Senate Bill sb2480
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Florida Senate - 2004 SB 2480
By Senator Alexander
17-1857-04 See HB 1187
1 A bill to be entitled
2 An act relating to agricultural equipment
3 manufacturers, distributors, and dealers;
4 amending s. 686.40, F.S.; providing a popular
5 name; amending s. 686.401, F.S.; clarifying
6 intent of the Agricultural Equipment
7 Manufacturers and Dealers Act to provide for
8 regulation of the conduct of manufacturers,
9 distributors, and dealers of equipment
10 primarily designed for or used in agriculture;
11 amending s. 686.402, F.S.; revising and adding
12 definitions; amending s. 686.403, F.S.;
13 clarifying provisions relating to application;
14 amending s. 686.405, F.S.; providing that it is
15 unlawful to deny, delay payment for, or
16 restrict warranty claims under certain
17 circumstances; providing for audit of warranty
18 claims; amending s. 686.406, F.S.; clarifying
19 provisions relating to surplus parts; amending
20 s. 686.407, F.S.; providing requirements for
21 the establishment of a new dealership or
22 relocation of a current dealership within a
23 certain area; providing requirements for the
24 sale or lease of new equipment; amending s.
25 686.409, F.S.; clarifying provisions relating
26 to compensation for inventory under certain
27 circumstances; amending s. 686.413, F.S.;
28 providing additional unlawful acts and
29 practices in the conduct of the manufacturing,
30 distribution, wholesaling, franchising, sale,
31 and advertising of equipment; providing
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Florida Senate - 2004 SB 2480
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1 requirements for termination of a franchise or
2 selling agreement under certain circumstances;
3 amending s. 686.418, F.S.; clarifying
4 provisions relating to the effect of the act on
5 local ordinances; providing an effective date.
6
7 Be It Enacted by the Legislature of the State of Florida:
8
9 Section 1. Section 686.40, Florida Statutes, is
10 amended to read:
11 686.40 Agricultural Farm Equipment Manufacturers and
12 Dealers Act; short title.--Sections 686.40-686.418 shall be
13 known by the popular name and may be cited as the
14 "Agricultural Farm Equipment Manufacturers and Dealers Act."
15 Section 2. Subsection (1) of section 686.401, Florida
16 Statutes, is amended to read:
17 686.401 Legislative finding and intent; construction
18 of ss. 686.40-686.418.--
19 (1) The Legislature finds and declares that the
20 distribution and sale of tractors and farm equipment primarily
21 designed for or used in agriculture in this state vitally
22 affects the general economy of the state, the public interest,
23 and the public welfare and that, in the exercise of its police
24 power, it is necessary to regulate the conduct of tractor and
25 farm equipment manufacturers, distributors, and dealers of
26 such equipment, and their representatives, doing business in
27 this state in order to prevent fraud, unfair business
28 practices, unfair methods of competition, impositions, and
29 other abuses upon its citizens.
30 Section 3. Section 686.402, Florida Statutes, is
31 amended to read:
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Florida Senate - 2004 SB 2480
17-1857-04 See HB 1187
1 686.402 Definitions of terms used in ss.
2 686.40-686.418.--In construing ss. 686.40-686.418, unless the
3 context otherwise requires, the word, phrase, or term:
4 (1)(16) "Tractor or farm equipment Dealer" means a
5 person who sells, solicits, or advertises the sale of new and
6 used tractors and farm equipment to the consuming public, or
7 who maintains such equipment, but does not include:
8 (a) A receiver, trustee, administrator, executor,
9 personal representative, guardian, or other person appointed
10 by or acting under judgment, decree, or order of any court.
11 (a)(b) A public officer while performing her or his
12 duties as such officer.
13 (b)(c) A person making casual or isolated sales of her
14 or his own tractors or items of farm equipment not subject to
15 sales tax under the laws of this state.
16 (c)(d) A person engaged in the auction sale of
17 tractors and farm equipment.
18 (d)(e) A dealer in used tractors and farm equipment.
19 (2) "Dealership" means the business of selling or
20 attempting to effect the sale by a dealer of new equipment or
21 the right conferred by written or oral agreement with the
22 manufacturer, distributor, or wholesaler, for a definite or
23 indefinite period of time, to sell or attempt to effect the
24 sale of new equipment.
25 (3)(1) "Distributor" or "wholesaler" means any person,
26 firm, association, corporation, or company that sells or
27 distributes new tractors and farm equipment to tractor or farm
28 equipment dealers and that maintains distributor
29 representatives within this state.
