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PUBLIC LAWS OF MAINE
First Special Session of the 118th

CHAPTER 473
H.P. 964 - L.D. 1327

An Act to Regulate Personal Sports Mobile Franchises

     Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and

     Whereas, personal sports mobile dealers in this State are currently being subjected to economic coercion by certain manufacturers; and

     Whereas, this legislation protects those dealers from such coercion; and

     Whereas, it is imperative to address this issue and ensure the ability of such dealers to conduct their business without such coercion; and

     Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 10 MRSA 1171, sub-11, as amended by PL 1995, c. 65, Pt. A, 14 and affected by 153 and Pt. C, 15, is further amended to read:

     11. Motor vehicle. "Motor vehicle" means any motor driven vehicle, except motorcycles, required to be registered under Title 29-A, chapter 5.

     Sec. 2. 10 MRSA 1196, sub-6, as enacted by PL 1991, c. 631, is amended to read:

     6. Watercraft. "Watercraft" means any type of vessel, boat or craft used or capable of being used as a means of transportation on water. "Watercraft" does not include a seaplane or a personal sports mobile as defined in section 1242, subsection 15.

     Sec. 3. 10 MRSA c. 206-B is enacted to read:

CHAPTER 206-B
PERSONAL SPORTS MOBILE MANUFACTURERS, DISTRIBUTORS AND DEALERS

1241. Short title

     This chapter may be known and cited as the "Personal Sports Mobile Business Practices Act."

1242. Definitions

     As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.

     1. Designated family member. "Designated family member" means the spouse, child, grandchild, parent or sibling of the owner of a new personal sports mobile dealership who in the case of the owner's death is entitled to inherit the ownership interest in the new personal sports mobile dealership under the terms of the owner's will or who in the case of an incapacitated owner of a new personal sports mobile dealership has been appointed by a court as the legal representative of the new personal sports mobile dealer's property.

     2. Distributor branch. "Distributor branch" means a branch office maintained by a distributor or wholesaler that sells or distributes new or used personal sports mobiles to personal sports mobile dealers.

     3. Distributor representative. "Distributor representative" means a representative employed by a distributor branch, distributor or wholesaler.

     4. Distributor or wholesaler. "Distributor" or "wholesaler" means any person that sells or distributes new or used personal sports mobiles to personal sports mobile dealers or that maintains distributor representatives within this State.

     5. Factory branch. "Factory branch" means a branch maintained by a manufacturer that manufactures or assembles personal sports mobiles for sale to distributors or personal sports mobile dealers or that is maintained for directing and supervising the representatives of the manufacturer.

     6. Factory representative. "Factory representative" means a representative employed by a manufacturer or employed by a factory branch for the purpose of making or promoting the sale of personal sports mobiles or for contracting with, supervising, servicing or instructing personal sports mobile dealers or prospective personal sports mobile dealers.

     7. Franchise. "Franchise" means an oral or written arrangement in which there is a community of interest in the marketing of personal sports mobiles or services related to personal sports mobiles at wholesale, retail, leasing or otherwise. The franchise may be for a definite or indefinite time period in which a manufacturer, distributor or wholesaler grants to a personal sports mobile dealer a license to use a trade name, service mark or related characteristic.

     8. Franchisee. "Franchisee" means a personal sports mobile dealer to whom a franchise is offered or granted.

     9. Franchisor. "Franchisor" means a manufacturer, distributor or wholesaler who grants a franchise to a personal sports mobile dealer.

     10. Fraud. "Fraud" includes, in addition to its normal legal connotation, a misrepresentation in any manner, whether intentionally false or due to gross negligence of a material fact, a promise or representation not made honestly and in good faith and an intentional failure to disclose a material fact.

     11. Good faith. "Good faith" means honesty in fact and the observation of reasonable commercial standards of fair dealing in the trade as defined in Title 11, section 2103, subsection (1), paragraph (b).

     12. Manufacturer. "Manufacturer" means any person, resident or nonresident, that manufactures or assembles new personal sports mobiles or imports for distribution through distributors or any person, resident or nonresident, that is controlled by the manufacturer. The term "manufacturer" includes the terms "franchisor," "distributor," "distributor branch," "wholesaler," "factory branch" and "factory representative."

