Senate Bill No. 372–Senator Townsend

March 11, 1999

____________

Referred to Committee on Transportation

 

SUMMARY—Revises provisions governing franchises for dealers in new motor vehicles. (BDR 43-156)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to motor vehicles; revising the rights of dealers in new vehicles as against manufacturers, importers and distributors; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 482 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 to 8, inclusive, of this act.

1-3 Sec. 2. 1. In addition to other criteria provided for determining

1-4 whether good cause exists for terminating, refusing to continue,

1-5 modifying or replacing a franchise, or for establishing an additional

1-6 dealership or relocating an existing dealership, the director shall

1-7 consider the lasting nature of each affected dealer’s investment. The

1-8 investment includes commitments of the owner to the dealership, the

1-9 value of time and effort devoted to building the business, and any real

1-10 property of the owner used by the dealership whether or not held in the

1-11 name of the dealership.

1-12 2. The sole fact that a manufacturer or distributor desires further

1-13 penetration of the market does not constitute good cause to take any of

1-14 the actions described in subsection 1.

1-15 Sec. 3. The director shall adopt regulations for the conduct of

1-16 discovery preliminary to each hearing required pursuant to NRS

1-17 482.36352, 482.36354 or 482.36357. The practice so established must

1-18 conform insofar as practicable to the practice established for use in the

1-19 district courts pursuant to N.R.C.P. 26 to 37, inclusive.

2-1 Sec. 4. A manufacturer or distributor, or an agent, officer, parent,

2-2 subsidiary or enterprise under common control with a manufacturer or

2-3 distributor shall not own or operate a facility for the repair or

2-4 maintenance of motor vehicles except:

2-5 1. Vehicles owned or operated by the manufacturer, distributor or a

2-6 related person; or

2-7 2. Service required to comply with a statute or regulation or the order

2-8 of a court.

2-9 Sec. 5. It is an unfair act or practice for a manufacturer or

2-10 distributor to:

2-11 1. Sell or offer to sell a new motor vehicle to a dealer at a lower

2-12 actual price than the actual price offered to another dealer for the same

2-13 model similarly equipped or to use a promotion or other device that

2-14 results in a lower actual price. This subsection does not apply to a sale to

2-15 a governmental unit or to a dealer for resale to a governmental unit, or

2-16 to a sale to a dealer of a vehicle ultimately sold, donated or used by the

2-17 dealer or in a program of driver’s education.

2-18 2. Offer, sell or lease a new motor vehicle to any person, except a

2-19 distributor, at a lower actual price than the price offered or charged a

2-20 dealer for the same model similarly equipped, or use any device that

2-21 results in a lower actual price.

2-22 3. Offer or sell parts or accessories to a dealer for his own use in

2-23 repairing or replacing the same or a comparable part or accessory at a

2-24 lower actual price than the actual price charged to another dealer for his

2-25 own similar use, but a lower price may be charged to a dealer who buys

2-26 as a distributor for resale to retail outlets than is charged to a dealer who

2-27 does not buy for that purpose.

2-28 Sec. 6. A manufacturer, importer or distributor shall not:

2-29 1. Adopt or put into effect a method for the allocation, scheduling or

2-30 delivery of new motor vehicles, parts or accessories to its dealers that is

2-31 not fair, reasonable and equitable or change an existing method so as to

2-32 be unfair, unreasonable or inequitable. Upon the request of a dealer, a

2-33 manufacturer, importer or distributor shall disclose in writing to the

2-34 dealer the method by which new motor vehicles, parts and accessories are

2-35 allocated, scheduled or delivered to its dealers handling the same line or

2-36 make of vehicles.

