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The Vermont Statutes Online
Title
09
:
Commerce and Trade
Chapter
108
:
MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS, AND DEALERS FRANCHISING
§
4097. Manufacturer violations
It shall be a
violation of this chapter for any manufacturer defined under this chapter:
(1) To delay,
refuse, or fail to deliver new motor vehicles or new motor vehicle parts or
accessories in a reasonable time, and in reasonable quantity relative to the
new motor vehicle dealer's facilities and sales potential in the new motor
vehicle dealer's relevant market area, after acceptance of an order from a new
motor vehicle dealer having a franchise for the retail sale of any new motor
vehicle sold or distributed by the manufacturer, any new motor vehicle, parts
or accessories to new vehicles as are covered by such franchise, if such
vehicle, parts, accessories are publicly advertised as being available for
delivery or actually being delivered. This subdivision is not violated,
however, if failure is caused by acts or causes beyond the control of the
manufacturer.
(2) To refuse to
disclose to any new motor vehicle dealer, handling the same line-make, the
manner and mode of distribution of that line-make within the State.
(3) To obtain
money, goods, service, or any other benefit from any other person with whom the
new motor vehicle dealer does business, on account of, or in relation to, the
transaction between the new motor vehicle dealer and such other person, other
than for compensation for services rendered, unless such benefit is promptly
accounted for, and transmitted to, the new motor vehicle dealer.
(4) To increase
prices of new motor vehicles which the new motor vehicle dealer had ordered for
private retail consumers prior to the new motor vehicle dealer's receipt of the
written official price increase notification. A sales contract signed by a
private retail consumer shall constitute evidence of each such order provided that
the vehicle is in fact delivered to that consumer. In the event of manufacturer
price reductions or cash rebates paid to the new motor vehicle dealer, the
amount of any reduction or rebate received by a new motor vehicle dealer shall
be passed on to the private retail consumer by the new motor vehicle dealer.
Price reductions shall apply to all vehicles in the dealer's inventory which
were subject to the price reduction. Price differences applicable to a new
model or series shall not be considered a price increase or price decrease.
Price changes caused by either the addition to a motor vehicle of required or
optional equipment; or revaluation of the United States dollar, in the case of
foreign-make vehicles or components; or an increase in transportation charges
due to increased rates imposed by common carriers shall not be subject to the
provisions of this subdivision.
(5) To offer any
refunds or other types of inducements to any person for the purchase of new
motor vehicles of a certain line or make to be sold to the State or any
political subdivision thereof without making the same offer available upon
request to all other new motor vehicle dealers in the same line-make within the
State.
(6) To release
to any outside party, except under subpoena or as otherwise required by law or
in an administrative, judicial, or arbitration proceeding involving the
manufacturer or new motor vehicle dealer, any business, financial, or personal
information which may be from time-to-time provided by the new motor vehicle dealer
to the manufacturer, without the express written consent of the new motor
vehicle dealer.
(7) To deny any
new motor vehicle dealer the right of free association with any other new motor
vehicle dealer for any lawful purpose.
(8) To compete
with a new motor vehicle dealer in the same line-make operating under an
agreement or franchise from the aforementioned manufacturer in the relevant
market area. A manufacturer shall not, however, be deemed to be competing when
operating a dealership either temporarily for a reasonable period, or in a bona
fide retail operation which is for sale to any qualified independent person at
a fair and reasonable price, or in a bona fide relationship in which an
independent person has made a significant investment subject to loss in the
dealership and can reasonably expect to acquire full ownership of the
dealership on reasonable terms and conditions.
(9) To unfairly
discriminate among its new motor vehicle dealers with respect to warranty
reimbursement.
