Senate Bill sb2214
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Florida Senate - 2007 SB 2214
By Senator Dockery
15-1418-07 See HB
1 A bill to be entitled
2 An act relating to deceptive and unfair trade
3 practices; amending s. 501.975, F.S.; providing
4 definitions for part VI of ch. 501, F.S.;
5 creating s. 501.9755, F.S.; declaring that
6 unfair methods of competition, unconscionable
7 acts or practices, and unfair or deceptive acts
8 or practices used by motor vehicle dealers are
9 unlawful; providing legislative intent;
10 amending s. 501.976, F.S.; revising language
11 concerning actionable, unfair, or deceptive
12 acts or practices by dealers; correcting a
13 cross-reference; creating s. 501.9765, F.S.;
14 providing definitions; providing that a motor
15 vehicle dealer who willfully uses a method or
16 practice that victimizes or attempts to
17 victimize senior citizens or handicapped
18 persons commits an unfair or deceptive trade
19 practice; providing a civil penalty; providing
20 for reimbursement or restitution; providing for
21 disposition of penalties; creating s. 501.977,
22 F.S.; providing additional remedies against a
23 motor vehicle dealer; creating s. 501.978,
24 F.S.; providing that the remedies of part VI of
25 ch. 501, F.S., are in addition to remedies
26 otherwise available for the same conduct under
27 state or local law and do not preempt local
28 consumer protection ordinances not in conflict
29 with that part; creating s. 501.979, F.S.;
30 providing for attorney's fees for a prevailing
31 party; providing procedures for receiving
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Florida Senate - 2007 SB 2214
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1 attorney's fees; authorizing the Department of
2 Legal Affairs or the office of the state
3 attorney to receive attorney's fees and costs
4 under certain circumstances; creating s.
5 501.98, F.S.; requiring that, as a condition
6 precedent to initiating civil litigation
7 arising under part VI of ch. 501, F.S., a
8 claimant give the motor vehicle dealer written
9 notice of the claimant's intent to initiate
10 litigation within a specified period before
11 initiating the litigation; providing for the
12 content of the notice and the method of
13 delivery of the notice; providing that if the
14 claim is paid by the dealer within a specified
15 period after receiving the notice, with a
16 specified surcharge, the claimant may not
17 initiate litigation against the dealer, and the
18 dealer is obligated to pay only a set amount
19 for the claimant's attorney's fees; providing a
20 cap on the surcharge; providing that a claimant
21 is not entitled to a surcharge under certain
22 circumstances; providing that a dealer is not
23 obligated to pay the claimant's attorney's fees
24 under certain circumstances; providing for the
25 effect of payment of actual damages or an offer
26 to pay actual damages for specified purposes;
27 providing that the statute of limitations is
28 tolled for a certain period upon the mailing of
29 a specified notice; requiring the Department of
30 Legal Affairs to prepare a specified sample
31 demand letter and make it available to the
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Florida Senate - 2007 SB 2214
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1 public; permitting a court to abate litigation,
2 without prejudice, until the claimant has
3 complied with the required procedures and the
4 dealer has opportunity to respond to demand;
5 creating s. 501.99, F.S.; providing application
6 of certain provisions; amending s. 501.212,
7 F.S.; exempting certain claims against motor
8 vehicle dealers from the provisions of part II
9 of ch. 501, F.S.; providing an effective date.
10
11 Be It Enacted by the Legislature of the State of Florida:
12
13 Section 1. Section 501.975, Florida Statutes, is
14 amended to read:
15 501.975 Definitions.--As used in this part s. 501.976,
16 the term following terms shall have the following meanings:
17 (1) "Customer" includes a customer's designated agent.
18 (2) "Dealer" means a motor vehicle dealer as defined
19 in s. 320.27, but does not include a motor vehicle auction as
20 defined in s. 320.27(1)(c)4.
21 (3) "Replacement item" means a tire, bumper, bumper
22 fascia, glass, in-dashboard equipment, seat or upholstery
23 cover or trim, exterior illumination unit, grill, sunroof,
24 external mirror and external body cladding. The replacement of
25 up to three of these items does not constitute repair of
26 damage if each item is replaced because of a product defect or
27 damaged due to vandalism while the new motor vehicle is under
28 the control of the dealer and the items are replaced with
29 original manufacturer equipment, unless an item is replaced
30 due to a crash, collision, or accident.
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1 (4) "Threshold amount" means 3 percent of the
2 manufacturer's suggested retail price of a motor vehicle or
3 $650, whichever is less.
