Bill Text: NY A00486 | 2019-2020 | 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 39-1)

Status: (Introduced) 2019-06-13 - amended on third reading 486b [A00486 Detail]

Download: New_York-2019-A00486-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         486--B
                                                                Cal. No. 372

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                       (Prefiled)

                                     January 9, 2019
                                       ___________

        Introduced  by  M.  of A. L. ROSENTHAL, MOSLEY, GOTTFRIED, OTIS, WEPRIN,
          ORTIZ, PERRY, DAVILA, DINOWITZ, SIMON, M. G. MILLER,  LIFTON,  BARRON,
          SEAWRIGHT,  RICHARDSON,  BENEDETTO,  STECK,  BRONSON,  CRESPO, HUNTER,
          ROZIC, COLTON, TAYLOR, PICHARDO, EPSTEIN, REYES, DeSTEFANO, ZEBROWSKI,
          STIRPE, CARROLL, McMAHON, RAMOS, JAFFEE, CRUZ -- Multi-Sponsored by --
          M. of A. COOK, DE LA ROSA, HEVESI, KIM, LENTOL, RIVERA  --  read  once
          and referred to the Committee on Judiciary -- reported and referred to
          the  Committee on Codes -- committee discharged, bill amended, ordered
          reprinted as amended and recommitted to  said  committee  --  reported
          from  committee,  advanced  to  a  third  reading, amended and ordered
          reprinted, retaining its place on 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-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00946-06-9

        A. 486--B                           2

     1  teen  and  nineteen-A of the labor law, as applicable, or the Fair Labor
     2  Standards Act, 29 U.S.C. § 201 et. seq., as applicable, except that  the
     3  term "employer" shall not include a governmental agency.
     4    23.  Wage  claim.  The  term  "wage claim", when used in this chapter,
     5  means a claim that an employee has suffered a violation of sections  one
     6  hundred seventy, one hundred ninety-three, one hundred ninety-six-d, six
     7  hundred  fifty-two  or six hundred seventy-three of the labor law or the
     8  related regulations and wage orders promulgated by the  commissioner,  a
     9  claim  for  wages  due to an employee pursuant to an employment contract
    10  that were unpaid in violation of that  contract,  or  a  claim  that  an
    11  employee has suffered a violation of 29 U.S.C. § 206 or 207.
    12    §  2. Section 3 of the lien law, as amended by chapter 137 of the laws
    13  of 1985, is amended to read as follows:
    14    § 3. Mechanic's lien  and  employee's  lien  on  [real]  property.  1.
    15  Mechanic's  lien.  A  contractor,  subcontractor,  laborer, materialman,
    16  landscape gardener, nurseryman or person or corporation selling fruit or
    17  ornamental trees, roses, shrubbery, vines and small fruits, who performs
    18  labor or furnishes materials for the improvement of real  property  with
    19  the  consent  or  at  the request of the owner thereof, or of his agent,
    20  contractor or subcontractor, and any trust fund to  which  benefits  and
    21  wage  supplements  are  due or payable for the benefit of such laborers,
    22  shall have a lien for the principal and interest, of the value,  or  the
    23  agreed price, of such labor, including benefits and wage supplements due
    24  or  payable  for  the benefit of any laborer, or materials upon the real
    25  property improved or to be improved and upon such improvement, from  the
    26  time  of  filing  a  notice  of such lien as prescribed in this chapter.
    27  Where the contract for an improvement is made with a husband or wife and
    28  the property belongs to the other or both, the husband or wife contract-
    29  ing shall also be presumed to be the agent of  the  other,  unless  such
    30  other  having  knowledge of the improvement shall, within ten days after
    31  learning of the contract give the contractor written notice  of  his  or
    32  her  refusal  to  consent  to the improvement. Within the meaning of the
    33  provisions of this chapter, materials actually manufactured for but  not
    34  delivered  to  the  real  property, shall also be deemed to be materials
    35  furnished.
    36    2. Employee's lien. An employee who has a wage claim as that  term  is
    37  defined in subdivision twenty-three of section two of this chapter shall
    38  have  a lien on his or her employer's interest in property for the value
    39  of that employee's wage claim arising out of the  employment,  including
    40  liquidated  damages pursuant to subdivision one-a of section one hundred
    41  ninety-eight, section six hundred sixty-three  or  section  six  hundred
    42  eighty-one  of  the  labor law, or 29 U.S.C. § 216 (b), from the time of
    43  filing a notice of such lien as prescribed in this chapter.  An  employ-
    44  ee's lien based on a wage claim may be had against the employer's inter-
    45  est  in  real  property  and against the employer's interest in personal
    46  property that can  be  sufficiently  described  within  the  meaning  of
    47  section  9-108 of the uniform commercial code, except that an employee's
    48  lien shall not extend to deposit accounts or goods as  those  terms  are
    49  defined in section 9-102 of the uniform commercial code.  The department
    50  of  labor and the attorney general may obtain an employee's lien for the
    51  value of wage claims of the employees  who  are  the  subject  of  their
    52  investigations, court 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. 486--B                           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 interest in such real property
     9  by a general assignment for the benefit of creditors, within thirty days
    10  prior to such filing,  the  lien  shall  extend  to  the  interest  thus
    11  assigned.  If  any  part  of the real property subjected to such lien be
    12  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. 486--B                           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  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 shall enter the
    55  particulars  of  the  notice, properly belonging therein. The date, hour
    56  and minute of the filing of each notice of lien shall be entered in  the

