Bill Text: MI HB6554 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Businesses; distributors and dealers; requirements applicable to succession of new vehicle dealerships; modify. Amends secs. 2, 8 & 15 of 1981 PA 118 (MCL 445.1562 et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-12-04 - Bill Electronically Reproduced 11/29/2018 [HB6554 Detail]

Download: Michigan-2017-HB6554-Introduced.html

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HOUSE BILL No. 6554

 

 

November 29, 2018, Introduced by Rep. Marino and referred to the Committee on Commerce and Trade.

 

     A bill to amend 1981 PA 118, entitled

 

"An act to regulate motor vehicle manufacturers, distributors,

wholesalers, dealers, and their representatives; to regulate

dealings between manufacturers and distributors or wholesalers and

their dealers; to regulate dealings between manufacturers,

distributors, wholesalers, dealers, and consumers; to prohibit

unfair practices; to provide remedies and penalties; and to repeal

certain acts and parts of acts,"

 

by amending sections 2, 8, and 15 (MCL 445.1562, 445.1568, and

 

445.1575), section 2 as amended by 2010 PA 140 and section 15 as

 

amended by 2010 PA 138.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2. (1) "Closed dealership" means a new motor vehicle

 

dealer whose dealer agreement has been terminated, canceled,

 

discontinued, or not renewed.

 

     (2) "Coerce" means to compel or attempt to compel a person to

act in a given manner or to refrain from acting in a given manner

 

by pressure, intimidation, or threat of harm, damage, breach of

 

contract, or other adverse consequences, including, but not limited

 

to, the loss of any benefit available to other new motor vehicle

 

dealers of the same line make in this state. The term does not

 

include any of the following actions by a manufacturer:

 

     (a) Without conditions, making a good faith recommendation,

 

exposition, or argument or persuading or attempting to persuade a

 

person.

 

     (b) Giving notice in good faith to a new motor vehicle dealer

 

of that dealer's violation of the terms or provisions of a dealer

 

agreement.

 

     (c) Engaging in any conduct the manufacturer is permitted to

 

engage in under this act.

 

     (3) "Dealer agreement" means an agreement or contract in

 

writing between a distributor and a new motor vehicle dealer,

 

between a manufacturer and a distributor or a new motor vehicle

 

dealer, or between an importer and a distributor or a new motor

 

vehicle dealer, that purports to establish the legal rights and

 

obligations of the parties to the agreement or contract and under

 

which the dealer purchases and resells new motor vehicles and

 

conducts service operations. The term includes the sales and

 

service agreement, regardless of the terminology used to describe

 

that agreement, and any addenda to the dealer agreement, including

 

all schedules, attachments, exhibits, and agreements incorporated

 

by reference into the dealer agreement.

 

     (4) "Designated family member" means any of the following:

     (a) If an individual who is a new motor vehicle dealer who or

 

an owner of capital stock or other equity interests in a new motor

 

vehicle dealer dies or becomes incapacitated, and he or she has

 

designated a successor under section 15(6), that designated

 

successor.

 

     (b) If a an individual who is a new motor vehicle dealer or an

 

owner of capital stock or other equity interests in a new motor

 

vehicle dealer dies and has not designated a successor under

 

section 15(6), the any of the following:

 

     (i) The spouse or a child, grandchild, step-child, step-

 

grandchild, spouse of a child, parent, brother, or sister of a

 

deceased new motor vehicle dealer, the deceased individual, who is

 

entitled to inherit the deceased dealer's ownership individual's

 

interest in the new motor vehicle dealership under the terms of the

 

dealer's will, deceased individual's estate or succession planning

 

documents; who has otherwise been designated in writing by a the

 

deceased dealer individual to succeed the deceased dealer

 

individual in the new motor vehicle dealership; , or who is

 

entitled to inherit under the laws of intestate succession of this

 

state. or

 

     (ii) During the period of administration of the deceased

 

individual's estate or trust and before the ultimate distribution

 

of the stock or equity interest in the new motor vehicle dealer,

 

the appointed and qualified personal representative or testamentary

 

trustee of the deceased new motor vehicle dealer.individual.

 

     (c) If a an individual who is a new motor vehicle dealer or an

 

owner of capital stock or other equity interests in a new motor

vehicle dealer becomes incapacitated and has not designated a

 

successor under section 15(6), the person designated in writing as

 

an attorney-in-fact or agent of the incapacitated individual under

 

a power of attorney or trust executed under or valid under the laws

 

of this state; or, if there is no written power of attorney or

 

trust designating an attorney-in-fact or agent, the person

 

appointed by the court as the legal representative of the

 

dealer.incapacitated individual.