4 (5) "Vehicle" means any automobile, truck, bus,
5 recreational vehicle, or motorcycle required to be licensed
6 under chapter 320 for operation over the roads of Florida, but
7 does not include trailers, mobile homes, travel trailers, or
8 trailer coaches without independent motive power.
9 Section 2. Section 501.9755, Florida Statutes, is
10 created to read:
11 501.9755 Unlawful acts and practices.--
12 (1) Unfair methods of competition, unconscionable acts
13 or practices, and unfair or deceptive acts or practices in the
14 conduct of any trade or commerce by a dealer are unlawful.
15 (2) It is the intent of the Legislature that, in
16 construing subsection (1), due consideration and great weight
17 be given to the interpretations of the Federal Trade
18 Commission and the federal courts relating to s. 5(a)(1) of
19 the Federal Trade Commission Act, as amended, 15 U.S.C. s.
20 45(a)(1).
21 Section 3. Section 501.976, Florida Statutes, is
22 amended to read:
23 501.976 Actionable, unfair, or deceptive acts or
24 practices.--In addition to acts and practices actionable under
25 s. 501.9755, it is an unfair or deceptive act or practice,
26 actionable under the Florida Deceptive and Unfair Trade
27 Practices Act, for a dealer to:
28 (1) Represent directly or indirectly that a motor
29 vehicle is a factory executive vehicle or executive vehicle
30 unless the such vehicle was purchased directly from the
31 manufacturer or a subsidiary of the manufacturer and the
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1 vehicle was used exclusively by the manufacturer, its
2 subsidiary, or a dealer for the commercial or personal use of
3 the manufacturer's, subsidiary's, or dealer's employees.
4 (2) Represent directly or indirectly that a vehicle is
5 a demonstrator unless the vehicle complies with the definition
6 of a demonstrator in s. 320.60(3).
7 (3) Represent the previous usage or status of a
8 vehicle to be something that it was not, or make usage or
9 status representations unless the dealer has correct
10 information regarding the history of the vehicle to support
11 the representations.
12 (4) Represent the quality of care, regularity of
13 servicing, or general condition of a vehicle unless known by
14 the dealer to be true and supportable by material fact.
15 (5) Represent orally or in writing that a particular
16 vehicle has not sustained structural or substantial skin
17 damage unless the statement is made in good faith and the
18 vehicle has been inspected by the dealer or his or her agent
19 to determine whether the vehicle has incurred such damage.
20 (6) Sell a vehicle without fully and conspicuously
21 disclosing in writing at or before the consummation of sale
22 any warranty or guarantee terms, obligations, or conditions
23 that the dealer or manufacturer has given to the buyer. If the
24 warranty obligations are to be shared by the dealer and the
25 buyer, the method of determining the percentage of repair
26 costs to be assumed by each party must be disclosed. If the
27 dealer intends to disclaim or limit any expressed or implied
28 warranty, the disclaimer must be in writing in a conspicuous
29 manner and in lay terms in accordance with chapter 672 and the
30 Magnuson-Moss Warranty--Federal Trade Commission Improvement
31 Act.
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1 (7) Provide an express or implied warranty and fail to
2 honor such warranty unless properly disclaimed pursuant to
3 subsection (6).
4 (8) Misrepresent warranty coverage, application
5 period, or any warranty transfer cost or conditions to a
6 customer.
7 (9) Obtain signatures from a customer on contracts
8 that are not fully completed at the time the customer signs or
9 which do not reflect accurately the negotiations and agreement
10 between the customer and the dealer.
11 (10) Require or accept a deposit from a prospective
12 customer prior to entering into a binding contract for the
13 purchase and sale of a vehicle unless the customer is given a
14 written receipt that states how long the dealer will hold the
15 vehicle from other sale and the amount of the deposit, and
16 clearly and conspicuously states whether and upon what
17 conditions the deposit is refundable or nonrefundable.
18 (11) Add to the cash price of a vehicle as defined in
19 s. 520.02(2) any fee or charge other than those provided in
20 that section and in rule 69V-50.001 3D-50.001, Florida
21 Administrative Code. All fees or charges permitted to be added
22 to the cash price by rule 69V-50.001 3D-50.001, Florida
23 Administrative Code, must be fully disclosed to customers in
24 all binding contracts concerning the vehicle's selling price.
25 (12) Alter or change the odometer mileage of a
26 vehicle.
27 (13) Sell a vehicle without disclosing to the customer
28 the actual year and model of the vehicle.
