Bill Text: MI SB0094 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Trade; watercraft; regulation of new watercraft manufacturers, wholesalers, and dealers; revise. Amends title & secs. 1, 2, 3, 4, 5, 6 & 7 of 1989 PA 88 (MCL 445.541 et seq.) & adds secs. 4a, 4b, 4c, 4d, 4e, 4f, 4g, 7a, 7b, 7c, 7d, 7e, 7f & 8.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2009-01-28 - Referred To Committee On Economic Development And Regulatory Reform [SB0094 Detail]
Download: Michigan-2009-SB0094-Introduced.html
SENATE BILL No. 94
January 28, 2009, Introduced by Senator RICHARDVILLE and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1989 PA 88, entitled
"An act to regulate watercraft and outboard motor manufacturers,
distributors, dealers, and their representatives; and to regulate
dealings between those manufacturers and distributors and their
dealers,"
by amending the title and sections 1, 2, 3, 4, 5, 6, and 7 (MCL
445.541, 445.542, 445.543, 445.544, 445.545, 445.546, and 445.547)
and by adding sections 4a, 4b, 4c, 4d, 4e, 4f, 4g, 7a, 7b, 7c, 7d,
7e, 7f, and 8.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to regulate watercraft and outboard motor
manufacturers,
distributors, dealers, and their representatives;
and
to regulate dealings between those manufacturers and
distributors
and their dealers. An act to
regulate watercraft
manufacturers, distributors, wholesalers, dealers, and their
representatives; to regulate their dealings with dealers and retail
customers; to prohibit unfair practices; and to provide remedies
and penalties.
Sec.
1. For the purposes of this act, the words and phrases
defined
in sections 2 to 6 have the meanings ascribed to them in
those
sections, except where the context clearly indicates a
different
meaning. This act shall be
known and may be cited as the
"watercraft manufacturer and dealer act".
Sec.
2. (1) "Dealer agreement" means the agreement or contract
in
writing between a manufacturer or distributor and a new
watercraft
dealer which purports to establish the legal rights and
obligations
of the parties to the agreement or contract with regard
to
the purchase and sale of new watercraft or new outboard motors.
(2)
"Designated successor" means 1 or more persons nominated
by
the new watercraft dealer, in a written document filed by the
dealer
with the manufacturer or distributor at the time the dealer
agreement
is executed, to succeed the dealer in the event of his or
her
death or incapacity.
(3)
"Distributor" means a person, resident or nonresident, who
in
whole or in part offers for sale, sells, or distributes a new
watercraft
or new outboard motor to a new watercraft dealer or who
maintains
a factory representative, resident or nonresident, or who
controls
a person, resident or nonresident, who in whole or in part
offers
for sale, sells, or distributes a new watercraft or new
outboard
motor to a new watercraft dealer.
(4)
"Manufacturer" means a person who manufactures or
assembles
new watercraft or new outboard motors, or a distributor,
factory
branch, or factory representative.
(5)
"New watercraft dealer" means a person who holds a dealer
agreement
granted by a manufacturer or distributor for the sale of
the
manufacturer's or distributor's watercraft or outboard motors,
who
is engaged in the business of purchasing, selling, exchanging,
or
servicing new watercraft or new outboard motors, and who has an
established
place of business.
(6)
"Person" means a natural person, partnership, corporation,
association,
trust, estate, or other legal entity.
(7)
"Proposed new watercraft dealer" means a person who has an
application
pending for a new dealer agreement with a manufacturer
or
distributor. Proposed new watercraft dealer does not include a
person
whose dealer agreement is being renewed or continued.
As used in this act:
(a) "Closed dealership" means a new watercraft dealer whose
dealer agreement is terminated, canceled, discontinued, or not
renewed.
(b) "Dealer agreement" means an agreement or contract in
writing between a distributor and a new watercraft dealer, between
a manufacturer and a distributor or a new watercraft dealer, or
between a watercraft importer and a distributor or a new watercraft
dealer, that purports to establish the legal rights and obligations
of the parties to the agreement or contract with regard to the
purchase and sale or resale of new watercraft.
(c) "Designated family member" means the designated successor
nominated by a new watercraft dealer in a written document filed by
the dealer with a manufacturer. If the dealer did not file that
document, the term means any of the following, if applicable:
(i) A spouse, child, grandchild, parent, brother, or sister of
a deceased new watercraft dealer who has otherwise been designated
in writing by a deceased dealer to succeed the deceased dealer in
the new watercraft dealership.
(ii) The appointed and qualified personal representative and
the testamentary trustee of a deceased new watercraft dealer.
(iii) A spouse, child, grandchild, parent, brother, or sister of
a deceased new watercraft dealer who is entitled to inherit the
deceased dealer's ownership interest in the new watercraft
dealership under the terms of the dealer's will or who is entitled
to inherit under the laws of intestate succession of this state.
(iv) A person appointed by a court as the legal representative
of the property of an incapacitated new watercraft dealer.
(d) "Distributor" means a resident or nonresident person who
is engaged in the business of offering for sale, selling, or
distributing new watercraft to a new watercraft dealer pursuant to
a dealer agreement, who maintains a resident or nonresident factory
representative for that business, or who controls any resident or
nonresident person who offers for sale, sells, or distributes new
watercraft to a new watercraft dealer. The term includes a
watercraft importer.
(e) "Established place of business" means a permanent,
enclosed commercial building located in this state and open to the
public at all reasonable times at which a person conducts any of
the business of a new watercraft dealer, including, but not limited
to, the display and repair of watercraft.
