Senate Bill sb1090c1

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    Florida Senate - 2001                           CS for SB 1090

    By the Committee on Transportation and Senator Villalobos





    306-1837-01

  1                      A bill to be entitled

  2         An act relating to motor vehicle dealer

  3         franchise agreements; amending s. 320.60, F.S.;

  4         revising definitions used in ss. 320.61-320.70,

  5         F.S.; amending s. 320.61, F.S.; amending

  6         procedures to be followed when a complaint of

  7         unfair cancellation of a dealer agreement has

  8         been made by a motor vehicle dealer against a

  9         licensee; defining the term "final decision";

10         amending s. 320.64, F.S.; revising provisions

11         relating to the denial, suspension, or

12         revocation of a license; amending s. 320.641,

13         F.S.; providing procedures relating to

14         discontinuations, cancellations, nonrenewals,

15         modifications, and replacements of franchise

16         agreements; amending s. 320.643, F.S.; amending

17         provisions relating to the transfer,

18         assignment, or sale of franchise agreements;

19         amending s. 320.645, F.S.; amending provisions

20         relating to restrictions upon a licensee's

21         owning a dealership; providing for dealer

22         development arrangements; providing exceptions;

23         amending s. 320.699, F.S.; amending procedures

24         for administrative hearings; creating s.

25         320.69905; providing for severability;

26         providing an effective date.

27

28  Be It Enacted by the Legislature of the State of Florida:

29

30

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    Florida Senate - 2001                           CS for SB 1090
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  1         Section 1.  Paragraph (a) of subsection (11) of section

  2  320.60, Florida Statutes, is amended and subsection (15) is

  3  added to that section to read:

  4         320.60  Definitions for ss. 320.61-320.70.--Whenever

  5  used in ss. 320.61-320.70, unless the context otherwise

  6  requires, the following words and terms have the following

  7  meanings:

  8         (11)(a)  "Motor vehicle dealer" means any person, firm,

  9  company, or corporation, or other entity who:

10         1.  Is licensed pursuant to s. 320.27 as a franchised

11  motor vehicle dealer and, for commission, money, or other

12  things of value, repairs or services motor vehicles or used

13  motor vehicles pursuant to an agreement as defined in

14  subsection (1), or

15         2.  Sells, exchanges, buys, leases, or rents, or

16  offers, or attempts to negotiate a sale or exchange of any

17  interest in, motor vehicles, or

18         3.  who Is engaged wholly or in part in the business of

19  selling motor vehicles, whether or not such motor vehicles are

20  owned by such person, firm, company, or corporation.

21         (15)  "Sell," "selling," "sold," "exchange," "retail

22  sales," and "leases" includes any transaction where the title

23  of motor vehicle or used motor vehicle is transferred to a

24  retail consumer, and also includes any retail lease

25  transaction in which a retail customer leases a vehicle for a

26  period of at least 12 months.

27         Section 2.  Subsection (4) of section 320.61, Florida

28  Statutes, is amended to read:

29         320.61  Licenses required of motor vehicle

30  manufacturers, distributors, importers, etc.--

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    Florida Senate - 2001                           CS for SB 1090
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  1         (4)  When a complaint of unfair or prohibited

  2  cancellation or nonrenewal of a dealer agreement is made by a

  3  motor vehicle dealer against a licensee and such complaint is

  4  pending is in the process of being heard pursuant to ss.

  5  320.60-320.70 by the department, no replacement application

  6  for such agreement shall be granted and no license shall be

  7  granted by the department under s. 320.27 to any replacement

  8  dealer until a final decision is rendered by the department on

  9  the complaint of unfair cancellation so long as the dealer

10  agreement of the complaining dealer is in effect as provided

11  under s. 320.641(7).

12         Section 3.  Section 320.64, Florida Statutes, is

13  amended to read:

14         320.64  Denial, suspension, or revocation of license;

15  grounds.--A license of a licensee under s. 320.61 may be

16  denied, suspended, or revoked within the entire state or at

17  any specific location or locations within the state at which

18  the applicant or licensee engages or proposes to engage in

19  business, upon proof that this section was violated with

20  sufficient frequency to establish a pattern of wrongdoing, and

21  a license or applicant shall be liable for claims and remedies

22  provided in ss. 320.695 and 320.697 for any violation of any

23  of the following provisions.  A licensee is prohibited from

24  committing the following acts an applicant or licensee has

25  failed to comply with any of the following provisions with

26  sufficient frequency so as to establish a pattern of

27  wrongdoing on the part of the applicant:

28         (1)  The applicant or licensee is determined to be

29  unable to carry out contractual obligations with its motor

30  vehicle dealers.

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  1         (2)  The applicant or licensee has knowingly made a

  2  material misstatement in its application for a license.

  3         (3)  The applicant or licensee willfully has failed to

  4  comply with significant provisions of ss. 320.60-320.70 or

  5  with any lawful rule or regulation adopted or promulgated by

  6  the department.

  7         (4)  The applicant or licensee has indulged in any

  8  illegal act relating to his or her business.

  9         (5)  The applicant or licensee has coerced or attempted

10  to coerce any motor vehicle dealer into accepting delivery of

11  any motor vehicle or vehicles or parts or accessories therefor

12  or any other commodities which have not been ordered by the

13  dealer.

