Bill Text: NY A08559 | 2019-2020 | General Assembly | Introduced

Bill Title: Relates to process servers; enacts provisions relating to issuance, renewal, suspension and revocation of a license to do business as a process server.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2019-08-23 - referred to economic development [A08559 Detail]

Download: New_York-2019-A08559-Introduced.html

                STATE OF NEW YORK


                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                     August 23, 2019

        Introduced  by  M.  of  A.  COOK, STECK -- read once and referred to the
          Committee on Economic Development

        AN ACT to amend the general business law and the civil practice law  and
          rules, in relation to process servers

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 89-t of the general business law, as added by chap-
     2  ter 397 of the laws of 1973 and as redesignated by chapter  336  of  the
     3  laws of 1992, is amended to read as follows:
     4    §  89-t.  Definitions.  1.  For  this article, a "process server" is a
     5  person other than an attorney or a party to an action acting on his  own
     6  behalf who:  (a) derives income from the service of papers in an action;
     7  or  (b)  has  effected  service  of  process  in five or more actions or
     8  proceedings in the twelve month period immediately preceding the service
     9  in question. A person who serves interlocutory papers upon  an  attorney
    10  or who serves papers on behalf of a federal, state or local governmental
    11  agency  in  the  course  of  his  employment by such agency shall not be
    12  deemed a process server within the meaning of this article by virtue  of
    13  such  service.   For the purposes of this chapter the service of five or
    14  more process in any one year shall be deemed to constitute  doing  busi-
    15  ness as a process server.
    16    2. "Department" shall mean department of state.
    17    3. "Secretary" shall mean secretary of state.
    18    §  2. Article 8 of the general business law is amended by adding a new
    19  section 89-x to read as follows:
    20    § 89-x. Process server, licensing, penalties.  1.  Issuance,  renewal,
    21  suspension  and  revocation of a license. On or after October first, two
    22  thousand twenty, no person shall act as a process server  without  first
    23  having  obtained  a  license  in  accordance with the provisions of this
    24  article, and without first being in compliance with all other applicable
    25  laws, rules and regulations.

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

        A. 8559                             2

     1    2. (a) All licenses issued pursuant to this article shall be valid for
     2  two years unless sooner suspended or revoked. The secretary shall estab-
     3  lish by regulation the expiration date of such licenses.
     4    (b)  The  fee  for  a license or renewal thereof shall be five hundred
     5  dollars.
     6    3. (a) Each person applying for a process server  license  or  renewal
     7  thereof  shall file an application in such form and detail as the secre-
     8  tary may prescribe and shall pay the fee required by this section.
     9    (b) In addition to any other information required, the secretary shall
    10  require the following information, and shall,  as  appropriate,  require
    11  such  information not only of the applicant but also of any of its prin-
    12  cipals, partners, officers  and  directors,  or  any  person  or  entity
    13  controlling an interest greater than ten percent:
    14    (i) the name and residence address of the applicant;
    15    (ii) the business name, if other than applicant;
    16    (iii)  the place, including the city, town or village, with the street
    17  and number, where the business is to be located;
    18    (iv) the business telephone of the applicant;
    19    (v) the length of time that the applicant has been a process server;
    20    (vi) a statement indicating whether the applicant has:
    21    (A) been convicted of any crime or is a debtor  on  any  unpaid  civil
    22  judgment relating to work as a process server; and
    23    (B)  at  any  time  in the past been issued a license pursuant to this
    24  article, or has been issued a license for process serving activities  by
    25  any  other state or local authority, and if so, whether such license was
    26  ever revoked or suspended;
    27    (vii) a detailed description of  the  business  practices  or  methods
    28  used,  or  intended  to  be  used,  by the applicant to confirm that the
    29  actions of its employees are in  compliance  with  applicable  laws,  in
    30  particular  with  regard to employees carrying out the New York require-
    31  ments of service of process as set forth in the civil practice  law  and
    32  rules;
    33    (viii)  an  applicant who is a non-resident of the state shall provide
    34  the name and address of a registered agent within the state or designate
    35  the secretary as his or her agent upon whom process or  other  notifica-
    36  tion may be served.
    37    4.  In  determining whether to issue or renew a license, the secretary
    38  shall consider the character, competency and integrity of the applicant.
    39  The secretary may refuse to issue or renew a license to any person, firm
    40  or corporation whom he or she finds has: been  convicted  of  any  crime
    41  defined  in  article  one hundred fifty-five of the penal law or article
    42  twenty-two-A of this chapter or failed to pay any final  civil  judgment
    43  relating  to  work as a process server, if such refusal, in the judgment
    44  of the secretary, best promotes the interests  of  the  people  of  this
    45  state.
    46    5.  Notice in writing in the manner and form prescribed by the depart-
    47  ment shall be given to the department at its offices  in  Albany  within
    48  ten  days  of changes of name or address by licensed process server. The
    49  fee for filing each change of  name  or  address  notice  shall  be  ten
    50  dollars.
    51    6. The fees established by this section shall not be refundable.
    52    7.  Each  process  server engaged in serving process shall communicate
    53  his or her license number upon the request of any interested party.  Any
    54  advertisement, letterhead, receipt or other printed matter of a licensee
    55  must  contain the license number assigned to the licensee by the depart-
    56  ment. Such license number shall be clearly and conspicuously displayed.

