STATE OF NEW YORK ________________________________________________________________________ 7200 2023-2024 Regular Sessions IN SENATE May 18, 2023 ___________ Introduced by Sen. HELMING -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the uniform justice court act, in relation to authoriz- ing the exercise of jurisdiction over commercial claims in justice courts The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The uniform justice court act is amended by adding a new 2 article 18-A to read as follows: 3 ARTICLE 18-A 4 COMMERCIAL CLAIMS 5 Section 1820. Commercial claims defined. 6 1821. Parts for the determination of commercial claims estab- 7 lished. 8 1822. Commencement of action upon commercial claims. 9 1823. Informal and simplified procedure on commercial claims. 10 1824. Remedies available; transfer of commercial claims. 11 1825. Trial by jury; how obtained; discretionary costs. 12 1826. Proceedings on default and review of judgments. 13 1827. Judgment obtained to be res judicata in certain cases. 14 1828. Procedures relating to corporations, associations, insur- 15 ers and assignees. 16 1829. Limitation on right to resort to commercial claims proce- 17 dures. 18 1830. Indexing commercial claims part judgments. 19 1831. Enforcement of commercial claims judgments. 20 1832. Duty to pay judgments. 21 1833. Designation of defendant; amendment procedure. 22 § 1820. Commercial claims defined. 23 (a) The term "commercial claim" or "commercial claims" as used in this 24 act shall mean and include any cause of action for money only not in EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03995-01-3S. 7200 2 1 excess of the maximum amount permitted for a small claim in the small 2 claims part of the court, exclusive of interest and costs, provided that 3 subject to the limitations contained in section eighteen hundred twen- 4 ty-eight of this article, the claimant is a corporation, partnership or 5 association, which has its principal office in the state of New York and 6 provided that the defendant either resides, or has an office for the 7 transaction of business or a regular employment, within the county in 8 which the court is located. 9 (b) The term "consumer transaction" means a transaction between a 10 claimant and a natural person, wherein the money, property or service 11 which is the subject of the transaction is primarily for personal, fami- 12 ly or household purposes. 13 § 1821. Parts for the determination of commercial claims established. 14 The chief administrator shall assign the times and places for holding, 15 and the judges who shall hold, one or more parts of the court for the 16 hearing of commercial claims as herein defined, and the rules may regu- 17 late the practice and procedure controlling the determination of such 18 claims and prescribe and furnish the forms for instituting the same. 19 There shall be at least one evening session of each part every month for 20 the hearing of commercial claims, provided however, that the chief 21 administrator may provide for exemption from this requirement where 22 there exists no demonstrated need for evening sessions. The chief admin- 23 istrator shall not combine commercial claims part actions with small 24 claims part actions for purposes of convenience unless a preference is 25 given to small claims and to commercial claims arising out of consumer 26 transactions. Such practice, procedure and forms shall differ from the 27 practice, procedure and forms used in the court for other than small 28 claims and commercial claims, notwithstanding any provision of law to 29 the contrary. They shall constitute a simple, informal and inexpensive 30 procedure for the prompt determination of commercial claims in accord- 31 ance with the rules and principles of substantive law. The procedure 32 established pursuant to this article shall not be exclusive of but shall 33 be alternative to the procedure now or hereafter established with 34 respect to actions commenced in the court by the service of a summons. 35 No rule to be enacted pursuant to this article shall dispense with or 36 interfere with the taking of stenographic minutes of any hearing of any 37 business claim hereunder. 38 § 1822. Commencement of action upon commercial claims. 39 (a) (i) Commercial claims other than claims arising out of consumer 40 transactions shall be commenced upon the payment by the claimant of a 41 filing fee of twenty-five dollars and the cost of mailings as herein 42 provided, without the service of a summons and, except by special order 43 of the court, without the service of any pleading other than a required 44 certification verified as to its truthfulness by the claimant on a form 45 prescribed by the state office of court administration and filed with 46 the clerk, that no more than five such actions or proceedings (including 47 the instant action or proceeding) have been instituted during that 48 calendar month, and a statement of its cause of action by the claimant 49 or someone on the claimants behalf to the clerk, who shall reduce the 50 same to a concise, written form and record it in a docket kept especial- 51 ly for such purpose. Such procedure shall provide that the commercial 52 claims part of the court shall have no jurisdiction over, and shall 53 dismiss, any case with respect to which the required certification is 54 not made upon the attempted institution of the action or proceeding. 