CHAPTER 27

FORMERLY

SENATE BILL NO. 26

AS AMENDED BY SENATE AMENDMENT NOS. 1, 3, 4, 5 AND HOUSE AMENDMENT NOS. 1, 2 AND 3

AN ACT TO AMEND TITLE 6, DELAWARE CODE, RELATING TO THE ESTABLISHMENT OF A MOTOR VEHICLE FRANCHISING PRACTICES ACT.

BE IT ENACTED BY THE GENERAL ASSEMBLY OP THE STATE OF DELAWARE:

Section 1. Amend Title 6, Delaware Code, by adding thereto a new Chapter to be designated as Chapter 49 which new Chapter shall read as follows:

"CHAPTER 49. MOTOR VEHICLE FRANCHISING ACT

§4901. Declaration of Purpose

The Legislature finds and declares that the distribution and sale of vehicles within this State vitally affects the general economy of the State and the public interest and the public welfare, and that In order to promote the public interest and the public welfare, and in the exercise of its police power, it Is necessary to regulate vehicle manufacturers, distributors or wholesalers and factory or distributor representatives, and to regulate franchise issued by the aforementioned who are doing business in this State in order to prevent frauds, impositions and other abases upon its citizens and to protect and preserve the investments and properties of the citizens of this State.

§4902. Definitions

The following words, terms, and phrases when used in this Chapter shall have the meanings respectively ascribed to them in this Section,except where the context clearly indicates a different meaning.

°Manufacturer' means any person, resident or nonresident, who manufactures or assembles new motor vehicles, or imports for distribution through distributors of motor vehicles, including any person, partnership, or corporation which acts for and is under the control of such manufacturer or assembler in connection with the distribution of said motor vehicles.

Additionally, the term manufacturer shall include the following terms:

(a) 'Distributor' which means any person, resident or nonresident, who in whole or in part offers for sale, sells or distributes any new motor vehicle to new motor vehicle dealers or who maintains factory representatives or who controls any person, firm, association, corporation or trust, resident or nonresident, who In whole or in part offers for sale, sells or distributes any new motor vehicle to new motor vehicle dealers.

(b) 'Factory branch' which means a branch office maintained by a manufacturer for the purpose of selling, or offering for sale, vehicles to a distributor or new motor vehicle dealer, or for directing or supervising In whole or in part factory or distributor representatives.

(2) 'Dealership facilities' means the real estate, buildings, fixtures and improvements which have been devoted to the conduct of business under the franchise by the new motor vehicle dealer.

(3) New motor vehicle dealer' means any person engaged in the business of selling, offering to sell, soliciting or advertising the sale of new motor vehicles and who holds, or held at the time a cause of action under this section accrued, a valid sales and service agreement, franchise or contract, granted by the manufacturer or distributor for the retail sale of said manufacturer's or distributor's new motor vehicles.

(4)(a) 'Motor vehicle' means every vehicle intended primarily for use and operation on the public highways which is self-propelled, not including motor homes, motor home products, and recreational vehicles, farm tractors and other machines and tools used in the production, harvesting and care of farm products.

(b) New motor vehicle' means a vehicle which has been sold to a new motor vehicle dealer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer.

(5) 'Established place of business' means a permanent, commercial building located within this State easily accessible and open to the public at all reasonable times and at which the business of a new motor vehicle dealer, including the display and repair of vehicles, may be lawfully carried on in accordance with the terms of all applicable building codes, zoning and other land-use regulatory ordinances.

(6) 'Franchise' means the written agreement or contract between any new motor vehicle manufacturer and any new motor vehicle dealer which purports to fix the legal rights and liabilities of the parties to such agreement or contract, and pursuant to which the dealer purchases and resells the franchise product or leases or rents the dealership premises.

(7) 'Good faith' means honesty in fact and the observation of reasonable commercial standards of fair dealing in the trade as defined and interpreted in Section 2-103(1)(b) of the Uniform Commercial Code.