        A. 486--B                           5

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

        A. 486--B                           6

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

        A. 486--B                           7

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

        A. 486--B                           8

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

        A. 486--B                           9

     1    (d) Notwithstanding the foregoing, if a lienor commences a foreclosure
     2  action or an action to obtain a judgment on the wage  claim  within  one
     3  year  from  the  filing  of  the  notice of lien on real property or the
     4  recording of the financing statement creating lien on personal property,
     5  the lien shall be extended during the pendency of the action and for one
     6  hundred  twenty  days  following  the  entry  of  final judgment in such
     7  action, unless the action results in a final judgment or  administrative
     8  order  in the lienor's favor on the wage claims and the lienor commences
     9  a foreclosure action, in which instance the lien shall be  valid  during
    10  the  pendency of the foreclosure action, provided, that the lien will be
    11  automatically extinguished if, after a dismissal with prejudice  of  the
    12  wage  claims  on which it is based, the lienor fails to file a notice of
    13  appeal within the prescribed period to file a notice of appeal.    If  a
    14  lien  is  extended  due  to  the  pendency of a foreclosure action or an
    15  action to obtain a judgment on the wage claim, the lienor shall  file  a
    16  notice of such pendency and extension with the county clerk of the coun-
    17  ty  in  which  the  notice of lien is filed, containing the names of the
    18  parties to the action, the object of the action, a brief description  of
    19  the  property  affected  thereby,  and  the time of filing the notice of
    20  lien, or in the case of a lien on  personal  property  shall  file  such
    21  notice  with the office authorized to accept financing statements pursu-
    22  ant to section 9-501 of the uniform commercial  code.  For  purposes  of
    23  this  section,  an action to obtain judgment on a wage claim includes an
    24  action brought in any court of competent jurisdiction, the submission of
    25  a complaint to the department of labor or the submission of a  claim  to
    26  arbitration  pursuant  to  an  arbitration  agreement.  An  action  also
    27  includes an investigation of wage claims by the commissioner of labor or
    28  the attorney general of the state of New  York,  regardless  of  whether
    29  such investigation was initiated by a complaint.
    30    (e) A lien, the duration of which has been extended by the filing of a
    31  notice  of  the pendency of an action as above provided, shall neverthe-
    32  less terminate as a lien after such notice has been canceled as provided
    33  in section sixty-five hundred fourteen of the  civil  practice  law  and
    34  rules  or  has ceased to be effective as constructive notice as provided
    35  in section sixty-five hundred thirteen of the  civil  practice  law  and
    36  rules.
    37    §  12. Subdivisions 2 and 4 of section 19 of the lien law, subdivision
    38  2 as amended by chapter 310 of the laws of 1962, subdivision 4 as  added
    39  by  chapter  582 of the laws of 2002 and paragraph a of subdivision 4 as
    40  further amended by section 104 of part A of chapter 62 of  the  laws  of
    41  2011, are amended to read as follows:
    42    (2)  By failure to begin an action to foreclose such lien or to secure
    43  an order continuing it, within one year from  the  time  of  filing  the
    44  notice  of lien, unless (i) an action be begun within the same period to
    45  foreclose a mortgage or another mechanic's lien upon the  same  property
    46  or  any  part  thereof  and a notice of pendency of such action is filed
    47  according to law, or (ii) an action is commenced to obtain a judgment on
    48  a wage claim pursuant to subdivision two of section  seventeen  of  this
    49  article,  but  a  lien,  the  duration of which has been extended by the
    50  filing of a notice of the pendency of  an  action  as  herein  provided,
    51  shall  nevertheless  terminate  as  a  lien  after  such notice has been
    52  cancelled or has ceased to be effective as constructive notice.
    53    (4) Either before or after the beginning of an action by the employer,
    54  owner or contractor executing a bond or undertaking in an  amount  equal
    55  to  one  hundred ten percent of such lien conditioned for the payment of

