1. The Laws of New York
  2. Consolidated Laws
  3. Agriculture & Markets
  4. Article 20: Licensing of Farm Products Dealers


Section 250-B Producer claims against security and agricultural producers security fund

Agriculture & Markets (AGM)

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.