interest in personal property that
    40  can be sufficiently described within the meaning of section 9-108 of the
    41  uniform commercial code, except that an employee's lien shall not extend
    42  to deposit accounts or goods as those terms are defined in section 9-102
    43  of the uniform commercial code.  The department of labor and the  attor-
    44  ney  general  may obtain an employee's lien for the value of wage claims
    45  of the employees who are the  subject  of  their  investigations,  court
    46  actions or administrative agency actions.
    47    3.  As  used  in  this  article and unless otherwise specified, a lien
    48  shall mean an employee's lien or a mechanic's lien.
    49    § 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision  1
    50  as amended by chapter 515 of the laws of 1929 and subdivision 2 as added
    51  by chapter 704 of the laws of 1985, are amended to read as follows:
    52    (1) [Such] A mechanic's or employee's lien and employee's lien against
    53  real  property  shall  extend to the owner's right, title or interest in
    54  the real property and improvements, existing at the time of  filing  the
    55  notice  of  lien,  or thereafter acquired, except as hereinafter in this
    56  article provided. If an owner assigns his interest in such real property

        A. 628                              3
 
     1  by a general assignment for the benefit of creditors, within thirty days
     2  prior to such filing,  the  lien  shall  extend  to  the  interest  thus
     3  assigned.  If  any  part  of the real property subjected to such lien be
     4  removed  by  the  owner  or  by any other person, at any time before the
     5  discharge thereof, such removal shall  not  affect  the  rights  of  the
     6  lienor, either in respect to the remaining real property, or the part so
     7  removed.  If  labor  is  performed  for,  or  materials  furnished to, a
     8  contractor or subcontractor for  an  improvement,  the  mechanic's  lien
     9  shall  not  be  for  a sum greater than the sum earned and unpaid on the
    10  contract at the time of filing the notice of lien, and  any  sum  subse-
    11  quently  earned  thereon. In no case shall the owner be liable to pay by
    12  reason of all mechanic's liens created pursuant to this  article  a  sum
    13  greater  than  the  value  or  agreed  price  of the labor and materials
    14  remaining unpaid, at the time of filing notices of such liens, except as
    15  hereinafter provided.
    16    (2) [Such] A mechanic's or employee's lien shall  not  extend  to  the
    17  owner's  right,  title  or  interest  in real property and improvements,
    18  existing at the time of filing the notice of lien if  such  lien  arises
    19  from the failure of a lessee of the right to explore, develop or produce
    20  natural  gas or oil, to pay for, compensate or render value for improve-
    21  ments made with the consent or at  the  request  of  such  lessee  by  a
    22  contractor,  subcontractor,  materialman,  equipment  operator or owner,
    23  landscaper, nurseryman, or person or corporation who performs  labor  or
    24  furnishes  materials  for the exploration, development, or production of
    25  oil or natural gas or otherwise  improves  such  leased  property.  Such
    26  mechanic's  or employee's lien shall extend to the improvements made for
    27  the exploration, development and production of oil and natural gas,  and
    28  the  working  interest held by a lessee of the right to explore, develop
    29  or produce oil and natural gas.
    30    § 4. The opening paragraph of section 4-a of the lien law, as  amended
    31  by chapter 696 of the laws of 1959, is amended to read as follows:
    32    The  proceeds  of  any  insurance which by the terms of the policy are
    33  payable to the owner of real property improved, and actually received or
    34  to be received by him because of the destruction or removal by  fire  or
    35  other  casualty  of an improvement on which lienors have performed labor
    36  or services or for which they have furnished materials, or upon which an
    37  employee has established an employee's lien, shall after the  owner  has
    38  been  reimbursed  therefrom  for  premiums paid by him, if any, for such
    39  insurance, be subject to liens provided by this act to the  same  extent
    40  and  in  the same order of priority as the real property would have been
    41  had such improvement not been so destroyed or removed.
    42    § 5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as  amended
    43  by chapter 515 of the laws of 1929, are amended to read as follows:
    44    1.  The  name of the lienor, and either the residence of the lienor or
    45  the name and business address of the lienor's attorney, if any;  and  if
    46  the  lienor  is  a partnership or a corporation, the business address of
    47  such firm, or corporation, the names of partners and principal place  of
    48  business,  and if a foreign corporation, its principal place of business
    49  within the state.
    50    2. The name of the owner of the [real] property against whose interest
    51  therein a lien is claimed, and the interest of the owner as far as known
    52  to the lienor.
    53    5. The amount unpaid to the lienor for such labor or materials, or the
    54  amount of the wage claim if a wage claim is the basis for  establishment
    55  of  the  lien,  the  items of the wage claim and the value thereof which
    56  make up the amount for which the lienor claims a lien.

        A. 628                              4
 
     1    § 6. Subdivision 1 of section 10 of the lien law, as amended by  chap-
     2  ter 367 of the laws of 2011, is amended to read as follows:
     3    1.  (a)  Notice of mechanic's lien may be filed at any time during the
     4  progress of the work and the furnishing of  the  materials,  or,  within
     5  eight months after the completion of the contract, or the final perform-
     6  ance  of the work, or the final furnishing of the materials, dating from
     7  the last item of work performed or materials furnished; provided, howev-
     8  er, that where the improvement is related to real property  improved  or
     9  to  be  improved with a single family dwelling, the notice of mechanic's
    10  lien may be filed at any time during the progress of the  work  and  the
    11  furnishing of the materials, or, within four months after the completion
    12  of  the  contract,  or  the  final performance of the work, or the final
    13  furnishing of the materials, dating from the last item of work performed
    14  or materials furnished; and provided further where the notice of mechan-
    15  ic's lien is for retainage, the notice of mechanic's lien may  be  filed
    16  within  ninety days after the date the retainage was due to be released;
    17  except that in the case of a mechanic's lien by a  real  estate  broker,
    18  the notice of mechanic's lien may be filed only after the performance of
    19  the  brokerage services and execution of lease by both lessor and lessee
    20  and only if a copy of the alleged written  agreement  of  employment  or
    21  compensation  is  annexed to the notice of lien, provided that where the
    22  payment pursuant to the written agreement of employment or  compensation
    23  is to be made in installments, then a notice of lien may be filed within
    24  eight  months after the final payment is due, but in no event later than
    25  a date five years after the first payment was made. For purposes of this
    26  section, the term "single family dwelling" shall not include a  dwelling
    27  unit which is a part of a subdivision that has been filed with a munici-
    28  pality  in which the subdivision is located when at the time the lien is
    29  filed, such property in the subdivision is owned by  the  developer  for
    30  purposes  other  than  his  personal  residence.  For  purposes  of this
    31  section, "developer" shall mean  and  include  any  private  individual,
    32  partnership,  trust or corporation which improves two or more parcels of
    33  real property with single family dwellings pursuant to a  common  scheme
    34  or plan. [The]
    35    (b)  Notice of employee's lien may be filed at any time not later than
    36  three years following the end of the employment giving rise to the  wage
    37  claim.
    38    (c) A notice of lien, other than for a lien on personal property, must
    39  be filed in the clerk's office of the county where the property is situ-
    40  ated.  If  such property is situated in two or more counties, the notice
    41  of lien shall be filed in the office of the clerk of each of such  coun-
    42  ties.  The  county clerk of each county shall provide and keep a book to
    43  be called the "lien docket," which shall be suitably  ruled  in  columns
    44  headed  "owners,"  "lienors," "lienor's attorney," "property," "amount,"
    45  "time of filing," "proceedings had," in each of which he shall enter the
    46  particulars of the notice, properly belonging therein.  The  date,  hour
    47  and  minute of the filing of each notice of lien shall be entered in the
    48  proper column. Except where the county clerk maintains  a  block  index,
    49  the  names  of the owners shall be arranged in such book in alphabetical
    50  order. The validity of the lien and the right to file a  notice  thereof
    51  shall  not  be  affected  by the death of the owner before notice of the
    52  lien is filed.  A notice of employee's lien on personal property must be
    53  filed, together with a financing statement, in the filing office as  set
    54  forth in section 9-501 of the uniform commercial code.
    55    § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
    56  of 1996, is amended to read as follows:

        A. 628                              5
 
     1    §  11.  Service of copy of notice of lien.  1. Within five days before
     2  or thirty days after filing the notice of a mechanic's lien, the  lienor
     3  shall  serve  a copy of such notice upon the owner, if a natural person,
     4  (a) by delivering the same to him personally, or if the owner cannot  be
     5  found,  to his agent or attorney, or (b) by leaving it at his last known
     6  place of residence in the city or town in which  the  real  property  or
     7  some  part  thereof  is  situated,  with  a  person  of suitable age and
     8  discretion, or (c) by registered or certified mail addressed to his last
     9  known place of residence, or (d) if such owner has no such residence  in
    10  such  city or town, or cannot be found, and he has no agent or attorney,
    11  by affixing a copy thereof conspicuously on such property,  between  the
    12  hours of nine o'clock in the forenoon and four o'clock in the afternoon;
    13  if  the owner be a corporation, said service shall be made (i) by deliv-
    14  ering such copy to and leaving the same with the president,  vice-presi-
    15  dent, secretary or clerk to the corporation, the cashier, treasurer or a
    16  director  or  managing  agent  thereof, personally, within the state, or
    17  (ii) if such officer cannot be found within the state by affixing a copy
    18  thereof conspicuously on such property between the hours of nine o'clock
    19  in the forenoon and four o'clock in the afternoon, or  (iii)  by  regis-
    20  tered  or  certified mail addressed to its last known place of business.
    21  Failure to file proof of such a service with  the  county  clerk  within
    22  thirty-five  days  after the notice of lien is filed shall terminate the
    23  notice as a lien. Until service of the notice has been  made,  as  above
    24  provided, an owner, without knowledge of the lien, shall be protected in
    25  any  payment made in good faith to any contractor or other person claim-
    26  ing a lien.
    27    2. Within five days before or thirty days after filing the  notice  of
    28  an  employee's  lien,  the lienor shall serve a copy of such notice upon
    29  the employer, if a natural person, (a) by delivering  the  same  to  him
    30  personally,  or  if the employer cannot be found, to his agent or attor-
    31  ney, or (b) by leaving it as his last known place of residence or  busi-
    32  ness, with a person of suitable age and discretion, or (c) by registered
    33  or  certified  mail  addressed  to  his last known place of residence or
    34  business, or (d) if such employer owns real property, by affixing a copy
    35  thereof conspicuously on  such  property,  between  the  hours  of  nine
    36  o'clock  in  the  forenoon and four o'clock in the afternoon. The lienor
    37  also shall, within thirty days after filing  the  notice  of  employee's
    38  lien, affix a copy thereof conspicuously on the real property identified
    39  in  the  notice of employee's lien, between the hours of nine o'clock in
    40  the forenoon and four o'clock in the afternoon. If  the  employer  be  a
    41  corporation,  said  service shall be made (i) by delivering such copy to
    42  and leaving the same with the president,  vice-president,  secretary  or
    43  clerk to the corporation, the cashier, treasurer or a director or manag-
    44  ing agent thereof, personally, within the state, or (ii) if such officer
    45  cannot be found within the state by affixing a copy thereof conspicuous-
    46  ly  on  such  property between the hours of nine o'clock in the forenoon
    47  and four o'clock in the afternoon, or (iii) by registered  or  certified
    48  mail  addressed to its last known place of business, or (iv) by delivery
    49  to the secretary of the department  of  state  in  the  same  manner  as
    50  required  by  subparagraph one of paragraph (b) of section three hundred
    51  six of the business corporation law.  Failure to file proof  of  such  a
    52  service  with  the county clerk within thirty-five days after the notice
    53  of lien is filed shall terminate the notice as a lien. Until service  of
    54  the notice has been made, as above provided, an owner, without knowledge
    55  of the lien, shall be protected in any payment made in good faith to any
    56  other person claiming a lien.

        A. 628                              6
 
     1    §  8.  Section  11-b of the lien law, as amended by chapter 147 of the
     2  laws of 1996, is amended to read as follows:
     3    §  11-b.  Copy of notice of mechanic's lien to a contractor or subcon-
     4  tractor.  Within five days before or thirty days after filing  a  notice
     5  of mechanic's lien in accordance with section ten of this chapter or the
     6  filing  of  an amendment of notice of mechanic's lien in accordance with
     7  section twelve-a of this [chapter] article the lienor shall serve a copy
     8  of such notice or amendment by certified mail on the contractor, subcon-
     9  tractor, assignee or legal representative for whom he was employed or to
    10  whom he furnished materials or if the lienor is a contractor or  subcon-
    11  tractor  to  the  person, firm or corporation with whom the contract was
    12  made. A lienor having a direct contractual relationship with  a  subcon-
    13  tractor  or  a  sub-subcontractor  but  not with a contractor shall also
    14  serve a copy of such notice  or  amendment  by  certified  mail  to  the
    15  contractor.  Failure  to  file  proof  of such a service with the county
    16  clerk within thirty-five days after the notice of lien  is  filed  shall
    17  terminate the notice as a lien. Any lienor, or a person acting on behalf
    18  of  a lienor, who fails to serve a copy of the notice of mechanic's lien
    19  as required by this section shall be liable  for  reasonable  attorney's
    20  fees,  costs  and  expenses,  as  determined  by  the court, incurred in
    21  obtaining such copy.
    22    § 9. Subdivision 1 of section 12-a of the  lien  law,  as  amended  by
    23  chapter 1048 of the laws of 1971, is amended to read as follows:
    24    1. Within sixty days after the original filing, a lienor may amend his
    25  lien  upon  twenty  days  notice to existing lienors, mortgagees and the
    26  owner, provided that no action or proceeding to enforce  or  cancel  the
    27  mechanics'  lien  or  employee's  lien  has been brought in the interim,
    28  where the purpose of the amendment is to reduce the amount of the  lien,
    29  except the question of wilful exaggeration shall survive such amendment.
    30    § 10. Subdivision 1 of section 13 of the lien law, as amended by chap-
    31  ter 878 of the laws of 1947, is amended to read as follows:
    32    (1) [A] An employee's lien, or a lien for materials furnished or labor
    33  performed  in the improvement of real property, shall have priority over
    34  a conveyance, mortgage, judgment or other claim  against  such  property
    35  not  recorded, docketed or filed at the time of the filing of the notice
    36  of such lien, except as  hereinafter  in  this  chapter  provided;  over
    37  advances  made upon any mortgage or other encumbrance thereon after such
    38  filing, except as hereinafter in this article  provided;  and  over  the
    39  claim  of  a creditor who has not furnished materials or performed labor
    40  upon such property, if such property has been assigned by the owner by a
    41  general assignment for the benefit  of  creditors,  within  thirty  days
    42  before the filing of either of such notices; and also over an attachment
    43  hereafter  issued  or a money judgment hereafter recovered upon a claim,
    44  which, in whole or in part,  was  not  for  materials  furnished,  labor
    45  performed  or moneys advanced for the improvement of such real property;
    46  and over any claim or lien acquired in any proceedings upon  such  judg-
    47  ment.  Such  liens  shall  also  have priority over advances made upon a
    48  contract by an owner for an improvement of real property which  contains
    49  an  option  to  the contractor, his successor or assigns to purchase the
    50  property, if such advances were made after the time when the labor began
    51  or the first item of material was furnished, as stated in the notice  of
    52  lien. If several buildings are demolished, erected, altered or repaired,
    53  or  several  pieces  or parcels of real property are improved, under one
    54  contract, and there are conflicting liens  thereon,  each  lienor  shall
    55  have  priority upon the particular part of the real property or upon the
    56  particular building or premises where his  labor  is  performed  or  his

