This chapter may be cited as 'The Motor Vehicle Franchise Act.'

Every motor vehicle dealer shall have the right of free association with other motor vehicle dealers for any lawful purpose.

Notwithstanding the terms, provisions, or conditions of any dealer agreement or franchise or the terms or provisions of any waiver, and notwithstanding any other legal remedies available, any person who is injured in his business or property by a violation of this chapter by the commission of any unfair and deceptive trade practices, or because he refuses to accede to a proposal for an arrangement which, if consummated, would be in violation of this chapter, may bring a civil action in a court of competent jurisdiction in this state to enjoin further violations, to recover the damages sustained by him together with the costs of the suit, including a reasonable attorney's fee.

Except as otherwise provided in paragraph l. of subdivision (3) of Section 8-20-4, any civil action commenced under the provisions of this chapter must be brought within four years after the cause of action has accrued. The cause of action shall not accrue until the discovery by the aggrieved party of the fact or facts constituting a violation of the provisions of this chapter.

All procedures, protections, and remedies afforded to a motor vehicle dealer under Sections 8-20-1 through 8-20-12 of this chapter shall be available to a motor vehicle distributor whose distributor agreement is terminated, canceled, not renewed, modified or replaced by a manufacturer or an importer.

The legislature finds and declares that the distribution and sale of motor vehicles within this state vitally affect the general economy of the state and the public interest and the public welfare, and that in order to promote the public interest and the public welfare, and in the exercise of its police power, it is necessary to regulate motor vehicle manufacturers, distributors, dealers, and their representatives and to regulate the dealings between manufacturers and distributors or wholesalers and their dealers in order to prevent fraud and other abuses upon the citizens of this state and to protect and preserve the investments and properties of the citizens of this state.

For the purpose of this chapter, the following terms shall have the meanings respectively ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) DEALER AGREEMENT or FRANCHISE. The written contract between any new motor vehicle manufacturer and any new motor vehicle dealer which purports to fix the legal rights and liabilities of the parties to such agreement or contract, and pursuant to which the dealer purchases and resells the franchise product or leases or rents the dealership premises.

(2) DISTRIBUTOR or WHOLESALER. A person, whether a resident or a nonresident, other than a manufacturer, who sells or distributes motor vehicles to motor vehicle dealers or who maintains distributor representatives within the state.

(3) DISTRIBUTOR BRANCH. A branch office maintained by a distributor or wholesaler.

(4) DISTRIBUTOR REPRESENTATIVE. A representative employed by a distributor or wholesaler for the purpose of making or promoting the sale of the distributor's or wholesaler's new motor vehicles to motor vehicle dealers or for supervising or contracting the motor vehicle dealers or prospective motor vehicle dealers.

(5) FACTORY BRANCH. A branch office maintained by a manufacturer in order to direct and supervise the representatives of the manufacturer.

(6) FACTORY REPRESENTATIVE. A person employed by a manufacturer for the purpose of making or promoting the sale of the manufacturer's new motor vehicles to motor vehicle dealers or distributors or for supervising or contacting the motor vehicle dealers or prospective motor vehicle dealers.

(7) GOOD FAITH. Honesty in fact and the observation of reasonable commercial standards of fair dealing in the trade as is defined and interpreted in paragraph (1)(b) of Section 7-2-103.

(8) MANUFACTURER. Any person engaged in the manufacturing or assembling of new motor vehicles as a regular business or any person who is controlled by the manufacturer.

(9) MOTOR VEHICLE. Every vehicle intended primarily for use and operation on the public highways which is self-propelled.

(10) MOTOR VEHICLE DEALER. A person operating under a dealer agreement from a manufacturer or distributor and who is engaged regularly in the business of buying, selling, or exchanging motor vehicles in this state and who has in this state an established place of business.

(11) NEW MOTOR VEHICLE. A vehicle which has been sold to a new motor vehicle dealer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer.

(12) PERSON. An individual, firm, partnership, association, joint stock company, corporation, or other legal entity or a combination of legal entities.

(13) RELEVANT MARKET AREA. The area within a radius of 20 miles around an existing dealer or the area of responsibility defined in the franchise, whichever is greater; except that, where a manufacturer is seeking to establish an additional new motor vehicle dealer and there are one or more existing new motor vehicle dealers of the same line make within a 10 mile radius of the proposed dealer site, the 'relevant market area' shall in all instances be the area within a radius of 10 miles around an existing dealer.