30 (4)(2) "Distributor branch" means a branch office
31 maintained by a distributor or wholesaler which sells or
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Florida Senate - 2004 SB 2480
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1 distributes new tractors and farm equipment to tractor or farm
2 equipment dealers.
3 (5)(3) "Distributor representative" means a
4 representative employed by a distributor, distributor branch,
5 or wholesaler.
6 (6) "Farm Equipment" means those tractors, farm
7 implements, or items which are primarily designed for or used
8 use in agriculture, including horticulture. Equipment designed
9 for or used in irrigation for agriculture or horticulture is
10 included in this definition.
11 (7)(4) "Factory branch" means a branch office
12 maintained by a manufacturer which manufactures and assembles
13 tractors and farm equipment for sale to distributors of
14 tractors or to farm equipment dealers or which is maintained
15 for directing and supervising the representatives of the
16 manufacturer.
17 (8)(5) "Factory representative" means a representative
18 employed by a manufacturer or factory branch for the purpose
19 of making or promoting the sale of tractors and farm equipment
20 or for supervising, servicing, introducing, or contracting
21 with tractor or farm equipment dealers or prospective dealers.
22 (9)(7) "Franchise" means a contract or agreement,
23 either expressed or implied, whether oral or written, for a
24 definite or indefinite period of time in which a manufacturer,
25 distributor, or wholesaler grants to a tractor or farm
26 equipment dealer permission to use a trade name, service mark,
27 trademark, or related characteristic and in which there is a
28 common interest or community of interest in the marketing of
29 tractors or farm equipment or services related thereto at
30 wholesale or retail, whether by leasing, sale, or otherwise.
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Florida Senate - 2004 SB 2480
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1 (10)(8) "Franchisee" means a tractor or farm equipment
2 dealer to whom a franchise is offered or granted.
3 (11)(9) "Franchisor" means a manufacturer,
4 distributor, or wholesaler who grants a franchise to a tractor
5 or farm equipment dealer.
6 (12)(10) "Fraud" means and includes actual fraud or
7 constructive fraud as normally defined, in addition to the
8 following:
9 (a) A misrepresentation in any manner, whether
10 intentionally false or arising from gross negligence, of a
11 material fact.
12 (b) A promise or representation not made honestly and
13 in good faith.
14 (c) An intentional failure to disclose a material
15 fact.
16 (d) Any artifice employed to deceive another.
17 (13)(11) "Manufacturer" means any person engaged in
18 the business of manufacturing or assembling new and unused
19 tractors and farm equipment.
20 (14)(12) "New tractor or farm equipment" means a
21 tractor or item of farm equipment which has not been
22 previously sold to and put into regular use or service by any
23 person, except a distributor, wholesaler, or tractor or farm
24 equipment dealer for resale.
25 (15)(13) "Person" means a natural person, corporation,
26 association, partnership, trust, or other business entity and,
27 in the case of a business entity, includes any other entity in
28 which the business entity has a majority interest or which it
29 effectively controls, as well as the individual officers,
30 directors, and other persons in active control of the
31 activities of each such entity.
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Florida Senate - 2004 SB 2480
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1 (16) "Relevant market area" means the geographic area
2 for which a dealer is assigned responsibility for selling or
3 soliciting or advertising the sale of equipment under the
4 terms of a franchise.
5 (17)(14) "Sale" means and includes the issuance,
6 transfer, agreement for transfer, exchange, pledge,
7 hypothecation, or mortgage in any manner or form, whether by
8 transfer in trust or otherwise, of any tractor or item of farm
9 equipment or interest therein, or of any franchise related
10 thereto, for a consideration and any option, subscription or
11 other contract, or solicitation, looking to a sale, or offer
12 or attempt to sell in any form, whether in oral or written
13 form for a consideration.
14 (18) "Termination" means the termination,
15 cancellation, nonrenewal, or noncontinuation of a contract or
16 agreement.
17 (19)(15) "Tractor" means a vehicle that is operated
18 principally upon a farm, grove, or orchard in connection with
19 agricultural or horticultural pursuits or in connection with
20 irrigation.
21 Section 4. Section 686.403, Florida Statutes, is
22 amended to read:
23 686.403 Application of ss. 686.40-686.418.--
24 (1) Any person who engages directly or indirectly in
25 purposeful agreements or contracts within this state in
26 connection with the sale or advertising for sale of new
27 equipment tractors and farm machinery and parts is subject to
28 ss. 686.40-686.418 and to the jurisdiction of the courts of
29 this state for violations of such sections in accordance with
30 the provisions of the laws of this state.