(8) 'Designated family member' means the spouse, child, grandchild, parent, brother or sister of the owner of a new motor vehicle dealer who, in the case of the owner's death, is entitled to inherit the ownership interest in the new motor vehicle dealer under the terms of the owner's will, or who has been nominated in any other written instrument, or who, in the case of an incapacitated owner of a new motor vehicle dealer, has been appointed by a court as the legal representative of the new motor vehicle dealer's property.

(1) 'Person' means every natural person, partnership, corporation, association, trust, estate or any other legal entity.

(2) 'Relevant market area' means the area within a radius of ten (la) miles from the intended site of a proposed additional dealership, except that in New Castle County the radius shall be seven (7) miles from the intended site of a proposed additional dealership.

(II) 'Commission' means the Public Service Commission.

§4903. Warranty and Pre-delivery Obligations to new Motor Vehicle Dealers

(a) Each new motor vehicle manufacturer shall specify in writing to each of its new motor vehicle dealers licensed in this State the dealer's obligations for pre-delivery preparation and warranty service on its products, shall compensate the new motor vehicle dealer for such service required of the dealer by the manufacturer, and shall provide dealer the schedule of compensation to be paid such dealer for parts, work and service in connection therewith, and the time allowance for the performance of such work and service.

(b) In no event shall such schedule of compensation fail to include reasonable compensation for diagnostic work, as well as repair service and labor. Time allowances for the diagnosis and performance of warranty work and service shall be reasonable and adequate for the work to be performed. In no event shall the hourly labor rate paid to a dealer for warranty services be less than the rate charged by such dealer for like services to nonwarranty customers for nonwarranty service and reapirs, provided such rate is reasonable.

(c) It is a violation of this Section for any new motor vehicle manufacturer to fail to perform any warranty obligations or to fail to include in written notices of factory recalls to new motor vehicle owners and dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of such defects, or to fall to compensate any of the new motor vehicle dealers in this State for repairs effected by such recall.

(d) All claims made by new motor vehicle dealers pursuant to this Section for such labor and parts shall be paid within thirty (30) days following their approval, provided, however, that the manufacturer retains the right to audit such claims and to chargeback the dealer for unsubstantiated, incorrect, false, or fraudulent claims for a period of two (2) years following payment. All such claims shall be either approved or disapproved within thirty (30) days after their receipt on forms and in the manner specified by the manufacturer, and any claim not specifically disapproved in writing within thirty (30) days after the receipt shall be construed to be approved and payment must follow within thirty (30) days.

§4904. Transportation Damages

(a) Notwithstanding the terms, provisions or conditions of any agreement or franchise, the manufacturer is liable for all damages to motor vehicles before delivery to a carrier or transporter.

(b) If a new motor vehicle dealer determines the method of transportation, the risk of loss passes to the dealer upon delivery of the vehicle to the carrier.

(c) In every other instance, the risk of loss remains with the manufacturer until such time as the new motor vehicle dealer or his designee accepts the vehicle from the carrier.

§4905. Product Liability Indemnification

Notwithstanding the terms of any franchise agreement, it shall be a violation of this law for any new motor vehicle manufacturer to fall to indemnify and hold harmless its franchised dealers against any judgement or settlement agreed to in writing by the manufacturer for damages, including, but not limited to, court costs and reasonable attorneys' fees of the new motor vehicle dealer, arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, warranty (express or implied), or rescission of the sale as is defined in Section 2-608 of the Uniform Commercial Code, less any offset recovered by the dealer and only to the extent that the judgement or settlement relates to the alleged defective or negligent manufacture, assembly or design of new motor vehicles, parts or accessories or other functions by the manufacturer, beyond the control of the dealer.

§4906. Termination, Cancellation or Non-renewal

(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 paragraph d; and

(2) Has good came for cancellation, termination or non-renewal; and

(3) Has acted in- good faith with regard to the cancellation, termination, or nonrenewal as defined in this Act.