(f) "Factory branch" means an office maintained by a
manufacturer for the purpose of selling or offering for sale
watercraft to a distributor, wholesaler, or new watercraft dealer,
or for directing or supervising any factory representatives. The
term includes a sales promotion organization maintained by a
manufacturer that is engaged in this state in promoting the sale of
a particular make of new watercraft to new watercraft dealers.
(g) "Factory representative" means an agent or employee of a
manufacturer retained or employed for the purpose of making or
promoting the sale of new watercraft or for supervising or
contracting with new watercraft dealers or proposed watercraft
dealers.
(h) "Former dealer" means a new watercraft dealer whose dealer
agreement is terminated, canceled, not renewed, or discontinued by
a manufacturer.
(i) "Good cause" means that term as defined in section
4a(1)(c).
(j) "Good faith" means that term as defined in section 2103 of
the uniform commercial code, 1962 PA 174, MCL 440.2103.
(k) "Manufacturer" means a person who manufactures or
assembles new watercraft. The term also includes a distributor,
factory branch, or factory representative.
(l) "New watercraft" means a watercraft that is in the
possession of a manufacturer or wholesaler, or that a manufacturer
or wholesaler has sold to a new watercraft dealer, and on which the
new watercraft dealer has not issued an original title or transfer
document.
(m) "New watercraft dealer" means either of the following:
(i) A distributor or other person who is a party to a dealer
agreement with a manufacturer for the sale or distribution of its
watercraft, that is engaged in the business of purchasing, selling,
exchanging, or dealing in new watercraft, and that has an
established place of business in this state.
(ii) A person that is engaged in the business of purchasing,
selling, exchanging, or dealing in new watercraft and purchases,
sells, exchanges, or deals in 5 or more new watercraft in this
state in any 12-month period.
(n) "Person" means an individual, partnership, corporation,
limited liability company, association, trust, estate, or other
legal entity.
(o) "Proposed new watercraft dealer" means a person who has an
application pending for a new dealer agreement with a manufacturer.
The term does not include a person whose dealer agreement is being
renewed or continued.
(p) "Relevant market area" means the area within a specific
geographical area negotiated in good faith between a manufacturer
and a new watercraft dealer and included in a dealer agreement.
(q) "Watercraft" means any type of watercraft or vessel used
or capable of use as a means of transportation on water but does
not include paddleboats, canoes, kayaks, or water skis or similar
devises towed by watercraft.
Sec.
3. A manufacturer or distributor shall not offer for sale
to
a new watercraft dealer, and a new or proposed new watercraft
dealer
shall not offer to purchase from a manufacturer, a new
watercraft
or a new outboard motor without first entering into a
written
dealer agreement and complying with all other applicable
provisions
of this act. A manufacturer,
wholesaler, or
representative of a manufacturer or wholesaler shall not offer to
sell a new watercraft to a new watercraft dealer, and a new
watercraft dealer shall not offer to purchase a new watercraft from
a manufacturer, wholesaler, or representative of a manufacturer or
wholesaler, without first entering into a written dealer agreement
and complying with all applicable provisions of this act.
Sec.
4. Each dealer agreement shall include, but is not
limited
to, all of the following:
(a)
The territory or market area.
(b)
The period of time covered by the dealer agreement.
(c)
Performance and marketing standards.
(d)
Notice provisions for termination, cancellation, or
nonrenewal.
(e)
Obligations in the preparation and delivery of the product
and
warranty service.
(f)
Disposal obligations upon termination, cancellation, or
nonrenewal
of inventory, equipment, furnishings, special tools, and
required
signs acquired within 18 months of the date of
termination,
cancellation, or nonrenewal.
(g)
Dispute resolution procedures. A
written dealer agreement
required in section 3 shall include at least all of the following
provisions:
(a) A specific term for the agreement.
(b) That the manufacturer shall respond promptly and provide
adequate information in response to the new watercraft dealer's
reasonable inquiries concerning the manufacturer's financial
condition.
(c) That the new watercraft dealer shall respond promptly and
provide adequate information in response to the manufacturer's
reasonable inquiries concerning the new watercraft dealer's
financial condition.
(d) That the new watercraft dealer is not prohibited from
selling a new watercraft to a customer who resides outside of the
dealer's relevant market area if the customer voluntarily elects to
purchase the new watercraft from the dealer.
(e) That the manufacturer shall not appoint another authorized
dealer in the relevant market area during the term of the dealer
agreement so long as the new watercraft dealer remains in
compliance with the dealer agreement.
Sec. 4a. (1) A manufacturer shall not cancel, terminate, fail
to renew, or refuse to continue a dealer agreement with a new
watercraft dealer unless the manufacturer complies with all of the
following:
(a) Satisfies the notice requirement of section 4c.
(b) Acts in good faith.
(c) Has good cause for the cancellation, termination,
nonrenewal, or discontinuance. As used in this subdivision and
section 4d(1), subject to subsection (2), "good cause" means either
of the following:
(i) There is a failure by the new watercraft dealer to comply
with a provision of the dealer agreement, the provision is both
reasonable and of material significance to the relationship between
the manufacturer and the new watercraft dealer, and the
manufacturer first acquired actual or constructive knowledge of the
failure not more than 2 years before the date on which notice is
given under section 4c.
(ii) If a failure described in subparagraph (i) is a failure by
the new watercraft dealer to effectively execute a provision of a
dealer agreement related to the performance of the new watercraft
dealer in sales or service, all of the following have occurred:
(A) The new watercraft dealer was given written notice by the
manufacturer of the failure.
(B) The notice stated that the notice of failure of
performance was provided under this act.