        A. 628                              7
 
     1  materials  are  used.  Persons  shall have no priority on account of the
     2  time of filing their respective notices of liens, but all liens shall be
     3  on a parity except as hereinafter in section fifty-six of  this  chapter
     4  provided;  and  except  that  in  all cases laborers for daily or weekly
     5  wages with a mechanic's lien, and employees  with  an  employee's  lien,
     6  shall have preference over all other claimants under this article.
     7    §  11.  Section  17  of the lien law, as amended by chapter 324 of the
     8  laws of 2000, is amended to read as follows:
     9    § 17. Duration of lien. 1. (a) No mechanic's lien  specified  in  this
    10  article  shall  be  a  lien  for a longer period than one year after the
    11  notice of lien has been filed, unless within  that  time  an  action  is
    12  commenced  to  foreclose  the lien, and a notice of the pendency of such
    13  action, whether in a court of record or in a court  not  of  record,  is
    14  filed with the county clerk of the county in which the notice of lien is
    15  filed,  containing the names of the parties to the action, the object of
    16  the action, a brief description of the real property  affected  thereby,
    17  and  the  time  of  filing the notice of lien; or unless an extension to
    18  such lien, except for a lien on real property improved or to be improved
    19  with a single family dwelling, is filed with the  county  clerk  of  the
    20  county  in  which  the  notice of lien is filed within one year from the
    21  filing of the original notice of lien, continuing  such  lien  and  such
    22  lien  shall  be redocketed as of the date of filing such extension. Such
    23  extension shall contain the names of the lienor and  the  owner  of  the
    24  real  property  against  whose  interest therein such lien is claimed, a
    25  brief description of the real property affected by such lien, the amount
    26  of such lien, and the date of filing the notice of lien. No  lien  shall
    27  be  continued  by  such extension for more than one year from the filing
    28  thereof. In the event an action is not commenced to foreclose  the  lien
    29  within  such  extended period, such lien shall be extinguished unless an
    30  order be granted by a court of record or a  judge  or  justice  thereof,
    31  continuing  such  lien, and such lien shall be redocketed as of the date
    32  of granting such order and a statement made that such lien is  continued
    33  by  virtue  of  such  order.  A  lien on real property improved or to be
    34  improved with a single family dwelling may only be extended by an  order
    35  of  a  court  of record, or a judge or justice thereof. No lien shall be
    36  continued by court order for more than one year from the granting there-
    37  of, but a new order and entry may be made  in  each  of  two  successive
    38  years.  If  a  lienor  is made a party defendant in an action to enforce
    39  another lien, and the plaintiff or such defendant has filed a notice  of
    40  the  pendency  of the action within the time prescribed in this section,
    41  the lien of such defendant is thereby continued. Such  action  shall  be
    42  deemed an action to enforce the lien of such defendant lienor. The fail-
    43  ure to file a notice of pendency of action shall not abate the action as
    44  to any person liable for the payment of the debt specified in the notice
    45  of  lien,  and  the  action  may  be prosecuted to judgment against such
    46  person. The provisions of this section in  regard  to  continuing  liens
    47  shall  apply to liens discharged by deposit or by order on the filing of
    48  an undertaking. Where a lien is discharged by deposit  or  by  order,  a
    49  notice of pendency of action shall not be filed.
    50    (b) A lien, the duration of which has been extended by the filing of a
    51  notice  of  the pendency of an action as above provided, shall neverthe-
    52  less terminate as a lien after such notice has been canceled as provided
    53  in section sixty-five hundred fourteen of the  civil  practice  law  and
    54  rules  or  has ceased to be effective as constructive notice as provided
    55  in section sixty-five hundred thirteen of the  civil  practice  law  and
    56  rules.

        A. 628                              8
 
     1    2. (a) No employee's lien on real property shall be a lien for a long-
     2  er  period than one year after the notice of lien has been filed, unless
     3  an extension to such lien is filed with the county clerk of  the  county
     4  in  which the notice of lien is filed within one year from the filing of
     5  the original notice of lien, continuing such lien and such lien shall be
     6  redocketed as of the date of filing such extension. Such extension shall
     7  contain  the  names  of  the  lienor  and the owner of the real property
     8  against whose interest therein such lien is claimed, a brief description
     9  of the property affected by such lien, the amount of such lien, and  the
    10  date  of  filing the notice of lien.  No lien shall be continued by such
    11  extension for more than one year from the filing thereof. In  the  event
    12  an  action  is  not commenced to obtain judgment on the wage claim or to
    13  foreclose the lien within such  extended  period,  such  lien  shall  be
    14  extinguished  unless an order be granted by a court of record or a judge
    15  or justice thereof, continuing such lien, and such lien shall be redock-
    16  eted as of the date of granting such order and  a  statement  made  that
    17  such lien is continued by virtue of such order.
    18    (b)  No  employee's  lien  on  personal property shall be a lien for a
    19  longer period than one year  after  the  financing  statement  has  been
    20  recorded,  unless  an  extension  to such lien, is filed with the filing
    21  office in which the financing statement is required to be filed pursuant
    22  to section 9-501 of the uniform commercial code within one year from the
    23  filing of the original financing statement, continuing such  lien.  Such
    24  extension  shall  contain  the  names of the lienor and the owner of the
    25  property against whose interest therein such lien is  claimed,  a  brief
    26  description  of  the  prior  financing statement to be extended, and the
    27  date of filing the prior financing statement.  No lien shall be  contin-
    28  ued by such extension for more than one year from the filing thereof. In
    29  the  event  an  action  is  not commenced to obtain judgment on the wage
    30  claim or to foreclose the lien within such extended  period,  such  lien
    31  shall be extinguished unless an order be granted by a court of record or
    32  a judge or justice thereof, continuing such lien, and such lien shall be
    33  refiled  as of the date of granting such order and a statement made that
    34  such lien is continued by virtue of such order.
    35    (c) If a lienor is made a party defendant  in  an  action  to  enforce
    36  another  lien, and the plaintiff or such defendant has filed a notice of
    37  the pendency of the action within the time prescribed in  this  section,
    38  the  lien  of  such defendant is thereby continued. Such action shall be
    39  deemed an action to enforce the lien of such defendant lienor. The fail-
    40  ure to file a notice of pendency of action shall not abate the action as
    41  to any person liable for the payment of the debt specified in the notice
    42  of lien, and the action may  be  prosecuted  to  judgment  against  such
    43  person.    The  provisions of this section in regard to continuing liens
    44  shall apply to liens discharged by deposit or by order on the filing  of
    45  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
    46  notice of pendency of action shall not be filed.
    47    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
    48  action or an action to obtain a judgment on the wage  claim  within  one
    49  year  from  the  filing  of  the  notice of lien on real property or the
    50  recording of the financing statement creating lien on personal property,
    51  the lien shall be extended during the pendency of the action and for one
    52  hundred twenty days following  the  entry  of  final  judgment  in  such
    53  action,  unless the action results in a final judgment or administrative
    54  order in the lienor's favor on the wage claims and the lienor  commences
    55  a  foreclosure  action, in which instance the lien shall be valid during
    56  the pendency of the foreclosure action. If a lien is extended due to the

