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S02844 Summary:

S02844 Actions:

S02844 Committee Votes:

S02844 Floor Votes:

S02844 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2844--B
            Cal. No. 492
 
                               2019-2020 Regular Sessions
 
                    IN SENATE
 
                                    January 29, 2019
                                       ___________
 
        Introduced by Sens. RAMOS, BAILEY, BIAGGI, GIANARIS, GOUNARDES, JACKSON,
          KRUEGER,  RIVERA, SALAZAR, SANDERS, STAVISKY -- read twice and ordered
          printed, and when printed to be committed to the Committee on  Judici-
          ary  --  reported  favorably from said committee, ordered to first and
          second report,  ordered  to  a  third  reading,  amended  and  ordered
          reprinted,  retaining its place in the order of third reading -- again
          amended and ordered reprinted, retaining its place  in  the  order  of
          third reading
 
        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, except that the
    11  term "employer" shall not include a governmental agency.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00946-05-9
        S. 2844--B                          2
 
     1    23. Wage claim. The term "wage claim",  when  used  in  this  chapter,
     2  means  a claim that an employee has suffered a violation of sections one
     3  hundred seventy, one hundred ninety-three, one hundred ninety-six-d, six
     4  hundred fifty-two or six hundred seventy-three of the labor law  or  the
     5  related  regulations  and wage orders promulgated by the commissioner, a
     6  claim for wages due to an employee pursuant to  an  employment  contract
     7  that  were  unpaid  in  violation  of  that contract, or a claim that an
     8  employee has suffered a violation of 29 U.S.C. § 206 or 207.
     9    § 2. Section 3 of the lien law, as amended by chapter 137 of the  laws
    10  of 1985, is amended to read as follows:
    11    §  3.  Mechanic's  lien  and  employee's  lien  on [real] property. 1.
    12  Mechanic's lien.  A  contractor,  subcontractor,  laborer,  materialman,
    13  landscape gardener, nurseryman or person or corporation selling fruit or
    14  ornamental trees, roses, shrubbery, vines and small fruits, who performs
    15  labor  or  furnishes materials for the improvement of real property with
    16  the consent or at the request of the owner thereof,  or  of  his  agent,
    17  contractor  or  subcontractor,  and any trust fund to which benefits and
    18  wage supplements are due or payable for the benefit  of  such  laborers,
    19  shall  have  a lien for the principal and interest, of the value, or the
    20  agreed price, of such labor, including benefits and wage supplements due
    21  or payable for the benefit of any laborer, or materials  upon  the  real
    22  property  improved or to be improved and upon such improvement, from the
    23  time of filing a notice of such lien  as  prescribed  in  this  chapter.
    24  Where the contract for an improvement is made with a husband or wife and
    25  the property belongs to the other or both, the husband or wife contract-
    26  ing  shall  also  be  presumed to be the agent of the other, unless such
    27  other having knowledge of the improvement shall, within ten  days  after
    28  learning  of  the  contract give the contractor written notice of his or
    29  her refusal to consent to the improvement. Within  the  meaning  of  the
    30  provisions  of this chapter, materials actually manufactured for but not
    31  delivered to the real property, shall also be  deemed  to  be  materials
    32  furnished.
    33    2.  Employee's  lien. An employee who has a wage claim as that term is
    34  defined in subdivision twenty-three of section two of this chapter shall
    35  have a lien on his or her employer's interest in property for the  value
    36  of  that  employee's wage claim arising out of the employment, including
    37  liquidated damages pursuant to subdivision one-a of section one  hundred
    38  ninety-eight,  section  six  hundred  sixty-three or section six hundred
    39  eighty-one of the labor law, or 29 U.S.C. § 216 (b), from  the  time  of
    40  filing  a  notice of such lien as prescribed in this chapter. An employ-
    41  ee's lien based on a wage claim may be had against the employer's inter-
    42  est in real property and against the  employer's  interest  in  personal
    43  property  that  can  be  sufficiently  described  within  the meaning of
    44  section 9-108 of the uniform commercial code, except that an  employee's
    45  lien  shall  not  extend to deposit accounts or goods as those terms are
    46  defined in section 9-102 of the uniform commercial code.  The department
    47  of labor and the attorney general may obtain an employee's lien for  the
    48  value  of  wage  claims  of  the  employees who are the subject of their
    49  investigations, court actions or administrative agency actions.
    50    3. As used in this article and  unless  otherwise  specified,  a  lien
    51  shall mean an employee's lien or a mechanic's lien.
    52    §  3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision 1
    53  as amended by chapter 515 of the laws of 1929 and subdivision 2 as added
    54  by chapter 704 of the laws of 1985, are amended to read as follows:
    55    (1) [Such] A mechanic's or employee's lien and employee's lien against
    56  real property shall extend to the owner's right, title  or  interest  in
        S. 2844--B                          3
 
     1  the  real  property and improvements, existing at the time of filing the
     2  notice of lien, or thereafter acquired, except as  hereinafter  in  this
     3  article provided. If an owner assigns his interest in such real property
     4  by a general assignment for the benefit of creditors, within thirty days
     5  prior  to  such  filing,  the  lien  shall  extend  to the interest thus
     6  assigned. If any part of the real property subjected  to  such  lien  be
     7  removed  by  the  owner  or  by any other person, at any time before the
     8  discharge thereof, such removal shall  not  affect  the  rights  of  the
     9  lienor, either in respect to the remaining real property, or the part so
    10  removed.  If  labor  is  performed  for,  or  materials  furnished to, a
    11  contractor or subcontractor for  an  improvement,  the  mechanic's  lien
    12  shall  not  be  for  a sum greater than the sum earned and unpaid on the
    13  contract at the time of filing the notice of lien, and  any  sum  subse-
    14  quently  earned  thereon. In no case shall the owner be liable to pay by
    15  reason of all mechanic's liens created pursuant to this  article  a  sum
    16  greater  than  the  value  or  agreed  price  of the labor and materials
    17  remaining unpaid, at the time of filing notices of such liens, except as
    18  hereinafter provided.
    19    (2) [Such] A mechanic's or employee's lien shall  not  extend  to  the
    20  owner's  right,  title  or  interest  in real property and improvements,
    21  existing at the time of filing the notice of lien if  such  lien  arises
    22  from the failure of a lessee of the right to explore, develop or produce
    23  natural  gas or oil, to pay for, compensate or render value for improve-
    24  ments made with the consent or at  the  request  of  such  lessee  by  a
    25  contractor,  subcontractor,  materialman,  equipment  operator or owner,
    26  landscaper, nurseryman, or person or corporation who performs  labor  or
    27  furnishes  materials  for the exploration, development, or production of
    28  oil or natural gas or otherwise  improves  such  leased  property.  Such
    29  mechanic's  or employee's lien shall extend to the improvements made for
    30  the exploration, development and production of oil and natural gas,  and
    31  the  working  interest held by a lessee of the right to explore, develop
    32  or produce oil and natural gas.
    33    § 4. The opening paragraph of section 4-a of the lien law, as  amended
    34  by chapter 696 of the laws of 1959, is amended to read as follows:
    35    The  proceeds  of  any  insurance which by the terms of the policy are
    36  payable to the owner of real property improved, and actually received or
    37  to be received by him because of the destruction or removal by  fire  or
    38  other  casualty  of an improvement on which lienors have performed labor
    39  or services or for which they have furnished materials, or upon which an
    40  employee has established an employee's lien, shall after the  owner  has
    41  been  reimbursed  therefrom  for  premiums paid by him, if any, for such
    42  insurance, be subject to liens provided by this act to the  same  extent
    43  and  in  the same order of priority as the real property would have been
    44  had such improvement not been so destroyed or removed.
    45    § 5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as  amended
    46  by chapter 515 of the laws of 1929, are amended to read as follows:
    47    1.  The  name of the lienor, and either the residence of the lienor or
    48  the name and business address of the lienor's attorney, if any;  and  if
    49  the  lienor  is  a partnership or a corporation, the business address of
    50  such firm, or corporation, the names of partners and principal place  of
    51  business,  and if a foreign corporation, its principal place of business
    52  within the state.
    53    2. The name of the owner of the [real] property against whose interest
    54  therein a lien is claimed, and the interest of the owner as far as known
    55  to the lienor.
        S. 2844--B                          4
 