(C) The new watercraft dealer was afforded a reasonable
opportunity to exert good faith efforts to carry out the dealer
agreement.
(D) The failure or deficiency continued for more than 180 days
after the date notice was given under sub-subparagraph (A).
(2) The following do not constitute good cause for the
termination, cancellation, nonrenewal, or discontinuance of a
dealer agreement under subsection (1)(c):
(a) A change in ownership of a new watercraft dealer's
dealership if section 5 is met. This subdivision does not authorize
a change in ownership that results in a sale or an assignment of
the dealer agreement or a change in the principal management of the
dealership without the manufacturer's prior written consent.
(b) A refusal of a new watercraft dealer to purchase or accept
delivery of any new watercraft parts, or accessories or any other
commodity or services not ordered by the new watercraft dealer.
(c) The fact that a new watercraft dealer owns, has an
investment in, participates in the management of, or holds a dealer
agreement for the sale of another make or line of new watercraft,
or that the new watercraft dealer has established another make or
line of new watercraft in the same dealership facilities as those
of the manufacturer, if both of the following are met:
(i) The new watercraft dealer maintains a reasonable line of
credit for each make or line of new watercraft.
(ii) The new watercraft dealer remains in substantial
compliance with the terms and conditions of the dealer agreement
and with the reasonable facilities' requirements of the
manufacturer.
(d) The fact that a new watercraft dealer sells or transfers
ownership of the dealership or sells or transfers capital stock in
the dealership to the new watercraft dealer's spouse, son, or
daughter, if the sale or transfer does not have the effect of a
sale or an assignment of the dealer agreement or a change in the
principal management of the dealership without the manufacturer's
prior written consent.
(3) A provision in a dealer agreement that is contrary to this
section is not enforceable.
Sec. 4b. In any proceeding concerning a termination,
cancellation, nonrenewal, or discontinuance of a dealer agreement
under section 4a, the manufacturer has the burden of proof for
showing that it has acted in good faith, that it has complied with
any notice requirement, and that there was good cause for the
termination, cancellation, nonrenewal, or discontinuance.
Sec. 4c. (1) Before a manufacturer or a new watercraft dealer
who is a party to a dealer agreement terminates, cancels, does not
renew, or discontinues the dealer agreement, the manufacturer or
dealer shall provide written notice of the termination,
cancellation, nonrenewal, or discontinuance to the other party to
the dealer agreement and do all of the following:
(a) Provide the notice to the other party by certified mail.
(b) Include all of the following in the notice:
(i) A statement of intention to terminate, cancel, not renew,
or discontinue the dealer agreement.
(ii) A statement of the reason for the termination,
cancellation, nonrenewal, or discontinuance.
(iii) The date on which the termination, cancellation,
nonrenewal, or discontinuance takes effect.
(c) Provide the notice within 1 of the following time periods:
(i) At least 30 days before the effective date of a
termination, cancellation, nonrenewal, or discontinuance for any of
the following reasons:
(A) Insolvency of the other party or the filing of a petition
by or against the other party under any bankruptcy or receivership
law.
(B) Failure of the other party to conduct its customary sales
and service operations during its customary business hours for 30
consecutive business days.
(C) Conviction of the other party or its principal owners of a
misdemeanor that involves theft, dishonesty, or false statement or
any felony.
(D) If the terminating, canceling, nonrenewing, or
discontinuing party is the manufacturer, revocation of a license
the new watercraft dealer is required to have to operate a
dealership or loss of authorization to purchase marine engines
appropriate for the manufacturer's products.
(E) A fraudulent misrepresentation by the other party that is
material to the dealer agreement.
(ii) At least 180 days before the effective date of a
termination, cancellation, nonrenewal, or discontinuance because
the manufacturer discontinued production of the new watercraft
dealer's product line or discontinued distribution of that product
line in this state.
(iii) If subparagraph (i) or (ii) does not apply, at least 180
days before the effective date of the termination, cancellation,
nonrenewal, or discontinuance. During this time period, the
manufacturer may execute a dealer agreement with another new
watercraft dealer and the new watercraft dealer may execute a
dealer agreement with another manufacturer.
(2) A notice provision in a dealer agreement that is contrary
to this section is not enforceable.
Sec. 4d. (1) If a dealer agreement is terminated, canceled,
not renewed, or discontinued by a manufacturer without good cause,
the manufacturer shall pay the new watercraft dealer fair and
reasonable compensation for all of the following:
(a) Each new current model year watercraft purchased from the
manufacturer in the dealer's inventory that has not been materially
altered or substantially damaged.
(b) Each new watercraft of the immediately preceding model
year purchased from the manufacturer in the dealer's inventory that
has not been materially altered or substantially damaged, if that
watercraft was purchased from the manufacturer and drafted on the
dealer's financing source or paid for within the 2-year period
before the effective date of the termination, cancellation,
nonrenewal, or discontinuance.
(c) Any electronic or printed parts catalogs or other supplies
purchased from the manufacturer within the 18-month period before
the effective date of the termination, cancellation, nonrenewal, or
discontinuance.
(d) Any parts inventory, purchased from the manufacturer
within the 18-month period before the effective date of the
termination, cancellation, nonrenewal, or discontinuance, except
special order parts.
(e) Any equipment, furnishings, and signs identifying the
watercraft or the manufacturer brand or trade name purchased from
the manufacturer in the current model year.
(f) Any expenditures by the new watercraft dealer in the
current model year for boat show exhibit spaces that were committed
to the dealer but not occupied by the dealer and any other
expenditures made by the new watercraft dealer in the current model
year in marketing the manufacturer's products based upon future
anticipated incentives, holdbacks on boats not refunded by the
manufacturer, or similar financial promotions before the
cancellation of the agreement.