        A. 628                              9
 
     1  pendency of a foreclosure action or an action to obtain  a  judgment  on
     2  the  wage  claim,  the  lienor  shall file a notice of such pendency and
     3  extension with the county clerk of the county in  which  the  notice  of
     4  lien  is  filed,  containing the names of the parties to the action, the
     5  object of the action, a  brief  description  of  the  property  affected
     6  thereby,  and the time of filing the notice of lien, or in the case of a
     7  lien on personal property shall file such notice with the office author-
     8  ized to accept financing statements pursuant to  section  9-501  of  the
     9  uniform  commercial  code.  For  purposes  of this section, an action to
    10  obtain judgment on a wage claim includes an action brought in any  court
    11  of  competent jurisdiction, the submission of a complaint to the depart-
    12  ment of labor or the submission of a claim to arbitration pursuant to an
    13  arbitration agreement. An action also includes an investigation of  wage
    14  claims by the commissioner of labor or the attorney general of the state
    15  of New York, regardless of whether such investigation was initiated by a
    16  complaint.
    17    (e) A lien, the duration of which has been extended by the filing of a
    18  notice  of  the pendency of an action as above provided, shall neverthe-
    19  less terminate as a lien after such notice has been canceled as provided
    20  in section sixty-five hundred fourteen of the  civil  practice  law  and
    21  rules  or  has ceased to be effective as constructive notice as provided
    22  in section sixty-five hundred thirteen of the  civil  practice  law  and
    23  rules.
    24    §  12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
    25  2 as amended by chapter 310 of the laws of 1962, subdivision 4 as  added
    26  by  chapter  582 of the laws of 2002 and paragraph a of subdivision 4 as
    27  further amended by section 104 of part A of chapter 62 of  the  laws  of
    28  2011, are amended to read as follows:
    29    (2)  By failure to begin an action to foreclose such lien or to secure
    30  an order continuing it, within one year from  the  time  of  filing  the
    31  notice  of lien, unless (i) an action be begun within the same period to
    32  foreclose a mortgage or another mechanic's lien upon the  same  property
    33  or  any  part  thereof  and a notice of pendency of such action is filed
    34  according to law, or (ii) an action is commenced to obtain a judgment on
    35  a wage claim pursuant to subdivision two of section  seventeen  of  this
    36  article,  but  a  lien,  the  duration of which has been extended by the
    37  filing of a notice of the pendency of  an  action  as  herein  provided,
    38  shall  nevertheless  terminate  as  a  lien  after  such notice has been
    39  cancelled or has ceased to be effective as constructive notice.
    40    (4) Either before or after the beginning of an action by the employer,
    41  owner or contractor executing a bond or undertaking in an  amount  equal
    42  to  one  hundred ten percent of such lien conditioned for the payment of
    43  any judgment which may be rendered against the property or employer  for
    44  the enforcement of the lien:
    45    a.  The  execution  of any such bond or undertaking by any fidelity or
    46  surety company authorized by the laws of this state  to  transact  busi-
    47  ness,  shall be sufficient; and where a certificate of qualification has
    48  been issued by  the  superintendent  of  financial  services  under  the
    49  provisions  of  section one thousand one hundred eleven of the insurance
    50  law, and has not been revoked, no justification or notice thereof  shall
    51  be  necessary. Any such company may execute any such bond or undertaking
    52  as surety by the hand of its  officers,  or  attorney,  duly  authorized
    53  thereto  by  resolution  of  its board of directors, a certified copy of
    54  which resolution, under the seal of said company, shall  be  filed  with
    55  each  bond  or  undertaking. Any such bond or undertaking shall be filed
    56  with the clerk of the county in which the notice of lien is filed, and a

        A. 628                             10
 
     1  copy shall be served upon the adverse party. The undertaking  is  effec-
     2  tive  when so served and filed. If a certificate of qualification issued
     3  pursuant to subsections (b), (c) and (d) of  section  one  thousand  one
     4  hundred eleven of the insurance law is not filed with the undertaking, a
     5  party may except, to the sufficiency of a surety and by a written notice
     6  of  exception  served  upon  the  adverse  party  within  ten days after
     7  receipt, a copy of the undertaking. Exceptions deemed by  the  court  to
     8  have  been  taken  unnecessarily,  or  for  vexation or delay, may, upon
     9  notice, be set aside, with costs. Where  no  exception  to  sureties  is
    10  taken  within  ten  days  or  where  exceptions taken are set aside, the
    11  undertaking shall be allowed.
    12    b. In the case of bonds or undertakings not executed pursuant to para-
    13  graph a of this subdivision, the employer,  owner  or  contractor  shall
    14  execute  an  undertaking with two or more sufficient sureties, who shall
    15  be free holders, to the clerk of the county where the premises are situ-
    16  ated. The sureties must together justify in  at  least  double  the  sum
    17  named  in  the  undertaking. A copy of the undertaking, with notice that
    18  the sureties will justify before the court, or a judge or justice there-
    19  of, at the time and place therein mentioned, must  be  served  upon  the
    20  lienor  or  his attorney, not less than five days before such time. Upon
    21  the approval of the undertaking by the court, judge or justice an  order
    22  shall be made by such court, judge or justice discharging such lien.
    23    c.  If  the  lienor  cannot  be found, or does not appear by attorney,
    24  service under this subsection may be made by  leaving  a  copy  of  such
    25  undertaking  and  notice  at  the  lienor's  place of residence, or if a
    26  corporation at its principal place of business within the state as stat-
    27  ed in the notice of lien, with a person of suitable age  and  discretion
    28  therein,  or  if  the house of his abode or its place of business is not
    29  stated in said notice of lien and is not known, then in such  manner  as
    30  the  court  may direct. The premises, if any, described in the notice of
    31  lien as the lienor's residence or place of business shall be  deemed  to
    32  be  his said residence or its place of business for the purposes of said
    33  service at the time thereof, unless it is shown affirmatively  that  the
    34  person  servicing  the  papers or directing the service had knowledge to
    35  the contrary. Notwithstanding the other provisions of  this  subdivision
    36  relating  to service of notice, in any case where the mailing address of
    37  the lienor is outside the state such service may be made  by  registered
    38  or certified mail, return receipt requested, to such lienor at the mail-
    39  ing address contained in the notice of lien.
    40    d. Except as otherwise provided in this subdivision, the provisions of
    41  article  twenty-five  of  the  civil  practice  law and rules regulating
    42  undertakings is applicable to  a  bond  or  undertaking  given  for  the
    43  discharge  of a lien on account of private improvements or of an employ-
    44  ee's lien.
    45    § 13. Section 24 of the lien law, as amended by  chapter  515  of  the
    46  laws of 1929, is amended to read as follows:
    47    §  24.  Enforcement  of  [mechanic's]  lien.  (1)  Real  property. The
    48  [mechanics'] liens on real property specified in  this  article  may  be
    49  enforced  against the property specified in the notice of lien and which
    50  is subject thereto and against any person liable for the debt upon which
    51  the lien is founded, as prescribed in article three of this chapter.
    52    (2) Personal property. An employee's lien on personal property  speci-
    53  fied  in  this  article may immediately be enforced against the property
    54  through a foreclosure as prescribed  in  article  nine  of  the  uniform
    55  commercial code, or upon judgment obtained by the employee, commissioner
    56  of  labor  or attorney general of the state of New York, may be enforced