 

     Sec. 8. Notwithstanding any agreement, the following alone

 

shall does not constitute good cause for the termination,

 

cancellation, nonrenewal, or discontinuance of a dealer agreement

 

under section 7(1)(c):

 

     (a) A change in ownership of the new motor vehicle dealer's

 

dealership or ownership of capital stock or other equity interests

 

in the new motor vehicle dealer. This subdivision does not

 

authorize any change in ownership which that would have the effect

 

of a sale or an assignment of the dealer agreement or a change in

 

the principal management of the dealership without the

 

manufacturer's or distributor's prior written consent, unless the

 

change in ownership is to an individual designated as a successor

 

under section 15(6).

 

     (b) The refusal of the new motor vehicle dealer to purchase or

 

accept delivery of any new motor vehicle parts, accessories, or any

 

other commodity or services not ordered by the new motor vehicle

 

dealer.

 

     (c) The fact that the new motor vehicle dealer or an owner of

 

capital stock or other equity interests in a new motor vehicle

dealer owns, has an investment in, participates in the management

 

of, or holds a dealer agreement for the sale of another make or

 

line of new motor vehicles, or that the new motor vehicle dealer or

 

stock or equity interest holder has established another make or

 

line of new motor vehicles in the same dealership facilities as

 

those of the manufacturer or distributor, provided that the new

 

motor vehicle dealer maintains a reasonable line of credit for each

 

make or line of new motor vehicles, and that the new motor vehicle

 

dealer remains in substantial compliance with the terms and

 

conditions of the dealer agreement and with the reasonable

 

facilities' requirements of the manufacturer or distributor.

 

     (d) The fact that the new motor vehicle dealer sells or

 

transfers ownership of the dealership or sells or transfers capital

 

stock in the dealership to the new motor vehicle dealer's spouse,

 

son, or daughter, provided that the sale or transfer shall not have

 

the effect of a sale or an assignment of the dealer agreement or a

 

change in the principal management of the dealership without the

 

manufacturer's or distributor's prior written consent.

 

     Sec. 15. (1) Any designated family member of a deceased or

 

incapacitated new motor vehicle dealer If an individual who is a

 

new motor vehicle dealer or an owner of capital stock or other

 

equity interests in a new motor vehicle dealer dies or becomes

 

incapacitated, any designated family member of that individual, or

 

an individual who is an executive manager of the dealership may

 

succeed the dealer that individual in the ownership or operation of

 

the dealership under the existing dealer agreement if the

 

designated family member or executive manager gives the

manufacturer written notice of his or her intention to succeed to

 

the dealership that individual within 120 days after the dealer's

 

his or her death or incapacity, agrees to be bound by all of the

 

terms and conditions of the dealer agreement, and meets the current

 

criteria generally applied by the manufacturer in qualifying new

 

motor vehicle dealers. A manufacturer may refuse to continue the

 

existing dealer agreement with the designated family member only

 

for good cause.

 

     (2) A manufacturer may request from a designated family member

 

or executive manager described in subsection (1) a completed

 

application form and any personal and financial information that is

 

reasonably necessary to determine whether the existing dealer

 

agreement should continue. The designated family member or

 

executive manager shall supply the completed application form and

 

personal and financial information promptly on request. As used in

 

this subsection and subsection (3), "application form" means the

 

application form generally used by the manufacturer in connection

 

with a proposal to continue a dealer agreement under this section.

 

     (3) If a manufacturer believes that good cause exists for

 

refusing to continue a dealer agreement under this section with a

 

designated family member or executive manager described in

 

subsection (1), the manufacturer may, within 60 days after

 

receiving notice of the designated family member's or executive

 

manager's intent to succeed the dealer in the ownership and

 

operation of the dealership, or within 60 days after receiving the

 

requested personal and financial information and completed

 

application form, serve on the designated family member or

executive manager notice of its refusal to approve the succession.

 

     (4) A notice of refusal served by a manufacturer under

 

subsection (3) shall state the specific grounds for the refusal to

 

approve the succession and that discontinuance of the agreement

 

shall take effect not fewer than on a date specified in the notice

 

that is at least 90 days after the date the notice is served.

 

     (5) If a notice of refusal described in subsection (3) is not

 

served within the 60-day period described in subsection (3), the

 

dealer agreement shall continue in effect and is subject to

 

termination only as otherwise permitted under this act.

 

     (6) This section does not preclude a new motor vehicle dealer

 

from designating any person as his or her successor individual to

 

succeed the dealer in the operation of the dealership, by written

 

instrument filed with the manufacturer. If the dealer files an

 

instrument described in this subsection, it alone shall determine

 

the succession rights to the management and operation of the

 

dealership.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.