N.Y. Agriculture & Markets Law § 250-b: Producer claims against security and agricultural producers security fund

§ 250-b. Producer claims against security and agricultural producers

security fund. 1. (a) A producer who has not received full payment of

amounts due for farm products in accordance with the prompt payment

provisions of sections two hundred forty-five and two hundred forty-six

of this article shall immediately notify the commissioner in writing of

such default in payment. The notification shall set forth the dates of

the transactions, the dealer to whom the farm products were sold and/or

delivered, the type of product delivered, the amount and the price

agreed upon for such product.

(b) If the commissioner has reason to believe that a licensed dealer

has defaulted in making payments for farm products to producers, the

commissioner shall give notice to producers to file verified claims

within thirty days of such notice. The commissioner shall examine the

claims so filed, determine the amount due upon such claims, and certify

the amounts due each claimant. No claims against the security or the

agricultural producers security fund shall be allowed for sales of farm

products: (i) to any unlicensed person; (ii) that occurred more than one

hundred twenty days after the earliest transaction between the producer

and the dealer that remains unpaid as of the date the claim is filed,

whether or not that earliest unpaid transaction is included in the

claim; or (iii) where a claim is submitted more than three hundred

sixty-five days after sale and delivery, but in no event beyond the

expiration of the thirty day period provided in the notice published by

the commissioner pursuant to this section.

(c) Claims shall be chargeable first against any initial or additional

bond or letter of credit provided by the defaulting dealer, and in the

event such security is not sufficient to pay the amount owed to all

producers, the amounts recovered shall be divided pro rata among all

claimants. Any remaining amount of the certified claim shall be payable

as set forth in paragraph (d) of this subdivision. The commissioner may

bring an action upon the bonds or letter of credit and for purposes of

such action his or her determination certifying the amounts due shall be

presumptive evidence of the facts stated therein. In the event that the

issuer of the bond or letter of credit fails or refuses to honor its

obligation to pay under the bond or letter of credit within thirty days

from the date of the commissioner's demand for payment, the commissioner

may pay from the agricultural producers security fund the amount of the

demand and bring an action to recover the amount of the demand from the

issuer of the bond or letter of credit. Any recovery in such action

shall be deposited in the agricultural producers security fund.

(d) The remainder of such claims against a licensee who elects not to

be subject to the additional bonding requirements which are not

satisfied by the bond or letter of credit or alternative security shall

be processed first against any credit insurance purchased pursuant to

this article and any balance thereafter against the agricultural

producers security fund. Payment of individual claims against the fund

shall not exceed eighty percent of the difference between the total

amount recovered on that claim against the bond or other security and

the amount determined to be owed pursuant to paragraph (b) of this

subdivision. In the event that the fund is not sufficient to pay such

amounts owed to the claimants, recovery from the fund shall be divided

pro rata.

2. If any claim is paid from the agricultural producers security fund,

the defaulting licensee shall be liable to the commissioner for the

benefit of the fund for the amount of claims so paid. If the defaulting

licensee has not paid the commissioner within fifteen days after

personal service upon him or her of the commissioner's certification of

payment of a claim from the fund for which the licensee has been found

liable to the claimant, the commissioner may issue a warrant under seal

of the department directed to the sheriff of any county of the state

commanding him or her to levy upon and sell the real and personal

property of the defaulting licensee, found within his or her county, for

the payment of the amount of such claim with interest and the cost of

executing the warrant, and to return such warrant to the commissioner

and pay to him or her the money collected by virtue thereof within sixty

days after the receipt of such warrant. The commissioner may file with

the clerk of any county a copy of such warrant, and thereupon the clerk

shall enter in the judgment docket, in the column for judgment debtors,

the name of the defaulting licensee designated in the warrant, and in

appropriate columns the amount of the licensee's liability to the

commissioner for claims, interest and costs, and the date when such copy

is filed. Thereupon, the amount of such warrant so docketed shall become

a lien, relating back to and deemed perfected as of the date of the

dealer's earliest default in payment to producers as determined by the

commissioner, upon and shall bind the real and personal property and

chattels real of the person against whom it is issued in the same manner

as a judgment duly docketed in the office of such clerk. The sheriff

shall thereupon proceed upon the same in all respects, with like effect,

and in the same manner prescribed by law in respect to executions issued

against property upon judgments of a court of record, and shall be

entitled to the same fees for his or her services in executing the

warrant, to be collected in the same manner. Upon such filing of a copy

of a warrant, the commissioner shall have the same remedies to enforce

the licensee's liability as if he or she had recovered judgment against

the licensee for the amount of the warrant.