        A. 628                             11
 
     1  in any manner available to the judgment  creditor  pursuant  to  article
     2  nine of the uniform commercial code or other applicable laws.
     3    §  14.  Section  26  of the lien law, as amended by chapter 373 of the
     4  laws of 1977, is amended to read as follows:
     5    § 26. Subordination of liens after agreement with owner.  In  case  an
     6  owner of real property shall execute to one or more persons, or a corpo-
     7  ration,  as trustee or trustees, a bond and mortgage or a note and mort-
     8  gage affecting such property in whole or in part, or  an  assignment  of
     9  the  moneys due or to become due under a contract for a building loan in
    10  relation to such property, and in case such mortgage, if any,  shall  be
    11  recorded  in  the  office  of the register of the county where such real
    12  property is situated, or if such county has  no  register  then  in  the
    13  office of the clerk of such county, and in case such assignment, if any,
    14  shall  be filed in the office of the clerk of the county where such real
    15  property is situated; and in  case  lienors  having  [mechanics']  liens
    16  against  said  real property, notices of which have been filed up to and
    17  not later than fifteen days after the recording of such mortgage or  the
    18  filing  of  such assignment, and which liens have not been discharged as
    19  in this article provided, shall, to the extent of  at  least  fifty-five
    20  per  centum of the aggregate amount for which such notices of liens have
    21  been so filed, approve such bond and mortgage or such note and mortgage,
    22  if any, and such assignment, if any, by an instrument or instruments  in
    23  writing, duly acknowledged and filed in the office of such county clerk,
    24  then  all  mechanics'  liens  for  labor performed or material furnished
    25  prior to the recording of such mortgage or filing  of  such  assignment,
    26  whether  notices  thereof  have been theretofore or are thereafter filed
    27  and which have not been discharged as in this article provided, shall be
    28  subordinate to the lien of such trust bond and mortgage  or  such  trust
    29  note  and  mortgage to the extent of the aggregate amount of all certif-
    30  icates of interest therein issued by such trustee or trustees, or  their
    31  successors,  for moneys loaned, materials furnished, labor performed and
    32  any other indebtedness incurred after said  trust  mortgage  shall  have
    33  been  recorded, and for expenses in connection with said trust mortgage,
    34  and shall also be subordinate to the lien of the bond  and  mortgage  or
    35  note  and  mortgage,  given  to  secure the amount agreed to be advanced
    36  under such contract for a building loan to  the  extent  of  the  amount
    37  which  shall be advanced by the holder of such bond and mortgage or such
    38  note and mortgage to the trustee or trustees, or their successors, under
    39  such assignment. The provisions of this section shall apply to all bonds
    40  and mortgages and notes and mortgages and all assignments of moneys due,
    41  or to become due under building loan contracts executed by  such  owner,
    42  in like manner, and recorded or filed, from time to time as hereinbefore
    43  provided.  In  case of an assignment to trustees under the provisions of
    44  this section, the trustees and their successors shall be the  agents  of
    45  the assignor to receive and receipt for any and all sums advanced by the
    46  holder  of the building loan bond and mortgage or the building loan note
    47  and mortgage under the building loan contract and  such  assignment.  No
    48  lienor  shall  have  any priority over the bond and mortgage or note and
    49  mortgage given to secure the money agreed to be advanced under a  build-
    50  ing loan contract or over the advances made thereunder, by reason of any
    51  act preceding the making and approval of such assignment.
    52    §  15.  Section  38  of the lien law, as amended by chapter 859 of the
    53  laws of 1930, is amended to read as follows:
    54    § 38. Itemized statement may be required of lienor. A lienor  who  has
    55  filed  a  notice of mechanic's lien shall, on demand in writing, deliver
    56  to the owner or contractor making such demand  a  statement  in  writing

        A. 628                             12
 
     1  which  shall  set forth the items of labor and/or material and the value
     2  thereof which make up the amount for which he claims a lien,  and  which
     3  shall  also  set  forth the terms of the contract under which such items
     4  were  furnished.    The statement shall be verified by the lienor or his
     5  agent in the form required for the verification of  notices  in  section
     6  nine  of this [chapter] article. If the lienor shall fail to comply with
     7  such a demand within five days after the same shall have  been  made  by
     8  the  owner  or  contractor,  or  if  the lienor delivers an insufficient
     9  statement, the person aggrieved may petition the supreme court  of  this
    10  state  or  any  justice thereof, or the county court of the county where
    11  the premises are situated, or the county judge of  such  county  for  an
    12  order  directing  the  lienor  within  a  time specified in the order to
    13  deliver to the petitioner the statement required by  this  section.  Two
    14  days'  notice  in  writing  of such application shall be served upon the
    15  lienor. Such service shall be made in the manner provided by law for the
    16  personal service of a summons. The court or a justice or  judge  thereof
    17  shall  hear  the  parties  and  upon being satisfied that the lienor has
    18  failed, neglected or refused to comply with  the  requirements  of  this
    19  section  shall  have  an appropriate order directing such compliance. In
    20  case the lienor fails to comply with the order so made within  the  time
    21  specified,  then  upon  five  days'  notice to the lienor, served in the
    22  manner provided by law for the personal service of a summons, the  court
    23  or a justice or judge thereof may make an order cancelling the lien.
    24    §  16. Section 39 of the lien law, as added by chapter 859 of the laws
    25  of 1930, is amended to read as follows:
    26    § 39. Lien wilfully exaggerated is void. In any action  or  proceeding
    27  to  enforce  a [mechanic's] lien upon a private or public improvement or
    28  in which the validity of the lien is an issue, if the court  shall  find
    29  that  a lienor has wilfully exaggerated the amount for which he claims a
    30  lien as stated in his notice of lien, his lien shall be declared  to  be
    31  void  and  no recovery shall be had thereon. No such lienor shall have a
    32  right to file any other or further lien for the same claim. A second  or
    33  subsequent  lien  filed  in contravention of this section may be vacated
    34  upon application to the court on two days' notice.
    35    § 17. Section 40 of the lien law, as amended by  chapter  515  of  the
    36  laws of 1929, is amended to read as follows:
    37    §  40.  Construction  of  article.  This article is to be construed in
    38  connection with article two of this chapter,  and  provides  proceedings
    39  for  the  enforcement  of  employee's liens on real property, as well as
    40  liens for labor performed and materials furnished in the improvement  of
    41  real property, created by virtue of such article.
    42    §  18.  Section  41  of the lien law, as amended by chapter 807 of the
    43  laws of 1952, is amended to read as follows:
    44    § 41. Enforcement of mechanic's or employee's lien on real property. A
    45  mechanic's lien or employee's lien on  real  property  may  be  enforced
    46  against  such  property,  and  against a person liable for the debt upon
    47  which the lien is founded, by an action, by the lienor, his assignee  or
    48  legal  representative,  in the supreme court or in a county court other-
    49  wise having jurisdiction, regardless of the amount of such debt, or in a
    50  court which has jurisdiction in an action founded on a  contract  for  a
    51  sum of money equivalent to the amount of such debt.
    52    §  19.  Section  43  of the lien law, as amended by chapter 310 of the
    53  laws of 1962, is amended to read as follows:
    54    § 43. Action in a court  of  record;  consolidation  of  actions.  The
    55  provisions  of the real property actions and proceedings law relating to
    56  actions for the foreclosure of a mortgage upon real  property,  and  the

