FIRST REGULAR SESSION

[TRULY AGREED TO AND FINALLY PASSED]

SENATE SUBSTITUTE FOR

SENATE COMMITTEE SUBSTITUTE FOR

HOUSE BILL NO. 575

91ST GENERAL ASSEMBLY

1430S.04T 2001


AN ACT

To repeal sections 407.815, 407.816, 407.820, 407.822 and 407.825, RSMo 2000, and section 407.822 as truly agreed to and finally passed by the first regular session of the ninety-first general assembly in senate committee substitute for house bill no. 693, relating to franchise practices, and to enact in lieu thereof eighteen new sections relating to the same subject, with a delayed effective date for certain sections.




Be it enacted by the General Assembly of the state of Missouri, as follows:

Section A. Sections 407.815, 407.816, 407.820, 407.822 and 407.825, RSMo 2000, and section 407.822 as truly agreed to and finally passed by the first regular session of the ninety-first general assembly in senate committee substitute for house bill no. 693, are repealed and eighteen new sections enacted in lieu thereof, to be known as sections 407.815, 407.816, 407.817, 407.820, 407.822, 407.825, 407.826, 407.828, 407.1320, 407.1323, 407.1326, 407.1329, 407.1332, 407.1335, 407.1338, 407.1340, 407.1343 and 407.1346, to read as follows:

407.815. As used in sections 407.810 to 407.835, unless the context otherwise requires, the following terms mean:

(1) "Administrative hearing commission", the body established in chapter 621, RSMo, to conduct administrative hearings;

(2) "All-terrain vehicle", any motorized vehicle manufactured and used exclusively for off-highway use which is fifty inches or less in width, with an unladen dry weight of six hundred pounds or less, traveling on three, four or more low pressure tires, with a seat designed to be straddled by the operator, and handlebars for steering control;

(3) "Coerce", to force a person to act in a given manner or to compel by pressure or threat but shall not be construed to include the following:

(a) Good faith recommendations, exposition, argument, persuasion or attempts at persuasion;

(b) Notice given in good faith to any franchisee of such franchisee's violation of terms or provisions of such franchise or contractual agreement;

(c) Any other conduct set forth in section 407.830 as a defense to an action brought pursuant to sections 407.810 to 407.835; or

(d) Any other conduct set forth in sections 407.810 to 407.835 that is permitted of the franchisor or is expressly excluded from coercion or a violation of sections 407.810 to 407.835;

(4) "Franchise" or "franchise agreement", a written arrangement or contract for a definite or indefinite period, in which a person grants to another person a license to use, or the right to grant to others a license to use, a trade name, trademark, service mark, or related characteristics, in which there is a community of interest in the marketing of goods or services, or both, at wholesale or retail, by agreement, lease or otherwise, and in which the operation of the franchisee's business with respect to such franchise is substantially reliant on the franchisor for the continued supply of franchised new motor vehicles, parts and accessories for sale at wholesale or retail;

(5) "Franchisee", a person to whom a franchise is granted;

(6) "Franchisor", a person who grants a franchise to another person;

(7) "Motor vehicle", for the purposes of sections 407.810 to 407.835, any motor-driven vehicle required to be registered pursuant to the provisions of chapter 301, RSMo, except that, motorcycles and all-terrain vehicles as defined in section 301.010, RSMo, shall not be included;

(8) "New", when referring to motor vehicles or parts, means those motor vehicles or parts which have not been held except as inventory, as that term is defined in subdivision (4) of section 400.9-109, RSMo;

(9) "Person", a natural person, sole proprietor, partnership, corporation, or any other form of business entity or organization.

407.816. 1. As used in subdivision [(5)] (7) of section 407.815, the term "motor [driven] vehicle" shall not include "trailer" as such term is defined in subdivision [(56)] (58) of section 301.010, RSMo.

2. Prior to August 1, 2002, the provisions of section 407.817, subdivisions (13), (17) and (18) of section 407.825 and section 407.826 shall not apply to recreational vehicle dealers or manufacturers.

3. As of August 1, 2002, the term "motor vehicle" as used in sections 407.810 to 407.835 shall not apply to recreational vehicles as defined in section 407.1320.

407.817. 1. For purposes of this section, "relevant market area" means:

(1) For a proposed new motor vehicle dealer or a new motor vehicle dealer who plans to relocate his or her place of business in a county having a population which is greater than one hundred thousand, the area within a radius of six miles of the intended site of the proposed or relocated dealer. The six-mile distance shall be determined by measuring the distance between the nearest surveyed boundary of the existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business; or

(2) For a proposed new motor vehicle dealer or a new motor vehicle dealer who plans to relocate his or her place of business in a county having a population which is not greater than one hundred thousand, the area within a radius of ten miles of the intended site of the proposed or relocated dealer, or the county line, whichever is closer to the intended site. The ten-mile distance shall be determined by measuring the distance between the nearest surveyed boundary line of the existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business.

