Agriculture & Markets - Licensing of Farm Products Dealers - Producer claims against security and agricultural producers security fund


Published: 2014-09-22

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§ 250-b. 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.