Notwithstanding the terms, provisions, or conditions of any dealer agreement or franchise or the terms or provisions of any waiver, prior to the termination, cancellation, or nonrenewal of any dealer agreement or franchise, the following acts or conduct shall constitute unfair and deceptive trade practices:

(1) For any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to coerce or attempt to coerce any motor vehicle dealer:

a. To accept, buy or order any motor vehicle or vehicles, appliances, equipment, parts, or accessories therefor, or any other commodity or commodities or service or services which such motor vehicle dealer has not voluntarily ordered or requested except items required by applicable local, state or federal law; or to require a motor vehicle dealer to accept, buy, order or purchase such items in order to obtain any motor vehicle or vehicles or any other commodity or commodities which have been ordered or requested by such motor vehicle dealer;

b. To order or accept delivery of any motor vehicle with special features, appliances, accessories, or equipment not included in the list price of said motor vehicles as publicly advertised by the manufacturer thereof, except items required by applicable law;

c. To enter into any agreement with such manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch or distributor representative, to do any other act prejudicial to said dealer, the effect of which is to reduce the motor vehicle dealer's allocation of motor vehicles or cancel or fail to renew any franchise or any dealer agreement existing between the parties other than as hereinafter provided; provided, however, that this subsection is not intended to preclude the manufacturer or distributor from insisting on compliance with the reasonable terms or provisions of the franchise, and notice in good faith to any motor vehicle dealer of said dealer's violation of any reasonable terms or provisions of such franchise or dealer agreement or of any law or regulation applicable to the conduct of a motor vehicle dealer shall not constitute a violation of this chapter;

d. To participate monetarily in an advertising campaign or contest, or to purchase any promotional materials, training materials, showroom or other display decorations or materials at the expense of the new motor vehicle dealer. This paragraph is not intended to modify any reasonable and uniformly applied provision of the franchise which requires the new motor vehicle dealer to advertise and promote the sale of vehicles and does not apply to campaigns, contests, advertising and other promotional programs in which the new motor vehicle dealer voluntarily elects to participate;

e. To refrain from participation in the management of, investment in, or the acquisition of any other line of new motor vehicle or related products; provided that the new motor vehicle dealer maintains a reasonable line of credit for each make or line of new motor vehicle, and that the new motor vehicle dealer remains in substantial compliance with the terms and conditions of the franchise and with any reasonable facilities requirements of the manufacturer;

f. To change the location of the new motor vehicle dealership or, during the course of the agreement, to make any substantial alterations to the dealership premises when to do so would be unreasonable; or

g. To establish or maintain exclusive facilities, personnel or display space for a new motor vehicle make or line, if such requirement is not reasonable.

(2) For any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, distributor representative, or motor vehicle dealer to engage in any action with respect to a franchise which is arbitrary, in bad faith or unconscionable and which causes damage to any of the parties.

(3) For any manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch or distributor representative:

a. To adopt, change, establish, or implement a plan or system for the allocation and distribution of new or used motor vehicles to motor vehicle dealers which is arbitrary, capricious, or unreasonably discriminatory or to modify an existing plan so as to cause the same to be arbitrary, capricious, or unreasonably discriminatory;

b. To fail or refuse to advise or disclose to any motor vehicle dealer having a franchise or dealer agreement, upon written request therefor, the basis upon which new motor vehicles of the same line make are allocated or distributed to motor vehicle dealers in the state and the basis upon which the current allocation or distribution is being made or will be made to such motor vehicle dealer;

c. To refuse to deliver to a motor vehicle dealer in reasonable quantities and within a reasonable time after receipt of the motor vehicle dealer's order any such motor vehicles as are covered by a franchise or dealer agreement and specifically publicly advertised in the state by such manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative to be available for immediate delivery; provided, however, that the failure to deliver any motor vehicle shall not be considered a violation of this chapter if such failure is due to an act of God, a work stoppage or delay due to a strike or labor difficulty, a shortage of materials, lack of available manufacturing capacity, a freight embargo or other cause over which the manufacturer, factory branch, factory representative, distributor, or wholesaler, distributor branch, or distributor representative shall have no control;

