§ 47-596.6. Dealer termination of dealer agreement - Good cause - Notice - Repurchase of inventory.

A.  A dealer may terminate a dealer agreement with a manufacturer with or without good cause.  If the dealer terminates or does not renew the dealer agreement with good cause, the manufacturer shall comply with the provisions of paragraphs D and E of this section.  If the dealer terminates or does not renew the dealer agreement without good cause, the provisions of paragraphs D and E of this section shall not apply.  A dealer that terminates a dealer agreement shall provide the manufacturer with written notice at least ninety (90) days prior to the effective date of the termination of the dealer agreement.

B.  All of the following conditions shall apply to a termination of a dealer agreement under this section for good cause:

1.  The notice described in subsection A of this section shall state all reasons for the proposed termination;

2.  The notice described in subsection A of this section shall state that if the manufacturer provides to the dealer a written notification of intent to cure all claimed deficiencies within thirty (30) days after the manufacturer receives the notice, the manufacturer shall have one hundred twenty (120) days after the date of the notice to correct the deficiencies.  If all of the deficiencies are corrected within the one-hundred-twenty-day period, the notice shall be deemed void and the dealer shall not terminate the dealer agreement because of the claimed deficiencies stated in the notice.  If the manufacturer does not provide a notification of intent to cure deficiencies within thirty (30) days of receiving the notice to terminate the dealer agreement, the termination shall take effect sixty (60) days after the manufacturer received from the dealer the notice to terminate;

3.  A dealer may reduce the notice period described in subsection A of this section from ninety (90) days to thirty (30) days and shall not be required to allow the manufacturer an opportunity to correct the deficiencies if the grounds for termination or nonrenewal of the dealer agreement by the dealer are any of the specific categories of good cause described in subsection C of this section; and

4.  A dealer is not required to provide notice or an opportunity to correct deficiencies under this section if the grounds for termination or nonrenewal of the dealer agreement by the dealer includes one of the following:

a.the manufacturer becomes insolvent,

b.the manufacturer is bankrupt, or

c.the manufacturer makes an assignment for the benefit of creditors.

C.  The dealer has the burden of showing good cause.  Any one of the following categories is considered good cause for a proposed termination of a dealer agreement by a dealer:

1.  A conviction of a felony or a plea of guilty or nolo contendere to a felony by a manufacturer of a crime that was committed during the time frame of the current dealer agreement; provided, there is full disclosure, in writing, of any felony conviction or plea of guilty or nolo contendere to any such felony crime that occurred within ten (10) years of entering into such dealer agreement;

2.  Abandonment or permanent closing of the business operations of the manufacturer for twenty-one (21) consecutive business days without contacting the dealer prior to the closing unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the manufacturer has no control;

3.  A material misrepresentation to the dealer by the manufacturer that severely affects the business relationship between the dealer and manufacturer;

4.  A material violation of any of the provisions of the Recreational Vehicle Franchise Act by the manufacturer;

5.  A material breach of the dealer agreement by the manufacturer; or

6.  The manufacturer becomes insolvent, is bankrupt, or makes an assignment for the benefit of creditors.

D.  If the manufacturer fails to cure any claimed deficiencies pursuant to subsection B of this section, the dealer may require that the manufacturer repurchase any of the following from the dealer:

1.  All new, untitled recreational vehicles that were acquired from the manufacturer within eighteen (18) months prior to the effective date of the notice of termination of the dealer agreement that have not been used, except for demonstration purposes, and that have not been altered or damaged, may be repurchased at one hundred percent (100%) of the net invoice cost of the recreational vehicles, including transportation, less applicable rebates and discounts to the dealer;

2.  All current and undamaged accessories and proprietary parts sold to the dealer for resale within eighteen (18) months prior to the effective date of the termination of the dealer agreement that are accompanied by the original invoice may be repurchased at one hundred five percent (105%) of the original net price paid to the manufacturer to compensate the dealer for handling, packing, and shipping the accessories and parts; and

3.  Any properly functioning diagnostic equipment, special tools, current signage, and other equipment and machinery, purchased by the dealer within five (5) years prior to the effective date of the termination of the dealer agreement if such equipment or machinery cannot be used in the normal course of the ongoing business of the dealer, may be repurchased at one hundred percent (100%) of the net cost of the dealer, plus freight, destination, delivery, and distribution charges and sales taxes.

E.  The dealer shall promptly return or arrange for the return of all of the items the manufacturer is required to repurchase under subsection D of this section at the expense of the manufacturer.

Added by Laws 2011, c. 272, § 8, eff. Jan. 1, 2012.