Rescuing Hostage Checks

Oftentimes, one sees situations where claims checks or settlement checks due to clients are held hostage by either a homeowner and/or a bank to avoid paying one’s client under an assignment of benefits.  If a claims check or settlement check is improperly encumbered or negotiated by a homeowner or bank, Florida’s civil theft law can help sort the situation out.

Florida’s statutes place strict liability upon a bank for a check’s conversion. Fla. Stat. § 673.1101(4) is very clear where a negotiable instrument “is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them” (emphasis added).  Moreover, a negotiable instrument is converted pursuant to Fla. Stat. § 673.4201(1), “if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to a person not entitled to enforce the instrument or receive payment.” (emphasis added).

Consequently, such a check conversion is punishable under Florida’s civil theft statute, Fla. Stat. § 772.11 (1) (2001), entitled “Civil Remedy For Theft,” which provides: 

Any person who proves by clear and convincing evidence that he or she has been injured in any fashion by reason of any violation of the provisions of ss. 812.012-812.037 has a cause of action for threefold the actual damages sustained and, in any such action, is entitled to minimum damages in the amount of $200, and reasonable attorney’s fees and court costs in the trial and appellate courts.

Therefore, a lawsuit under Florida’s civil theft statute would award one’s client treble damages, attorney’s fees and legal costs.  Note that the law requires that one first make a written demand for the monies due for a period of thirty (30) days.  If the letter’s recipient fails to pay the amount at issue within those thirty (30) days, then one may file suit for the hostage check’s amount, attorney’s fees and treble damages.

 Article Written By: Ricardo Diaz

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Attorney at: Cohen Battisti, Attorneys at Law

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