2-37 2. Refuse or fail to deliver, in reasonable quantities and within a

2-38 reasonable time after receipt of an order, to a dealer holding a franchise

2-39 for a line or make of motor vehicle sold or distributed by the

2-40 manufacturer, importer or distributor any new vehicle sold under the

2-41 same name, trade-mark, service mark or brand, or parts or accessories

2-42 for the new vehicle, if the vehicle, parts or accessories are being delivered

2-43 to others or advertised as available for delivery, or require a dealer to

3-1 purchase unreasonable advertising displays or other materials, or require

3-2 a dealer to remodel or renovate his existing facilities as a prerequisite to

3-3 receiving a model or series of vehicles. Compliance with this subsection

3-4 is excused if prevented by an act of God, strike or labor dispute, embargo

3-5 or other cause beyond the control of the manufacturer, importer or

3-6 distributor.

3-7 Sec. 7. 1. Except as otherwise provided in NRS 482.36396 to

3-8 482.36414, inclusive, if a transfer of the entire, or substantially the

3-9 entire, ownership or of all, or substantially all, the assets of a dealership

3-10 is proposed, a manufacturer or distributor may exercise a contractual

3-11 right of first refusal only if all the following requirements are met:

3-12 (a) The transfer is not to the dealer’s spouse, a member of his family,

3-13 a qualified manager, or a trust or artificial person controlled by any of

3-14 them.

3-15 (b) The manufacturer or distributor notifies the dealer in writing,

3-16 within 60 days after receipt of the completed form and information

3-17 customarily used to review such transfers and a copy of all relevant

3-18 agreements, of its intent to exercise the right of first refusal or its

3-19 rejection of the proposed transfer. If the manufacturer or distributor fails

3-20 to notify the dealer within the 60-day period, the effect is to approve the

3-21 proposed transfer.

3-22 (c) The exercise of the right of first refusal provides to the dealer the

3-23 same compensation as or greater compensation than he had negotiated

3-24 to receive from the proposed transferee.

3-25 (d) The manufacturer or distributor agrees to pay the reasonable

3-26 expenses, including attorney’s fees that do not exceed the usual and

3-27 reasonable fees charged to other clients for similar work, incurred by the

3-28 proposed transferee before the exercise of the right of first refusal in

3-29 negotiating and putting into effect the proposed transfer.

3-30 2. A manufacturer or distributor shall not utilize a right of first

3-31 refusal to influence terms offered by a third person, or to influence a

3-32 third person to refrain from negotiating, for the acquisition of a

3-33 dealership.

3-34 Sec. 8. A manufacturer shall not require a dealer to disclose

3-35 information concerning a customer to the manufacturer or a third party

3-36 if the customer objects or the disclosure is otherwise unlawful.

3-37 Sec. 9. NRS 482.36311 is hereby amended to read as follows:

3-38 482.36311 As used in NRS 482.36311 to 482.36425, inclusive, and

3-39 sections 2 to 8, inclusive, of this act, unless the context otherwise requires,

3-40 the words and terms defined in NRS 482.36319 to 482.36345, inclusive,

3-41 have the meanings ascribed to them in those sections.

4-1 Sec. 10. NRS 482.36352 is hereby amended to read as follows:

4-2 482.36352 1. Notwithstanding the terms of any franchise, a

4-3 manufacturer or distributor shall not terminate or refuse to continue any

4-4 franchise unless it has received the written consent of the dealer or:

4-5 (a) It has given written notice of its intention to the dealer and the

4-6 director; and

4-7 (b) Either of the following conditions occurs:

4-8 (1) The dealer does not file a protest with the director within the time

4-9 allowed by this section; or

4-10 (2) After the dealer has filed a protest and the director has conducted

4-11 a hearing on the matter, the director issues an order authorizing the

4-12 manufacturer or distributor to terminate the franchise or permit it to lapse.