        A. 486--B                          10

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

        A. 486--B                          11

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

        A. 486--B                          12

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

        A. 486--B                          13

     1  shall be liable in damages to the owner or contractor. The damages which
     2  said owner or contractor shall be entitled to recover, shall include the
     3  amount  of  any  premium for a bond given to obtain the discharge of the
     4  lien or the interest on any money deposited for the purpose of discharg-
     5  ing  the  lien,  reasonable attorney's fees for services in securing the
     6  discharge of the lien, and, in an action  or  proceeding  to  enforce  a
     7  mechanic's  lien,  an amount equal to the difference by which the amount
     8  claimed to be due or to become due as  stated  in  the  notice  of  lien
     9  exceeded the amount actually due or to become due thereon.
    10    §  18.  Section  40  of the lien law, as amended by chapter 515 of the
    11  laws of 1929, is amended to read as follows:
    12    § 40. Construction of article. This article  is  to  be  construed  in
    13  connection  with  article  two of this chapter, and provides proceedings
    14  for the enforcement of employee's liens on real  property,  as  well  as
    15  liens  for labor performed and materials furnished in the improvement of
    16  real property, created by virtue of such article.
    17    § 19. Section 41 of the lien law, as amended by  chapter  807  of  the
    18  laws of 1952, is amended to read as follows:
    19    § 41. Enforcement of mechanic's or employee's lien on real property. A
    20  mechanic's  lien  or  employee's  lien  on real property may be enforced
    21  against such property, and against a person liable  for  the  debt  upon
    22  which  the lien is founded, by an action, by the lienor, his assignee or
    23  legal representative, in the supreme court or in a county  court  other-
    24  wise having jurisdiction, regardless of the amount of such debt, or in a
    25  court  which  has  jurisdiction in an action founded on a contract for a
    26  sum of money equivalent to the amount of such debt.
    27    § 20. Section 43 of the lien law, as amended by  chapter  310  of  the
    28  laws of 1962, is amended to read as follows:
    29    §  43.  Action  in  a  court  of record; consolidation of actions. The
    30  provisions of the real property actions and proceedings law relating  to
    31  actions  for  the  foreclosure of a mortgage upon real property, and the
    32  sale and the distribution of the proceeds thereof apply to actions in  a
    33  court  of  record,  to  enforce mechanics' liens and employees' liens on
    34  real property, except as otherwise provided in this article. If  actions
    35  are  brought  by  different  lienors  in a court of record, the court in
    36  which the first action was brought, may, upon its own  motion,  or  upon
    37  the  application of any party in any of such actions, consolidate all of
    38  such actions.
    39    § 21. Section 46 of the lien law, as amended by  chapter  515  of  the
    40  laws of 1929, is amended to read as follows:
    41    §  46.  Action  in  a  court  not of record. If an action to enforce a
    42  mechanic's lien or employee's lien against real property is brought in a
    43  court not of record, it shall be commenced by the personal service  upon
    44  the  owner  of  a summons and complaint verified in the same manner as a
    45  complaint in an action in a court of  record.  The  complaint  must  set
    46  forth  substantially  the facts contained in the notice of lien, and the
    47  substance of the agreement under which the labor was  performed  or  the
    48  materials  were  furnished, or if the lien is based upon a wage claim as
    49  defined in section two of this chapter, the basis for such  wage  claim.
    50  The  form  and  contents of the summons shall be the same as provided by
    51  law for the commencement of an action upon a contract in such court. The
    52  summons must be returnable not less than twelve  nor  more  than  twenty
    53  days  after  the  date of the summons, or if service is made by publica-
    54  tion, after the day of the last publication of  the  summons.    Service
    55  must be made at least eight days before the return day.

