HB 7101

1
A bill to be entitled
2An act relating to deceptive and unfair trade practices;
3amending s. 501.975, F.S.; providing definitions for part
4VI of ch. 501, F.S.; creating s. 501.9755, F.S.; declaring
5that unfair methods of competition, unconscionable acts or
6practices, and unfair or deceptive acts or practices used
7by motor vehicle dealers are unlawful; providing
8legislative intent; amending s. 501.976, F.S.; revising
9language concerning actionable, unfair, or deceptive acts
10or practices by dealers; correcting a cross-reference;
11creating s. 501.9765, F.S.; providing definitions;
12providing that a motor vehicle dealer who willfully uses a
13method or practice that victimizes or attempts to
14victimize senior citizens or handicapped persons commits
15an unfair or deceptive trade practice; providing a civil
16penalty; providing for reimbursement or restitution;
17providing for disposition of penalties; creating s.
18501.977, F.S.; providing additional remedies against a
19motor vehicle dealer; creating s. 501.978, F.S.; providing
20that the remedies of part VI of ch. 501, F.S., are in
21addition to remedies otherwise available for the same
22conduct under state or local law and do not preempt local
23consumer protection ordinances not in conflict with that
24part; creating s. 501.979, F.S.; providing for attorney's
25fees for a prevailing party; providing procedures for
26receiving attorney's fees; authorizing the Department of
27Legal Affairs or the office of the state attorney to
28receive attorney's fees and costs under certain
29circumstances; creating s. 501.98, F.S.; requiring that,
30as a condition precedent to initiating civil litigation
31arising under part VI of ch. 501, F.S., a claimant give
32the motor vehicle dealer written notice of the claimant's
33intent to initiate litigation within a specified period
34before initiating the litigation; providing for the
35content of the notice and the method of delivery of the
36notice; providing that if the claim is paid by the dealer
37within a specified period after receiving the notice, with
38a specified surcharge, the claimant may not initiate
39litigation against the dealer, and the dealer is obligated
40to pay only a set amount for the claimant's attorney's
41fees; providing a cap on the surcharge; providing that a
42claimant is not entitled to a surcharge under certain
43circumstances; providing that a dealer is not obligated to
44pay the claimant's attorney's fees under certain
45circumstances; providing for the effect of payment of
46actual damages or an offer to pay actual damages for
47specified purposes; providing that the statute of
48limitations is tolled for a certain period upon the
49mailing of a specified notice; requiring the Department of
50Legal Affairs to prepare a specified sample demand letter
51and a described explanation and make the documents
52available to the public; requiring the dealer to provide
53the documents at the time of transaction; permitting a
54court to abate litigation, without prejudice, until the
55claimant has complied with the required procedures and the
56dealer has opportunity to respond to demand; providing
57that failure to supply the documents at the time of
58transaction constitutes waiver by the dealer of the
59required notice; creating s. 501.99, F.S.; providing
60application of certain provisions; amending s. 501.212,
61F.S.; exempting certain claims against motor vehicle
62dealers from the provisions of part II of ch. 501, F.S.;
63providing an effective date.
64
65Be It Enacted by the Legislature of the State of Florida:
66
67     Section 1.  Section 501.975, Florida Statutes, is amended
68to read:
69     501.975  Definitions.--As used in this part s. 501.976, the
70term following terms shall have the following meanings:
71     (1)  "Customer" includes a customer's designated agent.
72     (2)  "Dealer" means a motor vehicle dealer as defined in s.
73320.27, but does not include a motor vehicle auction as defined
74in s. 320.27(1)(c)4.
75     (3)  "Replacement item" means a tire, bumper, bumper
76fascia, glass, in-dashboard equipment, seat or upholstery cover
77or trim, exterior illumination unit, grill, sunroof, external
78mirror and external body cladding. The replacement of up to
79three of these items does not constitute repair of damage if
80each item is replaced because of a product defect or damaged due
81to vandalism while the new motor vehicle is under the control of
82the dealer and the items are replaced with original manufacturer
83equipment, unless an item is replaced due to a crash, collision,
84or accident.
85     (4)  "Threshold amount" means 3 percent of the
86manufacturer's suggested retail price of a motor vehicle or
87$650, whichever is less.
88     (5)  "Vehicle" means any automobile, truck, bus,
89recreational vehicle, or motorcycle required to be licensed
90under chapter 320 for operation over the roads of Florida, but
91does not include trailers, mobile homes, travel trailers, or
92trailer coaches without independent motive power.
