05 LC 34
0236
Senate
Bill 155
By: Senators Tolleson of the 20th, Whitehead, Sr. of the 24th, Cagle of the 49th, Johnson of the 1st, Starr of the 44th and others
By: Senators Tolleson of the 20th, Whitehead, Sr. of the 24th, Cagle of the 49th, Johnson of the 1st, Starr of the 44th and others
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend provisions of the Official Code of Georgia Annotated relating to
recreational vehicles; to amend Part 1 of Article 22 of Chapter 1 of Title 10 of
the Official Code of Georgia Annotated, relating to general considerations
regarding motor vehicle franchises, so as to exempt recreational vehicles from
the definition of motor vehicle; to amend Chapter 1 of Title 10 of the Official
Code of Georgia Annotated, relating to selling and other trade practices, so as
to provide for definitions; to provide purposes and policies to protect
recreational vehicle dealers; to provide for sales areas; to provide for
changing or terminating sales areas only for good cause; to provide for notice
of termination or substantial change to a sales area; to provide for repurchase
of inventories by the grantor upon termination of a dealership; to provide that
it is illegal for a grantor to coerce a dealer to purchase its parts or
accessories; to provide that a grantor must approve a sale of a dealership if
the terms are reasonable; to provide for succession of the dealership to the
dealer´s named beneficiaries; to provide for warranty obligations; to
provide for dispute resolution; to provide for applicability; to provide for
related matters; to repeal conflicting laws; and for other
purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Part
1 of Article 22 of Chapter 1 of Title 10 of the Official Code of Georgia
Annotated, relating to general considerations regarding motor vehicle
franchises, is amended by striking paragraph (10) of Code Section 10_1_622,
relating to definitions relative to motor vehicle franchises, and inserting in
its place the following:
"(10)
'Motor vehicle' means every self_propelled vehicle intended primarily for use
and operation on the public highways, except farm tractors and other machines
and tools used in the production, harvesting, and care of farm
products,
and
except construction
equipment, and
recreational vehicles as defined in paragraph (5) of subsection (a) of Code
Section
10_1_679."
SECTION
2.
Chapter
1 of Title 10 of the Official Code of Georgia Annotated, relating to selling and
other trade practices, is amended by inserting a new Article 22B to read as
follows:
"ARTICLE
22B
10_1_679.
(a)
As used in this article, the term:
(1)
'Community of interest' means a continuing financial interest between the
grantor and the grantee in either the operation of the dealership business or
the marketing of such goods or services.
(2)
'Franchise' means an oral or written agreement for a definite or indefinite
period of time in which a manufacturer grants to a recreational vehicle dealer
permission to use a trade name, service mark, or related characteristic and in
which there is a community of interest in the marketing of recreational vehicle
products or services related thereto at wholesale or retail, whether by leasing,
sale, or otherwise.
(3)
'Grantor' means a person who grants a recreational vehicle
dealership.
(4)
'Person' means a natural person, partnership, joint venture, corporation, or
other entity.
(5)
'Recreational vehicle' means a vehicular type unit primarily designed as
temporary living quarters for recreational, camping, or travel use which either
has its own motive power or is mounted on or towed by another vehicle. The
basic entities are as follows: travel trailer, camping trailer, truck camper,
motor home, park trailer, and fifth wheel travel trailer.
(6)
'Recreational vehicle dealer' or 'dealer' means a person who is a grantee of a
recreational vehicle dealership situated in Georgia.
(7)
'Recreational vehicle dealership' means an established place of business engaged
in the marketing of new recreational vehicle products or services related
thereto at wholesale or retail, whether by leasing, sale, or otherwise, and
which is marked by an appropriate permanent sign, a working telephone with a
telephone number listed in the local phone directory, and which derives at least
75 percent of its revenue from the sale of new recreational vehicles and
recreational vehicle related products and services.
(b)
For purposes of this article when determining whether there is 'good cause' for
a proposed action, the trier of fact shall consider:
(1)
The volume of the affected dealer´s business in the relevant market
area;
(2)
The nature and extent of the dealer´s investment in its
business;
(3)
The adequacy of the dealer´s service facilities, equipment, parts,
supplies, and personnel;
(4)
The effect of the proposed action on the community;
(5)
The extent and quality of the dealer´s service under recreational vehicle
warranties; and
(6)
The dealer´s performance under the terms of its franchise
agreement.
10_1_679.1.
(a)
This article shall be liberally construed and applied to promote its underlying
remedial purposes and policies.
