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S. B. No. 204 As IntroducedAs Introduced
128th General Assembly | Regular Session | 2009-2010 |
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Cosponsors:
Senators Carey, Gibbs, Grendell, Husted, Jones, Morano, Niehaus, Patton, Schaffer, Widener, Schuring
A BILL
To amend sections 4517.52, 4517.54, 4517.55,
4517.57,
and 4517.59 and to enact section
4517.541 of the
Revised Code relative to the
termination of
franchises and prohibited acts
under the Motor
Vehicle Dealers Law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 4517.52, 4517.54, 4517.55,
4517.57,
and 4517.59 be amended and section 4517.541 of the
Revised Code
be
enacted to read as follows:
Sec. 4517.52. (A) Each franchisor shall fulfill warranty and
recall obligations of repairing and servicing motor vehicles,
including all parts and components manufactured for installation
in any motor vehicle.
(B) Each franchisor shall compensate each
of its franchisees
for labor and parts used to fulfill warranty and recall
obligations of repair
and servicing at rates not less than the
rates charged by the
franchisee to
its retail customers for like
service and parts for nonwarranty
work.
(C) A franchisor shall not otherwise recover its costs for
reimbursing a franchisee for parts and labor pursuant to this
section.
Sec. 4517.54. (A) Notwithstanding the terms, provisions,
or
conditions of an existing franchise, no franchisor shall
terminate, cancel,
or fail to continue or renew a franchise
except for
good cause.
This section governs any action or intent
to
terminate, cancel,
discontinue, or not renew a franchise
whether the
franchise was
entered into prior to or after the
effective date
of this
amendment.
(B) Each Except as otherwise provided in section 4517.541 of
the Revised Code, each franchisor proposing to terminate, cancel,
discontinue,
or not renew a franchise shall send written notice by
certified
mail of the proposed action to the franchisee at such
time as may
be necessary to ensure that the notice is received no
later than
ninety one hundred eighty days before the effective
date of the proposed action, or
no later than fifteen ninety days
before the effective date of the
proposed action when the proposed
action is based upon any of the
following:
(1) Insolvency of the franchisee, or filing of any
petition
by or against the franchisee under any bankruptcy or
receivership
law;
(2) Any unlawful business practice after written warning
thereof;
(3) The franchisee has ceased business operations.
Each notice shall set forth the specific grounds for the
proposed termination or refusal to continue or renew.
(C) Prior to the effective date of the proposed action, a
franchisee receiving written notice from a franchisor proposing
to
terminate, cancel, discontinue, or not renew a franchise may file
a
protest with the board against the franchisor's proposed action.
When such a protest has been filed, the board shall inform the
franchisor that a timely protest has been filed and that a
hearing
is required pursuant to section 4517.57 of the Revised
Code.
(D) A franchisor shall not terminate, cancel, discontinue, or
fail
to
renew a franchise before the holding of a hearing on any
protest
filed under this section, or after the hearing, if the
board
determines that good cause does not exist to terminate,
cancel,
discontinue, or not renew the franchise.
Sec. 4517.541. (A) Each franchisor proposing to terminate,
cancel,
discontinue, or not renew a franchise based upon any of
the
following shall send written notice by certified mail of the
proposed action to the franchisee at such time as may be necessary
to ensure that the notice is received not later than twelve months
before the effective date of the proposed action, unless
prohibited by law or regulation:
(1) As a result of any change in ownership, operation, or
control of all or any part of the business of the manufacturer,
factory branch, distributor, or distributor branch, whether by
sale or transfer of assets, corporate stock or other equity
interest, assignment, merger, consolidation, combination, joint
venture, redemption, operation of law, or otherwise;
(2) The termination, suspension, or cessation of a part or
all of the business operations of the manufacturer, factory
branch, distributor, or distributor branch;
(3) Discontinuance of the sale of a product line, series,
brand or class of vehicles or a change in distribution system by
the manufacturer, whether through a change in distributors or the
manufacturer's decision to cease conducting business through a
distributor altogether.