d. To cancel or terminate the franchise or dealer agreement of a motor vehicle dealer other than as hereinafter provided;

e. To fail or refuse to extend the franchise or dealer agreement of a motor vehicle dealer upon its expiration other than as hereinafter provided;

f. To offer a renewal, replacement or succeeding franchise or dealer agreement containing terms and provisions the effect of which is to substantially change or modify the sales and service obligations or capital requirements of the motor vehicle dealer other than as hereinafter provided;

g. To offer to sell or lease, or to sell or lease, any new motor vehicle to any motor vehicle dealer at a lower actual price therefor than the actual price offered to any other motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device including, but not limited to, sales promotion plans or programs which result in such lesser actual price and which are not offered to dealers of vehicles of the same line make; provided, however, that the provisions of this paragraph shall not apply to sale to a motor vehicle dealer for resale to any unit of the United States government, the state or any of its political subdivisions;

h. To offer to sell or lease, or to sell or lease, any new motor vehicle to any person, except a wholesaler's or distributor's or manufacturer's employees, at a lower actual price therefor than the actual price offered and charged to a motor vehicle dealer for the same model vehicle similarly equipped or to utilize any device which results in such lesser actual price and which are not offered to dealers of vehicles of the same line make; provided, however, that the provisions of this paragraph shall not apply to sales to a motor vehicle dealer for resale to any unit of the United States government, the state or any of its political subdivisions;

i. To prevent or attempt to prevent by contract or otherwise any motor vehicle dealer from changing the executive management control of the motor vehicle dealer unless such change of executive management control will result in executive management control by a person or persons who are not of good moral character or who do not meet the manufacturer's or wholesaler's or distributor's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the new motor vehicle dealer, uniformly applied minimum business experience standards in the market area; provided, however, that where the manufacturer, or distributor, or wholesaler rejects a proposed change in executive management control, the manufacturer, or distributor, or wholesaler shall give written notice of his reasons to the motor vehicle dealer within 45 days of notice to the manufacturer, or wholesaler, or distributor by the motor vehicle dealer of the proposed change accompanied by information reflecting the identity, business experience and affiliations, and source of investment funds of the proposed new management;

j. To prevent or attempt to prevent by contract or otherwise any motor vehicle dealer from establishing or changing the capital structure of his dealership or the means by or through which he finances the operation thereof; provided the dealer meets any reasonable capital standards agreed to between the motor vehicle dealer and the manufacturer, distributor, or wholesaler, who may require that the sources, method and manner by which the motor vehicle dealer finances or intends to finance its operation, equipment or facilities be fully disclosed;

k. To refuse to give effect to or prevent or attempt to prevent by contract or otherwise any motor vehicle dealer or any officer, partner or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person unless such sale or transfer is to a transferee who would not otherwise qualify for a new motor vehicle dealer's license issued by the State of Alabama or a political subdivision thereof or unless such sale or transfer is to a person who is not of good moral character or who does not meet the manufacturer's or wholesaler's or distributor's existing and reasonable capital standards and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards in the market area; provided, however, that where such a rejection of a transfer is made the manufacturer or distributor or wholesaler shall give written notice of his reasons to the motor vehicle dealer within 60 days of notice to the manufacturer or wholesaler or distributor by the dealer of the proposed transfer accompanied by information reflecting the identity of the new owner or owners, their business experience and affiliations and the pro forma balance sheet and source of investment funds of the proposed new dealership. A manufacturer or distributor may exercise a contractual right of first refusal with respect to the sale or transfer of the interest of the dealer only if each of the following requirements are met:

1. The sale or transfer is not to a family member of an owner of the dealership, nor a managerial employee of the dealership owning 15 percent or more of the dealership, nor a corporation, partnership, or other legal entity owned by the existing owners of the dealership. For purposes of this subparagraph, a 'family member' means the spouse of an owner of the dealership, the child, grandchild, brother, sister, or parent of an owner, or a spouse of one of those family members.