(b) Notwithstanding the terms, provisions or conditions of any franchise or the terms or provisions of any waiver, good cause shall exist for the purposes of a termination, cancellation or non-renewal 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 the dealer has been notified in writing of the failure within one hundred eighty (180) days after the manufacturer first acquired knowledge of such failure, or after the dealer was given a reasonable opportunity to correct such failure during a period of not less than six (6) months.

(2) If the failure by the new motor vehicle dealer 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:

(i) said notification stated that notice was provided of failure of performance pursuant to this Section;

(it) the new motor vehicle dealer was afforded a resonable opportunity, for a period of not less than six months, to comply with such criteria; and

(iii) the new motor vehicle dealer did not demonstrate substantial compliance with the manufacturer's performance criteria during such period.

(c) The manufacturer shall have the burden of proof under this Section.

(d) Notification of termination, cancellation and non-renewal.

(1) Notwithstanding the terms, provisions or conditions of any franchise prior to the termination, cancellation or nonrenewal of any franchise, the manufacturer shall furnish notification of such termination, cancellation or nonrenwal to the new motor vehicle dealer as follows:

(i) in the manner described in subsection (b); and

(ii) not less than ninety (90) days prior to the effective date of such termination, cancellation or non-renewal; or

(i) not less than fifteen (15) days prior to the effective date of such termination, cancellation or nonrenwal with respect to any of the following:

(aa) insolvency of the new motor vehicle dealer, or filing of any petition by or against the now motor vehicle dealer under any bankruptcy or receivership law;

(bb) failure of the new motor vehicle dealer to conduct its customary sales and service operations during its customary business hours for seven (7) consecutive business days, except for Acts of God or circumstances beyond the direct control of the new motor vehicle dealer;

(ce) conviction in a court of original jurisdiction of the new motor vehicle dealer, or any owner or operator thereof, of any crime which is punishable by imprisonment;

(dd) revocation of any license which the new motor vehicle dealer is required to have to operate a dealership.

(iv) not less than one hundred eighty (180) days prior to the effective date of such termination or cancellation where the manufacturer or distributor is discontinuing the sale of the product line.

(b) Notification under this Section shall be in writing; shall be by certified mail or personally delivered to the new motor vehicle dealer; and shall contain:

(i) a statement of intention to terminate, cancel or not to renew the franchise; and

(ii) a statement of the reasons for the termination, cancellation or non-renewal; and

(iii) the date on which such termination, cancellation or non-renewal takes effect. S4907. Payments

(a) Upon the termination, nonrenewal or cancellation of any franchise by the manufacturer, the new motor vehicle dealer shall be allowed fair and reasonable compensation by the manufacturer for the:

(i) new and unused current model motor vehicle Inventory which has been acquired from the manufacturer or distributor or new and unused motor vehicle inventory which has been acquired from the manufacturer or distributor within 120 days of the notice of termination and which has not been altered or damaged while in the dealer's possession;

(ii) unused, undamaged and unsold supplies and parts purchased from the manufacturer or distributor provided such supplies and parts are currently offered for sale by the manufacturer or distributor in its current parts catalog and are in salable condition;

(iii) equipment and furnishings provided the new motor vehicle dealer purchased such items from the manufacturer or distributor, or its approved sources; and

(iv) special tools;

(b) Such fair and reasonable compensation for the above shall be paid by the manufacturer within ninety (90) days of tender of the property, provided the new motor vehicle dealer has clear title to the inventory and other items and Is in a position to convey that title to the manufacturer.

§4908. Dealership Facilities Assistance Upon Termination, Cancellation, or Nonrenewal

In the event of a termination, cancellation or nonrenewal by the manufacturer under this section, except termination, cancellation or nonrenewal by the manufacturer for insolvency, license revocation, conviction of a crime or fraud by a dealer owner,

(a) if the new motor vehicle dealer is leasing the dealership facilities from a lessor other than the manufacturer, the manufacturer shall pay the new motor vehicle dealer a sum equivalent to the rent for the unexpired term of the lease or one (1) year's rent, whichever Is less, or

(b) If the new motor vehicle dealer owns the dealership facilities, the manufacturer shall pay the new motor vehicle dealer a sum equivalent to the reasonable rental value of the dealership facilities for one (4) year. Nothing in this section shall relieve a lessee from the obligation to mitigate damages under the lease, nor prevent a manufacturer from discharging its obligations by negotiating a lease termination, sub-lease or new lease.