        A. 486--B                          14

     1    §  22.  Section  50  of the lien law, as amended by chapter 515 of the
     2  laws of 1929, is amended to read as follows:
     3    §  50.  Execution. Execution may be issued upon a judgment obtained in
     4  an action to enforce a mechanic's lien or  an  employee's  lien  against
     5  real  property  in a court not of record, which shall direct the officer
     6  to sell the title and interest of the owner in the premises, upon  which
     7  the  lien  set  forth in the complaint existed at the time of filing the
     8  notice of lien.
     9    § 23. Section 53 of the lien law, as amended by  chapter  515  of  the
    10  laws of 1929, is amended to read as follows:
    11    §  53.  Costs  and disbursements. If an action is brought to enforce a
    12  mechanic's lien or an employee's lien against real property in  a  court
    13  of  record,  the costs and disbursements shall rest in the discretion of
    14  the court, and may be awarded to  the  prevailing  party.  The  judgment
    15  rendered  in  such  an action shall include the amount of such costs and
    16  specify to whom and by whom the costs are to be paid. If such action  is
    17  brought  in  a court not of record, they shall be the same as allowed in
    18  civil actions in such  court.  The  expenses  incurred  in  serving  the
    19  summons  by  publication may be added to the amount of costs now allowed
    20  in such court.
    21    § 24. Section 59 of the lien law, as amended by  chapter  515  of  the
    22  laws of 1929, is amended to read as follows:
    23    § 59. Vacating of a [mechanic's] lien; cancellation of bond; return of
    24  deposit,  by  order  of  court. 1. A mechanic's lien notice of which has
    25  been filed on real property or a bond given to discharge the same may be
    26  vacated and cancelled or a deposit made to discharge a lien pursuant  to
    27  section  twenty  of this chapter may be returned, by an order of a court
    28  of record. Before such order shall be granted, a notice shall be  served
    29  upon  the  lienor,  either personally or by leaving it as his last known
    30  place of residence, with a person of suitable age,  with  directions  to
    31  deliver  it  to  the  lienor.  Such  notice  shall require the lienor to
    32  commence an action to enforce the lien, within a time specified  in  the
    33  notice,  not  less  than  thirty  days from the time of service, or show
    34  cause at a special term of a court of record, or at a county court, in a
    35  county in which the property is situated, at a time and place  specified
    36  therein,  why  the  notice of lien filed or the bond given should not be
    37  vacated and cancelled, or the deposit returned,  as  the  case  may  be.
    38  Proof  of  such service and that the lienor has not commenced the action
    39  to foreclose such lien, as directed in the  notice,  shall  be  made  by
    40  affidavit, at the time of applying for such order.
    41    2.  An employee's lien notice of which has been filed on real property
    42  or a bond given to discharge the same may be vacated and cancelled or  a
    43  deposit  made  to  discharge  a  lien pursuant to section twenty of this
    44  chapter may be returned, by an order of a court of record.  Before  such
    45  order shall be granted, a notice shall be served upon the lienor, either
    46  personally  or  by  leaving  it  at his last known place of residence or
    47  attorney's place of business,  with  a  person  of  suitable  age,  with
    48  directions  to  deliver  it to the lienor. Such notice shall require the
    49  lienor to commence an action to enforce the  lien,  or  to  commence  an
    50  action  to  obtain  judgment  on  the wage claim upon which the lien was
    51  established, within a time specified in the notice, not less than thirty
    52  days from the time of service, or show cause at  a  special  term  of  a
    53  court of record, or at a county court, in a county in which the property
    54  is  situated,  at  a time and place specified therein, why the notice of
    55  lien filed or the bond given should not be vacated and cancelled, or the
    56  deposit returned, as the case may be. Proof of such service and that the