     1    5. The amount unpaid to the lienor for such labor or materials, or the
     2  amount of the wage claim if a wage claim is the basis for  establishment
     3  of  the  lien,  the  items of the wage claim and the value thereof which
     4  make up the amount for which the lienor claims a lien.
     5    §  6. Subdivision 1 of section 10 of the lien law, as amended by chap-
     6  ter 367 of the laws of 2011, is amended to read as follows:
     7    1. (a) Notice of mechanic's lien may be filed at any time  during  the
     8  progress  of  the  work  and the furnishing of the materials, or, within
     9  eight months after the completion of the contract, or the final perform-
    10  ance of the work, or the final furnishing of the materials, dating  from
    11  the last item of work performed or materials furnished; provided, howev-
    12  er,  that  where the improvement is related to real property improved or
    13  to be improved with a single family dwelling, the notice  of  mechanic's
    14  lien  may  be  filed at any time during the progress of the work and the
    15  furnishing of the materials, or, within four months after the completion
    16  of the contract, or the final performance of  the  work,  or  the  final
    17  furnishing of the materials, dating from the last item of work performed
    18  or materials furnished; and provided further where the notice of mechan-
    19  ic's  lien  is for retainage, the notice of mechanic's lien may be filed
    20  within ninety days after the date the retainage was due to be  released;
    21  except  that  in  the case of a mechanic's lien by a real estate broker,
    22  the notice of mechanic's lien may be filed only after the performance of
    23  the brokerage services and execution of lease by both lessor and  lessee
    24  and  only  if  a  copy of the alleged written agreement of employment or
    25  compensation is annexed to the notice of lien, provided that  where  the
    26  payment  pursuant to the written agreement of employment or compensation
    27  is to be made in installments, then a notice of lien may be filed within
    28  eight months after the final payment is due, but in no event later  than
    29  a date five years after the first payment was made. For purposes of this
    30  section,  the term "single family dwelling" shall not include a dwelling
    31  unit which is a part of a subdivision that has been filed with a munici-
    32  pality in which the subdivision is located when at the time the lien  is
    33  filed,  such  property  in the subdivision is owned by the developer for
    34  purposes other  than  his  personal  residence.  For  purposes  of  this
    35  section,  "developer"  shall  mean  and  include any private individual,
    36  partnership, trust or corporation which improves two or more parcels  of
    37  real  property  with single family dwellings pursuant to a common scheme
    38  or plan. [The]
    39    (b) Notice of employee's lien may be filed at any time not later  than
    40  three  years following the end of the employment giving rise to the wage
    41  claim.
    42    (c) A notice of lien, other than for a lien on personal property, must
    43  be filed in the clerk's office of the county where the property is situ-
    44  ated. If such property is situated in two or more counties,  the  notice
    45  of  lien shall be filed in the office of the clerk of each of such coun-
    46  ties. The county clerk of each county shall provide and keep a  book  to
    47  be  called  the  "lien docket," which shall be suitably ruled in columns
    48  headed "owners," "lienors," "lienor's attorney,"  "property,"  "amount,"
    49  "time of filing," "proceedings had," in each of which he shall enter the
    50  particulars  of  the  notice, properly belonging therein. The date, hour
    51  and minute of the filing of each notice of lien shall be entered in  the
    52  proper  column.  Except  where the county clerk maintains a block index,
    53  the names of the owners shall be arranged in such book  in  alphabetical
    54  order.  The  validity of the lien and the right to file a notice thereof
    55  shall not be affected by the death of the owner  before  notice  of  the
    56  lien is filed.  A notice of employee's lien on personal property must be
        S. 2844--B                          5
 
     1  filed,  together with a financing statement, in the filing office as set
     2  forth in section 9-501 of the uniform commercial code.
     3    § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
     4  of 1996, is amended to read as follows:
     5    §  11.  Service of copy of notice of lien.  1. Within five days before
     6  or thirty days after filing the notice of a mechanic's lien, the  lienor
     7  shall  serve  a copy of such notice upon the owner, if a natural person,
     8  (a) by delivering the same to him personally, or if the owner cannot  be
     9  found,  to his agent or attorney, or (b) by leaving it at his last known
    10  place of residence in the city or town in which  the  real  property  or
    11  some  part  thereof  is  situated,  with  a  person  of suitable age and
    12  discretion, or (c) by registered or certified mail addressed to his last
    13  known place of residence, or (d) if such owner has no such residence  in
    14  such  city or town, or cannot be found, and he has no agent or attorney,
    15  by affixing a copy thereof conspicuously on such property,  between  the
    16  hours of nine o'clock in the forenoon and four o'clock in the afternoon;
    17  if  the owner be a corporation, said service shall be made (i) by deliv-
    18  ering such copy to and leaving the same with the president,  vice-presi-
    19  dent, secretary or clerk to the corporation, the cashier, treasurer or a
    20  director  or  managing  agent  thereof, personally, within the state, or
    21  (ii) if such officer cannot be found within the state by affixing a copy
    22  thereof conspicuously on such property between the hours of nine o'clock
    23  in the forenoon and four o'clock in the afternoon, or  (iii)  by  regis-
    24  tered  or  certified mail addressed to its last known place of business.
    25  Failure to file proof of such a service with  the  county  clerk  within
    26  thirty-five  days  after the notice of lien is filed shall terminate the
    27  notice as a lien. Until service of the notice has been  made,  as  above
    28  provided, an owner, without knowledge of the lien, shall be protected in
    29  any  payment made in good faith to any contractor or other person claim-
    30  ing a lien.
    31    2. Within five days before or thirty days after filing the  notice  of
    32  an  employee's  lien,  the lienor shall serve a copy of such notice upon
    33  the employer, if a natural person, (a) by delivering  the  same  to  him
    34  personally,  or  if the employer cannot be found, to his agent or attor-
    35  ney, or (b) by leaving it as his last known place of residence or  busi-
    36  ness, with a person of suitable age and discretion, or (c) by registered
    37  or  certified  mail  addressed  to  his last known place of residence or
    38  business, or (d) if such employer owns real property, by affixing a copy
    39  thereof conspicuously on  such  property,  between  the  hours  of  nine
    40  o'clock  in  the  forenoon and four o'clock in the afternoon. The lienor
    41  also shall, within thirty days after filing  the  notice  of  employee's
    42  lien, affix a copy thereof conspicuously on the real property identified
    43  in  the  notice of employee's lien, between the hours of nine o'clock in
    44  the forenoon and four o'clock in the afternoon. If  the  employer  be  a
    45  corporation,  said  service shall be made (i) by delivering such copy to
    46  and leaving the same with the president,  vice-president,  secretary  or
    47  clerk to the corporation, the cashier, treasurer or a director or manag-
    48  ing agent thereof, personally, within the state, or (ii) if such officer
    49  cannot be found within the state by affixing a copy thereof conspicuous-
    50  ly  on  such  property between the hours of nine o'clock in the forenoon
    51  and four o'clock in the afternoon, or (iii) by registered  or  certified
    52  mail  addressed to its last known place of business, or (iv) by delivery
    53  to the secretary of the department  of  state  in  the  same  manner  as
    54  required  by  subparagraph one of paragraph (b) of section three hundred
    55  six of the business corporation law.  Failure to file proof  of  such  a
    56  service  with  the county clerk within thirty-five days after the notice
        S. 2844--B                          6
 