2. The manufacturer or distributor notifies the dealer in writing within 60 days after receipt of the completed application forms and related information generally used by a manufacturer or distributor to conduct its review and a copy of all agreements regarding the proposed transfer of its intent to exercise its right of first refusal or its rejection of the proposed transfer. If the manufacturer or distributor fails to notify the dealer of its exercise of the right of first refusal or its rejection of the proposed transferee within the 60-day period, the effect of such failure shall constitute approval of the proposed sale or transfer. If the manufacturer or distributor exercises a right of first refusal under this section, the transfer shall be deemed to be rejected.

3. The exercise of the right of first refusal provides to the dealer the same compensation as, or greater compensation than, the dealer had negotiated to receive from the proposed buyer or transferee.

4. The manufacturer or distributor agrees to pay the reasonable expenses, including reasonable attorneys' and accountants' fees that do not exceed the usual, customary, and reasonable fees charged for similar work done for other clients incurred by the proposed buyer or transferee before the manufacturer's or distributor's exercise of its right of first refusal in negotiating and implementing the contract for the sale or transfer. The proposed buyer or transferee shall provide to the manufacturer or distributor a written itemization of the expenses incurred within 30 days of the receipt by the proposed buyer or transferee of a written request from the manufacturer or distributor for an accounting of the expenses. The manufacturer or distributor shall make payment of these expenses within 30 days of exercising the right of first refusal.

l. To unreasonably and without notice to existing motor vehicle dealers, as hereinafter provided, enter into a franchise with an additional motor vehicle dealer who intends to conduct its dealership operations from a place of business situated within the relevant market area of an existing motor vehicle dealer or motor vehicle dealers representing the same line make. The appointment of a successor motor vehicle dealer at the same location as its predecessor or within a two-mile radius therefrom within two years from the date on which its predecessor ceased operations or was terminated, whichever occurred later, shall not be construed as the entering into of an additional franchise. Any manufacturer, distributor, or wholesaler, factory branch, factory representative, distributor branch, or distributor representative which intends to enter into an additional franchise shall, at least 60 days prior to granting such franchise, give written notice of its intention to do so to each motor vehicle dealer of the same line make within the relevant market area. Such notice shall state the date on or after which such proposed franchise shall be granted or entered into. Prior to the date set forth in said notice on or after which such franchise will be entered into, any such motor vehicle dealer may petition a court of competent jurisdiction to determine whether such appointment or proposed appointment is unreasonable in which action the manufacturer, wholesaler, or distributor shall have the burden of proof that such action is not unreasonable. No bond shall be required as a precondition to entry of an injunction enjoining appointment of an additional franchise. Such petition shall be entitled to a speedy trial. In determining whether such proposed appointment is unreasonable, the court shall consider all pertinent circumstances. These may include but are not limited to:

1. Whether the establishment of such additional franchise is warranted by economic and marketing conditions including anticipated future changes;

2. The past, present, and anticipated retail sales and service business transacted by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area;

3. The investment made and obligations incurred by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area;

4. Whether it is beneficial or injurious to the public welfare for an additional franchise to be established.

m. To prospectively assent to a release, assignment, novation, waiver, or estoppel which would relieve any person from any liability or obligation under this chapter or to require any controversy between a new motor vehicle dealer and a manufacturer to be referred to any person other than the duly constituted courts of this state or the United States, if the referral would be binding on the new motor vehicle dealer;

n. To prevent or refuse to give effect to the succession to the ownership or management control of a dealership upon the death or incapacity of a motor vehicle dealer to any legatee or devisee under the will of a dealer or to an heir under the laws of descent and distribution of this state unless the successor is a person who is not of good moral character or who does not meet the manufacturer's or distributor's or wholesaler's existing and reasonable capital standards and, with consideration given to the volume of the sales and service of the dealership, uniformly applied minimum business experience standards in the market area; provided, however, that where such a rejection of succession is made, the manufacturer or distributor or wholesaler shall give written notice of his reasons to the proposed successor within 60 days of notice to the manufacturer or wholesaler or distributor by the proposed successor of his intent to succeed to the ownership or management of the dealership accompanied by information reflecting the identity of the new owner or owners, their business experience and affiliation and the pro forma balance sheet and source of investment funds of the proposed new dealership. This section does not preclude the owner of a new motor vehicle dealer from designating any person as his successor by written instrument filed with the manufacturer or distributor and, in the event there is a conflict between such written instrument and the provisions of this section, the written instrument shall govern;