14         (6)  The applicant or licensee has coerced or attempted

15  to coerce any motor vehicle dealer to enter into any agreement

16  with the licensee.

17         (7)  The applicant or licensee has threatened to

18  discontinue, cancel, or not to renew a franchise agreement of

19  a licensed motor vehicle dealer, where the threatened

20  discontinuation, cancellation, or nonrenewal, if implemented,

21  would be in violation of any of the provisions of s. 320.641.

22         (8)  The applicant or licensee discontinued, canceled,

23  or failed to renew, a franchise agreement of a licensed motor

24  vehicle dealer in violation of any of the provisions of s.

25  320.641.

26         (9)  The applicant or licensee has threatened to modify

27  or replace, or has modified or replaced, a franchise agreement

28  with a succeeding franchise agreement which would adversely

29  alter the rights or obligations of a motor vehicle dealer

30  under an existing franchise agreement or which substantially

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    Florida Senate - 2001                           CS for SB 1090
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  1  impairs the sales, service obligations, or investment of the

  2  motor vehicle dealer.

  3         (10)  The applicant or licensee has attempted to enter,

  4  or has entered, into a franchise agreement with a motor

  5  vehicle dealer who does not, at the time of the franchise

  6  agreement, have proper facilities to provide the services to

  7  his or her purchasers of new motor vehicles which are covered

  8  by the new motor vehicle warranty issued by the applicant or

  9  licensee.

10         (11)  The applicant or licensee has coerced a motor

11  vehicle dealer to provide installment financing for the motor

12  vehicle dealer's purchasers with a specified financial

13  institution.

14         (12)  The applicant or licensee has advertised,

15  printed, displayed, published, distributed, broadcast, or

16  televised, or caused or permitted to be advertised, printed,

17  displayed, published, distributed, broadcast, or televised, in

18  any manner whatsoever, any statement or representation with

19  regard to the sale or financing of motor vehicles which is

20  false, deceptive, or misleading.

21         (13)  The applicant or licensee has refused to deliver,

22  in reasonable quantities and within a reasonable time, to any

23  duly licensed motor vehicle dealer who has an agreement with

24  such applicant or licensee for the retail sale of new motor

25  vehicles and parts for motor vehicles sold or distributed by

26  the applicant or licensee, any such motor vehicles or parts as

27  are covered by such agreement specifically publicly advertised

28  by such applicant or licensee to be available for immediate

29  delivery.  However, the failure to deliver any motor vehicle

30  or part will not be considered a violation of this section if

31  the failure is due to act of God, work stoppage, or delay due

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    Florida Senate - 2001                           CS for SB 1090
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  1  to a strike or labor difficulty, a freight embargo, product

  2  shortage, or other cause over which the applicant or licensee

  3  has no control. The failure to deliver parts or components for

  4  the current and 5 preceding years' models within 60 days from

  5  date of order shall be deemed prima facie unreasonable.

  6         (13)(14)  The applicant or licensee has sold,

  7  exchanged, or rented a motorcycle which produces in excess of

  8  5 brake horsepower, knowing the use thereof to be by, or

  9  intended for, the holder of a restricted Florida driver's

10  license.

11         (14)(15)  The applicant or licensee has engaged in

12  previous conduct which would have been a ground for revocation

13  or suspension of a license if the applicant or licensee had

14  been licensed.

15         (16)  Notwithstanding the terms of any franchise

16  agreement, and unless it can be shown that the licensee's

17  franchised dealer is actively negligent, the applicant or

18  licensee has failed to indemnify and hold harmless its

19  franchised motor vehicle dealer against any judgment for

20  damages or settlement agreed to in writing by the applicant or

21  licensee, including, but not limited to, court costs and

22  reasonable attorney's fees of the motor vehicle dealer, which

23  judgment or settlement arose out of complaints, claims, or

24  lawsuits based upon such grounds as strict liability;

25  negligence; misrepresentation; warranty, express or implied;

26  or rescission of the sale as described in s. 672.608, less any

27  offset for use recovered by the licensee's franchised motor

28  vehicle dealer, and only to the extent that the judgment or

29  settlement relates to the alleged defective or negligent

30  manufacture, assembly, or design of new motor vehicles, parts,

31  or accessories or other functions of the manufacturer.

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    Florida Senate - 2001                           CS for SB 1090
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  1         (15)(17)  The applicant or licensee, directly or

  2  indirectly, through the actions of any parent of the licensee,

  3  subsidiary of the licensee, or common entity causes a

  4  termination, cancellation, or nonrenewal of a franchise

  5  agreement by a present or previous distributor or importer

  6  unless, by the effective date of such action, the applicant or

  7  licensee offers the motor vehicle dealer whose franchise

  8  agreement is terminated, canceled, or not renewed a franchise

  9  agreement containing substantially the same provisions

10  contained in the previous franchise agreement or files an

11  affidavit with the department acknowledging its undertaking to

12  assume and fulfill the rights, duties, and obligations of its

13  predecessor distributor or importer under the terminated,

14  canceled, or nonrenewed franchise agreement and the same is

15  reinstated.

