Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 430 (2017GS)

Sponsor

Rep. Snow, V. L.

Final action

Governor Signed 3/21/2017

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• clarifies the action that initiates a civil action against an issuer of a dishonored check.

Every vote on this bill

Bill text

DISHONORED INSTRUMENTS AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: V. Lowry Snow
Senate Sponsor: 
Todd Weiler
LONG TITLE
General Description:
This bill modifies provisions related to dishonored instruments.
Highlighted Provisions:
This bill:
▸ clarifies the action that initiates a civil action against an issuer of a dishonored
check.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
7-15-1
, as last amended by Laws of Utah 2008, Chapter 96
7-15-2
, as last amended by Laws of Utah 2010, Chapter 324
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
7-15-1
 is amended to read:
7-15-1.
Definitions -- Civil liability of issuer -- Notice of action -- Collection costs
-- Exemptions.
(1) As used in this chapter:
(a) "Check" means a payment instrument on a depository institution including a:
(i) check;
(ii) draft;
(iii) order; or
(iv) other instrument.
(b) "Issuer" means a person who makes, draws, signs, or issues a check, whether as
corporate agent or otherwise, for the purpose of:
(i) obtaining from any person any money, merchandise, property, or other thing of
value; or
(ii) paying for any service, wages, salary, or rent.
(c) "Mailed" means the day that a notice is properly deposited in the United States
mail.
(2) (a) An issuer of a check is liable to the holder of the check if:
(i) the check:
(A) is not honored upon presentment; and
(B) is marked "refer to maker";
(ii) the account upon which the check is made or drawn:
(A) does not exist;
(B) has been closed; or
(C) does not have sufficient funds or sufficient credit for payment in full of the check;
or
(iii) (A) the check is issued in partial or complete fulfillment of a valid and legally
binding obligation; and
(B) the issuer stops payment on the check with the intent to:
(I) fraudulently defeat a possessory lien; or
(II) otherwise defraud the holder of the check.
(b) If an issuer of a check is liable under Subsection (2)(a), the issuer is liable for:
(i) the check amount; and
(ii) a service charge of $20.
(3) (a) The holder of a check that has been dishonored may:
(i) give written or oral notice of dishonor to the issuer of the check; and
(ii) waive all or part of the service charge imposed under Subsection (2)(b).
(b) Notwithstanding Subsection (2)(b), a holder of a check that has been dishonored
may not collect and the issuer is not liable for the service charge imposed under Subsection
(2)(b) if:
(i) the holder redeposits the check; and
(ii) that check is honored.
(4) If the issuer does not pay the amount owed under Subsection (2)(b) within 15
calendar days from the day on which the notice required under Subsection (5) is mailed, the
issuer is liable for:
(a) the amount owed under Subsection (2)(b); and
(b) collection costs not to exceed $20.
(5) (a) A holder shall provide written notice to an issuer before:
(i) charging collection costs under Subsection (4) in addition to the amount owed under
Subsection (2)(b); or
(ii) [
filing
] 
commencing
 an action based upon this section.
(b) The written notice required under Subsection (5)(a) shall notify the issuer of the
dishonored check that:
(i) if the amount owed under Subsection (2)(b) is not paid within 15 calendar days
from the day on which the notice is mailed, the issuer is liable for:
(A) the amount owed under Subsection (2)(b); and
(B) collection costs under Subsection (4); and
(ii) the holder may [
file
] 
commence a
 civil action if the issuer does not pay to the
holder the amount owed under Subsection (4) within 30 calendar days from the day on which
the notice is mailed.
(6) (a) Except as provided in Section 
7-23-401
, if the issuer has not paid the holder the
amounts owed under Subsection (4) within 30 calendar days from the day on which the notice
required by Subsection (5) is mailed, the holder may offer to not [
file
] 
commence a
 civil action
under this section if the issuer pays the holder:
(i) the amount owed under Subsection (2)(b);
(ii) the collection costs under Subsection (4);
(iii) an amount that:
(A) is equal to the greater of:
(I) $50; or
(II) triple the check amount; and
(B) does not exceed the check amount plus $250; and
(iv) if the holder retains an attorney to recover on the dishonored check, reasonable
attorney's fees not to exceed $50.
(b) (i) Notwithstanding Subsection (6)(a), all amounts charged or collected under
Subsection (6)(a)(iii) shall be paid to and be the property of the original payee of the check.
(ii) A person who is not the original payee may not retain any amounts charged or
collected under Subsection (6)(a)(iii).
(iii) The original payee of a check may not contract for a person to retain any amounts
charged or collected under Subsection (6)(a)(iii).
(7) (a) A [
civil action may not be filed
] 
holder may not commence a civil action
 under
this section unless the issuer fails to pay the amounts owed:
(i) under Subsection (4); and
(ii) within 30 calendar days from the day on which the notice required by Subsection
(5) is mailed.
(b) Subject to Subsections (7)(c) and (d) and except as provided in Section 
7-23-401
,
in a civil action the issuer of the check is liable to the holder for:
(i) the amount owed under Subsection (2)(b);
(ii) the collection costs under Subsection (4);
(iii) interest;
(iv) court costs;
(v) reasonable attorney fees; and
(vi) damages:
(A) equal to the greater of:
(I) $100; or
(II) triple the check amount; and
(B) not to exceed the check amount plus $500.
(c) If an issuer is held liable under Subsection (7)(b), notwithstanding Subsection
(7)(b), a court may waive any amount owed under Subsections (7)(b)(iii) through (vi) upon a
finding of good cause.
(d) If a holder of a check violates this section by [
filing
] 
commencing
 a civil action
under this section before 31 calendar days from the day on which the notice required by
Subsection (5) is mailed, an issuer may not be held liable for an amount in excess of the check
amount.
(e) (i) Notwithstanding Subsection (7)(b), all amounts charged or collected under
Subsection (7)(b)(vi) shall be paid to and be the property of the original payee of the check.
(ii) A person who is not the original payee may not retain any amounts charged or
collected under Subsection (7)(b)(vi).
(iii) The original payee of a check may not contract for a person to retain any amounts
charged or collected under Subsection (7)(b)(vi).
(8) This section may not be construed to prohibit the holder of the check from seeking
relief under any other applicable statute or cause of action.
(9) (a) Notwithstanding the other provisions of this section, a holder of a check is
exempt from this section if the holder is:
(i) a depository institution; or
(ii) a person that receives a payment on behalf of a depository institution.
(b) A holder exempt under Subsection (9)(a) may contract with an issuer for the
collection of fees or charges for the dishonor of a check.
Section 2. Section 
7-15-2
 is amended to read:
7-15-2.
Notice -- Form.
(1) (a) "Notice" means notice given to the issuer of a check either orally or in writing.
(b) Written notice may be given by United States mail that is:
(i) first class; and
(ii) postage prepaid.
(c) Notwithstanding Subsection (1)(b), written notice is conclusively presumed to have
been given when the notice is:
(i) properly deposited in the United States mail;
(ii) postage prepaid;
(iii) certified or registered mail;
(iv) return receipt requested; and
(v) addressed to the signer at the signer's:
(A) address as it appears on the check; or
(B) last-known address.
(2) Written notice under Subsection 
7-15-1
(5) shall take substantially the following
form:
"Date: ____
To: _____
You are hereby notified that the check(s) described below issued by you has (have)
been returned to us unpaid:
Check date: ____
Check number: ____
Originating institution: ____
Amount: ____
Reason for dishonor (marked on check): ____
In accordance with Section 
7-15-1
, Utah Code Annotated, you are liable for this check
together with a service charge of $20, which must be paid to the undersigned.
If you do not pay the check amount and the $20 service charge within 15 calendar days
from the day on which this notice was mailed, you are required to pay within 30 calendar days
from the day on which this notice is mailed:
(1) the check amount;
(2) the $20 service charge; and
(3) collection costs not to exceed $20.
If you do not pay the check amount, the $20 service charge, and the collection costs
within 30 calendar days from the day on which this notice is mailed, in accordance with
Section 
7-15-1
, Utah Code Annotated, an appropriate civil legal action may be [
filed
]
commenced
 against you for:
(1) the check amount;
(2) interest;
(3) court costs;
(4) attorneys' fees;
(5) actual costs of collection as provided by law; and
(6) damages in an amount equal to the greater of $100 or triple the check amount,
except:
(a) that damages recovered under this Subsection (6) may not exceed the check amount
by more than $500; and
(b) you are not liable for these damages for a check used to obtain a deferred deposit
loan.
In addition, the criminal code provides in Section 
76-6-505
, Utah Code Annotated, that
any person who issues or passes a check for the payment of money, for the purpose of
obtaining from any person, firm, partnership, or corporation, any money, property, or other
thing of value or paying for any services, wages, salary, labor, or rent, knowing it will not be
paid by the drawee and payment is refused by the drawee, is guilty of issuing a bad check.
The civil action referred to in this notice does not preclude the right to prosecute under
the criminal code of the state.
(Signed) ____________________________________________________
Name of Holder: ____________________________________________________
Address of Holder: ____________________________________________________
Telephone Number: ___________________________________________________"
(3) Notwithstanding the other provisions of this section, a holder exempt under
Subsection 
7-15-1
(9) is exempt from this section.