(B) Each notice described in division (A) of this section
shall set forth the specific grounds for the proposed termination,
cancellation,
or refusal to continue or renew. If the
manufacturer fails to
provide notice at least twelve months
before the effective date of
the proposed action, the
manufacturer shall pay liquidated damages
equal to the value of
the franchise as of the date notice was
required by this section.
(C) Except as provided in division (C)(6)(c) of this section,
upon the termination, cancellation, discontinuance, or
nonrenewal
of any franchise by the franchisor pursuant to this
section, or
upon a voluntary termination by a franchisee, the
manufacturer
shall pay fair and
reasonable compensation to the
new motor
vehicle dealer for at least
the following:
(1) New motor vehicle inventory, regardless of model year,
that has been acquired from the manufacturer or in trade from
another motor vehicle dealer, determined as follows:
(a) For each vehicle driven five hundred miles or less, the
net cost;
(b) For each vehicle driven more than five hundred miles,
whichever of the following that applies:
(i) Unless division (C)(1)(b)(ii) of this section applies,
the net cost reduced
by the net discount value of each vehicle;
(ii) If the vehicle cannot be reduced by the net discount
value, the net cost of the vehicle.
(2) Unused, undamaged, and unsold supplies and parts
purchased from the manufacturer or a source recommended or
approved by the franchisor, at the new motor vehicle dealer's net
acquisition cost, provided such supplies and parts are currently
offered for sale by the manufacturer or distributor in its current
parts catalogs and are in salable condition;
(3) Equipment, signs, and furnishings that have not been
altered or damaged and that have been required by the manufacturer
or distributor to be purchased by the new motor vehicle dealer
from the manufacturer or distributor, or their approved sources as
follows:
(a) The manufacturer shall purchase from the new motor
vehicle dealer each undamaged sign at a fair market price, if the
sign bears a common name, trade name, or trademark of the
manufacturer; the manufacturer required that the dealer acquire
the sign; and the sign was acquired by the dealer from the grantor
or from a source approved by the manufacturer.
(b) The manufacturer shall purchase from the new motor
vehicle dealer at a fair market price poles or other hardware used
to erect a sign if the manufacturer required that the sign be free
standing and not include a trademark or trade name other than that
of the manufacturer.
(c) Fair market price under division (C)(3) of this section
is rebuttably presumed to be equal to the new motor vehicle
dealer's original cost, reduced by one-tenth of the original cost
for each year of ownership.
(4) Special tools that have not been altered or damaged and
that the manufacturer or distributor required the new motor
vehicle dealer to purchase from the manufacturer or distributor,
or their approved sources, at whichever of the following value
applies:
(a) The new motor vehicle dealer's net acquisition cost, if
the item was acquired in the twelve months immediately preceding
the effective date of the termination, cancellation,
discontinuance,
nonrenewal, or voluntary termination;
(b) The greater of the fair market value or seventy-five per
cent of the new motor vehicle dealer's net acquisition cost, if
the item was acquired more than twelve but less than twenty-four
months immediately preceding the effective date of the
termination, cancellation, discontinuance, nonrenewal, or
voluntary termination;
(c) The greater of the fair market value or fifty per cent of
the new motor vehicle dealer's net acquisition cost, if the item
was acquired twenty-four or more but less than thirty-six months
immediately preceding the effective date of the termination,
cancellation, discontinuance, nonrenewal, or voluntary
termination;
(d) The greater of the fair market value or twenty-five per
cent of the new motor vehicle dealer's net acquisition cost, if
the item was acquired thirty-six or more but less than sixty
months immediately preceding the effective date of the
termination, cancellation, discontinuance, nonrenewal, or
voluntary termination;
(e) Fair market value, if the item was acquired sixty or more
months immediately preceding the effective date of the
termination, cancellation, discontinuance, nonrenewal, or
voluntary termination.