55 Such procedure shall provide for the sending of notice of such claim by 56 ordinary first-class mail and certified mail with return receiptS. 7200 3 1 requested to the party complained against at his residence, if he 2 resides within the county in which the court is located, and his resi- 3 dence is known to the claimant, or at his office or place of regular 4 employment within such county if he does not reside therein or his resi- 5 dence within the county is not known to the claimant. If, after the 6 expiration of twenty-one days, such ordinary first-class mailing has not 7 been returned as undeliverable, the party complained against shall be 8 presumed to have received notice of such claim. Such notice shall 9 include a clear description of the procedure for filing a counterclaim, 10 pursuant to subdivision (d) of this section. 11 (ii) Such procedure shall further provide for an early hearing upon 12 and determination of such claim. The hearing shall be scheduled in a 13 manner which, to the extent possible, minimizes the time the party 14 complained against must be absent from employment. 15 (iii) Either party may request that the hearing be scheduled during 16 evening hours, provided that the hearing shall not be scheduled during 17 evening hours if it would cause unreasonable hardship to either party. 18 The court shall not unreasonably deny requests for evening hearings if 19 such requests are made by the claimant upon commencement of the action 20 or by the party complained against within fourteen days of receipt of 21 the notice of claim. 22 (b) (i) Commercial claims in actions arising out of consumer trans- 23 actions shall be commenced upon the payment by the claimant of a filing 24 fee of twenty-five dollars and the cost of mailings as herein provided, 25 without the service of a summons and, except by special order of the 26 court, without the service of any pleading other than a required state- 27 ment of the cause of action by the claimant or someone on the claimants 28 behalf to the clerk, who shall reduce the same to a concise written form 29 including the information required by subdivision (c) of this section, 30 denominate it conspicuously as a consumer transaction, and record it in 31 the docket marked as a consumer transaction, and by filing with the 32 clerk a required certificate verified as to its truthfulness by the 33 claimant on forms prescribed by the state office of court adminis- 34 tration. 35 (ii) Such verified certificate shall certify (A) that the claimant has 36 mailed by ordinary first-class mail to the party complained against a 37 demand letter, no less than ten days and no more than one hundred eighty 38 days prior to the commencement of the claim, and (B) that, based upon 39 information and belief, the claimant has not instituted more than five 40 actions or proceedings (including the instant action or proceeding) 41 during the calendar month. 42 (iii) Such procedure shall further provide for an early hearing upon 43 and determination of such claim. The hearing shall be scheduled in a 44 manner which, to the extent possible, minimizes the time the party 45 complained against must be absent from employment. Either party may 46 request that the hearing be scheduled during evening hours, provided 47 that the hearing shall not be scheduled during evening hours if it would 48 cause unreasonable hardship to either party. The court shall not unrea- 49 sonably deny requests for evening hearings if such requests are made by 50 the claimant upon commencement of the action or by the party complained 51 against within fourteen days of receipt of the notice of claim. 52 (c) The clerk shall furnish every claimant, upon commencement of the 53 action, and every party complained against, with the notice of claim, 54 and with information written in clear and coherent language which shall 55 be prescribed and furnished by the state office of court administration, 56 concerning the commercial claims part. Such information shall include,S. 7200 4 1 but not be limited to, the form for certification and filing by the 2 claimant that no more than five such actions or proceedings have been 3 instituted during that calendar month, and an explanation of the follow- 4 ing terms and procedures: adjournments, counterclaims, jury trial 5 requests, evening hour requests, demand letters in cases concerning 6 consumer transactions, default judgments, subpoenas, arbitration and 7 collection methods, the responsibility of the judgment creditor to 8 collect data on the judgment debtor's assets, the ability of the court 9 prior to entering judgment to order examination of or disclosure by, the 10 defendant and restrain him, and fees. The information shall be available 11 in English and, if the chief administrator determines it is appropriate 12 or necessary, in Spanish. Large signs in English and, if the chief 13 administrator requires it, in Spanish shall be posted in conspicuous 14 locations in each commercial claims part clerk's office, advising the 15 public of its availability. 