     13. New personal sports mobile. "New personal sports mobile" means a personal sports mobile that has not been sold previously to any person except a distributor or wholesaler or personal sports mobile dealer for resale.

     14. Person. "Person" means a natural person, corporation, partnership, trust or other entity. In case of an entity, "person" includes any other entity in which the person has a majority interest or effectively controls, as well as the individual officers, directors and other persons in active control of the activities of each such entity.

     15. Personal sports mobile. "Personal sports mobile" means any snowmobile as defined in Title 12, section 7821, subsection 5; any all-terrain vehicle as defined in Title 12, section 7851, subsection 2; any motorcycle as defined in Title 29-A, section 101, subsection 38; and any personal watercraft as defined in Title 12, section 7791, subsection 11-A. "Personal sports mobile" does not include a motor vehicle as defined in section 1171, subsection 11.

     16. Personal sports mobile dealer. "Personal sports mobile dealer" means any person who sells or solicits or advertises the sale of new or used personal sports mobiles. "Personal sports mobile dealer" does not include receivers, trustees, administrators, executors, guardians or other persons appointed by or acting under judgment, decree or order of any court, or public officers while performing their duties as those officers.

     17. Sale. "Sale" means the issuance, transfer, agreement for transfer, exchange, pledge, hypothecation or mortgage in any form, whether by transfer in trust or otherwise, of any personal sports mobile or interest in a personal sports mobile or of any franchise related to a personal sports mobile; and any option, subscription or other contract or solicitation looking to a sale, or any offer or attempt to sell in any form, whether spoken or written. A gift or delivery of any personal sports mobile or franchise with or as a bonus on account of the sale of anything is deemed a sale of that personal sports mobile or franchise.

1243. Prohibited acts

     The following acts are unfair methods of competition and unfair and deceptive practices. It is unlawful for any:

     1. Damage to public. Manufacturer or personal sports mobile dealer to engage in any action that is arbitrary, in bad faith or unconscionable and that causes damage to any of the parties or to the public;

     2. Coercion involving deliveries and orders. Manufacturer or an officer, agent or other representative of a manufacturer to coerce or attempt to coerce any personal sports mobile dealer:

     3. Certain interference in dealer's business. Manufacturer or an officer, agent or other representative of a manufacturer:

     4. Dealer violations. Personal sports mobile dealer:

1244. Limitations on establishing or relocating dealerships

     A new personal sports mobile dealership may not be established nor may a personal sports mobile dealership be relocated, except as follows.

     1. Notification. If a manufacturer seeks to enter into a franchise establishing an additional new personal sports mobile dealership or relocating an existing new personal sports mobile dealership, within or into a relevant market area where the same line make is already represented, the manufacturer shall, in writing, first notify each new personal sports mobile dealer in the line make in the relevant market area of the intention to establish an additional dealership or to relocate an existing dealership within or into that market area. The relevant market area is a radius of 15 miles around an existing dealership in the following cities: Augusta, Auburn, Bangor, Biddeford, Brewer, Falmouth, Lewiston, Portland, Saco, South Portland, Waterville and Westbrook. The relevant market area is a radius of 30 miles around all other existing dealerships.

Within 30 days of receiving the notice or within 30 days after the end of any appeal procedure provided by the manufacturer, any such new personal sports mobile dealership may file a complaint in the Superior Court of the county in which the dealership is located, protesting the establishment or relocation of the proposed new personal sports mobile dealership. When such a complaint is filed, the manufacturer may not establish or relocate the proposed new personal sports mobile dealership until a hearing has been held on the merits, nor thereafter if the court determines that there is good cause for not permitting the proposed new personal sports mobile dealership.

     2. Good cause. In determining whether good cause has been established for not entering into or relocating an additional dealership for the same line make, the court shall take into consideration the existing circumstances, including, but not limited to:

     For the purposes of this section, the reopening in a relevant market area of a new personal sports mobile dealership that has not been in operation for one year or more is deemed the establishment of an additional new personal sports mobile dealership.