(5) The new motor vehicle dealer's cost of handling, packing,
loading, and transporting an item described in divisions (C)(1) to
(4) of this section for return to the franchisor;
(6)(a) Subject to divisions (C)(6)(b) and (c) of this
section, fair
market value of the franchise that is at least
equivalent to the
highest fair market value of the franchise on
the following dates:
(i) The date the manufacturer announces the action that
results in termination, cancellation, discontinuance, nonrenewal,
or voluntary termination;
(ii) The date the action that results in termination,
cancellation, discontinuance, nonrenewal, or voluntary termination
first became general knowledge;
(iii) The day twelve months prior to the date on which the
notice of termination, cancellation, discontinuance, or nonrenewal
is issued;
(iv) The date the franchisee provides the franchisor with
written notice of the voluntary termination.
(b) If the termination, cancellation, discontinuance, or
nonrenewal is due to
a manufacturer's change in distributors, the
manufacturer may
avoid paying fair market value to the dealer if
the new
distributor or the manufacturer offers the dealer a
franchise
agreement with terms acceptable to the dealer.
(c) The manufacturer is not required to pay fair market value
of the franchise if the termination, discontinuance,
nonrenewal,
or cancellation of the franchise agreement is the
result of the
voluntary act of the new motor vehicle dealer.
Notwithstanding
the terms of any contract or agreement, any
dealer's termination
or resignation shall not be deemed to be
voluntary if that
termination or resignation occurred under the
manufacturer's
threat of termination, cancellation,
discontinuance, or
nonrenewal
of the franchise.
(D) The manufacturer shall pay the fair and reasonable
compensation for the items described in division (C) of
this
section within thirty days after the effective date of
termination,
cancellation, discontinuance, nonrenewal, or
voluntary
termination, provided the new motor
vehicle dealer
will
thereafter be able to present clear title to the property
within a
reasonable period of time. The manufacturer shall pay or
reimburse
the dealer for any costs of storing, insuring, and
floor planning
any of the property described in division (C) of
this section from
the effective date of termination until the
date the property is
transported, in addition to transportation
charges associated with
the manufacturer's repurchase
obligations. The manufacturer shall
not charge the dealer any
handling, restocking, or other similar
costs or fees associated
with items repurchased by the
manufacturer under division (C) of
this section.
(E) Dealership facilities assistance shall be paid as
follows:
(1) If the new motor vehicle dealer is leasing the dealership
facilities from the manufacturer or a subsidiary thereof, the
manufacturer or subsidiary shall forgive any future lease
obligations.
(2) Subject to division (E)(4) of this section, 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 two years' rent, whichever is
less, or such longer term as is provided in the franchise
agreement between the dealer and manufacturer.
(3) Subject to division (E)(4) of this section, 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 two years.
(4) In order to be entitled to facilities assistance from the
manufacturer as provided in divisions (E)(2) and (3) of this
section, the new
motor vehicle dealer shall mitigate damages by
listing the
dealership facilities for lease or sublease with a
licensed real
estate agent or retail industry broker within
thirty days after
the effective date of the termination of the
franchise and
thereafter by reasonably cooperating with the real
estate agent or
retail industry broker in the performance of the
agent's or
broker's duties. If the dealer is able to lease or
sublease the
dealership facilities, the dealer shall pay the
manufacturer the
net revenue received from the mitigation up to
the total amount of
facilities assistance that the dealer has
received from the
manufacturer pursuant to division (E)(2) or (3)
of this section.
(5) If the termination relates to fewer than all of the
franchises operated by the new motor vehicle dealer at a single
location, the amount of facilities assistance that the
manufacturer is required to pay the dealer under division (E) of
this section shall be based on the proportion of gross revenue
received from the sale and lease of new vehicles by the dealer and
from the dealer's parts and service operations during the three
years immediately preceding the effective date of the termination,
or any shorter period that the dealer may have held these
franchises, of the line-makes being terminated, in relation to the
gross revenue received from the sale and lease of all line-makes
of new vehicles by the dealer and from the total of the dealer's
and parts and service operations from this location during the
same three-year period.
