Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                         CHAPTER 34-H.F.No. 241 
           An act relating to commerce; modifying certain motor 
          vehicle sale and distribution regulations; amending 
          Minnesota Statutes 1984, sections 80E.04, subdivision 
          4; 80E.06, subdivision 1; 80E.10, subdivision 5; 
          80E.12; and 80E.14, subdivision 1; repealing Minnesota 
          Statutes 1984, section 80E.03, subdivision 11. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 80E.04, 
subdivision 4, is amended to read: 
    Subd. 4.  [PAYMENT OF CLAIMS.] All claims made by new motor 
vehicle dealers pursuant to this section for labor and parts 
shall be paid within 30 days of their approval.  Claims shall be 
either approved or disapproved within 30 days after they are 
submitted to the manufacturer in the manner and on the forms it 
prescribes, and any claims not specifically disapproved in 
writing within 30 days after the manufacturer receives them 
shall be construed to be approved and payment must follow within 
30 days; provided, however, that the manufacturer retains the 
right to audit the claims for a period of two years one year and 
to charge back any amounts paid on unsubstantiated claims not 
reasonably substantiated or fraudulent claims.  The audit and 
charge back provisions of this subdivision also apply to all 
other incentive and reimbursement programs that are subject to 
audit by the manufacturer. 
    Sec. 2.  Minnesota Statutes 1984, section 80E.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [REQUIREMENTS.] Notwithstanding the terms 
of any franchise agreement or waiver to the contrary, no 
manufacturer shall cancel or terminate any franchise 
relationship with a licensed new motor vehicle dealer unless the 
manufacturer has:  
    (a) Satisfied the notice requirement of section 80E.08;  
    (b) Acted in good faith as defined in section 80E.03, 
subdivision 9; and 
    (c) Good cause for the cancellation or termination.  
    For the purposes of sections 80E.06 to 80E.09, a 
manufacturer includes a distributor.  Any action by a 
manufacturer terminating a contractual relationship with a 
distributor is not effective to terminate existing valid 
franchises running from the distributor to new motor vehicle 
dealers unless the manufacturer follows the provisions of 
sections 80E.06 to 80E.09. 
    Sec. 3.  Minnesota Statutes 1984, section 80E.10, 
subdivision 5, is amended to read: 
    Subd. 5.  [CERTAIN FRANCHISES ONLY.] This section applies 
only when the franchise agreement has a term of at least five 
years.  In all other instances, nonrenewal must be treated as a 
termination or cancellation under the provisions of sections 
80E.06 to 80E.09.  However, nothing in this section shall 
prohibit a manufacturer from offering or agreeing before 
expiration of the current franchise term to extend the term of 
the franchise for a limited period in order to satisfy the time 
of notice or nonrenewal requirement contained herein.  
    Sec. 4.  Minnesota Statutes 1984, section 80E.12, is 
amended to read: 
    80E.12 [UNLAWFUL ACTS BY MANUFACTURERS, DISTRIBUTORS, OR 
FACTORY BRANCHES.] 