        A. 8559                             3

     1    8. No person, firm or corporation shall: (a) present,  or  attempt  to
     2  present, as his, her or its own, the license number of another;
     3    (b)  knowingly give false evidence of a material nature to the depart-
     4  ment for the purpose of procuring a license;
     5    (c) falsely represent themselves to be a licensed process server;
     6    (d) use or attempt to use a license which has expired;
     7    (e) offer to perform or perform any service of process without  having
     8  a current license as is required under this article; or
     9    (f)  represent  in any manner that his, her or its license constitutes
    10  an endorsement of the quality of workmanship or competency of the  proc-
    11  ess server.
    12    9.  Licenses  issued  to  process servers shall not be transferable or
    13  assignable.
    14    10. The secretary shall issue each process  server  a  unique  license
    15  number.
    16    11.  The  secretary  shall  maintain  and  publish  a  registry of all
    17  licensed process servers which shall  list  and  identify  all  licensed
    18  process  servers  doing business in this state. The secretary shall make
    19  the registry available on its website. (a)  The  secretary  shall  adopt
    20  such  rules and regulations as he or she may determine are necessary for
    21  the administration and enforcement of this article,  and  shall  provide
    22  written  notification  of  the provisions of this article to all process
    23  servers licensed pursuant to this article;
    24    (b) In addition to any other powers of the secretary, not  in  limita-
    25  tion  thereof,  he or she shall have the power to enforce the provisions
    26  of this article, to investigate any violation  thereof,  to  investigate
    27  the  business,  business  practices  and business methods of any process
    28  server, and to conduct routine examinations of the financial solvency of
    29  any process server, if in the opinion of the  secretary,  such  investi-
    30  gation  or  examination  is  warranted.  Each  process  server  shall be
    31  obliged, on request of the secretary of state, to supply  such  informa-
    32  tion, books, papers or records as may be required concerning his, her or
    33  its  business, business practices or business methods, or proposed busi-
    34  ness practices or methods. Failure to comply with a  lawful  request  of
    35  the  secretary  shall  be  a  ground  for  denying  an application for a
    36  license, or for revoking, suspending, or  failing  to  renew  a  license
    37  issued under this article;
    38    (c)  The  department  shall  have  the  power to revoke or suspend any
    39  license, or in lieu thereof to impose a fine not less than  one  hundred
    40  dollars  nor  more  than two thousand dollars per violation or instance,
    41  payable to the department, or reprimand any licensee or deny an applica-
    42  tion for a license or renewal thereof upon proof:
    43    (i) that the applicant or licensee has violated any of the  provisions
    44  of  this  article  or  the rules and regulations promulgated pursuant to
    45  this article;
    46    (ii) that the applicant or licensee has  practiced  fraud,  deceit  or
    47  misrepresentation;
    48    (iii)  that the applicant or licensee has made a material misstatement
    49  in the application for or renewal of his or her license; or
    50    (iv) that the applicant or licensee has demonstrated  incompetence  or
    51  untrustworthiness in his or her actions.
    52    12.  The  department shall before denying an application for a license
    53  or before revoking or suspending any license, or imposing  any  fine  or
    54  reprimand, and at least fifteen days prior to the date set for the hear-
    55  ing, and upon due notice to the complainant or objector, notify in writ-
    56  ing the applicant, or the holder of such license, of any charge made and