4-13 2. The notice required by this section must be given to the dealer and

4-14 the director:

4-15 (a) At least 15 days before the effective date of the intended termination

4-16 or the date on which the existing franchise is to expire if the grounds for the

4-17 termination or refusal include any of the following:

4-18 (1) Except as otherwise provided in NRS 482.36396 to 482.36414,

4-19 inclusive, transfer of any ownership or interest in the franchised dealership

4-20 without the consent of the manufacturer or distributor unless that consent

4-21 has been withheld without good cause;

4-22 (2) Material misrepresentation by the dealer in applying for the

4-23 franchise;

4-24 (3) Insolvency of the dealer or the filing of any petition by or against

4-25 the dealer under any law governing bankruptcy or receivership ; [law;]

4-26 (4) Any unfair business practice by the dealer after the manufacturer

4-27 or distributor has issued a written warning to the dealer to desist from that

4-28 practice;

4-29 (5) Revocation of a dealer’s license under this chapter;

4-30 (6) Conviction of the dealer for a felony; and

4-31 (7) Closure by the dealer for a period longer than 14 days, unless the

4-32 closure was caused by a force beyond the control of the dealer.

4-33 (b) At least 60 days before the effective date of the intended termination

4-34 or the date on which the existing franchise is to expire if the grounds for the

4-35 termination or refusal do not include one or more of those set forth in

4-36 paragraph (a).

4-37 The notice required by this section must include a statement of the

4-38 particular grounds for the intended termination or refusal to continue a

4-39 franchise.

4-40 3. A dealer who has received a notice pursuant to this section may file

4-41 a protest with the director:

4-42 (a) Within 10 days after receiving the notice if it states one or more of

4-43 the grounds specified in paragraph (a) of subsection 2; [or]

5-1 (b) Within 30 days after receiving the notice if it does not state one of

5-2 the grounds specified in that paragraph [.] ; or

5-3 (c) In either case, within 30 days after the end of any appellate

5-4 procedure provided by the manufacturer or distributor.

5-5 Sec. 11. NRS 482.363521 is hereby amended to read as follows:

5-6 482.363521 1. Upon the termination or refusal to continue a

5-7 franchise, the manufacturer or distributor shall compensate the dealer for:

5-8 (a) The dealer’s inventory of new vehicles, including new vehicles not

5-9 of the current model year. As used in this paragraph, a "new vehicle" is one

5-10 which has not been damaged or materially altered and registers 50 miles or

5-11 less on its odometer.

5-12 (b) The dealer’s inventory of parts and accessories which:

5-13 (1) Have been purchased by the dealer from the manufacturer or

5-14 distributor; and

5-15 (2) Are listed in a current parts catalog of the manufacturer or

5-16 distributor.

5-17 (c) Any special tools purchased by the dealer from the manufacturer or

5-18 distributor, less a reasonable allowance for depreciation.

5-19 (d) Any equipment, furnishings or signs purchased by the dealer from

5-20 the manufacturer or distributor, less a reasonable allowance for

5-21 depreciation.

5-22 (e) Except as otherwise provided in subsection 4, the fair rental value

5-23 for 90 days , and any additional period allowed by the director after

5-24 considering the difficulty of finding a new tenant for the dealer’s

5-25 premises affected, after the effective date of the termination or refusal to

5-26 continue of the portion of the dealer’s place of business that was used by

5-27 the dealer to sell or service motor vehicles or other products of the

5-28 manufacturer or distributor.

5-29 2. Compensation paid pursuant to paragraphs (a) to (d), inclusive, of

5-30 subsection 1 must be paid in an amount at least equal to the greater of:

5-31 (a) The amount actually paid by the dealer for the vehicles, parts, tools

5-32 and equipment; or

5-33 (b) The amount currently paid by other dealers in this state for the

5-34 vehicles, parts, tools and equipment.

5-35 3. If compensation is paid pursuant to paragraph (e) of subsection 1,

5-36 the dealer shall allow the manufacturer or distributor paying [such] the

5-37 compensation the use and possession of the [place of business.] premises

5-38 affected.