     1  of lien is filed shall terminate the notice as a lien. Until service  of
     2  the notice has been made, as above provided, an owner, without knowledge
     3  of the lien, shall be protected in any payment made in good faith to any
     4  other person claiming a lien.
     5    §  8.  Section  11-b of the lien law, as amended by chapter 147 of the
     6  laws of 1996, is amended to read as follows:
     7    § 11-b. Copy of notice of mechanic's lien to a contractor  or  subcon-
     8  tractor.    Within five days before or thirty days after filing a notice
     9  of mechanic's lien in accordance with section ten of this chapter or the
    10  filing of an amendment of notice of mechanic's lien in  accordance  with
    11  section twelve-a of this [chapter] article the lienor shall serve a copy
    12  of such notice or amendment by certified mail on the contractor, subcon-
    13  tractor, assignee or legal representative for whom he was employed or to
    14  whom  he furnished materials or if the lienor is a contractor or subcon-
    15  tractor to the person, firm or corporation with whom  the  contract  was
    16  made.  A  lienor having a direct contractual relationship with a subcon-
    17  tractor or a sub-subcontractor but not  with  a  contractor  shall  also
    18  serve  a  copy  of  such  notice  or  amendment by certified mail to the
    19  contractor. Failure to file proof of such  a  service  with  the  county
    20  clerk  within  thirty-five  days after the notice of lien is filed shall
    21  terminate the notice as a lien. Any lienor, or a person acting on behalf
    22  of a lienor, who fails to serve a copy of the notice of mechanic's  lien
    23  as  required  by  this section shall be liable for reasonable attorney's
    24  fees, costs and expenses,  as  determined  by  the  court,  incurred  in
    25  obtaining such copy.
    26    §  9.  Subdivision  1  of  section 12-a of the lien law, as amended by
    27  chapter 1048 of the laws of 1971, is amended to read as follows:
    28    1. Within sixty days after the original filing, a lienor may amend his
    29  lien upon twenty days notice to existing  lienors,  mortgagees  and  the
    30  owner,  provided  that  no action or proceeding to enforce or cancel the
    31  mechanics' lien or employee's lien has  been  brought  in  the  interim,
    32  where  the purpose of the amendment is to reduce the amount of the lien,
    33  except the question of wilful exaggeration shall survive such amendment.
    34    § 10. Subdivision 1 of section 13 of the lien law, as amended by chap-
    35  ter 878 of the laws of 1947, is amended to read as follows:
    36    (1) [A] An employee's lien, or a lien for materials furnished or labor
    37  performed in the improvement of real property, shall have priority  over
    38  a  conveyance,  mortgage,  judgment or other claim against such property
    39  not recorded, docketed or filed at the time of the filing of the  notice
    40  of  such  lien,  except  as  hereinafter  in this chapter provided; over
    41  advances made upon any mortgage or other encumbrance thereon after  such
    42  filing,  except  as  hereinafter  in this article provided; and over the
    43  claim of a creditor who has not furnished materials or  performed  labor
    44  upon such property, if such property has been assigned by the owner by a
    45  general  assignment  for  the  benefit  of creditors, within thirty days
    46  before the filing of either of such notices; and also over an attachment
    47  hereafter issued or a money judgment hereafter recovered upon  a  claim,
    48  which,  in  whole  or  in  part,  was not for materials furnished, labor
    49  performed or moneys advanced for the improvement of such real  property;
    50  and  over  any claim or lien acquired in any proceedings upon such judg-
    51  ment. Such liens shall also have priority  over  advances  made  upon  a
    52  contract  by an owner for an improvement of real property which contains
    53  an option to the contractor, his successor or assigns  to  purchase  the
    54  property, if such advances were made after the time when the labor began
    55  or  the first item of material was furnished, as stated in the notice of
    56  lien. If several buildings are demolished, erected, altered or repaired,
        S. 2844--B                          7
 
     1  or several pieces or parcels of real property are  improved,  under  one
     2  contract,  and  there  are  conflicting liens thereon, each lienor shall
     3  have priority upon the particular part of the real property or upon  the
     4  particular  building  or  premises  where  his labor is performed or his
     5  materials are used. Persons shall have no priority  on  account  of  the
     6  time of filing their respective notices of liens, but all liens shall be
     7  on  a  parity except as hereinafter in section fifty-six of this chapter
     8  provided; and except that in all cases  laborers  for  daily  or  weekly
     9  wages  with  a  mechanic's  lien, and employees with an employee's lien,
    10  shall have preference over all other claimants under this article.
    11    § 11. Section 17 of the lien law, as amended by  chapter  324  of  the
    12  laws of 2000, is amended to read as follows:
    13    §  17.  Duration  of lien. 1. (a) No mechanic's lien specified in this
    14  article shall be a lien for a longer period  than  one  year  after  the
    15  notice  of  lien  has  been  filed, unless within that time an action is
    16  commenced to foreclose the lien, and a notice of the  pendency  of  such
    17  action,  whether  in  a  court of record or in a court not of record, is
    18  filed with the county clerk of the county in which the notice of lien is
    19  filed, containing the names of the parties to the action, the object  of
    20  the  action,  a brief description of the real property affected thereby,
    21  and the time of filing the notice of lien; or  unless  an  extension  to
    22  such lien, except for a lien on real property improved or to be improved
    23  with  a  single  family  dwelling, is filed with the county clerk of the
    24  county in which the notice of lien is filed within  one  year  from  the
    25  filing  of  the  original  notice of lien, continuing such lien and such
    26  lien shall be redocketed as of the date of filing such  extension.  Such
    27  extension  shall  contain  the  names of the lienor and the owner of the
    28  real property against whose interest therein such  lien  is  claimed,  a
    29  brief description of the real property affected by such lien, the amount
    30  of  such  lien, and the date of filing the notice of lien. No lien shall
    31  be continued by such extension for more than one year  from  the  filing
    32  thereof.  In  the event an action is not commenced to foreclose the lien
    33  within such extended period, such lien shall be extinguished  unless  an
    34  order  be  granted  by  a court of record or a judge or justice thereof,
    35  continuing such lien, and such lien shall be redocketed as of  the  date
    36  of  granting such order and a statement made that such lien is continued
    37  by virtue of such order. A lien on  real  property  improved  or  to  be
    38  improved  with a single family dwelling may only be extended by an order
    39  of a court of record, or a judge or justice thereof. No  lien  shall  be
    40  continued by court order for more than one year from the granting there-
    41  of,  but  a  new  order  and entry may be made in each of two successive
    42  years. If a lienor is made a party defendant in  an  action  to  enforce
    43  another  lien, and the plaintiff or such defendant has filed a notice of
    44  the pendency of the action within the time prescribed in  this  section,
    45  the  lien  of  such defendant is thereby continued. Such action shall be
    46  deemed an action to enforce the lien of such defendant lienor. The fail-
    47  ure to file a notice of pendency of action shall not abate the action as
    48  to any person liable for the payment of the debt specified in the notice
    49  of lien, and the action may  be  prosecuted  to  judgment  against  such
    50  person.  The  provisions  of  this section in regard to continuing liens
    51  shall apply to liens discharged by deposit or by order on the filing  of
    52  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
    53  notice of pendency of action shall not be filed.
    54    (b) A lien, the duration of which has been extended by the filing of a
    55  notice of the pendency of an action as above provided,  shall  neverthe-
    56  less terminate as a lien after such notice has been canceled as provided
        S. 2844--B                          8
 
     1  in  section  sixty-five  hundred  fourteen of the civil practice law and
     2  rules or has ceased to be effective as constructive notice  as  provided
     3  in  section  sixty-five  hundred  thirteen of the civil practice law and
     4  rules.
     5    2. (a) No employee's lien on real property shall be a lien for a long-
     6  er  period than one year after the notice of lien has been filed, unless
     7  an extension to such lien is filed with the county clerk of  the  county
     8  in  which the notice of lien is filed within one year from the filing of
     9  the original notice of lien, continuing such lien and such lien shall be
    10  redocketed as of the date of filing such extension. Such extension shall
    11  contain the names of the lienor and  the  owner  of  the  real  property
    12  against whose interest therein such lien is claimed, a brief description
    13  of  the property affected by such lien, the amount of such lien, and the
    14  date of filing the notice of lien.  No lien shall be continued  by  such
    15  extension  for  more than one year from the filing thereof. In the event
    16  an action is not commenced to obtain judgment on the wage  claim  or  to
    17  foreclose the lien within such extended period, such lien shall be auto-
    18  matically  extinguished  unless an order be granted by a court of record
    19  or a judge or justice thereof, continuing such lien, and such lien shall
    20  be redocketed as of the date of granting such order and a statement made
    21  that such lien is continued by virtue of such order.
    22    (b) No employee's lien on personal property shall  be  a  lien  for  a
    23  longer  period  than  one  year  after  the financing statement has been
    24  recorded, unless an extension to such lien, is  filed  with  the  filing
    25  office in which the financing statement is required to be filed pursuant
    26  to section 9-501 of the uniform commercial code within one year from the
    27  filing  of  the original financing statement, continuing such lien. Such
    28  extension shall contain the names of the lienor and  the  owner  of  the
    29  property  against  whose  interest therein such lien is claimed, a brief
    30  description of the prior financing statement to  be  extended,  and  the
    31  date  of filing the prior financing statement.  No lien shall be contin-
    32  ued by such extension for more than one year from the filing thereof. In
    33  the event an action is not commenced to  obtain  judgment  on  the  wage
    34  claim  or  to  foreclose the lien within such extended period, such lien
    35  shall be automatically extinguished unless an  order  be  granted  by  a
    36  court of record or a judge or justice thereof, continuing such lien, and
    37  such  lien  shall be refiled as of the date of granting such order and a
    38  statement made that such lien is continued by virtue of such order.
    39    (c) If a lienor is made a party defendant  in  an  action  to  enforce
    40  another  lien, and the plaintiff or such defendant has filed a notice of
    41  the pendency of the action within the time prescribed in  this  section,
    42  the  lien  of  such defendant is thereby continued. Such action shall be
    43  deemed an action to enforce the lien of such defendant lienor. The fail-
    44  ure to file a notice of pendency of action shall not abate the action as
    45  to any person liable for the payment of the debt specified in the notice
    46  of lien, and the action may  be  prosecuted  to  judgment  against  such
    47  person.    The  provisions of this section in regard to continuing liens
    48  shall apply to liens discharged by deposit or by order on the filing  of
    49  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
    50  notice of pendency of action shall not be filed.
    51    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
    52  action or an action to obtain a judgment on the wage  claim  within  one
    53  year  from  the  filing  of  the  notice of lien on real property or the
    54  recording of the financing statement creating lien on personal property,
    55  the lien shall be extended during the pendency of the action and for one
    56  hundred twenty days following  the  entry  of  final  judgment  in  such
        S. 2844--B                          9
 
