REPORT TITLE:
Comm. Paper, Dishonored Checks


DESCRIPTION:
Provides that persons bringing an action to recover damages
resulting from the dishonor of a check or other negotiable
instrument may assess and collect a $20 service charge and
attorney's fees, in addition to the amount of the dishonored
check, incurred court and service costs.  (HB936 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        936
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO COMMERCIAL PAPER.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 490, article 3, Hawaii Revised Statutes,
 
 2 is amended by adding a new section to be appropriately designated
 
 3 and to read as follows:
 
 4      "�490:3-     Charges for dishonored checks.  The payee or a
 
 5 holder in due course of any check, draft, or order for the
 
 6 payment of money that has been dishonored for lack of funds or
 
 7 credit to pay the check, draft, or order or because the maker has
 
 8 no account with the drawee shall be allowed to assess the maker a
 
 9 reasonable service charge of not more than $20."
 
10      SECTION 2.  Section 490:3-506, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "[[]�490:3-506[]]  Dishonored check; action for treble
 
13 damages; procedures.(a)  In any action against a person who
 
14 makes any check, draft, or order for the payment of money [which]
 
15 that has been dishonored for lack of funds or credit to pay the
 
16 [same,] check, draft, or order or because the maker has no
 
17 account with the drawee, the plaintiff may recover from the
 
18 defendant damages in an amount equal to $100 or triple the amount
 
19 for which the check, draft, or order is drawn, whichever is
 
20 greater; provided that damages recovered under this section shall
 

 
Page 2                                                     936
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 not exceed by more than $500 the amount of the check, draft, or
 
 2 order, and may be awarded only if:
 
 3      (1)  The plaintiff made written demand of the defendant for
 
 4           payment of the amount of the check, draft, or order and
 
 5           any service charge assessed under section 490:3-    not
 
 6           less than ten days before commencing the action; and
 
 7      (2)  The defendant failed to tender to the plaintiff, prior
 
 8           to commencement of the action, an amount of money not
 
 9           less than the sum of the amount demanded[.] and any
 
10           service charge assessed under section 490:3-   .
 
11 The written demand shall include notice that if the money is not
 
12 paid within ten days, triple damages may be incurred by the
 
13 defendant.  The plaintiff shall provide the defendant written
 
14 notice of demand for payment by certified mail, restricted
 
15 delivery, at the last known address of the defendant with a
 
16 request for a return receipt and marked "deliver to addressee
 
17 only".
 
18      (b)  Subsequent to the commencement of the action but prior
 
19 to the hearing, the defendant may tender to the plaintiff, as
 
20 satisfaction of the claim, an amount of money equal to the sum of
 
21 the amount of the check and the incurred court and service
 
22 costs[.] including attorney's fees and any service charge
 
23 assessed under section 490:3-   .
 

 
Page 3                                                     936
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (c)  If the court or jury determines that the failure of the
 
 2 defendant to satisfy the dishonored check was due to economic
 
 3 hardship, the court or jury may waive all or part of the
 
 4 statutory damages; provided the court or jury shall render
 
 5 judgment against the defendant for not less than the amount of
 
 6 the dishonored check plus incurred court and service costs[.]
 
 7 including attorney's fees and any service charge assessed under
 
 8 section 490:3-   ."
 
 9      SECTION 3.  Statutory material to be repealed is bracketed.
 
10 New statutory material is underscored.
 
11      SECTION 4.  This Act shall take effect upon its approval.