        A. 628                             13
 
     1  sale  and the distribution of the proceeds thereof apply to actions in a
     2  court of record, to enforce mechanics' liens  and  employees'  liens  on
     3  real  property, except as otherwise provided in this article. If actions
     4  are  brought  by  different  lienors  in a court of record, the court in
     5  which the first action was brought, may, upon its own  motion,  or  upon
     6  the  application of any party in any of such actions, consolidate all of
     7  such actions.
     8    § 20. Section 46 of the lien law, as amended by  chapter  515  of  the
     9  laws of 1929, is amended to read as follows:
    10    §  46.  Action  in  a  court  not of record. If an action to enforce a
    11  mechanic's lien or employee's lien against real property is brought in a
    12  court not of record, it shall be commenced by the personal service  upon
    13  the  owner  of  a summons and complaint verified in the same manner as a
    14  complaint in an action in a court of  record.  The  complaint  must  set
    15  forth  substantially  the facts contained in the notice of lien, and the
    16  substance of the agreement under which the labor was  performed  or  the
    17  materials  were  furnished, or if the lien is based upon a wage claim as
    18  defined in section two of this chapter, the basis for such  wage  claim.
    19  The  form  and  contents of the summons shall be the same as provided by
    20  law for the commencement of an action upon a contract in such court. The
    21  summons must be returnable not less than twelve  nor  more  than  twenty
    22  days  after  the  date of the summons, or if service is made by publica-
    23  tion, after the day of the last publication of  the  summons.    Service
    24  must be made at least eight days before the return day.
    25    §  21.  Section  50  of the lien law, as amended by chapter 515 of the
    26  laws of 1929, is amended to read as follows:
    27    § 50. Execution. Execution may be issued upon a judgment  obtained  in
    28  an  action  to  enforce  a mechanic's lien or an employee's lien against
    29  real property in a court not of record, which shall direct  the  officer
    30  to  sell the title and interest of the owner in the premises, upon which
    31  the lien set forth in the complaint existed at the time  of  filing  the
    32  notice of lien.
    33    §  22.  Section  53  of the lien law, as amended by chapter 515 of the
    34  laws of 1929, is amended to read as follows:
    35    § 53. Costs and disbursements. If an action is brought  to  enforce  a
    36  mechanic's  lien  or an employee's lien against real property in a court
    37  of record, the costs and disbursements shall rest in the  discretion  of
    38  the  court,  and  may  be  awarded to the prevailing party. The judgment
    39  rendered in such an action shall include the amount of  such  costs  and
    40  specify  to whom and by whom the costs are to be paid. If such action is
    41  brought in a court not of record, they shall be the same as  allowed  in
    42  civil  actions  in  such  court.  The  expenses  incurred in serving the
    43  summons by publication may be added to the amount of costs  now  allowed
    44  in such court.
    45    §  23.  Section  59  of the lien law, as amended by chapter 515 of the
    46  laws of 1929, is amended to read as follows:
    47    § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
    48  deposit, by order of court. 1. A mechanic's lien  notice  of  which  has
    49  been filed on real property or a bond given to discharge the same may be
    50  vacated  and cancelled or a deposit made to discharge a lien pursuant to
    51  section twenty of this chapter may be returned, by an order of  a  court
    52  of  record. Before such order shall be granted, a notice shall be served
    53  upon the lienor, either personally or by leaving it as  his  last  known
    54  place  of  residence,  with a person of suitable age, with directions to
    55  deliver it to the lienor.  Such  notice  shall  require  the  lienor  to
    56  commence  an  action to enforce the lien, within a time specified in the

        A. 628                             14
 
     1  notice, not less than thirty days from the  time  of  service,  or  show
     2  cause at a special term of a court of record, or at a county court, in a
     3  county  in which the property is situated, at a time and place specified
     4  therein,  why  the  notice of lien filed or the bond given should not be
     5  vacated and cancelled, or the deposit returned,  as  the  case  may  be.
     6  Proof  of  such service and that the lienor has not commenced the action
     7  to foreclose such lien, as directed in the  notice,  shall  be  made  by
     8  affidavit, at the time of applying for such order.
     9    2.  An employee's lien notice of which has been filed on real property
    10  or a bond given to discharge the same may be vacated and cancelled or  a
    11  deposit  made  to  discharge  a  lien pursuant to section twenty of this
    12  chapter may be returned, by an order of a court of record.  Before  such
    13  order shall be granted, a notice shall be served upon the lienor, either
    14  personally  or  by  leaving  it  at his last known place of residence or
    15  attorney's place of business,  with  a  person  of  suitable  age,  with
    16  directions  to  deliver  it to the lienor. Such notice shall require the
    17  lienor to commence an action to enforce the  lien,  or  to  commence  an
    18  action  to  obtain  judgment  on  the wage claim upon which the lien was
    19  established, within a time specified in the notice, not less than ninety
    20  days from the time of service, or show cause at  a  special  term  of  a
    21  court of record, or at a county court, in a county in which the property
    22  is  situated,  at  a time and place specified therein, why the notice of
    23  lien filed or the bond given should not be vacated and cancelled, or the
    24  deposit returned, as the case may be. Proof of such service and that the
    25  lienor has not commenced the action to foreclose such lien or an  action
    26  to  obtain  judgment  on  the  wage claim upon which the lien was estab-
    27  lished, as directed in the notice, shall be made by  affidavit,  at  the
    28  time of applying for such order.
    29    §  24.  Section  62  of the lien law, as amended by chapter 697 of the
    30  laws of 1934, is amended to read as follows:
    31    § 62. Bringing in new parties. A lienor who has filed a notice of lien
    32  after the commencement of an action in a court of record to foreclose or
    33  enforce an employee's lien or a mechanic's lien against real property or
    34  a public improvement, may at any  time  up  to  and  including  the  day
    35  preceding  the  day on which the trial of such action is commenced, make
    36  application upon notice to the plaintiff or his attorney in such action,
    37  to be made a party therein. Upon good cause shown, the court must  order
    38  such lienor to be brought in by amendment. If the application is made by
    39  any  other  party  in  said action to make such lienor or other person a
    40  party, the court may in its  discretion  direct  such  lienor  or  other
    41  person  to  be  brought in by like amendment. The order to be entered on
    42  such application shall provide the time for and manner  of  serving  the
    43  pleading of such additional lienor or other person and shall direct that
    44  the  pleadings,  papers  and proceedings of the other several parties in
    45  such action, shall be deemed amended, so as not to require the making or
    46  serving of papers other than said order to  effectuate  such  amendment,
    47  and  shall  further  provide  that the allegations in the answer of such
    48  additional lienor or other person shall, for the purposes of the action,
    49  be deemed denied by the other parties therein. The action  shall  be  so
    50  conducted  by  the  court as not to cause substantially any delay in the
    51  trial thereof.   The bringing in of  such  additional  lienor  or  other
    52  person  shall  be  without  prejudice to the proceedings had, and if the
    53  action be on the calendar of the court, same shall retain its  place  on
    54  such  calendar  without the necessity of serving a new note of issue and
    55  new notices of trial.

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     1    § 25. Subdivision 3 of section 199-a of the labor law, as  amended  by
     2  chapter 564 of the laws of 2010, is amended to read as follows:
     3    3.  Each  employee  and  his or her authorized representative shall be
     4  notified in writing, of the termination of the  commissioner's  investi-
     5  gation of the employee's complaint and the result of such investigation,
     6  of  any  award  and collection of back wages and civil penalties, and of
     7  any intent to seek criminal penalties. In the event that criminal penal-
     8  ties are sought the employee and his or  her  authorized  representative
     9  shall be notified of the outcome of prosecution.
    10    §  26.  Subdivision  2  of section 663 of the labor law, as amended by
    11  chapter 564 of the laws of 2010, is amended to read as follows:
    12    2. By commissioner. On behalf of any employee paid less than the  wage
    13  to  which the employee is entitled under the provisions of this article,
    14  the commissioner may bring any legal action necessary, including  admin-
    15  istrative  action,  to  collect  such  claim,  and the employer shall be
    16  required to pay the full amount of the  underpayment,  plus  costs,  and
    17  unless the employer proves a good faith basis to believe that its under-
    18  payment  was  in compliance with the law, an additional amount as liqui-
    19  dated damages. Liquidated damages shall be calculated by the commission-
    20  er as  no  more  than  one  hundred  percent  of  the  total  amount  of
    21  underpayments found to be due the employee. In any action brought by the
    22  commissioner  in  a  court of competent jurisdiction, liquidated damages
    23  shall be calculated as an amount equal to one hundred percent of  under-
    24  payments  found  to  be  due  the  employee. Each employee or his or her
    25  authorized representative shall be notified in writing of the outcome of
    26  any legal action brought on  the  employee's  behalf  pursuant  to  this
    27  section.
    28    §  27.  Subdivision  5  of  section 6201 of the civil practice law and
    29  rules, as amended by chapter 860 of the laws of 1977 and  as  renumbered
    30  by  chapter  618 of the laws of 1992, is amended and a new subdivision 6
    31  is added to read as follows:
    32    5. the cause of action is based on a judgment, decree or  order  of  a
    33  court  of  the  United States or of any other court which is entitled to
    34  full faith and credit in this state, or on a  judgment  which  qualifies
    35  for  recognition  under the provisions of article 53[.] of this chapter;
    36  or
    37    6. the cause of action is based on wage claims.  "Wage  claims,"  when
    38  used in this chapter, shall include any claims of violations of articles
    39  five, six, and nineteen of the labor law, section two hundred fifteen of
    40  the labor law, and the related regulations or wage orders promulgated by
    41  the  commissioner  of  labor, including but not limited to any claims of
    42  unpaid, minimum, overtime, and spread-of-hours pay, unlawfully  retained
    43  gratuities,  unlawful  deductions from wages, unpaid commissions, unpaid
    44  benefits and wage supplements, and retaliation, and any claims  pursuant
    45  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    46  as  well  as the concomitant liquidated damages and penalties authorized
    47  pursuant to the labor law, the Fair Labor Standards Act, or any  employ-
    48  ment contract.
    49    §  28.  Section  6210 of the civil practice law and rules, as added by
    50  chapter 860 of the laws of 1977, is amended to read as follows:
    51    § 6210. Order of attachment on notice;  temporary  restraining  order;
    52  contents.  Upon a motion on notice for an order of attachment, the court
    53  may, without notice to the  defendant,  grant  a  temporary  restraining
    54  order  prohibiting  the transfer of assets by a garnishee as provided in
    55  subdivision (b) of section 6214. When attachment is sought  pursuant  to
    56  subdivision  six  of  section  6201,  and  if  the employer contests the

