N.Y. Civil Practice Law & Rules § 1327: Proceedings to determine adverse claims

§ 1327. Proceedings to determine adverse claims. Prior to the

application of property or debt to the satisfaction of a judgment, any

person, other than a party to the action, who has an interest in the

property subject to forfeiture may commence a special proceeding against

the claiming authority to determine the rights of adverse claimants to

the property or debt, and in such proceeding shall serve a notice of

petition upon the claiming agent and upon each party in the same manner

as a notice of motion. The proceeding may be commenced in the county

where the property was levied upon, or in the county where the order of

attachment is filed. The court may vacate or discharge the attachment,

void the levy, direct the disposition of the property or debt, direct

that undertakings be provided or released, or direct that damages be

awarded. Where there appear to be disputed questions of fact, the court

shall order a separate trial, indicating the person who shall have

possession of the property pending a decision and the undertaking, if

any, which such person shall give. If the court determines that the

adverse claim was fraudulent or made without any reasonable basis

whatsoever, it may require the claimant to pay the claiming authority

the reasonable expenses incurred in the proceeding, including reasonable

attorney's fees, and any other damages suffered by reason of the claim.

The commencement of the proceeding shall not of itself subject the

adverse claimant to personal jurisdiction with respect to any matter

other than the claim asserted in the proceeding.