16 (d) A defendant who wishes to file a counterclaim shall do so by 17 filing with the clerk a statement containing such counterclaim within 18 five days of receiving the notice of claim. At the time of such filing 19 the defendant shall pay to the clerk a filing fee of five dollars plus 20 the cost of mailings which are required pursuant to this subdivision. 21 The clerk shall forthwith send notice of the counterclaim by ordinary 22 first-class mail to the claimant. If the defendant fails to file the 23 counterclaim in accordance with the provisions of this subdivision, the 24 defendant retains the right to file the counterclaim, however the claim- 25 ant may, but shall not be required to, request and obtain adjournment of 26 the hearing to a later date. The claimant may reply to the counterclaim 27 but shall not be required to do so. 28 § 1823. Informal and simplified procedure on commercial claims. 29 The court shall conduct hearings upon commercial claims in such manner 30 as to do substantial justice between the parties according to the rules 31 of substantive law and shall not be bound by statutory provisions or 32 rules of practice, procedure, pleading or evidence, except statutory 33 provisions relating to privileged communications and personal trans- 34 actions or communications with a decedent or person with a mental 35 illness. An itemized bill or invoice, receipted or marked paid, or two 36 itemized estimates for services or repairs, are admissible in evidence 37 and are prima facie evidence of the reasonable value and necessity of 38 such services and repairs. Disclosure shall be unavailable in commercial 39 claims procedure except upon order of the court on showing of proper 40 circumstances. The provisions of this act and the rules of this court, 41 together with the statutes and rules governing supreme court practice, 42 shall apply to claims brought under this article so far as the same can 43 be made applicable and are not in conflict with the provisions of this 44 article; in case of conflict, the provisions of this article shall 45 control. 46 § 1824. Remedies available; transfer of commercial claims. 47 (a) Upon determination of a commercial claim, the court shall direct 48 judgment in accordance with its findings, and, when necessary to do 49 substantial justice between the parties, may condition the entry of 50 judgment upon such terms as the court shall deem proper. Pursuant to 51 section fifty-two hundred twenty-nine of the civil practice law and 52 rules prior to entering a judgment, the court may order the examination 53 of or disclosure by, the defendant and restrain him to the same extent 54 as if a restraining notice had been served upon him after judgment was 55 entered.S. 7200 5 1 (b) The court shall have power to transfer any commercial claim or 2 claims to any other part of the court upon such terms as the rules may 3 provide, and to proceed to hear the same according to the usual practice 4 and procedure applicable to other parts of the court. 5 (c) No counterclaim shall be permitted in a commercial claims action, 6 unless the court would have had monetary jurisdiction over the counter- 7 claim if it had been filed as a commercial claim. Any other claim sought 8 to be maintained against the claimant may be filed in any court of 9 competent jurisdiction. 10 (d) If the defendant appears to be engaged in repeated fraudulent or 11 illegal acts or otherwise demonstrates persistent fraud or illegality in 12 the carrying on, conducting or transaction of business, the court shall 13 either advise the attorney general in relation to his authority under 14 subdivision twelve of section sixty-three of the executive law, or shall 15 advise the claimant to do the same, but shall retain jurisdiction over 16 the commercial claim. 17 (e) If the defendant appears to be engaged in fraudulent or illegal 18 acts or otherwise demonstrates fraud or illegality in the carrying on, 19 conducting or transaction of a licensed or certified business, the court 20 shall either advise the appropriate state or local licensing or certify- 21 ing authority or shall advise the claimant to do the same, but shall 22 retain jurisdiction over the commercial claim. 23 § 1825. Trial by jury; how obtained; discretionary costs. 