16         (16)(18)  Notwithstanding the terms of any franchise

17  agreement, the applicant or licensee prevents or refuses to

18  accept the succession to any interest in a franchise agreement

19  by any legal heir or devisee under the will of a motor vehicle

20  dealer or under the laws of descent and distribution of this

21  state; provided, the applicant or licensee is not required to

22  accept a succession where such heir or devisee does not meet

23  licensee's written, reasonable, and uniformly applied minimal

24  standard qualifications for dealer applicants or which, after

25  notice and administrative hearing pursuant to chapter 120, is

26  demonstrated to be detrimental to the public interest or to

27  the representation of the applicant or licensee.  Nothing

28  contained herein, however, shall prevent a motor vehicle

29  dealer, during his or her lifetime, from designating any

30  person as his or her successor in interest by written

31  instrument filed with and accepted by the applicant or

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    Florida Senate - 2001                           CS for SB 1090
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  1  licensee.  A licensee who rejects the successor transferee

  2  under this subsection shall have the burden of establishing in

  3  any proceeding where such rejection is in issue that the

  4  rejection of the successor transferee complies with this

  5  subsection.

  6         (17)(19)  The applicant or licensee has included in any

  7  franchise agreement with a motor vehicle dealer terms or

  8  provisions that are contrary to, prohibited by, or otherwise

  9  inconsistent with the provisions contained in ss.

10  320.60-320.70, or has failed to include in such franchise

11  agreement a provision conforming to the requirements of s.

12  320.63(3).

13         (18)(20)  The applicant or licensee has established a

14  system of motor vehicle allocation or distribution or has

15  implemented a system of allocation or distribution of motor

16  vehicles to one or more of its franchised motor vehicle

17  dealers which is unfair, inequitable, unreasonably

18  discriminatory, or not supportable by reason and good cause

19  after considering the equities of the affected motor vehicles

20  dealer or dealers. An applicant or licensee shall maintain for

21  3 years records that describe its methods or formula of

22  allocation and distribution of its motor vehicles and records

23  of its actual allocation and distribution of motor vehicles to

24  its motor vehicle dealers in this state.

25         (19)(21)  The applicant or licensee, without good and

26  fair cause, has delayed, refused, or failed to provide a

27  supply of motor vehicles by series in reasonable quantities,

28  including the models publicly advertised by the applicant or

29  licensee as being available, or has delayed, refused, or

30  failed to deliver motor vehicle parts and accessories within a

31  reasonable time after receipt of an order by a franchised

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  1  dealer.  However, this subsection is not violated if such

  2  failure is caused by acts or causes beyond the control of the

  3  applicant or licensee.

  4         (20)(22)  The applicant or licensee has required, or

  5  threatened to require, a motor vehicle dealer to prospectively

  6  assent to a release, assignment, novation, waiver, or

  7  estoppel, which instrument or document operates, or is

  8  intended by the applicant or licensee to operate, to relieve

  9  any person from any liability or obligation under the

10  provisions of ss. 320.60-320.70.

11         (21)(23)  The applicant or licensee has threatened or

12  coerced a motor vehicle dealer toward conduct or action

13  whereby the dealer would waive or forego its right to protest

14  the establishment or relocation of a motor vehicle dealer in

15  the community or territory serviced by the threatened or

16  coerced dealer.

17

18  A motor vehicle dealer who can demonstrate that a violation

19  of, or failure to comply with, any of the preceding provisions

20  by an applicant or licensee will or can adversely and

21  pecuniarily affect the complaining dealer, shall be entitled

22  to pursue all of the remedies, procedures, and rights of

23  recovery available under ss. 320.695 and 320.697.

24         (22)  The applicant or licensee has refused to deliver,

25  in reasonable quantities and within a reasonable time, to any

26  duly licensed motor vehicle dealer who has an agreement with

27  such applicant or licensee for the retail sale of new motor

28  vehicles and parts for motor vehicles sold or distributed by

29  the applicant or licensee, any such motor vehicles or parts as

30  are covered by such agreement.  Such refusal includes the

31  failure to offer to its same line-make franchised motor

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  1  vehicle dealers all models manufactured for that line-make;

  2  requiring a dealer to pay any extra fee; or requiring a dealer

  3  to execute a separate franchise agreement, to purchase

  4  unreasonable advertising displays or other materials, to

  5  remodel, renovate, or recondition the dealer's existing

  6  facilities, or to provide exclusive facilities as a

  7  prerequisite to receiving a model or services of vehicles.

  8  However, the failure to deliver any motor vehicle or part will

  9  not be considered a violation of this section if the failure

10  is due to an act of God, work stoppage, or delay due to a

11  strike or labor difficulty, a freight embargo, product

12  shortage, or other cause over which the applicant or licensee

13  has no control.  An applicant or licensee may impose

14  reasonable requirements on the motor vehicle dealer, other

15  than the items listed in this subsection, including, but not

16  limited to, the purchase of special tools required to properly

17  service a motor vehicle and the undertaking of sales-person or

18  service-person training related to the motor vehicle.

19         (23)  The applicant or licensee has, directly or

20  indirectly, competed or is competing with a motor vehicle

21  dealer of the same line-make located in this state with whom

22  the applicant or licensee has entered into a franchise

23  agreement, except as permitted in s. 320.645.

