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.
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.
A. 628 15
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.
