Bill Text: NY A00046 | 2023-2024 | General Assembly | Amended


Bill Title: 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.

Spectrum: Partisan Bill (Democrat 26-1)

Status: (Introduced) 2024-01-03 - referred to codes [A00046 Detail]

Download: New_York-2023-A00046-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          46--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                       (Prefiled)

                                     January 4, 2023
                                       ___________

        Introduced  by  M.  of  A.  L. ROSENTHAL,  AUBRY, TAYLOR, SIMON, SAYEGH,
          DINOWITZ, REYES, COLTON,  MAMDANI,  GONZALEZ-ROJAS,  RAMOS,  MITAYNES,
          FORREST,  OTIS,  EPSTEIN,  GLICK,  FALL,  SEPTIMO, GALLAGHER, BURDICK,
          SANTABARBARA, HEVESI, LUNSFORD, DE LOS SANTOS, SHRESTHA --  read  once
          and referred to the Committee on Judiciary -- reported and referred to
          the  Committee  on  Codes -- reported and referred to the Committee on
          Rules -- Rules Committee discharged, bill amended,  ordered  reprinted
          as amended and recommitted to the Committee on Rules

        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.
                                                                   LBD00720-03-3

        A. 46--A                            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 section 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  or  her
    17  agent, contractor or subcontractor, and any trust fund to which benefits
    18  and  wage  supplements are due or payable for the benefit of such labor-
    19  ers, shall have a lien for the principal and interest, of the value,  or
    20  the agreed price, of such labor, including benefits and wage supplements
    21  due  or  payable  for  the benefit of any laborer, or materials upon the
    22  real property improved or to be improved and upon such improvement, from
    23  the 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  or,
    35  in  the  case  of  an  employee  whose  wage claim originates from or is
    36  covered by a collective bargaining  agreement,  his  or  her  authorized
    37  bargaining  representative on behalf of such employee, shall have a lien
    38  on his or her employer's interest in property  for  the  value  of  that
    39  employee's  wage  claim  arising out of the employment, including liqui-
    40  dated damages pursuant to subdivision one-a of section one hundred nine-
    41  ty-eight, section six hundred sixty-three or section six hundred  eight-
    42  y-one  of the labor law, or 29 U.S.C. § 216 (b), from the time of filing
    43  a notice of such lien as prescribed in this chapter. An employee's  lien
    44  based on a wage claim may be had against the employer's interest in real
    45  property  and  against the employer's interest in personal property that
    46  can be sufficiently described within the meaning of section 9-108 of the
    47  uniform commercial code, except that an employee's lien shall not extend
    48  to deposit accounts or goods as those terms are defined in section 9-102
    49  of the uniform commercial code.  The department of labor and the  attor-
    50  ney  general  may obtain an employee's lien for the value of wage claims
    51  of the employees who are the  subject  of  their  investigations,  court
    52  actions or administrative agency actions.
    53    3.  As  used  in  this  article and unless otherwise specified, a lien
    54  shall mean an employee's lien or a mechanic's lien.

        A. 46--A                            3

     1    § 3. Subdivisions 1 and 2 of section 4 of the lien law, subdivision  1
     2  as amended by chapter 515 of the laws of 1929 and subdivision 2 as added
     3  by chapter 704 of the laws of 1985, are amended to read as follows:
     4    (1) [Such] A mechanic's or employee's lien and employee's lien against
     5  real  property  shall  extend to the owner's right, title or interest in
     6  the real property and improvements, existing at the time of  filing  the
     7  notice  of  lien,  or thereafter acquired, except as hereinafter in this
     8  article provided. If an owner assigns his or her interest in  such  real
     9  property  by  a  general assignment for the benefit of creditors, within
    10  thirty days prior to such filing, the lien shall extend to the  interest
    11  thus  assigned.  If any part of the real property subjected to such lien
    12  be removed by the owner or by any other person, at any time  before  the
    13  discharge  thereof,  such  removal  shall  not  affect the rights of the
    14  lienor, either in respect to the remaining real property, or the part so
    15  removed. If labor  is  performed  for,  or  materials  furnished  to,  a
    16  contractor  or  subcontractor  for  an  improvement, the mechanic's lien
    17  shall not be for a sum greater than the sum earned  and  unpaid  on  the
    18  contract  at  the  time of filing the notice of lien, and any sum subse-
    19  quently earned thereon. In no case shall the owner be liable to  pay  by
    20  reason  of  all  mechanic's liens created pursuant to this article a sum
    21  greater than the value or  agreed  price  of  the  labor  and  materials
    22  remaining unpaid, at the time of filing notices of such liens, except as
    23  hereinafter provided.
    24    (2)  [Such]  A  mechanic's  or employee's lien shall not extend to the
    25  owner's right, title or interest  in  real  property  and  improvements,
    26  existing  at  the  time of filing the notice of lien if such lien arises
    27  from the failure of a lessee of the right to explore, develop or produce
    28  natural gas or oil, to pay for, compensate or render value for  improve-
    29  ments  made  with  the  consent  or  at  the request of such lessee by a
    30  contractor, subcontractor, materialman,  equipment  operator  or  owner,
    31  landscaper,  nurseryman,  or person or corporation who performs labor or
    32  furnishes materials for the exploration, development, or  production  of
    33  oil  or  natural  gas  or  otherwise improves such leased property. Such
    34  mechanic's or employee's lien shall extend to the improvements made  for
    35  the  exploration, development and production of oil and natural gas, and
    36  the working interest held by a lessee of the right to  explore,  develop
    37  or produce oil and natural gas.
    38    §  4. The opening paragraph of section 4-a of the lien law, as amended
    39  by chapter 696 of the laws of 1959, is amended to read as follows:
    40    The proceeds of any insurance which by the terms  of  the  policy  are
    41  payable to the owner of real property improved, and actually received or
    42  to  be  received by him because of the destruction or removal by fire or
    43  other casualty of an improvement on which lienors have  performed  labor
    44  or services or for which they have furnished materials, or upon which an
    45  employee  has  established an employee's lien, shall after the owner has
    46  been reimbursed therefrom for premiums paid by him,  if  any,  for  such
    47  insurance,  be  subject to liens provided by this act to the same extent
    48  and in the same order of priority as the real property would  have  been
    49  had such improvement not been so destroyed or removed.
    50    §  5. Subdivisions 1, 2 and 5 of section 9 of the lien law, as amended
    51  by chapter 515 of the laws of 1929, are amended to read as follows:
    52    1. The name of the lienor, and either the residence of the  lienor  or
    53  the  name  and business address of the lienor's attorney, if any; and if
    54  the lienor is a partnership or a corporation, the  business  address  of
    55  such  firm, or corporation, the names of partners and principal place of

