AB1112: Bill Text

AB1112,12,7 (a) The transferee has previously been terminated for cause by the manufacturer.

AB1112,12,9 (b) The transferee has been convicted of a felony or any crime of fraud, deceit, or moral turpitude.

AB1112,12,10 (c) The transferee lacks any license required by law.

AB1112,12,12 (d) The transferee does not have an active line of credit sufficient to purchase a manufacturer's product.

AB1112,12,15 (e) The transferee has undergone in the last 10 years bankruptcy, insolvency, a general assignment for the benefit of creditors, or the appointment of a receiver, trustee, or conservator to take possession of the transferee's business or property.

AB1112,12,21 (2) If a manufacturer or distributor objects to a proposed change in ownership, the manufacturer or distributor shall give written notice of its reasons to the dealer within 7 business days after receipt of the dealer's notification and complete documentation. The manufacturer or distributor has the burden of proof with regard to its objection. If the manufacturer or distributor does not give timely notice of its objection, the change, sale, or transfer shall be approved.

AB1112,13,4 (3) (a) A manufacturer or distributor shall provide a dealer an opportunity to designate, in writing, a family member as a successor to the dealership in the event of the death, incapacity, or retirement of the dealer. A manufacturer or distributor may not prevent or refuse to honor the succession unless the manufacturer or distributor has provided to the dealer written notice of its objections within 10 business days after receipt of the dealer's modification of the dealer's succession plan. In the absence of a breach of the dealer agreement, the manufacturer may object to the succession only for any of the following reasons:

AB1112,13,6 1. Conviction of the successor of a felony or any crime of fraud, deceit, or moral turpitude.

AB1112,13,7 2. Bankruptcy or insolvency of the successor during the past 10 years.

AB1112,13,9 3. Prior termination by the manufacturer of the successor for breach of a dealer agreement.

AB1112,13,11 4. The lack of an active line of credit for the successor sufficient to purchase the manufacturer's product.

AB1112,13,12 5. The lack of any license for the successor required by law.

AB1112,13,16 (b) The manufacturer or distributor has the burden of proof regarding its objection. A family member may not succeed to a dealership if the succession involves, without the manufacturer's or distributor's consent, a relocation of the business or an alteration of the terms and conditions of the dealer agreement.

AB1112,21 Section 21. 218.164 of the statutes is created to read:

AB1112,13,19 218.164 Warranty obligation. (1) Each warrantor shall do all of the following:

AB1112,13,22 (a) Specify, in writing, to each of the warrantor's dealers, the dealer's obligations, if any, for preparation, delivery, and warranty service on the warrantor's products.

AB1112,13,24 (b) Compensate the dealer for warranty service performed by the dealer that is covered by the warrantor's own warranty.

AB1112,14,8 (c) Provide the dealer with the schedule of compensation to be paid and the time allowances for the performance of any work and service. The schedule of compensation shall include reasonable compensation for diagnostic work as well as warranty labor. If the schedule of compensation required by this paragraph does not include a particular repair, the warrantor shall reimburse the dealer for warranty service for the actual time expended unless the warrantor demonstrates that the actual time was not reasonable. If the warrantor demonstrates that the actual time was not reasonable, the dealer shall be paid a reasonable sum.

AB1112,14,13 (2) Time allowances for the diagnosis and performance of warranty labor shall be reasonable for the work to be performed. The compensation of a dealer for warranty labor may not be less than the lowest retail labor rate actually charged by the dealer in the ordinary course of business for like nonwarranty labor as long as the rate is reasonable.

AB1112,14,21 (3) The warrantor shall reimburse the dealer for any warranty part at actual wholesale cost plus a minimum 30 percent handling charge and the cost, if any, of freight to return such part to the warrantor. If a part is sent to the dealer at no cost, the dealer is entitled to payment of 30 percent of the wholesale cost of the part from warrantor as a handling charge. The maximum handling charge for a part shall not exceed $300. If the warrantor requires the dealer to return a warranty part, accessory, or complete component, the warrantor shall reimburse the dealer the cost of freight to return the part, accessory, or component.

AB1112,15,2 (4) Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis, and dealer claims for warranty compensation may not be denied except for cause, including performance of nonwarranty repairs, material noncompliance with the warrantor's published policies and procedures, lack of material documentation, fraud, or misrepresentation.

AB1112,15,4 (5) A dealer shall submit warranty claims within 45 days after completing work.

AB1112,15,7 (6) A dealer shall notify the warrantor as soon as is reasonably possible, verbally or in writing, if the dealer is unable or unwilling to perform material or repetitive warranty repairs.

