218.0116(1)(z)1.1. In this paragraph, “adverse action” includes all of the following: 218.0116(1)(z)1.i.i. Conducting or threatening to conduct a nonroutine or nonrandom audit. 218.0116(1)(z)2.2. Being a manufacturer, importer, or distributor who directly or indirectly takes or threatens to take an adverse action against a dealer for any of the following reasons: 218.0116(1g)(a)(a) A license described in s. 218.0114 (14) shall be denied, restricted, limited or suspended if the applicant or licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. 218.0116(1g)(b)(b) A license described in s. 218.0114 (14) (a), (b), (c) or (e) shall be suspended or revoked if the department of revenue certifies under s. 73.0301 that the applicant or licensee is liable for delinquent taxes or if the department of workforce development certifies under s. 108.227 that the applicant or licensee is liable for delinquent unemployment insurance contributions. 218.0116(1g)(c)(c) No provision of ss. 218.0101 to 218.0163 that entitles an applicant or licensee to a notice or hearing applies to a denial, restriction, limitation, suspension or revocation of a license under this subsection. 218.0116(1m)(a)2.2. The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant whose license is denied under this subdivision for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section. 218.0116(1m)(a)2m.2m. The department of workforce development certifies under s. 108.227 that the applicant is liable for delinquent unemployment insurance contributions. An applicant whose license is denied under this subdivision for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and hearing under s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section. 218.0116(1m)(a)3.3. The applicant is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. An applicant whose application is denied under this subdivision is entitled to a notice and hearing under s. 49.857 but is not entitled to any other notice or hearing under ss. 218.0101 to 218.0163. 218.0116(1m)(b)(b) A license described in s. 218.0114 (16) shall be restricted or suspended if the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. A licensee whose license is restricted or suspended under this paragraph is entitled to a notice and hearing under s. 49.857 but is not entitled to any other notice or hearing under ss. 218.0101 to 218.0163. 218.0116(1m)(c)(c) A license described in s. 218.0114 (16) shall be revoked if the department of revenue certifies under s. 73.0301 that the licensee is liable for delinquent taxes. A licensee whose license is revoked under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section. 218.0116(1m)(d)(d) A license described in s. 218.0114 (16) shall be revoked if the department of workforce development certifies under s. 108.227 that the licensee is liable for delinquent unemployment insurance contributions. A licensee whose license is revoked under this paragraph for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and hearing under s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section. 218.0116(2)(2) The licensor may without prior notice deny the application for a license within 60 days after receipt of the application by written notice to the applicant, stating the grounds for the denial. Within 30 days after receiving the notice, the applicant, for a denial by the division of banking, may petition the division of hearings and appeals or, for a denial by the department of transportation, may petition the department of transportation to conduct a hearing to review the denial. For review of a denial by the division of banking, a hearing shall be scheduled with reasonable promptness and, for review of a denial by the department of transportation, a hearing shall be held within 45 days. Within 30 days after receiving an adverse decision reviewing a denial of the department of transportation under this subsection, an applicant may appeal the decision to the division of hearings and appeals. The division of hearings and appeals shall hold an appeal hearing under this subsection and issue its decision within 30 days of receiving the appeal. 218.0116(3)(a)1.1. Except as provided in subd. 2., the department of transportation shall not license an applicant as a dealer for the sale or lease of motor vehicles at retail unless the applicant owns or leases a vehicle display lot and a permanent building in which there are facilities to display motor vehicles and to repair functional and nonfunctional parts of motor vehicles, where replacement parts, repair tools and equipment to service motor vehicles are kept, and at which the books, records and files necessary to conduct the dealer’s business shall be kept and maintained. 218.0116(3)(a)1m.1m. A residence, tent or temporary stand is not a sufficiently permanent building within the meaning of subd. 1. 218.0116(3)(a)2.2. The requirements in subd. 1. that an applicant own or lease a vehicle display lot and that the permanent building owned or leased by the applicant contain facilities to display motor vehicles do not apply to persons who are engaged only in the leasing of motor vehicles and who do not maintain an inventory of motor vehicles offered for lease. 218.0116(3)(b)(b) An approved service contract with an established repair shop having the repair parts and repair facilities specified in par. (a) 1. shall serve in lieu of the applicant’s owning or leasing the applicant’s own repair facilities if the service connection is within a reasonable distance from the applicant’s place of business and if the service connection guarantees in writing the making of the repairs or replacements ordered by the dealer. 