(10) To
unreasonably withhold consent to a change in executive management or the sale,
transfer, or exchange of the franchise to a qualified buyer capable of being
licensed as a new motor vehicle dealer in this State. If a new motor vehicle
dealer desires to make a change in its executive management or ownership or to
sell its principal assets, the new motor vehicle dealer will give the
franchisor written notice of the proposed change or sale. The franchisor shall
not arbitrarily refuse to agree to such proposed change or sale and may not
disapprove or withhold approval of such change or sale unless the franchisor
can prove that:
(A) its decision
is not arbitrary; and
(B) the new
management, owner, or transferee is unfit or unqualified to be a dealer based
on the franchisor's prior written, reasonable, objective standards or
qualifications which directly relate to the prospective transferee's business
experience, moral character, and financial qualifications.
(11) To fail to
respond in writing to a request for consent as specified in subdivision (10) of
this section within 60 days of receipt of a written request on the forms, if
any, generally utilized by the manufacturer or distributor for such purposes
and containing the information required therein. Such failure to respond shall
be deemed to be consent to the request.
(12) To unfairly
prevent a new motor vehicle dealer from receiving fair and reasonable
compensation for the value of the new motor vehicle dealership.
(13) To engage
in any predatory practice or in any action or failure to act with respect to a
new motor vehicle dealer if the action or failure to act is arbitrary, in bad
faith, or discriminatory compared to similarly situated new motor vehicle
dealers.
(14) To
terminate any franchise solely because of the death or incapacity of an owner
who is not listed in the franchise as one on whose expertise and abilities the
manufacturer relied in the granting of the franchise.
(15) To require
a motor vehicle franchisee to agree to a term or condition in a franchise, or
in any lease related to the operation of the franchise or agreement ancillary
or collateral to a franchise, as a condition to the offer, grant, or renewal of
the franchise, lease, or agreement, that:
(A) requires the
motor vehicle franchisee to waive trial by jury in actions involving the motor
vehicle franchisor;
(B) specifies
the jurisdictions, venues, or tribunals in which disputes arising with respect
to the franchise, lease, or agreement shall or shall not be submitted for
resolution or otherwise prohibits a motor vehicle franchisee from bringing an
action in a particular forum otherwise available under the law of this State;
(C) requires
that disputes between the motor vehicle franchisor and motor vehicle franchisee
be submitted to arbitration or to any other binding alternate dispute
resolution procedure; provided, however, that any franchise, lease, or
agreement may authorize the submission of a dispute to arbitration or to
binding alternate dispute resolution if the motor vehicle franchisor and motor
vehicle franchisee voluntarily agree to submit the dispute to arbitration or
binding alternate dispute resolution at the time the dispute arises;
(D) provides
that in any administrative or judicial proceeding arising from any dispute with
respect to the agreements in this section that the franchisor shall be entitled
to recover its costs, reasonable attorney's fees, and other expenses of
litigation from the franchisee; or
(E) grants the
manufacturer an option to purchase the franchise, or real estate, or business
assets of the franchisee.
(16) To impose
unreasonable standards of performance or unreasonable facilities, financial,
operating, or other requirements upon a motor vehicle franchisee.
(17) To fail or
refuse to sell or offer to sell to all motor vehicle franchisees of a
line-make, all models manufactured for that line-make, or to require a motor
vehicle franchisee to do any of the following as a prerequisite to receiving a
model or series of vehicles: requiring the dealer to pay any extra fee;
requiring a dealer to execute a separate franchise agreement, purchase
unreasonable advertising displays or other materials, or relocate, expand,
improve, remodel, renovate, recondition, or alter the dealer's existing
facilities; or requiring the dealer to provide exclusive facilities. However, a
manufacturer may require reasonable improvements to the existing facility that
are necessary to accommodate special or unique features of a specific model or
line. The failure to deliver any such motor vehicle, however, shall not be
considered a violation of this section if the failure is due to a lack of
manufacturing capacity or to a strike or labor difficulty, a shortage of
materials, a freight embargo, or other cause over which the franchisor has no
control. This subdivision shall not apply to a manufacturer of a motor home.
(18) To prevent
or attempt to prevent any new motor vehicle dealer or any officer, partner, or
stockholder of any new motor vehicle dealer from transferring any part of the
interest of any of them to any other person; provided, however, that no dealer,
officer, partner, or stockholder shall have the right to sell, transfer, or
assign the franchise or power of management or control without the consent of
the manufacturer or distributor unless such consent is unreasonably withheld.