5-39 4. The manufacturer or distributor is not required to pay compensation

5-40 pursuant to paragraph (e) of subsection 1 if the dealer has been convicted

5-41 of a crime involving fraud in connection with his application for or

5-42 operation of the franchise.

6-1 5. This section does not relieve a dealer of his obligation to mitigate

6-2 damages resulting from the termination or refusal to continue the franchise.

6-3 Sec. 12. NRS 482.36355 is hereby amended to read as follows:

6-4 482.36355 In determining whether good cause has been established for

6-5 permitting a manufacturer or distributor to terminate, refuse to continue,

6-6 modify or replace a franchise, the director shall consider, without

6-7 limitation:

6-8 1. The amount of business transacted by the dealer, as compared to the

6-9 business available to the dealer, but only if there was merchandise available

6-10 to the dealer in sufficient quantities of models to match competitive makes

6-11 and models available in the relevant marketing area. All transactions and all

6-12 registrations must be taken into account within the area covered by the

6-13 franchise.

6-14 2. The investment necessarily made and obligations incurred by the

6-15 dealer to perform its part of the franchise.

6-16 3. [The permanency of the dealer’s investment.

6-17 4.] Whether the proposed action would be injurious or beneficial to the

6-18 public welfare.

6-19 [5.] 4. Whether the dealer has adequate new facilities for sales and

6-20 service, equipment, vehicle parts and qualified personnel to provide

6-21 reasonably for the needs of the customers for the new vehicles handled by

6-22 the dealer, and whether he has been and is rendering adequate services to

6-23 the public.

6-24 [6.] 5. Whether the dealer fails to fulfill warranty obligations of the

6-25 manufacturer or distributor to be performed by the dealer.

6-26 [7.] 6. The extent of the dealer’s failure, if any, to comply with the

6-27 terms of the franchise.

6-28 [8.] 7. Whether the dealer, his successor in interest or the manufacturer

6-29 or distributor has complied with the provisions of NRS 482.36396 to

6-30 482.36414, inclusive.

6-31 Sec. 13. NRS 482.36358 is hereby amended to read as follows:

6-32 482.36358 In determining whether good cause has been established for

6-33 preventing a manufacturer or distributor from establishing an additional

6-34 dealership or relocating an existing dealership within the relevant market

6-35 area of another dealer in the same line and make of vehicles, the director

6-36 shall consider, without limitation:

6-37 1. [The permanency of the investment of each affected dealer.

6-38 2.] The effect of the intended action on the business of selling new

6-39 motor vehicles at retail in the relevant market area.

6-40 [3.] 2. Whether the establishment of an additional dealership or the

6-41 relocation of an existing dealership for motor vehicles of the particular line

6-42 and make would be injurious to the welfare of the public.

7-1 [4.] 3. Whether the dealers franchised to sell new motor vehicles of the

7-2 particular line and make in the relevant market area are providing adequate

7-3 competition, convenient customer service and adequate personnel and

7-4 facilities for sales of the vehicles to persons in the area, as well as adequate

7-5 equipment, spare parts and qualified mechanics and other service personnel

7-6 for repair and maintenance of the vehicles.

7-7 [5.] 4. Whether the establishment of an additional dealership or the

7-8 relocation of an existing dealership would increase constructive

7-9 competition and therefore be in the public interest.

7-10 [6.] 5. Any other fact which the director regards as relevant to the

7-11 decision required of him.

7-12 Sec. 14. NRS 482.36361 is hereby amended to read as follows:

7-13 482.36361 1. If the director receives a written protest from a

7-14 [franchise] dealer pursuant to NRS 482.36352, 482.36354 or 482.36357,

7-15 the director shall [schedule a hearing on the protest within 60 days after the

7-16 director receives it. The director shall] give notice as follows:

7-17 (a) To the manufacturer or distributor, that the protest has been filed [,

7-18 the date, time, and place of the hearing on the protest,] and that he may not

7-19 take the intended action which has given rise to the protest until the director

7-20 has made his findings and issued an order permitting him to do so; and

7-21 (b) [To the dealer who has protested, the date, time, and place of the

7-22 hearing on his protest; and

7-23 (c)] To any other dealer who has requested such a notice or who may be

7-24 adversely affected by the intended action, [the date, time and place of the

7-25 hearing.] that the protest has been filed.