        A. 8559                             4

     1  shall  afford  such  applicant or licensee an opportunity to be heard in
     2  person or by counsel in reference thereto. Such written  notice  may  be
     3  served  personally to the applicant or licensee, or by certified mail to
     4  the last known business address of such applicant or licensee.
     5    13. The hearing on such charges shall be at such time and place as the
     6  department  shall  prescribe  and  shall be conducted by such officer or
     7  person in the department as the secretary may designate, who shall  have
     8  the  power to subpoena and bring before the officer, or person so desig-
     9  nated, any person in this state and  administer  an  oath  to  and  take
    10  testimony  of  any  person or cause his or her deposition to be taken. A
    11  subpoena issued under this section shall be regulated by the civil prac-
    12  tice law and rules. Such officer or person in  the department designated
    13  to take such testimony shall not be bound by  common  law  or  statutory
    14  rules of evidence or by technical or formal rules of procedure.
    15    14.  In  the event that the department shall deny the application for,
    16  or revoke or suspend any such license, or impose any fine or  reprimand,
    17  its  determination  shall  be  in  writing  and  officially  signed. The
    18  original of such determinations, when so signed, shall be filed  in  the
    19  office  of  the  department  and  copies  thereof shall be mailed to the
    20  applicant or licensee and to the complainant within two days after  such
    21  filing.
    22    15.  The  department,  acting  by  the  office or person designated to
    23  conduct the hearing pursuant to subdivision thirteen of this section  or
    24  by  such  other  officer or person in the department as the secretary of
    25  state may designate, shall have the power to suspend the license of  any
    26  licensee  who  has  been  convicted  in this state or any other state or
    27  territory of a felony or of any misdemeanor for a period  not  exceeding
    28  thirty  days  pending  a  hearing  and  a  determination of charges made
    29  against him or her. If such hearing is adjourned at the request  of  the
    30  licensee, or by reason of any act or omission by him or her or on his or
    31  her  behalf,  such suspension may be continued for the additional period
    32  of such adjournment.
    33    16. The action of the department in granting or refusing to  grant  or
    34  to  renew  a  license under this article or in revoking or suspending or
    35  refusing to revoke or suspend such a license or  imposing  any  fine  or
    36  reprimand  shall  be  subject to review by a proceeding instituted under
    37  article seventy-eight of  the  civil  practice  law  and  rules  at  the
    38  instance  of  the applicant for such license, the holder of a license so
    39  revoked, suspended, fined or reprimanded.
    40    17. For the purpose of this article, licensees may be held responsible
    41  for statements, representations, promises or acts of their employees  or
    42  their  agents  within  the  scope of their authority; provided, however,
    43  that licensees shall not be held responsible for statements, representa-
    44  tions, promises or acts which are  contrary  to  instructions  or  which
    45  constitute  gross  negligence  or  intentional torts unless specifically
    46  authorized by the licensee. (a) Any person,  firm  or  corporation  that
    47  operates  as a process server without a license shall be required to pay
    48  a civil penalty to the department of not more than five hundred  dollars
    49  per attempt to serve process in violation of this section;
    50    (b)  In  addition to any other penalties, if a person is found to have
    51  committed repeated, multiple or persistent violations of  any  provision
    52  of  this  article,  such  person  may be responsible for the cost of the
    53  department's investigation.
    54    18. (a) As a condition of obtaining a license pursuant to  this  arti-
    55  cle,  every  process  server applicant who is applying for a license and
    56  employs between one and four individuals engaged in the service of proc-

