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A07500 Summary:

BILL NOA07500A
 
SAME ASSAME AS S06395
 
SPONSORDinowitz
 
COSPNSRNiou, DenDekker, Wright, Wallace, Schimminger, Kim
 
MLTSPNSR
 
Amd 3218, CPLR
 
Relates to judgment by confession; allows a government agency engaged in the enforcement of a civil or criminal law to file an affidavit in any county.
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A07500 Actions:

BILL NOA07500A
 
05/07/2019referred to judiciary
05/30/2019amend and recommit to judiciary
05/30/2019print number 7500a
06/04/2019reported referred to codes
06/13/2019reported referred to rules
06/17/2019reported
06/17/2019rules report cal.395
06/17/2019ordered to third reading rules cal.395
06/20/2019substituted by s6395
 S06395 AMEND= HOYLMAN
 06/07/2019REFERRED TO RULES
 06/19/2019ORDERED TO THIRD READING CAL.1714
 06/19/2019PASSED SENATE
 06/19/2019DELIVERED TO ASSEMBLY
 06/19/2019referred to codes
 06/20/2019substituted for a7500a
 06/20/2019ordered to third reading rules cal.395
 06/20/2019passed assembly
 06/20/2019returned to senate
 08/28/2019DELIVERED TO GOVERNOR
 08/30/2019SIGNED CHAP.214
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A07500 Committee Votes:

JUDICIARY Chair:Dinowitz DATE:06/04/2019AYE/NAY:14/7 Action: Favorable refer to committee Codes
DinowitzAyePalumboNay
TitusAyeMontesanoNay
LavineAyeGoodellNay
ZebrowskiAyeNorrisNay
WeprinAyeWalshNay
BraunsteinAyeByrnesNay
SimotasAye
QuartAye
BuchwaldAye
SteckAye
SeawrightAye
JoynerAye
AbinantiNay
WrightAye
WallaceAye

CODES Chair:Lentol DATE:06/13/2019AYE/NAY:14/6 Action: Favorable refer to committee Rules
LentolAyeRaNay
SchimmingerExcusedGiglioNay
PretlowAyeMontesanoNay
CookExcusedMorinelloNay
CymbrowitzAyePalumboNay
O'DonnellAyeGarbarinoNay
LavineAye
PerryAye
ZebrowskiAye
AbinantiAye
WeprinAye
MosleyAye
HevesiAye
FahyAye
SeawrightAye
RosenthalAye

RULES Chair:Gottfried DATE:06/17/2019AYE/NAY:26/0 Action: Favorable
HeastieExcusedKolbAye
GottfriedAyeCrouchAye
LentolAyeFinchAye
GanttExcusedBarclayAye
NolanExcusedRaiaAye
WeinsteinAyeHawleyAye
OrtizAyeGiglioAye
PretlowAyeMalliotakisAye
CookAye
GlickAye
AubryAye
EnglebrightAye
DinowitzAye
ColtonAye
MagnarelliAye
PerryAye
PaulinAye
TitusExcused
Peoples-StokesAye
BenedettoAye
LavineExcused
LupardoAye
ZebrowskiAye

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A07500 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7500A
 