(b)
The underlying purposes and policies of this article are:
(1)
To promote the compelling interest of the public in fair business relations
between recreational vehicle dealers and grantors and in the continuation of
recreational vehicle dealerships on a fair basis;
(2)
To protect recreational vehicle dealers against unfair treatment by grantors who
inherently have superior economic power and superior bargaining power in the
negotiations of recreational vehicle dealerships;
(3)
To provide recreational vehicle dealers with rights and remedies in addition to
those existing by contract or common law; and
(4)
To govern all franchise agreements for recreational vehicle dealerships,
including any renewals or amendments, to the full extent consistent with the
Constitutions of Georgia and the United States.
(c)
The effect of this article may not be varied by contract or agreement. Any
contract or agreement purporting to do so is void and unenforceable to that
extent only.
10_1_679.2.
The
grantor shall designate in writing the area of sales responsibility assigned to
a recreational vehicle dealer and shall not change such area nor establish
another recreational vehicle dealer in the same area unless the grantor can show
good cause for the addition of the new recreational vehicle dealer, including
reasonable evidence that the market will support the establishment of a new
dealership.
10_1_679.3.
Sales
of recreational vehicles by grantors or distributors shall be in accordance with
published prices, charges, and terms of sale in effect at any given
time.
10_1_679.4.
No
grantor, directly or through any officer, agent, or employee, may terminate,
cancel, fail to renew, or substantially change the competitive circumstances,
including the area of sales responsibility, of a recreational vehicle dealership
agreement without good cause. The burden of proving good cause shall be on the
grantor.
10_1_679.5.
Except
as provided in this Code section, a grantor shall provide a recreational vehicle
dealer at least 180 days´ prior written notice of termination,
cancellation, nonrenewal, or substantial change in competitive circumstances and
shall provide that the recreational vehicle dealer has 180 days in which to
rectify any claimed deficiency. If the deficiency is rectified within 180 days,
the notice shall be void. The notice provisions of this Code section shall not
apply if the reason for termination, cancellation, or nonrenewal is insolvency,
the occurrence of an assignment for the benefit of creditors, or
bankruptcy.
10_1_679.6.
(a)
If a recreational vehicle dealership franchise agreement is terminated,
canceled, or not renewed by the grantor, the grantor, at the option of the
recreational vehicle dealer, shall repurchase:
(1)
All inventories of recreational vehicles, parts, and accessories sold by the
grantor to the recreational vehicle dealer for resale; and
(2)
All diagnostic equipment, special tools, other equipment and machinery, and
signage as were required to meet the dealer´s service responsibilities in
accordance with manufacturer´s guides and applicable customer service
bulletins and signs sold under the recreational vehicle dealership
agreement.
(b)
The repurchase price shall be at the original invoice price plus freight,
destination, delivery, and distribution charges and sales taxes incurred by the
recreational vehicle dealer. The grantor shall pay the dealer within 30 days of
receipt of the returned items. This Code section shall apply only to merchandise
with a name, trademark, label, or other mark on it which identifies the grantor
or with proof of purchase from the grantor.
(c)
The grantor shall reimburse the dealer for 100 percent of the net cost to the
dealer, including transportation, of all new current model year and new current
year recreational vehicle inventory acquired from the manufacturer which has not
been materially altered or substantially damaged, and all new recreational
vehicle inventory not of the current model year which has not been materially
altered or substantially damaged, provided the noncurrent model year vehicles
were acquired from the manufacturer within 12 months prior to the effective date
of the termination, cancellation, or nonrenewal.
(d)
The manufacturer shall reimburse the dealer for 100 percent of the current net
prices as published in the manufacturer´s current price lists or catalogs
on accessories and parts, including superseded parts, plus 40 percent of the
current net price of all manufacturer´s accessories and parts returned to
compensate the dealer for handling, packing, and loading the parts.
10_1_679.7.
It
shall be unlawful for any grantor, directly or through any officer, agent, or
employee:
(1)
To coerce, or attempt to coerce, any dealer to accept delivery of any parts or
accessories or any other commodities which have not been ordered by such dealer;
or
(2)
To coerce, or attempt to coerce, any dealer to enter into an agreement with such
grantor or do any other act unfair to such dealer by threatening to cancel any
recreational vehicle dealership franchise agreement existing between such
grantor and such dealer.
10_1_679.8.