        A. 486--B                          15

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

        A. 486--B                          16

     1  any legal action brought on  the  employee's  behalf  pursuant  to  this
     2  section.
     3    §  28.  Subdivision  5  of  section 6201 of the civil practice law and
     4  rules, as amended by chapter 860 of the laws of 1977 and  as  renumbered
     5  by  chapter  618 of the laws of 1992, is amended and a new subdivision 6
     6  is added to read as follows:
     7    5. the cause of action is based on a judgment, decree or  order  of  a
     8  court  of  the  United States or of any other court which is entitled to
     9  full faith and credit in this state, or on a  judgment  which  qualifies
    10  for  recognition  under the provisions of article 53[.] of this chapter;
    11  or
    12    6. the cause of action is based on wage claims.  "Wage  claims,"  when
    13  used in this chapter, shall include any claims of violations of articles
    14  five, six, and nineteen of the labor law, section two hundred fifteen of
    15  the labor law, and the related regulations or wage orders promulgated by
    16  the  commissioner  of  labor, including but not limited to any claims of
    17  unpaid, minimum, overtime, and spread-of-hours pay, unlawfully  retained
    18  gratuities,  unlawful  deductions from wages, unpaid commissions, unpaid
    19  benefits and wage supplements, and retaliation, and any claims  pursuant
    20  to 18 U.S.C. § 1595, 29 U.S.C. § 201 et seq., and/or employment contract
    21  as  well  as the concomitant liquidated damages and penalties authorized
    22  pursuant to the labor law, the Fair Labor Standards Act, or any  employ-
    23  ment contract.
    24    §  29.  Section  6210 of the civil practice law and rules, as added by
    25  chapter 860 of the laws of 1977, is amended to read as follows:
    26    § 6210. Order of attachment on notice;  temporary  restraining  order;
    27  contents.  Upon a motion on notice for an order of attachment, the court
    28  may, without notice to the  defendant,  grant  a  temporary  restraining
    29  order  prohibiting  the transfer of assets by a garnishee as provided in
    30  subdivision (b) of section 6214. When attachment is sought  pursuant  to
    31  subdivision  six  of  section  6201,  and  if  the employer contests the
    32  motion, the court shall hold a hearing  within  ten  days  of  when  the
    33  employer's  response  to  plaintiffs'  motion for attachment is due. The
    34  contents of the order of attachment granted  pursuant  to  this  section
    35  shall be as provided in subdivision (a) of section 6211.
    36    §  30.  Subdivision  (b) of section 6211 of the civil practice law and
    37  rules, as amended by chapter 566 of the laws of 1985, is amended to read
    38  as follows:
    39    (b) Confirmation of order. Except where  an  order  of  attachment  is
    40  granted  on  the  ground  specified in subdivision one or six of section
    41  6201, an order of attachment granted without notice shall  provide  that
    42  within  a period not to exceed five days after levy, the plaintiff shall
    43  move, on such notice as the court shall direct  to  the  defendant,  the
    44  garnishee, if any, and the sheriff, for an order confirming the order of
    45  attachment.  Where  an  order of attachment without notice is granted on
    46  the ground specified in subdivision one or  six  of  section  6201,  the
    47  court shall direct that the statement required by section 6219 be served
    48  within  five days, that a copy thereof be served upon the plaintiff, and
    49  the plaintiff shall move  within  ten  days  after  levy  for  an  order
    50  confirming  the  order  of attachment. If the plaintiff upon such motion
    51  shall show that the statement has not been served and that the plaintiff
    52  will be unable to satisfy the requirement of subdivision (b) of  section
    53  6223 until the statement has been served, the court may grant one exten-
    54  sion of the time to move for confirmation for a period not to exceed ten
    55  days. If plaintiff fails to make such motion within the required period,
    56  the  order  of  attachment and any levy thereunder shall have no further