SPONSOR: Dinowitz
  TITLE OF BILL: An act to amend the civil practice law and rules, in relation to judgment by confession This proposal is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of his Advisory Committee on Civil Practice. This measure would amend section 3218 of the Civil Practice Law and Rules to remedy abuses in the use of confessions of judgment by credi- tors against out-of-state debtors. This measure is in response to recent press reports regarding creditors that execute confessions of judgment in New York State even though the associated agreement or debtor have no nexus to the State.{1} Under the current statute, a confession of judgment is a written and signed statement, in the form of an affidavit, in which a debtor admits liability and agrees to pay the sum confessed as owed to the creditor pursuant to an agreement. A confession of judgment is a legitimate tool that may facilitate commercial transactions, resolve or avoid liti- gation, support collection of moneys owed under an equitable distrib- ution plan, or ensure that government agencies can recover funds on behalf of victims. When the debtor does not per form or pay according to the agreement, a confession may be filed as a judgment with the county clerk, even in the absence of a pending court action.{2} But, in recent years, creditors, often from out-of-state, have entered confessions of judgment in various New York counties against debtors who themselves are out-of-state small business owners with no connection to New York. This practice has resulted in some unscrupulous creditors using New York law and procedure to freeze and then seize debtors' assets based on a judgment entered in a venue far from where the agree- ment was executed and the parties reside, making it difficult for a debtor to contest abusive conduct by a creditor. This measure seeks to correct such abuse without frustrating legitimate use of confessions of judgment within the State. It limits the venue for filing a confession of judgment to in-state debtors, based on where the debtor resided at the time the affidavit was executed or, if the debtor moves, where he or she resides at the time of filing the judgment. This approach is intended to prevent creditors from abusing confessions of judgment by using New York courts as a venue to profit from debtors with no New York connection. Under this measure, a non-natural person, such as a corporation, would be deemed to reside in the county where it has a principal place of business. This measure would provide an exemption for government agencies engaged in enforcing civil or criminal law against a person or non-natural person. Government agencies often use confessions of judgment to ensure that they can recover assets to pay, for example, restitution to victims. Therefore, the proposal would permit government law enforcement agencies to enter such judgments in any county within the State. This measure, which would have no fiscal impact, would take effect imme- diately and apply to judgments by confession filed on or after the effective date.   :LEGISLATIVE HISTORY;:US OFF;: NONE. NEW PROPOSAL. (*) ZACHARY R. MIDER AND ZEKE FAUX, 'SIGN HERE TO LOSE EVERYTHING', BLOOMBERG BUSINESSWEEK (ONLINE, NOVEMBER 20, 2018), HTTPS://WWW.BLOOM BERG.COM/GRAPHICS/2018-CONFESSIONS-OFJUDGMENT/?SRND=CONFESSIONS-OF-JUD GMENT. (**) IN THE MID-1980S, THE FEDERAL TRADE COMMISSION (FTC) BANNED CONFESSIONS OF JUDGMENT IN CONSUMER TRANSACTIONS AND BANK TRANSACTIONS: "(I)T IS AN UNFAIR ACT OR PRACTICE WITHIN THE MEANING OF SECTION 5 OF (THE FTC) ACT FOR A LENDER OR RETAIL INSTALLMENT SELLER DIRECTLY OR INDIRECTLY TO TAKE OR RECEIVE FROM A CONSUMER AN OBLIGATION THAT: 1) CONSTITUTES OR CONTAINS A COGNOVIT OR CONFESSION OF JUDGMENT (FOR PURPOSES OTHER THAN EXECUTORY PROCESS IN THE STATE OF LOUISIANA), WARRANT OF ATTORNEY, OR OTHER WAIVER OF THE RIGHT TO NOTICE AND THE OPPORTUNITY TO BE HEARD IN THE EVENT OF SUIT OR PROCESS THERE ON." (16 CFR 444.2.)
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A07500 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7500--A
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                       May 7, 2019
                                       ___________
 
        Introduced  by  M.  of  A.  DINOWITZ,  NIOU, DenDEKKER, WRIGHT, WALLACE,
          SCHIMMINGER -- (at request of the Office of Court  Administration)  --
          read  once  and  referred  to  the Committee on Judiciary -- committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee

        AN ACT to amend the civil practice law and rules, in relation  to  judg-
          ment by confession
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph 1 of  subdivision  (a)  and  subdivision  (b)  of
     2  section  3218 of the civil practice law and rules, paragraph 1 of subdi-
     3  vision (a) as amended by chapter 311 of the laws of 1963, are amended to
     4  read as follows:
     5    1. stating the sum for which judgment may be entered, authorizing  the
     6  entry  of  judgment,  and stating the county where the defendant resides
     7  [or if he is a non-resident, the county in which entry is authorized];
     8    (b) Entry of judgment. At any time within three years after the  affi-
     9  davit is executed, it may be filed, but only with the clerk of the coun-
    10  ty  where the [defendant] defendant's affidavit stated [in his affidavit
    11  that he] that the defendant resided when it was  executed  or[,  if  the
    12  defendant  was  then a non-resident, with the clerk of the county desig-
    13  nated in the affidavit] where the  defendant  resided  at  the  time  of
    14  filing.  [Thereupon  the]  The  clerk shall then enter a judgment in the
    15  supreme court for the sum confessed. [He] The clerk shall tax costs [to]
    16  in the amount of fifteen dollars, besides disbursements  taxable  in  an
    17  action.    The  judgment may be docketed and enforced in the same manner
    18  and with the same effect as a judgment  in  an  action  in  the  supreme
    19  court.  No  judgment  by confession may be entered after the defendant's
    20  death.  For purposes of this section, a non-natural  person  resides  in
    21  any county where it has a place of business.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11359-02-9

        A. 7500--A                          2
 
     1    Notwithstanding  any other provision of law to the contrary, a govern-
     2  ment agency engaged in the enforcement of civil or criminal law  against
     3  a  person  or  a  non-natural person may file an affidavit in any county
     4  within the state.
     5    §  2. This act shall take effect immediately and apply to judgments by
     6  confession entered upon affidavits filed  on  or  after  such  effective
     7  date.
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A07500 Chamber Video/Transcript:

6-18-19Video (@ 03:47:07)Transcript pdf Transcript html
6-20-19Video (@ 03:43:29)Transcript pdf Transcript html
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