93     Section 2.  Section 501.9755, Florida Statutes, is created
94to read:
95     501.9755  Unlawful acts and practices.--
96     (1)  Unfair methods of competition, unconscionable acts or
97practices, and unfair or deceptive acts or practices in the
98conduct of any trade or commerce by a dealer are unlawful.
99     (2)  It is the intent of the Legislature that, in
100construing subsection (1), due consideration and great weight be
101given to the interpretations of the Federal Trade Commission and
102the federal courts relating to s. 5(a)(1) of the Federal Trade
103Commission Act, as amended, 15 U.S.C. s. 45(a)(1).
104     Section 3.  Section 501.976, Florida Statutes, is amended
105to read:
106     501.976  Actionable, unfair, or deceptive acts or
107practices.--In addition to acts and practices actionable under
108s. 501.9755, it is an unfair or deceptive act or practice,
109actionable under the Florida Deceptive and Unfair Trade
110Practices Act, for a dealer to:
111     (1)  Represent directly or indirectly that a motor vehicle
112is a factory executive vehicle or executive vehicle unless the
113such vehicle was purchased directly from the manufacturer or a
114subsidiary of the manufacturer and the vehicle was used
115exclusively by the manufacturer, its subsidiary, or a dealer for
116the commercial or personal use of the manufacturer's,
117subsidiary's, or dealer's employees.
118     (2)  Represent directly or indirectly that a vehicle is a
119demonstrator unless the vehicle complies with the definition of
120a demonstrator in s. 320.60(3).
121     (3)  Represent the previous usage or status of a vehicle to
122be something that it was not, or make usage or status
123representations unless the dealer has correct information
124regarding the history of the vehicle to support the
125representations.
126     (4)  Represent the quality of care, regularity of
127servicing, or general condition of a vehicle unless known by the
128dealer to be true and supportable by material fact.
129     (5)  Represent orally or in writing that a particular
130vehicle has not sustained structural or substantial skin damage
131unless the statement is made in good faith and the vehicle has
132been inspected by the dealer or his or her agent to determine
133whether the vehicle has incurred such damage.
134     (6)  Sell a vehicle without fully and conspicuously
135disclosing in writing at or before the consummation of sale any
136warranty or guarantee terms, obligations, or conditions that the
137dealer or manufacturer has given to the buyer. If the warranty
138obligations are to be shared by the dealer and the buyer, the
139method of determining the percentage of repair costs to be
140assumed by each party must be disclosed. If the dealer intends
141to disclaim or limit any expressed or implied warranty, the
142disclaimer must be in writing in a conspicuous manner and in lay
143terms in accordance with chapter 672 and the Magnuson-Moss
144Warranty--Federal Trade Commission Improvement Act.
145     (7)  Provide an express or implied warranty and fail to
146honor such warranty unless properly disclaimed pursuant to
147subsection (6).
148     (8)  Misrepresent warranty coverage, application period, or
149any warranty transfer cost or conditions to a customer.
150     (9)  Obtain signatures from a customer on contracts that
151are not fully completed at the time the customer signs or which
152do not reflect accurately the negotiations and agreement between
153the customer and the dealer.
154     (10)  Require or accept a deposit from a prospective
155customer prior to entering into a binding contract for the
156purchase and sale of a vehicle unless the customer is given a
157written receipt that states how long the dealer will hold the
158vehicle from other sale and the amount of the deposit, and
159clearly and conspicuously states whether and upon what
160conditions the deposit is refundable or nonrefundable.
161     (11)  Add to the cash price of a vehicle as defined in s.
162520.02(2) any fee or charge other than those provided in that
163section and in rule 69V-50.001 3D-50.001, Florida Administrative
164Code. All fees or charges permitted to be added to the cash
165price by rule 69V-50.001 3D-50.001, Florida Administrative Code,
166must be fully disclosed to customers in all binding contracts
167concerning the vehicle's selling price.
168     (12)  Alter or change the odometer mileage of a vehicle.
169     (13)  Sell a vehicle without disclosing to the customer the
170actual year and model of the vehicle.
171     (14)  File a lien against a new vehicle purchased with a
172check unless the dealer fully discloses to the purchaser that a
173lien will be filed if purchase is made by check and fully
174discloses to the buyer the procedures and cost to the buyer for
175gaining title to the vehicle after the lien is filed.