(2) A manufacturer shall pay any compensation required under
subsection (1)(a) or (b) within 30 days after the effective date of
the termination, cancellation, nonrenewal, or discontinuance if the
new watercraft dealer has met any reasonable requirements of the
dealer agreement with respect to the return of the new watercraft
inventory. A manufacturer shall pay any compensation required under
subsection (1)(c), (d), (e), or (f) within 90 days after the
effective date of the termination, cancellation, nonrenewal, or
discontinuance if the new watercraft dealer provides clear title to
any items of personal property and has met any other reasonable
requirements of the dealer agreement with respect to the return of
that personal property.
(3) If a manufacturer does not pay any compensation required
under subsection (1) within the applicable 30- or 90-day time
period provided in subsection (2), interest shall accrue on the
amount due the new watercraft dealer at a rate of 12% per annum
from the date the applicable time period expires to the date the
payment is made.
(4) As used in subsection (1), "fair and reasonable
compensation" means 1 of the following:
(a) In subsection (1)(a) or (b), an amount that is at least
the new watercraft dealer's net invoice cost, freight, and floor
plan interest paid by the watercraft dealer for the new watercraft.
(b) In subsection (1)(d), the amount stated in the
manufacturer's invoice.
(c) In subsection (1)(c) or (e), the actual cost to the dealer
of personal property purchased from the manufacturer.
(d) In subsection (1)(f), the actual expenditures of the new
watercraft dealer.
Sec. 4e. (1) In addition to the provisions of subsection (2)
and sections 4a, 4b, 4c, and 4d, all of the following apply if a
dealer agreement is terminated, canceled, not renewed, or
discontinued by the manufacturer:
(a) For a 12-month period beginning on the effective date of
the termination, cancellation, nonrenewal, or discontinuance of the
dealer agreement, the former dealer may continue to purchase parts
and accessories from the manufacturer to service customers of the
manufacturer's products by submitting a purchase order to the
manufacturer. The manufacturer shall sell parts or accessories
under this subdivision at its standard dealer rates and according
to its standard dealer terms and conditions.
(b) Beginning 12 months after the effective date of the
termination, cancellation, nonrenewal, or discontinuance of the
dealer agreement, the former dealer may continue to purchase parts
and accessories from the manufacturer to service customers of the
manufacturer's products by submitting a purchase order to the
manufacturer. The manufacturer shall sell parts or accessories
under this subdivision at its standard rates for retail sales of
the parts and accessories and according to its standard terms and
conditions for retail sales of the parts and accessories.
(c) The manufacturer or former dealer shall not construe a
sale of parts or accessories under this section as a waiver of the
termination, cancellation, nonrenewal, or discontinuance of the
dealer agreement, a continuation of the dealer agreement, or the
commencement of a new dealer agreement.
(2) All of the following apply if a dealer agreement is
terminated, canceled, not renewed, or discontinued by a
manufacturer or a dealer:
(a) The manufacturer is relieved from any obligation contained
in the dealer agreement to deliver additional new watercraft to the
former dealer and may cancel all outstanding orders for new
watercraft, including orders that the former dealer has previously
accepted. This subdivision does not apply to a new watercraft if
the former dealer proves to the manufacturer's satisfaction that
the watercraft is the subject of a binding customer order received
by the former dealer before receipt of the written notice required
under section 4c.
(b) For a 12-month period beginning on the effective date of
the termination, cancellation, nonrenewal, or discontinuance of the
dealer agreement, the former dealer may continue to perform
warranty work for customers of the manufacturer's watercraft. The
manufacturer shall reimburse the former dealer for warranty work
performed under this subdivision at the rates generally charged by
the former dealer for like service to retail customers for
nonwarranty parts, service, or repairs and according to the
standard terms and conditions in effect before the termination,
cancellation, nonrenewal, or discontinuance of the dealer
agreement.
(c) The manufacturer or former dealer shall not construe the
performance of warranty work under subdivision (b), acceptance by
the manufacturer of an order for new watercraft from the former
dealer, continued sales of new watercraft to the former dealer, or
any other act after termination, cancellation, nonrenewal, or
discontinuance of the dealer agreement as a waiver of the
termination, cancellation, nonrenewal, or discontinuance of the
dealer agreement, a continuation of the dealer agreement, or the
commencement of a new dealer agreement.
(d) Any compensation owed by the former dealer to the
manufacturer is due and payable within 30 days after the effective
date of the termination, cancellation, nonrenewal, or
discontinuance of the dealer agreement.
Sec. 4f. A manufacturer shall not require a new watercraft
dealer in this state to do any of the following:
(a) Order or accept delivery of any new watercraft, part or
accessory of a new watercraft, equipment, or any other commodity
not required by law that was not voluntarily ordered by the new
watercraft dealer. This subdivision does not apply to new
watercraft delivered under a dealer agreement as part of the annual
inventory required by the manufacturer.
(b) Order or accept delivery of any new watercraft with
special features, accessories, or equipment not included in the
list price of the new watercraft as publicly advertised by the
manufacturer.
(c) Participate monetarily in any advertising campaign or
contest, purchase any promotional materials, display devices, or
display decorations or materials, or pay or assume directly in
connection with the sale of new watercraft any part of the cost of
a refund, rebate, or discount made by or lawfully imposed by the
manufacturer to or in favor of a retail customer, unless the dealer
voluntarily agrees.
