N.Y. Tax Law § 3032: Civil damages for failure to release a lien

§ 3032. Civil damages for failure to release a lien. (a) In general. A

taxpayer may bring a civil action for damages against the state in the

court of claims if any officer or employee of the department knowingly,

or by reason of negligence, fails to release a lien on property of such

taxpayer within forty days after the day on which (1) the commissioner

finds that the liability for the amount assessed or determined, together

with all interest in respect thereof, has been fully satisfied or has

become legally unenforceable, or (2) there is furnished to the

commissioner a surety bond issued by a surety company approved by the

superintendent of financial services as to solvency or responsibility

and authorized to transact business in this state, or other security

acceptable to the commissioner, that is conditioned upon the payment of

the amount assessed or determined, together with all interest in respect

thereof, within the time prescribed by law (including any extension of

such time) and is in accordance with such requirements relating to

terms, conditions, and form of the bond or other acceptable security, as

may be specified by regulation.

(b) Damages. In any action brought under subdivision (a) of this

section, upon a finding of liability on the part of the defendant, the

defendant shall be liable to the plaintiff in an amount equal to the sum

of (1) actual, direct economic damages sustained by the plaintiff which,

but for the actions of the defendant, would not have been sustained,

plus (2) the costs of the action.

(c) Limitations. (1) Exhaustion of administrative remedies. The amount

of damages awarded under subdivision (b) of this section may be reduced

if the court determines that the plaintiff has not exhausted the

administrative remedies available to such plaintiff within the

department which have been established pursuant to the commissioner's

authority to compromise civil liability provided in subdivision

eighteenth-a of section one hundred seventy-one of this chapter. In

establishing administrative review procedures regarding claims for

damages under this section, the commissioner is authorized to enter into

contracts with private dispute resolution entities for the purpose of

providing review of such claims and suggested compromises by independent

third parties.

(2) Mitigation of damages. The amount of damages awarded under

paragraph one of subdivision (b) of this section shall be reduced by the

amount of such damages which could have reasonably been mitigated by the

plaintiff.

(d) Notice of failure to release lien. The commissioner shall by

regulation prescribe reasonable procedures for a taxpayer to notify the

commissioner of the failure to release a lien on the property of the

taxpayer.