N.Y. Tax Law § 3036: Civil actions by persons other than taxpayers

§ 3036. Civil actions by persons other than taxpayers. (a) Actions

permitted. (1) Wrongful levy. If a levy has been made on property or

property has been sold pursuant to a levy, any person (other than the

person against whom is assessed the tax out of which such levy arose)

who claims an interest in or lien on such property and that such

property was wrongfully levied upon may bring a civil action against the

state of New York in the court of claims. Such action may be brought

without regard to whether such property has been surrendered to or sold

by the commissioner.

(2) Surplus proceeds. If property has been sold pursuant to a levy,

any person (other than the person against whom is assessed the tax out

of which the levy arose) who claims an interest in or lien on such

property junior to that of the state of New York and to be legally

entitled to the surplus of the proceeds of such sale may bring a civil

action against the state of New York in the court of claims.

(b) Adjudication. The court shall have jurisdiction to grant only

such of the following forms of relief as may be appropriate in the

circumstances:

(1) Injunction. If a levy or sale would irreparably injure rights in

property which the court determines to be superior to rights of this

state in property, the court may grant an injunction to prohibit the

enforcement of such levy or to prohibit such sale.

(2) Recovery of property. If the court determines that such property

has been wrongfully levied upon, the court may:

(A) order the return of specific property if this state is in

possession of such property;

(B) grant a judgment for the amount of money levied upon; or

(C) if such property was sold, grant a judgment for an amount equal

to the actual direct and consequential damages proven.

(3) Surplus proceeds. If the court determines that the interest or

lien of any party to an action under this section was transferred to the

proceeds of a sale of such property, the court may grant a judgment in

an amount equal to all or any part of the amount of the surplus proceeds

of such sale.

(c) Validity of assessment. For purposes of an adjudication under

this section, the assessment of tax upon which the interest or lien of

the department is based shall be conclusively presumed to be valid.

(d) Limitation on rights of action. No action may be maintained

against any sheriff acting on behalf of the commissioner or any officer

or employee of the department (or former sheriff, officer or employee)

or his personal representative with respect to any acts for which an

action could be maintained under this section.

(e) Substitution of the state as party. If an action, which could be

brought against the state under this section, is improperly brought

against any sheriff acting on behalf of the commissioner or any officer

or employee of the department (or former sheriff, officer or employee)

or his personal representative, the court shall order, upon such terms

as are just, that the pleadings be amended to substitute the state as a

party for such sheriff, officer or employee as of the time such action

was commenced upon proper service of process on the state.