24         (24)  The applicant or licensee has sold a motor

25  vehicle to any retail consumer in the state except through a

26  motor vehicle dealer holding a franchise agreement for the

27  line-make that includes the motor vehicle.  This section does

28  not apply to sales by the applicant or licensee of motor

29  vehicles to its current employees and the Federal Government.

30  This subsection expires July 1, 2006.

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  1         (25)  The applicant or licensee has undertaken an audit

  2  of warranty payments or incentive payments previously paid to

  3  a motor vehicle dealer in violation of this section or has

  4  failed to comply with s. 320.696.  An applicant or licensee

  5  may reasonably and periodically audit a motor vehicle dealer

  6  to determine the validity of paid claims.  Audit of warranty

  7  payments shall be only for the 1-year period immediately

  8  following the date the claim was paid.  Audit of incentive

  9  payments shall be only for an 18-month period immediately

10  following the date the incentive was paid.  An applicant or

11  licensee shall not deny a claim or charge back a motor vehicle

12  dealer subsequent to the payment of the claim unless the

13  applicant or licensee shows that the claim was false or

14  fraudulent or that the motor vehicle dealer failed to

15  subsequently comply with the reasonable written and uniformly

16  applied procedures of the applicant or licensee.

17         (26)  Notwithstanding the terms of any franchise

18  agreement, the applicant or licensee has refused to allocate,

19  sell, or deliver motor vehicles, has charged back or withheld

20  payments or other things of value for which the dealer is

21  otherwise eligible under a sales promotion, program, or

22  contest, or has prevented the motor vehicle dealer from

23  participating in any promotion, program, or contest for

24  selling a motor vehicle to a customer who was present at the

25  dealership and the motor vehicle dealer did not know or should

26  not have reasonably known that the vehicle would be shipped to

27  a foreign country.  There will be a rebuttable presumption

28  that the dealer did not know or should not have reasonably

29  known that the vehicle would be shipped to a foreign country

30  if the vehicle is titled in the United States.

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  1         (27)  Notwithstanding the terms of any franchise

  2  agreement, the applicant or licensee has failed or refused to

  3  indemnify and hold harmless any motor vehicle dealer against

  4  any judgment for damages or settlements agreed to by the

  5  applicant or licensee, including, without limitation, court

  6  costs and reasonable attorney's fees arising out of

  7  complaints, claims, or lawsuits, including, without

  8  limitation, strict liability, negligence, misrepresentation,

  9  express or implied warranty, or revocation or rescission of

10  acceptance of the sale of a motor vehicle, to the extent that

11  the judgment or settlement relates to the alleged negligent

12  manufacture, design, or assembly of motor vehicles, parts, or

13  accessories.  Nothing in this subsection shall obviate the

14  licensee's obligations pursuant to chapter 681.

15         (28)  The applicant or licensee has published,

16  disclosed, or otherwise made available in any form information

17  provided by a motor vehicle dealer with respect to sales

18  prices of motor vehicles or profit per motor vehicle sold.

19  Other confidential information provided by motor vehicle

20  dealers shall not be published, disclosed, or otherwise made

21  available except in composite form.  However, this information

22  may be disclosed with the written consent of the dealer, after

23  timely notice to an affected dealer, or in response to a

24  subpoena or order of the department, a court, or a lawful

25  tribunal, or introduced into evidence in such a proceeding.

26         (29)  The applicant or licensee has failed to reimburse

27  a motor vehicle dealer in full for the reasonable cost of

28  providing a loaner vehicle to any customer who is having a

29  vehicle serviced at the motor vehicle dealer, if a loaner is

30  required by the applicant or licensee or if a loaner is

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  1  expressly part of an applicant or licensee's

  2  customer-satisfaction index or computation.

  3         (30)  The applicant or licensee has conducted or

  4  threatened to conduct any audit of a motor vehicle dealer in

  5  order to coerce or attempt to coerce the dealer to forego any

  6  rights granted to the dealer under ss. 320.60-320.70 or under

  7  the agreement between the licensee and the motor vehicle

  8  dealer.  Nothing in this subsection shall prohibit an

  9  applicant or licensee from reasonably and periodically

10  auditing a dealer to determine the validity of paid claims.

11         (31)  The applicant or licensee has, on or after the

12  effective date of this subsection, offered to any motor

13  vehicle dealer a franchise agreement that:

14         (a)  At the time of execution of that franchise

15  agreement fails to provide a motor vehicle dealer with an

16  option not to submit to binding arbitration or mediation for

17  any dispute between the licensee and the motor vehicle dealer;

18         (b)  Requires that a motor vehicle dealer bring an

19  administrative or legal action in a venue outside this state;

20         (c)  Requires that any arbitration, mediation, or other

21  legal proceeding be conducted outside this state; or

22         (d)  Fails to provide that the law of the State of

23  Florida, to the exclusion of any other jurisdiction, shall be

24  applied in any arbitration or other legal proceeding between a

25  motor vehicle dealer and licensee.

26

27  The licensee shall, at the time it offers the franchise

28  agreement to a motor vehicle dealer, provide the motor vehicle

29  dealer with a copy of the licensee's arbitration and mediation

30  rules and procedures, including the composition of the finders

31  of fact.

