§4089. Termination; cancellation or nonrenewal

Link to law: http://legislature.vermont.gov/statutes/section/09/108/04089
Published: 2015

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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.)
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