§4909. Survivorship

(/ ) Right of designated family member to succeed in ownership of a new motor vehicle dealer.

(a) Any owner of a new motor vehicle dealer may appoint by will, or any other written instilment, a designated family member to succeed in the ownership interest of the said owner In the new motor vehicle dealer.

(b) Unless there exists good cause for refusal to honor succession on the part of the manufacturer or distributor, any designated family member of a deceased or incapacitated owner of a new motor vehicle dealer may succeed to the ownership of the new motor vehicle dealer under the existing franchise provided that:

(I) the designated family member gives the manufacturer or distributor written notice of his or her intention to succeed to the ownership of the new motor vehicle dealer within sixty (60) days of the owner's death or incapacity, and

(ii) the designated family member agrees to be bound by all the terms and conditions of the franchise.

(c) The manufacturer or distributor may request, and the designated family member shall provide, promptly upon said request, personal and financial data that is reasonably necessary and is customarily required by the manufacturer to determine whether the succession should be honored.

S4910. Refusal to Honor Succession to Ownership—Notice Required

(a) If a manufacturer or distributor believes that good cause exists for refusing to honor the succession to the ownership of a new motor vehicle dealer by a family member of a deceased or Incapacitated owner of a new motor vehicle dealer under the existing franchise agreement, the manufacturer or distributor may, not more than sixty (60) days following receipt of:

(I) notice of the designated family member's intent to succeed to the ownership of the new motor vehicle dealer, or

(II) any personal or financial data which It has requested, serve upon the designated family member notice of its refusal to honor the succession and of its intent to discontinue the existing franchise with the dealer no sooner than ninety (90) days from the date such notice is served.

(b) The notice must state the specific grounds for the refusal to honor the succession and of its intent to discontinue the existing franchise with the new motor vehicle dealer no sooner than ninety (90) days from the date such notice is served.

(c) If notice of refusal and discontinuance Is not timely served upon the family member, the franchise shall continue in effect subject to termination only as otherwise permitted by this Act.

§4911. Burden of Proof

In determining whether good cause for the refusal to honor the succession exists, the manufacturer, distributor, factory branch, or importer has the burden of proving that the successor is a person who is not of good moral character or does not meet the franchisor's existing and reasonable standards and, considering the volume of sales and service of the new motor vehicle dealer, uniformly applied minimum business experience standards In the market area.

§4912. Written Designation of Succession Unaffected

This Act does not preclude the owner of a new motor vehicle dealer from designating any person as his successor by written instrument filed with the manufacturer or distributor and, in the event there is a conflict between such written instrument and the provisions of this Section, and that written instrument has not been revoked by the owner of the new motor vheicic dealer in writing to the manufacturer or distributor, then the written instrument shall govern.

§4913. Unlawful Acts by Manufacturers or Distributors

(I) It shall be a violation of this Act, for any manufacturer, licensed under this Act to require, attempt to require, coerce or attempt to coerce any new motor vehicle dealer In this State:

(a) To order or accept delivery of any new motor vehicle, part or accessory thereof, equipment or any other commodity not required by law which shall not have been voluntarily ordered by the new motor vehicle dealer; except that this subsection is not intended to modify or supersede any terms or provisions of the franchise requiring new motor vehicle dealers to market a representative line of those motor vehicles which the manufacturer or distributor is publicly advertising.

(b) To order or accept delivery of any new motor vehicle with special features, accessories or equipment not included in the list price of such motor vehicles as publicly advertised by the manufacturer or distributor.

(c) To participate monetarily in an advertising campaign or contest, or to purchase any promotional materials, training materials, showroom or other display decorations or materials at the expense of the new motor vehicle dealer.