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Florida Senate - 2004 SB 2480
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1 (2) Sections 686.40-686.418 apply to all written or
2 oral agreements between a manufacturer, distributor, or
3 wholesaler with a tractor or farm equipment dealer, including,
4 but not limited to, the franchise offering; the franchise
5 agreement; sales of goods, services, and advertising; leases
6 or mortgages of real or personal property; promises to pay;
7 security interests; pledges; insurance contracts; advertising
8 contracts; construction or installation contracts; servicing
9 contracts; and all other such agreements in which the
10 manufacturer, distributor, or wholesaler has any direct or
11 indirect interest.
12 (3) Sections 686.40-686.418 apply to all continuing
13 contracts now in effect which have no expiration date and to
14 all other contracts entered into or renewed after July 1,
15 1984.
16 Section 5. Section 686.405, Florida Statutes, is
17 amended to read:
18 686.405 Warranty agreements; claims; compensation of
19 dealers.--
20 (1) Every manufacturer, distributor, wholesaler,
21 factory branch or division, distributor branch or division, or
22 wholesale branch or division shall provide a fair and
23 reasonable warranty agreement on any new tractor or item of
24 farm equipment which it sells and shall fairly compensate each
25 of its tractor or farm equipment dealers for labor and parts
26 used in fulfilling such warranty agreements.
27 (2)(a) Each claim for payment under such warranty
28 agreements made by a tractor or farm equipment dealer for such
29 labor and parts shall be paid within 30 days following its
30 approval. Each such claim shall be either approved or
31 disapproved within 30 days after its receipt. When any such
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Florida Senate - 2004 SB 2480
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1 claim is disapproved, the tractor or farm equipment dealer who
2 submitted it shall be notified in writing of such disapproval
3 within such period, and such notice shall state the specific
4 grounds upon which the disapproval is based.
5 (b) Any special handling of claims required of the
6 dealer by the manufacturer, distributor, wholesaler, factory
7 branch or division, distributor branch or division, or
8 wholesale branch or division, which handling is not uniformly
9 required of all dealers of that make, may be enforced only
10 after 30 days' notice in writing to the dealer and upon good
11 and sufficient reason.
12 (3)(a) The minimum lawful basis for compensating a
13 dealer for warranty work, as provided for in this section,
14 shall be calculated for labor in accordance with the
15 reasonable and customary amount of time required to complete
16 such work, expressed in hours and fractions of hours
17 multiplied by the dealer's established hourly retail labor
18 rate. Prior to filing a claim for reimbursement for warranty
19 work, the dealer must notify the applicable manufacturer,
20 distributor, or wholesaler of his or her hourly retail labor
21 rate.
22 (b) The minimum lawful basis for compensation to the
23 dealer for parts used in fulfilling such warranty work shall
24 be at the dealer's costs for such parts, including all freight
25 and handling charges applicable to such parts, plus 15 percent
26 of the sum of such costs and charges to reimburse the dealer's
27 reasonable cost of doing business and providing such warranty
28 service on behalf of the manufacturer.
29 (4) It shall be unlawful to deny, delay payment for,
30 or restrict a claim by a dealer for warranty service or parts,
31 incentives, hold-backs, or other amounts owed to a dealer
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Florida Senate - 2004 SB 2480
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1 unless the denial, delay, or restriction is the direct result
2 of a material defect in the claim that affects its validity.
3 (5) A manufacturer, distributor, or wholesaler may
4 audit warranty claims submitted by its dealers only for a
5 period of up to 1 year following payment of such claims and
6 may charge back to its dealers only those amounts based upon
7 paid claims shown by the audit to be invalid. However, this
8 limitation shall not apply in any case of fraudulent claims.
9 (6) Any audit of a dealer by or on behalf of a
10 manufacturer, distributor, or wholesaler for sales incentives,
11 service incentives, rebates, or other forms of incentive
12 compensation shall be completed not later than 6 months after
13 the date of termination of such incentive compensation
14 program. However, this limitation shall not apply in any case
15 of fraudulent claims.
16 Section 6. Section 686.406, Florida Statutes, is
17 amended to read:
18 686.406 Parts; availability; return.--
19 (1) Every manufacturer shall specify, and every dealer
20 shall provide and fulfill, reasonable predelivery and
21 preparation obligations for its tractors and farm equipment
22 prior to delivery of the tractors and equipment to retail
23 purchasers.
24 (2) Every manufacturer shall provide for the
25 availability of repair parts throughout the reasonable useful
26 life of any tractor or farm equipment sold.
