(a) This section shall govern a special proceeding authorized by subsection (d) of section 9-518 of the Uniform Commercial Code for the redaction or expungement of a falsely-filed or amended financing statement. Except as otherwise provided in such subsection and in this section, such a special proceeding shall be subject to the provisions of article four of the CPLR and of section 202.9 of these rules.
(b) The following shall apply to a special proceeding governed by this section:
(1) Venue. Such a special proceeding shall be commenced in the Supreme Court in:
(i) Albany County; or
(ii) the County of the petitioner’s residence; or
(iii) any County within a Judicial District in which any property covered by the financing statement is located.
(2) No fee required. Notwithstanding any provision of Article eighty of the CPLR, no fee shall be collected pursuant to such Article in such a special proceeding.
(3) Petitioner. In order to commence such a special proceeding, the petitioner must be:
(i) either (A)an employee of the State or of a political subdivision thereof, or (B)an attorney who represents or has represented the respondent in a criminal court; and
(ii) a person identified as a debtor in a financing statement filed pursuant to Subpart one of Part five of Article nine of the Uniform Commercial Code; and
(iii) bringing such special proceeding against the respondent to invalidate the false filing or amendment of such financing statement.
(4) Form and contentof petition. A petition in such a special proceeding shall substantially conform to the model petition set forth in Appendix A of this section and shall allege that:
(i) the financing statement referred to in paragraph (3)(i) of this subdivision was falsely filed or amended to retaliate for the performance of the petitioner’s official duties in his or her capacity as a public employee (or, if the petitioner is an attorney referred to in paragraph (3)(i)(B) of this subdivision, to retaliate for the performance of the petitioner’s duties in his or her capacity as an attorney for the respondent in a criminal court); and
(ii) such financing statement does not relate to an interest in a consumer-goods transaction, a commercial transaction, or any other actual transaction between the petitioner and the respondent; and
(iii) the collateral covered in the financing statement is the property of the petitioner; and
(iv) prompt redaction or invalidation of such financing statement is necessary to avert or mitigate prejudice to the petitioner.
The petition shall demand the expungement or redaction of such financing statement or, as appropriate, any amendment thereof, in the office in which the financing statement is filed; and may demand any additional relief authorized under section 9-625 of the Uniform Commercial Code.
(5) Use of Referee. The court may order a referee to hear and determine such a special proceeding.
(6) Judgment.
(i) Where the court (or a referee ordered by the court) makes a written finding that the allegations of the petition are established, it shall deliver a judgment, which shall include such finding and shall direct the expungement or redaction of the financing statement found therein to be falsely filed or amended in the public office in which it was filed; and may grant any additional relief sought that is authorized under section 9-625 of the Uniform Commercial Code. Where the court also finds that the respondent has engaged in a repeated pattern of falsely filing financing statements under Subpart one of Part five of Article nine of the Uniform Commercial Code, the court may enjoin the respondent from filing or amending any further financing statement without court leave; and, in such case, where respondent is incarcerated at the time such injunction issues, the court shall cause a copy thereof to be transmitted to the head of the correctional facility in which respondent is incarcerated.
(ii) In form, the judgment in such a special proceeding shall substantially conform to the model judgment set forth in Appendix B of this section.
Historical Note
Added on April 9, 2014.