(a) To enter into any agreement with the manufacturer or to do any other act prejudicial to the new motor vehicle dealer by threatening to terminate or cancel a franchise or any contractual agreement existing between the dealer and the manufacturer; except that this subsection is not intended to preclude the manufacturer or distributor from insisting on compliance with the reasonable terms or provisions of the franchise or other contractual agreement, and notice in good faith to any new motor vehicle dealer of the new motor vehicle dealer's violation of such terms or provisions shall not constitute a violation of the Act.

(a) To change the capital structure of the new motor vehicle dealer or the means by or through which the new motor vehicle dealer finances the operation of the dealership provided that the new motor vehicle dealer at all times meets any reasonable capital standards determined by the manufacturer in accordance with uniformly applied criteria; and also provided that no change in the capital structure shall cause a change in the principal management or have the effect of a sale of the franchise without the consent of the manufacturer or distributor; said consent shall not be unreasonably withheld.

(a) To refrain from participation in the management of, investment in, or the acquisition of any other line of new motor vehicle or related products; provided, however, that this subsection does not apply unless the new motor vehicle dealer maintains a reasonable line of credit for each make or line of new motor vehicle, the new motor vehicle dealer remains in substantial compliance with the terms and conditions of the franchise and any reasonable facilities requirements of the manufacturer, and no change is made in the principal management of the new motor vehicle dealer.

(a) To prospectively assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability to be imposed by this law or to require any controversy between a new motor vehicle dealer and a manufacturer, distributor, or representatives, to be referred to any person other than the duly constituted courts of the State or the United States of America, if such referral would be binding upon the new motor vehicle dealer.

(a) To either establish or maintain exclusive facilities, personnel, or display space when such requirements would not be justified by reasonable business considerations.

(I) To expand, construct, or significantly modify facilities without written assurances that the franchisor will provide a reasonable supply of new motor vehicles within a reasonable time so as to justify such an expansion, in light of the market and economic conditions.

(2) it shall be a violation of this Act for any manufacturer licensed under this Act:

(a) To delay, refuse, or fail to deliver new motor vehicles or new motor vehicle parts or accessories in a reasonable time, and in reasonable quantity relative to the new motor vehicle dealer's facilities and sales potential in the new motor vehicle dealer's relevant market area, after acceptance of an order from a new motor vehicle dealer having a franchise for the retail sale of any new motor vehicle sold or distributed by the manufacturer, any new motor vehicle, parts or accessories to new vehicles as are covered by such franchise, if such vehicle, parts, accessories are publicly advertised as being available for immediate delivery or actually being delivered. This subsection is not violated, however, if such failure is caused by acts or causes beyond the control of the manufacturer.

(b) To refuse to disclose to any new motor vehicle dealer, handling the same line make, the manner and mode of distribution of that line make within the State.

(c) To obtain money, goods, service, or any other benefit from any other person with whom the new motor vehicle dealer does business, on account of, or in relation to, the transaction between the new motor vehicle dealer and such other person, other than for compensation for services rendered, unless such benefit is promptly accounted for, and transmitted to, the new motor vehicle dealer.

(d) To increase prices of new motor vehicles which the new motor vehicle dealer had ordered for consumers prior to the new motor vehicle dealer's receipt of the written official price increase notification. A sales contract signed by a consumer shall constitute evidence of each such order provided that the vehicle is in fact delivered to that customer. In the event of manufacturer price reductions or cash rebates paid to the new motor vehicle dealer, the amount of any such reduction or rebate received by a new motor vehicle dealer shall be passed on to the consumer by the new motor vehicle dealer. Price reductions shall apply to all vehicles in the denier's inventory which were subject to the price reduction. Price differences applicable to new model or series shall not be considered a price increase or price decrease. Price changes caused by either: (1) the addition to a motor vehicle of required or optional equipment; or (2) revaluation of the United States dollar, in the case of foreign-make vehicles or components; or (3) an Increase in transportation charges due to increased rates imposed by carriers shall not be subject to the provisions of this subsection.