(6) The manufacturer shall pay the dealership facilities
assistance under division (E) of this section within thirty days
after the effective date of termination, cancellation,
discontinuance, or
nonrenewal.
(7) The manufacturer is not required to pay dealership
facilities assistance if the termination, discontinuance,
nonrenewal, or cancellation of the franchise agreement is the
result of the voluntary act of the new motor vehicle dealer.
Notwithstanding the terms of any contract or agreement, any
dealer's termination or resignation shall not be deemed to be
voluntary if that termination or resignation occurred under the
manufacturer's threat of termination, cancellation,
discontinuance, or nonrenewal
of the franchise.
(F) A franchise shall continue in full force and operation
notwithstanding a change, in whole or in part, of an established
plan of distribution or system of distribution of the motor
vehicles offered for sale under the franchise. The appointment of
a new manufacturer, factory branch, distributor, or distributor
branch for motor vehicles offered for sale under the franchise
agreement shall be considered to be a change of an established
plan of distribution or system of distribution.
(G) Disputes arising between a manufacturer or distributor
and a new motor vehicle dealer under this section shall be
resolved by a court of competent jurisdiction and not by the motor
vehicle dealers board.
(H) Nothing in this section shall be construed as prohibiting
a manufacturer or distributor from changing, adding or deleting
models, specifications, model names, numbers or identifying marks,
or similar characteristics of the new vehicles it markets,
provided that the change, addition, or deletion does not result in
the termination or discontinuance of a distinct series, line,
brand, or class of new vehicle.
(I) As used in this section:
(1) "Discontinuation of a product line, series, brand, or
class" includes a reduction in products manufactured or made
available for sale through a new motor vehicle that results in a
substantial impairment of the viability of the franchise.
(2) "Net cost" means the franchised dealer cost for a new and
unsold motor vehicle in a dealer's
inventory plus any charges by
the manufacturer or distributor for destination, distribution, or
delivery, and taxes, less all
allowances paid or credited to the
franchised dealer by the manufacturer or
distributor, and less an
amount equal to the diminution in wholesale value caused by
damages to the new motor vehicle before the motor vehicle dealer
delivers the new motor vehicle to the manufacturer.
(3) "Net discount value" is the net cost multiplied by the
total mileage, exclusive of mileage placed on the motor vehicle
before it was delivered to a dealer, divided by one hundred
thousand.
(4) "Product line" is a line-make produced by a manufacturer.
Sec. 4517.55. (A) In determining whether good cause has
been
established by the franchisor for terminating, cancelling, or
failing to
continue or renew a franchise, the motor vehicle
dealers board
shall take into consideration the existing
circumstances,
including, but not limited to:
(1) The amount of retail sales transacted by the
franchisee
during a five-year period immediately preceding such
notice as
compared to the business available to the franchisee;
(2) The investment necessarily made and obligations
incurred
by the franchisee to perform its part of the franchise;
(3) The permanency of the franchisee's investment;
(4) Whether it is injurious or beneficial to the public
interest for the franchise to be modified or replaced, or the
business of the franchisee disrupted;
(5) Whether the franchisee has adequate motor vehicle
sales
and service facilities, equipment, vehicle parts, and
qualified
service personnel to reasonably provide for the needs
of the
consumers for the motor vehicles handled by the
franchisee, and is
rendering adequate service to the public;
(6) Whether the franchisee fails to fulfill the warranty
obligations of the franchisor required to be performed by the
franchisee;
(7) The extent and materiality of the franchisee's failure
to
comply with the terms of the franchise and the reasonableness
and
fairness of the franchise terms;
(8) Whether the owners of the new motor vehicle dealer had
actual knowledge of the facts and circumstances upon which
termination is based;
(9) Whether the proposed termination constitutes
discriminatory enforcement of the franchise agreement.