        A. 46--A                            4

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

        A. 46--A                            5

     1  entered in the proper column. Except where the county clerk maintains  a
     2  block  index,  the names of the owners shall be arranged in such book in
     3  alphabetical order. The validity of the lien and the  right  to  file  a
     4  notice  thereof  shall  not be affected by the death of the owner before
     5  notice of the lien is filed.  A notice of employee's  lien  on  personal
     6  property  must  be  filed,  together  with a financing statement, in the
     7  filing office as set forth in section 9-501 of  the  uniform  commercial
     8  code.
     9    § 7. Section 11 of the lien law, as amended by chapter 147 of the laws
    10  of 1996, is amended to read as follows:
    11    §  11.  Service of copy of notice of lien.  1. Within five days before
    12  or thirty days after filing the notice of a mechanic's lien, the  lienor
    13  shall  serve  a copy of such notice upon the owner, if a natural person,
    14  (a) by delivering the same to him or her personally,  or  if  the  owner
    15  cannot  be  found, to his or her agent or attorney, or (b) by leaving it
    16  at his or her last known place of residence in the city or town in which
    17  the real property or some part thereof is situated,  with  a  person  of
    18  suitable  age  and  discretion,  or  (c) by registered or certified mail
    19  addressed to his or her last known place of residence, or  (d)  if  such
    20  owner  has  no  such residence in such city or town, or cannot be found,
    21  and he or she has no agent or  attorney,  by  affixing  a  copy  thereof
    22  conspicuously on such property, between the hours of nine o'clock in the
    23  forenoon  and  four  o'clock  in the afternoon; if the owner be a corpo-
    24  ration, said service shall be made (i) by delivering such  copy  to  and
    25  leaving  the same with the president, vice-president, secretary or clerk
    26  to the corporation, the cashier, treasurer or  a  director  or  managing
    27  agent  thereof,  personally,  within  the state, or (ii) if such officer
    28  cannot be found within the state by affixing a copy thereof conspicuous-
    29  ly on such property between the hours of nine o'clock  in  the  forenoon
    30  and  four  o'clock in the afternoon, or (iii) by registered or certified
    31  mail addressed to its last known place  of  business.  Failure  to  file
    32  proof  of  such  a service with the county clerk within thirty-five days
    33  after the notice of lien is filed shall terminate the notice as a  lien.
    34  Until  service of the notice has been made, as above provided, an owner,
    35  without knowledge of the lien, shall be protected in any payment made in
    36  good faith to any contractor or other person claiming a lien.
    37    2. Within five days before or thirty days after filing the  notice  of
    38  an  employee's  lien,  the lienor shall serve a copy of such notice upon
    39  the employer, if a natural person, (a) by delivering the same to him  or
    40  her  personally, or if the employer cannot be found, to his or her agent
    41  or attorney, or (b) by leaving it as his or  her  last  known  place  of
    42  residence  or business, with a person of suitable age and discretion, or
    43  (c) by registered or certified mail addressed to his or her  last  known
    44  place  of residence or business, or (d) if such employer owns real prop-
    45  erty, by affixing a copy thereof conspicuously on such property, between
    46  the hours of nine o'clock in the forenoon and four o'clock in the after-
    47  noon. The lienor also shall, within thirty days after filing the  notice
    48  of employee's lien, affix a copy thereof conspicuously on the real prop-
    49  erty  identified  in the notice of employee's lien, between the hours of
    50  nine o'clock in the forenoon and four o'clock in the afternoon.  If  the
    51  employer  be a corporation, said service shall be made (i) by delivering
    52  such copy to and leaving the same with  the  president,  vice-president,
    53  secretary  or  clerk  to  the  corporation,  the cashier, treasurer or a
    54  director or managing agent thereof, personally,  within  the  state,  or
    55  (ii) if such officer cannot be found within the state by affixing a copy
    56  thereof conspicuously on such property between the hours of nine o'clock

        A. 46--A                            6

     1  in  the  forenoon  and four o'clock in the afternoon, or (iii) by regis-
     2  tered or certified mail addressed to its last known place  of  business,
     3  or  (iv)  by delivery to the secretary of the department of state in the
     4  same  manner as required by subparagraph one of paragraph (b) of section
     5  three hundred six of the business corporation  law.    Failure  to  file
     6  proof  of  such  a service with the county clerk within thirty-five days
     7  after the notice of lien is filed shall terminate the notice as a  lien.
     8  Until  service of the notice has been made, as above provided, an owner,
     9  without knowledge of the lien, shall be protected in any payment made in
    10  good faith to any other person claiming a lien.
    11    § 8. Section 11-b of the lien law, as amended by chapter  147  of  the
    12  laws of 1996, is amended to read as follows:
    13    §  11-b.  Copy of notice of mechanic's lien to a contractor or subcon-
    14  tractor.  Within five days before or thirty days after filing  a  notice
    15  of  mechanic's  lien  in  accordance  with section ten of this [chapter]
    16  article or the filing of an amendment of notice of  mechanic's  lien  in
    17  accordance  with  section  twelve-a of this [chapter] article the lienor
    18  shall serve a copy of such notice or amendment by certified mail on  the
    19  contractor,  subcontractor, assignee or legal representative for whom he
    20  or she was employed or to whom he or she furnished materials or  if  the
    21  lienor  is  a  contractor or subcontractor to the person, firm or corpo-
    22  ration with whom the  contract  was  made.  A  lienor  having  a  direct
    23  contractual relationship with a subcontractor or a sub-subcontractor but
    24  not  with  a contractor shall also serve a copy of such notice or amend-
    25  ment by certified mail to the contractor. Failure to file proof of  such
    26  a service with the county clerk within thirty-five days after the notice
    27  of  lien is filed shall terminate the notice as a lien. Any lienor, or a
    28  person acting on behalf of a lienor, who fails to serve a  copy  of  the
    29  notice  of  mechanic's  lien as required by this section shall be liable
    30  for reasonable attorney's fees, costs and expenses, as determined by the
    31  court, incurred in obtaining such copy.
    32    § 9. Subdivision 1 of section 12-a of the  lien  law,  as  amended  by
    33  chapter 1048 of the laws of 1971, is amended to read as follows:
    34    1. Within sixty days after the original filing, a lienor may amend his
    35  or  her lien upon twenty days notice to existing lienors, mortgagees and
    36  the owner, provided that no action or proceeding to  enforce  or  cancel
    37  the  mechanics' lien or employee's lien has been brought in the interim,
    38  where the purpose of the amendment is to reduce the amount of the  lien,
    39  except the question of wilful exaggeration shall survive such amendment.
    40    § 10. Subdivision 1 of section 13 of the lien law, as amended by chap-
    41  ter 878 of the laws of 1947, is amended to read as follows:
    42    (1) [A] An employee's lien, or a lien for materials furnished or labor
    43  performed  in the improvement of real property, shall have priority over
    44  a conveyance, mortgage, judgment or other claim  against  such  property
    45  not  recorded, docketed or filed at the time of the filing of the notice
    46  of such lien, except as  hereinafter  in  this  chapter  provided;  over
    47  advances  made upon any mortgage or other encumbrance thereon after such
    48  filing, except as hereinafter in this article  provided;  and  over  the
    49  claim  of  a creditor who has not furnished materials or performed labor
    50  upon such property, if such property has been assigned by the owner by a
    51  general assignment for the benefit  of  creditors,  within  thirty  days
    52  before the filing of either of such notices; and also over an attachment
    53  hereafter  issued  or a money judgment hereafter recovered upon a claim,
    54  which, in whole or in part,  was  not  for  materials  furnished,  labor
    55  performed  or moneys advanced for the improvement of such real property;
    56  and over any claim or lien acquired in any proceedings upon  such  judg-

