11-104 - Additional liability of drawer.

§ 11-104. Additional  liability  of  drawer.  1.  Notwithstanding  any  contrary provision of law, a drawer negotiating a  check  who  knows  or  should  know  that  payment  of such check will be refused by the drawee  bank either because the drawer has no account with such bank or  because  the  drawer  has  insufficient  funds on deposit with such bank shall be  liable, except as provided in subdivision four of this section,  to  the  payee  who  has  presented such check for payment, not only for the face  amount of the check but also for additional, liquidated  damages,  where  the  check  is dishonored and the drawer fails to pay the face amount of  such check within thirty days following the date of mailing by the payee  of the second written demand for payment as provided in this section.    2. In the case of a drawer negotiating a check  who  knows  or  should  know  that  payment  of  such  check  will be refused by the drawee bank  because the drawer has no  account  with  such  bank,  such  additional,  liquidated  damages  shall be in an amount to be determined by the court  in light of the circumstances, but in no  event  shall  such  amount  be  greater  than  twice the face amount of the check or seven hundred fifty  dollars, whichever is less.    3. In the case of a drawer negotiating a check  who  knows  or  should  know  that  payment  of  such  check  will be refused by the drawee bank  because the drawer has insufficient funds on  deposit  with  such  bank,  such  additional,  liquidated  damages  shall  be  in  an  amount  to be  determined by the court in light of the circumstances, but in  no  event  shall  such amount be greater than twice the face amount of the check or  four hundred dollars, whichever is less.    4. The drawer shall not be liable to the  payee  for  the  additional,  liquidated damages provided for by this section if:    (a)  The  drawer  gave  such  check  as  payment  for  the  rental  of  residential premises; or    (b) The drawer gave such check  as  payment  for  residential  service  supplied by a gas, electric, steam, telephone or water corporation; or    (c) The drawer gave such check as repayment of all, or a portion of, a  debt secured by collateral which the payee has repossessed.    5.  Defenses  which  may be asserted against any person not having the  rights of a holder in due course, as specified  in  sections  3-306  and  3-408  of the uniform commercial code, shall be available to a defendant  in any action or proceeding in which  additional  liability  is  claimed  under this section.    6.  The  additional  liquidated  damages  provided for in this section  shall be available only to those  persons  or  entities  which  post  or  otherwise  give  conspicuous  notice  to  the  public of the additional,  liquidated damages which may be imposed pursuant to this  section.  Such  notice  shall  set  forth  the additional liquidated damages that may be  imposed if a check is dishonored and  the  section  of  law  authorizing  imposition  of  such damages, and provide notice that criminal penalties  also may apply.    7. The first written demand for payment on the dishonored check  shall  be in the form prescribed by subdivision eight of this section and shall  be sent to the drawer's last known residence address or last known place  of  business  by  first  class mail and by certified mail return receipt  requested with delivery restricted to the drawer, on or after  the  date  the  payee  received  notice  that  such  check had been dishonored. The  second written demand for payment on the dishonored check  shall  be  in  the form provided in subdivision eight of this section and shall be sent  to the drawer at the drawer's last known residence address or last known  place  of  business  by  first  class mail on or after the fifteenth day  following the date of receipt of the first written demand for payment.8. The written demands for payment required by  subdivision  seven  of  this  section, shall be in the following form and shall be printed in at  least ten point type in both the English and Spanish languages:                    DEMAND FOR PAYMENT OF DISHONORED CHECK   DATE:                                1ST NOTICE                                       2ND AND FINAL NOTICE  TO: _____________________            WARNING: YOU MAY BE      NAME OF DRAWER                   SUED 30 DAYS AFTER      _____________________            THE DATE OF THIS      _____________________            NOTICE IF YOU DO      _____________________            NOT MAKE PAYMENT   LAST KNOWN RESIDENCE ADDRESS        OR PLACE OF BUSINESS   YOUR CHECK IN THE AMOUNT OF $___________ DATED____________________    PAYABLE TO THE ORDER OF__________________ HAS BEEN DISHONORED BY  THE BANK UPON WHICH IT WAS DRAWN, BECAUSE:  ________YOU HAD NO ACCOUNT WITH THAT BANK.  ________YOU HAD INSUFFICIENT FUNDS ON DEPOSIT WITH THAT BANK.  IF  YOU DO NOT MAKE PAYMENT, YOU MAY BE SUED UNDER SECTION 11-104 OF THE  GENERAL OBLIGATIONS LAW TO RECOVER PAYMENT. IF A  JUDGMENT  IS  RENDERED  AGAINST  YOU  IN COURT, IT MAY INCLUDE NOT ONLY THE ORIGINAL FACE AMOUNT  OF THE CHECK, BUT ALSO ADDITIONAL LIQUIDATED DAMAGES, AS FOLLOWS:    --IF YOU HAD NO ACCOUNT WITH THE BANK UPON WHICH THE CHECK WAS  DRAWN,  AN  ADDITIONAL  SUM  WHICH MAY BE EQUIVALENT TO TWICE THE FACE AMOUNT OF  THE CHECK OR SEVEN HUNDRED FIFTY DOLLARS, WHICHEVER IS LESS; OR    --IF YOU HAD INSUFFICIENT FUNDS ON DEPOSIT WITH THE  BANK  UPON  WHICH  THE  CHECK WAS DRAWN, AN ADDITIONAL SUM WHICH MAY BE EQUIVALENT TO TWICE  THE FACE AMOUNT OF THE CHECK OR FOUR HUNDRED DOLLARS, WHICHEVER IS LESS.   PLEASE MAKE PAYMENT IN THE AMOUNT OF_______ TO:       ____________________________________________________________________      NAME OF PAYEE      ____________________________________________________________________      ____________________________________________________________________      ____________________________________________________________________                   ADDRESS TO WHICH PAYMENT SHOULD BE DELIVERED       IF YOU DISPUTE ANY OF THE FACTS  LISTED  ABOVE,  CONTACT  THE  PAYEE    IMMEDIATELY.       9.  The  public  service  commission shall study the extent to which    checks given in payment for residential service  supplied  by  a  gas,    electric,  steam, telephone or water corporation are dishonored either    because the drawer had no account with the bank on which the check was    written or because the drawer had insufficient funds on  deposit  with    such  bank,  including  the extent of chronic payment with checks that    are dishonored and  the  impact  of  such  dishonored  checks  on  the    operating  costs  of  these  corporations  and their requests for rate    increases, and whether any penalty for dishonored checks, in  addition    to  recovery of the utilities' administrative costs, is necessary. The    commission shall report to the governor and the legislature  no  later    than one year after the effective date of this section.