2. As used in this section, "relocate" and "relocation" shall not include the relocation of a new motor vehicle dealer within two miles of its established place of business.

3. Before a franchisor enters into a franchise establishing or relocating a new motor vehicle dealer within a relevant market area where the same line-make is represented, the franchisor shall give written notice to each new motor vehicle dealer of the same line-make in the relevant market area of its intention to establish an additional dealer or to relocate an existing dealer within that relevant market area.

4. Within thirty days after receiving the notice provided for in subsection 3 of this section, or within thirty days after the end of any appeal procedure provided by the franchisor, a new motor vehicle dealer may bring an action pursuant to section 407.822 to determine whether good cause exists for the establishing or relocating of a proposed new motor vehicle dealer.

5. This section shall not apply to the reopening or replacement in a relevant market area of a closed dealership that has been closed within the preceding year, if the established place of business of the reopened or replacement dealer is within two miles of the established place of business of the closed dealership.

6. In determining whether good cause exists for establishing or relocating an additional new motor vehicle dealer for the same line-make, the court shall take into consideration the existing circumstances, including, but not limited to, the following:

(1) Permanency of the investment;

(2) Effect on the retail motor vehicle business and the consuming public in the relevant market area;

(3) Whether it is injurious or beneficial to the public welfare;

(4) Whether the new motor vehicle dealers of the same line-make in that relevant market area are providing adequate competition and convenient consumer care for the motor vehicles of that line-make in the market area, including the adequacy of motor vehicle sales and qualified service personnel;

(5) Whether the establishment or relocation of the new motor vehicle dealer would promote competition;

(6) Growth or decline of the population and the number of new motor vehicle registrations in the relevant market area; and

(7) Effect on the relocating dealer of a denial of its relocations into the relevant market area.

7. The remedies and relief available pursuant to section 407.835 shall apply to this section.

407.820. Any person who is engaged or engages directly or indirectly in purposeful contacts within the state of Missouri in connection with the offering, advertising, purchasing, selling, or contracting to purchase or to sell new motor vehicles, or who, being a motor vehicle franchisor, is transacting or transacts any business with a motor vehicle franchisee who maintains a place of business within the state and with whom he or she has a franchise, shall be subject to the jurisdiction of the courts and administrative agencies of the state of Missouri, upon service of process in accordance with the provisions of section 506.510, RSMo, irrespective of whether such person is a manufacturer, importer, distributor or dealer in new motor vehicles.

407.822. 1. Any party seeking relief pursuant to the provisions of sections 407.810 to 407.835 may file an application for a hearing with the administrative hearing commission within the time periods specified in this section. The application for a hearing shall comply with the requirements for a request for agency action set forth in chapter 536, RSMo. Simultaneously, with the filing of the application for a hearing with the administrative hearing commission, the applicant shall send by certified mail, return receipt requested, a copy of the application to the party or parties against whom relief is sought. [Within ten days of] Upon receiving a timely application for a hearing, the administrative hearing commission shall enter an order fixing a date, time and place for a hearing on the record. [Such hearing shall be within forty-five days of the date of the order but the administrative hearing commission may continue the hearing date up to forty-five additional days by agreement of the parties or upon a finding of good cause.] The administrative hearing commission shall send by certified mail, return receipt requested, a copy of the order to the party seeking relief and to the party or parties against whom relief is sought. The order shall also state that the party against whom relief is sought shall not proceed with the initiation of its activity or activities until the administrative hearing commission issues its final decision or order, and the party against whom relief is sought shall, within thirty days of such order, file an answer or other responsive pleading directed to each claim for relief set forth in the application for hearing. Failure to answer or otherwise respond within such time frame may be deemed by the administrative hearing commission as an admission of the grounds for relief set forth in the application for hearing.