218.0116(3)(c)(c) This subsection does not apply to persons who deal only in mopeds or motor bicycles. 218.0116(4)(a)(a) Except as provided in par. (am), no license may be suspended or revoked except after a hearing on the possible suspension or revocation. Except as provided in par. (b), the licensor shall give the licensee at least 5 days’ notice of the time and place of the hearing. Except as provided in par. (am), the order suspending or revoking the license shall not be effective until after 10 days’ written notice of the order to the licensee, after the hearing under this paragraph has been held. 218.0116(4)(am)(am) A license suspension or revocation takes effect immediately if the department of transportation determines that immediate suspension or revocation is appropriate and alleges any of the following: 218.0116(4)(am)3.3. Intentionally fraudulent conduct related to certificates of title, mileage disclosure, or use of personal identifying information, as defined in s. 943.201 (1) (b). 218.0116(4)(b)(b) When in the licensor’s opinion the best interest of the public or the trade demands it, for conduct or under circumstances specified in ss. 218.0101 to 218.0163 or in rules promulgated by the licensor, the licensor may suspend a license upon not less than 24 hours’ notice of hearing and with not less than 24 hours’ notice of the suspension of the license. 218.0116(4)(c)(c) Matters involving suspensions or revocations brought before the department of transportation shall be heard and decided upon by the department of transportation. Within 30 days after receiving a decision of suspension or revocation under this paragraph, an applicant may appeal the decision to the division of hearings and appeals. The division of hearings and appeals shall hold an appeal hearing under this paragraph and issue its decision within 30 days of receiving the appeal. 218.0116(5)(5) The licensor may inspect the pertinent books, records, letters and contracts of a licensee and shall determine the cost of an examination. The cost of an examination shall be paid by the licensee so examined within 30 days after demand for the examination by the licensor. The licensor may maintain an action for the recovery of the costs of the examination in any court of competent jurisdiction. 218.0116(6)(6) If a licensee is a firm, corporation or limited liability company, it shall be sufficient cause for the denial, suspension or revocation of a license that any officer, director, trustee or manager of the firm, corporation or limited liability company, or any member in case of a partnership, has been guilty of any act or omission which would be cause for refusing, suspending or revoking a license to that party as an individual. Each licensee shall be responsible for the acts of any or all of his or her salespersons while acting as his or her agent, if the licensee approved of or had knowledge of the acts or other similar acts and after approving of or obtaining knowledge of the acts retained the benefit, proceeds, profits or advantages accruing from the acts or otherwise ratified the acts. 218.0116(7)(a)1.1. A manufacturer, importer or distributor who seeks to enter into a franchise agreement establishing or relocating a motor vehicle dealership, parts outlet or service outlet within the relevant market area of an existing enfranchised dealer of the line make of motor vehicle shall first notify, in writing, the department of transportation and that existing enfranchised dealer of its intention to establish or relocate a dealership or outlet. Within 30 days of receiving the notice or within 30 days after the end of any appeal procedure provided by the manufacturer, importer or distributor, whichever is later, any existing enfranchised dealer of the same line make to whom the manufacturer, importer or distributor is required to give notice under this paragraph may file with the department of transportation and the division of hearings and appeals a complaint protesting the proposed establishment or relocation of the dealership or outlet within the relevant market area of the existing enfranchised dealer. 218.0116(7)(a)2.2. If a complaint is filed under subd. 1., the department of transportation shall inform the manufacturer, importer or distributor that a timely complaint has been filed, that a hearing is required, and that the proposed franchise agreement may not be entered into until the division of hearings and appeals has held a hearing, nor thereafter, if the division of hearings and appeals determines that there is not good cause for permitting the proposed establishment or relocation of the dealership or outlet. In the event of multiple complaints, hearings shall be consolidated to expedite the disposition of the issue. 218.0116(7)(b)(b) In determining whether good cause exists for permitting the proposed establishment or relocation of a dealership or outlet, the burden of proof for showing good cause shall be on the manufacturer, importer, or distributor, and the division of hearings and appeals shall take into consideration the existing circumstances, including, but not limited to: 218.0116(7)(b)1.1. The amount of business transacted by existing enfranchised dealers of the line make of motor vehicle when compared with the amount of business available to them. 218.0116(7)(b)2.2. The permanency of the investment necessarily made and the obligations incurred by existing enfranchised dealers in the performance of their franchise agreements. 