(e) To release to any outside party, except under subpoena or as otherwise required by law or In an administrative, judicial or arbitration proceeding involving the manufacturer or new motor vehicle dealer, any business, financial, or personal information which may be from time-to-time provided by the new motor vehicle dealer to the manufacturer, without the express written consent of the new motor vehicle dealer.

(f) To deny any new motor vehicle dealer the right of free association with any other new motor vehicle dealer for any lawful purpose.

(g) To unfairly compete with a new motor vehicle dealer in the same line make operating under an agreement or franchise from the aforementioned manufacturer in the relevant market area. A manufacturer shall not, however, be deemed to be competing when operating a dealership either temporarily for a reasonable period, or in a bona fide retail operation which is for sale to any qualified Independent person at a fair and reasonable price, or in a bona fide relationship in which an independent person has made a significant investment subject to loss In the dealership and can reasonably expect to acquire full ownership of such dealership on reasonable terms and conditions.

(h) To unfairly discriminate among its new motor vehicle dealers with respect to warranty reimbursement.

(I) To unreasonably withhold consent to the sale, transfer, or exchange of the franchise to a qualified buyer capable of being licensed as a new motor vehicle dealer in this State.

(j) To fall to respond In writing to a request for consent as specified in subsection (I) above within sixty (60) days of receipt of a written request on the forms, if any, generally utilized by the manufacturer or distributor for such purposes and containing the information required therein. Such failure to respond shall be deemed to be consent to the request.

(k) To prevent or attempt to prevent by contract or otherwise, any new motor vehicle dealer from changing the executive management control of the new motor vehicle dealer unless, the manufacturer, having the burden of proof, can show that such change of executive management will result in executive management or control by a person or persons who are not of good moral character or who do not meet reasonable, pre-existing and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards; provided, however, that where the manufacturer rejects a proposed change in executive management control, the manufacturer shall give written notice of his reasons to the dealer within sixty (60) days of notice to the manufacturer by the dealer of the proposed change, otherwise, the change in the executive management of the new motor vehicle dealer shall be presumptively deemed approved.

(1) To terminate, cancel or fall to renew any franchise solely because of the death or incapacity of an owner who Is not listed In the franchise as one on whose expertise and abilities the manufacturer relied in the granting of the franchise.

(m) To prevent or attempt to prevent the new motor vehicle dealer by written instrument or otherwise from either receiving the fair market value of the dealersip in a sale transaction or from transferring the new motor vehicle dealership to a spouse or legal heir as specified In this Act.

(n) To engage in any predatory practice or discrimination against any new motor vehicle dealer.

(o) To resort to or to use any false or intentionally misleading advertisement in connection with his business as a or distributor manufacturer licensed in this State; or for any agent of a or distributor manufacturer or distributor to make any false or intentionally misleading statements to new motor vehicle dealers as inducements to enter Into any agreement or franchise.

(3)(a) It Is unlawful for any manufacturer, or any officer, agent or representative to coerce or to attempt to coerce any new motor vehicle dealer in this State to sell, assign or transfer any retail installment sales contract, obtained by such dealer In connection with the sale by him in this State of new motor vehicles manufactured or sold by such manufacturer, to a specified finance company or class of such companies, or to any other specified persons, by any of the acts or moans hereinafter set forth, namely:

(I) By any statement, suggestion, promise or threat that such manufacturer will in any manner benefit or Injure such new motor vehicle dealer, whether such statement, suggestion, threat or promise is express or implied or made directly or indirectly.

(ii) By any act that will benelft Or injure such new motor vehicle dealer.

(iii) By any contract, or any express or implied offer of contract, made directly or indirectly to such new motor vehicle dealer, for handling such new motor vehicles on the condition that such new motor vehicle dealer sell, assign or transfer his retail installment sales contract thereon, in this State, to a specified finance company or class of such companies or to any other specified person.

(iv) By any express or implied statement or representation made directly or indirectly that such new motor vehicle dealer is under any obligation whatsoever to sell, assign or transfer any of his retail sales contracts, in this State, on new motor vehicles manufactured or sold by such manufacturer, to such finance company, or class of companies, or other specified person, because of any relationship or affiliation between such manufacturer, and such finance company or companies or such specified person or persons.