     1  action,  unless the action results in a final judgment or administrative
     2  order in the lienor's favor on the wage claims and the lienor  commences
     3  a  foreclosure  action, in which instance the lien shall be valid during
     4  the  pendency of the foreclosure action, provided, that the lien will be
     5  automatically extinguished if, after a dismissal with prejudice  of  the
     6  wage  claims  on which it is based, the lienor fails to file a notice of
     7  appeal within the prescribed period to file a notice of appeal.    If  a
     8  lien  is  extended  due  to  the  pendency of a foreclosure action or an
     9  action to obtain a judgment on the wage claim, the lienor shall  file  a
    10  notice of such pendency and extension with the county clerk of the coun-
    11  ty  in  which  the  notice of lien is filed, containing the names of the
    12  parties to the action, the object of the action, a brief description  of
    13  the  property  affected  thereby,  and  the time of filing the notice of
    14  lien, or in the case of a lien on  personal  property  shall  file  such
    15  notice  with the office authorized to accept financing statements pursu-
    16  ant to section 9-501 of the uniform commercial  code.  For  purposes  of
    17  this  section,  an action to obtain judgment on a wage claim includes an
    18  action brought in any court of competent jurisdiction, the submission of
    19  a complaint to the department of labor or the submission of a  claim  to
    20  arbitration  pursuant  to  an  arbitration  agreement.  An  action  also
    21  includes an investigation of wage claims by the commissioner of labor or
    22  the attorney general of the state of New  York,  regardless  of  whether
    23  such investigation was initiated by a complaint.
    24    (e) A lien, the duration of which has been extended by the filing of a
    25  notice  of  the pendency of an action as above provided, shall neverthe-
    26  less terminate as a lien after such notice has been canceled as provided
    27  in section sixty-five hundred fourteen of the  civil  practice  law  and
    28  rules  or  has ceased to be effective as constructive notice as provided
    29  in section sixty-five hundred thirteen of the  civil  practice  law  and
    30  rules.
    31    §  12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
    32  2 as amended by chapter 310 of the laws of 1962, subdivision 4 as  added
    33  by  chapter  582 of the laws of 2002 and paragraph a of subdivision 4 as
    34  further amended by section 104 of part A of chapter 62 of  the  laws  of
    35  2011, are amended to read as follows:
    36    (2)  By failure to begin an action to foreclose such lien or to secure
    37  an order continuing it, within one year from  the  time  of  filing  the
    38  notice  of lien, unless (i) an action be begun within the same period to
    39  foreclose a mortgage or another mechanic's lien upon the  same  property
    40  or  any  part  thereof  and a notice of pendency of such action is filed
    41  according to law, or (ii) an action is commenced to obtain a judgment on
    42  a wage claim pursuant to subdivision two of section  seventeen  of  this
    43  article,  but  a  lien,  the  duration of which has been extended by the
    44  filing of a notice of the pendency of  an  action  as  herein  provided,
    45  shall  nevertheless  terminate  as  a  lien  after  such notice has been
    46  cancelled or has ceased to be effective as constructive notice.
    47    (4) Either before or after the beginning of an action by the employer,
    48  owner or contractor executing a bond or undertaking in an  amount  equal
    49  to  one  hundred ten percent of such lien conditioned for the payment of
    50  any judgment which may be rendered against the property or employer  for
    51  the enforcement of the lien:
    52    a.  The  execution  of any such bond or undertaking by any fidelity or
    53  surety company authorized by the laws of this state  to  transact  busi-
    54  ness,  shall be sufficient; and where a certificate of qualification has
    55  been issued by  the  superintendent  of  financial  services  under  the
    56  provisions  of  section one thousand one hundred eleven of the insurance
        S. 2844--B                         10
 
     1  law, and has not been revoked, no justification or notice thereof  shall
     2  be  necessary. Any such company may execute any such bond or undertaking
     3  as surety by the hand of its  officers,  or  attorney,  duly  authorized
     4  thereto  by  resolution  of  its board of directors, a certified copy of
     5  which resolution, under the seal of said company, shall  be  filed  with
     6  each  bond  or  undertaking. Any such bond or undertaking shall be filed
     7  with the clerk of the county in which the notice of lien is filed, and a
     8  copy shall be served upon the adverse party. The undertaking  is  effec-
     9  tive  when so served and filed. If a certificate of qualification issued
    10  pursuant to subsections (b), (c) and (d) of  section  one  thousand  one
    11  hundred eleven of the insurance law is not filed with the undertaking, a
    12  party may except, to the sufficiency of a surety and by a written notice
    13  of  exception  served  upon  the  adverse  party  within  ten days after
    14  receipt, a copy of the undertaking. Exceptions deemed by  the  court  to
    15  have  been  taken  unnecessarily,  or  for  vexation or delay, may, upon
    16  notice, be set aside, with costs. Where  no  exception  to  sureties  is
    17  taken  within  ten  days  or  where  exceptions taken are set aside, the
    18  undertaking shall be allowed.
    19    b. In the case of bonds or undertakings not executed pursuant to para-
    20  graph a of this subdivision, the employer,  owner  or  contractor  shall
    21  execute  an  undertaking with two or more sufficient sureties, who shall
    22  be free holders, to the clerk of the county where the premises are situ-
    23  ated. The sureties must together justify in  at  least  double  the  sum
    24  named  in  the  undertaking. A copy of the undertaking, with notice that
    25  the sureties will justify before the court, or a judge or justice there-
    26  of, at the time and place therein mentioned, must  be  served  upon  the
    27  lienor  or  his attorney, not less than five days before such time. Upon
    28  the approval of the undertaking by the court, judge or justice an  order
    29  shall be made by such court, judge or justice discharging such lien.
    30    c.  If  the  lienor  cannot  be found, or does not appear by attorney,
    31  service under this subsection may be made by  leaving  a  copy  of  such
    32  undertaking  and  notice  at  the  lienor's  place of residence, or if a
    33  corporation at its principal place of business within the state as stat-
    34  ed in the notice of lien, with a person of suitable age  and  discretion
    35  therein,  or  if  the house of his abode or its place of business is not
    36  stated in said notice of lien and is not known, then in such  manner  as
    37  the  court  may direct. The premises, if any, described in the notice of
    38  lien as the lienor's residence or place of business shall be  deemed  to
    39  be  his said residence or its place of business for the purposes of said
    40  service at the time thereof, unless it is shown affirmatively  that  the
    41  person  servicing  the  papers or directing the service had knowledge to
    42  the contrary. Notwithstanding the other provisions of  this  subdivision
    43  relating  to service of notice, in any case where the mailing address of
    44  the lienor is outside the state such service may be made  by  registered
    45  or certified mail, return receipt requested, to such lienor at the mail-
    46  ing address contained in the notice of lien.
    47    d. Except as otherwise provided in this subdivision, the provisions of
    48  article  twenty-five  of  the  civil  practice  law and rules regulating
    49  undertakings is applicable to  a  bond  or  undertaking  given  for  the
    50  discharge  of a lien on account of private improvements or of an employ-
    51  ee's lien.
    52    § 13. Section 24 of the lien law, as amended by  chapter  515  of  the
    53  laws of 1929, is amended to read as follows:
    54    §  24.  Enforcement  of  [mechanic's]  lien.  (1)  Real  property. The
    55  [mechanics'] liens on real property specified in  this  article  may  be
    56  enforced  against the property specified in the notice of lien and which
        S. 2844--B                         11
 
