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Cause of Action for Collections of a Worthless Check, Draft or Order of Payment

Business and Commercial Torts : Cause of Action for Collections of a Worthless Check, Draft or Order of Payment

Pursuant to Florida Statute § 68.065(1), a civil action may be initiated for the purpose of collecting on a worthless or bad check, draft, or order of payment, in which the payment was refused by the drawee because of a lack of funds, and where the maker or drawer stops the payment of a check, draft or order of payment for the purpose of defrauding a person or business, and fails to pay the amount owed within 30 days of a written demand letter.  A West Palm Beach collections lawyer will advise a plaintiff that under Florida law, the 30 day period is mandatory.  However, a check maker is liable under the statute only if the payment has been stopped on a check with an intent to defraud, and the maker fails to pay the amount within 30 days of the written demand.  For instance, a property owner did not have the requisite "intent to defraud" when it stopped payment on a check, which was sent to a contractor as an advance payment for the work to be performed on a construction project because the owner notified the contractor that he would not proceed with the project on the same day that the he notified the bank to stop payment, and the check was not a payment for services rendered. 

Additionally, the Florida Statute requires that an award of triple the amount of the worthless check against the issuer in addition to, the face value of the check be awarded for damages in a civil action.  In other words, in a lawsuit for treble damages against the drawer for issuing a worthless check, the payee is entitled to three times the value of the worthless check, in addition to the face amount of the check.  However, the statute is only applicable to checks or other instruments that have been validly delivered to a payee.  On the other hand, a maker of a worthless check is not entitled to a defense of a conditional delivery with respect to a vendor's worthless check action where the check was not given to the vendor subject to some condition precedent.  For instance, where a the check was delivered as a deposit to bind the vendor to the real estate contract, and having received the benefit of the check, the purchaser could not now offer an oral agreement that would nullify the effects of that written instrument.  Further, the payee may charge the maker or drawer of the check a service charge not to exceed the service fees allowed under the statute, which is 5% of the face value of the instrument, or whichever is greater, when the plaintiff or payee makes a written demand for payment.  In the event that judgment or decree is rendered, interest at the rate and in the manner described in the statute may be added toward the total amount due.

A cause of action for collections of a worthless check, draft or order of payment may have many complex issues.  Therefore, you should consult with an experienced West Palm Beach collections lawyer. Call Sharmin & Sharmin P.A. at 1-800-74-TRIAL.

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