        A. 46--A                            7

     1  ment.  Such  liens  shall  also  have priority over advances made upon a
     2  contract by an owner for an improvement of real property which  contains
     3  an option to the contractor, his or her successor or assigns to purchase
     4  the  property,  if such advances were made after the time when the labor
     5  began or the first item of material was  furnished,  as  stated  in  the
     6  notice of lien. If several buildings are demolished, erected, altered or
     7  repaired,  or  several  pieces or parcels of real property are improved,
     8  under one contract, and there are conflicting liens thereon, each lienor
     9  shall have priority upon the particular part of  the  real  property  or
    10  upon  the  particular  building  or  premises  where his or her labor is
    11  performed or his or her materials are used. Persons shall have no prior-
    12  ity on account of the time of filing their respective notices of  liens,
    13  but  all  liens  shall  be  on a parity except as hereinafter in section
    14  fifty-six of this chapter provided; and except that in all cases  labor-
    15  ers for daily or weekly wages with a mechanic's lien, and employees with
    16  an employee's lien, shall have preference over all other claimants under
    17  this article.
    18    §  11.  Section  17  of the lien law, as amended by chapter 324 of the
    19  laws of 2000, is amended to read as follows:
    20    § 17. Duration of lien. 1. (a) No mechanic's lien  specified  in  this
    21  article  shall  be  a  lien  for a longer period than one year after the
    22  notice of lien has been filed, unless within  that  time  an  action  is
    23  commenced  to  foreclose  the lien, and a notice of the pendency of such
    24  action, whether in a court of record or in a court  not  of  record,  is
    25  filed with the county clerk of the county in which the notice of lien is
    26  filed,  containing the names of the parties to the action, the object of
    27  the action, a brief description of the real property  affected  thereby,
    28  and  the  time  of  filing the notice of lien; or unless an extension to
    29  such lien, except for a lien on real property improved or to be improved
    30  with a single family dwelling, is filed with the  county  clerk  of  the
    31  county  in  which  the  notice of lien is filed within one year from the
    32  filing of the original notice of lien, continuing  such  lien  and  such
    33  lien  shall  be redocketed as of the date of filing such extension. Such
    34  extension shall contain the names of the lienor and  the  owner  of  the
    35  real  property  against  whose  interest therein such lien is claimed, a
    36  brief description of the real property affected by such lien, the amount
    37  of such lien, and the date of filing the notice of lien. No  lien  shall
    38  be  continued  by  such extension for more than one year from the filing
    39  thereof. In the event an action is not commenced to foreclose  the  lien
    40  within  such  extended period, such lien shall be extinguished unless an
    41  order be granted by a court of record or a  judge  or  justice  thereof,
    42  continuing  such  lien, and such lien shall be redocketed as of the date
    43  of granting such order and a statement made that such lien is  continued
    44  by  virtue  of  such  order.  A  lien on real property improved or to be
    45  improved with a single family dwelling may only be extended by an  order
    46  of  a  court  of record, or a judge or justice thereof. No lien shall be
    47  continued by court order for more than one year from the granting there-
    48  of, but a new order and entry may be made  in  each  of  two  successive
    49  years.  If  a  lienor  is made a party defendant in an action to enforce
    50  another lien, and the plaintiff or such defendant has filed a notice  of
    51  the  pendency  of the action within the time prescribed in this section,
    52  the lien of such defendant is thereby continued. Such  action  shall  be
    53  deemed an action to enforce the lien of such defendant lienor. The fail-
    54  ure to file a notice of pendency of action shall not abate the action as
    55  to any person liable for the payment of the debt specified in the notice
    56  of  lien,  and  the  action  may  be prosecuted to judgment against such

        A. 46--A                            8

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

        A. 46--A                            9

     1  an  undertaking.  Where  a  lien is discharged by deposit or by order, a
     2  notice of pendency of action shall not be filed.
     3    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
     4  action  or  an  action to obtain a judgment on the wage claim within one
     5  year from the filing of the notice of  lien  on  real  property  or  the
     6  recording of the financing statement creating lien on personal property,
     7  the lien shall be extended during the pendency of the action and for one
     8  hundred  twenty  days  following  the  entry  of  final judgment in such
     9  action, unless the action results in a final judgment or  administrative
    10  order  in the lienor's favor on the wage claims and the lienor commences
    11  a foreclosure action, in which instance the lien shall be  valid  during
    12  the  pendency of the foreclosure action, provided, that the lien will be
    13  automatically extinguished if, after a dismissal with prejudice  of  the
    14  wage  claims  on which it is based, the lienor fails to file a notice of
    15  appeal within the prescribed period to file a notice of appeal.    If  a
    16  lien  is  extended  due  to  the  pendency of a foreclosure action or an
    17  action to obtain a judgment on the wage claim, the lienor shall  file  a
    18  notice of such pendency and extension with the county clerk of the coun-
    19  ty  in  which  the  notice of lien is filed, containing the names of the
    20  parties to the action, the object of the action, a brief description  of
    21  the  property  affected  thereby,  and  the time of filing the notice of
    22  lien, or in the case of a lien on  personal  property  shall  file  such
    23  notice  with the office authorized to accept financing statements pursu-
    24  ant to section 9-501 of the uniform commercial  code.  For  purposes  of
    25  this  section,  an action to obtain judgment on a wage claim includes an
    26  action brought in any court of competent jurisdiction, the submission of
    27  a complaint to the department of labor or the submission of a  claim  to
    28  arbitration  pursuant  to  an  arbitration  agreement.  An  action  also
    29  includes an investigation of wage claims by the commissioner of labor or
    30  the attorney general of the state of New  York,  regardless  of  whether
    31  such investigation was initiated by a complaint.
    32    (e) A lien, the duration of which has been extended by the filing of a
    33  notice  of  the pendency of an action as above provided, shall neverthe-
    34  less terminate as a lien after such notice has been canceled as provided
    35  in section sixty-five hundred fourteen of the  civil  practice  law  and
    36  rules  or  has ceased to be effective as constructive notice as provided
    37  in section sixty-five hundred thirteen of the  civil  practice  law  and
    38  rules.
    39    §  12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
    40  2 as amended by chapter 310 of the laws of 1962, subdivision 4 as  added
    41  by  chapter  582 of the laws of 2002 and paragraph a of subdivision 4 as
    42  further amended by section 104 of part A of chapter 62 of  the  laws  of
    43  2011, are amended to read as follows:
    44    (2)  By failure to begin an action to foreclose such lien or to secure
    45  an order continuing it, within one year from  the  time  of  filing  the
    46  notice  of lien, unless (i) an action be begun within the same period to
    47  foreclose a mortgage or another mechanic's lien upon the  same  property
    48  or  any  part  thereof  and a notice of pendency of such action is filed
    49  according to law, or (ii) an action is commenced to obtain a judgment on
    50  a wage claim pursuant to subdivision two of section  seventeen  of  this
    51  article,  but  a  lien,  the  duration of which has been extended by the
    52  filing of a notice of the pendency of an action as [herein] provided  in
    53  this  section,  shall nevertheless terminate as a lien after such notice
    54  has been cancelled or has ceased to be effective as constructive notice.
    55    (4) Either before or after the beginning of an action by the employer,
    56  owner or contractor executing a bond or undertaking in an  amount  equal