24 A claimant commencing an action upon a commercial claim under this 25 article shall be deemed to have waived a trial by jury, but if said 26 action shall be removed to a regular part of the court, the claimant 27 shall have the same right to demand a trial by jury as if such action 28 had originally been begun in such part. Any party to such action, other 29 than the claimant, prior to the day upon which he is notified to appear 30 or answer, may file with the court a demand for a trial by jury and his 31 affidavit that there are issues of fact in the action requiring such a 32 trial, specifying the same and stating that such trial is desired and 33 intended in good faith. Such demand and affidavit shall be accompanied 34 with the jury fee required by law and an undertaking in the sum of fifty 35 dollars in such form as may be approved by the rules, payable to the 36 other party or parties, conditioned upon the payment of any costs which 37 may be entered against him in the said action or any appeal within thir- 38 ty days after the entry thereof; or, in lieu of said undertaking, the 39 sum of fifty dollars may be deposited with the clerk of the court and 40 thereupon the clerk shall forthwith transmit such original papers or 41 duly attested copies thereof as may be provided by the rules to the part 42 of the court to which the action shall have been transferred and 43 assigned and such part may require pleadings in such action as though it 44 had been begun by the service of a summons. Such action may be consid- 45 ered a preferred cause of action. In any commercial claim which may have 46 been transferred to another part of the court, the court may award costs 47 up to twenty-five dollars to the claimant if the claimant prevails. 48 § 1826. Proceedings on default and review of judgments. 49 (a) A claimant commencing an action upon a commercial claim under this 50 article shall be deemed to have waived all right to appeal, except that 51 either party may appeal on the sole grounds that substantial justice has 52 not been done between the parties according to the rules and principles 53 of substantive law. 54 (b) The clerk shall mail notice of the default judgment by first-class 55 mail, both to the claimant and to the party complained against. Such 56 notice shall inform the defaulting party, in language promulgated by theS. 7200 6 1 state office of court administration, of such party's legal obligation 2 to pay; that failure to pay may result in garnishments, repossessions, 3 seizures and similar actions; and that if there was a reasonable excuse 4 for the default the defaulting party may apply to have the default 5 vacated by submitting a written request to the court. 6 (c) Proceedings on default under this article are to be governed by, 7 but are not limited to, rule five thousand fifteen of the civil practice 8 law and rules. 9 § 1827. Judgment obtained to be res judicata in certain cases. 10 A judgment obtained under this article shall not be deemed an adjudi- 11 cation of any fact at issue or found therein in any other action or 12 court except that a subsequent judgment obtained in another action or 13 court involving the same facts, issues and parties shall be reduced by 14 the amount of a judgment awarded under this article. 15 § 1828. Procedures relating to corporations, associations, insurers and 16 assignees. 17 (a) Any corporation, including a municipal corporation or public bene- 18 fit corporation, partnership, or association, which has its principal 19 office in the state of New York and an assignee of any commercial claim 20 may institute an action or proceeding under this article. 21 (b) No person or co-partnership, engaged directly or indirectly in the 22 business of collection and adjustment of claims, and no corporation or 23 association, directly or indirectly, itself or by or through its offi- 24 cers, agents or employees, shall solicit, buy or take an assignment of, 25 or be in any manner interested in buying or taking an assignment of a 26 bond, promissory note, bill of exchange, book debt, or any other thing 27 in action, or any claim or demand, with the intent and for the purpose 28 of bringing an action or proceeding thereon under this article. 29 (c) A corporation, partnership or association, which institutes an 30 action or proceeding under this article shall be limited to five such 31 actions or proceedings per calendar month. Such corporation, partnership 32 or association shall complete and file with the clerk the required 33 certification, provided it is true and verified as to its truthfulness, 34 as a prerequisite to the institution of an action or proceeding in this 35 part of the court. 36 (d) A corporation may appear as a party in any action brought pursuant 37 to this article by an attorney as well as by any authorized officer, 38 director or employee of the corporation provided that the appearance by 39 a non-lawyer on behalf of a corporation shall be deemed to constitute 40 the requisite authority to bind the corporation in a settlement or 41 trial. The court or arbitrator may make reasonable inquiry to determine 42 the authority of any person who appears for the corporation in a commer- 43 cial claims part case. 44 § 1829. Limitation on right to resort to commercial claims procedures. 