05 LC 34
0367S
The
House Committee on Judiciary offers the following substitute to SB
155:
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 or warrantor upon termination of a dealership; to
provide that it is illegal for a grantor or warrantor to coerce a dealer to
purchase its parts or accessories; to provide that a grantor or warrantor must
approve a sale of a dealership if the terms are reasonable; to provide for
succession of the dealership to the
dealeŕs
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.
(8)
'Warrantor' means a person, firm, corporation, or business entity that gives a
warranty in connection with a new recreational vehicle or parts, accessories, or
components thereof. Such term does not include service contracts, mechanical or
other insurance, or extended warranties sold for separate consideration by a
dealer or other person not controlled by a manufacturer.
(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
dealeŕs
business in the relevant market area;
(2)
The nature and extent of the
dealeŕs
investment in its business;
(3)
The adequacy of the
dealeŕs
service facilities, equipment, parts, supplies, and personnel;
(4)
The effect of the proposed action on the community;
(5)
The extent and quality of the
dealeŕs
service under recreational vehicle warranties; and
(6)
The
dealeŕs
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.
(a)
Except as provided in this Code section, a grantor shall provide a recreational
vehicle dealer at least 120
dayś
prior written notice of termination, cancellation, nonrenewal, or substantial
change in competitive circumstances and shall provide that the recreational
vehicle dealer has 120 days in which to rectify any claimed deficiency. The
notice shall state all the reasons for termination, cancellation, or nonrenewal
and shall further state that if, within 30 days following the receipt of the
grantoŕs
notice, the recreational vehicle dealer provides to the grantor a written notice
to cure all claimed deficiencies, the recreation vehicle dealer shall then have
120 days from the date of the notice to rectify such deficiencies. If the
deficiency is rectified within 120 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.
(b)
The 120
dayś
notice shall be reduced to 30
dayś
notice if the grounds for termination, cancellation, or nonrenewal is due
to:
(1)
Conviction or pleas of nolo contendere to a felony of a recreational vehicle
dealer or one of its principal owners;
(2)
The business operation of the recreational vehicle dealer has been abandoned or
closed for ten consecutive days, unless the closing is due to an act of God,
strike, or labor difficulty or other cause over which the dealer has no
control;
(3)
The suspension, revocation, or refusal to renew the recreational vehicle
dealeŕs
license; or
(4)
A significant misrepresentation by the recreational dealer.
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 new, untitled recreational vehicle inventory acquired from the manufacturer
within 12 months prior to the effective date of the termination, cancellation,
or nonrenewal which has not been materially altered or substantially damaged.
The grantor shall reimburse the dealer for 100 percent of the net invoice cost
of such inventory, including transportation, less applicable rebates and
discounts to the dealer.
(2)
All functioning diagnostic equipment, special tools, other equipment and
machinery, accessories and proprietary parts, and signage as were required to
meet the
dealeŕs
service responsibilities in accordance with
manufactureŕs
guides and applicable customer service bulletins and signs sold under the
recreational vehicle dealership agreement.
(b)
The manufacturer shall reimburse the dealer for 100 percent of the current net
prices as published in the
manufactureŕs
current price lists or catalogs on accessories and parts, including superseded
parts, provided it was purchased by the dealer within five years before
termination and can no longer be used in the normal course of the
dealeŕs
business, plus 5 percent of the current net price of all
manufactureŕs
accessories and parts returned to compensate the dealer for handling, packing,
and loading the parts, plus the cost of freight to return said parts. 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.
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 shall not result in a relocation of
the business; and the sale or transfer is otherwise reasonable under the
circumstances. The recreational vehicle dealer must give the manufacturer 30
dayś
written notice prior to the closing of such agreement. If the manufacturer
rejects a proposed change or sale, the manufacturer shall give written notice of
its reasons to the recreational vehicle dealer within 30 days after receipt of
the dealer notification and complete documentation. If no such notice is given
to the recreational vehicle dealer, the change or sale shall be deemed approved.
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, incapacity, or retirement 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 family member of the deceased, incapacitated, or retired dealer
unless the grantor has provided to the family member so designated written
notice of its objections. The burden of proving that 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 and required 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 family member of the deceased,
incapacitated, or retired dealer may succeed to a recreational vehicle
dealership unless the succession to the recreational vehicle dealership will not
involve, without the
grantoŕs
consent, a relocation of the business.