7-26 2. A manufacturer or distributor who receives a notice pursuant to this

7-27 section shall not proceed with the action which has given rise to the protest

7-28 until the director notifies him that he has made a decision authorizing him

7-29 to proceed with that action.

7-30 3. Upon completion of discovery by the parties, the director shall

7-31 schedule a hearing upon the protest, to be held within 60 days thereafter.

7-32 4. If two or more protests are filed concerning a particular intended

7-33 action, the director may consolidate the hearings on the protests.

7-34 Sec. 15. NRS 482.36363 is hereby amended to read as follows:

7-35 482.36363 1. In any hearing on a protest filed pursuant to NRS

7-36 482.36352 , [or] 482.36354 [,] or 482.36357, the manufacturer or

7-37 distributor has the burden of proof to establish that there is good cause to

7-38 terminate, refuse to continue, modify or replace a franchise [.] , or to

7-39 establish an additional dealership or relocate an existing dealership.

7-40 2. In any hearing on a protest filed pursuant to NRS 482.36357, the

7-41 [dealer has the burden of proof to establish that there is good cause to

7-42 prevent the establishment of an additional dealership or the relocation of an

8-1 existing dealership.] director shall consider the economic effect of the

8-2 proposed action upon the protesting dealer.

8-3 Sec. 16. NRS 482.36371 is hereby amended to read as follows:

8-4 482.36371 1. It is an unfair act or practice for any manufacturer,

8-5 distributor or factory branch, directly or through any representative, to:

8-6 [1.] (a) Prevent or require or attempt to prevent or require by contract

8-7 or otherwise any change in the capital structure of a dealer or the means by

8-8 which he finances his operation if at all times the dealer meets any

8-9 reasonable standards for capital previously agreed to by the dealer and the

8-10 manufacturer or distributor. A dealer may not change the capital structure if

8-11 it causes a change in the ownership or control of the franchised dealership,

8-12 or has the effect of a sale of the franchised dealership, without the consent

8-13 of the manufacturer or distributor . [, which] The consent must not be

8-14 unreasonably withheld.

8-15 [2.] (b) Prevent or require or attempt to prevent or require a dealer to

8-16 change his executive management.

8-17 [3.] (c) Prevent or require or attempt to prevent or require by contract

8-18 or otherwise the sale or transfer of any part of the interest of the principal

8-19 owner or any officer, partner [,] or stockholder of any dealership to any

8-20 other person. Except as otherwise provided in NRS 482.36396 to

8-21 482.36414, inclusive, a principal owner, officer, partner or stockholder may

8-22 not cause a change in the control of the dealership or sell, transfer or assign

8-23 the franchise or any right thereunder without the consent of the

8-24 manufacturer or distributor . [, which] The consent must not be

8-25 unreasonably withheld.

8-26 [4.] (d) Prevent or attempt to prevent a dealer from receiving fair and

8-27 reasonable compensation for the value of the franchised dealership as a

8-28 going concern.

8-29 2. If the consent of a manufacturer or distributor to a change of

8-30 ownership or control is requested pursuant to paragraph (a) or (c), the

8-31 manufacturer or distributor shall grant or deny the request, in writing,

8-32 within 60 days after receipt of the request. If the request is denied, the

8-33 material reasons for the denial must be stated. Failure to grant or deny

8-34 the request, in writing, within 60 days has the effect of granting the

8-35 request.

