46.2-1993.67 - Other coercion of dealers; transfer, grant, succession to and cancellation of dealer franchises; delivery of motorcycles, parts, and accessories.
§ 46.2-1993.67. Other coercion of dealers; transfer, grant, succession to andcancellation of dealer franchises; delivery of motorcycles, parts, andaccessories.
It shall be unlawful for any manufacturer, factory branch, distributor, ordistributor branch, or any field representative, officer, agent, or theirrepresentatives:
1. To coerce or attempt to coerce any dealer to accept delivery of anymotorcycle or motorcycles, parts or accessories therefor, or any othercommodities, which have not been ordered by the dealer.
2. To coerce or attempt to coerce any dealer to enter into an agreement withthe manufacturer, factory branch, distributor, or distributor branch, orrepresentative thereof, or do any other act unfair to the dealer, bythreatening to cancel any franchise existing between the manufacturer,factory branch, distributor, distributor branch, or representative thereofand the dealer.
3. To coerce or attempt to coerce any dealer to join, contribute to, oraffiliate with any advertising association.
4. To prevent or refuse to approve the sale or transfer of the ownership of adealership by the sale of the business, stock transfer, or otherwise, or thetransfer, sale, or assignment of a dealer franchise, or a change in theexecutive management or principal operator of the dealership, unless thefranchisor provides written notice to the dealer of its objection and thereasons therefor at least 30 days prior to the proposed effective date of thetransfer, sale, assignment, or change. No such objection shall be effectiveto prevent the sale, transfer, assignment, or change if the Commissioner hasdetermined, if requested in writing by the dealer within 30 days afterreceipt of an objection to the proposed sale, transfer, or change, and aftera hearing on the matter, that the failure to permit or honor the sale,transfer, assignment, or change is unreasonable under the circumstances. Nofranchise may be sold, assigned, or transferred unless (i) the franchisor hasbeen given at least 90 days' prior written notice by the dealer as to theidentity, financial ability, and qualifications of the proposed transfereeand (ii) the sale or transfer of the franchise and business will not involve,without the franchisor's consent, a relocation of the business.
5. To grant an additional franchise for a particular line-make of motorcyclein a relevant market area in which a dealer or dealers in that line-make arealready located unless the franchisor has first advised in writing, bycertified mail, return receipt requested, all other dealers in the line-makein the relevant market area. No such additional franchise may be establishedat the proposed site unless the Commissioner has determined, if requested bya dealer of the same line-make in the relevant market area within 30 daysafter receipt of the franchisor's notice of intention to establish theadditional franchise, and after a hearing on the matter, that there isreasonable evidence that after the grant of the new franchise, the marketwill support all of the dealers in that line-make in the relevant marketarea. Establishing a franchised dealer in a relevant market area to replace afranchised dealer that has not been in operation for more than two yearsshall constitute the establishment of a new franchise subject to the terms ofthis subdivision. The two-year period for replacing a franchised dealer shallbegin on the day the franchise was terminated, or, if a termination hearingwas held, on the day the franchisor was legally permitted finally toterminate the franchise. This subdivision shall not apply to (i) therelocation of an existing dealer within that dealer's relevant market area ifthe relocation site is to be more than 10 miles distant from any other dealerfor the same line-make; (ii) the relocation of an existing dealer within thatdealer's relevant market area if the relocation site is to be more distantthan the existing site from all other dealers of the same line-make in thatrelevant market area; or (iii) the relocation of an existing new motorcycledealer within two miles of the existing site of the relocating dealer.