2. Unless otherwise expressly provided in sections 407.810 to 407.835, the provisions of chapter 536, RSMo, shall govern hearings and prehearing procedures conducted pursuant to the authority of this section. Any party may obtain discovery in the same manner, and under the same conditions and requirements, as is or may hereafter be provided for with respect to discovery in civil actions by rule of the supreme court of Missouri for use in the circuit courts, and the administrative hearing commission may enforce discovery by the same methods as provided by supreme court rule for use in civil cases. The administrative hearing commission shall issue a final decision or order, in proceedings arising pursuant to the provisions of sections 407.810 to 407.835, within [sixty] ninety days from the conclusion of the hearing. In any proceeding initiated pursuant to sections 407.810 to 407.835 involving a matter requiring a franchisor to show good cause for any intended action being protested by a franchisee, the franchisor shall refrain from taking the protested action if, after a hearing on the matter before the administrative hearing commission, the administrative hearing commission determines that good cause does not exist for the franchisor to take such action. The franchisee may, if necessary, seek enforcement of the decision of the administrative hearing commission pursuant to the provisions of section 407.835. Venue for such proceedings shall be in the circuit court of Cole County, Missouri, or in the circuit court of the county in which the franchisee resides or operates the franchise business. In determining any relief necessary for enforcement of the decision of the administrative hearing commission, the court shall defer to the commission's factual findings, and review shall be limited to a determination of whether the commission's decision was authorized by law and whether the commission abused its discretion. Any final decisions of the administrative hearing commission shall be subject to review pursuant to a petition for review to be filed in the court of appeals in the district in which the hearing, or any part of the hearing, is held and by delivery of copies of the petition to each party of record, within thirty days after the mailing or delivery of the final decision and notice of the final decision in such a case. Appeal of the administrative hearing commission's decision pursuant to this section shall not preclude any action authorized by section 407.835, brought in a court of competent jurisdiction, requesting an award of legal or equitable relief, provided that if such an action is brought solely for the purpose of enforcing a decision of the administrative hearing commission which is on appeal pursuant to this subsection, the court in which such action is pending may hold in abeyance its judgment pending issuance of a decision by the court of appeals. Review pursuant to this section shall be exclusive and decisions of the administrative hearing commission reviewable pursuant to this section shall not be reviewable in any other proceeding, and no other official or court shall have power to review any such decision by an action in the nature of mandamus or otherwise, except pursuant to the provisions of this section. The party seeking review shall be responsible for the filing of the transcript and record of all proceedings before the administrative hearing commission with the appropriate court of appeals.

3. Any franchisee receiving a notice from a franchisor pursuant to the provisions of sections 407.810 to 407.835, or any franchisee adversely affected by a franchisor's acts or proposed acts described in the provisions of sections 407.810 to 407.835, shall be entitled to file an application for a hearing before the administrative hearing commission for a determination as to whether the franchisor has good cause for its acts or proposed acts.

4. Not less than sixty days before the effective date of the initiation of any enumerated act pursuant to subdivisions (5), (6), (7) and (14) of subsection 1 of section 407.825, a franchisor shall give written notice to the affected franchisee or franchisees, by certified mail, return receipt requested, except as follows:

(1) Upon the initiation of an act pursuant to subdivision (5) of subsection 1 of section 407.825, such notice shall be given not less than fifteen days before the effective date of such act only if the grounds for the notice include the following:

(a) Transfer of any ownership or interest in the franchised dealership without the consent of the motor vehicle franchisor;

(b) Material misrepresentation by the motor vehicle franchisee in applying for the franchise;

(c) Insolvency of the motor vehicle franchisee or the filing of any petition by or against the motor vehicle franchisee under any bankruptcy or receivership law;

(d) Any unfair business practice by the motor vehicle franchisee after the motor vehicle franchisor has issued a written warning to the motor vehicle franchisee to desist from such practice;

(e) Conviction of the motor vehicle franchisee of a crime which is a felony;

(f) Failure of the motor vehicle franchisee to conduct customary sales and service operations during customary business hours for at least seven consecutive business days unless such closing is due to an act of God, strike or labor difficulty or other cause over which the motor vehicle franchisee has no control; or

(g) Revocation of the motor vehicle franchisee's license;

(2) Upon initiation of an act pursuant to subdivision (7) of subsection 1 of section 407.825, such notice shall be given within sixty days of the franchisor's receipt of a written proposal to consummate such sale or transfer and the receipt of all necessary information and documents generally used by the franchisor to conduct its review. The franchisor shall acknowledge in writing to the applicant the receipt of the information and documents and if the franchisor requires additional information or documents to complete its review, the franchisor shall notify the applicant within fifteen days of the receipt of the information and documents. If the franchisor fails to request additional information and documents from the applicant within fifteen days after receipt of the initial forms, the sixty-day time period for approval shall be deemed to run from the initial receipt date. Otherwise, the sixty-day time period for approval shall run from receipt of the supplemental requested information. In no event shall the total time period for approval exceed seventy-five days from the date of the receipt of all necessary information and documents generally used by the franchisor to conduct its review. The franchisor's notice of disapproval shall also specify the reasonable standard which the franchisor contends is not satisfied and the reason the franchisor contends such standard is not satisfied. Failure on the part of the franchisor to provide such notice shall be conclusively deemed an approval by the franchisor of the proposed sale or transfer to the proposed transferee. A franchisee's application for a hearing shall be filed with the administrative hearing commission within twenty days from receipt of such franchisor's notice;

(3) Pursuant to paragraphs (a) and (b) of subdivision (14) of subsection 1 of section 407.825, such notice shall be given within sixty days of the franchisor's receipt of a deceased or incapacitated franchisee's designated family member's intention to succeed to the franchise or franchises or of the franchisor's receipt of the personal and financial data of the designated family member, whichever is later.