     1  is subject thereto and against any person liable for the debt upon which
     2  the lien is founded, as prescribed in article three of this chapter.
     3    (2)  Personal property. An employee's lien on personal property speci-
     4  fied in this article may immediately be enforced  against  the  property
     5  through  a  foreclosure  as  prescribed  in  article nine of the uniform
     6  commercial code, or upon judgment obtained by the employee, commissioner
     7  of labor or attorney general of the state of New York, may  be  enforced
     8  in  any  manner  available  to the judgment creditor pursuant to article
     9  nine of the uniform commercial code or other applicable laws.
    10    § 14. Section 26 of the lien law, as amended by  chapter  373  of  the
    11  laws of 1977, is amended to read as follows:
    12    §  26.  Subordination  of liens after agreement with owner. In case an
    13  owner of real property shall execute to one or more persons, or a corpo-
    14  ration, as trustee or trustees, a bond and mortgage or a note and  mort-
    15  gage  affecting  such  property in whole or in part, or an assignment of
    16  the moneys due or to become due under a contract for a building loan  in
    17  relation  to  such property, and in case such mortgage, if any, shall be
    18  recorded in the office of the register of the  county  where  such  real
    19  property  is  situated,  or  if  such county has no register then in the
    20  office of the clerk of such county, and in case such assignment, if any,
    21  shall be filed in the office of the clerk of the county where such  real
    22  property  is  situated;  and  in  case lienors having [mechanics'] liens
    23  against said real property, notices of which have been filed up  to  and
    24  not  later than fifteen days after the recording of such mortgage or the
    25  filing of such assignment, and which liens have not been  discharged  as
    26  in  this  article  provided, shall, to the extent of at least fifty-five
    27  per centum of the aggregate amount for which such notices of liens  have
    28  been so filed, approve such bond and mortgage or such note and mortgage,
    29  if  any, and such assignment, if any, by an instrument or instruments in
    30  writing, duly acknowledged and filed in the office of such county clerk,
    31  then all mechanics' liens for  labor  performed  or  material  furnished
    32  prior  to  the  recording of such mortgage or filing of such assignment,
    33  whether notices thereof have been theretofore or  are  thereafter  filed
    34  and which have not been discharged as in this article provided, shall be
    35  subordinate  to  the  lien of such trust bond and mortgage or such trust
    36  note and mortgage to the extent of the aggregate amount of  all  certif-
    37  icates  of interest therein issued by such trustee or trustees, or their
    38  successors, for moneys loaned, materials furnished, labor performed  and
    39  any  other  indebtedness  incurred  after said trust mortgage shall have
    40  been recorded, and for expenses in connection with said trust  mortgage,
    41  and  shall  also  be subordinate to the lien of the bond and mortgage or
    42  note and mortgage, given to secure the  amount  agreed  to  be  advanced
    43  under  such  contract  for  a  building loan to the extent of the amount
    44  which shall be advanced by the holder of such bond and mortgage or  such
    45  note and mortgage to the trustee or trustees, or their successors, under
    46  such assignment. The provisions of this section shall apply to all bonds
    47  and mortgages and notes and mortgages and all assignments of moneys due,
    48  or  to  become due under building loan contracts executed by such owner,
    49  in like manner, and recorded or filed, from time to time as hereinbefore
    50  provided. In case of an assignment to trustees under the  provisions  of
    51  this  section,  the trustees and their successors shall be the agents of
    52  the assignor to receive and receipt for any and all sums advanced by the
    53  holder of the building loan bond and mortgage or the building loan  note
    54  and  mortgage  under  the building loan contract and such assignment. No
    55  lienor shall have any priority over the bond and mortgage  or  note  and
    56  mortgage  given to secure the money agreed to be advanced under a build-
        S. 2844--B                         12
 
     1  ing loan contract or over the advances made thereunder, by reason of any
     2  act preceding the making and approval of such assignment.
     3    §  15.  Section  38  of the lien law, as amended by chapter 859 of the
     4  laws of 1930, is amended to read as follows:
     5    § 38. Itemized statement may be required of lienor. A lienor  who  has
     6  filed  a  notice of mechanic's lien shall, on demand in writing, deliver
     7  to the owner or contractor making such demand  a  statement  in  writing
     8  which  shall  set forth the items of labor and/or material and the value
     9  thereof which make up the amount for which he claims a lien,  and  which
    10  shall  also  set  forth the terms of the contract under which such items
    11  were furnished.  The statement shall be verified by the  lienor  or  his
    12  agent  in  the  form required for the verification of notices in section
    13  nine of this [chapter] article. If the lienor shall fail to comply  with
    14  such  a  demand  within five days after the same shall have been made by
    15  the owner or contractor, or  if  the  lienor  delivers  an  insufficient
    16  statement,  the  person aggrieved may petition the supreme court of this
    17  state or any justice thereof, or the county court of  the  county  where
    18  the  premises  are  situated,  or the county judge of such county for an
    19  order directing the lienor within a  time  specified  in  the  order  to
    20  deliver  to  the  petitioner the statement required by this section. Two
    21  days' notice in writing of such application shall  be  served  upon  the
    22  lienor. Such service shall be made in the manner provided by law for the
    23  personal  service  of a summons. The court or a justice or judge thereof
    24  shall hear the parties and upon being  satisfied  that  the  lienor  has
    25  failed,  neglected  or  refused  to comply with the requirements of this
    26  section shall have an appropriate order directing  such  compliance.  In
    27  case  the  lienor fails to comply with the order so made within the time
    28  specified, then upon five days' notice to  the  lienor,  served  in  the
    29  manner  provided by law for the personal service of a summons, the court
    30  or a justice or judge thereof may make an order cancelling the lien.
    31    § 16. Section 39 of the lien law, as added by chapter 859 of the  laws
    32  of 1930, is amended to read as follows:
    33    §  39.  Lien wilfully exaggerated is void. In any action or proceeding
    34  to enforce a mechanic's lien upon a private or public improvement or  an
    35  employee's  lien,  or  in which the validity of the lien is an issue, if
    36  the court shall find that a lienor has wilfully exaggerated  the  amount
    37  for  which  he  claims  a lien as stated in his notice of lien, his lien
    38  shall be declared to be void and no recovery shall be  had  thereon.  No
    39  such lienor shall have a right to file any other or further lien for the
    40  same  claim.  A second or subsequent lien filed in contravention of this
    41  section may be vacated upon  application  to  the  court  on  two  days'
    42  notice.
    43    §  17.  Section  39-a  of the lien law, as added by chapter 859 of the
    44  laws of 1930, is amended to read as follows:
    45    § 39-a. Liability of lienor where  lien  has  been  declared  void  on
    46  account  of  wilful  exaggeration.  Where in any action or proceeding to
    47  enforce a mechanic's lien upon a private or  public  improvement  or  an
    48  employee's  lien  the  court shall have declared said lien to be void on
    49  account of wilful exaggeration the person filing  such  notice  of  lien
    50  shall be liable in damages to the owner or contractor. The damages which
    51  said owner or contractor shall be entitled to recover, shall include the
    52  amount  of  any  premium for a bond given to obtain the discharge of the
    53  lien or the interest on any money deposited for the purpose of discharg-
    54  ing the lien, reasonable attorney's fees for services  in  securing  the
    55  discharge  of  the  lien,  and,  in an action or proceeding to enforce a
    56  mechanic's lien, an amount equal to the difference by which  the  amount
        S. 2844--B                         13
 