176     (15)  Increase the price of the vehicle after having
177accepted an order of purchase or a contract from a buyer,
178notwithstanding subsequent receipt of an official price change
179notification. The price of a vehicle may be increased after a
180dealer accepts an order of purchase or a contract from a buyer
181if:
182     (a)  A trade-in vehicle is reappraised because it
183subsequently is damaged, or parts or accessories are removed;
184     (b)  The price increase is caused by the addition of new
185equipment, as required by state or federal law;
186     (c)  The price increase is caused by the revaluation of the
187United States dollar by the Federal Government, in the case of a
188foreign-made vehicle;
189     (d)  The price increase is caused by state or federal tax
190rate changes; or
191     (e)  Price protection is not provided by the manufacturer,
192importer, or distributor.
193     (16)  Advertise the price of a vehicle unless the vehicle
194is identified by year, make, model, and a commonly accepted
195trade, brand, or style name. The advertised price must include
196all fees or charges that the customer must pay, including
197freight or destination charge, dealer preparation charge, and
198charges for undercoating or rustproofing. State and local taxes,
199tags, registration fees, and title fees, unless otherwise
200required by local law or standard, need not be disclosed in the
201advertisement. When two or more dealers advertise jointly, with
202or without participation of the franchisor, the advertised price
203need not include fees and charges that are variable among the
204individual dealers cooperating in the advertisement, but the
205nature of all charges that are not included in the advertised
206price must be disclosed in the advertisement.
207     (17)  Charge a customer for any predelivery service
208required by the manufacturer, distributor, or importer for which
209the dealer is reimbursed by the manufacturer, distributor, or
210importer.
211     (18)  Charge a customer for any predelivery service without
212having printed on all documents that include a line item for
213predelivery service the following disclosure: "This charge
214represents costs and profit to the dealer for items such as
215inspecting, cleaning, and adjusting vehicles, and preparing
216documents related to the sale."
217     (19)  Fail to disclose damage to a new motor vehicle, as
218defined in s. 319.001(8), of which the dealer had actual
219knowledge, if the dealer's actual cost of repairs exceeds the
220threshold amount, excluding replacement items.
221
222In any civil litigation resulting from a violation of this
223section, when evaluating the reasonableness of an award of
224attorney's fees to a private person, the trial court shall
225consider the amount of actual damages in relation to the time
226spent.
227     Section 4.  Section 501.9765, Florida Statutes, is created
228to read:
229     501.9765  Violations involving a senior citizen or
230handicapped person; civil penalties; presumption.--
231     (1)  As used in this section, the term:
232     (a)  "Handicapped person" means any person who has a mental
233or educational impairment that substantially limits one or more
234major life activities.
235     (b)  "Major life activities" means functions associated
236with the normal activities of independent daily living, such as
237caring for oneself, performing manual tasks, walking, seeing,
238hearing, speaking, breathing, learning, and working.
239     (c)  "Mental or educational impairment" means:
240     1.  Any mental or psychological disorder or specific
241learning disability.
242     2.  Any educational deficiency that substantially affects a
243person's ability to read and comprehend the terms of any
244contractual agreement entered into.
245     (d)  "Senior citizen" means a person who is 60 years of age
246or older.
247     (2)  Any person who willfully uses, or has willfully used,
248a method, act, or practice in violation of this part, which
249method, act, or practice victimizes or attempts to victimize a
250senior citizen or handicapped person, and commits such violation
251when he or she knew or should have known that his or her conduct
252was unfair or deceptive is liable for a civil penalty of not
253more than $15,000 for each such violation.
254     (3)  Any order of restitution or reimbursement based on a
255violation of this part committed against a senior citizen or
256handicapped person has priority over the imposition of civil
257penalties for violations of this section.
258     (4)  Civil penalties collected under this section shall be
259deposited into the Legal Affairs Revolving Trust Fund of the
260Department of Legal Affairs and allocated to the Department of
261Legal Affairs solely for the purpose of preparing and
262distributing consumer education materials, programs, and
263seminars to benefit senior citizens and handicapped persons or
264to enhance efforts to enforce this section.