(B) Notwithstanding the terms, conditions, or provisions
of
any franchise or waiver, the following do not constitute
sufficient good cause for terminating, cancelling, or failing to
continue or
renew a franchise:
(1) Refusal by the franchisee to purchase or accept
delivery
of any new motor vehicle, parts, accessories, or any
other
commodity or service not ordered by the franchisee;
(2) The fact that the franchisee or the owner of any
interest
therein, owns, has an investment in, participates in the
management of, or holds a license for the sale of the same or any
other line-make of new motor vehicle;
(3) The sale, transfer, or issuance of any equity or
debenture issue, or the transfer or issuance of any security or
shares of stock in a new motor vehicle dealer to any person,
whenever the sale, issuance, or transfer does not result in a
change in the controlling ownership of the dealership;
(4) A change by the franchisee in the administrative or
executive management of the dealership;
(5) Failure of the franchisee to achieve any unreasonable
or
discriminatory performance criteria;
(6) A loss of trust by the franchisor absent circumstances or
facts that would be a material breach of the franchise agreement
and that material breach is known and ratified by the owners of
the new motor vehicle dealer;
(7) A change, in whole or in part, of an established plan of
distribution or system of distribution of the motor vehicles
offered for sale under the franchise. The appointment of a new
manufacturer, factory branch, distributor, or distributor branch
for motor vehicles offered for sale under the franchise agreement
shall be considered to be a change of an established plan or
system of distribution.
(8) A change in ownership, operation, or control of all or
any part of the business of the manufacturer, factory branch,
distributor, or distributor branch whether by sale or transfer of
assets, corporate stock or other equity interest, assignment,
merger, consolidation, combination, joint venture, redemption,
operation of law or otherwise;
(9) The termination, suspension, or cessation of a part or
all of the business operations of the manufacturer, factory
branch, distributor, or distributor branch;
(10) Discontinuance of the sale of the product line or a
change in distribution system by the manufacturer whether through
a change in distributors or the manufacturer's decision to cease
conducting business through a distributor altogether;
(11) The failure of a franchisee to maintain a motor vehicle
floor plan line of credit, unless the franchisee fails to maintain
a floor plan line of credit for one hundred twenty days or longer;
(12) The export of new motor vehicles to a foreign country,
absent evidence that the dealer had actual knowledge that the
vehicle was purchased for export. There shall be a rebuttable
presumption that a dealer does not have actual knowledge that a
vehicle was purchased for export if the vehicle is titled in the
United States.
Sec. 4517.57. (A) Upon receiving a notice of protest
pursuant to section 4517.50, 4517.53, 4517.54, or 4517.56 of the
Revised Code, the motor vehicle dealers board shall set a time,
which shall be within one hundred eighty days of such order, and
place of hearing and send by certified mail a copy of the order
to
the franchisor, the protesting franchisee or dealer
organization,
and all individuals and groups that have requested
notification by
the board of protests to and decisions of the
board. Subject to
sections 119.01 to 119.13 of the Revised Code,
the board shall
designate an attorney at law as a hearing
officer, who shall hear
and consider the oral and documented
evidence introduced by the
parties and other interested
individuals and groups, and issue his
findings and
recommendations to the board within thirty days
following the
close of the hearing.
(B) The parties may engage in discovery, prior to the
hearing, in accordance with the Rules of Civil Procedure. The
hearing examiner may continue the hearing date, beyond one
hundred
eighty days of the board's order, by agreement of the
parties, or
upon a finding of good cause, including but not
limited to the
failure of either party to allow relevant
discovery.
(C) In any hearing on a protest filed pursuant to section
4517.50, 4517.53, 4517.54, or 4517.56 of the Revised Code, the
franchisor shall have the burden of going forward and of
persuasion to establish that there is good cause for the
franchisor: to establish or relocate an additional motor vehicle
dealer; to terminate, cancel, discontinue, or not renew a
franchise; to
fail or refuse to approve a sale or transfer of all
or a
controlling interest in a franchise; or that recall
reimbursement
schedules or formulas or the schedules of
compensation are
reasonable.