It
shall be unlawful for any grantor to prevent or refuse to approve the sale or
transfer of the ownership of a recreational vehicle dealership by the sale of
the business assets, stock transfer, or otherwise, or a change in executive
management or principal operator of the dealership if the new owner, principal
operator, or management is creditworthy, has not been convicted of a felony, and
is properly licensed; the sale or transfer will not result in a relocation of
the business; and the sale or transfer is otherwise reasonable under the
circumstances. The burden of proving that any sale or transfer is not
reasonable shall be on the grantor.
10_1_679.9.
(a)
It shall be unlawful for any grantor to fail to provide a recreational vehicle
dealer with an opportunity, at the time of signing a recreational vehicle
dealership franchise agreement or at a reasonable time thereafter, to designate
a member of his or her family as a successor to the dealership in the event of
the death or incapacity of the dealer. A dealer may from time to time during
the term of the franchise agreement change the beneficiary by providing a
written notification to the manufacturer.
(b)
It shall be unlawful to prevent or refuse to honor the succession to a
dealership by a member of the family of the deceased or incapacitated dealer
unless the grantor has provided to the member of the family so designated
written notice of its objections. The burden of proving such transfer is not
reasonable shall be on the grantor.
(c)
Grounds for objection shall be lack of creditworthiness, conviction of a felony,
inability to obtain necessary licenses by the beneficiary, lack of required
licenses, or other conditions which make such succession unreasonable under the
circumstances, but the grantor shall bear the burden of proving the
unreasonableness of such succession. No member of the family of the deceased or
incapacitated dealer may succeed to a recreational vehicle dealership unless the
succession to the recreational vehicle dealership will not involve, without the
grantor´s consent, a relocation of the business.
10_1_679.10.
(a)
Each grantor shall specify in writing to each of its recreational vehicle
dealers licensed in Georgia the dealer´s obligation for preparation,
delivery, and warranty service on its products; shall compensate the dealer for
warranty service required of the dealer by the manufacturer; and shall provide
the dealer the schedule of compensation to be paid to such dealers for parts,
work, and service in connection with warranty service and the time allowances
for the performance of such work and service. In no event shall such schedule
of compensation fail to include reasonable compensation for diagnostic work as
well as repair service and labor.
(b)
Time allowances for the diagnosis and performance of warranty work and service
shall be reasonable and adequate for the work to be performed. In the
determination of what constitutes reasonable compensation under this Code
section, the principal factors to be given consideration shall be the prevailing
wage rates being paid by the dealer and the prevailing labor rate being charged
by the dealer in the community in which the dealer is doing business. In no
event shall such compensation of a dealer for warranty service be less than the
rates charged by the dealer for like service to retail customers for nonwarranty
service and repairs as long as such rates are reasonable.
(c)
A grantor shall reimburse the dealer for warranty parts at actual wholesale
costs plus a minimum 40 percent handling charge and the cost, if any, of freight
to return warranty parts to the manufacturer. Warranty audits of dealer records
may be conducted by the grantor on a reasonable basis. A grantor must
disapprove warranty claims in writing within 30 days of the date of submission
by the dealer in the manner and form prescribed by the manufacturer. Claims not
specifically disapproved in writing within this 30 days shall be construed to be
approved and shall be paid within 45 days.
(d)
Dealer claims for warranty compensation shall not be denied except for good
cause such as performance of nonwarranty repairs, lack of material
documentation, fraud, or misrepresentation. Claims for dealer compensation
shall be paid within 30 days of dealer submission or rejected in writing for
stated reasons.
(e)
It shall be a violation of this article for any grantor to:
(1)
Fail to perform any of its warranty obligations with respect to a recreational
vehicle and recreational vehicle components;
(2)
Fail to assume all responsibility for any liability resulting from structural or
production defects;
(3)
Fail to include written notices of factory recalls to vehicle owners and dealers
and the expected date by which necessary parts and equipment will be available
to dealers for the correction of such defects;
(4)
Fail to compensate any of its recreational vehicle dealers licensed in Georgia
for repairs effected by such dealer of merchandise damaged in manufacture or
transit to the dealer where the carrier is designated by the manufacturer,
factory branch, distributor, or distributor branch;
(5)
Fail to compensate its recreational vehicle dealers licensed in this state for
warranty parts, work, and service in accordance with the schedule of
compensation provided the dealer pursuant to subsection (a) of this Code section
or for legal costs and expenses incurred by such dealers in connection with
warranty obligations for which the grantor is legally responsible or which the
grantor imposes upon the dealer;
(6)
Misrepresent in any way purchases of recreational vehicles that contain
warranties with respect to the manufacture, performance, or design of the
vehicles which are made by the dealer, either as warrantor or co_warrantor;
or
(7)
Require the dealer to make warranties to customers in any manner related to the
manufacture of a recreational vehicle.