8-36 Sec. 17. NRS 482.3638 is hereby amended to read as follows:

8-37 482.3638 It is an unfair act or practice for any manufacturer,

8-38 distributor or factory branch, directly or through any representative, to:

8-39 1. Require a dealer to agree to a release, assignment, novation, waiver

8-40 or estoppel which purports to relieve any person from liability imposed by

8-41 this chapter, or require any controversy between a dealer and a

8-42 manufacturer, distributor or representative to be referred to any person or

9-1 agency except as set forth in this chapter if that referral would be binding

9-2 on the dealer, except that this section does not prevent the parties from

9-3 mutually agreeing to arbitration pursuant to law.

9-4 2. Require a dealer to agree to the jurisdiction, venue or tribunal in

9-5 which a controversy arising under the provisions of the franchise agreement

9-6 may or may not be submitted for resolution, or prohibit a dealer from

9-7 bringing an action in any forum allowed by Nevada law.

9-8 3. Require a dealer to waive a trial by jury in actions involving the

9-9 manufacturer, distributor or factory branch.

9-10 4. Increase prices of new motor vehicles which the dealer had ordered

9-11 for private retail consumers before his receipt of the written official

9-12 notification of a price increase. A sales contract signed by a retail consumer

9-13 constitutes evidence of each order. Price changes applicable to new model

9-14 or series motor vehicles at the time of the introduction of new models or

9-15 series shall not be deemed a price increase. Price changes caused by:

9-16 (a) The addition to a motor vehicle of equipment formerly optional as

9-17 standard or required equipment pursuant to state or federal law;

9-18 (b) Revaluation of the United States dollar in the case of foreign-made

9-19 vehicles; or

9-20 (c) Transportation cost increases,

9-21 are not subject to this subsection.

9-22 5. Deny the principal owner the opportunity to designate his spouse, a

9-23 member of his family [or other qualified designee] , a qualified manager,

9-24 or a trust or other artificial person controlled by any of them as entitled to

9-25 participate in the ownership of:

9-26 (a) The franchised dealership;

9-27 (b) A successor franchised dealership for 2 years or a longer reasonable

9-28 time after the incapacity of the principal owner; or

9-29 (c) A successor franchised dealership after the death of the principal in

9-30 accordance with NRS 482.36396 to 482.36414, inclusive.

9-31 6. Modify unilaterally, replace, enter into, relocate, terminate or refuse

9-32 to renew a franchise in violation of law.

9-33 7. Terminate or refuse to approve a transfer of a franchise for a

9-34 dealership, or honor the right of succession set forth in a franchise

9-35 agreement or refuse to approve the transfer of a controlling interest in a

9-36 dealership because the dealer has [, before October 1, 1997,] established an

9-37 additional franchise to sell or service another line or make of new vehicles

9-38 in the same facility as the existing dealership.

9-39 8. Prevent a dealer from establishing [, on or after October 1, 1997,] an

9-40 additional franchise to sell or service another line or make of new vehicles

9-41 in the same facility as the existing dealership if the dealer:

9-42 (a) Submits a written request for approval of the additional franchise to

9-43 the manufacturer, distributor or factory branch of the existing dealership;

10-1 (b) Complies with the reasonable requirements for approval set forth in

10-2 the franchise [agreement] of the existing dealership; and

10-3 (c) Obtains the approval of the manufacturer, distributor or factory

10-4 branch of the existing dealership.

10-5 The manufacturer, distributor or factory branch shall notify the dealer in

10-6 writing of its decision to approve or deny the request within 90 days after

10-7 receipt of the request. The manufacturer, distributor or factory branch shall

10-8 not unreasonably withhold its approval. If the request is denied, the

10-9 material reasons for the denial must be stated. Failure to approve or deny

10-10 the request, in writing, within 90 days has the effect of approval.