27 (3) Every manufacturer or distributor shall provide to
28 each of its her or his dealers, annually, an opportunity to
29 return a portion of its their surplus parts inventories for
30 credit. The surplus procedure shall be administered as
31 follows:
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Florida Senate - 2004 SB 2480
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1 (a) The manufacturer or distributor may specify, and
2 thereupon notify each of its her or his dealers of, a time
3 period of at least 60 days' duration during which each of its
4 the dealers may submit its their surplus parts list lists and
5 return the their surplus parts to the manufacturer or
6 distributor.
7 (b) If a manufacturer or distributor has not notified
8 a dealer of a specific time period for returning surplus parts
9 within the preceding 12 months, the manufacturer or
10 distributor she or he shall authorize and allow the dealer's
11 surplus parts return request within 30 days after receipt of
12 such request from such the dealer.
13 (c) A manufacturer or distributor must allow surplus
14 parts return authority on a dollar value of parts equal to 6
15 percent of the total dollar value of parts purchased from the
16 manufacturer or distributor by the dealer during the 12-month
17 period immediately preceding the notification to such the
18 dealer by the manufacturer or distributor of the surplus parts
19 return program, or the month such the dealer's return request
20 is made, whichever is applicable. However, the dealer may, at
21 her or his option, elect to return a dollar value of her or
22 his surplus parts equal to less than 6 percent of the total
23 dollar value of parts purchased by such the dealer from the
24 manufacturer or distributor during the preceding 12-month
25 period as provided herein.
26 (d) No obsolete or superseded part may be returned,
27 but any part listed in the manufacturer's, distributor's, or
28 wholesaler's current returnable parts list at the date of
29 notification of the surplus parts return program by the
30 manufacturer or distributor to the dealer, or the date of the
31 dealer's parts return request, whichever is applicable, is
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Florida Senate - 2004 SB 2480
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1 eligible for return and credit specified. However, returned
2 parts must be in new and unused condition and must have been
3 purchased from the manufacturer, distributor, or wholesaler to
4 whom they are returned.
5 (e) The minimum lawful credit to be allowed for
6 returned parts is 85 percent of the wholesale cost of the
7 parts as listed in the manufacturer's, distributor's, or
8 wholesaler's current returnable parts list at the date of the
9 notification of the surplus parts return program by the
10 manufacturer, wholesaler, or distributor to the dealer, or the
11 date of the dealer's parts return request, whichever is
12 applicable.
13 (f) Applicable credit must be issued or furnished by
14 the manufacturer or distributor to the dealer within 60 days
15 after receipt of her or his returned parts.
16 (g) The packing and return freight expense incurred in
17 any return of surplus parts pursuant to the terms of this
18 section shall be borne by the dealer.
19 Section 7. Section 686.407, Florida Statutes, is
20 amended to read:
21 686.407 Repurchase of inventory upon termination of
22 franchise agreement; establishment or relocation of
23 dealership; sale or lease of new equipment.--
24 (1) Whenever any tractor or farm equipment dealer
25 enters into a franchise agreement with a manufacturer,
26 distributor, or wholesaler in which agreement the dealer
27 agrees to maintain an inventory of tractors, farm equipment,
28 or repair parts and the franchise is subsequently terminated,
29 the manufacturer, distributor, or wholesaler shall repurchase
30 the inventory as provided in this section. However, the dealer
31 may keep the inventory if he or she desires. If the dealer has
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Florida Senate - 2004 SB 2480
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1 any outstanding debts to the manufacturer, distributor, or
2 wholesaler, then the repurchase amount may be credited to the
3 dealer's account.
4 (2) If the dealer decides not to keep the inventory,
5 the manufacturer, distributor, or wholesaler shall repurchase
6 that inventory previously purchased from such manufacturer,
7 distributor, or wholesaler him or her and held by the dealer
8 on the date of termination of the contract. The manufacturer,
9 distributor, or wholesaler shall pay:
10 (a) One hundred percent of the actual dealer cost,
11 including freight, of all new, unsold, undamaged, and complete
12 tractors, or other items of farm equipment which is are
13 resalable, less a reasonable allowance for depreciation due to
14 usage by the dealer and deterioration directly attributable to
15 weather conditions at the dealer's location; and
16 (b) Eighty-five percent of the current wholesale price
17 of all new, unused, and undamaged repair parts and accessories
18 which are listed in the manufacturer's, distributor's, or
19 wholesaler's current returnable parts list. The manufacturer,
20 distributor, or wholesaler shall also pay the dealer 6 percent
21 of the current wholesale price on all new, unused, and
22 undamaged repair parts returned to cover the cost of handling,
23 packing, and loading. However, the manufacturer, distributor,
24 or wholesaler shall have the option of performing the
25 handling, packing, and loading in lieu of paying the 6-percent
26 sum imposed in this subsection for these services; and, in
27 this event, after receipt by the dealer of the full repurchase
28 amount as provided in this section, the dealer shall make
29 available to the manufacturer, distributor, or wholesaler, at
30 the dealer's address or at the places at which the tractors
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Florida Senate - 2004 SB 2480
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1 and equipment is are located, all tractors and items of farm
2 equipment previously purchased by the dealer.