        A. 46--A                           10

     1  to  one  hundred ten percent of such lien conditioned for the payment of
     2  any judgment which may be rendered against the property or employer  for
     3  the enforcement of the lien:
     4    a.  The  execution  of any such bond or undertaking by any fidelity or
     5  surety company authorized by the laws of this state  to  transact  busi-
     6  ness,  shall be sufficient; and where a certificate of qualification has
     7  been issued by  the  superintendent  of  financial  services  under  the
     8  provisions  of  section one thousand one hundred eleven of the insurance
     9  law, and has not been revoked, no justification or notice thereof  shall
    10  be  necessary. Any such company may execute any such bond or undertaking
    11  as surety by the hand of its  officers,  or  attorney,  duly  authorized
    12  thereto  by  resolution  of  its board of directors, a certified copy of
    13  which resolution, under the seal of said company, shall  be  filed  with
    14  each  bond  or  undertaking. Any such bond or undertaking shall be filed
    15  with the clerk of the county in which the notice of lien is filed, and a
    16  copy shall be served upon the adverse party. The undertaking  is  effec-
    17  tive  when so served and filed. If a certificate of qualification issued
    18  pursuant to subsections (b), (c) and (d) of  section  one  thousand  one
    19  hundred eleven of the insurance law is not filed with the undertaking, a
    20  party may except, to the sufficiency of a surety and by a written notice
    21  of  exception  served  upon  the  adverse  party  within  ten days after
    22  receipt, a copy of the undertaking. Exceptions deemed by  the  court  to
    23  have  been  taken  unnecessarily,  or  for  vexation or delay, may, upon
    24  notice, be set aside, with costs. Where  no  exception  to  sureties  is
    25  taken  within  ten  days  or  where  exceptions taken are set aside, the
    26  undertaking shall be allowed.
    27    b. In the case of bonds or undertakings not executed pursuant to para-
    28  graph a of this subdivision, the employer,  owner  or  contractor  shall
    29  execute  an  undertaking with two or more sufficient sureties, who shall
    30  be free holders, to the clerk of the county where the premises are situ-
    31  ated. The sureties must together justify in  at  least  double  the  sum
    32  named  in  the  undertaking. A copy of the undertaking, with notice that
    33  the sureties will justify before the court, or a judge or justice there-
    34  of, at the time and place therein mentioned, must  be  served  upon  the
    35  lienor or his or her attorney, not less than five days before such time.
    36  Upon  the  approval of the undertaking by the court, judge or justice an
    37  order shall be made by such court, judge  or  justice  discharging  such
    38  lien.
    39    c.  If  the  lienor  cannot  be found, or does not appear by attorney,
    40  service under this subsection may be made by  leaving  a  copy  of  such
    41  undertaking  and  notice  at  the  lienor's  place of residence, or if a
    42  corporation at its principal place of business within the state as stat-
    43  ed in the notice of lien, with a person of suitable age  and  discretion
    44  therein, or if the house of his or her abode or its place of business is
    45  not  stated in said notice of lien and is not known, then in such manner
    46  as the court may direct. The premises, if any, described in  the  notice
    47  of  lien  as the lienor's residence or place of business shall be deemed
    48  to be his or her said  residence  or  its  place  of  business  for  the
    49  purposes  of said service at the time thereof, unless it is shown affir-
    50  matively that the person servicing the papers or directing  the  service
    51  had  knowledge  to the contrary. Notwithstanding the other provisions of
    52  this subdivision relating to service of notice, in any  case  where  the
    53  mailing  address  of the lienor is outside the state such service may be
    54  made by registered or certified mail, return receipt requested, to  such
    55  lienor at the mailing address contained in the notice of lien.

        A. 46--A                           11

     1    d. Except as otherwise provided in this subdivision, the provisions of
     2  article  twenty-five  of  the  civil  practice  law and rules regulating
     3  undertakings is applicable to  a  bond  or  undertaking  given  for  the
     4  discharge  of a lien on account of private improvements or of an employ-
     5  ee's lien.
     6    §  13.  Section  24  of the lien law, as amended by chapter 515 of the
     7  laws of 1929, is amended to read as follows:
     8    § 24.  Enforcement  of  [mechanic's]  lien.  (1)  Real  property.  The
     9  [mechanics']  liens  on  real  property specified in this article may be
    10  enforced against the property specified in the notice of lien and  which
    11  is subject thereto and against any person liable for the debt upon which
    12  the lien is founded, as prescribed in article three of this chapter.
    13    (2)  Personal property. An employee's lien on personal property speci-
    14  fied in this article may immediately be enforced  against  the  property
    15  through  a  foreclosure  as  prescribed  in  article nine of the uniform
    16  commercial code, or upon judgment obtained by the employee, commissioner
    17  of labor or attorney general of the state of New York, may  be  enforced
    18  in  any  manner  available  to the judgment creditor pursuant to article
    19  nine of the uniform commercial code or other applicable laws.
    20    § 14. Section 26 of the lien law, as amended by  chapter  373  of  the
    21  laws of 1977, is amended to read as follows:
    22    §  26.  Subordination  of liens after agreement with owner. In case an
    23  owner of real property shall execute to one or more persons, or a corpo-
    24  ration, as trustee or trustees, a bond and mortgage or a note and  mort-
    25  gage  affecting  such  property in whole or in part, or an assignment of
    26  the moneys due or to become due under a contract for a building loan  in
    27  relation  to  such property, and in case such mortgage, if any, shall be
    28  recorded in the office of the register of the  county  where  such  real
    29  property  is  situated,  or  if  such county has no register then in the
    30  office of the clerk of such county, and in case such assignment, if any,
    31  shall be filed in the office of the clerk of the county where such  real
    32  property  is  situated;  and  in  case lienors having [mechanics'] liens
    33  against said real property, notices of which have been filed up  to  and
    34  not  later than fifteen days after the recording of such mortgage or the
    35  filing of such assignment, and which liens have not been  discharged  as
    36  in  this  article  provided, shall, to the extent of at least fifty-five
    37  per centum of the aggregate amount for which such notices of liens  have
    38  been so filed, approve such bond and mortgage or such note and mortgage,
    39  if  any, and such assignment, if any, by an instrument or instruments in
    40  writing, duly acknowledged and filed in the office of such county clerk,
    41  then all mechanics' liens for  labor  performed  or  material  furnished
    42  prior  to  the  recording of such mortgage or filing of such assignment,
    43  whether notices thereof have been theretofore or  are  thereafter  filed
    44  and which have not been discharged as in this article provided, shall be
    45  subordinate  to  the  lien of such trust bond and mortgage or such trust
    46  note and mortgage to the extent of the aggregate amount of  all  certif-
    47  icates  of interest therein issued by such trustee or trustees, or their
    48  successors, for moneys loaned, materials furnished, labor performed  and
    49  any  other  indebtedness  incurred  after said trust mortgage shall have
    50  been recorded, and for expenses in connection with said trust  mortgage,
    51  and  shall  also  be subordinate to the lien of the bond and mortgage or
    52  note and mortgage, given to secure the  amount  agreed  to  be  advanced
    53  under  such  contract  for  a  building loan to the extent of the amount
    54  which shall be advanced by the holder of such bond and mortgage or  such
    55  note and mortgage to the trustee or trustees, or their successors, under
    56  such assignment. The provisions of this section shall apply to all bonds