(f)
Notwithstanding the terms of any agreement, it shall be a violation of this
article for any grantor to fail to indemnify and hold harmless its recreational
vehicle dealers against any losses or damages arising out of claims, costs,
judgments, and expenses, including reasonable attorney´s fees, or suits
relating to the manufacture, assembly, or design of recreational vehicles,
parts, or accessories, or other functions by the grantor beyond the control of
the dealer, including, without limitation, the selection by the grantor of parts
or components for the recreational vehicle or any damages to merchandise
occurring in transit to the dealer where the carrier is designated by the
grantor. The dealer shall give notice to the grantor of pending suits in which
allegations are made which come within this subsection whenever reasonably
practicable to do so. Any recreational vehicle dealer franchise agreement
issued to, amended, or renewed for recreational vehicles in Georgia on or after
July 1, 2005, shall be deemed to incorporate provisions consistent with the
requirements of this subsection.
(g)
On any new recreational vehicle, any uncorrected and significant damage, or any
corrected damage exceeding 5 percent of the manufacturer´s suggested retail
price or $500.00 or more in paint damage, must be disclosed to the dealer in
writing prior to delivery. Factory mechanical repair and damage to glass,
tires, and bumpers is excluded from disclosure when properly replaced by
identical manufacturer´s or distributor´s original equipment or
parts.
(h)
Whenever a new recreational vehicle is damaged in transit when the carrier or
means of transportation is determined by the manufacturer or distributor or
whenever a recreational vehicle is otherwise damaged prior to delivery to the
recreational vehicle dealer or if a new recreational vehicle is found to have
substantial box or chassis defects upon arrival at the recreational vehicle
dealership, the dealer must notify the manufacturer or distributor of such
damage or such defects within ten business days from the date of delivery or
within a reasonable amount of additional time or, if longer, such time as
specified in the recreational vehicle dealership franchise agreement and
either:
(1)
Request from the manufacturer or distributor authorization to replace the
components, parts, and accessories damaged or otherwise correct the damage;
or
(2)
Reject the vehicle.
If
the dealer exercises the option to refuse delivery of the vehicle, the
recreational vehicle manufacturer must immediately repurchase such
vehicle.
(i)
If the manufacturer or distributor refuses or fails to authorize repair of such
damage within ten days after receipt of notification or if the dealer rejects a
recreational vehicle because of damage, ownership of the new recreational
vehicle shall revert to the manufacturer or distributor and the recreational
vehicle dealer shall have no obligations, financial or otherwise, with respect
to such recreational vehicle.
(j)
All manufacturers, distributors, and suppliers of recreational vehicle
components shall be subject to the provisions of this article.
10_1_679.11.
If
any grantor violates this article, a recreational vehicle dealer may bring an
action against such grantor in a court of competent jurisdiction in the county
of the recreational vehicle dealer for damages sustained as a consequence of the
grantor´s violation, together with the actual costs of the action including
reasonable attorney´s fees, and the dealer also may be granted injunctive
relief against unlawful termination, cancellation, nonrenewal, or substantial
change of competitive circumstances and refusal to permit transfer of ownership
in accordance with Code Sections 10_1_679.2 and 10_1_679.3.
10_1_679.12.
In
any action brought by a recreational vehicle dealer against a grantor under this
article, any violation of this article by the grantor shall be deemed an
irreparable injury to the recreational vehicle dealer for determining if a
temporary injunction should be issued.
10_1_679.13.
It
shall be unlawful for a grantor to establish a new recreational vehicle
dealership unless the dealer meets the requirements and definitions provided in
this article.
10_1_679.14.
It
shall be unlawful for any dealer to sell or distribute any new recreational
vehicle in Georgia unless the dealer has a franchise dealership agreement with a
grantor with the express right to sell or distribute recreational vehicles in
Georgia and meets the requirements and definitions provided in this article.
Any dealer who does not meet the requirements of this article may participate in
events where recreational vehicles are exhibited or demonstrated and seminars
are provided but shall be prohibited from contracting to sell or distribute
recreational vehicles to the public.
10_1_679.15.
Any
person who violates the provisions of this article shall be guilty of a
misdemeanor."
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.