1245. Transportation damages

     1. Liability of new dealer after acceptance. Notwithstanding the terms, provisions or conditions of any agreement or franchise, the new personal sports mobile dealer is solely liable for damages to new personal sports mobiles after acceptance from the carrier and before delivery to the ultimate purchaser.

     2. Liability of manufacturer. Notwithstanding the terms, provisions or conditions of any agreement or franchise, the manufacturer is liable for all damages to personal sports mobiles before delivery to a carrier or transporter.

     3. Additional liability of dealer. Notwithstanding the provisions of subsections 1 and 2, the new personal sports mobile dealer is liable for damages to new personal sports mobiles after delivery to the carrier if the dealer selects the mode of transportation and the carrier. In all other instances, the manufacturer is liable for carrier-related new personal sports mobile damage as long as the new personal sports mobile dealer annotates the bill of lading or other carrier document indicating damages observed at the time of delivery to the new personal sports mobile dealer and promptly notifies the manufacturer of any concealed damage discovered after delivery.

1246. Survivorship

     1. Right of family member. The right of a designated family member to succeed in dealer ownership is governed by the following provisions.

     2. Refusal to honor; notice required. The refusal to honor the right of a designated family member to succeed in dealer ownership is governed by the following provisions.

     3. Written designation of succession unaffected. This section does not preclude a new personal sports mobile dealer from designating any person as that new personal sports mobile dealer's successor by written instrument filed with the manufacturer.

1247. Delivery and preparation obligations; product liability and implied warranty complaints

     Every manufacturer shall specify to the dealer the delivery and preparation obligations of its personal sports mobile dealers prior to delivery of new personal sports mobiles to retail buyers. The delivery and preparation obligations of its personal sports mobile dealers and a schedule of the compensation to be paid to its personal sports mobile dealers for the work and services they are required to perform in connection with the delivery and preparation are the dealer's only responsibility for product liability between that dealer and that manufacturer. The compensation set forth on the schedule must be reasonable.

     In any action or claim brought against the personal sports mobile dealer on a product liability complaint in which it is later determined that the manufacturer is liable, the dealer is entitled to receive from the manufacturer that dealer's reasonable costs and attorney's fees incurred in defending the claim or action.

     In any action or claim brought against the personal sports mobile dealer on a breach of implied warranty complaint in which it is later determined that the manufacturer is liable, the dealer is entitled to receive from the manufacturer the dealer's reasonable costs and attorney's fees incurred in defending the claim or action. In any such implied warranty action, a dealer has the rights of a buyer under Title 11, section 2607, subsection 5.

     The court shall consider the personal sports mobile dealer's share in the responsibility for the damages in awarding costs and attorney's fees.

1248. Warranty

     1. Parts or labor; satisfaction of warranty. If a personal sports mobile franchisor requires or permits a personal sports mobile franchisee to perform labor or provide parts in satisfaction of a warranty created by the franchisor, the franchisor shall properly and promptly fulfill its warranty obligations and shall:

     2. Claim. Any claim made by a franchisee for compensation for parts provided or for reimbursement for labor performed in satisfaction of a warranty must be paid within 30 days of its approval from the franchisor. All the claims must be either approved or disapproved within 30 days of their receipt. When any such claim is disapproved, the franchisee that submitted it must be notified in writing from the franchisor of its disapproval within that period, together with the specific reasons for its disapproval.

     3. Restrictions prohibited. A franchisor may not restrict by agreement, restriction upon reimbursement or otherwise the nature or extent of labor performed or parts provided so that the restriction impairs the franchisee's ability to satisfy a warranty created by the franchisor by performing labor in a professional manner or by providing parts required in accordance with generally accepted standards.

     4. Costs; fees. In any claim that is disapproved by the manufacturer and in which the dealer brings legal action to collect the disapproved claim and is successful in the action, the court shall award the dealer the cost of the action together with reasonable attorney's fees. Reasonable attorney's fees must be determined by the value of the time reasonably expended by the attorney and not by the amount of the recovery on behalf of the dealer.