     1  claimed  to  be  due  or  to  become due as stated in the notice of lien
     2  exceeded the amount actually due or to become due thereon.
     3    §  18.  Section  40  of the lien law, as amended by chapter 515 of the
     4  laws of 1929, is amended to read as follows:
     5    § 40. Construction of article. This article  is  to  be  construed  in
     6  connection  with  article  two of this chapter, and provides proceedings
     7  for the enforcement of employee's liens on real  property,  as  well  as
     8  liens  for labor performed and materials furnished in the improvement of
     9  real property, created by virtue of such article.
    10    § 19. Section 41 of the lien law, as amended by  chapter  807  of  the
    11  laws of 1952, is amended to read as follows:
    12    § 41. Enforcement of mechanic's or employee's lien on real property. A
    13  mechanic's  lien  or  employee's  lien  on real property may be enforced
    14  against such property, and against a person liable  for  the  debt  upon
    15  which  the lien is founded, by an action, by the lienor, his assignee or
    16  legal representative, in the supreme court or in a county  court  other-
    17  wise having jurisdiction, regardless of the amount of such debt, or in a
    18  court  which  has  jurisdiction in an action founded on a contract for a
    19  sum of money equivalent to the amount of such debt.
    20    § 20. Section 43 of the lien law, as amended by  chapter  310  of  the
    21  laws of 1962, is amended to read as follows:
    22    §  43.  Action  in  a  court  of record; consolidation of actions. The
    23  provisions of the real property actions and proceedings law relating  to
    24  actions  for  the  foreclosure of a mortgage upon real property, and the
    25  sale and the distribution of the proceeds thereof apply to actions in  a
    26  court  of  record,  to  enforce mechanics' liens and employees' liens on
    27  real property, except as otherwise provided in this article. If  actions
    28  are  brought  by  different  lienors  in a court of record, the court in
    29  which the first action was brought, may, upon its own  motion,  or  upon
    30  the  application of any party in any of such actions, consolidate all of
    31  such actions.
    32    § 21. Section 46 of the lien law, as amended by  chapter  515  of  the
    33  laws of 1929, is amended to read as follows:
    34    §  46.  Action  in  a  court  not of record. If an action to enforce a
    35  mechanic's lien or employee's lien against real property is brought in a
    36  court not of record, it shall be commenced by the personal service  upon
    37  the  owner  of  a summons and complaint verified in the same manner as a
    38  complaint in an action in a court of  record.  The  complaint  must  set
    39  forth  substantially  the facts contained in the notice of lien, and the
    40  substance of the agreement under which the labor was  performed  or  the
    41  materials  were  furnished, or if the lien is based upon a wage claim as
    42  defined in section two of this chapter, the basis for such  wage  claim.
    43  The  form  and  contents of the summons shall be the same as provided by
    44  law for the commencement of an action upon a contract in such court. The
    45  summons must be returnable not less than twelve  nor  more  than  twenty
    46  days  after  the  date of the summons, or if service is made by publica-
    47  tion, after the day of the last publication of  the  summons.    Service
    48  must be made at least eight days before the return day.
    49    §  22.  Section  50  of the lien law, as amended by chapter 515 of the
    50  laws of 1929, is amended to read as follows:
    51    § 50. Execution. Execution may be issued upon a judgment  obtained  in
    52  an  action  to  enforce  a mechanic's lien or an employee's lien against
    53  real property in a court not of record, which shall direct  the  officer
    54  to  sell the title and interest of the owner in the premises, upon which
    55  the lien set forth in the complaint existed at the time  of  filing  the
    56  notice of lien.
        S. 2844--B                         14
 
     1    §  23.  Section  53  of the lien law, as amended by chapter 515 of the
     2  laws of 1929, is amended to read as follows:
     3    §  53.  Costs  and disbursements. If an action is brought to enforce a
     4  mechanic's lien or an employee's lien against real property in  a  court
     5  of  record,  the costs and disbursements shall rest in the discretion of
     6  the court, and may be awarded to  the  prevailing  party.  The  judgment
     7  rendered  in  such  an action shall include the amount of such costs and
     8  specify to whom and by whom the costs are to be paid. If such action  is
     9  brought  in  a court not of record, they shall be the same as allowed in
    10  civil actions in such  court.  The  expenses  incurred  in  serving  the
    11  summons  by  publication may be added to the amount of costs now allowed
    12  in such court.
    13    § 24. Section 59 of the lien law, as amended by  chapter  515  of  the
    14  laws of 1929, is amended to read as follows:
    15    § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
    16  deposit,  by  order  of  court. 1. A mechanic's lien notice of which has
    17  been filed on real property or a bond given to discharge the same may be
    18  vacated and cancelled or a deposit made to discharge a lien pursuant  to
    19  section  twenty  of this chapter may be returned, by an order of a court
    20  of record. Before such order shall be granted, a notice shall be  served
    21  upon  the  lienor,  either personally or by leaving it as his last known
    22  place of residence, with a person of suitable age,  with  directions  to
    23  deliver  it  to  the  lienor.  Such  notice  shall require the lienor to
    24  commence an action to enforce the lien, within a time specified  in  the
    25  notice,  not  less  than  thirty  days from the time of service, or show
    26  cause at a special term of a court of record, or at a county court, in a
    27  county in which the property is situated, at a time and place  specified
    28  therein,  why  the  notice of lien filed or the bond given should not be
    29  vacated and cancelled, or the deposit returned,  as  the  case  may  be.
    30  Proof  of  such service and that the lienor has not commenced the action
    31  to foreclose such lien, as directed in the  notice,  shall  be  made  by
    32  affidavit, at the time of applying for such order.
    33    2.  An employee's lien notice of which has been filed on real property
    34  or a bond given to discharge the same may be vacated and cancelled or  a
    35  deposit  made  to  discharge  a  lien pursuant to section twenty of this
    36  chapter may be returned, by an order of a court of record.  Before  such
    37  order shall be granted, a notice shall be served upon the lienor, either
    38  personally  or  by  leaving  it  at his last known place of residence or
    39  attorney's place of business,  with  a  person  of  suitable  age,  with
    40  directions  to  deliver  it to the lienor. Such notice shall require the
    41  lienor to commence an action to enforce the  lien,  or  to  commence  an
    42  action  to  obtain  judgment  on  the wage claim upon which the lien was
    43  established, within a time specified in the notice, not less than thirty
    44  days from the time of service, or show cause at  a  special  term  of  a
    45  court of record, or at a county court, in a county in which the property
    46  is  situated,  at  a time and place specified therein, why the notice of
    47  lien filed or the bond given should not be vacated and cancelled, or the
    48  deposit returned, as the case may be. Proof of such service and that the
    49  lienor has not commenced the action to foreclose such lien or an  action
    50  to  obtain  judgment  on  the  wage claim upon which the lien was estab-
    51  lished, as directed in the notice, shall be made by  affidavit,  at  the
    52  time of applying for such order.
    53    §  25.  Section  62  of the lien law, as amended by chapter 697 of the
    54  laws of 1934, is amended to read as follows:
    55    § 62. Bringing in new parties. A lienor who has filed a notice of lien
    56  after the commencement of an action in a court of record to foreclose or
        S. 2844--B                         15