29 (14) File a lien against a new vehicle purchased with
30 a check unless the dealer fully discloses to the purchaser
31 that a lien will be filed if purchase is made by check and
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1 fully discloses to the buyer the procedures and cost to the
2 buyer for gaining title to the vehicle after the lien is
3 filed.
4 (15) Increase the price of the vehicle after having
5 accepted an order of purchase or a contract from a buyer,
6 notwithstanding subsequent receipt of an official price change
7 notification. The price of a vehicle may be increased after a
8 dealer accepts an order of purchase or a contract from a buyer
9 if:
10 (a) A trade-in vehicle is reappraised because it
11 subsequently is damaged, or parts or accessories are removed;
12 (b) The price increase is caused by the addition of
13 new equipment, as required by state or federal law;
14 (c) The price increase is caused by the revaluation of
15 the United States dollar by the Federal Government, in the
16 case of a foreign-made vehicle;
17 (d) The price increase is caused by state or federal
18 tax rate changes; or
19 (e) Price protection is not provided by the
20 manufacturer, importer, or distributor.
21 (16) Advertise the price of a vehicle unless the
22 vehicle is identified by year, make, model, and a commonly
23 accepted trade, brand, or style name. The advertised price
24 must include all fees or charges that the customer must pay,
25 including freight or destination charge, dealer preparation
26 charge, and charges for undercoating or rustproofing. State
27 and local taxes, tags, registration fees, and title fees,
28 unless otherwise required by local law or standard, need not
29 be disclosed in the advertisement. When two or more dealers
30 advertise jointly, with or without participation of the
31 franchisor, the advertised price need not include fees and
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1 charges that are variable among the individual dealers
2 cooperating in the advertisement, but the nature of all
3 charges that are not included in the advertised price must be
4 disclosed in the advertisement.
5 (17) Charge a customer for any predelivery service
6 required by the manufacturer, distributor, or importer for
7 which the dealer is reimbursed by the manufacturer,
8 distributor, or importer.
9 (18) Charge a customer for any predelivery service
10 without having printed on all documents that include a line
11 item for predelivery service the following disclosure: "This
12 charge represents costs and profit to the dealer for items
13 such as inspecting, cleaning, and adjusting vehicles, and
14 preparing documents related to the sale."
15 (19) Fail to disclose damage to a new motor vehicle,
16 as defined in s. 319.001(8), of which the dealer had actual
17 knowledge, if the dealer's actual cost of repairs exceeds the
18 threshold amount, excluding replacement items.
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20 In any civil litigation resulting from a violation of this
21 section, when evaluating the reasonableness of an award of
22 attorney's fees to a private person, the trial court shall
23 consider the amount of actual damages in relation to the time
24 spent.
25 Section 4. Section 501.9765, Florida Statutes, is
26 created to read:
27 501.9765 Violations involving a senior citizen or
28 handicapped person; civil penalties; presumption.--
29 (1) As used in this section, the term:
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Florida Senate - 2007 SB 2214
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1 (a) "Handicapped person" means any person who has a
2 mental or educational impairment that substantially limits one
3 or more major life activities.
4 (b) "Major life activities" means functions associated
5 with the normal activities of independent daily living, such
6 as caring for oneself, performing manual tasks, walking,
7 seeing, hearing, speaking, breathing, learning, and working.
8 (c) "Mental or educational impairment" means:
9 1. Any mental or psychological disorder or specific
10 learning disability.
11 2. Any educational deficiency that substantially
12 affects a person's ability to read and comprehend the terms of
13 any contractual agreement entered into.
14 (d) "Senior citizen" means a person who is 60 years of
15 age or older.
16 (2) Any person who willfully uses, or has willfully
17 used, a method, act, or practice in violation of this part,
18 which method, act, or practice victimizes or attempts to
19 victimize a senior citizen or handicapped person, and commits
20 such violation when he or she knew or should have known that
21 his or her conduct was unfair or deceptive is liable for a
22 civil penalty of not more than $15,000 for each such
23 violation.
24 (3) Any order of restitution or reimbursement based on
25 a violation of this part committed against a senior citizen or
26 handicapped person has priority over the imposition of civil
27 penalties for violations of this section.
28 (4) Civil penalties collected under this section shall
29 be deposited into the Legal Affairs Revolving Trust Fund of
30 the Department of Legal Affairs and allocated to the
31 Department of Legal Affairs solely for the purpose of
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1 preparing and distributing consumer education materials,
2 programs, and seminars to benefit senior citizens and
3 handicapped persons or to enhance efforts to enforce this
4 section.