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  1         (32)  The applicant or licensee has varied the price

  2  charged to any of its motor vehicle dealers located in this

  3  state by offering rebates, credits, incentives, or other

  4  consideration that has the effect of varying the price based

  5  on the volume of vehicles purchased by the motor vehicle

  6  dealer or based on the motor vehicle dealer's geographic

  7  location within this state.

  8         Section 4.  Section 320.641, Florida Statutes, is

  9  amended to read:

10         320.641  Discontinuations, cancellations, nonrenewals,

11  modifications, and replacements Unfair cancellation of

12  franchise agreements.--

13         (1)(a)  An applicant or licensee shall give written

14  notice to the motor vehicle dealer and the department of the

15  licensee's intention to discontinue, cancel, or fail to renew

16  a franchise agreement or of the licensee's intention to modify

17  a franchise or replace a franchise with a succeeding

18  franchise, which modification or replacement may will

19  adversely alter the rights or obligations of a motor vehicle

20  dealer under an existing franchise agreement or may will

21  substantially impair the sales, service obligations, or

22  investment of the motor vehicle dealer, at least 90 days

23  before the effective date thereof, together with the specific

24  grounds for such action.

25         (b)  The failure by the licensee to comply with the

26  90-day notice period and procedure prescribed herein shall

27  render voidable, at the option of the motor vehicle dealer,

28  any discontinuation, cancellation, nonrenewal, modification,

29  or replacement of any franchise agreement.  Designation of a

30  franchise agreement at a specific location as a "nondesignated

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  1  point" shall be deemed an evasion of this section and

  2  constitutes an unfair cancellation.

  3         (2)  Franchise agreements are deemed to be continuing

  4  unless the applicant or licensee has notified the department

  5  of the discontinuation of, cancellation of, failure to renew,

  6  modification of, or replacement of the agreement of any of its

  7  motor vehicle dealers; and annual renewal of the license

  8  provided for under ss. 320.60-320.70 is not necessary for any

  9  cause of action against the licensee.

10         (3)  Any motor vehicle dealer who receives a notice of

11  intent to discontinue, cancel, not renew, modify, or replace a

12  franchise agreement whose franchise agreement is discontinued,

13  canceled, not renewed, modified, or replaced may, within the

14  90-day notice period, file a petition or complaint for a

15  determination of whether such action is an unfair or

16  prohibited discontinuation, cancellation, nonrenewal,

17  modification, or replacement.  Agreements and certificates of

18  appointment shall continue in effect until final determination

19  of the issues raised in such petition or complaint by the

20  motor vehicle dealer.  A discontinuation, cancellation, or

21  nonrenewal of a franchise agreement is unfair if it is not

22  clearly permitted by the franchise agreement; if it is not

23  undertaken in good faith; if it is not undertaken for good

24  cause; if it or is based on an alleged breach of the franchise

25  agreement which is not in fact a material and substantial

26  breach; or if the grounds relied upon for termination,

27  cancellation, or nonrenewal have not been applied in a uniform

28  and consistent manner by the licensee.  A modification or

29  replacement is unfair if it is not clearly permitted by the

30  franchise agreement; is not undertaken in good faith; or is

31  not undertaken for good cause.  The applicant or licensee

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  1  shall have the burden of proof that such action is fair and

  2  not prohibited.

  3         (4)  Notwithstanding any other provision of this

  4  section, the failure of a motor vehicle dealer to be engaged

  5  in business with the public for 10 consecutive business days

  6  constitutes abandonment by the dealer of his or her franchise

  7  agreement. If any motor vehicle dealer abandons his or her

  8  franchise agreement, he or she has no cause of action under

  9  this section. For the purpose of this section, a dealer shall

10  be considered to be engaged in business with the public if a

11  sales and service facility is open and is performing such

12  services 8 hours a day, 5 days a week, excluding holidays.

13  However, it will not be considered abandonment if such failure

14  to engage in business is due to an act of God, a work

15  stoppage, or a delay due to a strike or labor difficulty, a

16  freight embargo, or other cause over which the motor vehicle

17  dealer has no control, including any violation of ss.

18  320.60-320.70.

19         (5)  Notwithstanding any other provision of this

20  section, if a motor vehicle dealer has abandoned his or her

21  franchise agreement as provided in subsection (4), the

22  licensee may give written notice to the dealer and the

23  department of the licensee's intention to discontinue, cancel,

24  or fail to renew the franchise agreement with the dealer at

25  least 15 days before the effective date thereof, specifying

26  the grounds for such action.  A motor vehicle dealer receiving

27  such notice may file a petition or complaint for determination

28  of whether in fact there has been an abandonment of the

29  franchise.

30         (6)  If the complainant motor vehicle dealer prevails,

31  he or she shall have a cause of action against the licensee

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  1  for reasonable attorneys' fees and costs incurred by him or

  2  her in such proceeding, and he or she shall have a cause of

  3  action under s. 320.697.

