An Act To Amend the Laws Relating to Motor Vehicle Dealers
Sec. 1. 10 MRSA §1174, sub-§3, ¶¶C-2 to C-5 are enacted to read:
Nothing in this paragraph prevents a manufacturer from instructing a dealer to repair used vehicles of the line make for which the dealer holds a franchise with an open recall, as long as the instruction does not involve coercion that imposes a penalty or provision of loss of benefits on the dealer.
A manufacturer may not use any data, calculations or statistical determinations of the sales performance of a dealer for any purpose, including loss of incentive payments or other benefits, claim of breach or threats thereof or notice of termination or threats thereof, for the period of time that the manufacturer has established an agreement, program, incentive program or provision for loss of incentive payments or other benefits of any kind whatsoever that causes a dealer to refrain from selling any used motor vehicle subject to a recall, stop sale directive, do not drive directive, technical service bulletin or other manufacturer notification or pursuant to federal law to perform work on a dealer's used motor vehicles in its inventory when there is no remedy or parts are not available from the manufacturer to remediate each affected used motor vehicle and for 90 days after the termination of such an agreement, program, incentive program or provision for loss of incentive payments or other benefits of any kind whatsoever. The data on which the manufacturer seeks to rely under this paragraph may be for only a period or periods not excluded under this paragraph. A dealer is deemed to be in compliance with any performance standard or program requirements related to sales performance or sales or service customer satisfaction performance of the dealer during the period or periods excluded under this paragraph.
This paragraph does not prevent a manufacturer from requiring that a motor vehicle not be subject to an open recall or stop sale directive or do not drive directive, technical service bulletin, or other manufacturer notification or similar notification pursuant to federal law in order to be qualified, remain qualified or be sold as a certified preowned vehicle or similar designation; from paying incentives for selling used vehicles with no unremedied recall; from paying incentives for performing recalled repairs on a vehicle in the dealer's inventory; or from instructing a dealer to repair used vehicles of the line make for which the dealer holds a franchise with an open recall as long as the instruction does not involve coercion that imposes a penalty or provision of loss of benefits on the dealer.
A dealer may apply to a manufacturer for adjustment to data, calculations or statistical determination of sales performance or sales and service customer satisfaction performance for any period of time during which the dealer has at least 5% of its new motor vehicle inventory subject to a recall, stop sale directive or do not drive directive and for 90 days after the end of such a period of time. Within 30 days of application for adjustment, the manufacturer shall use reasonable efforts to review and adjust the data, calculations or other statistical determinations back to the date the dealer was prevented from selling the new motor vehicles. The manufacturer has the burden of showing by clear and convincing evidence that the prevention of sale did not have a material, adverse effect on the dealer's new vehicle sales performance or sales and service customer satisfaction performance, and the adjustments by the manufacturer must remediate the effect shown on the data, calculations or statistical determinations of sales performance or sales and service customer satisfaction performance.
The manufacturer shall take into consideration any adjustments to a dealer's new vehicle sales performance or sales and service customer satisfaction performance made by the manufacturer under this paragraph in determining a dealer's compliance with a performance standard or program.
Nothing in this paragraph is intended to limit in any way the rights of a dealer under section 1176;
Sec. 2. 10 MRSA §1174, sub-§3-A, as corrected by RR 2013, c. 1, §20, is amended to read:
For purposes of this subsection, "franchise market area" means the area located within 15 miles of the territorial limits of the municipality in which the former franchisee's franchise facility was located.
For purposes of this subsection, the fair market value of a former franchisee's motor vehicle dealership must be calculated as of the date of the following that yields the highest fair market value: the date the predecessor manufacturer announced the action that resulted in the cancellation, termination, noncontinuance or nonrenewal; the date the action that resulted in cancellation, termination, noncontinuance or nonrenewal became final; or the date 12 months prior to the date that the predecessor manufacturer announced the action that resulted in the cancellation, termination, noncontinuance or nonrenewal; and
Sec. 3. 10 MRSA §1174, sub-§4, ¶F, as enacted by PL 2009, c. 53, §1, is amended to read:
Sec. 4. 10 MRSA §1174, sub-§5 is enacted to read:
(1) If the dealer resolved a condition covered by the manufacturer's original warranty or any extended warranty of the manufacturer;
(2) If the dealer remedied a safety-related defect that is subject to an outstanding recall under federal law;
(3) If the dealer performed the repairs and submitted the claim; or
(4) If the dealer discovered the need for repairs:
(a) During the course of a separate repair request by the customer; or
(b) Through notice of an outstanding recall under federal law for a safety-related defect.
Sec. 5. 10 MRSA §1174-C, sub-§1, ¶A, as amended by PL 2003, c. 356, §9, is further amended to read:
Sec. 6. 10 MRSA §1176-A, as amended by PL 2013, c. 534, §8, is further amended by adding at the end a new paragraph to read:
A franchisor may not deny those elements of a paid claim or customer or dealer incentive that are based on a dealer's incidental failure to comply with a claim requirement or a clerical error or other technicality, regardless of whether the franchisor contests any other element of that claim, as long as the dealer corrects the clerical error or other technicality according to licensee guidelines.
SUMMARY
This bill makes it an unfair and deceptive practice for a motor vehicle manufacturer to use unreasonable performance standards in assessing motor vehicle dealer compliance with franchise agreements, to require a dealer to refrain from selling a new or used motor vehicle when there is no remedy to a recall without the manufacturer's providing compensation or to prohibit a dealer from providing to a consumer information of a defective condition in a motor vehicle when the vehicle is being repaired under a manufacturer's warranty. It clarifies the standard of review in succession planning and in the analysis by a manufacturer of a dealer's sales and incentive performance.