        A. 46--A                           12

     1  and mortgages and notes and mortgages and all assignments of moneys due,
     2  or  to  become due under building loan contracts executed by such owner,
     3  in like manner, and recorded or filed, from time to time as hereinbefore
     4  provided.  In  case of an assignment to trustees under the provisions of
     5  this section, the trustees and their successors shall be the  agents  of
     6  the assignor to receive and receipt for any and all sums advanced by the
     7  holder  of the building loan bond and mortgage or the building loan note
     8  and mortgage under the building loan contract and  such  assignment.  No
     9  lienor  shall  have  any priority over the bond and mortgage or note and
    10  mortgage given to secure the money agreed to be advanced under a  build-
    11  ing loan contract or over the advances made thereunder, by reason of any
    12  act preceding the making and approval of such assignment.
    13    §  15.  Section  38  of the lien law, as amended by chapter 859 of the
    14  laws of 1930, is amended to read as follows:
    15    § 38. Itemized statement may be required of lienor. A lienor  who  has
    16  filed  a  notice of mechanic's lien shall, on demand in writing, deliver
    17  to the owner or contractor making such demand  a  statement  in  writing
    18  which  shall  set forth the items of labor and/or material and the value
    19  thereof which make up the amount for which he or she claims a lien,  and
    20  which  shall  also  set forth the terms of the contract under which such
    21  items were furnished.  The statement shall be verified by the lienor  or
    22  his or her agent in the form required for the verification of notices in
    23  section  nine  of  this  [chapter]  article. If the lienor shall fail to
    24  comply with such a demand within five days after  the  same  shall  have
    25  been  made  by  the  owner  or  contractor, or if the lienor delivers an
    26  insufficient statement, the person aggrieved may  petition  the  supreme
    27  court  of  this state or any justice thereof, or the county court of the
    28  county where the premises are situated, or  the  county  judge  of  such
    29  county  for an order directing the lienor within a time specified in the
    30  order to deliver to  the  petitioner  the  statement  required  by  this
    31  section. Two days' notice in writing of such application shall be served
    32  upon  the  lienor.  Such service shall be made in the manner provided by
    33  law for the personal service of a summons. The court  or  a  justice  or
    34  judge  thereof  shall hear the parties and upon being satisfied that the
    35  lienor has failed, neglected or refused to comply with the  requirements
    36  of  this  section shall have an appropriate order directing such compli-
    37  ance. In case the lienor fails to comply with the order so  made  within
    38  the time specified, then upon five days' notice to the lienor, served in
    39  the  manner  provided  by law for the personal service of a summons, the
    40  court or a justice or judge thereof may make  an  order  cancelling  the
    41  lien.
    42    §  16. Section 39 of the lien law, as added by chapter 859 of the laws
    43  of 1930, is amended to read as follows:
    44    § 39. Lien wilfully exaggerated is void. In any action  or  proceeding
    45  to  enforce a mechanic's lien upon a private or public improvement or an
    46  employee's lien, or in which the validity of the lien is  an  issue,  if
    47  the  court  shall find that a lienor has wilfully exaggerated the amount
    48  for which he or she claims a lien as stated in  his  or  her  notice  of
    49  lien, [his] such lien shall be declared to be void and no recovery shall
    50  be  had  thereon. No such lienor shall have a right to file any other or
    51  further lien for the same claim. A second or subsequent  lien  filed  in
    52  contravention  of  this  section  may be vacated upon application to the
    53  court on two days' notice.
    54    § 17. Section 39-a of the lien law, as added by  chapter  859  of  the
    55  laws of 1930, is amended to read as follows:

        A. 46--A                           13

     1    §  39-a.  Liability  of  lienor  where  lien has been declared void on
     2  account of wilful exaggeration. Where in any  action  or  proceeding  to
     3  enforce  a  mechanic's  lien  upon a private or public improvement or an
     4  employee's lien the court shall have declared said lien to  be  void  on
     5  account  of  wilful  exaggeration  the person filing such notice of lien
     6  shall be liable in damages to the owner or contractor. The damages which
     7  said owner or contractor shall be entitled to recover, shall include the
     8  amount of any premium for a bond given to obtain the  discharge  of  the
     9  lien or the interest on any money deposited for the purpose of discharg-
    10  ing  the  lien,  reasonable attorney's fees for services in securing the
    11  discharge of the lien, and, in an action  or  proceeding  to  enforce  a
    12  mechanic's  lien,  an amount equal to the difference by which the amount
    13  claimed to be due or to become due as  stated  in  the  notice  of  lien
    14  exceeded the amount actually due or to become due thereon.
    15    §  18.  Section  40  of the lien law, as amended by chapter 515 of the
    16  laws of 1929, is amended to read as follows:
    17    § 40. Construction of article. This article  is  to  be  construed  in
    18  connection  with  article  two of this chapter, and provides proceedings
    19  for the enforcement of employee's liens on real  property,  as  well  as
    20  liens  for labor performed and materials furnished in the improvement of
    21  real property, created by virtue of such article.
    22    § 19. Section 41 of the lien law, as amended by  chapter  807  of  the
    23  laws of 1952, is amended to read as follows:
    24    § 41. Enforcement of mechanic's or employee's lien on real property. A
    25  mechanic's  lien  or  employee's  lien  on real property may be enforced
    26  against such property, and against a person liable  for  the  debt  upon
    27  which  the  lien  is  founded,  by  an action, by the lienor, his or her
    28  assignee or legal representative, in the supreme court or  in  a  county
    29  court  otherwise  having  jurisdiction, regardless of the amount of such
    30  debt, or in a court which has jurisdiction in an  action  founded  on  a
    31  contract for a sum of money equivalent to the amount of such debt.
    32    §  20.  Section  43  of the lien law, as amended by chapter 310 of the
    33  laws of 1962, is amended to read as follows:
    34    § 43. Action in a court  of  record;  consolidation  of  actions.  The
    35  provisions  of the real property actions and proceedings law relating to
    36  actions for the foreclosure of a mortgage upon real  property,  and  the
    37  sale  and the distribution of the proceeds thereof apply to actions in a
    38  court of record, to enforce mechanics' liens  and  employees'  liens  on
    39  real  property, except as otherwise provided in this article. If actions
    40  are brought by different lienors in a court  of  record,  the  court  in
    41  which  the  first  action was brought, may, upon its own motion, or upon
    42  the application of any party in any of such actions, consolidate all  of
    43  such actions.
    44    §  21.  Section  46  of the lien law, as amended by chapter 515 of the
    45  laws of 1929, is amended to read as follows:
    46    § 46. Action in a court not of record.  If  an  action  to  enforce  a
    47  mechanic's lien or employee's lien against real property is brought in a
    48  court  not of record, it shall be commenced by the personal service upon
    49  the owner of a summons and complaint verified in the same  manner  as  a
    50  complaint  in  an  action  in  a court of record. The complaint must set
    51  forth substantially the facts contained in the notice of lien,  and  the
    52  substance  of  the  agreement under which the labor was performed or the
    53  materials were furnished, or if the lien is based upon a wage  claim  as
    54  defined  in  section two of this chapter, the basis for such wage claim.
    55  The form and contents of the summons shall be the same  as  provided  by
    56  law for the commencement of an action upon a contract in such court. The

