1st Hawaiian Bank v. Zukerkorn
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1st Hawaiian Bank v. Zukerkorn | |
Court | Hawaii Court of Appeals |
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Citation | 633 P.2d 550 |
Date decided | September 4, 1981 |
Facts
- "Zukerkorn" = Mr. Zukerkorn = defendant = borrower of money
- First Hawaiian Bank = plaintiff = "Bank"
- In 1965, Zukerkorn executed a $6,000 demand note with the Bank
- In 1966, Zukerkorn executed a $2,500 2-year note with the Bank
- Zukerkorn didn't pay anything on these aforesaid bank notes
- In 1973, Zukerkorn was approved on a car loan.
- In 1975, when Zukerkorn applied for a credit card, his application was initially declined, & he was reminded about his un-paid debts. In exchange for agreeing to pay $100/month on his "old" debts, his credit card application was approved.
- In 1976, Zukerkorn made several payment for $100/month to the Bank.
Procedural History
In 1978, the Bank sued Zukerkorn on the 1965 & 1966 debts + the credit card balance.
The Bank won a summary judgment in the trial court in Hawaii.Issues
Does a debtor's new promise [the 1975 credit card application] to pay a debt trigger a new limitations period for stale debts that would otherwise be un-collectable because of the statute of limitations?
Arguments
Zukerkorn argued that the bank's collection activity came too late.
- Zukerkorn argued that there was a 6-year statute of limitation on collecting a debt in Hawaii.
Holding
Yes. A debtor's new promise to pay a debt triggers a new limitations period for stale debts that would otherwise be un-collectable because of the statute of limitations.
Case is remanded.Judgment
Reversed the trial court as to the 1965 & 1966 debts while affirming the credit card balance
Reasons
Judge Burns: A debtor's new promise to pay a debt begins a new limitations period for old debts, even if the applicable statute of limitations has already run.
Rule
Upon the expiration of the statute of limitations on a debt, the lender can no longer collect. However, certain action by the debtor can re-start the clock.
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