265     Section 5.  Section 501.977, Florida Statutes, is created
266to read:
267     501.977  Other individual remedies.--
268     (1)  Without regard to any other remedy or relief to which
269a person is entitled, anyone aggrieved by a violation of this
270part by a dealer may bring an action against the dealer in order
271to obtain a declaratory judgment that an act or practice
272violates this part and to enjoin a dealer who has violated, is
273violating, or is otherwise likely to violate this part.
274     (2)  In any action brought by a person who has suffered a
275loss as a result of a violation of this part, the person may
276recover actual damages plus attorney's fees and court costs as
277provided in s. 501.979. However, damages, fees, or costs are not
278recoverable under this section against a dealer who has, in good
279faith, engaged in the dissemination of claims of a manufacturer,
280distributor, importer, or wholesaler without actual knowledge
281that doing so violates this part.
282     (3)  In any action brought under this section, if, after
283the filing of a motion by the dealer, the court finds that the
284action is frivolous, without legal or factual merit, or brought
285for the purpose of harassment, the court may, after hearing
286evidence as to the necessity for a bond, require the party
287instituting the action to post a bond in the amount that the
288court finds reasonable to indemnify the defendant for any costs
289incurred, or to be incurred, including reasonable attorney's
290fees, in defending the claim. This subsection does not apply to
291any action initiated by the enforcing authority.
292     Section 6.  Section 501.978, Florida Statutes, is created
293to read:
294     501.978  Effect on other remedies.--
295     (1)  The remedies of this part are in addition to remedies
296otherwise available for the same conduct under state or local
297law.
298     (2)  This part is supplemental to, and does not preempt,
299local consumer protection ordinances not inconsistent with this
300part.
301     Section 7.  Section 501.979, Florida Statutes, is created
302to read:
303     501.979  Attorney's fees.--
304     (1)  In any civil litigation resulting from an act or
305practice involving a violation of this part, except as provided
306in subsection (5) and s. 501.98, the prevailing party, after
307judgment in the trial court and exhaustion of all appeals, if
308any, shall receive his or her reasonable attorney's fees and
309costs from the nonprevailing party. When evaluating the
310reasonableness of an award of attorney's fees to a private
311person, the trial court shall consider the actual damages in
312relation to the time spent.
313     (2)  The attorney for the prevailing party shall submit a
314sworn affidavit of his or her time spent on the case and his or
315her costs incurred for all the motions, hearings, and appeals to
316the trial judge who presided over the civil case.
317     (3)  The trial judge may award the prevailing party the sum
318of reasonable costs incurred in the action and reasonable
319attorney's fees for the hours actually spent on the case as
320sworn to in an affidavit.
321     (4)  Any award of attorney's fees or costs becomes a part
322of the judgment and is subject to execution as the law allows.
323     (5)  In any civil litigation initiated by the enforcing
324authority, the court may award to the prevailing party
325reasonable attorney's fees and costs if the court finds that
326there was a complete absence of a justiciable issue of law or
327fact raised by the nonprevailing party or if the court finds bad
328faith on the part of the nonprevailing party.
329     (6)  In any administrative proceeding or other nonjudicial
330action initiated by an enforcing authority, the attorney for the
331enforcing authority may certify by sworn affidavit the number of
332hours and the cost thereof to the enforcing authority for the
333time spent in the investigation and litigation of the case, plus
334costs reasonably incurred in the action. Payment to the
335enforcing authority of the sum of the costs may, by stipulation
336of the parties, be made a part of the final order or decree
337disposing of the matter. The affidavit shall be attached to and
338become a part of the order or decree.
339     Section 8.  Section 501.98, Florida Statutes, is created to
340read:
341     501.98  Demand letter.--
342     (1)  As a condition precedent to initiating any civil
343litigation arising under this part, a claimant must give the
344dealer written notice of the claimant's intent to initiate
345litigation against the dealer not less than 15 business days
346before initiating the litigation.
347     (2)  The notice, which must be completed in good faith,
348must:
349     (a)  State that it is a demand letter under "s. 501.98,
350Florida Statutes";
351     (b)  State the name, address, and telephone number of the
352claimant;
353     (c)  State the name and address of the dealer;
354     (d)  Provide the date and a description of the transaction,
355event, or circumstance that is the basis of the claim;
356     (e)  Describe the facts and how they give rise to an
357alleged violation of this part;
358     (f)  To the extent applicable, be accompanied by all
359transaction or other documents in the claimant's possession upon
360which the claim is based or upon which the claimant is relying
361to assert the claim; and
362     (g)  Include a statement describing each item of actual
363damage demanded by the claimant and the amount claimed.