5. A franchisor's notice to a franchisee or franchisees pursuant to subdivisions (5), (6), (7) and (14) of subsection 1 of section 407.825 shall contain a statement of the particular grounds supporting the intended action or activity which shall include any reasonable standards which were not satisfied. The notice shall also contain at a minimum, on the first page thereof, a conspicuous statement which reads as follows: "NOTICE TO FRANCHISEE: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE MISSOURI ADMINISTRATIVE HEARING COMMISSION IN JEFFERSON CITY, MISSOURI, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE CONTENTS OF THIS NOTICE. ANY ACTION MUST BE FILED WITHIN TWENTY DAYS FROM RECEIPT OF THIS NOTICE."

6. When more than one application for a hearing is filed with the administrative hearing commission, the administrative hearing commission may consolidate the applications into one proceeding to expedite the disposition of all relevant issues.

7. In all proceedings before the administrative hearing commission pursuant to this section, section 407.825 and section 621.053, RSMo, where the franchisor is required to give notice pursuant to subsection 4 of this section, the franchisor shall have the burden of proving by a preponderance of the evidence that good cause exists for its actions. In all other actions, the franchisee shall have the burden of proof.

[407.822. 1. Any party seeking relief pursuant to the provisions of sections 407.810 to 407.835 may file an application for a hearing with the administrative hearing commission within the time periods specified in this section. The application for a hearing shall comply with the requirements for a request for agency action set forth in chapter 536, RSMo. Simultaneously, with the filing of the application for a hearing with the administrative hearing commission, the applicant shall send by certified mail, return receipt requested, a copy of the application to the party or parties against whom relief is sought. [Within ten days of receiving] Upon receipt of a timely application for a hearing, the administrative hearing commission shall enter an order fixing a date, time and place for a hearing on the record. [Such hearing shall be within forty-five days of the date of the order but the administrative hearing commission may continue the hearing date up to forty-five additional days by agreement of the parties or upon a finding of good cause.] The administrative hearing commission shall send by certified mail, return receipt requested, a copy of the order to the party seeking relief and to the party or parties against whom relief is sought. The order shall also state that the party against whom relief is sought shall not proceed with the initiation of its activity or activities until the administrative hearing commission issues its final decision or order.

2. Unless otherwise expressly provided in sections 407.810 to 407.835, the provisions of chapter 536, RSMo, shall govern hearings and prehearing procedures conducted pursuant to the authority of this section. The administrative hearing commission shall issue a final decision or order, in proceedings arising pursuant to the provisions of sections 407.810 to 407.835[, within sixty days from the conclusion of the hearing]. Any final decisions of the administrative hearing commission shall be subject to review pursuant to a petition for review to be filed in the court of appeals in the district in which the hearing, or any part of the hearing, is held and by delivery of copies of the petition to each party of record, within thirty days after the mailing or delivery of the final decision and notice of the final decision in such a case. Review pursuant to this section shall be exclusive and decisions of the administrative hearing commission reviewable pursuant to this section shall not be reviewable in any other proceeding, and no other official or court shall have power to review any such decision by an action in the nature of mandamus or otherwise, except pursuant to the provisions of this section. The party seeking review shall be responsible for the filing of the transcript and record of all proceedings before the administrative hearing commission with the appropriate court of appeals.

3. Any franchisee receiving a notice from a franchisor pursuant to the provisions of sections 407.810 to 407.835, or any franchisee adversely affected by a franchisor's acts or proposed acts described in the provisions of sections 407.810 to 407.835, shall be entitled to file an application for a hearing before the administrative hearing commission for a determination as to whether the franchisor has good cause for its acts or proposed acts.

4. Not less than sixty days before the effective date of the initiation of any enumerated act pursuant to subdivisions (5), (6), (7) and (14) of subsection 1 of section 407.825, a franchisor shall give written notice to the affected franchisee or franchisees, by certified mail, return receipt requested, except as follows:

(1) Upon the initiation of an act pursuant to subdivision (5) of subsection 1 of section 407.825, such notice shall be given not less than fifteen days before the effective date of such act only if the grounds for the notice include the following:

(a) Transfer of any ownership or interest in the franchised dealership without the consent of the motor vehicle franchisor;

(b) Material misrepresentation by the motor vehicle franchisee in applying for the franchise;

(c) Insolvency of the motor vehicle franchisee or the filing of any petition by or against the motor vehicle franchisee under any bankruptcy or receivership law;

(d) Any unfair business practice by the motor vehicle franchisee after the motor vehicle franchisor has issued a written warning to the motor vehicle franchisee to desist from such practice;

(e) Conviction of the motor vehicle franchisee of a crime which is a felony;

(f) Failure of the motor vehicle franchisee to conduct customary sales and service operations during customary business hours for at least seven consecutive business days unless such closing is due to an act of God, strike or labor difficulty or other cause over which the motor vehicle franchisee has no control; or

(g) Revocation of the motor vehicle franchisee's license;