(D) Only the public members of the board and the hearing
officer designated by the board shall participate in, deliberate
on, hear, consider, or decide any matter filed pursuant to
section
4517.50, 4517.53, 4517.54, or 4517.56 of the Revised
Code. The
public members shall act by majority vote.
(E) In any hearing filed under section 4517.50, 4517.53,
4517.54, or 4517.56 of the Revised Code, the hearing officer
shall
permit the parties of cross examination.
(F) In any hearing on a protest filed pursuant to section
4517.54 of the Revised Code, the board shall hear evidence
concerning only the grounds set forth in the franchisor's written
notice proposing to terminate, cancel, discontinue, or not renew
the
franchise sent in accordance with that section.
In any hearing or appeal relating to a protest filed pursuant
to section 4517.54 of the Revised Code, the board or court shall
prohibit the franchisor from offering evidence concerning any
grounds not set forth in the notice proposing to terminate,
cancel,
discontinue, or not renew the franchise sent in
accordance with
that section.
Sec. 4517.59. (A) Notwithstanding the terms, provisions, or
conditions of any agreement, franchise, or waiver, no franchisor
shall:
(A)(1) In acting or purporting to act under the terms,
provisions, or conditions of a franchise or in terminating,
canceling, or failing to renew a franchise, fail to act in good
faith;
(B)(2) Prevent a franchisee from changing administrative or
executive management, provided such personnel satisfy reasonable
and objective standards formulated and objectively applied by the
franchisor;
(C)(3) Restrict the sale of any equity or debenture issue or
the transfer of any securities in a dealership, or in any way
prevent or attempt to prevent the transfer, sale, or issuance of
shares of stock or debentures to any person, if the basic
financial requirements of the franchisor have been equalled at
the
time of the execution of the franchise agreement and
continued in
effect, and if the sale, transfer, or issuance does
not have the
effect of accomplishing a sale of a controlling
interest in the
dealership;
(D)(4) Coerce or threaten any franchisee by refusing or
failing to renew or extend a lease of premises where the fee or
right of possession is in the absolute control of the franchisor
and the franchisee upon request or demand of the franchisor fails
to expand its facilities, increase sales personnel, purchase more
parts or accept programs for sales and operation of the
franchisee's business, when such demand is not reasonable, fair,
and equitable under all circumstances, or tends to depreciate the
franchisee's equity;
(E)(5) Sell, lease, or rent goods or new or used motor
vehicles, or
render any service normally performed and required of
franchisees
under the franchise agreement with the franchisor, in
unfair
competition with the franchisee whether directly or
indirectly, or in combination with or through any person,
subsidiary, or affiliated entity, except that this division does
not apply to a sale, lease, or rental to, or service performed
for, an agency of federal, state, or local government;. Nothing in
division (A)(5) of this section shall prohibit a franchisor from
operating a
dealership for a time limited to that which is
required to wind up
all transactions in instances in which a
franchisee has been
terminated or voluntarily relinquishes its
franchise.