     1  enforce an employee's lien or a mechanic's lien against real property or
     2  a public improvement, may at any  time  up  to  and  including  the  day
     3  preceding  the  day on which the trial of such action is commenced, make
     4  application upon notice to the plaintiff or his attorney in such action,
     5  to  be made a party therein. Upon good cause shown, the court must order
     6  such lienor to be brought in by amendment. If the application is made by
     7  any other party in said action to make such lienor  or  other  person  a
     8  party,  the  court  may  in  its  discretion direct such lienor or other
     9  person to be brought in by like amendment. The order to  be  entered  on
    10  such  application  shall  provide the time for and manner of serving the
    11  pleading of such additional lienor or other person and shall direct that
    12  the pleadings, papers and proceedings of the other  several  parties  in
    13  such action, shall be deemed amended, so as not to require the making or
    14  serving  of  papers  other than said order to effectuate such amendment,
    15  and shall further provide that the allegations in  the  answer  of  such
    16  additional lienor or other person shall, for the purposes of the action,
    17  be  deemed  denied  by the other parties therein. The action shall be so
    18  conducted by the court as not to cause substantially any  delay  in  the
    19  trial  thereof.    The  bringing  in  of such additional lienor or other
    20  person shall be without prejudice to the proceedings  had,  and  if  the
    21  action  be  on the calendar of the court, same shall retain its place on
    22  such calendar without the necessity of serving a new note of  issue  and
    23  new notices of trial.
    24    §  26.  Subdivision 3 of section 199-a of the labor law, as amended by
    25  chapter 564 of the laws of 2010, is amended to read as follows:
    26    3. Each employee and his or her  authorized  representative  shall  be
    27  notified  in  writing, of the termination of the commissioner's investi-
    28  gation of the employee's complaint and the result of such investigation,
    29  of any award and collection of back wages and civil  penalties,  and  of
    30  any intent to seek criminal penalties. In the event that criminal penal-
    31  ties  are  sought  the employee and his or her authorized representative
    32  shall be notified of the outcome of prosecution.
    33    § 27. Subdivision 2 of section 663 of the labor  law,  as  amended  by
    34  chapter 564 of the laws of 2010, is amended to read as follows:
    35    2.  By commissioner. On behalf of any employee paid less than the wage
    36  to which the employee is entitled under the provisions of this  article,
    37  the  commissioner may bring any legal action necessary, including admin-
    38  istrative action, to collect such  claim,  and  the  employer  shall  be
    39  required  to  pay  the  full amount of the underpayment, plus costs, and
    40  unless the employer proves a good faith basis to believe that its under-
    41  payment was in compliance with the law, an additional amount  as  liqui-
    42  dated damages. Liquidated damages shall be calculated by the commission-
    43  er  as  no  more  than  one  hundred  percent  of  the  total  amount of
    44  underpayments found to be due the employee. In any action brought by the
    45  commissioner in a court of competent  jurisdiction,  liquidated  damages
    46  shall  be calculated as an amount equal to one hundred percent of under-
    47  payments found to be due the employee.  Each  employee  or  his  or  her
    48  authorized representative shall be notified in writing of the outcome of
    49  any  legal  action  brought  on  the  employee's behalf pursuant to this
    50  section.
    51    § 28. Subdivision 5 of section 6201 of  the  civil  practice  law  and
    52  rules,  as  amended by chapter 860 of the laws of 1977 and as renumbered
    53  by chapter 618 of the laws of 1992, is amended and a new  subdivision  6
    54  is added to read as follows:
    55    5.  the  cause  of action is based on a judgment, decree or order of a
    56  court of the United States or of any other court which  is  entitled  to
        S. 2844--B                         16
 
     1  full  faith  and  credit in this state, or on a judgment which qualifies
     2  for recognition under the provisions of article 53[.] of  this  chapter;
     3  or
     4    6.  the  cause  of action is based on wage claims. "Wage claims," when
     5  used in this chapter, shall include any claims of violations of articles
     6  five, six, and nineteen of the labor law, section two hundred fifteen of
     7  the labor law, and the related regulations or wage orders promulgated by
     8  the commissioner of labor, including but not limited to  any  claims  of
     9  unpaid,  minimum, overtime, and spread-of-hours pay, unlawfully retained
    10  gratuities, unlawful deductions from wages, unpaid  commissions,  unpaid
    11  benefits  and wage supplements, and retaliation, and any claims pursuant
    12  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    13  as well as the concomitant liquidated damages and  penalties  authorized
    14  pursuant  to the labor law, the Fair Labor Standards Act, or any employ-
    15  ment contract.
    16    § 29. Section 6210 of the civil practice law and rules,  as  added  by
    17  chapter 860 of the laws of 1977, is amended to read as follows:
    18    §  6210.  Order  of attachment on notice; temporary restraining order;
    19  contents. Upon a motion on notice for an order of attachment, the  court
    20  may,  without  notice  to  the  defendant, grant a temporary restraining
    21  order prohibiting the transfer of assets by a garnishee as  provided  in
    22  subdivision  (b)  of section 6214. When attachment is sought pursuant to
    23  subdivision six of section  6201,  and  if  the  employer  contests  the
    24  motion,  the  court  shall  hold  a  hearing within ten days of when the
    25  employer's response to plaintiffs' motion for  attachment  is  due.  The
    26  contents  of  the  order  of attachment granted pursuant to this section
    27  shall be as provided in subdivision (a) of section 6211.
    28    § 30. Subdivision (b) of section 6211 of the civil  practice  law  and
    29  rules, as amended by chapter 566 of the laws of 1985, is amended to read
    30  as follows:
    31    (b)  Confirmation  of  order.  Except  where an order of attachment is
    32  granted on the ground specified in subdivision one  or  six  of  section
    33  6201,  an  order of attachment granted without notice shall provide that
    34  within a period not to exceed five days after levy, the plaintiff  shall
    35  move,  on  such  notice  as the court shall direct to the defendant, the
    36  garnishee, if any, and the sheriff, for an order confirming the order of
    37  attachment. Where an order of attachment without notice  is  granted  on
    38  the  ground  specified  in  subdivision  one or six of section 6201, the
    39  court shall direct that the statement required by section 6219 be served
    40  within five days, that a copy thereof be served upon the plaintiff,  and
    41  the  plaintiff  shall  move  within  ten  days  after  levy for an order
    42  confirming the order of attachment. If the plaintiff  upon  such  motion
    43  shall show that the statement has not been served and that the plaintiff
    44  will  be unable to satisfy the requirement of subdivision (b) of section
    45  6223 until the statement has been served, the court may grant one exten-
    46  sion of the time to move for confirmation for a period not to exceed ten
    47  days. If plaintiff fails to make such motion within the required period,
    48  the order of attachment and any levy thereunder shall  have  no  further
    49  effect and shall be vacated upon motion. Upon the motion to confirm, the
    50  provisions  of  subdivision (b) of section 6223 shall apply. An order of
    51  attachment granted without notice may provide that the  sheriff  refrain
    52  from  taking  any  property levied upon into his actual custody, pending
    53  further order of the court.
    54    § 31. Subdivisions (b) and (e) of rule 6212 of the civil practice  law
    55  and  rules, subdivision (b) as separately amended by chapters 15 and 860
        S. 2844--B                         17
 
     1  of the laws of 1977 and subdivision (e) as added by chapter 860  of  the
     2  laws of 1977, are amended to read as follows:
     3    (b) Undertaking. [On] 1. Except where an order of attachment is sought
     4  on  the ground specified in subdivision six of section 6201, on a motion
     5  for an order of attachment, the plaintiff shall give an undertaking,  in
     6  a  total  amount  fixed  by  the  court,  but not less than five hundred
     7  dollars, a specified part thereof conditioned that the  plaintiff  shall
     8  pay  to the defendant all costs and damages, including reasonable attor-
     9  ney's fees, which may be sustained by reason of the  attachment  if  the
    10  defendant  recovers judgment or if it is finally decided that the plain-
    11  tiff was not entitled to an attachment of the defendant's property,  and
    12  the  balance conditioned that the plaintiff shall pay to the sheriff all
    13  of his allowable fees.
    14    2. On a motion for  an  attachment  pursuant  to  subdivision  six  of
    15  section  6201, the court shall order that the plaintiff give an accessi-
    16  ble undertaking of no more than five hundred dollars, or in the alterna-
    17  tive, may waive the undertaking altogether. The attorney for the  plain-
    18  tiff shall not be liable to the sheriff for such fees. The surety on the
    19  undertaking shall not be discharged except upon notice to the sheriff.
    20    (e)  Damages.  [The]  Except where an order of attachment is sought on
    21  the ground specified in subdivision six of section 6201,  the  plaintiff
    22  shall  be  liable  to the defendant for all costs and damages, including
    23  reasonable attorney's fees, which may be  sustained  by  reason  of  the
    24  attachment  if  the  defendant  recovers  judgment,  or if it is finally
    25  decided that the plaintiff was not entitled  to  an  attachment  of  the
    26  defendant's  property. Plaintiff's liability shall not be limited by the
    27  amount of the undertaking.
    28    § 32. Paragraph (b) of section 624 of the business corporation law, as
    29  amended by chapter 449 of the laws  of  1997,  is  amended  to  read  as
    30  follows:
    31    (b) Any person who shall have been a shareholder of record of a corpo-
    32  ration,  or  who  is  or shall have been a laborer, servant or employee,
    33  upon at least five days' written demand shall have the right to  examine
    34  in  person  or  by  agent  or attorney, during usual business hours, its
    35  minutes of the proceedings of its shareholders and record of  sharehold-
    36  ers and to make extracts therefrom for any purpose reasonably related to
    37  such  person's  interest as a shareholder, laborer, servant or employee,
    38  provided the purpose reasonably related to  a  person's  interest  as  a
    39  laborer,  servant  or  employee shall be to obtain the names, addresses,
    40  and value of shareholders' interests  in  the  corporation.  Holders  of
    41  voting  trust  certificates representing shares of the corporation shall
    42  be regarded as shareholders for the purpose of this section.   Any  such
    43  agent  or  attorney  shall be authorized in a writing that satisfies the
    44  requirements of a writing under paragraph (b) of section 609  (Proxies).
    45  A  corporation  requested  to provide information pursuant to this para-
    46  graph shall make available such information in written form and  in  any
    47  other  format in which such information is maintained by the corporation
    48  and shall not be required to  provide  such  information  in  any  other
    49  format.  If a request made pursuant to this paragraph includes a request
    50  to furnish information  regarding  beneficial  owners,  the  corporation
    51  shall  make available such information in its possession regarding bene-
    52  ficial owners as is provided to the corporation by a  registered  broker
    53  or  dealer or a bank, association or other entity that exercises fiduci-
    54  ary powers in connection with the  forwarding  of  information  to  such
    55  owners.  The  corporation  shall  not  be required to obtain information
    56  about beneficial owners not in its possession.
        S. 2844--B                         18
 