5 Section 5. Section 501.977, Florida Statutes, is
6 created to read:
7 501.977 Other individual remedies.--
8 (1) Without regard to any other remedy or relief to
9 which a person is entitled, anyone aggrieved by a violation of
10 this part by a dealer may bring an action against the dealer
11 in order to obtain a declaratory judgment that an act or
12 practice violates this part and to enjoin a dealer who has
13 violated, is violating, or is otherwise likely to violate this
14 part.
15 (2) In any action brought by a person who has suffered
16 a loss as a result of a violation of this part, the person may
17 recover actual damages plus attorney's fees and court costs as
18 provided in s. 501.979. However, damages, fees, or costs are
19 not recoverable under this section against a dealer who has,
20 in good faith, engaged in the dissemination of claims of a
21 manufacturer, distributor, importer, or wholesaler without
22 actual knowledge that doing so violates this part.
23 (3) In any action brought under this section, if,
24 after the filing of a motion by the dealer, the court finds
25 that the action is frivolous, without legal or factual merit,
26 or brought for the purpose of harassment, the court may, after
27 hearing evidence as to the necessity for a bond, require the
28 party instituting the action to post a bond in the amount that
29 the court finds reasonable to indemnify the defendant for any
30 costs incurred, or to be incurred, including reasonable
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1 attorney's fees, in defending the claim. This subsection does
2 not apply to any action initiated by the enforcing authority.
3 Section 6. Section 501.978, Florida Statutes, is
4 created to read:
5 501.978 Effect on other remedies.--
6 (1) The remedies of this part are in addition to
7 remedies otherwise available for the same conduct under state
8 or local law.
9 (2) This part is supplemental to, and does not
10 preempt, local consumer protection ordinances not inconsistent
11 with this part.
12 Section 7. Section 501.979, Florida Statutes, is
13 created to read:
14 501.979 Attorney's fees.--
15 (1) In any civil litigation resulting from an act or
16 practice involving a violation of this part, except as
17 provided in subsection (5) and s. 501.98, the prevailing
18 party, after judgment in the trial court and exhaustion of all
19 appeals, if any, shall receive his or her reasonable
20 attorney's fees and costs from the nonprevailing party. When
21 evaluating the reasonableness of an award of attorney's fees
22 to a private person, the trial court shall consider the actual
23 damages in relation to the time spent.
24 (2) The attorney for the prevailing party shall submit
25 a sworn affidavit of his or her time spent on the case and his
26 or her costs incurred for all the motions, hearings, and
27 appeals to the trial judge who presided over the civil case.
28 (3) The trial judge may award the prevailing party the
29 sum of reasonable costs incurred in the action and reasonable
30 attorney's fees for the hours actually spent on the case as
31 sworn to in an affidavit.
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1 (4) Any award of attorney's fees or costs becomes a
2 part of the judgment and is subject to execution as the law
3 allows.
4 (5) In any civil litigation initiated by the enforcing
5 authority, the court may award to the prevailing party
6 reasonable attorney's fees and costs if the court finds that
7 there was a complete absence of a justiciable issue of law or
8 fact raised by the nonprevailing party or if the court finds
9 bad faith on the part of the nonprevailing party.
10 (6) In any administrative proceeding or other
11 nonjudicial action initiated by an enforcing authority, the
12 attorney for the enforcing authority may certify by sworn
13 affidavit the number of hours and the cost thereof to the
14 enforcing authority for the time spent in the investigation
15 and litigation of the case, plus costs reasonably incurred in
16 the action. Payment to the enforcing authority of the sum of
17 the costs may, by stipulation of the parties, be made a part
18 of the final order or decree disposing of the matter. The
19 affidavit shall be attached to and become a part of the order
20 or decree.
21 Section 8. Section 501.98, Florida Statutes, is
22 created to read:
23 501.98 Demand letter.--
24 (1) As a condition precedent to initiating any civil
25 litigation arising under this part, a claimant must give the
26 dealer written notice of the claimant's intent to initiate
27 litigation against the dealer not less than 30 days before
28 initiating the litigation.
29 (2) The notice, which must be completed in good faith,
30 must:
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1 (a) State that it is a demand letter under "s. 501.98,
2 Florida Statutes";
3 (b) State the name, address, and telephone number of
4 the claimant;
5 (c) State the name and address of the dealer;
6 (d) Provide the date and a description of the
7 transaction, event, or circumstance that is the basis of the
8 claim;
9 (e) Describe with specificity the underlying facts and
10 how they give rise to an alleged violation of this part;
11 (f) To the extent applicable, be accompanied by all
12 transaction or other documents upon which the claim is based
13 or upon which the claimant is relying to assert the claim; and
14 (g) Include a comprehensive and detailed statement
15 describing each item of actual damage demanded by the claimant
16 and recoverable under this part and the amount claimed for
17 each item of damage, including, if applicable, the formula or
18 basis by which each item of damage was calculated.