        A. 486--B                          17

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

        A. 486--B                          18

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

        A. 486--B                          19

     1  he  intends to hold them so liable to him. Such notice shall be given by
     2  him within twenty days after the date that [notice was given to him  by]
     3  he became aware that a laborer, servant or employee may seek to hold him
     4  liable under paragraph (a).
     5    §  34. Subdivision (c) of section 609 of the limited liability company
     6  law, as added by chapter 537 of the laws of 2014, is amended to read  as
     7  follows:
     8    (c) Notwithstanding the provisions of subdivisions (a) and (b) of this
     9  section, the ten members with the largest percentage ownership interest,
    10  as  determined as of the beginning of the period during which the unpaid
    11  services referred to in this section are  performed,  of  every  limited
    12  liability  company, shall jointly and severally be personally liable for
    13  all debts, wages or salaries due and owing to any of its laborers, serv-
    14  ants or employees, for services  performed  by  them  for  such  limited
    15  liability  company.  [Before  such  laborer,  servant  or employee shall
    16  charge such member for such services, he or she  shall  give  notice  in
    17  writing to such member that he or she intends to hold such member liable
    18  under this section. Such notice shall be given within one hundred eighty
    19  days  after  termination  of  such  services.  An action to enforce such
    20  liability shall be commenced within ninety days after the return  of  an
    21  execution unsatisfied against the limited liability company upon a judg-
    22  ment recovered against it for such services.] A member who has paid more
    23  than  his  or her pro rata share under this section shall be entitled to
    24  contribution pro rata from the other members liable under  this  section
    25  with  respect  to the excess so paid, over and above his or her pro rata
    26  share, and may sue them jointly or severally or any number  of  them  to
    27  recover the amount due from them. Such recovery may be had in a separate
    28  action.  As  used in this subdivision, "pro rata" means in proportion to
    29  percentage ownership interest. Before a member  may  claim  contribution
    30  from  other members under this section, he or she shall give them notice
    31  in writing that he or she intends to hold them so liable to him or her.
    32    § 35. Section 1102 of the limited liability company law is amended  by
    33  adding a new subdivision (e) to read as follows:
    34    (e) Any person who is or shall have been a laborer, servant or employ-
    35  ee  of  a  limited  liability  company, upon at least five days' written
    36  demand shall have the right to examine in person or by agent  or  attor-
    37  ney,  during usual business hours, records described in paragraph two of
    38  subdivision (a) of this section throughout the  period  of  time  during
    39  which such laborer, servant or employee provided services to such compa-
    40  ny.  A  company  requested to provide information pursuant to this para-
    41  graph shall make available such records in written form and in any other
    42  format in which such information is maintained by the company and  shall
    43  not  be  required to provide such information in any other format.  Upon
    44  refusal by the company or by an officer  or  agent  of  the  company  to
    45  permit  an  inspection  of  the records described in this paragraph, the
    46  person making the demand for inspection may apply to the  supreme  court
    47  in  the  judicial  district  where the office of the company is located,
    48  upon such notice as the court may direct, for  an  order  directing  the
    49  company,  its  members or managers to show cause why an order should not
    50  be granted permitting such inspection by the applicant.  Upon the return
    51  day of the order to show cause, the court shall hear the parties summar-
    52  ily, by affidavit or otherwise, and if it appears that the applicant  is
    53  qualified  and  entitled  to  such  inspection, the court shall grant an
    54  order compelling such inspection and awarding such further relief as  to
    55  the  court  may  seem  just  and proper. If the applicant is found to be
    56  qualified and entitled to such inspection, the  company  shall  pay  all

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     1  reasonable  attorney's  fees  and costs of said applicant related to the
     2  demand for inspection of the records.
     3    §  36.  This act shall take effect on the thirtieth day after it shall
     4  have become a law. The procedures and rights created in this act may  be
     5  used  by  employees,  laborers or servants in connection with claims for
     6  liabilities that arose prior to the effective date.
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