(d) Enter into any agreement with the manufacturer, other than
normal program purchase requirements or warranty service
agreements, if the manufacturer represents to the new watercraft
dealer that refusing to execute the agreement will cause a
termination of the dealer agreement or any other contractual
agreement or understanding between the dealer and manufacturer. A
notice given in good faith to a dealer of the dealer's violation of
any terms or provisions of a dealer agreement is not a violation of
this subdivision.
(e) Change the capital structure of the new watercraft
dealership or the means by or through which the dealer finances the
operation of the dealership, if the dealership at all times meets
any reasonable capital standards determined by the manufacturer in
accordance with uniformly applied criteria.
(f) Refrain from participation in the management of,
investment in, or acquisition of, any other line of new watercraft
or related products, if the dealer maintains a reasonable line of
credit for each make or line of watercraft, remains in compliance
with reasonable facilities requirements, and does not change the
principal management of the dealer.
(g) Change the location of the new watercraft dealership or
make any substantial alterations to the dealership premises, unless
that requirement is reasonable.
(h) Prospectively assent to a release, assignment, novation,
waiver, or estoppel that relieves any person from liability imposed
by this act; require that the law of a state other than this state
govern a dealer agreement; or require referral of any controversy
between a new watercraft dealer and a manufacturer to a person
other than a court of this state or a federal court located in this
state, if the referral is binding on the new watercraft dealer,
unless the parties agree at the time of a controversy to refer the
controversy to a federal court located outside this state or agree
at the time of an arbitration to conduct arbitration either within
or outside this state. A provision in a dealer agreement that is
contrary to this subdivision is unenforceable by a manufacturer.
Sec. 4g. (1) A manufacturer shall not do any of the following:
(a) Adopt, change, establish, or implement a plan or system
for the allocation and distribution of new watercraft to new
watercraft dealers that is arbitrary or capricious, or modify an
existing plan or system in a way that causes the plan or system to
be arbitrary or capricious.
(b) If the manufacturer publicly advertises that a specific
model of watercraft is available for immediate delivery in this
state, refuse to deliver inventory of that watercraft to a new
watercraft dealer entitled to sell that watercraft under a dealer
agreement, in reasonable quantities and within a reasonable time
after receipt of the dealer's order. This subdivision does not
apply to a failure to deliver watercraft due to an act of God, a
work stoppage or delay due to a strike or labor difficulty, a
shortage of materials, a lack of manufacturing capacity, a freight
embargo, or another cause over which the manufacturer has no
control.
(c) Require that a new watercraft dealer purchase essential
service tools with a purchase price in the aggregate of more than
$7,500.00 in order to receive a specific model watercraft without
providing the dealer a good faith estimate in writing of the number
of watercraft of that specific model the manufacturer intends to
allocate to that dealer during the model year in which the tool
purchase requirement is imposed. This subdivision does not apply if
the dealer does not request the estimate in writing.
(d) Subject to subsection (2), if a new watercraft dealer
orders a new watercraft for a retail customer within 15 days after
receiving a written official price increase notification from the
manufacturer, and that retail customer purchases that new
watercraft, apply that price increase to that new watercraft. A
sales contract signed by a retail customer and binding on a dealer
is evidence of an order subject to this subdivision.
(e) Subject to subsection (2), if a new watercraft dealer
orders a new current model year watercraft for a retail customer
within 30 days after receiving notice of a price reduction of more
than $5.00 or a cash rebate for that model of watercraft, and that
retail customer purchases that new watercraft, fail to reduce the
price of or provide the rebate for that new watercraft.
(f) Except under subpoena in an administrative or judicial
proceeding to which the new watercraft dealer or the manufacturer
is a party, or where the new watercraft dealer has given written
consent, release to a person any business, financial, or personal
information that a new watercraft dealer provided to a
manufacturer.
(g) Deny a new watercraft dealer the right to associate with
another new watercraft dealer for any lawful purpose.
(h) Directly or indirectly own, operate, or control a new
watercraft dealer including, but not limited to, a new watercraft
dealer engaged primarily in performing warranty repair services on
watercraft pursuant to the manufacturer's warranty. This
subdivision does not apply to either of the following:
(i) The ownership, operation, or control by a manufacturer of a
new watercraft dealer for a period of not more than 24 months
during the transition from 1 owner or operator to another. A
circuit court may extend the 24-month time period for an additional
12 months upon receipt of an application from a manufacturer and a
showing of good cause.
(ii) The ownership, operation, or control of a new watercraft
dealer by a manufacturer while it is being sold under a bona fide
contract or purchase option to the operator of the new watercraft
dealer.
(i) Sell a new watercraft directly to a retail customer other
than through its new watercraft dealers located in this state. This
subdivision does not prohibit a manufacturer from providing
information to a retail customer for the purpose of marketing or
facilitating the sale of new watercraft or from establishing a
program to sell or offer to sell new watercraft through the
manufacturer's new watercraft dealers and does not prohibit sales
directly to retail customers in this state if the manufacturer does
not have any new watercraft dealers in this state.
(j) Prevent or attempt to prevent by contract or otherwise a
new watercraft dealer from changing its executive management,
unless the manufacturer demonstrates that a proposed change of
executive management will result in executive management by 1 or
more individuals who are not of good moral character or who do not
meet reasonable, preexisting, and equitably applied standards of
the manufacturer. If a manufacturer rejects a proposed change in
executive management of a new watercraft dealer, the manufacturer
shall give written notice of its reasons to the dealer within 60
days after receiving written notice from the dealer of the proposed
change and all related information reasonably requested by the
manufacturer. Failure to provide the written notice within the 60-
day time period is approval of the change in executive management
by the manufacturer.
