Protect RV Dealer Agreements

Section 1. It is the intent of the legislature to protect the public health, safety, and welfare of the residents of the state by regulating the relationship between recreation vehicle dealers, manufacturers and suppliers, maintaining competition, and providing consumer protection and fair trade.

§ 2. The general business law is amended by adding a new article 42 to read as follows:

ARTICLE 42

RECREATIONAL VEHICLE DEALER AGREEMENTS Section 1100. Definitions.

1101. Written agreements/designated territories.

1102. Manufacturer initiated termination, cancellation, and

alteration of a dealership.

1103. Dealer initiated termination, cancellation, and alteration

of a dealership.

1104. Repurchase of inventory.

1105. Transfer of dealership/family succession.

1106. Warranty obligations.

1107. Indemnification.

1108. Inspection and rejection by the dealer.

1109. Coercion of dealer prohibited.

1110. Preservation of consumer protection statutes.

1111. Private actions.

1112. Powers of the commissioner of motor vehicles.

1113. Construction of article.

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD02690-01-9

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1114. Notice requirement.

1115. Adjudicatory proceedings.

1116. Judicial review.

1117. Separability.

1118. Savings clause.

§ 1100. Definitions. As used in this article, the following terms shall have the following meanings: 1. "Area of sales responsibility" means the geographical area, agreed to by the dealer and the manufacturer or distributor in the manufacturer/dealer agreement, within which area the dealer has the exclusive right to display or sell the manufacturer's or distributor's new recreation vehicles of a particular linemake to the retail public.

2. "Dealer" means any person, firm, corporation, or business entity licensed or required to be licensed under this article to sell new recreation vehicles to the retail public and who maintains a permanent business establishment including a service and repair facility which offers mechanical services for the recreation vehicles it sells.

3. "Distributor" means any person, firm, corporation, or business entity that purchases new recreation vehicles from manufacturers for resale to dealers.

4. "Factory campaign" means an effort on the part of a warrantor to contact recreation vehicle owners or dealers in order to address a part or equipment issue.

5. "Family member" means a spouse, child, grandchild, parent, sibling, niece, or nephew, or the spouse thereof.

6. "Line-make" means a specific series of recreation vehicle products that:

(a) are identified by a common series trade name or trademark;

(b) are targeted to a particular market segment, as determined by their decor, features, equipment, size, weight, and price range;

(c) have lengths and interior floor plans that distinguish the recreation vehicles from other recreation vehicles with substantially the same decor, equipment, features, price, and weight;

(d) belong to a single, distinct classification of recreation vehicle product type having a substantial degree of commonality in the construction of the chassis, frame, and body; and

(e) the manufacturer/dealer agreement authorizes a dealer to sell.

7. "Manufacturer" means any person, firm, corporation, or business entity that engages in the manufacturing of recreation vehicles.

8. "New recreation vehicle" means a recreation vehicle that has never been sold to the retail public nor titled nor registered in any state.

9. "Manufacturer/dealer agreement" means a written agreement or contract entered into between a manufacturer or distributor and a dealer that fixes the rights and responsibilities of the parties and pursuant to which the dealer sells new recreation vehicles.

10. "Proprietary part" means any part manufactured by or for and sold exclusively by the manufacturer or distributor.

11. "Recreational vehicle" means a motor home or trailer used for recreational camping or seasonal use, that is equipped with a cooking facility with an on-board fuel source; a potable water supply system that includes at least a sink, a faucet and a water tank with an exterior service supply connection, a toilet with exterior evacuation, a gas or electric refrigerator, a heating or air conditioning system with an on-board power or fuel source separate from the vehicle engine, and an electric power system. Recreational vehicle types include the motor

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home, travel trailer, folding camping trailer, truck camper or park model RV as defined in this subdivision.

(a) "Motor home" means a self-propelled recreation vehicle, designed to provide temporary living quarters for recreational, camping or travel use that complies with all the applicable federal vehicle regulations. The unit must contain at least four of the following permanently installed independent life support systems which meet the National Fire Protection Association (NFPA) 1192 Standard for Recreational Vehicles:

(i) a cooking facility with an on-board fuel source;

(ii) a potable water supply system that includes at least a sink, a faucet and a water tank with an exterior service supply connection;

(iii) a toilet with exterior evacuation;

(iv) a gas or electric refrigerator;

(v) a heating or air conditioning system with an on-board power or fuel source separate from the vehicle engine; or

(vi) an electric power system.

(b) "Travel trailer" means a recreation vehicle mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use that complies with all the applicable federal vehicle regulations and is of such size and weight as to not require a special highway movement permit when towed by a motorized vehicle.

(c) "Fifth wheel trailer" means a recreation vehicle mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use that complies with all the applicable federal vehicle regulations and is of such size and weight as to not require a special highway movement permit when towed by a motorized vehicle equipped with a towing mechanism that is mounted above or forward of the tow vehicle's rear axle.

(d) "Folding camping trailer" means a recreation vehicle mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use that complies with all the applicable federal vehicle regulations and is constructed with collapsible partial side walls that fold for towing by another vehicle and unfold at the campsite.