o. To fail to indemnify and hold harmless its motor vehicle dealers against any losses, including, but not limited to, court costs and reasonable attorneys' fees, or damages arising out of complaints, claims, or lawsuits, including, but not limited to, strict liability, negligence, misrepresentation, warranty (express or implied), or rescission of the sale where the complaint, claim or lawsuit relates to (i) the manufacture, assembly or design of new motor vehicles, parts or accessories; (ii) a defect in any forms furnished to the dealer or in the written instructions for the completion of such forms by the manufacturer, an affiliate of the manufacturer, or person controlled by the manufacturer used in connection with the sale, lease, or financing of a vehicle and associated products, unless the dealer improperly completes the forms or makes misrepresentations contrary either to the terms of the forms or the written instructions for their completion; or (iii) other functions by the manufacturer, beyond the control of the dealer, including, without limitation, the selection by the manufacturer of parts or components for the vehicle, or any damages to merchandise occurring in transit to the dealer where the carrier is designated by the manufacturer;

p. To increase prices of new motor vehicles which the new motor vehicle dealer had ordered for retail consumers prior to the dealer's receipt of the written official price increase notification. A sales contract signed by a retail consumer shall constitute evidence of each such order; provided that the vehicle is in fact delivered to that customer. In the event of manufacturer price reductions or cash rebates, the amount of any such reduction or rebate received by a dealer shall be passed on to the retail consumer by the dealer if the retail price was negotiated on the basis of the previous higher price to the dealer. Price reductions shall apply to all vehicles in the dealer's inventory which were subject to the price reduction. Price differences applicable to new model or series motor vehicles at the time of the introduction of new models or series shall not be considered a price increase or price decrease. Price changes caused by either: (i) the addition to a motor vehicle of required or optional equipment pursuant to state or federal law; (ii) revaluation of the United States dollar, in the case of foreign-made vehicles or components; or (iii) an increase in transportation charges due to increased rates imposed by common or contract carriers, shall not be subject to the provisions of this paragraph;

q. To offer any refunds or other types of inducements to any person for the purchase of new motor vehicles of a certain line make to be sold to the state or any political subdivision thereof without making the same offer to all other new motor vehicle dealers in the same line make within the state;

r. To release to any outside party, except under subpoena, or as otherwise required by law or in an administrative, judicial, or arbitration proceeding, any business, financial, or personal information which may be from time to time provided by the dealer to the manufacturer, without the express written consent of the dealer;

s. To own an interest in a new motor vehicle dealership, to operate or control a dealership, to make direct sales or leases of new motor vehicles to the public in Alabama, or to own, operate, or control a facility for performance of motor vehicle warranty or repair service work, except as follows:

1. The manufacturer or distributor is owning or operating a new motor vehicle dealership or a warranty repair facility for a temporary period of not more than 24 months, as long as the new motor vehicle dealership or warranty repair center is for sale at a reasonable price and on reasonable terms and conditions; or

2. The manufacturer's or distributor's participation is in a bona fide relationship with an independent person (i) who is required to make significant investment in the new motor vehicle dealership or warranty repair center subject to loss, (ii) and operates the dealership or warranty repair center and may reasonably be expected to acquire full ownership of the dealership or warranty repair center within a reasonable time and under reasonable terms and conditions.

3. The manufacturer or distributor is selling or leasing new motor vehicles in Alabama to its qualified vendors, not-for-profit organizations, fleets, or the federal, state, or local government if sold or leased and delivered through new motor vehicle dealers in this state. The manufacturer or distributor is selling or leasing new motor vehicles in Alabama to its employees and employees' families if delivered through new motor vehicle dealers in this state. The manufacturer or distributor is implementing a program to sell or lease or offer to sell or lease new motor vehicles through new motor vehicle dealers in this state.

4. The manufacturer or distributor owns a passive interest of not more than 10 percent in a publicly traded corporation held exclusively for investment purposes.

5. A manufacturer of recreational vehicles which as of December 31, 1999, owns, operates, or controls a facility in this state for performance of motor vehicle warranty repair or service work on recreational vehicles manufactured by that manufacturer.