    It shall be unlawful for any manufacturer, distributor, or 
factory branch to require a new motor vehicle dealer to do any 
of the following:  
    (a) Order or accept delivery of any new motor vehicle, part 
or accessory thereof, equipment, or any other commodity not 
required by law which has not been voluntarily ordered by the 
new motor vehicle dealer;  
    (b) Order or accept delivery of any new motor vehicle, part 
or accessory thereof, equipment, or any other commodity not 
required by law in order for the dealer to obtain delivery of 
any other motor vehicle ordered by the dealer or to qualify for 
or participate in any rebate, refund, or similar program offered 
by the manufacturer;  
    (c) Order or accept delivery of any new motor vehicle with 
special features, accessories, or equipment not included in the 
list price of the motor vehicles as publicly advertised by the 
manufacturer or distributor;  
     (d) Participate monetarily in an advertising campaign or 
contest, or to purchase any promotional materials, showroom, or 
other display decorations or materials at the expense of the new 
motor vehicle dealer;  
     (e) Enter into any agreement with the manufacturer or to do 
any other act prejudicial to the new motor vehicle dealer by 
threatening to cancel a franchise or any contractual agreement 
existing between the dealer and the manufacturer.  Notice in 
good faith to any dealer of the dealer's violation of any terms 
of the franchise agreement shall not constitute a violation of 
sections 80E.01 to 80E.17; 
     (f) Change the capital structure of the new motor vehicle 
dealer or the means by or through which the dealer finances the 
operation of the dealership; provided, that the new motor 
vehicle dealer at all times meets any reasonable capital 
standards agreed to by the dealer; and also provided, that no 
change in the capital structure shall cause a change in the 
principal management or have the effect of a sale of the 
franchise without the consent of the manufacturer or distributor 
as provided in section 80E.13, paragraph (j);  
    (g) Prevent or attempt to prevent, by contract or 
otherwise, any motor vehicle dealer from changing the executive 
management control of the new motor vehicle dealer unless the 
franchisor proves that the change of executive management will 
result in executive management control by a person who is not of 
good moral character or who does not meet the franchisor's 
existing reasonable capital standards and, with consideration 
given to the volume of sales and services of the new motor 
vehicle dealer, uniformly applied minimum business experience 
standards in the market area; provided, that where the 
manufacturer, distributor, or factory branch rejects a proposed 
change in executive management control, the manufacturer, 
distributor, or factory branch shall give written notice of its 
reasons to the dealer;  
    (h) Refrain from participation in the management of, 
investment in, or the acquisition of, any other line of new 
motor vehicle or related products; provided, however, that this 
clause does not apply unless 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;  
    (i) During the course of the agreement, change the location 
of the new motor vehicle dealership or make any substantial 
alterations to the dealership premises during the course of the 
agreement, when to do so would be unreasonable; or 
    (j) Prospectively assent to a release, assignment, 
novation, waiver, or estoppel whereby a dealer relinquishes any 
rights under sections 80E.01 to 80E.17, or which would relieve 
any person from liability imposed by sections 80E.01 to 80E.17 
or to require any controversy between a new motor vehicle dealer 
and a manufacturer, distributor, or factory branch to be 
referred to any person or tribunal other than the duly 
constituted courts of this state or the United States, if the 
referral would be binding upon the new motor vehicle dealer.  
    Sec. 5.  Minnesota Statutes 1984, section 80E.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [NOTIFICATION; PROTEST; HEARING.] In the 
event that a manufacturer seeks to enter into a franchise 
establishing an additional new motor vehicle dealership or 
relocating an existing new motor vehicle dealership within or 
into a relevant market area where the line make is then 
represented, the manufacturer shall, in writing, first notify 
each new motor vehicle dealer in this line make in the relevant 
market area of the intention to establish an additional 
dealership or to relocate an existing dealership within or into 
that market area.  The relevant market area is a radius of ten 
miles around an existing dealership.  Within 15 days of 
receiving the notice or within 15 days after the end of any 
appeal procedure provided by the manufacturer, the new motor 
vehicle dealership may commence a civil action in a court of 
competent jurisdiction pursuant to section 80E.17 challenging 
the establishing or relocating of the new motor vehicle 
dealership.  An action brought under this section shall be 
placed on the calendar ahead of other civil actions to be heard 
and determined as expeditiously as possible.  Thereafter the 
manufacturer shall not establish or relocate the proposed new 
motor vehicle dealership unless the court has determined that 
there is good cause for permitting the establishment or 
relocation of the motor vehicle dealership.  
    For the purposes of this section, the reopening in a 
relevant market area of a new motor vehicle dealership within 
two miles of a location at which a former dealership of the same 
line make had been in operation within the previous two years 
shall not be deemed the establishment of a new motor vehicle 
dealership if the reopening is carried out in good faith and 
does not violate the provisions of section 80E.13, paragraph (i).
    The relocation of an existing dealer within its area of 
responsibility as defined in the franchise agreement shall not 
be subject to this section, if the proposed relocation site is 
not within five miles of an existing dealer of the same line 
make.  
    Sec. 6.  [REPEALER.] 
    Minnesota Statutes 1984, section 80E.03, subdivision 11, is 
repealed. 
    Approved April 29, 1985