(F)(6) Coerce, or attempt to coerce, any franchisee to accept
delivery of any motor vehicle, parts, accessories, or any other
commodities connected therewith which are not ordered by said
franchisee; nor withhold or delay delivery of motor vehicles out
of the ordinary course of business; nor discriminate against any
franchisee in the allocation or through the withholding from
delivery of certain models of motor vehicles ordered by a
franchisee out of the ordinary course of business; nor unfairly
change or amend unilaterally a franchisee's allotment of motor
vehicles or quota in a sales contest, sales expectancy, or sales
penetration without reasonable cause;
nor coerce a franchisee by
any means to participate or contribute
to any local or national
advertising fund; nor employ any
coercive techniques for any other
purposes such as obtaining
franchisee participation in contests,
"giveaways," or other sales
devices;
(G)(7) Coerce, or attempt to coerce, a franchisee by
threatening to award an additional franchise or agreement to
another person for the sale of its same product in the same area
of influence for the purposes of compelling such franchisee to
yield to demands of the franchisor for increased sales of the
franchisor's products, parts, expansion of facilities and
improvement of operations inconsistent with good business
practices of the franchisee;
(H)(8) Fail or refuse to make equally available to its same
line-make franchisees all motor vehicles, motor vehicle parts, or
other products manufactured for that line-make at the same price,
including discounts, rebates, incentives, or other payments or
allowances affecting the net price. A franchisor has not made a
motor vehicle, motor vehicle part, or other product available to
all line-make franchisees if the franchisor does any of the
following:
(a) Requires a franchisee to remodel, renovate, or
recondition the dealer's existing dealership facilities as a
prerequisite to receiving the model, part, or product. As used in
division (A)(8) of this section, "remodel, renovate, and
recondition" includes the requirement that a franchisee purchase
or lease unreasonably expensive advertising or promotional
displays or other similar materials.
(b) Requires a franchisee to pay an additional fee to receive
any model, part, or product within a franchisor's line-make;
(c) Requires a franchisee to accept additional inventory to
receive any model, part, or product within a franchisor's
line-make.
(9) Fail to either return a part to the franchisee, at the
franchisor's expense, or reimburse the franchisee for the
franchisee's cost of the part where a franchisor does not approve
a franchisee's claim for a defective part;
(I)(10) Fail to approve or disapprove any warranty or recall
claim submitted by a franchisee within forty-five days after
receipt from the franchisee. If a claim is not approved, the
franchisor shall immediately so notify in writing the franchisee
who submitted the claim and shall include in the notice the
specific grounds upon which the disapproval is based.
(J)(11) Fail to pay a franchisee within thirty days after
approval by the franchisor of any claim by a franchisee for labor
and parts made under sections division (B) of section 4517.52 and
section 4517.53 of the Revised
Code. Any failure of a franchisor
to act on or pay a claim
within the time limits specified by this
section that results
from causes beyond the franchisor's
reasonable control does not
constitute a violation of this
section.
(K)(12) Disclaim an otherwise valid warranty or recall claim
because the franchisee fails to submit or resubmit the claim
within a period of less than six months from the date on which
the
service was rendered or parts supplied;
(L)(13) Provide reimbursement to any nonfranchised individual
or entity for labor and parts used to fulfill warranty and recall
work;
(14) Directly sell, distribute, or otherwise make available
to any nonfranchised individual or entity any original equipment
manufacturer motor vehicle parts, accessories, or other
commodities that would otherwise be sold by a franchised dealer;
(15) Refuse to disclose to any new motor vehicle dealer who
handles the same line-make, the manner and mode of distribution
of
that line-make, the allocation by segment of that
line-make, and
the number of units allocated by that line-make to
other same
line-make dealers within the same county and all contiguous
counties for the previous five years;
(M)(16) Engage in any predatory practice or discriminate
against any new motor vehicle dealer including discriminating
against a franchisee, as compared to a same line-make franchisee,
with regard to motor vehicle allocation, motor vehicle sales
expectations, motor vehicle market penetration, motor vehicle
planning volume requirements, customer service satisfaction
requirements, dealership facility requirements, or dealer
capitalization requirements;
(N)(17) Prohibit a franchisee from operating a franchise in
conjunction with the franchise of another line-make of new motor
vehicles at the same address and in the same dealership facility
building;
(18) Prohibit a franchisee from operating a franchise of the
same line-make of new motor vehicles at two or more locations
regardless of whether the markets served by the locations are
contiguous;
(19) Use any financial services company or leasing company
owned in whole or part or controlled by the manufacturer or
distributor to accomplish what would otherwise be illegal conduct
on the part of the manufacturer or distributor pursuant to this
section. This section does not limit the right of the financial
services or leasing company to otherwise engage in regular
financial services or leasing business practices.