        A. 46--A                           14

     1  summons  must  be  returnable  not less than twelve nor more than twenty
     2  days after the date of the summons, or if service is  made  by  publica-
     3  tion,  after  the  day  of the last publication of the summons.  Service
     4  must be made at least eight days before the return day.
     5    §  22.  Section  50  of the lien law, as amended by chapter 515 of the
     6  laws of 1929, is amended to read as follows:
     7    § 50. Execution. Execution may be issued upon a judgment  obtained  in
     8  an  action  to  enforce  a mechanic's lien or an employee's lien against
     9  real property in a court not of record, which shall direct  the  officer
    10  to  sell the title and interest of the owner in the premises, upon which
    11  the lien set forth in the complaint existed at the time  of  filing  the
    12  notice of lien.
    13    §  23.  Section  53  of the lien law, as amended by chapter 515 of the
    14  laws of 1929, is amended to read as follows:
    15    § 53. Costs and disbursements. If an action is brought  to  enforce  a
    16  mechanic's  lien  or an employee's lien against real property in a court
    17  of record, the costs and disbursements shall rest in the  discretion  of
    18  the  court,  and  may  be  awarded to the prevailing party. The judgment
    19  rendered in such an action shall include the amount of  such  costs  and
    20  specify  to whom and by whom the costs are to be paid. If such action is
    21  brought in a court not of record, they shall be the same as  allowed  in
    22  civil  actions  in  such  court.  The  expenses  incurred in serving the
    23  summons by publication may be added to the amount of costs  now  allowed
    24  in such court.
    25    §  24.  Section  59  of the lien law, as amended by chapter 515 of the
    26  laws of 1929, is amended to read as follows:
    27    § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
    28  deposit, by order of court. 1. A mechanic's lien  notice  of  which  has
    29  been filed on real property or a bond given to discharge the same may be
    30  vacated  and cancelled or a deposit made to discharge a lien pursuant to
    31  section twenty of this chapter may be returned, by an order of  a  court
    32  of  record. Before such order shall be granted, a notice shall be served
    33  upon the lienor, either personally or by leaving it as his or  her  last
    34  known place of residence, with a person of suitable age, with directions
    35  to  deliver  it  to  the lienor. Such notice shall require the lienor to
    36  commence an action to enforce the lien, within a time specified  in  the
    37  notice,  not  less  than  thirty  days from the time of service, or show
    38  cause at a special term of a court of record, or at a county court, in a
    39  county in which the property is situated, at a time and place  specified
    40  therein,  why  the  notice of lien filed or the bond given should not be
    41  vacated and cancelled, or the deposit returned,  as  the  case  may  be.
    42  Proof  of  such service and that the lienor has not commenced the action
    43  to foreclose such lien, as directed in the  notice,  shall  be  made  by
    44  affidavit, at the time of applying for such order.
    45    2.  An employee's lien notice of which has been filed on real property
    46  or a bond given to discharge the same may be vacated and cancelled or  a
    47  deposit  made  to  discharge  a  lien pursuant to section twenty of this
    48  chapter may be returned, by an order of a court of record.  Before  such
    49  order shall be granted, a notice shall be served upon the lienor, either
    50  personally  or by leaving it at his or her last known place of residence
    51  or attorney's place of business, with a person  of  suitable  age,  with
    52  directions  to  deliver  it to the lienor. Such notice shall require the
    53  lienor to commence an action to enforce the  lien,  or  to  commence  an
    54  action  to  obtain  judgment  on  the wage claim upon which the lien was
    55  established, within a time specified in the notice, not less than thirty
    56  days from the time of service, or show cause at  a  special  term  of  a

        A. 46--A                           15

     1  court of record, or at a county court, in a county in which the property
     2  is  situated,  at  a time and place specified therein, why the notice of
     3  lien filed or the bond given should not be vacated and cancelled, or the
     4  deposit returned, as the case may be. Proof of such service and that the
     5  lienor  has not commenced the action to foreclose such lien or an action
     6  to obtain judgment on the wage claim upon  which  the  lien  was  estab-
     7  lished,  as  directed  in the notice, shall be made by affidavit, at the
     8  time of applying for such order.
     9    § 25. Section 62 of the lien law, as amended by  chapter  697  of  the
    10  laws of 1934, is amended to read as follows:
    11    § 62. Bringing in new parties. A lienor who has filed a notice of lien
    12  after the commencement of an action in a court of record to foreclose or
    13  enforce an employee's lien or a mechanic's lien against real property or
    14  a  public  improvement,  may  at  any  time  up to and including the day
    15  preceding the day on which the trial of such action is  commenced,  make
    16  application  upon notice to the plaintiff or his or her attorney in such
    17  action, to be made a party therein. Upon good  cause  shown,  the  court
    18  must order such lienor to be brought in by amendment. If the application
    19  is  made  by any other party in said action to make such lienor or other
    20  person a party, the court may in its discretion direct  such  lienor  or
    21  other person to be brought in by like amendment. The order to be entered
    22  on such application shall provide the time for and manner of serving the
    23  pleading of such additional lienor or other person and shall direct that
    24  the  pleadings,  papers  and proceedings of the other several parties in
    25  such action, shall be deemed amended, so as not to require the making or
    26  serving of papers other than said order to  effectuate  such  amendment,
    27  and  shall  further  provide  that the allegations in the answer of such
    28  additional lienor or other person shall, for the purposes of the action,
    29  be deemed denied by the other parties therein. The action  shall  be  so
    30  conducted  by  the  court as not to cause substantially any delay in the
    31  trial thereof.   The bringing in of  such  additional  lienor  or  other
    32  person  shall  be  without  prejudice to the proceedings had, and if the
    33  action be on the calendar of the court, same shall retain its  place  on
    34  such  calendar  without the necessity of serving a new note of issue and
    35  new notices of trial.
    36    § 26. Subdivision 3 of section 199-a of the labor law, as  amended  by
    37  chapter 564 of the laws of 2010, is amended to read as follows:
    38    3.  Each  employee  and  his or her authorized representative shall be
    39  notified in writing, of the termination of the  commissioner's  investi-
    40  gation of the employee's complaint and the result of such investigation,
    41  of  any  award  and collection of back wages and civil penalties, and of
    42  any intent to seek criminal penalties. In the event that criminal penal-
    43  ties are sought the employee and his or  her  authorized  representative
    44  shall be notified of the outcome of prosecution.
    45    §  27.  Subdivision  2  of section 663 of the labor law, as amended by
    46  chapter 564 of the laws of 2010, is amended to read as follows:
    47    2. By commissioner. On behalf of any employee paid less than the  wage
    48  to  which the employee is entitled under the provisions of this article,
    49  the commissioner may bring any legal action necessary, including  admin-
    50  istrative  action,  to  collect  such  claim,  and the employer shall be
    51  required to pay the full amount of the  underpayment,  plus  costs,  and
    52  unless the employer proves a good faith basis to believe that its under-
    53  payment  was  in compliance with the law, an additional amount as liqui-
    54  dated damages. Liquidated damages shall be calculated by the commission-
    55  er as  no  more  than  one  hundred  percent  of  the  total  amount  of
    56  underpayments found to be due the employee. In any action brought by the