(2) Upon initiation of an act pursuant to subdivision (7) of subsection 1 of section 407.825, such notice shall be given within sixty days of the franchisor's receipt of a written proposal to consummate such sale or transfer and the receipt of all necessary information and documents generally used by the franchisor to conduct its review. The franchisor's notice of disapproval shall also specify the reasonable standard which the franchisor contends is not satisfied and the reason the franchisor contends such standard is not satisfied. Failure on the part of the franchisor to provide such notice shall be conclusively deemed an approval by the franchisor of the proposed sale or transfer to the proposed transferee. A franchisee's application for a hearing shall be filed with the administrative hearing commission within twenty days from receipt of such franchisor's notice;

(3) Pursuant to paragraphs (a) and (b) of subdivision (14) of subsection 1 of section 407.825, such notice shall be given within sixty days of the franchisor's receipt of a deceased or incapacitated franchisee's designated family member's intention to succeed to the franchise or franchises or of the franchisor's receipt of the personal and financial data of the designated family member, whichever is later.

5. A franchisor's notice to a franchisee or franchisees pursuant to subdivisions (5), (6), (7) and (14) of subsection 1 of section 407.825 shall contain a statement of the particular grounds supporting the intended action or activity which shall include any reasonable standards which were not satisfied. The notice shall also contain at a minimum, on the first page thereof, a conspicuous statement which reads as follows: "NOTICE TO FRANCHISEE: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE MISSOURI ADMINISTRATIVE HEARING COMMISSION IN JEFFERSON CITY, MISSOURI, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE CONTENTS OF THIS NOTICE. ANY ACTION MUST BE FILED WITHIN TWENTY DAYS FROM RECEIPT OF THIS NOTICE."

6. When more than one application for a hearing is filed with the administrative hearing commission, the administrative hearing commission may consolidate the applications into one proceeding to expedite the disposition of all relevant issues.

7. In all proceedings before the administrative hearing commission pursuant to this section, section 407.825 and section 621.053, RSMo, where the franchisor is required to give notice pursuant to subsection 4 of this section, the franchisor shall have the burden of proving by a preponderance of the evidence that good cause exists for its actions. In all other actions, the franchisee shall have the burden of proof.]".

407.825. Notwithstanding the terms of any franchise agreement, the performance, whether by act or omission, by a motor vehicle franchisor of any or all of the following acts enumerated in this subsection are hereby defined as unlawful practices, the remedies for which are set forth in section 407.835:

(1) To engage in any conduct which is capricious, in bad faith, or unconscionable and which causes damage to a motor vehicle franchisee or to the public; provided, that good faith conduct engaged in by motor vehicle franchisors as sellers of new motor vehicles or parts or as holders of security interest therein, in pursuit of rights or remedies accorded to sellers of goods or to holders of security interests pursuant to the provisions of chapter 400, RSMo, uniform commercial code, shall not constitute unfair practices pursuant to sections 407.810 to 407.835;

(2) To coerce any motor vehicle franchisee to accept delivery of any new motor vehicle or vehicles, equipment, parts or accessories therefor, or any other commodity or commodities which such motor vehicle franchisee has not ordered after such motor vehicle franchisee has rejected such commodity or commodities. It shall not be deemed a violation of this section for a motor vehicle franchisor to require a motor vehicle franchisee to have an inventory of parts, tools, and equipment reasonably necessary to service the motor vehicles sold by a motor vehicle franchisor; or new motor vehicles reasonably necessary to meet the demands of dealers or the public or to display to the public the full line of a motor vehicle franchisor's product line;

(3) To unreasonably refuse to deliver in reasonable quantities and within a reasonable time after receipt of orders for new motor vehicles, such motor vehicles as are so ordered and as are covered by such franchise and as are specifically publicly advertised by such motor vehicle franchisor to be available for immediate delivery; provided, however, the failure to deliver any motor vehicle shall not be considered a violation of sections 407.810 to 407.835 if such failure is due to an act of God, work stoppage, or delay due to a strike or labor difficulty, shortage of products or materials, freight delays, embargo or other cause of which such motor vehicle franchisor shall have no control;

(4) To coerce any motor vehicle franchisee to enter into any agreement with such motor vehicle franchisor or to do any other act prejudicial to such motor vehicle franchisee, by threatening to cancel any franchise or any contractual agreement existing between such motor vehicle franchisor and motor vehicle franchisee; provided, however, that notice in good faith to any motor vehicle franchisee of such motor vehicle franchisee's violation of any provisions of such franchise or contractual agreement shall not constitute a violation of sections 407.810 to 407.835;

(5) To terminate, cancel or refuse to continue any franchise without good cause, directly or indirectly through the actions of the franchisor, unless such new motor vehicle franchisee substantially defaults in the performance of such franchisee's reasonable and lawful obligations under such franchisee's franchise, or such new motor vehicle franchisor discontinues the sale in the state of Missouri of such franchisor's products which are the subject of the franchise[:

(a) Notwithstanding the terms of any franchise agreement to the contrary, good cause to terminate, cancel or refuse to continue any franchise agreement shall not be established based upon the fact that the motor vehicle franchisee owns, has an investment in, participates in the management of or holds a franchise agreement for the sale or service of another make or line of new motor vehicles or the motor vehicle dealer has established another make or line of new motor vehicles or service in the same dealership facilities as those of the motor vehicle franchisor prior to February 1, 1997, or such establishment is approved in writing by the franchisee and the franchisor. If the franchise agreement requires the approval of the franchisor, such approval shall be requested in writing by the franchisee and the franchisor shall approve or disapprove such a request in writing within sixty days of receipt of such request. A request from a franchisee shall be deemed to have been approved if the franchisor fails to notify the franchisee, in writing, of its disapproval within sixty days after its receipt of the written request;

(b)]. In determining whether good cause exists, the administrative hearing commission shall take into consideration the existing circumstances, including, but not limited to, the following factors:

[a.] (a) The franchisee's sales in relation to sales in the market;

[b.] (b) The franchisee's investment and obligations;

[c.] (c) Injury to the public welfare;

[d.] (d) The adequacy of the franchisee's service facilities, equipment, parts and personnel in relation to those of other franchisees of the same line-make;

[e.] (e) Whether warranties are being honored by the franchisee;

[f.] (f) The parties' compliance with their franchise agreement;

[g.] (g) The desire of a franchisor for market penetration or a market study, if any, prepared by the franchisor or franchisee are two factors which may be considered;

[h.] (h) The harm to the franchisor;

(6) To prevent by contract or otherwise, any motor vehicle franchisee from changing the capital structure of the franchisee's franchise of such motor vehicle franchisee or the means by or through which the franchisee finances the operation of the franchisee's franchise, provided the motor vehicle franchisee at all times meets any reasonable capital standards agreed to between the motor vehicle franchisee and the motor vehicle franchisor and grants to the motor vehicle franchisor a purchase money security interest in the new motor vehicles, new parts and accessories purchased from the motor vehicle franchisor;

(7) (a) Prevent, by contract or otherwise, any sale or transfer of a franchisee's franchise or franchises or interest or management thereof; provided, if the franchise specifically permits the franchisor to approve or disapprove any such proposed sale or transfer, a franchisor shall only be allowed to disapprove a proposed sale or transfer if the interest being sold or transferred when added to any other interest owned by the transferee constitutes fifty percent or more of the ownership interest in the franchise and if the proposed transferee fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to its entering into a franchise, and which relate to the proposed management or ownership of the franchise operations or to the qualification, capitalization, integrity or character of the proposed transferee and which are reasonable. A franchisee may request, at any time, that the franchisor provide a copy of the standards which are normally relied upon by the franchisor to evaluate a proposed sale or transfer and a proposed transferee;

(b) The franchisee and the prospective franchisee shall cooperate fully with the franchisor in providing information relating to the prospective transferee's qualifications, capitalization, integrity and character;

(c) In the event of a proposed sale or transfer of a franchise, the franchisor shall be permitted to exercise a right of first refusal to acquire the franchisee's assets or ownership if:

a. The franchise agreement permits the franchisor to exercise a right of first refusal to acquire the franchisee's assets or ownership in the event of a proposed sale or transfer;

b. Such sale or transfer is conditioned upon the franchisor or franchisee entering a franchise agreement with the proposed transferee;

c. The exercise of the right of first refusal shall result in the franchisee and the franchisee's owners receiving the same or greater consideration and the same terms and conditions as contracted to receive in connection with the proposed sale or transfer;

d. The sale or transfer does not involve the sale or transfer to an immediate member or members of the family of one or more franchisee owners, defined as a spouse, child, grandchild, spouse of a child or grandchild, brother, sister or parent of the franchisee owner, or to the qualified manager, defined as an individual who has been employed by the franchisee for at least two years and who otherwise qualifies as a franchisee operator, or a partnership or corporation controlled by such persons; and

e. The franchisor agrees to pay the reasonable expenses, including attorney's fees which do not exceed the usual, customary and reasonable fees charged for similar work done for other clients, incurred by the proposed transferee prior to the franchisor's exercise of its right of first refusal in negotiating and implementing the contract for the proposed sale or transfer of the franchise or the franchisee's assets. Notwithstanding the foregoing, no payment of such expenses and attorney's fees shall be required if the franchisee has not submitted or caused to be submitted an accounting of those expenses within fourteen days of the franchisee's receipt of the franchisor's written request for such an accounting. Such accounting may be requested by a franchisor before exercising its right of first refusal;

(d) For determining whether good cause exists for the purposes of this subdivision, the administrative hearing commission shall take into consideration the existing circumstances, including, but not limited to, the following factors:

a. Whether the franchise agreement specifically permits the franchisor to approve or disapprove any proposed sale or transfer;

b. Whether the interest to be sold or transferred when added to any other interest owned by the proposed transferee constitutes fifty percent or more of the ownership interest in the franchise;

c. Whether the proposed transferee fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to its entering into a franchise, and which related to the proposed management or ownership of the franchise operations or to the qualification, capitalization, integrity or character of the proposed transferee which are reasonable;

d. Injury to the public welfare;

e. The harm to the franchisor;