        A. 628                             16
 
     1  motion, the court shall hold a hearing  within  ten  days  of  when  the
     2  employer's  response  to  plaintiffs'  motion for attachment is due. The
     3  contents of the order of attachment granted  pursuant  to  this  section
     4  shall be as provided in subdivision (a) of section 6211.
     5    §  29.  Subdivision  (b) of section 6211 of the civil practice law and
     6  rules, as amended by chapter 566 of the laws of 1985, is amended to read
     7  as follows:
     8    (b) Confirmation of order. Except where  an  order  of  attachment  is
     9  granted  on  the  ground  specified in subdivision one or six of section
    10  6201, an order of attachment granted without notice shall  provide  that
    11  within  a period not to exceed five days after levy, the plaintiff shall
    12  move, on such notice as the court shall direct  to  the  defendant,  the
    13  garnishee, if any, and the sheriff, for an order confirming the order of
    14  attachment.  Where  an  order of attachment without notice is granted on
    15  the ground specified in subdivision one or  six  of  section  6201,  the
    16  court shall direct that the statement required by section 6219 be served
    17  within  five days, that a copy thereof be served upon the plaintiff, and
    18  the plaintiff shall move  within  ten  days  after  levy  for  an  order
    19  confirming  the  order  of attachment. If the plaintiff upon such motion
    20  shall show that the statement has not been served and that the plaintiff
    21  will be unable to satisfy the requirement of subdivision (b) of  section
    22  6223 until the statement has been served, the court may grant one exten-
    23  sion of the time to move for confirmation for a period not to exceed ten
    24  days. If plaintiff fails to make such motion within the required period,
    25  the  order  of  attachment and any levy thereunder shall have no further
    26  effect and shall be vacated upon motion. Upon the motion to confirm, the
    27  provisions of subdivision (b) of section 6223 shall apply. An  order  of
    28  attachment  granted  without notice may provide that the sheriff refrain
    29  from taking any property levied upon into his  actual  custody,  pending
    30  further order of the court.
    31    §  30. Subdivisions (b) and (e) of rule 6212 of the civil practice law
    32  and rules, subdivision (b) as separately amended by chapters 15 and  860
    33  of  the  laws of 1977 and subdivision (e) as added by chapter 860 of the
    34  laws of 1977, are amended to read as follows:
    35    (b) Undertaking. [On] 1. Except where an order of attachment is sought
    36  on the ground specified in subdivision six of section 6201, on a  motion
    37  for  an order of attachment, the plaintiff shall give an undertaking, in
    38  a total amount fixed by the  court,  but  not  less  than  five  hundred
    39  dollars,  a  specified part thereof conditioned that the plaintiff shall
    40  pay to the defendant all costs and damages, including reasonable  attor-
    41  ney's  fees,  which  may be sustained by reason of the attachment if the
    42  defendant recovers judgment or if it is finally decided that the  plain-
    43  tiff  was not entitled to an attachment of the defendant's property, and
    44  the balance conditioned that the plaintiff shall pay to the sheriff  all
    45  of his allowable fees.
    46    2.  On  a  motion  for  an  attachment  pursuant to subdivision six of
    47  section 6201, the court shall order that the plaintiff give an  accessi-
    48  ble undertaking of no more than five hundred dollars, or in the alterna-
    49  tive,  may waive the undertaking altogether. The attorney for the plain-
    50  tiff shall not be liable to the sheriff for such fees. The surety on the
    51  undertaking shall not be discharged except upon notice to the sheriff.
    52    (e) Damages. [The] Except where an order of attachment  is  sought  on
    53  the  ground  specified in subdivision six of section 6201, the plaintiff
    54  shall be liable to the defendant for all costs  and  damages,  including
    55  reasonable  attorney's  fees,  which  may  be sustained by reason of the
    56  attachment if the defendant recovers  judgment,  or  if  it  is  finally

        A. 628                             17
 
     1  decided  that  the  plaintiff  was  not entitled to an attachment of the
     2  defendant's property. Plaintiff's liability shall not be limited by  the
     3  amount of the undertaking.
     4    §  31. Section 6223 of the civil practice law and rules, as amended by
     5  chapter 860 of the laws of 1977, is amended to read as follows:
     6    § 6223. Vacating or modifying attachment.  (a)  Motion  to  vacate  or
     7  modify.    Prior to the application of property or debt to the satisfac-
     8  tion of a judgment, the defendant, the garnishee or any person having an
     9  interest in the property or debt may move, on notice to each  party  and
    10  the sheriff, for an order vacating or modifying the order of attachment.
    11  Upon  the motion, the court may give the plaintiff a reasonable opportu-
    12  nity to correct any defect. [If] Except as  provided  under  subdivision
    13  (b),  if,  after  the  defendant  has  appeared in the action, the court
    14  determines that the attachment is unnecessary to  the  security  of  the
    15  plaintiff, it shall vacate the order of attachment.  Such a motion shall
    16  not of itself constitute an appearance in the action.
    17    (b)  Burden  of  proof.  [Upon] Except where an order of attachment is
    18  granted pursuant to subdivision six of section 6201, upon  a  motion  to
    19  vacate  or  modify  an  order of attachment the plaintiff shall have the
    20  burden of establishing the grounds for  the  attachment,  the  need  for
    21  continuing  the  levy  and  the  probability that he will succeed on the
    22  merits. Upon a motion to vacate or modify an order of attachment granted
    23  pursuant to subdivision six of section 6201, the  defendant  shall  have
    24  the  burden  to  demonstrate  that  the attachment is unnecessary to the
    25  security of the plaintiff, in order to vacate or modify  the  attachment
    26  order.
    27    § 32. Paragraph (b) of section 624 of the business corporation law, as
    28  amended  by  chapter  449  of  the  laws  of 1997, is amended to read as
    29  follows:
    30    (b) Any person who shall have been a shareholder of record of a corpo-
    31  ration, or who is or shall have been a  laborer,  servant  or  employee,
    32  upon  at least five days' written demand shall have the right to examine
    33  in person or by agent or attorney,  during  usual  business  hours,  its
    34  minutes  of the proceedings of its shareholders and record of sharehold-
    35  ers and to make extracts therefrom for any purpose reasonably related to
    36  such person's interest as a shareholder, laborer, servant  or  employee.
    37  Holders  of  voting trust certificates representing shares of the corpo-
    38  ration shall be  regarded  as  shareholders  for  the  purpose  of  this
    39  section.    Any  such agent or attorney shall be authorized in a writing
    40  that satisfies the requirements of a  writing  under  paragraph  (b)  of
    41  section  609  (Proxies).  A corporation requested to provide information
    42  pursuant to this paragraph shall  make  available  such  information  in
    43  written  form and in any other format in which such information is main-
    44  tained by the corporation and shall not  be  required  to  provide  such
    45  information  in  any  other  format.  If a request made pursuant to this
    46  paragraph includes a request to furnish information regarding beneficial
    47  owners, the corporation shall make available  such  information  in  its
    48  possession regarding beneficial owners as is provided to the corporation
    49  by  a registered broker or dealer or a bank, association or other entity
    50  that exercises fiduciary powers in connection  with  the  forwarding  of
    51  information  to  such  owners.  The corporation shall not be required to
    52  obtain information about beneficial owners not in its possession.
    53    § 33. Section 630 of the business corporation law,  paragraph  (a)  as
    54  amended  by  chapter  5 of the laws of 2016, paragraph (c) as amended by
    55  chapter 746 of the laws of 1963, is amended to read as follows:

        A. 628                             18

     1  § 630. Liability of shareholders for wages due to laborers, servants  or
     2           employees.
     3    (a) The  ten  largest shareholders, as determined by the fair value of
     4  their beneficial interest as of the beginning of the period during which
     5  the unpaid services referred to in this section are performed, of  every
     6  domestic  corporation  or  of  any  foreign corporation, when the unpaid
     7  services were performed in the state, no shares of which are listed on a
     8  national securities exchange or regularly quoted in an  over-the-counter
     9  market  by one or more members of a national or an affiliated securities
    10  association, shall jointly and severally be personally  liable  for  all
    11  debts,  wages or salaries due and owing to any of its laborers, servants
    12  or employees other than contractors, for services performed by them  for
    13  such corporation. [Before such laborer, servant or employee shall charge
    14  such  shareholder  for such services, he shall give notice in writing to
    15  such shareholder that he intends to hold him liable under this  section.
    16  Such  notice  shall  be  given  within one hundred and eighty days after
    17  termination of such services, except that if, within  such  period,  the
    18  laborer,  servant  or  employee  demands an examination of the record of
    19  shareholders under paragraph (b) of  section  624  (Books  and  records;
    20  right  of inspection, prima facie evidence) of this article, such notice
    21  may be given within sixty days after he has been given  the  opportunity
    22  to examine the record of shareholders. An action to enforce such liabil-
    23  ity  shall  be  commenced  within  ninety  days  after  the return of an
    24  execution unsatisfied against the corporation upon a judgment  recovered
    25  against  it  for  such services.] The provisions of this paragraph shall
    26  not apply to an investment company registered as such under  an  act  of
    27  congress entitled "Investment Company Act of 1940."
    28    (b) For the purposes of this section, wages or salaries shall mean all
    29  compensation  and  benefits payable by an employer to or for the account
    30  of the employee for personal services rendered by such employee  includ-
    31  ing  any concomitant liquidated damages, penalties, interest, attorney's
    32  fees or costs.  These shall specifically include but not be  limited  to
    33  salaries,  overtime,  vacation,  holiday  and  severance  pay;  employer
    34  contributions to or payments of insurance or welfare benefits;  employer
    35  contributions to pension or annuity funds; and any other moneys properly
    36  due or payable for services rendered by such employee.
    37    (c) A shareholder who has paid more than his pro rata share under this
    38  section shall be entitled to contribution pro rata from the other share-
    39  holders  liable  under  this section with respect to the excess so paid,
    40  over and above his pro rata share, and may sue them jointly or severally
    41  or any number of them to recover the amount due from them.  Such  recov-
    42  ery  may  be  had  in a separate action. As used in this paragraph, "pro
    43  rata" means in proportion to beneficial share interest. Before a  share-
    44  holder  may  claim contribution from other shareholders under this para-
    45  graph, he shall[, unless they have been given notice by a laborer, serv-
    46  ant or employee under paragraph (a),] give them notice in  writing  that
    47  he  intends to hold them so liable to him. Such notice shall be given by
    48  him within twenty days after the date that [notice was given to him  by]
    49  he became aware that a laborer, servant or employee may seek to hold him
    50  liable under paragraph (a).
    51    §  34. Subdivision (c) of section 609 of the limited liability company
    52  law, as added by chapter 537 of the laws of 2014, is amended to read  as
    53  follows:
    54    (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
    55  section, the ten members with the largest percentage ownership interest,
    56  as  determined as of the beginning of the period during which the unpaid

        A. 628                             19

     1  services referred to in this section are  performed,  of  every  limited
     2  liability  company, shall jointly and severally be personally liable for
     3  all debts, wages or salaries due and owing to any of its laborers, serv-
     4  ants  or  employees,  for  services  performed  by them for such limited
     5  liability company. [Before  such  laborer,  servant  or  employee  shall
     6  charge  such  member  for  such services, he or she shall give notice in
     7  writing to such member that he or she intends to hold such member liable
     8  under this section. Such notice shall be given within one hundred eighty
     9  days after termination of such  services.  An  action  to  enforce  such
    10  liability  shall  be commenced within ninety days after the return of an
    11  execution unsatisfied against the limited liability company upon a judg-
    12  ment recovered against it for such services.] A member who has paid more
    13  than his or her pro rata share under this section shall be  entitled  to
    14  contribution  pro  rata from the other members liable under this section
    15  with respect to the excess so paid, over and above his or her  pro  rata
    16  share,  and  may  sue them jointly or severally or any number of them to
    17  recover the amount due from them. Such recovery may be had in a separate
    18  action. As used in this subdivision, "pro rata" means in  proportion  to
    19  percentage  ownership  interest.  Before a member may claim contribution
    20  from other members under this section, he or she shall give them  notice
    21  in writing that he or she intends to hold them so liable to him or her.
    22    §  35. Section 1102 of the limited liability company law is amended by
    23  adding a new subdivision (e) to read as follows:
    24    (e) Any person who is or shall have been a laborer, servant or employ-
    25  ee of a limited liability company, upon  at  least  five  days'  written
    26  demand  shall  have the right to examine in person or by agent or attor-
    27  ney, during usual business hours, records described in paragraph two  of
    28  subdivision  (a)  of  this  section throughout the period of time during
    29  which such laborer, servant or employee provided services to such compa-
    30  ny. A company requested to provide information pursuant  to  this  para-
    31  graph shall make available such records in written form and in any other
    32  format  in which such information is maintained by the company and shall
    33  not be required to provide such information in any other format.    Upon
    34  refusal  by  the  company  or  by  an officer or agent of the company to
    35  permit an inspection of the records described  in  this  paragraph,  the
    36  person  making  the demand for inspection may apply to the supreme court
    37  in the judicial district where the office of  the  company  is  located,
    38  upon  such  notice  as  the court may direct, for an order directing the
    39  company, its members or managers to show cause why an order  should  not
    40  be granted permitting such inspection by the applicant.  Upon the return
    41  day of the order to show cause, the court shall hear the parties summar-
    42  ily,  by affidavit or otherwise, and if it appears that the applicant is
    43  qualified and entitled to such inspection,  the  court  shall  grant  an
    44  order  compelling such inspection and awarding such further relief as to
    45  the court may seem just and proper. If the  applicant  is  found  to  be
    46  qualified  and  entitled  to  such inspection, the company shall pay all
    47  reasonable attorney's fees and costs of said applicant  related  to  the
    48  demand for inspection of the records.
    49    §  36.  This act shall take effect on the thirtieth day after it shall
    50  have become a law. The procedures and rights created in this act may  be
    51  used  by  employees,  laborers or servants in connection with claims for
    52  liabilities that arose prior to the effective date.
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