N.Y. C.P.L.R. 1327

§ 1327. Proceedings to determine adverse claims. Prior to the\napplication of property or debt to the satisfaction of a judgment, any\nperson, other than a party to the action, who has an interest in the\nproperty subject to forfeiture may commence a special proceeding against\nthe claiming authority to determine the rights of adverse claimants to\nthe property or debt, and in such proceeding shall serve a notice of\npetition upon the claiming agent and upon each party in the same manner\nas a notice of motion. The proceeding may be commenced in the county\nwhere the property was levied upon, or in the county where the order of\nattachment is filed. The court may vacate or discharge the attachment,\nvoid the levy, direct the disposition of the property or debt, direct\nthat undertakings be provided or released, or direct that damages be\nawarded. Where there appear to be disputed questions of fact, the court\nshall order a separate trial, indicating the person who shall have\npossession of the property pending a decision and the undertaking, if\nany, which such person shall give. If the court determines that the\nadverse claim was fraudulent or made without any reasonable basis\nwhatsoever, it may require the claimant to pay the claiming authority\nthe reasonable expenses incurred in the proceeding, including reasonable\nattorney's fees, and any other damages suffered by reason of the claim.\nThe commencement of the proceeding shall not of itself subject the\nadverse claimant to personal jurisdiction with respect to any matter\nother than the claim asserted in the proceeding.\n