(e) "Truck camper" means a recreation vehicle designed to be loaded onto the back of a pickup truck to provide temporary living quarters for recreational, camping or travel use; provided, however, that nothing in this paragraph shall authorize a dealer to sell or lease new pickup trucks, or include pickup trucks within the definition of "recreation vehicle", and provided, further, that nothing in this paragraph shall remove a dealer of new pickup trucks from subdivision seven of section four hundred sixty-two of the vehicle and traffic law.

(f) "Park model RV" means a recreation vehicle that is:

(i) designed and marketed as temporary living quarters for recreational, camping, travel, or seasonal use;

(ii) not permanently affixed to real property for use as a permanent dwelling;

(iii) built on a single chassis mounted on wheels; and

(iv) certified by the manufacturer as complying with the ANSI A119.5, Park Model RV Standard.

12. "Supplier" means any person, firm, corporation or business entity that engages in the manufacturing of recreation vehicle parts, accessories or components.

13. "Transient customer" means a customer who is temporarily traveling through a dealer's area of sales responsibility.

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14. "Warrantor" means any person, firm, corporation, or business entity, including any manufacturer, distributor or supplier that provides a written warranty to the consumer in connection with a new recreation vehicle or parts, accessories, or components thereof. The term does not include service contracts, mechanical or other insurance or extended warranties sold for separate consideration by a dealer or other person not controlled by a manufacturer or distributor.

§ 1101. Written agreements/designated territories. 1. A manufacturer or distributor may not sell a recreation vehicle in this state to or through a dealer without having first entered into a manufacturer/dealer agreement with a dealer which has been signed by both parties.

2. The manufacturer or distributor shall designate the area of sales responsibility exclusively assigned to a dealer in the manufacturer/dealer agreement and may not change such area or contract with another dealer for sale of the same line-make in the designated area during the duration of the agreement.

3. The area of sales responsibility may not be reviewed or changed without the consent of both parties until one year after the execution of the manufacturer/dealer agreement.

4. A recreation vehicle dealer may not sell a new recreation vehicle in this state without having first entered into a manufacturer/dealer agreement with a manufacturer or distributor which has been signed by both parties.

§ 1102. Manufacturer initiated termination, cancellation, and alteration of a dealership. 1. A manufacturer or distributor, directly or through any authorized officer, agent or employee, may not terminate, cancel or fail to renew a manufacturer/dealer agreement without good cause. If the manufacturer or distributor terminates, cancels or fails to renew the manufacturer/dealer agreement with good cause section eleven hundred four of this article does not apply.

2. The manufacturer or distributor has the burden of showing good cause for terminating, canceling, or failing to renew a manufacturer/dealer agreement with a dealer. For purposes of determining whether there is good cause for the proposed action, any of the following factors may be considered:

(a) The extent of the affected dealer's penetration in the area of sales responsibility.

(b) The nature and extent of the dealer's investment in its business.

(c) The adequacy of the dealer's service facilities, equipment, parts, supplies, and personnel.

(d) The effect of the proposed action on the community.

(e) The extent and quality of the dealer's service under recreation vehicle warranties.

(f) The dealer's failure to follow agreed-upon procedures or standards related to the overall operation of the dealership.

(g) The dealer's performance under the terms of its manufacturer/dealer agreement.

(h) Violation of the manufacturer/dealer agreement.

3. Except as otherwise provided in this section, a manufacturer or distributor shall provide a dealer with at least ninety days prior written notice of termination, cancellation, or nonrenewal of the manufacturer/dealer agreement in the event the dealer is being terminated for good cause.

(a) The notice must state all reasons for the proposed termination, cancellation, or nonrenewal and if the termination, cancellation or nonrenewal is based on lack of performance, the dealer's stocking histo-

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ry and reasonable market performance must be given consideration. A dealer's duty to cure and evaluation of same will include consideration of seasonal volatility of the market. The notice must further state that if, within thirty days following receipt of the notice, the dealer provides to the manufacturer or distributor a written notice of intent to cure all claimed deficiencies, the dealer will then have ninety days following receipt of the original notice to rectify the deficiencies.

(b) If the deficiencies are rectified within ninety days, the manufacturer's or distributor's notice is voided. If the dealer fails to provide the notice of intent to cure the deficiencies or fails to cure the deficiencies in the prescribed time period, the termination, cancellation, or nonrenewal takes effect as provided in the original notice.

(c) The notice period may be reduced to thirty days if the manufacturer's or distributor's grounds for termination, cancellation, or nonrenewal are due to any of the following good cause factors:

(i) a dealer or one of its owners being convicted of, or entering a plea of nolo contendere to, a felony;

(ii) the abandonment or closing of the business operations of the dealer for ten consecutive business days unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the dealer has no control;

(iii) a significant misrepresentation by the dealer materially affecting the business relationship;

(iv) a suspension or revocation of the dealer's license, or refusal to renew the dealer's license, by the department;

(v) a material violation of this article which is not cured within thirty days after the written notice by the manufacturer; or