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The Vermont Statutes Online
Title
09
:
Commerce and Trade
Chapter
108
:
MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS, AND DEALERS FRANCHISING
§
4089. Termination; cancellation or nonrenewal
(a)
Notwithstanding the terms, provisions, or conditions of any franchise or
notwithstanding the terms or provisions of any waiver, no manufacturer shall
cancel, terminate, or fail to renew any franchise with a licensed new motor
vehicle dealer unless the manufacturer has:
(1) satisfied
the notice requirement of section 4090 of this title;
(2) has good
cause for cancellation, termination, or nonrenewal;
(3) has acted in
good faith as defined in this chapter; and
(4)(A) The
Transportation Board finds after a hearing that the manufacturer has acted in
good faith and there is good cause for cancellation, termination, failure to
renew, or refusal to continue any franchise relationship. The new motor vehicle
dealer may file a protest with the Board within 45 days after receiving the
90-day notice. A copy of the protest shall be served by the new motor vehicle
dealer on the manufacturer. When a protest is filed to challenge the
cancellation, termination, or nonrenewal of a franchise agreement under this
section, such franchise agreement shall remain in full force and effect, and
such franchisee shall retain all rights and remedies pursuant to the terms and
conditions of such franchise agreement, including the right to sell or transfer
such franchisee's ownership interest until a final determination by the Board
and any appeal; or
(B) The
manufacturer, distributor, or branch or division thereof has received the
written consent of the new motor vehicle dealer; or
(C) The
appropriate period for filing a protest has expired.
(b) For purposes
of this act, good cause for terminating, canceling, or failing to renew a
franchise shall be limited to failure by the franchisee to substantially comply
with those requirements imposed upon the franchisee by the franchise as set
forth in subdivision (c)(1) of this section.
(c)
Notwithstanding the terms, provisions, or conditions of any agreement or
franchise or the terms or provisions of any waiver, good cause shall exist for
the purposes of a termination, cancellation, or nonrenewal when:
(1) there is a
failure by the new motor vehicle dealer to comply with a provision of the
franchise which provision is both reasonable and of material significance to
the franchise relationship, provided that compliance on the part of the new
motor vehicle dealer is reasonably possible; or if the failure by the new motor
vehicle dealer to comply with a provision of the franchise is pursuant to a
notice issued under subdivision 4090(a)(3) of this title; and the manufacturer,
distributor, or branch or division thereof first acquired actual or
constructive knowledge of such failure not more than 180 days prior to the date
on which notification is given pursuant to section 4090 of this title;
(2) if the failure
by the new motor vehicle dealer, defined in subdivision (1) of this subsection,
relates to the performance of the new motor vehicle dealer in sales or service,
then good cause shall be defined as the failure of the new motor vehicle dealer
to comply with reasonable performance criteria established by the manufacturer
if the new motor vehicle dealer was apprised by the manufacturer in writing of
such failure; and
(A) the
notification stated that notice was provided for failure of performance
pursuant to this section;
(B) the new
motor vehicle dealer was afforded a reasonable opportunity, for a period of not
less than six months, to comply with such criteria;
(C) the new
motor vehicle dealer did not demonstrate substantial progress towards
compliance with the manufacturer's performance criteria during such period and
the new motor vehicle dealer's failure was not primarily due to economic or
market factors within the dealer's relevant market area beyond the dealer's
control; and
(D) the
performance criteria established by the manufacturer are fair, reasonable, and
equitable as applied to all same line-make franchisees of the manufacturer in
the State.
(d) The
manufacturer shall have the burden of proof under this section for showing that
it has acted in good faith, that all notice requirements have been satisfied,
and that there was good cause for the franchise termination, cancellation,
nonrenewal, or noncontinuance.
(e)
Notwithstanding the terms, provisions, or conditions of any agreement or
franchise, or the terms or provisions of any waiver, the following do not
constitute good cause for the termination, cancellation, nonrenewal, or
noncontinuance of a franchise:
(1) The change
of ownership of the new motor vehicle dealer's dealership, excluding any change
in ownership which would have the effect of the sale of the franchise without
the reasonable consent of the manufacturer, distributor, or branch or division
thereof.
(2) The fact
that the new motor vehicle dealer refused to purchase or accept delivery of any
new motor vehicle parts, accessories, or any other commodity or services not
ordered by the new motor vehicle dealer.
(3) The fact
that the new motor vehicle dealer owns, has an investment in, participates in
the management of, or holds a license for the sale of another line-make of new
motor vehicle, or that the new motor vehicle dealer has established another
line-make of new motor vehicle in the same dealership facilities as those of
the manufacturer, distributor, or branch or division thereof, provided that the
new motor vehicle dealer maintains a reasonable line of credit for each
line-make of new motor vehicle and that the new motor vehicle dealer remains in
substantial compliance with any reasonable facilities requirements of the
manufacturer, distributor, or branch or division thereof.
(4) The fact
that the new motor vehicle dealer sells or transfers ownership of the
dealership or sells or transfers capital stock in the dealership to the new
motor vehicle dealer's spouse, son, or daughter. The manufacturer, distributor,
or branch or division thereof shall give effect to such change in ownership
unless the transfer of the new motor vehicle dealer's license is denied or the
new owner is unable to license, as the case may be. (Added 1981, No. 157 (Adj.
Sess.), § 1, eff. April 14, 1982; amended 2009, No. 57, § 1, eff. June 1,
2009.)