(8) To prevent by contract or otherwise any motor vehicle franchisee from changing the executive management of the motor vehicle franchisee's business, except that any attempt by a motor vehicle franchisor to demonstrate by giving reasons that such change in executive management will be detrimental to the distribution of the motor vehicle franchisor's motor vehicles shall not constitute a violation of this subdivision;

(9) To impose unreasonable standards of performance upon a motor vehicle franchisee;

(10) To require a motor vehicle franchisee at the time of entering into a franchise arrangement to assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by sections 407.810 to 407.835;

(11) To prohibit directly or indirectly the right of free association among motor vehicle franchisees for any lawful purpose;

(12) To provide any term or condition in any lease or other agreement ancillary or collateral to a franchise, which term or condition directly or indirectly violates the provisions of sections 407.810 to 407.835;

(13) Upon any termination, cancellation or refusal to continue any franchise or any discontinuation of any line-make or parts or products related to such line-make by a franchisor, fail to pay reasonable compensation to a franchisee as follows:

(a) Any new, undamaged and unsold vehicle in the franchisee's inventory of either the current model year or purchased from the franchisor within one hundred twenty days prior to receipt of a notice of termination or nonrenewal, provided the vehicle has less than five hundred miles registered on the odometer, including mileage incurred in delivery from the franchisor or in transporting the vehicle between dealers for sale, at the dealer's net acquisition cost, plus any cost to the dealer for returning the vehicle inventory to the franchisor;

(b) The franchisee's cost of each new, unused, undamaged and unsold part or accessory if the part or accessory is in the current parts catalog, less applicable allowances, plus five percent of the catalog price of the part for the cost of packing and returning the part to the franchisor. In the case of sheet metal, a comparable substitute for the original package may be used. Reconditioned or core parts shall be valued at their core value, the price listed in the current parts catalog or the amount paid for expedited return of core parts, whichever is higher. If the part or accessory was purchased by the franchisee from an outgoing authorized franchisee, the franchisor shall purchase the part for either the price in the current parts catalog or the franchisee's actual purchase price of the part, whichever is less. In the case of parts which no longer appear in the current parts catalog, the franchisor may purchase the part for either the price in the last version of the parts catalog in which the part appeared or the franchisee's actual purchase price of the part, whichever is less. The franchisee shall maintain accurate records regarding the actual purchase price of parts bought from an outgoing authorized franchisee. In the absence of such records, the franchisor is not required to purchase parts which are not in the current parts catalog;

(c) The depreciated value determined pursuant to generally accepted accounting principles of each undamaged sign owned by the franchisee which bears a trademark or trade name used or claimed by the franchisor if the sign was purchased from, or purchased at the request of, the franchisor;

(d) The fair market value of all special tools, data processing equipment and automotive service equipment owned by the franchisee which were recommended in writing and designated as special tools and equipment and purchased from, or purchased at the request of, the franchisor within three years of the termination of the franchise, if the tools and equipment are in usable and good condition, except for reasonable wear and tear;

(e) Except as provided in paragraph (a) of this subdivision, the cost of transporting, handling, packing, storing and loading of any property subject to repurchase pursuant to this section shall not exceed reasonable and customary charges; and

(f) The franchisor shall pay the franchisee the amounts specified in this subdivision within ninety days after the tender of the property subject to the franchisee providing evidence of good and clear title upon return of the property to the franchisor. The franchisor shall remove the property within one hundred eighty days after the tender of the property from the franchisee's property. Unless previous arrangements have been made and agreed upon, the franchisee is under no obligation to provide insurance for the property left after one hundred eighty days;

(14) To prevent or refuse to honor the succession to a franchise or franchises by any legal heir or devisee under the will of a franchisee, under any written instrument filed with the franchisor designating any person as the person's successor franchisee, or pursuant to the laws of descent and distribution of this state; provided:

(a) Any designated family member of a deceased or incapacitated franchisee shall become the succeeding franchisee of such deceased or incapacitated franchisee if such designated family member gives the franchisor written notice of such family member's intention to succeed to the franchise or franchises within one hundred twenty days after the death or incapacity of the franchisee, and agrees to be bound by all of the terms and conditions of the current franchise agreement, and the designated family member meets the current reasonable criteria generally applied by the franchisor in qualifying franchisees. A franchisee may request, at any time, that the franchisor provide a copy of such criteria generally applied by the franchisor in qualifying franchisees;

(b) The franchisor may request from a designated family member such personal and financial data as is reasonably necessary to determine whether the existing franchise agreement should be honored. The designated family member shall supply the personal and financial data promptly upon the request;

