Provides that court withdrawal actions must be commenced in the court which had original jurisdiction of the underlying matter and increases the threshold claim amount.
Ayes (35): DeFrancisco, Bonacic, Farley, Flanagan, Golden, Grisanti, Hannon, Lanza, Larkin, Little, Marcellino, Nozzolio, O'Mara, Ranzenhofer, Robach, Savino, Seward, Young, Valesky, Martins, Krueger, Diaz, Dilan, Rivera, Gianaris, Breslin, Montgomery, Parker, Peralta, Perkins, Stavisky, Squadron, Kennedy, Espaillat, Hassell-Thompson
Ayes W/R (2): Griffo, LaValle
TITLE OF BILL: An act to amend the abandoned property law, in relation to withdrawal actions
PURPOSE: The purpose of this legislation is to clarify that court withdrawal actions must be commenced in the court of original jurisdiction and specifically bars the commencement of court withdrawal actions as special proceedings against the State Comptroller.
SUMMARY OF PROVISIONS: Section 1 amends Subdivision 2 of section 1406 of the abandoned property law to increase from five to ten thousand dollars the amount of a claim for any abandoned property paid to the State that may be established only on order of the court which had original jurisdiction of the underlying matter, after service of notice upon the State Comptroller and upon due notice to all parties to the action or proceeding which resulted in the monies being paid into court (court withdrawal action.)
Also, provides that such court withdrawal action must be commenced in the court which had jurisdiction over the underlying matter using the court index number of that original action and further provides that no such withdrawal action shall be brought as a special proceeding against the State Comptroller.
PRIOR LEGISLATIVE HISTORY: New bill.
JUSTIFICATION: Recently, certain courts have held that court withdrawal actions to recover moneys paid into court and then subsequently turned over to the Office of the State Comptroller pursuant to the Abandoned Property Law should be brought as a special proceeding against the State Comptroller rather than what it actually is, simply a reopening of the original underlying action involving the same parties who were parties in the original action.
Therefore, it is necessary to clarify in statute that the court withdrawal actions must be commenced in the court of original jurisdiction and specifically bar the commencement of court withdrawal actions as special proceedings against the State Comptroller.
The proposal also increases the threshold for such withdrawal actions from five thousand to ten thousand where the underlying court record established someone's entitlement to court deposited funds now held by the State Comptroller (and such amount is below the threshold.) If the claimant can establish, by means of proof; to the State Comptroller that the claimant is the person who the court determined is entitled to the funds, the funds may be paid to such claimant without obtaining a court order thereby saving legal fees. This almost exclusively would apply in estate matters where the funds were clearly deposited for a known but unlocated distributee or legatee who later appears to claim the inheritance.
FISCAL IMPLICATIONS FOR STATE: This bill has no significant State fiscal impact.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 7332 IN SENATE May 13, 2014 ___________Introduced by Sen. DeFRANCISCO -- (at request of the State Comptroller) -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the abandoned property law, in relation to withdrawal actions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 2 of section 1406 of the abandoned property law, as amended by section 5 of part P of chapter 62 of the laws of 2003, is amended to read as follows: 2. (a) Claim in the amount or value of
[five]TEN thousand dollars or more for any abandoned property heretofore paid to the state pursuant to section forty-four of chapter fifty-eight of the laws of nineteen hundred nine or as such section was amended by chapter two hundred seventeen of the laws of nineteen hundred thirty-three and chapter two hundred thirty-one of the laws of nineteen hundred thirty-eight, or hereafter paid to the state comptroller pursuant to paragraph (a) of subdivision one of section six hundred of this chapter, may be estab- lished only on order of the court which had original jurisdiction of the underlying matter, after service of notice upon the state comptroller and upon due notice to all parties to the action or proceeding which resulted in the monies being paid into court. [Any other provision of law to the contrary notwithstanding]SUCH COURT WITHDRAWAL ACTION SHALL BE COMMENCED IN THE COURT WHICH HAD ORIGINAL JURISDICTION OF THE UNDER- LYING MATTER USING THE COURT INDEX NUMBER OF SUCH ORIGINAL ACTION. NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, NO SUCH WITHDRAWAL ACTION SHALL BE BROUGHT AS A SPECIAL PROCEEDING AGAINST THE STATE COMPTROLLER. NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, if an order directing payment by the state comptroller is made by the court, the claimant or the claimant's attorney shall serve upon the state comptroller a copy thereof, duly certified by the clerk of the court to be a true copy of the original of such order on file in the clerk's office.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13690-02-4 S. 7332 2
(b) Where the value or amount of the claim is less than
[five]TEN thousand dollars, payment may be made by the state comptroller on sworn application of the claimant when the identity of the claimant as the person entitled to payment is established to the satisfaction of the state comptroller. When, in the determination of the state comptroller, there is insufficient information to enable the state comptroller to make a determination of entitlement, any claim, including a claim the amount of which is less than [five]TEN thousand dollars, must be estab- lished on order of the court as set forth in paragraph (a) of this subdivision. The decision of the state comptroller that the information is insufficient shall not be deemed a denial of the claim. S 2. This act shall take effect immediately.