  4         (7)  Except as provided in s. 320.643, no replacement

  5  motor vehicle dealer shall be named for this point or location

  6  to engage in business, and the franchise agreement shall

  7  remain in effect until a final judgment is entered after all

  8  appeals are exhausted, provided that, when a motor vehicle

  9  dealer appeals a decision upholding a discontinuation,

10  cancellation, or nonrenewal based upon abandonment or

11  revocation of the dealer's license pursuant to s. 320.27 as

12  lawful reasons for such discontinuation, cancellation, or

13  nonrenewal, the franchise agreement shall remain in effect

14  pending exhaustion of all appeals only if the motor vehicle

15  dealer establishes a likelihood of success on appeal and

16  provided that the public interest will not be harmed by

17  keeping the franchise agreement in effect pending entry of

18  final judgment after such appeal prior to the final

19  adjudication by the department on the petition or complaint

20  and the exhaustion of all appellate remedies by the canceled

21  or discontinued dealer, if a stay is issued by either the

22  department or an appellate court.

23         (8)  If a transfer is proposed pursuant to s.

24  320.643(1) or (2) after a notice of intent to discontinue,

25  cancel, or not renew a franchise agreement has been received,

26  but prior to the final determination, including exhaustion of

27  all appellate remedies of a motor vehicle dealer's complaint

28  or petition contesting such action, the termination

29  proceedings shall be stayed, without bond, during the period

30  that the transfer is being reviewed by the licensee pursuant

31  to s. 320.643; the franchise agreement shall remain in full

                                  17

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  1  force and effect; and the motor vehicle dealer shall retain

  2  all rights and remedies pursuant to the terms and conditions

  3  of the franchise agreement and applicable law, including all

  4  rights of transfer until the licensee has accepted or rejected

  5  the proposed tranfer.  If the proposed transfer is rejected,

  6  the motor vehicle dealer shall retain all of its rights

  7  pursuant to s. 320.643 to an administrative determination as

  8  to whether the licensee's rejection is in compliance with the

  9  provisions of s. 320.643; and, during the pendency of any such

10  administrative proceeding and any related appellate

11  proceedings, the termination proceedings shall remain stayed

12  without bond, the franchise agreement shall remain in full

13  force and effect, and the motor vehicle dealer shall retain

14  all rights and remedies pursuant to the terms and conditions

15  of the franchise agreement and applicable law, including all

16  rights of transfer.  If a transfer is approved by the licensee

17  or mandated by law, the termination proceedings shall be

18  dismissed with prejudice as moot.

19         Section 5.  Section 320.643, Florida Statutes, is

20  amended to read:

21         320.643  Transfer, assignment, or sale of franchise

22  agreements.--

23         (1)  A motor vehicle dealer shall not transfer, assign,

24  or sell a franchise agreement to another person unless the

25  dealer first notifies the licensee of the dealer's decision to

26  make such transfer, by written notice setting forth the

27  prospective transferee's name, address, financial

28  qualification, and business experience during the previous 5

29  years.  The licensee shall, in writing, within 60 days after

30  receipt of such notice, inform the dealer either of the

31  licensee's approval of the transfer, assignment, or sale or of

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  1  the unacceptability of the proposed transferee, setting forth

  2  the material reasons for the rejection.  If the licensee does

  3  not so inform the dealer within the 60-day period, its

  4  approval of the proposed transfer is deemed granted.  No such

  5  transfer, assignment, or sale will be valid unless the

  6  transferee agrees in writing to comply with all requirements

  7  of the franchise then in effect. Notwithstanding the terms of

  8  any franchise agreement, the acceptance by the licensee of the

  9  proposed transferee shall not be unreasonably withheld. For

10  the purposes of this section, the refusal by the licensee to

11  accept a proposed transferee who is of good moral character

12  and who otherwise meets the written, reasonable, and uniformly

13  applied standards or qualifications, if any, of the licensee

14  relating to financial qualifications of the transferee and the

15  business experience of executive management required by the

16  licensee of its motor vehicle dealers is presumed to be

17  unreasonable.  A motor vehicle dealer whose proposed sale is

18  rejected licensee who receives such notice may, within 60 days

19  following such receipt of such rejection, file with the

20  department a verified complaint for a determination that the

21  proposed transferee has been rejected in violation of is not a

22  person qualified to be a transferee under this section. The

23  licensee has the burden of proof with respect to all issues

24  raised by such verified complaint.  The department shall

25  determine, and enter an order providing, that the proposed

26  transferee is either qualified or is not and cannot be

27  qualified for specified reasons, or the order may provide the

28  conditions under which a proposed transferee would be

29  qualified. If the licensee fails to file such a response to

30  the motor vehicle dealer's verified complaint within such

31  10-day 60-day period or if the department, after a hearing,

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  1  dismisses the complaint or renders a decision other than one

  2  disqualifying the proposed transferee, the franchise agreement

  3  between the motor vehicle dealer and the licensee shall be

  4  deemed amended to incorporate such transfer or amended in

  5  accordance with the determination and order rendered,

  6  effective upon compliance by the proposed transferee with any

  7  conditions set forth in the determination or order.