(20) Initiate a charge back without an audit or perform an
audit to confirm a warranty repair, sales incentive, or rebate
more than six months after the date of the repair or purchase,
provided that these limitations shall not be effective in the case
of a fraudulent claim;
(21) Refuse to pay a franchisee for sales incentives, service
incentives, rebates, or other forms of incentive compensation,
reduce the amount to be paid to the dealer, or charge a dealer
back subsequent to the payment of the claim unless it can be shown
that any of the following apply:
(a) The claim was false or fraudulent.
(b) The repairs were not properly made or were unnecessary to
correct the defective condition.
(c) The dealer failed to reasonably substantiate the claim in
accordance with the written requirements of the manufacturer in
effect at the time the claim arose.
(d) The dealer, with intent to do so, sold a new motor
vehicle for export to a foreign country. There shall exist a
rebuttable presumption that a dealer does not intend to export a
vehicle to a foreign country if the motor vehicle is titled in the
United States.
No refusal to pay sales incentives, service incentives,
rebates, or other forms of incentive compensation, no reduction in
the amount to be paid to the dealer, and no charge back subsequent
to the payment of a claim may be made until the dealer has had
notice
and an opportunity to participate in all franchisor
internal
appeal processes as well as all available legal
processes. If a
charge back is the subject of adjudication,
internal appeal,
mediation, or arbitration, no charge back shall
be made until, in
the case of an adjudication or legal action, a
final appealable
order has been issued.
No otherwise valid reimbursement claims shall be denied,
delayed, or restricted once properly submitted within
manufacturers' submission guidelines unless the denial, delay, or
restriction is the direct result of a material defect in the claim
that affects the claim's validity. At the time submitted, the
claim shall act as an immediate automatic credit against future
billings. Clerical errors or omissions or a different level of
technician technical certification or the dealer's failure to
subscribe to any manufacturer's computerized training programs are
not material defects. Any ambiguity or inconsistency in submission
guidelines shall be construed against the drafter. Any failure by
a dealer to exercise its rights to reimbursement under this
section does not create a waiver of these rights. Any unreasonable
denial,
delay, or restriction of a valid reimbursement claim
shall subject the manufacturer to interest
in accordance with
division (A) of section 1343.03 of the Revised
Code until paid.
(22) Prevent, attempt to prevent, prohibit, coerce, or
attempt to coerce, any new motor vehicle dealer from charging any
consumer any fee allowed to be charged by the dealer under Ohio
law;
(23) Require, coerce, or attempt to coerce any new motor
vehicle dealer in this state 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:
(a) The new motor vehicle dealer at all times shall meet any
reasonable capital standards determined by the manufacturer in
accordance with uniformly applied criteria.
(b) 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,
and further provided that the manufacturer or distributor shall
not unreasonably withhold consent.
(24) Require, coerce, or attempt to coerce any new motor
vehicle dealer in this state to change location of the dealership,
or to make any substantial alterations to the dealership premises
or facilities, when to do so would be unreasonable, or without
written assurance of a sufficient supply of new motor vehicles so
as to justify the location change or alterations, in light of the
current market and economic conditions;
(25) Require or request a franchisee to waive any
requirements of this section.
(B) No franchisor shall release to a third party any
information concerning the dealership or any information regarding
the dealership's customers that has been provided by the
franchisee to the franchisor, unless agreed to by both parties or
unless required by law.
(C) No franchise agreement shall require the franchisee to
pay the attorney fees of a franchisor, waive any remedy or defense
available to the franchisee, or waive any other provisions of this
chapter. In addition, no franchisor shall restrict a franchisee
from filing a legal action in a particular forum otherwise
available under federal or state law.
(D) This section applies to any franchise whether entered
into
prior to or after the effective date of this amendment.
Section 2. That existing sections 4517.52, 4517.54,
4517.55,
4517.57, and 4517.59 of the Revised Code are hereby
repealed.
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