6. The manufacturer or distributor is owning, operating, or controlling an entity primarily engaged in the business of renting passenger and commercial motor vehicles and industrial and construction equipment, as well as activities incidental to said businesses, including warranty and repair work on vehicles that it owns, previously owned, or takes in trade.

t. To make any material change in any franchise agreement without giving the dealer written notice by certified mail of such change at least 60 days prior to the effective date of such change.

u. To fail to pay or otherwise compensate its new motor vehicle dealers for sales incentives, service incentives, rebates, or other forms of incentive compensation earned by the dealer as a consequence of incentive programs of the manufacturer. The manufacturer shall have the right to audit any such incentive payments made to the dealer and to charge back the dealer for any fraudulent claims for incentive payments made to the dealer for a period not to exceed the current and the immediately preceding calendar year from payment of a claim. A manufacturer shall not disapprove claims for which the dealer has received preauthorization from the manufacturer or its representative nor shall the manufacturer unreasonably disapprove a claim solely based on the dealer's incidental failure to comply with a specific claim processing requirement that results only in a clerical error or administrative error; rather a claim denial must be based upon a material defect and deviation from the reasonable written claim submission requirements of the manufacturer.

v. To fail or refuse to offer its same line make franchised dealers all models of new motor vehicles manufactured for that line make and offered to any dealer in this state. No unreasonable additional requirements, over the requirements originally required to obtain a franchise from the manufacturer, may be required of existing franchised dealers to receive any model by that line make. The provisions in this paragraph shall not apply to recreational vehicles and reasonable requirements of a manufacturer that its dealers obtain tools or diagnostic equipment to properly service its line make of motor vehicles. The failure to deliver any such new motor vehicle shall not be considered a violation of this section if the failure is due to a lack of manufacturing capacity or to a strike or labor difficulty, a shortage of materials, a freight embargo, or any other cause over which the manufacturer has no control.

(a) Notwithstanding the terms, provisions, or conditions of any agreement or franchise or notwithstanding the terms or provisions of any waiver, no manufacturer shall cancel, terminate, modify, fail to renew, or refuse to continue any franchise relationship with a licensed new motor vehicle dealer unless the manufacturer has:

(1) Satisfied the notice requirement of this section;

(2) Acted in good faith as defined in this chapter;

(3) Has good cause for the cancellation, termination, modification, nonrenewal, or noncontinuance.

(b) Notwithstanding the terms, provisions or conditions of any agreement or franchise or the terms or provisions of any waiver, good cause shall exist for the purposes of a termination, cancellation, modification, nonrenewal, or noncontinuance when:

(1) There is a failure by the new motor vehicle dealer to comply with a provision of the franchise which provision is both reasonable and of material significance to the franchise relationship, provided that the manufacturer first acquired actual or constructive knowledge of such failure not more than 180 days prior to the date on which notification is given by the manufacturer pursuant to the requirements of this section;

(2) If the failure by the new motor vehicle dealer to comply with a provision of the franchise relates to the performance of the dealer in sales or service, then good cause shall be defined as the failure of the dealer to substantially comply with the reasonable performance provisions of the franchise if:

a. The new motor vehicle dealer was apprised by the manufacturer in writing of such failure; and

1. Said notification stated that notice was provided of failure of performance pursuant to this chapter; and

2. The new motor vehicle dealer was afforded a reasonable opportunity, for a period of not less than six months, to exert good faith efforts to carry out such provisions; and

3. The new motor vehicle dealer did not demonstrate substantial compliance with the manufacturer's performance standards during such period and that the failure to demonstrate such compliance was not due to factors which were beyond the control of such dealer.

b. Such failure thereafter continued within the period which began not more than 180 days before the date notification of termination, cancellation, modification, or nonrenewal was given pursuant to this section; and

(c) The manufacturer shall have the burden of proof for showing that it has acted in good faith, that the notice requirements have been complied with, and that there was good cause for the franchise termination, cancellation, modification, nonrenewal, or noncontinuance.