  8         (2)(a)  Notwithstanding the terms of any franchise

  9  agreement, a licensee shall not, by contract or otherwise,

10  fail or refuse to give effect to, prevent, prohibit, or

11  penalize, or attempt to refuse to give effect to, prevent,

12  prohibit, or penalize, any motor vehicle dealer or any

13  proprietor, partner, stockholder, owner, or other person who

14  holds or otherwise owns an interest therein from selling,

15  assigning, transferring, alienating, or otherwise disposing

16  of, in whole or in part, the equity interest of any of them in

17  such motor vehicle dealer to any other person or persons,

18  including a corporation established or existing for the

19  purpose of owning or holding the stock or ownership interests

20  of other entities, unless the licensee proves at a hearing

21  pursuant to this section that such sale, transfer, alienation,

22  or other disposition is to a person who is not, or whose

23  controlling executive management is not, of good moral

24  character.  A motor vehicle dealer, or any proprietor,

25  partner, stockholder, owner, or other person who holds or

26  otherwise owns an interest in the motor vehicle dealer, who

27  desires to sell, assign, transfer, alienate, or otherwise

28  dispose of any interest in such motor vehicle dealer shall

29  notify, or cause the proposed transferee to so notify, the

30  licensee, in writing, of the identity and address of the

31  proposed transferee.  A licensee who receives such notice may,

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  1  within 60 days following such receipt, notify the motor

  2  vehicle dealer in writing file with the department a verified

  3  complaint for a determination that the proposed transferee is

  4  not a person qualified to be a transferee under this section

  5  and setting forth the material reasons for such rejection.

  6  Failure of the licensee to notify the motor vehicle dealer

  7  within the 60-day period of such rejection shall be deemed an

  8  approval of the transfer.  Any person whose proposed sale of

  9  stock is rejected may file within 60 days after receipt of

10  such rejection a complaint with the department alleging that

11  the rejection was in violation of the law or the franchise

12  agreement. The licensee has the burden of proof with respect

13  to all issues raised by such verified complaint.  The

14  department shall determine, and enter an order providing, that

15  the proposed transferee either is qualified or is not and

16  cannot be qualified for specified reasons; or the order may

17  provide the conditions under which a proposed transferee would

18  be qualified. If the licensee fails to file a response to the

19  motor vehicle dealer's complaint within 10 days or if such

20  verified complaint within such 60-day period or if the

21  department, after a hearing, dismisses the complaint or

22  renders a decision on the complaint other than one

23  disqualifying the proposed transferee, the transfer shall be

24  deemed approved franchise agreement between the motor vehicle

25  dealer and the licensee shall be deemed amended to incorporate

26  such transfer or amended in accordance with the determination

27  and order rendered, effective upon compliance by the proposed

28  transferee with any conditions set forth in the determination

29  or order.

30         (b)  During the pendency of any such hearing, the

31  franchise agreement of the motor vehicle dealer shall continue

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  1  in effect in accordance with its terms.  The department shall

  2  expedite any determination requested under this section.

  3         Section 6.  Section 320.645, Florida Statutes, is

  4  amended to read:

  5         320.645  Restriction upon ownership of dealership by

  6  licensee.--

  7         (1)  No licensee, including a manufacturer or agent of

  8  a manufacturer, or any parent, subsidiary, common entity, or

  9  officer or representative of the licensee shall own or

10  operate, either directly or indirectly, a motor vehicle

11  dealership in this state for the sale or service of motor

12  vehicles which have been or are offered for sale under a

13  franchise agreement with a motor vehicle dealer in this state.

14  A licensee may not be issued a motor vehicle dealer license

15  pursuant to s. 320.27. However, no such licensee will be

16  deemed to be in violation of this section:

17         (a)  When operating a motor vehicle dealership for a

18  temporary period, not to exceed 1 year, during the transition

19  from one owner of the motor vehicle dealership to another;

20         (b)  When operating a motor vehicle dealership

21  temporarily for a reasonable period for the exclusive purpose

22  of broadening the diversity of its dealer body and enhancing

23  opportunities for qualified persons who are part of a group

24  that has historically been underrepresented in its dealer

25  body, or for other qualified persons whom the licensee deems

26  to lack the resources to purchase or capitalize the dealership

27  outright, not to exceed 1 year, or in a bona fide relationship

28  with an independent person, other than a licensee or its agent

29  or affiliate, who is required to make has made a significant

30  investment that is subject to loss in the dealership and who

31

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  1  can reasonably expect to acquire full ownership of the

  2  dealership on reasonable terms and conditions; or

  3         (c)  If the department determines, after a hearing on

  4  the matter, pursuant to chapter 120, at the request of any

  5  person, that there is no independent person available in the

  6  community or territory to own and operate the motor vehicle

  7  dealership in a manner consistent with the public interest.

  8

  9  In any such case, the licensee must continue to make the motor

10  vehicle dealership available for sale to an independent person

11  at a fair and reasonable price. Approval of the sale of such a

12  motor vehicle dealership to a proposed motor vehicle dealer

13  shall not be unreasonably withheld.

14         (2)  As used in this section, the term:

15         (a)  "Independent person" is a person who is not an

16  officer, director, or employee of the licensee.

