| 1 | A bill to be entitled |
| 2 | An act relating to motor vehicle dealers; amending s. |
| 3 | 320.64, F.S.; revising provisions for grounds for denial, |
| 4 | suspension, or revocation of license of a motor vehicle |
| 5 | manufacturer, factory branch, distributor, or importer |
| 6 | licensed by the Department of Highway Safety and Motor |
| 7 | Vehicles to enter into franchise agreements with dealers; |
| 8 | prohibiting certain charge-backs of warranty service |
| 9 | payments made to a dealer unless certain procedures are |
| 10 | followed; revising such procedures; prohibiting applicant |
| 11 | or licensee from refusing to allow, limiting, or |
| 12 | restricting a motor vehicle dealer acquisition or addition |
| 13 | of operations for another line-make of motor vehicles |
| 14 | without a showing that the acquisition or addition would |
| 15 | impair the dealer's ability to adequately sell or service |
| 16 | such applicant's or licensee's motor vehicles; amending s. |
| 17 | 320.641, F.S.; revising procedures for a determination |
| 18 | that a discontinuation, cancellation, or nonrenewal of a |
| 19 | franchise agreement by the applicant or licensee is |
| 20 | unfair; providing for a 180-day notice to cure an alleged |
| 21 | breach of the agreement; providing an effective date. |
| 22 |
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| 23 | Be It Enacted by the Legislature of the State of Florida: |
| 24 |
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| 25 | Section 1. Subsection (25) of section 320.64, Florida |
| 26 | Statutes, is amended, and subsection (37) is added to that |
| 27 | section, to read: |
| 28 | 320.64 Denial, suspension, or revocation of license; |
| 29 | grounds.--A license of a licensee under s. 320.61 may be denied, |
| 30 | suspended, or revoked within the entire state or at any specific |
| 31 | location or locations within the state at which the applicant or |
| 32 | licensee engages or proposes to engage in business, upon proof |
| 33 | that the section was violated with sufficient frequency to |
| 34 | establish a pattern of wrongdoing, and a licensee or applicant |
| 35 | shall be liable for claims and remedies provided in ss. 320.695 |
| 36 | and 320.697 for any violation of any of the following |
| 37 | provisions. A licensee is prohibited from committing the |
| 38 | following acts: |
| 39 | (25) The applicant or licensee has undertaken an audit of |
| 40 | warranty payments or incentive payment previously paid to a |
| 41 | motor vehicle dealer in violation of this section or has failed |
| 42 | to comply with s. 320.696. An applicant or licensee may |
| 43 | reasonably and periodically audit a motor vehicle dealer to |
| 44 | determine the validity of paid claims. Audit of warranty |
| 45 | payments shall only be for the 1-year period immediately |
| 46 | following the date the claim was paid. Audit of incentive |
| 47 | payments shall only be for an 18-month period immediately |
| 48 | following the date the incentive was paid. An applicant or |
| 49 | licensee shall not deny a claim or charge a motor vehicle dealer |
| 50 | back subsequent to the payment of the claim unless the applicant |
| 51 | or licensee can show that the claim was false or fraudulent or |
| 52 | that the motor vehicle dealer failed to substantially comply |
| 53 | with the reasonable written and uniformly applied procedures of |
| 54 | the applicant or licensee for such repairs or incentives. An |
| 55 | applicant or licensee may not charge a motor vehicle dealer back |
| 56 | subsequent to the payment of the claim unless a representative |
| 57 | of the applicant or licensee has met in person at the dealership |
| 58 | with an officer or employee of the dealer designated by the |
| 59 | motor vehicle dealer and explained in detail the basis for each |
| 60 | of the proposed charge-backs and thereafter given the motor |
| 61 | vehicle dealer's representative a reasonable opportunity at the |
| 62 | meeting, and no less than 30 days after such meeting, to explain |
| 63 | the motor vehicle dealer's position relating to each of the |
| 64 | proposed charge-backs. The applicant or licensee shall be |
| 65 | prohibited from changing or altering the basis for each of the |
| 66 | proposed charge-backs as presented to the motor vehicle dealer's |
| 67 | representative following the conclusion of the audit. In the |
| 68 | event the motor vehicle dealer was selected for audit or review |
| 69 | on the basis that some or all of the motor vehicle dealer's |
| 70 | claims were viewed as excessive in comparison to average, mean, |
| 71 | or aggregate data accumulated by the applicant or licensee, or |
| 72 | in relation to claims submitted by a group of other motor |
| 73 | vehicle dealers, the applicant or licensee shall, at or prior to |
| 74 | the meeting with the motor vehicle dealer's representative, |
| 75 | provide the dealer with a written statement containing the basis |
| 76 | or methodology upon which the motor vehicle dealer was selected |
| 77 | for audit or review. |
| 78 | (37) Notwithstanding the terms of any franchise agreement, |
| 79 | the applicant or licensee has refused to allow, limited, or |
| 80 | restricted a motor vehicle dealer from acquiring or adding a |
| 81 | sales or service operation for another line-make of motor |
| 82 | vehicles at the same or expanded facility at which the motor |
| 83 | vehicle dealer currently operates a dealership unless the |
| 84 | applicant or licensee can demonstrate that such acquisition or |
| 85 | addition will substantially impair the dealer's ability to |
| 86 | adequately sell or service such applicant's or licensee's motor |
| 87 | vehicles. |
| 88 |
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| 89 | A motor vehicle dealer who can demonstrate that a violation of, |
| 90 | or failure to comply with, any of the preceding provisions by an |
| 91 | applicant or licensee will or can adversely and pecuniarily |
| 92 | affect the complaining dealer, shall be entitled to pursue all |
| 93 | of the remedies, procedures, and rights of recovery available |
| 94 | under ss. 320.695 and 320.697. |
| 95 | Section 2. Subsection (3) of section 320.641, Florida |
| 96 | Statutes, is amended to read: |
| 97 | 320.641 Discontinuations, cancellations, nonrenewals, |
| 98 | modifications, and replacement of franchise agreements.-- |
| 99 | (3) Any motor vehicle dealer who receives a notice of |
| 100 | intent to discontinue, cancel, not renew, modify, or replace |
| 101 | may, within the 90-day notice period, file a petition or |
| 102 | complaint for a determination of whether such action is an |
| 103 | unfair or prohibited discontinuation, cancellation, nonrenewal, |
| 104 | modification, or replacement. Agreements and certificates of |
| 105 | appointment shall continue in effect until final determination |
| 106 | of the issues raised in such petition or complaint by the motor |
| 107 | vehicle dealer. A discontinuation, cancellation, or nonrenewal |
| 108 | of a franchise agreement is unfair if it is not clearly |
| 109 | permitted by the franchise agreement; is not undertaken in good |
| 110 | faith; is not undertaken for good cause; or is based on an |
| 111 | alleged breach of the franchise agreement for which the motor |
| 112 | vehicle dealer was not given 180 days' notice to cure the |
| 113 | alleged breach and which is not in fact a material and |
| 114 | substantial breach; or, if the grounds relied upon for |
| 115 | termination, cancellation, or nonrenewal have not been applied |
| 116 | in a uniform and consistent manner by the licensee. A |
| 117 | modification or replacement is unfair if it is not clearly |
| 118 | permitted by the franchise agreement; is not undertaken in good |
| 119 | faith; or is not undertaken for good cause. The applicant or |
| 120 | licensee shall have the burden of proof that such action is fair |
| 121 | and not prohibited. |
| 122 | Section 3. This act shall take effect July 1, 2007. |