3 (3) Upon payment within a reasonable time of the
4 repurchase amount to the dealer, the title and right of
5 possession to the repurchased inventory shall transfer or be
6 transferred to the manufacturer, distributor, or wholesaler,
7 as the case may be.
8 (4) The provisions of this section do not require the
9 repurchase from a dealer of:
10 (a) Any repair part which has a limited storage life
11 or is otherwise subject to deterioration.
12 (a)(b) Any single repair part which is priced as a set
13 of two or more items.
14 (b)(c) Any repair part which because of its condition
15 is not resalable as a new part without repackaging or
16 reconditioning.
17 (c)(d) Any inventory for which the dealer is unable to
18 furnish evidence, reasonably satisfactory to the manufacturer,
19 distributor, or wholesaler, of good title, free and clear of
20 all claims, liens, and encumbrances.
21 (d)(e) Any inventory which the dealer desires to keep,
22 if the dealer has a contractual right to keep it.
23 (e)(f) Any tractor or item of farm equipment which is
24 not in new, unused, undamaged, and complete condition.
25 (f)(g) Any tractor or item of farm equipment which has
26 been used by the dealer or has deteriorated because of weather
27 conditions at the dealer's location unless the manufacturer,
28 distributor, or wholesaler receives a reasonable allowance for
29 such usage or deterioration.
30 (g)(h) Any repair parts which are not in new, unused,
31 and undamaged condition.
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Florida Senate - 2004 SB 2480
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1 (h)(i) Any inventory which was ordered by the dealer
2 on or after the date of receipt of the notification of
3 termination of the franchise or contractual agreement.
4 (i)(j) Any inventory which was acquired by the dealer
5 from any source other than the manufacturer, distributor, or
6 wholesaler.
7 (5) If any manufacturer, distributor, or wholesaler
8 fails or refuses to repurchase any inventory covered under the
9 provisions of this section within 60 days after termination of
10 a dealer's contract, he or she is civilly liable for 100
11 percent of the current wholesale price of the inventory plus
12 any freight charges paid by the dealer, such the dealer's
13 reasonable attorney's fees, court costs, and interest on the
14 current wholesale price computed at the legal interest rate
15 provided in s. 687.01 from the 61st day after termination.
16 (6) A manufacturer, distributor, or wholesaler that
17 intends to establish a new dealership or to relocate a current
18 dealership for a particular product line or make of equipment
19 within the relevant market area of an existing dealership of
20 the same product line or make of equipment shall give written
21 notice of such intent by certified mail or overnight delivery,
22 return receipt requested, to such existing dealership. The
23 notice shall be delivered at least 180 days prior to
24 establishment of a new dealership or relocation of a current
25 dealership. The notice shall include:
26 (a) The specific location of the additional or
27 relocated dealership.
28 (b) The date on or after which the additional or
29 relocated dealership will commence operation at the new
30 location.
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Florida Senate - 2004 SB 2480
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1 (c) The identity of all existing dealerships in whose
2 relevant market area the new or relocated dealership is to be
3 located.
4 (d) The names and addresses of the dealer and
5 principals in the new or relocated dealership.
6 (7) A manufacturer, distributor, or wholesaler may
7 sell or lease new equipment for use within the state. If the
8 equipment is prepared for delivery or serviced by a dealer,
9 the manufacturer, distributor, or wholesaler shall reasonably
10 compensate the dealer for the preparation and delivery of the
11 new equipment and pay to the dealer a reasonable commission on
12 the sale or lease of the new equipment which shall not be less
13 than 8 percent of the sale price of the equipment. This
14 compensation must be paid or credited in the same manner as
15 provided in this section. The manufacturer, distributor, or
16 wholesaler, if practicable, shall utilize the dealer in the
17 relevant market area for preparation and delivery. For
18 purposes of the this subsection, equipment is considered to be
19 used primarily within a dealer's relevant market area if the
20 new equipment is located or housed at a user's facility
21 located within the relevant market area. This subsection shall
22 not be applicable to any liquidation or sale of equipment
23 which has been ordered by any court.