(b) Any such statements, threats, promises, acts, contracts or offers of contracts, when the effect thereof many be to lessen or eliminate competition or tend to create a monopoly, are declared unfair trade practices and unfair methods of competition and against the policy of this State, are unlawful and are hereby prohibited.

(4) It shall be illegal for any manufacturer or agent or employee of a manufacturer to use a written Instrument, agreement, or waiver to attempt to nullify any of the provisions of this Section and such agreement, written instrument or waiver shall be null and void.

§4914. Applicable Agreements

(I) It shall be unlawful directly or indirectly to impose unreasonable restrictions on the new motor vehicle dealer relative to the sale, transfer, right to renew, termination discipline, non-competition covenants, site-control (whether by sublease, collateral pledge of lease or otherwise), right of first refusal to purchase, option to purchase, compliance with subjective standards and assertion of legal or equitable rights.

(2) The provisions of this Act shall not preclude dealers, manufacturers, or distributors from entering Into valid releases or settlement agreements consistent with the policy of this Act. In no case shall a general release required to be executed as a condition to renewal of a franchise agreement be deemed to be consistent with the policy of this Act.

§4915. Limitations on Establishing or Relocating Dealers

(1) In the event that a manufacturer seeks to enter into a franchise establishing an additional new motor vehicle dealer or relocating an existing new motor vehicle dealer within or into a relevant market area where the same line make is then represented, the manufacturer shall in writing first notify the Public Service Commission and each new motor vehicle dealer in such line make in the relevant market area of the intention to establish an additional dealer or to relocate an existing dealer within or into that market area. Within thirty (30) days of receiving such- notice or within thirty (30) days after the end of any appeal procedure provided by the manufacturer, any such new motor vehicle dealer may file with the Public Service Commission a protest to the establishing or relocating of the new motor vehicle dealer. When such a protest is filed, the Public Service Commission shall inform the manufacturer that a timely protest has been filed, and that the manufacturer shall not establish or relocate the proposed new motor vehicle dealer until the Public Service Commission has held a hearing, nor thereafter, if the Public Service Commission has determined that there is good cause for not permitting the addition or relocation of such new motor vehicle dealer.

(2) This section does not apply:

(a) To the relocation of an existing dealer within that dealer's relevant market area, provided that the relocation not be at a site within seven miles of a licensed new motor vehicle dealer for the same line-make of motor vehicle; or

(b) If the proposed new motor vehicle dealer is to be established at or within two miles of a location at which a former licensed new motor vehicle dealer for the same line-make of new motor vehicle had ceased operating within the previous two years.

(3) In determining whether good cause has been established for not entering into or relocating an ethitional new motor vehicle dealer for the same line-make, the Public Service Commission shall take into consideration the existing circumstances, including, but not limited to:

(a) Permanency of the investment of both the existing and proposed new motor vehicle dealers;

(b) Growth or decline in population and new car registrations M the relevant market area;

(c) Effect on the consuming public in the relevant market area;

(d) Whether it is injurious or beneficial to the public welfare for an additional new motor vehicle dealer to be established.

(e) Whether the new motor vehicle dealers of the same line make in that relevant market area are providing adequate competition and convenient customer care for the motor vehicles of the line make in the market area which shall include the adequacy of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts, and qualified service personnel.

(f) Whether the establishment of an additional new motor vehicle dealer would increase competition, and therefore be in the public interest.

(g) The effect on the relocating dealer of a denial of its relocation.

(4) The Public Service Commission or his designee shall conduct the hearing and render its final determination within ninety (90) days after a protest is filed. Unless waived by the parties, failure to do so shall be deemed the equivalent of a determination that good cause does not exist for refusing to permit the proposed additional or relocated new motor vehicle dealer, unless such delay is caused by acts of the manufacturer, or the relocating or additional dealer.

(5) Any parties to a hearing by the Public Service Commission concerning the establishing or relocating of a new motor vehicle dealer shall have a right of review of the decision in the Superior Court.