218.0116(7)(b)3.3. The effect on the retail motor vehicle business in the relevant market area. 218.0116(7)(b)4.4. Whether it is injurious to the public welfare for the proposed dealership or outlet to be established or relocated. 218.0116(7)(b)5.5. Whether the establishment or relocation of the proposed dealership or outlet would increase competition and therefore be in the public interest. 218.0116(7)(b)6.6. Whether the existing enfranchised dealers of the line make of motor vehicle are providing adequate consumer care for the motor vehicles of that line make, including the adequacy of motor vehicle service facilities, equipment, supply of parts and qualified personnel. 218.0116(7)(b)7.7. Whether the existing enfranchised dealers of the line make of motor vehicle are receiving vehicles and parts in quantities promised by the manufacturer, factory branch or distributor and on which promised quantities existing enfranchised dealers based their investment and scope of operations. 218.0116(7)(b)8.8. The effect the denial of the proposed establishment or relocation would have on the license applicant, dealer or outlet operator who is seeking to establish or relocate a dealership or outlet. 218.0116(7)(c)(c) The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for not permitting the proposed establishment or relocation of the dealership or outlet. The division of hearings and appeals shall deliver copies of the decision to the parties personally or by registered mail. The decision is final upon its delivery or mailing and no reconsideration or rehearing by the division of hearings and appeals is permitted. 218.0116(7)(d)1d.1d. “Closed” means the effective date of the termination or expiration of a dealership’s or outlet’s license or franchise, whichever is earlier. 218.0116(7)(d)1h.1h. The reopening or replacement of a dealership or outlet that has been closed for less than 2 years, at the original location or within 2 miles of the original location by the closest highway route, is not the establishment of a motor vehicle dealership or outlet, unless the location is within 4 miles, by the closest highway route, of another franchised dealer of the same line make and is closer to that dealer than the closed dealership or outlet. 218.0116(7)(d)1m.1m. The reopening or replacement of a dealership or outlet that has been closed for less than 2 years at a location other than the original location and other than a location within 2 miles of the original location by the closest highway route, but within the area of sales responsibility that had been assigned to the closed dealership or outlet by the manufacturer, importer or distributor is not the establishment of a motor vehicle dealership or outlet, unless the new location is within 6 miles, by the closest highway route, of another franchised dealer of the same line make and is closer to that dealer than the closed dealership or outlet. 218.0116(7)(d)1q.1q. The reopening or replacement of a dealership or outlet that has been closed for 2 or more years or that is at a location outside of the area of sales responsibility that had been assigned to the closed dealership or outlet by the manufacturer, importer or distributor is the establishment of a dealership or outlet. 218.0116(7)(d)2.2. The relocation of a dealership or outlet to a location within 2 miles of the existing location by the closest highway route and within the existing area of sales responsibility assigned to that dealership or outlet by the manufacturer, importer or distributor is not the relocation of a dealership or outlet, unless the location is within 4 miles, by the closest highway route, of another franchised dealer of the same line make and is closer to that dealer than the existing location. The relocation of a dealership or outlet to a location other than a location within 2 miles of the existing location, but within the existing area of sales responsibility assigned to that dealership or outlet by the manufacturer, importer or distributor is not the relocation of a dealership or outlet, unless the relocation site is within 6 miles, by the closest highway route, of the location of another enfranchised dealer of the same line make and is closer to that dealer than the existing location. The relocation of a dealership or outlet to a location outside the area of sales responsibility assigned to the dealership or outlet by the manufacturer is the relocation of a dealership or outlet. 218.0116(7)(d)3.3. The establishment or relocation of a service or parts outlet requires that notice be given under par. (a) to existing enfranchised dealers who are otherwise entitled to receive notice under par. (a) and who are authorized to perform work to rectify product or warranty defects or delivery and preparation obligations on the same line make as the proposed service outlet or to use a trade name, trademark or service mark that is also proposed to be used by the proposed service or parts outlet, except that the establishment or relocation of a service or parts outlet that is owned and operated by a motor vehicle dealership enfranchised by the manufacturer, importer or distributor requires that notice be given only to existing dealers who are otherwise entitled to receive notice under par. (a) and who hold a franchise to sell the same line make as the dealership that will own and operate the proposed service or parts outlet. 