1249. Unreasonable restrictions

     It is unlawful directly or indirectly to impose unreasonable restrictions on a personal sports mobile dealer or franchisee relative to transfer; sale; right to renew; termination; discipline; noncompetition covenants; site-contracts whether by sublease, collateral pledge of lot purchase or option to purchase; compliance with subjective standards; or assertion of legal or equitable rights.

1250. Covered under written or oral agreements

     1. Agreements subject to this chapter. Written or oral agreements between a manufacturer, wholesaler or distributor with a personal sports mobile dealer, including, but not limited to, the franchise offering, the franchise agreement, sales of goods, services or advertising, leases or mortgages of real or personal property, promises to pay, security interests, pledges, insurance contracts, advertising contracts, construction or installation contracts, servicing contracts and all other such agreements in which the manufacturer, wholesaler or distributor has any direct or indirect interest, are subject to this chapter.

     2. Copy of agreement or amendments. Before any new selling agreement or any amendment to that selling agreement between the parties becomes effective, the manufacturer or an officer, agent or other representative of that manufacturer shall, 90 days prior to the effective date of the agreement or amendment, forward a copy of the agreement or amendment to the dealer.

1250-A. Franchise interest; vested rights

     Notwithstanding any other provision of law, it is unlawful for the manufacturer, wholesaler, distributor or franchisor without due cause to fail to renew a franchise on terms then equally available to all its personal sports mobile dealers, to terminate a franchise or to restrict the transfer of a franchise unless the franchisee receives fair and reasonable compensation for the value of the business.

1250-B. Franchisee's right to associate

     Any franchisee has the right of free association with other franchisees for any lawful purpose.

1250-C. Discounts and other inducements

     In connection with a sale of a personal sports mobile or mobiles to the State or to any political subdivision of the State, a manufacturer may not offer any discounts, refunds or any other similar type of inducement to any dealer without making the same offer or offers to all its dealers within the relevant market area. If such inducements are made, the manufacturer, distributor or wholesaler shall give simultaneous notice of those inducements to all of its dealers within the relevant market area.

1250-D. Public policy

     Any contract or part of a contract or practice under a contract in violation of any provision of this chapter is against public policy and is void and unenforceable. Any existing contract or part of a contract or practice under a contract in violation of any provision of this chapter is against public policy and is void and unenforceable to the extent that it is in conflict with this chapter.

1250-E. Advertisements

     Any person who engages directly or indirectly in purposeful contacts within this State in connection with the offering or advertising for sale or has business dealings with respect to a personal sports mobile within the State is subject to this chapter.

1250-F. Civil remedies

     1. Civil remedies. Any personal sports mobile dealer or franchisee who has been damaged by reason of a violation of a provision of this chapter may bring an action to enjoin that violation and to recover any damages arising from that violation. A final judgment, order or decree rendered against a person in any civil, criminal or administrative proceeding under the federal antitrust laws, the Federal Trade Commission Act, this chapter or any other part of the Maine Revised Statutes is prima facie evidence against that person subject to the conditions set forth in the federal antitrust laws, 15 United States Code, Section 16.

1250-G. Statute of limitation

     Actions arising out of any provision of this chapter must be commenced within 4 years after the cause of action accrues; however, if a person liable under this chapter conceals the cause of action from the knowledge of the person entitled to bring it, the period prior to the discovery of the cause of action by the person so entitled is excluded in determining the time limited for commencement of the action. If a cause of action accrues during the pendency of any civil, criminal or administrative proceeding against a person brought by the United States or any of its agencies under the antitrust laws, the Federal Trade Commission Act or any other federal Act or the laws of Maine related to antitrust laws or to franchising, that action may be commenced within one year after the final disposition of that civil, criminal or administrative proceeding.

1250-H. Construction

     In construing this chapter the courts may be guided by the interpretations of the Federal Trade Commission Act, 15 United States Code, Section 45, as amended.

1250-I. Jurisdiction

     Any person who violates any provision of this chapter is subject to the jurisdiction of the courts of this State upon service of process in accordance with Title 14, chapter 203 and consistent with the maximum limits of due process as decided by the United States Supreme Court.

1250-J. Penalty

     Any person who violates this chapter is guilty of a Class E crime.

     Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.

Effective June 11, 1997.

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