(k) Directly or through a subsidiary, terminate, cancel, fail
to renew, or discontinue a lease of a new watercraft dealer's
established place of business except for a material breach of the
lease.
(2) Subsection (1)(d) and (e) does not apply to a price
increase or reduction caused by any of the following:
(a) The introduction of a new model or new model year of a new
watercraft.
(b) Adding optional equipment or equipment required by state
or federal law to a new watercraft.
(c) If a new watercraft or components of a new watercraft are
made in another country, revaluation of the United States dollar.
(d) An increase in transportation charges due to an increase
in rates charged by a common carrier or transporter.
Sec. 5. (1) A manufacturer or distributor shall
not
unreasonably
withhold consent to the sale, transfer, or exchange of
a
dealership to a person who meets the criteria set forth in the
dealer
agreement.
(2)
Failure to respond within 60 days of receipt of a written
request
for the sale, transfer, or exchange of a dealership shall
be
considered consent to the request.
(3)
Except for a material breach of the lease, a manufacturer
or
distributor shall not terminate, cancel, fail to renew, or
discontinue
a lease of a new watercraft dealer's place of business.
(1) All of the following apply to a sale, transfer, or
exchange of the ownership of a new watercraft dealership to a
person other than a designated family member under section 6:
(a) A manufacturer shall not unfairly prevent a new watercraft
dealer from receiving reasonable compensation for the value of the
new watercraft dealership.
(b) A manufacturer shall consent to a sale, transfer, or
exchange of the ownership of a new watercraft dealership to a
qualified buyer. The manufacturer shall respond in writing to a
request for consent to a sale or other transfer of a new watercraft
dealership under this subdivision within 30 days after receipt of a
written request for consent from the new watercraft dealer. Failure
to respond to the request within the 30-day period is consent to
the sale or other transfer by the manufacturer.
(c) A manufacturer shall consent to assignment of an existing
dealer agreement to, or to execution of a new dealer agreement on
the same terms with, the purchaser or other transferee of an
existing new watercraft dealership if the purchaser or other
transferee is a qualified buyer. The manufacturer shall respond in
writing to a request for consent to an assignment of an existing
dealer agreement or execution of a new dealer agreement within 30
days after receipt of a written request for consent from the new
watercraft dealer. Failure to respond to the request within the 30-
day period is consent to the assignment of an existing dealer
agreement or execution of a new dealer agreement.
(2) As used in this section, "qualified buyer" means a
purchaser or other transferee of an existing new watercraft
dealership that meets the manufacturer's financial and business
criteria as generally applied by the manufacturer in qualifying new
watercraft dealers. These criteria may include the business
experience, moral character, financial qualifications, and criminal
record of the purchaser or transferee. The manufacturer has the
burden of proving that a prospective purchaser or transferee is not
a qualified buyer.
Sec.
6. If a designated successor is not able to succeed the
new
watercraft dealer because of the designated successor's death
or
legal incapacity, the dealer, within 60 days after that death or
incapacity,
shall execute a new document nominating a designated
successor.
(1) A designated family member of a deceased or incapacitated
new watercraft dealer may succeed the dealer in the ownership or
operation of the dealership under the existing dealer agreement if
the designated family member gives the manufacturer written notice
of his or her intention to succeed the dealer within 120 days after
the dealer's death or incapacity, agrees to be bound by all of the
terms and conditions of the dealer agreement, and meets the current
criteria generally applied by the manufacturer in qualifying new
watercraft dealers. A manufacturer may refuse to honor the existing
dealer agreement with the designated family member only for good
cause.
(2) A manufacturer may request that a designated family member
provide any personal and financial data that is reasonably
necessary to determine whether the designated family member meets
the requirements of subsection (1). The designated family member
shall supply the personal and financial data promptly upon request.
(3) If a manufacturer believes that good cause exists, it may
refuse to approve the succession of a designated family member
under subsection (1). A manufacturer who refuses shall provide the
designated family member with notice of its refusal to approve the
succession within 60 days after receipt of the written notice of
intention from the designated family member under subsection (1) or
within 60 days after the receipt of the requested personal and
financial data under subsection (2).
(4) A notice of refusal provided by a manufacturer under
subsection (3) shall state the specific grounds for the refusal to
approve the succession and that discontinuance of the agreement
takes effect not less than 90 days after the date the notice is
served.
(5) If a notice of refusal is not provided within the 60-day
period described in subsection (3), the dealer agreement continues
in effect and is subject to termination only as otherwise permitted
by this act.
(6) This section does not preclude a new watercraft dealer
from designating any person as his or her successor in a written
instrument filed with a manufacturer. If a written instrument
described in this subsection is filed with a manufacturer, that
instrument determines the succession rights to the ownership and
operation of the dealership.
Sec.
7. (1) A designated successor of a deceased or
incapacitated
new watercraft dealer may succeed the dealer in the
ownership
or operation of the dealership under the existing dealer
agreement
if the designated successor gives the manufacturer or
distributor
written notice of his or her intention to succeed to
the
dealership within 60 days after the dealer's death or
incapacity
and agrees to be bound by all of the terms and
conditions
of the dealer agreement. A manufacturer or distributor
may
refuse to honor the existing dealer agreement with the
designated
successor for good cause or criteria agreed to in the
existing
dealer agreement.
(2)
The manufacturer or distributor may request from a
designated
successor the personal and financial data necessary to
determine
whether the existing dealer agreement should be honored.
Upon
request, the designated successor shall supply the personal
and
financial data.