     1    § 33. Section 630 of the business corporation law,  paragraph  (a)  as
     2  amended  by  chapter  5 of the laws of 2016, paragraph (c) as amended by
     3  chapter 746 of the laws of 1963, is amended to read as follows:
     4  § 630. Liability  of shareholders for wages due to laborers, servants or
     5           employees.
     6    (a) The ten largest shareholders, as determined by the fair  value  of
     7  their beneficial interest as of the beginning of the period during which
     8  the  unpaid services referred to in this section are performed, of every
     9  domestic corporation or of any  foreign  corporation,  when  the  unpaid
    10  services were performed in the state, no shares of which are listed on a
    11  national  securities exchange or regularly quoted in an over-the-counter
    12  market by one or more members of a national or an affiliated  securities
    13  association,  shall  jointly  and severally be personally liable for all
    14  debts, wages or salaries due and owing to any of its laborers,  servants
    15  or  employees other than contractors, for services performed by them for
    16  such corporation. [Before such laborer, servant or employee shall charge
    17  such shareholder for such services, he shall give notice in  writing  to
    18  such  shareholder that he intends to hold him liable under this section.
    19  Such notice shall be given within one  hundred  and  eighty  days  after
    20  termination  of  such  services, except that if, within such period, the
    21  laborer, servant or employee demands an examination  of  the  record  of
    22  shareholders  under  paragraph  (b)  of  section 624 (Books and records;
    23  right of inspection, prima facie evidence) of this article, such  notice
    24  may  be  given within sixty days after he has been given the opportunity
    25  to examine the record of shareholders. An action to enforce such liabil-
    26  ity shall be commenced  within  ninety  days  after  the  return  of  an
    27  execution  unsatisfied against the corporation upon a judgment recovered
    28  against it for such services.] The provisions of  this  paragraph  shall
    29  not  apply  to  an investment company registered as such under an act of
    30  congress entitled "Investment Company Act of 1940."
    31    (b) For the purposes of this section, wages or salaries shall mean all
    32  compensation and benefits payable by an employer to or for  the  account
    33  of  the employee for personal services rendered by such employee includ-
    34  ing any concomitant liquidated damages, penalties, interest,  attorney's
    35  fees  or costs.   These shall specifically include but not be limited to
    36  salaries,  overtime,  vacation,  holiday  and  severance  pay;  employer
    37  contributions  to or payments of insurance or welfare benefits; employer
    38  contributions to pension or annuity funds; and any other moneys properly
    39  due or payable for services rendered by such employee.
    40    (c) A shareholder who has paid more than his pro rata share under this
    41  section shall be entitled to contribution pro rata from the other share-
    42  holders liable under this section with respect to the  excess  so  paid,
    43  over and above his pro rata share, and may sue them jointly or severally
    44  or  any number of them to recover the amount due from them.  Such recov-
    45  ery may be had in a separate action. As used  in  this  paragraph,  "pro
    46  rata"  means in proportion to beneficial share interest. Before a share-
    47  holder may claim contribution from other shareholders under  this  para-
    48  graph, he shall[, unless they have been given notice by a laborer, serv-
    49  ant  or  employee under paragraph (a),] give them notice in writing that
    50  he intends to hold them so liable to him. Such notice shall be given  by
    51  him  within twenty days after the date that [notice was given to him by]
    52  he became aware that a laborer, servant or employee may seek to hold him
    53  liable under paragraph (a).
    54    § 34. Subdivision (c) of section 609 of the limited liability  company
    55  law,  as added by chapter 537 of the laws of 2014, is amended to read as
    56  follows:
        S. 2844--B                         19
 
     1    (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
     2  section, the ten members with the largest percentage ownership interest,
     3  as determined as of the beginning of the period during which the  unpaid
     4  services  referred  to  in  this section are performed, of every limited
     5  liability  company, shall jointly and severally be personally liable for
     6  all debts, wages or salaries due and owing to any of its laborers, serv-
     7  ants or employees, for services  performed  by  them  for  such  limited
     8  liability  company.  [Before  such  laborer,  servant  or employee shall
     9  charge such member for such services, he or she  shall  give  notice  in
    10  writing to such member that he or she intends to hold such member liable
    11  under this section. Such notice shall be given within one hundred eighty
    12  days  after  termination  of  such  services.  An action to enforce such
    13  liability shall be commenced within ninety days after the return  of  an
    14  execution unsatisfied against the limited liability company upon a judg-
    15  ment recovered against it for such services.] A member who has paid more
    16  than  his  or her pro rata share under this section shall be entitled to
    17  contribution pro rata from the other members liable under  this  section
    18  with  respect  to the excess so paid, over and above his or her pro rata
    19  share, and may sue them jointly or severally or any number  of  them  to
    20  recover the amount due from them. Such recovery may be had in a separate
    21  action.  As  used in this subdivision, "pro rata" means in proportion to
    22  percentage ownership interest. Before a member  may  claim  contribution
    23  from  other members under this section, he or she shall give them notice
    24  in writing that he or she intends to hold them so liable to him or her.
    25    § 35. Section 1102 of the limited liability company law is amended  by
    26  adding a new subdivision (e) to read as follows:
    27    (e) Any person who is or shall have been a laborer, servant or employ-
    28  ee  of  a  limited  liability  company, upon at least five days' written
    29  demand shall have the right to examine in person or by agent  or  attor-
    30  ney,  during usual business hours, records described in paragraph two of
    31  subdivision (a) of this section throughout the  period  of  time  during
    32  which such laborer, servant or employee provided services to such compa-
    33  ny.  A  company  requested to provide information pursuant to this para-
    34  graph shall make available such records in written form and in any other
    35  format in which such information is maintained by the company and  shall
    36  not  be  required to provide such information in any other format.  Upon
    37  refusal by the company or by an officer  or  agent  of  the  company  to
    38  permit  an  inspection  of  the records described in this paragraph, the
    39  person making the demand for inspection may apply to the  supreme  court
    40  in  the  judicial  district  where the office of the company is located,
    41  upon such notice as the court may direct, for  an  order  directing  the
    42  company,  its  members or managers to show cause why an order should not
    43  be granted permitting such inspection by the applicant.  Upon the return
    44  day of the order to show cause, the court shall hear the parties summar-
    45  ily, by affidavit or otherwise, and if it appears that the applicant  is
    46  qualified  and  entitled  to  such  inspection, the court shall grant an
    47  order compelling such inspection and awarding such further relief as  to
    48  the  court  may  seem  just  and proper. If the applicant is found to be
    49  qualified and entitled to such inspection, the  company  shall  pay  all
    50  reasonable  attorney's  fees  and costs of said applicant related to the
    51  demand for inspection of the records.
    52    § 36. This act shall take effect on the thirtieth day after  it  shall
    53  have  become a law. The procedures and rights created in this act may be
    54  used by employees, laborers or servants in connection  with  claims  for
    55  liabilities that arose prior to the effective date.