AB1112,15,11 (7) A warrantor shall disapprove warranty claims in writing within 45 days after the date of submission by the dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within 45 days shall be construed to be approved and must be paid within 60 days.

AB1112,15,12 (8) No warrantor may do any of the following:

AB1112,15,14 (a) Fail to perform any of its warranty obligations with respect to its warranted products.

AB1112,15,21 (b) Fail to include, in written notices of factory campaigns to recreational vehicle owners and dealers, the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the factory campaign work. A warrantor may ship parts to the dealer to affect the factory campaign work, and, if parts provided are in excess of the dealer's requirements, the dealer may return unused parts to the warrantor for credit after completion of the campaign.

AB1112,15,24 (c) Fail to compensate any of its dealers for authorized repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer if the carrier is designated by the warrantor, factory branch, distributor, or distributor branch.

AB1112,16,3 (d) Fail to compensate any of its dealers for authorized warranty service in accordance with the time allowances set forth in the schedule of compensation under sub. (1) (c) if performed in a timely and competent manner.

AB1112,16,6 (e) Intentionally misrepresent in any way to purchasers of recreational vehicles that warranties with respect to the manufacture, performance, or design of the vehicle are made by the dealer as warrantor or co-warrantor.

AB1112,16,8 (f) Require the dealer to make warranties to customers in any manner related to the manufacture of the recreational vehicle.

AB1112,16,9 (9) No dealer may do any of the following:

AB1112,16,11 (a) Fail to perform predelivery inspection functions, as specified by the warrantor, in a competent and timely manner.

AB1112,16,15 (b) Fail to perform warranty service work authorized by the warrantor in a reasonably competent and timely manner on any transient customer's vehicle of the same line-make unless the dealer determines that the customer is acting in a manner detrimental to its business.

AB1112,16,17 (c) Fail to track actual time expended to perform warranty work not governed by time allowances in the schedule of compensation under sub. (1) (c).

AB1112,16,18 (d) Claim an agency relationship with the warrantor or manufacturer.

AB1112,16,19 (e) Misrepresent the terms of any warranty.

AB1112,16,21 (10) Notwithstanding the terms of any dealer agreement, all of the following apply:

AB1112,17,5 (a) A warrantor shall indemnify, defend, and hold harmless its dealer against any losses or damages to the extent such losses or damages are caused by the negligence or willful misconduct of the warrantor. A dealer may not be denied indemnification or a defense for failing to discover, disclose, or remedy a defect in the design or manufacturing of the recreational vehicle. A dealer shall provide to the warrantor a copy of any suit in which allegations are made under this section within 10 days after receiving the suit. This paragraph shall continue to apply even after the recreational vehicle is titled. Indemnification shall include court costs, reasonable attorney fees, and expert witness fees incurred by the dealer.

AB1112,17,12 (b) A dealer shall indemnify, defend, and hold harmless its warrantor against any losses or damages to the extent such losses or damages are caused by the negligence or willful misconduct of the dealer. The warrantor shall provide to the dealer a copy of any suit in which allegations are made under this section within 10 days after receiving the suit. This paragraph shall continue to apply even after the recreational vehicle is titled. Indemnification must include court costs, reasonable attorney fees, and expert witness fees incurred by the warrantor.

AB1112,22 Section 22. 218.165 of the statutes is created to read:

AB1112,17,19 218.165 Inspection of recreational vehicles. (1) Whenever a new recreational vehicle is damaged prior to transit to the dealer or is damaged in transit to the dealer when the carrier or means of transportation has been selected by the manufacturer or distributor, the dealer shall notify the manufacturer or distributor of the damage within the time frame specified in the dealer agreement and do any of the following:

AB1112,17,21 (a) Request from the manufacturer or distributor authorization to replace the components, parts, and accessories damaged or otherwise correct the damage.

AB1112,17,22 (b) Reject the vehicle within the time frame set forth in sub. (4).

AB1112,18,2 (2) If a manufacturer or distributor refuses or fails to authorize repair of damage described under sub. (1) within 10 days after receipt of notification under sub. (1) or if the dealer rejects the recreational vehicle because of damage, ownership of the new recreational vehicle reverts to the manufacturer or distributor.

AB1112,18,5 (3) A dealer shall exercise due care in custody of a damaged recreational vehicle, but the dealer shall have no other obligations, financial or otherwise, with respect to that recreational vehicle.

AB1112,18,8 (4) The time frame for inspection and rejection by the dealer shall be part of the dealer agreement and may not be less than 2 business days after the physical delivery of the recreational vehicle.