364     (3)  The notice of the claim must be delivered to the
365dealer by certified or registered United States mail, return
366receipt requested. The postal costs shall be reimbursed to the
367claimant by the dealer if the dealer pays the claim and if the
368claimant requests reimbursement of the postal costs in the
369notice of claim.
370     (4)  Notwithstanding any provision of this part to the
371contrary, a claimant may not initiate litigation against a
372dealer for a claim arising under this part related to, or in
373connection with, the transaction or event described in the
374notice of claim if the dealer pays the claimant within 15
375business days after receiving the notice of claim:
376     (a)  The amount requested in the demand letter as specified
377in paragraph (2)(g); and
378     (b)  A surcharge of 10 percent of the amount requested in
379the demand letter, not to exceed $500.
380     (5)  For the purpose of this section, payment by a dealer
381is deemed paid on the date a draft or other valid instrument
382that is equivalent to payment is placed in the United States
383mail, or other nationally recognized carrier, in a properly
384addressed, postpaid envelope, or, if not so posted, on the date
385of delivery.
386     (6)  The claimant is not entitled to a surcharge in any
387proceeding initiated against a dealer under this part if the
388dealer rejects or ignores the notice of claim.
389     (7)  Notwithstanding any provision of this part to the
390contrary, a dealer is not required to pay the attorney's fees of
391the claimant in any civil action brought under this part if:
392     (a)  The dealer, within 15 business days after receiving
393the claimant's notice of claim, notifies the claimant in
394writing, and a court or arbitrator agrees, that the amount
395claimed is not supported by the facts of the transaction or
396event described in the notice of claim or by generally accepted
397accounting principles or includes items not properly recoverable
398under this part; or
399     (b)  The claimant fails to substantially comply with this
400section.
401     (8)  Payment of the actual damages or an offer to pay
402actual damages as set forth in this section:
403     (a)  Does not constitute an admission of any wrongdoing by
404the dealer;
405     (b)  Is protected by s. 90.408; and
406     (c)  Serves to release the dealer from any suit, action, or
407other action that could be brought arising out of or in
408connection with the transaction, event, or occurrence described
409in the notice of claim.
410     (9)  The applicable statute of limitations for an action
411under this part is tolled for 15 business days, or such other
412period of time as agreed to by the parties in writing, by the
413mailing of the notice required by this section.
414     (10)  This section does not apply to:
415     (a)  Any claim for actual damages brought and certified as
416a maintainable class action; or
417     (b)  Any action brought by the enforcing authority.
418     (11)  The Department of Legal Affairs shall prepare a form
419demand letter to incorporate the information required by
420subsection (2) and shall prepare an explanation of this part.
421     (a)  The form and explanation shall be made available to
422the public by the department and shall be provided by the dealer
423to the customer at the time of the transaction.
424     (b)  The form provided by the dealer shall include the
425address where the demand letter must be sent.
426     (12)  If a claimant initiates civil litigation under this
427part without first complying with the requirements of this
428section, the court, upon a motion by the claimant, may abate the
429litigation, without prejudice, to permit the claimant to comply
430with the provisions of this part and allow the dealer the
431opportunity to accept or reject the demand in accordance with
432subsection (4).
433     (13)  Failure to provide the information required in
434subsection (11) by the dealer shall constitute waiver of the
435notice required under this part.
436     Section 9.  Section 501.99, Florida Statutes, is created to
437read:
438     501.99  Application.--This part does not apply to:
439     (1)  An act or practice required or specifically permitted
440by federal or state law.
441     (2)  A claim for personal injury or death or a claim for
442damage to property other than the property that is the subject
443of the consumer transaction.
444     (3)  Any person or activity regulated under laws
445administered by the Office of Insurance Regulation of the
446Financial Services Commission.
447     (4)  Any person or activity regulated under laws
448administered by the former Department of Insurance that are now
449administered by the Department of Financial Services.
450     Section 10.  Subsection (8) is added to section 501.212,
451Florida Statutes, to read:
452     501.212  Application.--This part does not apply to:
453     (8)  A claim brought by a person other than the enforcing
454authority against a dealer as defined in s. 501.975(2).
455     Section 11.  This act shall take effect upon becoming a
456law.


CODING: Words stricken are deletions; words underlined are additions.