        A. 8559                             5

     1  ess shall obtain and continue in full force and effect a bond,  contract
     2  of indemnity, or irrevocable letter of credit in the amount of ten thou-
     3  sand dollars to be filed with the secretary;
     4    (b)  As  a  condition to obtaining a license pursuant to this article,
     5  every process server applicant who is applying for a license and employs
     6  between five and nine individuals engaged  in  the  service  of  process
     7  shall  obtain  and continue in full force and effect a bond, contract of
     8  indemnity, or irrevocable letter of credit in the amount of  twenty-five
     9  thousand  dollars  to  be  filed  with  the  secretary as a condition to
    10  obtaining a license pursuant  to  this  article,  every  process  server
    11  applicant  who  is  applying  for  a license and employs between ten and
    12  twenty individuals engaged in the service of process  shall  obtain  and
    13  continue  in  full  force  and  effect a bond, contract of indemnity, or
    14  irrevocable letter of credit in the amount of fifty thousand dollars  to
    15  be filed with the secretary;
    16    (c)  As  a  condition to obtaining a license pursuant to this article,
    17  every process applicant who is applying for a license and employs twenty
    18  or more individuals engaged in the service of process shall  obtain  and
    19  continue  in  full  force  and  effect a bond, contract of indemnity, or
    20  irrevocable letter of credit, in the  amount  of  seventy-five  thousand
    21  dollars to be filed with the secretary;
    22    (d)  Such surety bond, contract of indemnity, or irrevocable letter of
    23  credit shall be conditioned that the applicant  will  comply  with  this
    24  article, article twenty-nine-H, and article twenty-nine-HH of this chap-
    25  ter  and pay all civil penalties, fines, or other obligations imposed by
    26  the secretary or a court of law,  investigatory  costs  required  to  be
    27  paid,  or any final judgment against the licensee pursuant to such arti-
    28  cles;
    29    (e) The total liability imposed on the surety bond under this  section
    30  for  all breaches of the bond condition is limited to the face amount of
    31  the bond. Such liability is limited to the  amount  of  the  penalty  or
    32  investigatory costs. In no event will the surety on a bond be liable for
    33  total  claims  in excess of the bond amount, regardless of the number or
    34  nature of claims made against the bond or the number of years  the  bond
    35  remained in force;
    36    (f)  Any surety issuing a bond pursuant to this section and any licen-
    37  see shall be required to provide thirty days  notice  to  the  secretary
    38  prior  to the effective date of cancellation of the bond. The failure to
    39  maintain such a bond shall operate to revoke the license of the  process
    40  server upon notice and hearing.
    41    19. (a) Wherever there shall be a violation of this article, an appli-
    42  cation  may be made by the attorney general in the name of the people of
    43  the state of New York to a court or justice  having  jurisdiction  by  a
    44  special  proceeding  to  issue  an  injunction,  and  upon notice to the
    45  defendant of not less than five days, to enjoin or restrain the  contin-
    46  uance  of  such violation; and if it shall appear to the satisfaction of
    47  the court or justice that the defendant  has,  in  fact,  violated  this
    48  section, an injunction may be issued by such court or justice, enjoining
    49  and  restraining any further violation, without requiring proof that any
    50  person has, in fact, been  injured  or  damaged  thereby.  In  any  such
    51  proceeding,  the  court  may  make allowances to the attorney general as
    52  provided in paragraph six of subdivision  (a)  of  section  eighty-three
    53  hundred  three  of the civil practice law and rules, and direct restitu-
    54  tion. Whenever the court  shall  determine  that  a  violation  of  this
    55  section  has  occurred, the court may impose a civil penalty of not less
    56  than one hundred dollars nor more than ten  thousand  dollars  for  each

        A. 8559                             6

     1  violation.  In connection with any such proposed application, the attor-
     2  ney general is authorized to take proof and make a determination of  the
     3  relevant facts and to issue subpoenas in accordance with the civil prac-
     4  tice law and rules;
     5    (b) Any person who has been injured by reason of any violation of this
     6  article may bring an action in his or her own name to enjoin such unlaw-
     7  ful  act  or practice, an action to recover his or her actual damages or
     8  one thousand dollars, whichever is greater, or both  such  actions.  The
     9  court may, in its discretion, increase the award of damages to an amount
    10  not to exceed three times the actual damages up to ten thousand dollars,
    11  if the court finds the defendant willfully violated this article. In the
    12  case  of  any  successful action to enforce the foregoing liability, the
    13  court may award the costs of the action together with reasonable  attor-
    14  ney's fees.
    15    20.  (a)  This  article  shall apply to all process servers, provided,
    16  however, that a political subdivision may impose other requirements that
    17  are in addition to the minimum standards set forth in this article.
    18    (b) The provisions of this article shall not be construed to limit  in
    19  any way the authority of a political subdivision to enact, implement and
    20  continue to enforce local laws and regulations governing process servers
    21  that  were  in effect prior to the effective date of this section, or to
    22  enact, implement and enforce any amendments thereto after the  effective
    23  date of this section.
    24    § 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
    25  as  amended  by  chapter  21  of the laws of 2013, is amended to read as
    26  follows:
    27    (e) License to do business. Where  the  plaintiff's  cause  of  action
    28  against  a  consumer  arises  from the plaintiff's conduct of a business
    29  which is required by state or local law to be licensed by the department
    30  of consumer affairs of the city of New York, the Suffolk county  depart-
    31  ment  of consumer affairs, the Westchester county department of consumer
    32  affairs/weight-measures, the county of Rockland, the county of Putnam or
    33  the Nassau county department of consumer affairs, or the  department  of
    34  state pursuant to section eighty-nine-u of the general business law, the
    35  complaint  shall  allege, as part of the cause of action, that plaintiff
    36  was duly licensed at the time of services rendered and shall contain the
    37  name and number, if any, of such license  and  the  governmental  agency
    38  which  issued  such license. The failure of the plaintiff to comply with
    39  this subdivision will permit the defendant to move for dismissal  pursu-
    40  ant  to  paragraph  seven  of subdivision (a) of rule thirty-two hundred
    41  eleven of this chapter.
    42    § 4. This act shall take effect on the one hundred eightieth day after
    43  it shall have become a law. Effective immediately, the addition,  amend-
    44  ment and/or repeal of any rule or regulation necessary for the implemen-
    45  tation  of  this act on its effective date are authorized to be made and
    46  completed on or before such effective date.