(d) Notwithstanding the terms, provisions or conditions of any agreement or franchise or the terms or provisions of any waiver, prior to the termination, cancellation, modification, or nonrenewal of any franchise, the manufacturer shall furnish notification of such termination, cancellation, modification, or nonrenewal to the new motor vehicle dealer as follows:

(1) In the manner described in subsection (e); and

(2) Not less than 90 days prior to the effective date of such termination, cancellation, modification, or nonrenewal or not less than 30 days prior to the effective date of such termination, cancellation, or nonrenewal with respect to any of the following:

a. Filing of any petition by or against the new motor vehicle dealer under any bankruptcy or receivership law;

b. Willful or intentional misrepresentation made by the new motor vehicle dealer with the express intent to defraud the manufacturer or distributor;

c. Failure of the new motor vehicle dealer to conduct its customary sales and service operations during its customary business hours for seven consecutive business days;

d. Final conviction (including appeal) of the new motor vehicle dealer, principal owner or principal executive manager of any felony.

(e) Notification under this section shall be in writing; shall be by certified mail or personally delivered to the new motor vehicle dealer; and shall contain:

(1) A statement of intention to terminate the franchise, cancel the franchise, modify the franchise or not to renew the franchise; and

(2) A statement of the reasons for the termination, cancellation, modification, or nonrenewal; and

(3) The date on which such termination, cancellation, modification, or nonrenewal takes effect.

(f) Upon the termination, cancellation, or nonrenewal by the manufacturer of any franchise for good cause, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the:

(1) New motor vehicle inventory of the current and previous model year which has been acquired from the manufacturer. Any new and unused motor vehicle repurchased by the manufacturer shall be repurchased at the net cost to the dealer;

(2) Supplies and parts acquired by the new motor vehicle dealer from the manufacturer or its approved sources within seven years prior to the effective date of the termination, cancellation, or nonrenewal;

(3) Equipment, signs and furnishings acquired by the new motor vehicle dealer from the manufacturer or its approved sources;

(4) Special tools;

(5) Dealership facilities, if the facilities were required to be purchased or constructed as a precondition to obtaining the franchise or to its renewal by the manufacturer. The manufacturer shall use its best efforts to locate a purchaser who will offer to purchase the facilities at a reasonable price. If the manufacturer does not locate a purchaser within a reasonable time, the manufacturer will pay the dealer an amount equivalent to the reasonable rental value of such facilities for three years during which time the manufacturer shall be entitled to possession of said facilities. If the facilities were leased and the lease was required as a precondition to obtaining the franchise or to its renewal by the manufacturer, then the manufacturer shall use its best efforts to locate a lessee who will offer to lease the premises for a reasonable term at a reasonable rent. If the manufacturer does not locate a lessee within a reasonable time, the manufacturer shall pay such rent for three years or the remainder of the term of the lease, whichever is less and the manufacturer shall have the option to succeed to the rights of the dealer under the lease.

(g) Upon the termination, cancellation, or nonrenewal by the manufacturer of any franchise without good cause, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the personal property described in subdivisions (f)(1) through (f)(4) and for the dealership facilities, if the facilities were required to be purchased or constructed as a precondition to obtain the franchise or to its renewal by the manufacturer. If the facilities were leased and the lease was required as a precondition to obtaining the franchise or to its renewal by the manufacturer, then the manufacturer shall be liable for payment of the rent for the remainder of the term of the lease during which time the manufacturer shall be entitled to possession of said facilities. The manufacturer shall also pay the dealer fair and reasonable compensation for the value of the dealership within six months after the date of termination, cancellation, or nonrenewal.

(h) Upon the termination, cancellation, or nonrenewal by the manufacturer of any franchise as a result of willful or intentional misrepresentations made by the new motor vehicle dealer with the express intent to defraud the manufacturer or distributor or upon the termination, cancellation, or nonrenewal by the motor vehicle dealer, the new motor vehicle dealer shall be paid fair and reasonable compensation by the manufacturer for the personal property described in subdivisions (f)(1) through (f)(4).

(i) The fair and reasonable compensation to the dealer shall be paid by the manufacturer within 90 days after tender by the dealer of the items in subdivisions (f)(1) through (f)(4) at the dealership premises, provided the new motor vehicle dealer has clear title to the inventory and other items and is in a position to convey that title to the manufacturer.

(j) The terms and provisions of subsections (f) through (i) of this section shall not apply upon the termination, cancellation, or nonrenewal of a franchise by a motor home or motorcycle dealer.