19 (3)(a) The notice of the claim must be delivered to
20 the dealer by certified or registered United States mail,
21 return receipt requested. The postal costs shall be reimbursed
22 to the claimant by the dealer if the dealer pays the claim and
23 if the claimant requests reimbursement of the postal costs in
24 the notice of claim.
25 (b) If the dealer is a corporate entity, the notice of
26 claim must be sent to the registered agent of the dealer as
27 recorded with the Department of State and, in the absence of a
28 registered agent, any person listed in s. 48.081(1).
29 (4) Notwithstanding any provision of this part to the
30 contrary, a claimant may not initiate litigation against a
31 dealer for a claim arising under this part related to, or in
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1 connection with, the transaction or event described in the
2 notice of claim if the dealer pays the claimant within 30 days
3 after receiving the notice of claim:
4 (a) The amount requested in the demand letter as
5 specified in paragraph (2)(g); and
6 (b) A surcharge of 10 percent of the amount requested
7 in the demand letter, not to exceed $500.
8 (5) For the purpose of this section, payment by a
9 dealer is deemed paid on the date a draft or other valid
10 instrument that is equivalent to payment is placed in the
11 United States mail, or other nationally recognized carrier, in
12 a properly addressed, postpaid envelope, or, if not so posted,
13 on the date of delivery.
14 (6) The claimant is not entitled to a surcharge in any
15 proceeding initiated against a dealer under this part if the
16 dealer rejects or ignores the notice of claim.
17 (7) Notwithstanding any provision of this part to the
18 contrary, a dealer is not required to pay the attorney's fees
19 of the claimant in any civil action brought under this part
20 if:
21 (a) The dealer, within 30 days after receiving the
22 claimant's notice of claim, notifies the claimant in writing,
23 and a court or arbitrator agrees, that the amount claimed is
24 not supported by the facts of the transaction or event
25 described in the notice of claim or by generally accepted
26 accounting principles or includes items not properly
27 recoverable under this part; or
28 (b) The claimant fails to substantially comply with
29 this section.
30 (8) Payment of the actual damages or an offer to pay
31 actual damages as set forth in this section:
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1 (a) Does not constitute an admission of any wrongdoing
2 by the dealer;
3 (b) Is protected by s. 90.408; and
4 (c) Serves to release the dealer from any suit,
5 action, or other action that could be brought arising out of
6 or in connection with the transaction, event, or occurrence
7 described in the notice of claim.
8 (9) The applicable statute of limitations for an
9 action under this part is tolled for 30 days, or such other
10 period of time as agreed to by the parties in writing, by the
11 mailing of the notice required by this section.
12 (10) This section does not apply to:
13 (a) Any claim for actual damages brought and certified
14 as a maintainable class action; or
15 (b) Any action brought by the enforcing authority.
16 (11) The Department of Legal Affairs shall prepare a
17 form demand letter to incorporate the information required by
18 subsection (2) and make it available to the public.
19 (12) If a claimant initiates civil litigation under
20 this part without first complying with the requirements of
21 this section, the court, upon a motion by the claimant, may
22 abate the litigation, without prejudice, to permit the
23 claimant to comply with the provisions of this part and allow
24 the dealer the opportunity to accept or reject the demand in
25 accordance with subsection (4).
26 Section 9. Section 501.99, Florida Statutes, is
27 created to read:
28 501.99 Application.--This part does not apply to:
29 (1) An act or practice required or specifically
30 permitted by federal or state law.
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1 (2) A claim for personal injury or death or a claim
2 for damage to property other than the property that is the
3 subject of the consumer transaction.
4 (3) Any person or activity regulated under laws
5 administered by the Office of Insurance Regulation of the
6 Financial Services Commission.
7 (4) Any person or activity regulated under laws
8 administered by the former Department of Insurance that are
9 now administered by the Department of Financial Services.
10 Section 10. Subsection (8) is added to section
11 501.212, Florida Statutes, to read:
12 501.212 Application.--This part does not apply to:
13 (8) A claim brought by a person other than the
14 enforcing authority against a dealer as defined in s.
15 501.975(2).
16 Section 11. This act shall take effect upon becoming a
17 law.
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