lt's The Law
Worthless Check Equals Big Damages
I loaned a former friend of mine some money. When he paid me back, the check bounced. I understand he can be liable for more than the amount of the check if I follow correct procedures. Can you explain?
Florida has a statute directly on point. Section 68.065, Florida Statutes is titled "Actions to Collect Worthless Payment Instruments; Attorney Fees and Collection Costs." If you follow the statute, you can get a judgment for four times the amount of the bad check. The statute applies to checks which are refused due to lack of funds, lack of an account, lack of credit, or where the maker stops payment with intent to defraud. It does not apply where the maker stops payment because of dispute with the payee, as where the check was for payment of something that turned out to be broken or worthless.
The statute specifies requirements you must meet in order to seek recovery greater than the face amount of the check. You must send the maker written demand by certified or registered mail, return receipt, or by first class mail with affidavit of service by mail. The demand must be sent to the address on the check, to the address given by the maker at the time the check was issued, or to the maker's last known address. You must send the notice to the best known address, not just pick one of the foregoing. The statute requires the notice be in substantially the following form:
"You are hereby notified that a check numbered ____ in the face amount of $________ issued by you on (date), drawn upon (name of bank), and payable to _________, has been dishonored. Pursuant to Florida law, you have 30 days from receipt of this notice to tender payment in cash of the full amount of the check plus a service charge of $25, if the face value does not exceed $50, $30, if the face value exceeds $50 but does not exceed $300, $40, if the face value exceeds $300, or 5 percent of the face amount of the check, whichever is greater, the total amount due being $____ and ____ cents. Unless this amount is paid in full within the 30-day period, the holder of the check or instrument may file a civil action against you for three times the amount of the check, but in no case less than $50, in addition to the payment of the check plus any court costs, reasonable attorney fees, and any bank fees incurred by the payee in taking the action."
The notice must be delivered. But, if the notice is sent by registered or certified mail to the proper address, and the maker refused to claim the notice or sign the postal receipt, the notice requirement is satisfied. Court cases have upheld that it would be unreasonable to interpret the statute to allow the maker to avoid liability by refusing to accept delivery of the certified or registered mail letter demand.
The demand for payment is not limited to face amount of the check. You may also demand a service charge not to exceed $25.00 if the check is $50.00 or less, $30.00 if the check is between $50.00 and $300.00, and $40.00 if the check is more than $300.00 or 5% of the check amount, whichever is greater.
If the maker does not pay you within 30 days after demand, you can sue for amount of the check plus triple damages, which means you will be entitled to judgment for four times the original face amount of the check. For small checks, the statute mandates that damages be no less than $50.00. The person who wrote the check is also liable for court costs and reasonable attorney fees you pay in connection with the court action. In addition to attorney fees and four times face amount of the check, you can also recover interest at a rate prescribed by Florida Statute and any bank fees you incur as a result of the bad check.
If you have endorsed and transferred the check to another person, that person has the same rights. However, that person can also seek recovery from you if the check was endorsed by you and the recipient gave you something of value in exchange.
After suit is filed, the statute allows the check writer to limit his or her liability by making payment. If the maker renders payment of the face amount of the check, the service charge, court costs and incurred bank fees, your opportunity for judgment of four times the check amount ends. You retain the right to recover attorney fees and collection costs.
There is one other opportunity for the maker to avoid the statute's expanded liability. If the court or jury determines that failure of the maker to make the check good was due to economic hardship, the court or jury has discretion to waive all or part of the statutory damages.
Although the statute provides for judgment, including four times the amount of the check, attorney fees, court costs, interest and bank fees, there can be one remaining problem. Collecting a judgment can be difficult if the person who wrote the check is broke. Moreover, Florida law provides many exemptions from creditor claims, including wages of a head of the household, retirement accounts and homestead. Before counting on recovering four times the amount of the check, you should discuss all aspects of your situation with an experienced attorney.
By: William G. Morris, Esquire
William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.
Questions for this column can be sent to: William G. Morris, e-mail: firstname.lastname@example.org or by fax, (239) 642-0722 or
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