        A. 46--A                           16

     1  commissioner  in  a  court of competent jurisdiction, liquidated damages
     2  shall be calculated as an amount equal to one hundred percent of  under-
     3  payments  found  to  be  due  the  employee. Each employee or his or her
     4  authorized representative shall be notified in writing of the outcome of
     5  any  legal  action  brought  on  the  employee's behalf pursuant to this
     6  section.
     7    § 28. Subdivision 5 of section 6201 of  the  civil  practice  law  and
     8  rules,  as  amended by chapter 860 of the laws of 1977 and as renumbered
     9  by chapter 618 of the laws of 1992, is amended and a new  subdivision  6
    10  is added to read as follows:
    11    5.  the  cause  of action is based on a judgment, decree or order of a
    12  court of the United States or of any other court which  is  entitled  to
    13  full  faith  and  credit in this state, or on a judgment which qualifies
    14  for recognition under the provisions of article 53[.] of  this  chapter;
    15  or
    16    6.  the  cause  of action is based on wage claims. "Wage claims," when
    17  used in this chapter, shall include any claims of violations of articles
    18  five, six, and nineteen of the labor law, section two hundred fifteen of
    19  the labor law, and the related regulations or wage orders promulgated by
    20  the commissioner of labor, including but not limited to  any  claims  of
    21  unpaid,  minimum, overtime, and spread-of-hours pay, unlawfully retained
    22  gratuities, unlawful deductions from wages, unpaid  commissions,  unpaid
    23  benefits  and wage supplements, and retaliation, and any claims pursuant
    24  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    25  as well as the concomitant liquidated damages and  penalties  authorized
    26  pursuant  to the labor law, the Fair Labor Standards Act, or any employ-
    27  ment contract.
    28    § 29. Section 6210 of the civil practice law and rules,  as  added  by
    29  chapter 860 of the laws of 1977, is amended to read as follows:
    30    §  6210.  Order  of attachment on notice; temporary restraining order;
    31  contents. Upon a motion on notice for an order of attachment, the  court
    32  may,  without  notice  to  the  defendant, grant a temporary restraining
    33  order prohibiting the transfer of assets by a garnishee as  provided  in
    34  subdivision  (b)  of section 6214. When attachment is sought pursuant to
    35  subdivision six of section  6201,  and  if  the  employer  contests  the
    36  motion,  the  court  shall  hold  a  hearing within ten days of when the
    37  employer's response to plaintiffs' motion for  attachment  is  due.  The
    38  contents  of  the  order  of attachment granted pursuant to this section
    39  shall be as provided in subdivision (a) of section 6211.
    40    § 30. Subdivision (b) of section 6211 of the civil  practice  law  and
    41  rules, as amended by chapter 566 of the laws of 1985, is amended to read
    42  as follows:
    43    (b)  Confirmation  of  order.  Except  where an order of attachment is
    44  granted on the ground specified in subdivision one  or  six  of  section
    45  6201,  an  order of attachment granted without notice shall provide that
    46  within a period not to exceed five days after levy, the plaintiff  shall
    47  move,  on  such  notice  as the court shall direct to the defendant, the
    48  garnishee, if any, and the sheriff, for an order confirming the order of
    49  attachment. Where an order of attachment without notice  is  granted  on
    50  the  ground  specified  in  subdivision  one or six of section 6201, the
    51  court shall direct that the statement required by section 6219 be served
    52  within five days, that a copy thereof be served upon the plaintiff,  and
    53  the  plaintiff  shall  move  within  ten  days  after  levy for an order
    54  confirming the order of attachment. If the plaintiff  upon  such  motion
    55  shall show that the statement has not been served and that the plaintiff
    56  will  be unable to satisfy the requirement of subdivision (b) of section

        A. 46--A                           17

     1  6223 until the statement has been served, the court may grant one exten-
     2  sion of the time to move for confirmation for a period not to exceed ten
     3  days. If plaintiff fails to make such motion within the required period,
     4  the  order  of  attachment and any levy thereunder shall have no further
     5  effect and shall be vacated upon motion. Upon the motion to confirm, the
     6  provisions of subdivision (b) of section 6223 shall apply. An  order  of
     7  attachment  granted  without notice may provide that the sheriff refrain
     8  from taking any property levied upon into his  or  her  actual  custody,
     9  pending further order of the court.
    10    §  31. Subdivisions (b) and (e) of rule 6212 of the civil practice law
    11  and rules, subdivision (b) as separately amended by chapters 15 and  860
    12  of  the  laws of 1977 and subdivision (e) as added by chapter 860 of the
    13  laws of 1977, are amended to read as follows:
    14    (b) Undertaking. [On] 1. Except where an order of attachment is sought
    15  on the ground specified in subdivision six of section 6201, on a  motion
    16  for  an order of attachment, the plaintiff shall give an undertaking, in
    17  a total amount fixed by the  court,  but  not  less  than  five  hundred
    18  dollars,  a  specified part thereof conditioned that the plaintiff shall
    19  pay to the defendant all costs and damages, including reasonable  attor-
    20  ney's  fees,  which  may be sustained by reason of the attachment if the
    21  defendant recovers judgment or if it is finally decided that the  plain-
    22  tiff  was not entitled to an attachment of the defendant's property, and
    23  the balance conditioned that the plaintiff shall pay to the sheriff  all
    24  of his or her allowable fees.
    25    2.  On  a  motion  for  an  attachment  pursuant to subdivision six of
    26  section 6201, the court shall order that the plaintiff give an  accessi-
    27  ble undertaking of no more than five hundred dollars, or in the alterna-
    28  tive,  may waive the undertaking altogether. The attorney for the plain-
    29  tiff shall not be liable to the sheriff for such fees. The surety on the
    30  undertaking shall not be discharged except upon notice to the sheriff.
    31    (e) Damages. [The] Except where an order of attachment  is  sought  on
    32  the  ground  specified in subdivision six of section 6201, the plaintiff
    33  shall be liable to the defendant for all costs  and  damages,  including
    34  reasonable  attorney's  fees,  which  may  be sustained by reason of the
    35  attachment if the defendant recovers  judgment,  or  if  it  is  finally
    36  decided  that  the  plaintiff  was  not entitled to an attachment of the
    37  defendant's property. Plaintiff's liability shall not be limited by  the
    38  amount of the undertaking.
    39    § 32. Paragraph (b) of section 624 of the business corporation law, as
    40  amended  by  chapter  449  of  the  laws  of 1997, is amended to read as
    41  follows:
    42    (b) Any person who shall have been a shareholder of record of a corpo-
    43  ration, or who is or shall have been a  laborer,  servant  or  employee,
    44  upon  at least five days' written demand shall have the right to examine
    45  in person or by agent or attorney,  during  usual  business  hours,  its
    46  minutes  of the proceedings of its shareholders and record of sharehold-
    47  ers and to make extracts therefrom for any purpose reasonably related to
    48  such person's interest as a shareholder, laborer, servant  or  employee,
    49  provided  the  purpose  reasonably  related  to a person's interest as a
    50  laborer, servant or employee shall be to obtain  the  names,  addresses,
    51  and  value  of  shareholders'  interests  in the corporation. Holders of
    52  voting trust certificates representing shares of the  corporation  shall
    53  be  regarded  as shareholders for the purpose of this section.  Any such
    54  agent or attorney shall be authorized in a writing  that  satisfies  the
    55  requirements  of a writing under paragraph (b) of section 609 (Proxies).
    56  A corporation requested to provide information pursuant  to  this  para-