10-11 Sec. 18. NRS 482.36385 is hereby amended to read as follows:

10-12 482.36385 It is an unfair act or practice for any manufacturer,

10-13 distributor or factory branch, directly or through any representative, to:

10-14 1. Compete with a dealer . [in the relevant market area.] A

10-15 manufacturer or distributor shall not be deemed to be competing when

10-16 operating a previously existing dealership temporarily for a reasonable

10-17 period , [of time,] or in a bona fide retail operation which is for sale to any

10-18 qualified person at a fair and reasonable price, or in a bona fide relationship

10-19 in which a person has made a significant investment subject to loss in the

10-20 dealership and can reasonably expect to acquire full ownership of the

10-21 dealership on reasonable terms and conditions.

10-22 2. Discriminate unfairly among its dealers, or fail without good cause

10-23 to comply with franchise agreements, with respect to warranty

10-24 reimbursement or authority granted to its dealers to make warranty

10-25 adjustments with retail customers.

10-26 3. Fail to compensate [fairly] a dealer fairly for the work and services

10-27 which he is required to perform in connection with the delivery and

10-28 preparation obligations under any franchise, or fail to compensate [fairly] a

10-29 dealer fairly for labor, parts and other expenses incurred by him under the

10-30 manufacturer’s warranty agreements. The manufacturer shall set forth in

10-31 writing the respective obligations of a dealer and the manufacturer in the

10-32 preparation of a vehicle for delivery, and as between them a dealer’s

10-33 liability for a defective product is limited to his obligation so set forth.

10-34 Fair compensation includes diagnosis and reasonable administrative and

10-35 clerical costs. The dealer’s compensation for parts and labor to satisfy a

10-36 warranty must not be less than the amount of money charged to its various

10-37 retail customers for parts and labor that are not covered by a warranty. If

10-38 parts are supplied by the manufacturer, including exchanged parts and

10-39 assembled components, the dealer is entitled with respect to each part to

10-40 an amount not less than his normal retail markup for the part. This

10-41 subsection does not apply to compensation for any part, system, fixture,

11-1 appliance, furnishing, accessory or feature of a motor home or recreational

11-2 vehicle that is designed, used and maintained primarily for nonvehicular,

11-3 residential purposes.

11-4 4. Fail to pay all claims made by dealers for compensation for delivery

11-5 and preparation work, transportation claims, special campaigns and work to

11-6 satisfy warranties within 30 days after approval, or fail to approve or

11-7 disapprove such claims within 30 days after receipt, or disapprove any

11-8 claim without notice to the dealer in writing of the grounds for disapproval.

11-9 Failure to approve or disapprove or to pay within the specified time limits

11-10 in an individual case does not constitute a violation of this section if the

11-11 failure is [due to] because of reasons beyond the control of the

11-12 manufacturer, distributor or factory branch.

11-13 5. Sell a new motor vehicle to a person who is not licensed as a new

11-14 motor vehicle dealer under the provisions of this chapter.

11-15 6. Use false, deceptive or misleading advertising or engage in

11-16 deceptive acts in connection with the manufacturer’s or distributor’s

11-17 business.

11-18 7. Perform an audit to confirm a warranty repair, sales incentive or

11-19 rebate more than 12 months after the date of the transaction.

11-20 Sec. 19. NRS 482.36395 is hereby amended to read as follows:

11-21 482.36395 No motor vehicle manufacturer, distributor, factory branch

11-22 or representative thereof may:

11-23 1. Encourage, aid or abet a dealer to sell motor vehicles through any

11-24 false, deceptive or misleading sales or financing practice.

11-25 2. Refuse to deliver an order of a dealer within 60 days after the order

11-26 is received in writing unless the inability to deliver the order is caused by

11-27 shortage or curtailment of material, labor, production capacity,

11-28 transportation or utility services, or to any labor or production difficulty, or

11-29 to any cause beyond the reasonable control of the motor vehicle

11-30 manufacturer or distributor.

11-31 3. Coerce, compel or otherwise require any dealer to pay over or to

11-32 repay any amount of money or other consideration which is in

11-33 substantiation of or repayment for any advertising, promotion activity or

11-34 scheme, or method of implementing the sale of motor vehicles.