218.0116(7)(d)4.4. A manufacturer’s, importer’s or distributor’s authorization of a fleet owner to perform warranty or delivery and preparation work only on the fleet owner’s own vehicles is not the establishment of a service outlet. In this subdivision: 218.0116(7)(d)4.a.a. “Fleet owner” means a person who owns for its own use or for the use of others 10 or more motor vehicles of the current or preceding model year manufactured or sold by the manufacturer, importer or distributor who is authorizing the warranty work to be performed. 218.0116(7)(d)4.b.b. “Fleet owner” does not include persons engaged in the business of leasing motor vehicles to individual consumers. 218.0116(7)(d)5.5. The establishment or relocation of a motor vehicle dealership with respect to used motor vehicles under an agreement between the dealer and a manufacturer, importer or distributor is the establishment or relocation of a motor vehicle dealership. 218.0116(8)(a)(a) A manufacturer or distributor may not modify a motor vehicle dealer agreement during the term of the agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer’s rights, obligations, investment or return on investment without giving 60 days written notice of the proposed modification to the motor vehicle dealer unless the modification is required by law, court order or the licensor. Within the 60-day notice period the motor vehicle dealer may file with the department of transportation and the division of hearings and appeals and serve upon the respondent a complaint for a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall promptly schedule a hearing and decide the matter. Multiple complaints pertaining to the same proposed modification shall be consolidated for hearing. The proposed modification may not take effect pending the determination of the matter. 218.0116(8)(b)(b) In making a determination of whether there is good cause for permitting a proposed modification, the burden of proof shall be on the manufacturer or distributor, except that the burden of proof with regard to the factor set forth in par. (b) 3. shall be on the dealer, and the division of hearings and appeals may consider any relevant factor including: 218.0116(8)(b)2.2. Whether the proposed modification is applied to or affects all motor vehicle dealers in a nondiscriminating manner. 218.0116(8)(b)3.3. The degree to which the proposed modification will have a substantial and adverse effect upon the motor vehicle dealer’s rights, investment, or return on investment. 218.0116(8)(b)5.5. The degree to which the proposed modification is necessary to the orderly and profitable distribution of products by the respondent. 218.0116(8)(b)6.6. Whether the proposed modification is offset by other modifications beneficial to the motor vehicle dealer. 218.0116(8)(c)(c) The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall deliver copies of the decision to the parties personally or by registered mail. The decision is final upon its delivery or mailing and no reconsideration or rehearing by the division of hearings and appeals is permitted. 218.0116(9)(9) Any person in interest aggrieved by a decision of the division of hearings and appeals or an order of the division of banking may have a review of the decision as provided in ch. 227. 218.0116(10)(10) In addition to the licensor’s authority to deny, suspend, or revoke a license under ss. 218.0101 to 218.0163, the division of banking, after public hearing, may issue a special order enjoining any licensee from engaging in any act or practice which is determined by the division of banking to be in violation of any provision of sub. (1), and the division of hearings and appeals may be petitioned to and, after notice and hearing, may issue a special order enjoining a licensee from engaging in any act or practice which the division of hearings and appeals determines to be in violation of any provision of sub. (1). 218.0116 Cross-referenceCross-reference: See also chs. Trans 137, 138, 139, and 140, Wis. adm. code. 218.0116 Annotation“Willful” under s. 218.01 (3) (a) 6. [now sub. (1) (cm)] means intentional. Fraud and malice are not elements. The state need not prove intent to deceive the buyer under s. 218.01 (3) (a) 18. [now sub. (1) (im) 2.]. DOT v. Transportation Commission, 105 Wis. 2d 678, 315 N.W.2d 371 (Ct. App. 1981). 218.0116 AnnotationUnder s. 218.01 (3) (b) [now sub. (2)], the commissioner may conduct a de novo review of a Department of Transportation decision and may substitute the commissioner’s own judgment for that of the department. DOT v. Office of Commissioner of Transportation, 159 Wis. 2d 271, 463 N.W.2d 870 (Ct. App. 1990). 218.0116 AnnotationA manufacturer’s assignment of territory to a dealer is part of their motor vehicle dealer agreement under sub. (8). Racine Harley-Davidson, Inc. v. Division of Hearings & Appeals, 2006 WI 86, 292 Wis. 2d 549, 717 N.W.2d 184, 03-2628. 218.0116 AnnotationPerfect performance is not required to effectuate a “cure” under sub. (1) (i) 1. b. The statutory word “cured” encompasses the meaning of “cured” in contract law: the breaching party is to stop the offending conduct and to substantially perform the contract. Only if the breach is not cured to the level of substantial performance may the injured party terminate the contract. This meaning focuses on the performance of the breaching party, rather than on matters beyond the control of the breaching party, such as the conduct of third parties or on the effects of an economic recession. Volvo Trucks North America v. DOT, 2010 WI 15, 323 Wis. 2d 294, 779 N.W.2d 423, 08-1385.
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Chs. 178-226, Partnerships and Corporations; Transportation; Utilities; Banks; Savings Associations
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