24 Section 8. Section 686.409, Florida Statutes, is
25 amended to read:
26 686.409 Compensation for inventory upon refusal to
27 renew, termination of, or restriction on transfer of a
28 franchise.--It is unlawful for the manufacturer, distributor,
29 wholesaler, or franchisor, without due cause, to fail to renew
30 a franchise on terms then equally available to all of its her
31 or his tractor or farm equipment dealers, to terminate a
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Florida Senate - 2004 SB 2480
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1 franchise, or to restrict the transfer of a franchise unless
2 the franchisee receives fair and reasonable compensation for
3 the inventory of the business. As used in this section, the
4 term "due cause" shall be construed in accordance with the
5 definition of due cause contained in s. 686.413(3)(c)2.
6 Section 9. Section 686.413, Florida Statutes, is
7 amended to read:
8 686.413 Unlawful acts and practices.--Unfair methods
9 of competition and unfair or deceptive acts or practices in
10 the conduct of the manufacturing, distribution, wholesaling,
11 franchising, sale, and advertising of tractors and farm
12 equipment are declared to be unlawful.
13 (1) It is deemed a violation of this section for any
14 manufacturer, factory branch, factory representative,
15 distributor, distributor branch, distributor representative,
16 wholesaler, or tractor or farm equipment dealer to engage in
17 any action which is arbitrary, capricious, in bad faith, or
18 unconscionable and which causes damage in terms of law or
19 equity to any of the parties or to the public.
20 (2) It is deemed a violation of this section for a
21 manufacturer, factory branch or division, distributor,
22 distributor branch or division, wholesaler, or wholesale
23 branch or division, or officer, agent, or other representative
24 thereof, to coerce, compel, or attempt to coerce or compel any
25 tractor or farm equipment dealer:
26 (a) To order or accept delivery of any tractor or item
27 of farm equipment, parts or accessories therefor, or other
28 commodity or commodities which such tractor or farm equipment
29 dealer has not voluntarily ordered.
30 (b) To order or accept delivery of any tractor or farm
31 equipment with special features, accessories, or equipment not
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1 included in the base list price of such tractor or farm
2 equipment as publicly advertised by the manufacturer of the
3 tractor or equipment.
4 (3) It is deemed a violation of this section for a
5 manufacturer, factory branch or division, distributor,
6 distributor branch or division, wholesaler, or wholesale
7 branch or division, or officer, agent, or other representative
8 thereof:
9 (a) To refuse to deliver to any tractor or farm
10 equipment dealer having a franchise or contractual agreement
11 for the retail sale of new tractors and farm equipment sold or
12 distributed by such manufacturer, factory branch or division,
13 distributor branch or division, or wholesale branch or
14 division, in reasonable quantities and within a reasonable
15 time after receipt of the dealer's order, any tractor or item
16 of farm equipment covered by such franchise or contract
17 specifically advertised or represented by such manufacturer,
18 factory branch or division, distributor, distributor branch or
19 division, wholesaler, or wholesale branch or division to be
20 available for immediate delivery. However, the failure to
21 deliver any such tractor or item of farm equipment is not
22 considered a violation of this section if such failure is due
23 to a prudent and reasonable restriction on the extension of
24 credit by the franchisor to the dealer, an act of God, a work
25 stoppage or delay due to a strike or labor difficulty, a bona
26 fide shortage of materials, a freight embargo, or another
27 cause over which the manufacturer, distributor, or wholesaler,
28 or any agent thereof, has no control whatsoever.
29 (b) To coerce, compel, or attempt to coerce or compel
30 any tractor or farm equipment dealer to enter into any
31 agreement, whether written or oral, supplementary to an
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Florida Senate - 2004 SB 2480
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1 existing franchise with such manufacturer, factory branch or
2 division, distributor, distributor branch or division,
3 wholesaler, or wholesale branch or division, or officer,
4 agent, or other representative thereof; or to do any other act
5 prejudicial to such dealer by threatening to cancel any
6 franchise or contractual agreement existing between such
7 manufacturer, factory branch or division, distributor,
8 distributor branch or division, wholesaler, or wholesale
9 branch or division and such dealer. However, notice in good
10 faith to any tractor or farm equipment dealer of such dealer's
11 violation or breach of any terms or provisions of such
12 franchise or contractual agreement does not constitute a
13 violation of this section if such notice is in writing and is
14 mailed by registered or certified mail to such dealer at her
15 or his current business address and such notice contains the
16 specific facts as to the dealer's violation or breach of such
17 franchise or contractual agreement.