45 If the clerk shall find that the procedures of the commercial claims 46 part are sought to be utilized by a claimant for purposes of oppression 47 or harassment, as where a claimant has previously resorted to such 48 procedures on the same claim and has been unsuccessful after the hearing 49 thereon, the clerk may in his discretion compel the claimant to make 50 application to the court for leave to prosecute the claim in the commer- 51 cial claims part. The court upon such application may inquire into the 52 circumstances and, if it shall find that the claim has already been 53 adjudicated, or that the claim is sought to be brought on solely for 54 purposes of oppression or harassment and not under color of right, it 55 may make an order denying the claimant the use of the commercial claims 56 part to prosecute the claim.S. 7200 7 1 § 1830. Indexing commercial claims part judgments. 2 All wholly or partially unsatisfied commercial claims part judgments 3 shall be indexed alphabetically and chronologically under the name of 4 the judgment debtor. Upon satisfying the judgment, the judgment debtor 5 shall present appropriate proof to the court and the court shall indi- 6 cate such in the records. 7 § 1831. Enforcement of commercial claims judgments. 8 Where a judgment has been entered in a commercial claims part and 9 remains unsatisfied, the commercial claims clerk shall, upon request, 10 issue information subpoenas, at nominal cost, for the judgment creditor 11 and provide the creditor with assistance on their preparation and use. 12 § 1832. Duty to pay judgments. 13 (a) Any person, partnership, firm or corporation which is sued in a 14 commercial claims part for any cause of action arising out of its busi- 15 ness activities, shall pay any judgment rendered against it in its true 16 name or in any name in which it conducts business. "True name" includes 17 the legal name of a natural person and the name under which a partner- 18 ship, firm or corporation is licensed, registered, incorporated or 19 otherwise authorized to do business. "Conducting business" as used in 20 this article shall include, but not be limited to, maintaining signs at 21 business premises or on business vehicles; advertising; entering into 22 contracts; and printing or using sales slips, checks, invoices or 23 receipts. Whenever a judgment has been rendered against a person, part- 24 nership, firm or corporation in other than its true name and the judg- 25 ment has remained unpaid for thirty-five days after receipt by the judg- 26 ment debtor of notice of its entry, the aggrieved judgment creditor 27 shall be entitled to commence an action in a commercial claims part 28 against such judgment debtor, notwithstanding the jurisdictional limit 29 of the court, for the sum of the original judgment, costs, reasonable 30 attorney's fees, and one hundred dollars. 31 (b) Whenever a judgment which relates to activities for which a 32 license is required has been rendered against a business which is 33 licensed by a state or local licensing authority and which remains 34 unpaid for thirty-five days after receipt by the judgment debtor of 35 notice of its entry and the judgment has not been stayed or appealed, 36 the state or local licensing authority shall consider such failure to 37 pay, if deliberate or part of a pattern of similar conduct indicating 38 recklessness, as a basis for the revocation, suspension, conditioning or 39 refusal to grant or renew such license. Nothing herein shall be 40 construed to preempt an authority's existing policy if it is more 41 restrictive. 42 (c) The clerk shall attach to the notice of suit required under this 43 article a notice of the duty imposed by this section. 44 § 1833. Designation of defendant; amendment procedure. 45 (a) A party who is ignorant, in whole or in part, of the true name of 46 a person, partnership, firm or corporation which may properly be made a 47 party defendant, may proceed against such defendant in any name used by 48 the person, partnership, firm or corporation in conducting business, as 49 defined in subdivision (a) of section eighteen hundred twenty-two of 50 this article. 51 (b) If the true name of the defendant becomes known at any time prior 52 to the hearing on the merits, such information shall be brought to the 53 attention of the clerk, who shall immediately amend all prior 54 proceedings and papers. The clerk shall send an amended notice to the 55 defendant, without payment of additional fees by the plaintiff, and all 56 subsequent proceedings and papers shall be amended accordingly.S. 7200 8 1 (c) In every action in the commercial claims part, at the hearing on 2 the merits, the judge or arbitrator shall determine the defendant's true 3 name. The clerk shall amend all prior proceedings and papers to conform 4 to such determination, and all subsequent proceedings and papers shall 5 be amended accordingly. 6 (d) A party against whom a judgment has been entered pursuant to this 7 article, in any proceeding under rule five thousand fifteen of the civil 8 practice law and rules for relief from such judgment, shall disclose its 9 true name; any and all names in which it is conducting business; and any 10 and all names in which it was conducting business at the time of the 11 transaction or occurrence on which such judgment is based. All subse- 12 quent proceedings and papers shall be amended to conform to such disclo- 13 sure. 14 § 2. This act shall take effect on the first of September next 15 succeeding the date on which it shall have become a law.