17         (b)  "Reasonable terms and conditions" requires that

18  profits from the dealership are reasonably expected to be

19  sufficient to allow full ownership of the dealership by the

20  independent person within a reasonable time period not to

21  exceed 10 years, which time period may be extended if there is

22  a reasonable basis to do so and the extension is not being

23  sought to evade the purpose of this section; that the

24  independent person has sufficient control to permit

25  acquisition of ownership; and that the relationship may not be

26  terminated solely to avoid full ownership.  The terms and

27  conditions are not reasonable if they preclude the independent

28  person from an expedited purchase of the dealership using a

29  monetary source other than profits from the dealership's

30  operation; however, the independent person must pay to the

31  licensee any and all reasonable prepayment charges and costs,

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  1  including all unrecouped restored losses, associated with the

  2  expedited purchase of the dealership.  For the purpose of this

  3  section, unrecouped restored losses are moneys that the

  4  manufacturer has contributed to the dealership to restore

  5  losses of the dealership which the manufacturer has not been

  6  paid back through profits of the dealership.

  7         (c)  "Significant investment" means a reasonable

  8  amount, considering the reasonable capital requirements of the

  9  dealership, acquired and obtained from sources other than the

10  licensee or any of its affiliates and not encumbered by the

11  person's interest in the dealership.

12         (3)  Nothing in this section shall prohibit, limit,

13  restrict, or impose conditions on:

14         (a)  The business activities, including, without

15  limitation, the dealings with motor vehicle manufacturers and

16  their representatives and affiliates, of any person that is

17  primarily engaged in the business of short-term, not to exceed

18  12 months, rental of motor vehicles and industrial and

19  construction equipment and activities incidental to that

20  business, provided that:

21         1.  Any motor vehicles sold by such person are limited

22  to used motor vehicles that have been previously used

23  exclusively and regularly by such person in the conduct of its

24  rental business and used motor vehicles traded in for motor

25  vehicles sold by such person;

26         2.  Warranty repairs performed under any manufacturer's

27  new vehicle warranty by such person on motor vehicles are

28  limited to repair of those motor vehicles that it owns.  As to

29  previously owned vehicles, warranty repairs may be performed

30  only if pursuant to a motor vehicle service agreement as

31  defined in part I of chapter 634 which is issued by such

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  1  person or pursuant to an express warranty issued by such

  2  person on the retail sale of those vehicles previously owned;

  3  and

  4         3.  Motor vehicle financing provided by such person to

  5  retail consumers for motor vehicles is limited to used motor

  6  vehicles sold by such person in the conduct of its business;

  7  or

  8         (b)  The direct or indirect ownership, affiliation, or

  9  control of a person described in paragraph (a).

10         (4)  This section does not apply to any dealership that

11  is owned, controlled, or operated by a licensee on July 1,

12  2000.

13         (2)  This section shall not be construed to prohibit

14  any licensee from owning or operating a motor vehicle

15  dealership in this state if such dealership was owned or

16  operated by the licensee on May 31, 1984.

17         Section 7.  Subsection (2) of section 320.699, Florida

18  Statutes, is amended to read:

19         320.699  Administrative hearings and adjudications;

20  procedure.--

21         (2)  If a written objection or notice of protest is

22  filed with the department under paragraph (1)(b), a hearing

23  shall be held not sooner than 180 days from within 180 days of

24  the date of filing of the first objection or notice of

25  protest, unless the time is extended by the hearing officer

26  for good cause shown.  If a hearing is not scheduled within

27  said time, any party may request such hearing which shall be

28  held forthwith by the hearing officer.

29         Section 8.  Section 320.69905, Florida Statutes, is

30  created to read:

31

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  1         320.69905  Severability.--If a provision of ss.

  2  320.60-320.70 or its application to any person or circumstance

  3  is held invalid, the invalidity does not affect other

  4  provisions or applications of ss. 320.60-320.70 which can be

  5  given effect without the invalid provision or application, and

  6  to this end the provisions of ss. 320.60-320.70 are severable.

  7         Section 9.  This act shall take effect July 1, 2001.

  8

  9          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
10                             SB 1090

11

12  The CS amends s. 360.60, F.S., to revise the definition of
    "motor vehicle dealer" to include licensed franchised motor
13  vehicle dealers who repair or service motor vehicles or
    certain used motor vehicles for commission, money, or other
14  things of value; and to define "sell" and its various synonyms
    to include lease transactions.
15
    The CS amends s. 360.61, F.S., to provide  no replacement
16  dealer license may be granted pending a dealer complaint of
    unfair or prohibited cancellation or non-renewal, so long as
17  the dealer agreement of the complaining dealer is in effect as
    provided under s. 320.641(7), F.S.
18
    The CS amends s. 320.64, F.S., to provide violations of
19  prohibited acts are sufficient grounds for license denial,
    suspension, or revocation and makes them subject to penalties
20  provided in ss. 320.695 and 320.697, F.S.

21  The CS also amends s. 320.64, F.S., to provide additional
    reasons which could justify the denial, suspension, or
22  revocation of a manufacturer's license in Florida.

23  The CS amends s. 320.641, F.S., to provide criteria to be used
    in determining whether a termination, cancellation,
24  non-renewal, or modification of a franchise should be
    approved.
25
    The CS amends s. 320.643, F.S., to allow a manufacturer to use
26  financial qualifications in its determinations regarding a
    transfer, and allows the dealer to file a complaint in protest
27  of the denial of a transfer of a franchise agreement.

28  The CS amends s. 320.645, F.S., relating to the restriction
    upon ownership of dealerships by a licensee to allow
29  manufacturers to operate motor vehicle dealerships for the
    exclusive purpose of broadening diversity and improving
30  minority representation.

31

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