(3)
Within 60 days after receiving the notice of the
designated
successor's intent to succeed the dealer in the
ownership
and operation of the dealership or within 60 days after
receiving
the requested personal and financial data, whichever last
occurs,
if a manufacturer or distributor believes that good cause
or
other criteria exist for refusing to honor the succession, the
manufacturer
or distributor may serve upon the designated successor
notice
of its refusal to approve the succession.
(1) Before a manufacturer enters into a dealer agreement
establishing or relocating a new watercraft dealer within a
relevant market area where another dealer sells the same make,
model, or size range of new watercraft for the manufacturer, the
manufacturer shall give written notice to each new watercraft
dealer of the same make, model, or size range of watercraft in the
relevant market area of its intention to establish an additional
dealer or to relocate an existing dealer within that relevant
market area.
(2) Within 30 days after receiving a notice under subsection
(1), or within 30 days after the end of any appeal procedure
provided by the manufacturer, a new watercraft dealer may bring a
declaratory judgment action in the circuit court for the county in
which the new watercraft dealer is located to determine whether
good cause exists for establishing an additional dealer or
relocating an existing dealer within the plaintiff's relevant
market area. If a declaratory judgment action is filed under this
subsection, a manufacturer shall not establish the additional
dealer or relocate the existing dealer until the circuit court has
rendered a decision on the matter. The circuit court shall give an
action brought under this subsection precedence over all other
civil matters on the court's docket.
(3) In determining whether good cause exists under subsection
(2), a circuit court shall take into consideration the existing
circumstances, including, but not limited to, all of the following:
(a) Permanency of the investment.
(b) Effect on the retail new watercraft business and the
consuming public in the relevant market area.
(c) Whether it is injurious or beneficial to the public
welfare.
(d) Whether the new watercraft dealers of the same make,
model, or size range in that relevant market area are providing
adequate competition and convenient retail customer care for the
watercraft of that make, model, or size range in the market area,
considering the adequacy of watercraft sales, availability of
qualified service personnel, and other factors determined by the
court.
(e) Whether the establishment of the additional new watercraft
dealer or relocation of the existing new watercraft dealer would
promote competition.
(f) Growth or decline of the population and the number of new
watercraft registrations in the relevant market area.
(g) The effect on the additional or relocating dealer of a
denial of its relocation into the relevant market area.
(4) This section does not apply to the relocation of a new
watercraft dealer within 2 miles of its established place of
business.
(5) This section shall not apply to the reopening or
replacement in a relevant market area of a closed dealership that
has been closed within the preceding year, if the established place
of business of the reopened or replacement dealer is within 2 miles
of the established place of business of the closed dealership.
Sec. 7a. If a new watercraft dealer enters into a dealer
agreement, the dealer shall within 30 days of executing that dealer
agreement notify every other manufacturer with which it has a
dealer agreement of the new dealer agreement.
Sec. 7b. (1) A manufacturer shall provide each of its new
watercraft dealers with a schedule of compensation it shall pay the
dealer for parts, diagnostic time, work, or service performed
pursuant to a warranty and a time allowance for the performance of
any work or service unless a flat rate is established. The
manufacturer shall pay compensation to a dealer for diagnostic
time, warranty work, parts used, or service performed that is the
same as the rates generally charged by the dealer for like service
to retail customers for nonwarranty parts, service, or repairs. If
the schedule of compensation provides that the manufacturer shall
compensate the new watercraft dealer for a specific type of
warranty work at an established flat rate, that established flat
rate for warranty work may not fall below 90% of the rate charged
by the dealer for nonwarranty work of the same kind.
(2) The manufacturer or dealer shall establish reasonable and
adequate time allowances for the diagnosis and performance of
warranty work and service under subsection (1).
(3) A manufacturer shall not do any of the following:
(a) Fail to perform any warranty obligation.
(b) Fail to include in a written notice of a factory recall to
new watercraft owners and dealers the date by which the
manufacturer expects any necessary parts and equipment will be
available to dealers for the correction of the defects.
(c) Fail to compensate a new watercraft dealer in this state
for a repair performed pursuant to a recall.
(4) All of the following apply to a claim made to a
manufacturer by a new watercraft dealer under this section for
labor or parts:
(a) The dealer shall submit the claim on the claim form
generally used by the manufacturer and provide all of the
information usually required by the manufacturer.
(b) The manufacturer in writing shall approve, disapprove, or
request more information about the claim within 2 days after
receiving the claim and information described in subdivision (a).
(c) If a manufacturer does not specifically disapprove of a
claim in writing within the 2-day time period described in
subdivision (b), the claim is considered approved and the
manufacturer shall pay the amount of the claim to the dealer.
(d) A manufacturer may not charge a claim that it has approved
and paid under this subsection back to the dealer unless the
manufacturer can demonstrate both of the following:
(i) The claim was fraudulent, false, or unsubstantiated.
(ii) The manufacturer paid the claim within the 6-month period
preceding the charge back to the dealer.
(e) The manufacturer shall pay the claim within 30 days after
the warranty work is completed.
(f) The new watercraft dealer shall maintain all records of
any warranty repair for at least 12 months following payment of the
warranty claim.
(5) A manufacturer shall compensate a new watercraft dealer
for sales or service promotion events, programs, or activities
sponsored by the manufacturer in accordance with the manufacturer's
established guidelines for those events, programs, or activities.
(6) All of the following apply to a claim made by a new
watercraft dealer under subsection (5) for compensation for a
promotion event, program, or activity:
(a) The dealer shall submit the claim on the claim form
generally used by the manufacturer and provide all of the
information usually required by the manufacturer.