Every manufacturer or wholesaler or distributor, factory branch, factory representative, distributor branch or distributor representative shall specify to the motor vehicle dealer the delivery and preparation obligations of its motor vehicle dealers prior to delivery of new motor vehicles to retail buyers. A copy of the delivery and preparation obligations of its motor vehicle dealers and a schedule of the compensation to be paid to its motor vehicle dealers for the work and services they shall be required to perform in connection with such delivery and preparation obligations shall be presented to the dealer and the obligations specified therein shall constitute any such dealer's only predelivery obligations as between such dealer and such manufacturer or wholesaler or distributor. The compensation as set forth on said schedule shall be reasonable.

(a) Every manufacturer, distributor, or wholesaler, factory branch, factory representative, distributor branch, or distributor representative shall specify in writing to each of its motor vehicle dealers the dealer's obligation for warranty service on its products, shall compensate the motor vehicle dealer for warranty service required of the dealer by the manufacturer, distributor, or wholesaler, factory branch, factory representative, distributor branch, or distributor representative and shall provide the dealer the schedule of compensation to be paid such dealer for parts, work and service in connection with warranty services, and the time allowance for the performance of such work and service.

(b) In no event shall such schedule of compensation fail to include reasonable compensation for diagnostic work, service, labor, and parts. Time allowances for the diagnosis and performance of warranty work and service shall be reasonable and adequate for the work to be performed. In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration shall be the prevailing wage rates being paid by the dealer, in the community in which the dealer is doing business, and in no event shall such compensation of a dealer for warranty services including labor and parts, be less than the rates or prices charged by such dealer for like service to retail customers for nonwarranty service, repairs and parts, provided that such prices and rates are not unreasonable. This subsection does not apply to compensation for parts, systems, fixtures, appliances, furnishings, accessories, and features of a motor home that are designed, used and maintained primarily for non-vehicular residential purposes, or parts related to motorcycle repairs.

(c) It is a violation of this section for any manufacturer, distributor, or wholesaler, factory branch, factory representative, distributor branch or distributor representative to fail to perform any warranty obligations under the motor vehicle manufacturer's warranty, or to fail to include in written notices of factory recalls to dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of such defects, or to fail to compensate any of the motor vehicle dealers for repairs effected by such recall.

(d) All claims made by new motor vehicle dealers pursuant to this section for such labor and parts shall be paid within 30 days following their approval; provided, however, that the manufacturer retains the right to audit such claims and to charge back the dealer for any fraudulent claims for a period not to exceed the current and the immediately preceding calendar year following payment. All such claims shall be either approved or disapproved within 30 days after their receipt on forms and in the manner specified by the manufacturer, and any claim not specifically disapproved in writing within 30 days after the receipt shall be construed to be approved and payment must follow within 30 days. A manufacturer shall not disapprove claims for which the dealer has received preauthorization from the manufacturer or its representative nor shall the manufacturer unreasonably disapprove a claim solely based on the dealer's incidental failure to comply with a specific claim processing requirement that results only in a clerical error or administrative error; rather a claim denial must be based upon a material defect and deviation from the reasonable written claim submission requirements of the manufacturer.

Every manufacturer and new motor vehicle dealer shall fulfill the terms of any express or implied warranty concerning the sale of a new motor vehicle to the public of the line make which is the subject of a contract or franchise agreement between the parties. If it is determined by a court of competent jurisdiction that either the manufacturer or new motor vehicle dealer, or both, have violated an express or implied warranty, the court shall add to any award or relief granted an additional award for reasonable attorney's fees.

(a) Notwithstanding the terms, provisions, or conditions of any agreement or franchise, the new motor vehicle dealer is solely liable for damages to new motor vehicles occurring after acceptance of the new motor vehicle from the carrier and before delivery to the ultimate purchaser.

(b) Notwithstanding the terms, provisions, or conditions of any agreement or franchise, the manufacturer is liable for all damages to motor vehicles occurring before delivery to a carrier or transporter. If a new motor vehicle dealer determines the method of transportation, the risk of loss passes to the dealer upon delivery of the vehicle to the carrier. In every other instance, the risk of loss remains with the manufacturer until such time as the new motor vehicle dealer or his designee accepts the vehicle from the carrier.

(c) With respect to new or used vehicles sold or otherwise transferred by the manufacturer to a new motor vehicle dealer, the manufacturer shall notify in writing the new motor vehicle dealer of all damage and repairs made to such vehicle which is known to the manufacturer.