18 (c)1. To terminate or cancel the franchise or selling
19 agreement of any tractor or farm equipment dealer without due
20 cause, as defined in subparagraph 2. The termination
21 nonrenewal of a franchise or selling agreement, without due
22 cause, constitutes an unfair termination or cancellation,
23 regardless of the specified time period of such franchise or
24 selling agreement. Except when the ground for such termination
25 or cancellation falls within sub-subparagraph 2.c., such
26 manufacturer, factory branch or division, distributor,
27 distributor branch or division, wholesaler, or wholesale
28 branch or division, or officer, agent, or other representative
29 thereof, shall notify a tractor or farm equipment dealer in
30 writing of the termination or cancellation of the franchise or
31 selling agreement of such dealer at least 180 90 days before
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1 the effective date of the termination or cancellation, stating
2 the specific ground for such termination or cancellation. In
3 no event shall the contractual term of any such franchise or
4 selling agreement expire, without the written consent of the
5 tractor or farm equipment dealer involved, prior to the
6 expiration of at least 180 90 days following such written
7 notice. During the 180-day 90-day period, either party may, in
8 appropriate circumstances, petition a court of competent
9 jurisdiction to modify such 180-day 90-day stay or to extend
10 it pending a final determination of such proceeding on the
11 merits. The court shall have authority to grant temporary,
12 preliminary, and final injunctive relief. Should a dealer cure
13 the claimed deficiency within the 180-day period, the
14 franchise or selling agreement shall not be terminated.
15 2. As used in this subparagraph, tests for determining
16 what constitutes due cause for a manufacturer or distributor
17 to terminate, cancel, or refuse to renew a franchise agreement
18 include whether the dealer:
19 a. Has transferred an ownership interest in the
20 dealership without the manufacturer's or distributor's
21 consent;
22 b. Has made a material misrepresentation in applying
23 for or in acting under the franchise agreement;
24 c. Has filed a voluntary petition in bankruptcy or has
25 had an involuntary petition in bankruptcy filed against her or
26 him which has not been discharged within 60 days after the
27 filing, is in default under the provisions of a security
28 agreement in effect with the manufacturer or distributor, or
29 is in receivership;
30 d. Has engaged in unfair business or trade practices;
31
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1 e. Has inadequately represented the manufacturer's or
2 distributor's products with respect to sales, service, or
3 warranty work;
4 f. Has inadequate and insufficient sales and service
5 facilities and personnel;
6 g. Has failed to comply with an applicable federal,
7 state, or local licensing law;
8 h. Has been convicted of a crime, the effect of which
9 would be detrimental to the manufacturer, distributor, or
10 dealership;
11 i. Has failed to operate in the normal course of
12 business for 10 consecutive business days or has terminated
13 her or his business;
14 j. Has relocated her or his place of business without
15 the manufacturer's or distributor's consent; or
16 k. Has failed to comply with the terms that are not in
17 conflict with this chapter or the terms of the dealership or
18 franchise agreement.
19 3. Before termination of the franchise or selling
20 agreement because of the dealer's failure to meet marketing
21 criteria or market penetration, the manufacturer, factory
22 branch or division, distributor, distributor branch or
23 division, wholesaler, or wholesale branch or division, or
24 officer, agent, or other representative thereof, shall provide
25 written notice of such intention at least 1 year in advance.
26 After such notice, the manufacturer or other entity issuing
27 the notice shall make good faith efforts to work with the
28 dealer to gain the desired market share, including, without
29 limitation, reasonably making available to the dealer an
30 adequate inventory of new equipment and parts and competitive
31 marketing programs. The manufacturer or other entity, at the
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1 end of the 1-year notice period, may terminate or elect not to
2 renew the agreement only upon further written notice
3 specifying the reasons for determining that the dealer failed
4 to meet reasonable marketing criteria or market penetration.
5 Such written notice must specify that termination is effective
6 90 days from the date of the notice. Either party may petition
7 the court pursuant to subparagraph (c)1. for the relief
8 specified in such subparagraph. Should a dealer cure the
9 claimed deficiency within the 90-day period, the franchise or
10 selling agreement shall not be terminated.
11 (d) To resort to or use any false or misleading
12 advertisement in connection with its her or his business as
13 such manufacturer, factory branch or division, distributor,
14 distributor branch or division, wholesaler, or wholesale
15 branch or division, or officer, agent, or other representative
16 thereof.