10-1-679.10.
(a)
Each grantor or warrantor, where applicable, shall specify in writing to each of
its recreational vehicle dealers licensed in Georgia the
dealeŕs
obligation for preparation, delivery, and warranty service on its products;
shall compensate the dealer for warranty service required of the dealer by the
grantor or warrantor; 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 considered shall be the actual wage rates
being paid by the dealer and the actual retail labor rates 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 labor be less than the retail
rates charged by the dealer for like service to retail customers for nonwarranty
labor and repairs as long as such rates are reasonable.
(c)
A grantor or warrantor, where applicable, shall reimburse the dealer for
warranty parts at actual wholesale costs plus a minimum 30 percent handling
charge and the cost, if any, of freight to return warranty parts to the grantor
or warrantor. Warranty audits of dealer records may be conducted by the grantor
or warrantor, where applicable, on a reasonable basis. A grantor or warrantor,
where applicable, 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
grantor or warrantor. Claims not specifically disapproved in writing within
this 30 day period 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 must
be submitted within 45 days of completing the work. The dealer must notify the
warrantor verbally or in writing if the dealer is unable to promptly perform
material or repetitive warranty repairs. All claims 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 or warrantor, where
applicable, 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. The grantor or warrantor, where
applicable, may ship parts in quantity to the dealer to effect such campaign
work, and if such parts are in excess of the
dealeŕs
requirements, the dealer may return unused parts to the grantor or warrantor for
credit after completion of the campaign;
(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 grantor, 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
if performed in a timely and competent manner, or for legal costs and expenses
incurred by such dealers in connection with warranty obligations for which the
grantor or warrantor, where applicable, is legally responsible or which the
grantor or warrantor 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 or warrantor, where applicable, 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
attorneýs
fees, or suits relating to the manufacture, assembly, or design of recreational
vehicles, parts, or accessories, or other functions by the grantor or warrantor
beyond the control of the dealer, including, without limitation, the selection
by the grantor or warrantor, where applicable, 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 or warrantor. The dealer
shall give notice to the grantor or warrantor 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
manufactureŕs
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
manufactureŕs
or
distributoŕs
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 grantor or distributor of such damage or
such defects within three business days from the date of delivery or within a
reasonable amount of additional time or such time as specified in the
recreational vehicle dealership franchise agreement and either:
(1)
Request from the grantor, warrantor, or distributor authorization to replace the
components, parts, and accessories damaged or otherwise correct the damage;
or
(2)
Reject the vehicle within the three day grace period.
If
the dealer exercises the option to refuse delivery of the vehicle, the
recreational vehicle grantor must immediately repurchase such
vehicle.
(i)
If the grantor, warrantor, 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 grantor or distributor and the
recreational vehicle dealer shall have no obligations, financial or otherwise,
with respect to such recreational vehicle.
(j)
It shall be a violation of this article for any recreational vehicle dealer
to:
(1)
Fail to perform predelivery inspection functions, if required, in a competent
and timely manner;
(2)
Fail to perform warranty service work, authorized by the vehicle warrantor, in a
reasonably timely and competent manner on any transient
customeŕs
vehicle of the same line-make, whether sold by that dealer or not;
(3)
Intentionally misrepresent the terms of any warranty.
(k)
All grantors, warrantors, and distributors of recreational vehicle components
shall be subject to the provisions of this article.
10-1-679.11.
If
any grantor or warrantor violates this article, a recreational vehicle dealer
may bring an action against such grantor or warrantor in a court of competent
jurisdiction in the county of the recreational vehicle dealer for damages
sustained as a consequence of the
grantoŕs
or
warrantoŕs
violation, together with the actual costs of the action including reasonable
attorneýs
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 or
warrantor under this article, any violation of this article by the grantor or
warrantor 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. Notwithstanding the foregoing, this
section shall not apply to the sale of recreational vehicles at events sponsored
by a Georgia based recreational vehicle grantor with manufacturing facilities
located in the state, where recreational vehicles are sold or contracted for by
its franchised out-of-state recreational vehicle dealers.
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.