6. Except as otherwise provided in this subdivision and notwithstanding theterms of any franchise, to terminate, cancel, or refuse to renew thefranchise of any dealer without good cause and unless (i) the dealer and theCommissioner have received written notice of the franchisor's intentions atleast 60 days prior to the effective date of such termination, cancellation,or the expiration date of the franchise, setting forth the specific groundsfor the action, and (ii) the Commissioner has determined, if requested inwriting by the dealer within the 60-day period, and after a hearing on thematter, that there is good cause for the termination, cancellation, ornonrenewal of the franchise. In any case where a petition is made to theCommissioner for a determination as to good cause for the termination,cancellation, or nonrenewal of a franchise, the franchise in question shallcontinue in effect pending the Commissioner's decision or, if that decisionis appealed to the circuit court, pending the decision of the circuit court.In any case in which a franchisor neither advises a dealer that it does notintend to renew a franchise nor takes any action to renew a franchise beyondits expiration date, the franchise in question shall continue in effect onthe terms last agreed to by the parties. Notwithstanding the other provisionsof this subdivision, notice of termination, cancellation, or nonrenewal maybe provided to a dealer by a franchisor not less than 15 days prior to theeffective date of such termination, cancellation, or nonrenewal when thegrounds for such action are any of the following:
a. Insolvency of the franchised motorcycle dealer or filing of any petitionby or against the franchised motorcycle dealer, under any bankruptcy orreceivership law, leading to liquidation or which is intended to lead toliquidation of the franchisee's business;
b. Failure of the franchised motorcycle dealer to conduct its customary salesand service operations during its posted business hours for seven consecutivebusiness days, except where the failure results from acts of God orcircumstances beyond the direct control of the franchised motorcycle dealer;
c. Revocation of any license which the franchised motorcycle dealer isrequired to have to operate a dealership;
d. Conviction of the dealer or any principal of the dealer of a felony.
The change or discontinuance of a marketing or distribution system of aparticular line-make product by a manufacturer or distributor, while the nameidentification of the product is continued in substantial form by the same ordifferent manufacturer or distributor, may be considered to be a franchisetermination, cancellation, or nonrenewal. The provisions of this paragraphshall apply to changes and discontinuances made after January 1, 1989, butthey shall not be considered by any court in any case in which such a changeor discontinuance occurring prior to that date has been challenged asconstituting a termination, cancellation or nonrenewal.
7. To fail to provide continued parts and service support to a dealer whichholds a franchise in a discontinued line-make for at least five years fromthe date of such discontinuance. This requirement shall not apply to aline-make which was discontinued prior to January 1, 1989.
8. To fail to allow a dealer the right at any time to designate a member ofhis family as a successor to the dealership in the event of the death orincapacity of the dealer. It shall be unlawful to prevent or refuse to honorthe succession to a dealership by a member of the family of a deceased orincapacitated dealer if the franchisor has not provided to the member of thefamily previously designated by the dealer as his successor written notice ofits objections to the succession and of such person's right to seek a hearingon the matter before the Commissioner pursuant to this article, and theCommissioner determines, if requested in writing by such member of the familywithin 30 days of receipt of such notice from the franchisor, and after ahearing on the matter before the Commissioner pursuant to this article, thatthe failure to permit or honor the succession is unreasonable under thecircumstances. No member of the family may succeed to a franchise unless (i)the franchisor has been given written notice as to the identity, financialability, and qualifications of the member of the family in question and (ii)the succession to the franchise will not involve, without the franchisor'sconsent, a relocation of the business.
9. To fail to ship monthly to any dealer, if ordered by the dealer, thenumber of new motorcycles of each make, series, and model needed by thedealer to receive a percentage of total new motorcycle sales of each make,series, and model equitably related to the total new motorcycle production orimportation currently being achieved nationally by each make, series, andmodel covered under the franchise. Upon the written request of any dealerholding its sales or sales and service franchise, the manufacturer ordistributor shall disclose to the dealer in writing the basis upon which newmotorcycles are allocated, scheduled, and delivered to the dealers of thesame line-make. If allocation is at issue in a request for a hearing, thedealer may demand the Commissioner to direct that the manufacturer ordistributor provide to the dealer, within 30 days of such demand, all recordsof sales and all records of distribution of all motorcycles to the sameline-make dealers who compete with the dealer requesting the hearing.
10. To require or otherwise coerce a dealer to underutilize the dealer'sfacilities.
11. To include in any franchise with a motorcycle dealer terms that arecontrary to, prohibited by, or otherwise inconsistent with the requirementsof this chapter.
12. For any franchise agreement to require a motorcycle dealer to pay theattorney's fees of the manufacturer or distributor related to hearings andappeals brought under this article.
13. To fail to include in any franchise with a motorcycle dealer thefollowing language: "If any provision herein contravenes the laws orregulations of any state or other jurisdiction wherein this agreement is tobe performed, or denies access to the procedures, forums, or remediesprovided for by such laws or regulations, such provision shall be deemed tobe modified to conform to such laws or regulations, and all other terms andprovisions shall remain in full force," or words to that effect.
14. To include in any franchise agreement with a motorcycle dealer terms thatprohibit a motorcycle dealer from exercising his right to a trial by jury inany action where such right otherwise exists.
(1996, cc. 1043, 1052; 1997, c. 802; 2010, c. 610.)