        A. 46--A                           18

     1  graph  shall  make available such information in written form and in any
     2  other format in which such information is maintained by the  corporation
     3  and  shall  not  be  required  to  provide such information in any other
     4  format.  If a request made pursuant to this paragraph includes a request
     5  to furnish information  regarding  beneficial  owners,  the  corporation
     6  shall  make available such information in its possession regarding bene-
     7  ficial owners as is provided to the corporation by a  registered  broker
     8  or  dealer or a bank, association or other entity that exercises fiduci-
     9  ary powers in connection with the  forwarding  of  information  to  such
    10  owners.  The  corporation  shall  not  be required to obtain information
    11  about beneficial owners not in its possession.
    12    § 33. Section 630 of the business corporation law,  paragraph  (a)  as
    13  amended  by  chapter  5 of the laws of 2016, paragraph (c) as amended by
    14  chapter 746 of the laws of 1963, is amended to read as follows:
    15  § 630. Liability of shareholders for wages due to laborers, servants  or
    16           employees.
    17    (a) The  ten  largest shareholders, as determined by the fair value of
    18  their beneficial interest as of the beginning of the period during which
    19  the unpaid services referred to in this section are performed, of  every
    20  domestic  corporation  or  of  any  foreign corporation, when the unpaid
    21  services were performed in the state, no shares of which are listed on a
    22  national securities exchange or regularly quoted in an  over-the-counter
    23  market  by one or more members of a national or an affiliated securities
    24  association, shall jointly and severally be personally  liable  for  all
    25  debts,  wages or salaries due and owing to any of its laborers, servants
    26  or employees other than contractors, for services performed by them  for
    27  such corporation. [Before such laborer, servant or employee shall charge
    28  such  shareholder  for such services, he shall give notice in writing to
    29  such shareholder that he intends to hold him liable under this  section.
    30  Such  notice  shall  be  given  within one hundred and eighty days after
    31  termination of such services, except that if, within  such  period,  the
    32  laborer,  servant  or  employee  demands an examination of the record of
    33  shareholders under paragraph (b) of  section  624  (Books  and  records;
    34  right  of inspection, prima facie evidence) of this article, such notice
    35  may be given within sixty days after he has been given  the  opportunity
    36  to examine the record of shareholders. An action to enforce such liabil-
    37  ity  shall  be  commenced  within  ninety  days  after  the return of an
    38  execution unsatisfied against the corporation upon a judgment  recovered
    39  against  it  for  such services.] The provisions of this paragraph shall
    40  not apply to an investment company registered as such under  an  act  of
    41  congress entitled "Investment Company Act of 1940."
    42    (b) For the purposes of this section, wages or salaries shall mean all
    43  compensation  and  benefits payable by an employer to or for the account
    44  of the employee for personal services rendered by such employee  includ-
    45  ing  any concomitant liquidated damages, penalties, interest, attorney's
    46  fees or costs.  These shall specifically include but not be  limited  to
    47  salaries,  overtime,  vacation,  holiday  and  severance  pay;  employer
    48  contributions to or payments of insurance or welfare benefits;  employer
    49  contributions to pension or annuity funds; and any other moneys properly
    50  due or payable for services rendered by such employee.
    51    (c)  A  shareholder  who  has paid more than his or her pro rata share
    52  under this section shall be entitled to contribution pro rata  from  the
    53  other  shareholders liable under this section with respect to the excess
    54  so paid, over and above his or her pro rata  share,  and  may  sue  them
    55  jointly  or  severally  or  any number of them to recover the amount due
    56  from them.  Such recovery may be had in a separate action.  As  used  in

        A. 46--A                           19

     1  this  paragraph,  "pro  rata"  means  in  proportion to beneficial share
     2  interest. Before a shareholder may claim contribution from other  share-
     3  holders  under  this  paragraph, he or she shall[, unless they have been
     4  given  notice  by  a  laborer, servant or employee under paragraph (a),]
     5  give them notice in writing that he or  she  intends  to  hold  them  so
     6  liable  to  him  or her. Such notice shall be given by him or her within
     7  twenty days after the date that [notice was given to him by] he  or  she
     8  became aware that a laborer, servant or employee may seek to hold him or
     9  her liable under paragraph (a).
    10    §  34. Subdivision (c) of section 609 of the limited liability company
    11  law, as amended by chapter 620 of the laws of 2019, is amended  to  read
    12  as follows:
    13    (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
    14  section, the ten members with the largest percentage ownership interest,
    15  as  determined as of the beginning of the period during which the unpaid
    16  services referred to in this section are performed,  of  every  domestic
    17  limited  liability company, or of any foreign limited liability company,
    18  when the unpaid services were performed in the state, shall jointly  and
    19  severally  be personally liable for all debts, wages or salaries due and
    20  owing to any of  its  laborers,  servants  or  employees,  for  services
    21  performed  by  them  for  such  limited  liability company. [Before such
    22  laborer, servant or employee shall charge such member for such services,
    23  he or she shall give notice in writing to such member  that  he  or  she
    24  intends to hold such member liable under this section. Such notice shall
    25  be  given  within  one  hundred  eighty  days  after termination of such
    26  services. An action to enforce such liability shall be commenced  within
    27  ninety  days  after  the  return of an execution unsatisfied against the
    28  limited liability company upon a judgment recovered against it for  such
    29  services.]  A  member  who  has paid more than his or her pro rata share
    30  under this section shall be entitled to contribution pro rata  from  the
    31  other  members  liable  under this section with respect to the excess so
    32  paid, over and above his or her pro rata share, and may sue them jointly
    33  or severally or any number of them to recover the amount due from  them.
    34  Such  recovery may be had in a separate action. As used in this subdivi-
    35  sion, "pro rata" means in proportion to percentage  ownership  interest.
    36  Before  a  member  may  claim contribution from other members under this
    37  section, he or she shall give them notice in  writing  that  he  or  she
    38  intends to hold them so liable to him or her.
    39    §  35. Section 1102 of the limited liability company law is amended by
    40  adding a new subdivision (e) to read as follows:
    41    (e) Any person who is or shall have been a laborer, servant or employ-
    42  ee of a limited liability company, upon  at  least  five  days'  written
    43  demand  shall  have the right to examine in person or by agent or attor-
    44  ney, during usual business hours, records described in paragraph two  of
    45  subdivision  (a)  of  this  section throughout the period of time during
    46  which such laborer, servant or employee provided services to such compa-
    47  ny. A company requested to provide information pursuant to this subdivi-
    48  sion shall make available such records in written form and in any  other
    49  format  in which such information is maintained by the company and shall
    50  not be required to provide such information in any other format.    Upon
    51  refusal  by  the  company  or  by  an officer or agent of the company to
    52  permit an inspection of the records described in this  subdivision,  the
    53  person  making  the demand for inspection may apply to the supreme court
    54  in the judicial district where the office of  the  company  is  located,
    55  upon  such  notice  as  the court may direct, for an order directing the
    56  company, its members or managers to show cause why an order  should  not

        A. 46--A                           20

     1  be granted permitting such inspection by the applicant.  Upon the return
     2  day of the order to show cause, the court shall hear the parties summar-
     3  ily,  by affidavit or otherwise, and if it appears that the applicant is
     4  qualified  and  entitled  to  such  inspection, the court shall grant an
     5  order compelling such inspection and awarding such further relief as  to
     6  the  court  may  seem  just  and proper. If the applicant is found to be
     7  qualified and entitled to such inspection, the  company  shall  pay  all
     8  reasonable  attorney's  fees  and costs of said applicant related to the
     9  demand for inspection of the records.
    10    § 36. This act shall take effect on the thirtieth day after  it  shall
    11  have become a law.  The procedures and rights created in this act may be
    12  used  by  employees,  laborers or servants in connection with claims for
    13  liabilities that arose prior to the effective date of this act.
feedback