Failure to respond within 60 days of receipt of a written request and
applicable manufacturer application forms and related reasonable information
customarily required for consent to a sale, transfer, or assignment shall be
deemed consent to the request. Within 20 days of receipt of notice from the
dealer, the manufacturer shall provide the dealer with a copy of all
application forms and all other required reasonable information necessary to
evaluate the dealer's request.
(19) To provide
any term or condition in any lease or other agreement ancillary or collateral
to a franchise, which term or condition directly or indirectly violates this
title.
(20) To use a
promotional program or device or an incentive, payment, or other benefit,
whether paid at the time of sale of the new motor vehicle to the dealer or
later, that results in the sale of or offer to sell a new motor vehicle at a
lower price, including the price for vehicle transportation, than the price at
which the same model similarly equipped is offered or is available to another
dealer in the State during a similar time period. This subdivision shall not
prohibit a promotional or incentive program that is available functionally and
equally to competing dealers of the same line-make in the State.
(21)(A) To vary
the price charged to any of its franchised new motor vehicle dealers located in
this State for new motor vehicles based on:
(i) the dealer's
purchase of new facilities, supplies, tools, equipment, or other merchandise
from the manufacturer;
(ii) the
dealer's relocation, remodeling, repair, or renovation of existing dealerships
or construction of a new facility;
(iii) the
dealer's participation in training programs sponsored, endorsed, or recommended
by the manufacturer;
(iv) whether or
not the dealer offers for sale more than one line-make of new motor vehicle in
the same dealership facility;
(v) the dealer's
sales penetration, sales volume, or level of sales or customer service
satisfaction;
(vi) the
dealer's purchase of advertising materials, signage, nondiagnostic computer
hardware or software, communications devices, or furnishings; or
(vii) the
dealer's participation in used motor vehicle inspection or certification
programs sponsored or endorsed by the manufacturer.
(B) The price of
the vehicle, for purposes of this subdivision (21), shall include the
manufacturer's use of rebates, credits, or other consideration that has the
effect of causing a variance in the price of new motor vehicles offered to its
franchised dealers located in the State.
(22) To modify a
franchise during the term of the franchise or upon its renewal if the
modification substantially and adversely affects the new motor vehicle dealer's
rights, obligations, investment, or return on investment without giving 60
days' written notice of the proposed modification to the new motor vehicle
dealer unless the modification is required by law, court order, or the Board.
Within the 60-day notice period, the new motor vehicle dealer may file with the
Board and serve notice upon the manufacturer a protest requesting a
determination of whether there is good cause for permitting the proposed
modification. Multiple protests pertaining to the same proposed modification
shall be consolidated for hearing. The proposed modification shall not take
effect pending the determination of the matter. The manufacturer shall have the
burden of establishing good cause for the proposed modification. In determining
whether there is good cause for permitting a proposed modification, the Board
shall consider any relevant factors, including:
(A) the reasons
for the proposed modification;
(B) whether the
proposed modification is applied to or affects all new motor vehicle dealers in
a nondiscriminatory manner;
(C) whether the
proposed modification will have a substantial and adverse effect upon the new
motor vehicle dealer's investment or return on investment;
(D) whether the
proposed modification is in the public interest;
(E) whether the
proposed modification is necessary to the orderly and profitable distribution
of products by the manufacturer; and
(F) whether the
proposed modification is offset by other modifications beneficial to the new
motor vehicle dealer.
(23) To engage
in any action which is arbitrary, in bad faith, or unconscionable.
(24) To change
the relevant market area set forth in the franchise agreement without good
cause. For purposes of this subdivision, good cause shall include changes in
the dealer's registration pattern, demographics, customer convenience, and
geographic barriers. (Added 1981, No. 157 (Adj. Sess.), § 1, eff. April 14,
1982; amended 1989, No. 84, § 2; 2009, No. 57, § 1, eff. June 1, 2009.)