17 (e) To offer to sell or to sell any new tractor or
18 item of farm equipment, or parts or accessories therefor, to
19 any other tractor or farm equipment dealer at a lower actual
20 price therefor than the actual price offered to any other
21 tractor or farm equipment dealer for the same model tractor or
22 farm equipment identically equipped or to utilize any device,
23 including, but not limited to, sales promotion plans or
24 programs, which results in such lesser actual price or results
25 in a fixed price predetermined solely by the manufacturer or
26 distributor. However, the provisions of this paragraph do not
27 apply to sales to a tractor or farm equipment dealer for
28 resale to any unit or agency of the United States Government,
29 the state or any of its political subdivisions, or any
30 municipality located within this state. Further, the
31 provisions of this paragraph do not apply so long as a
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1 manufacturer, distributor, or wholesaler, or any agent
2 thereof, sells or offers to sell such new tractor or farm
3 equipment, parts, or accessories to all of its her or his
4 franchised tractor or farm equipment dealers at an equal
5 price.
6 (f) To willfully discriminate, either directly or
7 indirectly, in price, programs, or terms of sale offered to
8 franchisees, when the effect of such discrimination may be to
9 substantially lessen competition or to give to one holder of a
10 franchise any economic, business, or competitive advantage not
11 offered to all holders of the same or similar franchise.
12 (g) To prevent or attempt to prevent, by contract or
13 otherwise, any tractor or farm equipment dealer from changing
14 the capital structure of her or his dealership or the means by
15 or through which the dealer finances the operation of her or
16 his dealership, provided the dealer at all times meets any
17 reasonable capital standards agreed to between the dealership
18 and the manufacturer, distributor, or wholesaler and provided
19 such change by the dealer does not result in a change in the
20 executive management of the dealership.
21 (h) To prevent or attempt to prevent, by contract or
22 otherwise, any tractor or farm equipment dealer or any
23 officer, member partner, or stockholder of any tractor or farm
24 equipment dealer from selling or transferring any part of the
25 interest of any of them to any other person or persons or
26 party or parties. However, no dealer, officer, partner, or
27 stockholder has the right to sell, transfer, or assign the
28 franchise or power of management or control thereunder without
29 the written consent of the manufacturer, distributor, or
30 wholesaler, except that such consent may not be unreasonably
31 withheld.
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1 (i) To impose, directly or indirectly, unreasonable
2 restrictions on the dealer relative to transfer, renewal,
3 termination, location, or site control.
4 (j) To prevent a dealer from having an investment in
5 or holding a dealership contract for the sale of competing
6 product lines or makes of equipment, or to require a dealer to
7 provide separate facilities for competing product lines or
8 makes of equipment.
9 (k)(i) To obtain money, goods, services, anything of
10 value, or any other benefit from any other person with whom
11 the tractor or farm equipment dealer does business or employs
12 on account of or in relation to the transactions between the
13 dealer, the franchisor, and such other person.
14 (l)(j) To require a tractor and farm equipment dealer
15 to assent to a release, assignment, novation, waiver, or
16 estoppel which would relieve any person from liability imposed
17 by ss. 686.40-686.418.
18 (4) It is deemed a violation of this section for a
19 tractor or farm equipment dealer:
20 (a) To require a retail purchaser of a new tractor or
21 item of farm equipment, as a condition of sale and delivery of
22 the tractor or equipment, also to purchase special features,
23 appliances, equipment, parts, or accessories not desired or
24 requested by the purchaser. However, this prohibition does not
25 apply to special features, appliances, equipment, parts, or
26 accessories which are already installed when the tractor or
27 item of farm equipment is received by the dealer from the
28 manufacturer, distributor, or wholesaler of such tractor or
29 equipment.
30 (b) To represent and sell as new and unused any
31 tractor or item of farm equipment which has been used and
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1 operated for demonstration or other purposes without stating
2 to the purchaser prior to the sale the approximate amount of
3 use the equipment tractor or item of farm machinery has
4 experienced or undergone.
5 (c) To resort to or use any false or misleading
6 advertisement in connection with her or his business as such
7 tractor or farm equipment dealer.
8 Section 10. Section 686.418, Florida Statutes, is
9 amended to read:
10 686.418 Effect of act on other remedies.--Sections
11 686.40-686.418 are supplemental to and do not preempt local
12 ordinances dealing with prohibited or unlawful conduct in the
13 manufacturing, distribution, wholesaling, advertising, or sale
14 of tractors and other items of farm equipment if such
15 ordinances are not inconsistent with such sections.
16 Section 11. This act shall take effect July 1, 2004.
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