11-35 4. Demand or require, directly or indirectly, a dealer to pay any amount

11-36 of money which is projected or proposed for the advertisement, display or

11-37 promotion of any motor vehicle which is being sold pursuant to a franchise,

11-38 unless the dealer has agreed thereto in writing.

11-39 5. Demand or require, directly or indirectly, a dealer to comply with

11-40 standards which exceed commonly accepted business practices within the

11-41 automotive industry relating to sales or service of motor vehicles.

12-1 6. Based solely upon the results of a survey of a dealer’s customers

12-2 conducted by or on behalf of a motor vehicle manufacturer which is

12-3 intended or otherwise purports to measure the performance of a dealer:

12-4 (a) Discriminate, directly or indirectly, against a dealer; [or]

12-5 (b) Take any action to terminate a dealer’s franchise [.] ; or

12-6 (c) Refuse to consent to the designation of a successor, refuse to

12-7 honor a right of succession set forth in a franchise or refuse to approve

12-8 the transfer of a controlling interest in a dealership.

12-9 This subsection does not prohibit a motor vehicle manufacturer, distributor,

12-10 factory branch or representative thereof from conducting a contest or other

12-11 award program to recognize the performance of a dealer based on

12-12 reasonable criteria relating to sales or service of motor vehicles.

12-13 Sec. 20. NRS 482.36423 is hereby amended to read as follows:

12-14 482.36423 1. Whenever it appears that a person has violated or is

12-15 violating or is threatening to violate any provision of NRS 482.36311 to

12-16 482.36425, inclusive, any person aggrieved thereby may apply to the

12-17 district court in the county where the defendant resides, or in the county

12-18 where the violation or threat of violation occurs, for injunctive relief to

12-19 restrain the person from continuing the violation or threat of violation.

12-20 2. In addition to any other judicial relief, any dealer or person who

12-21 assumes the operation of a franchise pursuant to NRS 482.36396 to

12-22 482.36414, inclusive, who is injured in his business or property by reason

12-23 of a violation of NRS 482.36311 to 482.36425, inclusive, may bring an

12-24 action in the district court in which the dealership is located, and may

12-25 recover [actual damages] three times the pecuniary loss sustained by him,

12-26 and the cost of suit, including a reasonable attorney’s fee. [In an action for

12-27 money damages, the court or jury may award punitive damages if the

12-28 defendant acted maliciously.] The amount of [damages] pecuniary loss

12-29 sustained by [any] a dealer, pursuant to subsection 6 of NRS 482.3638, is

12-30 the fair market value of the franchised dealership at the time of notification

12-31 of termination, refusal to continue or unilateral modification of a franchise.

12-32 3. Any [company, firm, partnership, corporation or association]

12-33 artificial person created and existing under the laws of any other state,

12-34 territory, foreign government or the government of the United States, or

12-35 any person residing outside the state, who grants a franchise to any dealer

12-36 in this state may be served with any legal process in any action for

12-37 injunctive relief or civil damages in the following manner:

12-38 (a) By delivering a copy of the process to the director; and

12-39 (b) By mailing to the last known address of the manufacturer or

12-40 distributor, by certified mail, return receipt requested, a copy of the

12-41 summons, a copy of the complaint, together with copies of any petition or

12-42 order for injunctive relief.

13-1 4. The defendant has 30 days, exclusive of the day of service, within

13-2 which to answer or plead.

13-3 5. The method of service provided in this section is cumulative and

13-4 may be utilized with, after or independently of all other methods of service.

13-5 Sec. 21. NRS 482.36375 is hereby repealed.

 

13-6 TEXT OF REPEALED SECTION

 

13-7 482.36375 Consent to transfer of ownership or interest not to be

13-8 unreasonably withheld. A manufacturer or distributor shall not

13-9 unreasonably withhold consent to the transfer of any ownership or interest

13-10 in a franchised dealership.

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