(6) All new motor vehicle dealers in the State shall bear the costs of the administration of this Chapter by means of an annual assessment which shall be established by the Commission and shall be no more than what is reasonably needed to defray the annual cost of administering this Chapter, provided, in the event the Commission determines that any action or actions by a manufacturer pursuant to this Section are frivolous, the Commission may assess the reasonable cost of the hearing against the manufacturer. Such assessment shall be paid by each new motor vehicle dealer on or before March 31 of each year. If a new motor vehicle dealer fails to pay the assessment, it shall pay a penalty of 12 percent of the amount due for each month or fraction thereof that the amount is unpaid. The Commission may enforce the collection of any delinquent assessment, or portion thereof, by legal action or in any other manner by which the collection of debts due the State may be enforced. All assessments under this Section shall be deposited in the State Treasury to the credit of a New Motor Vehicle Dealer Fund to be used for the administration of this Chapter by the Commission, as authorized by the General Assembly in its annual operating budget. Any amount which remains in the Fund at the end of any fiscal year shall be applied on an equal basis to the assessment charged against each new motor vehicle dealer for the next succeeding fiscal year.

§4916. Civil Actions for Violations

(1) Notwithstanding the terms, provisions or conditions of any agreement or franchise or other terms or provisions of any novation, waiver or other written instrument, any person who is or may be injured by a violation of a provision of this Act, or any party to a franchise who is so injured in his business or property by a violation of a provision of this Act relating to that franchise, or any person so injured because he refuses to accede to a proposal for an arrangement which, if consumated, would be in violation of this Act may bring an action for damages and equitable relief, including injunctive relief.

(2) Where the violation of a provision of this Act can be shown to be willful or wanton, or if continued multiple violations of a provision or provisions of this Act occur, the court may award punitive damages, attorney's fees and costs in addition to any other damages under this Act.

(3) A new motor vehicle dealer, if he has not suffered any loss of money or property, may obtain final equitable relief It it can be shown that the violation of a provision of this Act by a manufacturer may have the effect of causing such loss of money or property.

(4) Where there are continued violations of a provision or provisions of this Act and it can be shown that the violations are willful or wanton the court, in addition to any other remedy or award of damages under this Act may assess monetary penalties.

(5) In addition to any other relief under this Act, the Court may assess monetary penalties against a manufacturer for violations of this Act.

§4917. Applicability of this Act

(1) Any person who engages directly or indirectly M purposeful contacts within this State In connection with the offering or advertising for sale or has business dealings with respect to a new motor vehicle sale within this State shall be subject to the provisions of this Act and shall be subject to the jurisdiction of the courts of this State.

(2) The applicability of this Act shall not be effected by a choice of law clause in any franchise, agreement, prospective waiver, novation, or any other written instrument.

(3) Any provision of any agreement, franchise, prospective waiver, novation or any other written instrument which is in violation of any section of this Act shall be deemed null and void and without force and effect.

(4) It shall be unlawful for a manufacturer to use any subsidiary corporation, affiliated corporation, or any other controlled corporation, partnership, association or person to accomplish what would otherwise be illegal conduct under this Act on the part of the manufacturer.

§4918. SeverabiUty Clause

(1) If any provision of this Act is declared unconstitutional, or the applicability thereof to any person or circumstances is held invalid, the constitutionality of the remainder of this amendatory act and the applicability thereof to persons and circumstances shall not be affected thereby.

§4919. Limitations

(1) Actions arising out of any provision of this Act shall be commenced within a four (4) year period of the accrual of the cause of action; provided, however, that if a person liable hereunder conceals the cause of action from the knowledge of the person entitled to bring it, the period prior to the discovery of his cause of action by the person entitled shall be excluded in determining the time limited for the commencement of the action.

(2) If a came 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 or to franchising, such actions may be commenced within one year after the final disposition of such civil, criminal or administrative proceeding.

§4920. Effective Date

This Act takes effect upon its becoming a law."

Effective May 3, 1983.