AB1112,23 Section 23. 218.166 of the statutes is created to read:

AB1112,18,13 218.166 Coercion. (1) In this section, “coerce” includes threatening to terminate, cancel, or not renew a dealer agreement without good cause or threatening to withhold product lines or delay product delivery as an inducement to amending the dealer agreement.

AB1112,18,15 (2) A manufacturer or distributor may not coerce or attempt to coerce a dealer to do any of the following:

AB1112,18,16 (a) Purchase a product that the dealer did not order.

AB1112,18,17 (b) Enter into an agreement with the manufacturer or distributor.

AB1112,18,18 (c) Take any action that is unfair or unreasonable to the dealer.

AB1112,18,21 (d) Enter into an agreement that requires the dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under this subchapter.

AB1112,18,23 (e) Forego exercising a right authorized by a dealer agreement or any law governing the manufacturer-dealer relationship.

AB1112,18,25 (3) A dealer bears the burden of proof regarding the prohibited acts described in sub. (2).

AB1112,24 Section 24. 218.167 of the statutes is created to read:

AB1112,19,9 218.167 Dispute resolution. (1) A dealer, manufacturer, distributor, or warrantor injured by a violation of this subchapter by another dealer, manufacturer, distributor, or warrantor may bring a civil action in circuit court to recover actual damages. The court shall award attorney fees and costs to the prevailing party in an action under this section. Venue for any civil action authorized by this section shall be exclusively in the county in which the dealership is located. In an action involving more than one dealer, venue may be in any county in which a dealer who is party to the action is located.

AB1112,19,12 (2) (a) Before bringing suit under this section, the party bringing suit for an alleged violation shall serve a written demand for mediation upon the offending party. This paragraph does not apply to a proceeding for injunctive relief.

AB1112,19,18 (b) A demand for mediation under this subsection shall be served upon the offending party by certified mail at the address stated within the dealer agreement between the parties or, if the address is not contained in the agreement or the address is no longer valid, the address on the offending party's license filed with this state. In the event of a civil action between 2 dealers, the demand shall be mailed to the address on the dealer's license filed with this state.

AB1112,19,20 (c) A demand for mediation under this subsection shall contain a brief statement of the dispute and the relief sought by the party filing the demand.

AB1112,20,2 (d) Within 20 days after the date a demand for mediation is served under par. (b), the parties shall mutually select an independent mediator and meet with the mediator for the purpose of attempting to resolve the dispute. The meeting place shall be in this state in a location selected by the mediator. The mediator may extend the date of the meeting for good cause shown by either party or upon stipulation of both parties.

AB1112,20,12 (e) The service of a demand for mediation under this subsection stays the time for the filing of any complaint, petition, protest, or action under this subchapter until representatives of both parties have met with a mutually selected mediator for the purpose of attempting to resolve the dispute. If a complaint, petition, protest, or action is filed before that meeting, the court shall enter an order suspending the proceeding or action until the meeting has occurred and may, upon written stipulation of all parties to the proceeding or action that they wish to continue to mediate under this subsection, enter an order suspending the proceeding or action for as long a period as the court considers appropriate. A suspension order issued under this paragraph may be revoked by the court.

AB1112,20,14 (f) The parties to a mediation under this subsection shall bear their own costs for attorney fees and divide equally the cost of the mediator.

AB1112,20,24 (3) In addition to the remedies provided in this section, and notwithstanding the existence of any additional remedy at law, a dealer or manufacturer may apply to a circuit court for the grant, upon a hearing and for cause shown, of a temporary or permanent injunction, or both, restraining any person from acting as a dealer, manufacturer, or distributor without being properly licensed under this chapter, from violating or continuing to violate any of the provisions of this subchapter, or from failing or refusing to comply with the requirements of this subchapter. An injunction under this subsection shall be issued without bond. A single act in violation of any of the provisions of this subchapter is sufficient to authorize the issuance of an injunction.

AB1112,25 Section 25. 218.17 of the statutes is created to read:

AB1112,21,8 218.17 Penalties. The state may suspend or revoke any dealer, manufacturer, or distributor license upon a finding that any such party violated any provision of ss. 218.161 to 218.167. The department may impose, levy, and collect by legal process fines, in an amount not to exceed $1,000 for each violation, against any person or entity if it finds that such person or entity has violated any provision of ss. 218.161 to 218.167. A person against whom a fine is imposed under this section is entitled to an administrative hearing or other proceeding authorized under state law to contest the action or fine levied, or about to be levied, against the person or entity.

AB1112,21,9 (End)