(b) The manufacturer in writing shall approve or disapprove
the claim within 30 days after receiving the claim and information
described in subdivision (a).
(c) If a manufacturer does not specifically disapprove of a
claim in writing within the 30-day time period described in
subdivision (b), the claim is considered approved and the
manufacturer shall pay the amount of the claim to the dealer.
(d) A manufacturer may charge a claim that it has approved and
paid under this subsection back to the dealer, if the charge back
occurs within a 6-month period after the end of the promotion
event, program, or activity, or after it paid the claim, whichever
is later.
(e) The manufacturer shall pay a claim within 10 days after
the claim is approved under subdivision (b) or within 30 days after
a claim is considered approved under subdivision (c).
(7) Within 3 years after the effective date of a dealer
agreement, the manufacturer shall act as a single source of contact
for the new watercraft dealer for all of the manufacturer's
component part product warranties. This subsection does not apply
to a warranty for engine related parts or components.
(8) Beginning 2 years after the effective date of this
amendatory act, a manufacturer must provide each of its new
watercraft dealers a parts and components manual.
(9) Beginning 2 years after the effective date of this
amendatory act, a manufacturer must include an owner's manual for
each new watercraft delivered to a new watercraft dealer.
Sec. 7c. (1) A new watercraft dealer is solely responsible for
any damage to a new watercraft that occurs after it accepts the
watercraft from the carrier or transporter and before delivery to
the ultimate purchaser that is not the result of a latent or hidden
defect or is not reasonably observable at the time it accepts the
watercraft. A new watercraft dealer accepts a new watercraft when
it signs a delivery receipt for the watercraft. A provision in a
dealer agreement that is contrary to this subsection is
unenforceable by a manufacturer.
(2) The manufacturer is solely responsible for any damage to a
new watercraft that occurs before delivery to the carrier or
transporter. A provision in a dealer agreement that is contrary to
this subsection is unenforceable by a manufacturer.
(3) A new watercraft dealer is responsible for damage to a new
watercraft that occurs while the new watercraft is in the
possession of the carrier or transporter only if the dealer selects
the method of transportation, mode of transportation, and the
carrier or transporter. If not, the manufacturer is responsible for
damage to the new watercraft.
(4) A new watercraft dealer may refuse to accept a damaged new
watercraft by providing written notice to the manufacturer within
10 business days after the watercraft is delivered to the dealer.
If a new watercraft dealer refuses to accept a new watercraft, the
manufacturer shall credit the dealer's account for the invoice cost
to the dealer, plus freight and interest, within 10 business days
after receipt of the notice from the dealer.
Sec. 7d. (1) A manufacturer shall indemnify a new watercraft
dealer for a judgment for damages or settlement agreed to in
writing by the manufacturer, and for the court costs and reasonable
attorney fees of the new watercraft dealer, if the complaint,
claim, or action is based solely on a defect or defects occurring
in the manufacture, construction, assembly, or design of a new
watercraft or parts or accessories other than outboard motors and
trailers, the selection by the manufacturer of parts or components
for the watercraft, any damage to the new watercraft, parts, or
accessories occurring in transit to the dealer if the carrier or
transporter is designated by the manufacturer, or another function
or action of the manufacturer that is beyond the control of the
dealer. If the complaint, claim, or action contains independent
allegations against the dealer, the manufacturer shall pay only
that portion of the costs, fees, and judgment or settlement that is
directly related to the manufacture, assembly, or design of the
watercraft, parts or accessories, or other functions of the
manufacturer beyond the control of the dealer.
(2) A manufacturer is not required to indemnify a new
watercraft dealer under subsection (1) if the dealer has not given
reasonable notice in writing of the complaint, claim, or action to
the manufacturer.
(3) An indemnification provision in a dealer agreement that is
contrary to this section is unenforceable by a manufacturer.
Sec. 7e. (1) If a manufacturer terminates, cancels, fails to
renew, or discontinues a dealer agreement without good cause under
section 4a, a new watercraft dealer may bring an action against the
manufacturer to recover actual damages reasonably incurred as a
result of the termination, cancellation, nonrenewal, or
discontinuance.
(2) A manufacturer that violates this act is responsible for
all damages sustained by a new watercraft dealer as a result of the
violation and for court costs and reasonable attorney fees incurred
by the dealer. A new watercraft dealer that violates this act is
responsible for all damages sustained by a manufacturer as a result
of the violation and for court costs and reasonable attorney fees
incurred by the manufacturer.
(3) A manufacturer or new watercraft dealer may bring an
action for declaratory judgment for determination of any
controversy arising under this act.
(4) A manufacturer or new watercraft dealer may apply to the
circuit court and obtain appropriate injunctive relief against
termination, cancellation, nonrenewal, or discontinuance of a
dealer agreement or any other violation of this act. The court may
grant injunctive relief or a temporary restraining order without
bond.
Sec. 7f. A provision in a dealer agreement that is contrary to
this act is unenforceable by a manufacturer.
Sec. 8. (1) The attorney general may commence a civil action
in the circuit court for the county in which a violation occurs to
enforce compliance with this act or to restrain the violation of
this act.
(2) In a civil action for a violation of this act, in addition
to any other relief granted, the circuit court may assess a civil
fine of not more than $5,000.00 per day for each day the violation
continues.
(3) A person who violates this act is guilty of a misdemeanor
punishable by a fine of not more than $5,000.00 per day for each
day the violation continues.
Enacting section 1. This amendatory act takes effect 30 days
after the date it is enacted.