(c) If the designated family member does not meet the reasonable criteria generally applied by the franchisor in qualifying franchisees, the discontinuance of the current franchise agreement shall take effect not less than ninety days after the date the franchisor serves the required notice on the designated family member pursuant to subsection 4 of section 407.822;

(d) The provisions of this subdivision shall not preclude a franchisee from designating any person as the person's successor by written instrument filed with the franchisor, and if such an instrument is filed, it alone shall determine the succession rights to the management and operation of the franchise; and

(e) For determining whether good cause exists, the administrative hearing commission shall take into consideration the existing circumstances, including, but not limited to, the following factors:

a. Whether the franchise agreement specifically permits the franchisor to approve or disapprove any successor;

b. Whether the proposed successor fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to the successor entering into a franchise, and which relate to the proposed management or ownership of the franchise operation or to the qualification, capitalization, integrity or character of the proposed successor and which are reasonable;

c. Injury to the public welfare;

d. The harm to the franchisor;

(15) To coerce, threaten, intimidate or require a franchisee under any condition affecting or related to a franchise agreement, or to waive, limit or disclaim a right that the franchisee may have pursuant to the provisions of sections 407.810 to 407.835. Any contracts or agreements which contain such provisions shall be deemed against the public policy of the state of Missouri and are void and unenforceable. Nothing in this section shall prohibit voluntary settlement agreements;

(16) To initiate any act enumerated in this subsection on grounds that it has advised a franchisee of its intention to discontinue representation at the time of a franchisee change or require any franchisee to enter into a site control agreement as a condition to initiating any act enumerated in this subsection. Such condition shall not be construed to nullify an existing site control agreement for a franchisee's property[.];

(17) To require, coerce, or attempt to coerce any franchisee in this state to refrain from, or to terminate, cancel, or refuse to continue any franchise based upon participation by the franchisee in the management of, investment in or the acquisition of a franchise for the sale of any other line of new vehicle or related products in the same or separate facilities as those of the franchisor. This subdivision does not apply unless the franchisee maintains a reasonable line of credit for each make or line of new vehicle, the franchisee remains in compliance with the franchise and any reasonable facilities requirements of the franchisor, and no change is made in the principal management of the franchisee. The reasonable facilities requirement shall not include any requirement that a franchisee establish or maintain exclusive facilities, personnel, or display space, when such requirements or any of them would not otherwise be justified by reasonable business considerations. Before the addition of a line-make to the dealership facilities the franchisee must first request consent of the franchisor, if required by the franchise agreement. Any decision of the franchisor with regard to dualing of two or more franchises shall be granted or denied within sixty days of a written request from the new vehicle dealer. The franchiser's failure to respond timely to a dualing request shall be deemed to be approval of the franchisee's request;

(18) To fail or refuse to offer to sell to all franchisees for a line-make every motor vehicle sold or offered for sale to any franchisee of that line-make. However, the failure to deliver any such motor vehicle shall not be considered a violation of this section if the failure is not arbitrary, or is due to a lack of manufacturing capacity or to a strike or labor difficulty, a shortage of materials, a freight embargo or other cause over which the franchisor has no control. A franchisor may impose reasonable requirements on the franchisee including, but not limited to, the purchase of reasonable quantities of advertising materials, the purchase of special tools required to properly service a motor vehicle, the undertaking of sales person or service person training related to the motor vehicle, the meeting of reasonable display and facility requirements as a condition of receiving a motor vehicle, or other reasonable requirements; provided, that if a franchisor requires a franchisee to purchase essential service tools with a purchase price in the aggregate of more than seventy-five hundred dollars in order to receive a particular model of new motor vehicle, the franchisor shall upon written request provide such franchisee with a good faith estimate in writing of the number of vehicles of that particular model that the franchisee will be allocated during that model year in which the tools are required to be purchased.

407.826. 1. (1) A franchisor shall be prohibited from owning or operating a new motor vehicle dealership in this state. It is not a violation of this section for a franchisor to own or operate a new motor vehicle dealership:

(a) For a temporary period of not more than twenty-four months if the dealership is for sale at a reasonable price and on reasonable terms and conditions to an independent qualified buyer. On showing by a franchisor of good cause, the time limit set forth above may be extended for an additional period of up to twelve months; or

(b) In a bona fide relationship with an independent person (i) who is required to make a significant investment in the new motor vehicle dealership subject to loss and (ii) operates the dealership and can reasonably expect to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions.

(2) Nothing in this section shall be deemed to prohibit a franchisor from owning a minority interest in an entity that owns motor vehicle dealerships of the same line-make manufactured and franchised by the factory, provided that all of the following conditions are met at the time of acquisition and continue to be met during the time the entity maintains ownership:

(a) The interest owned by the factory in said entity shall not exceed forty-five percent of the total ownership;

(b) Any dealership in which the entity owns an interest shall be no less than nine miles of any unaffiliated new motor vehicle dealership trading in the same line-make of vehicle;

(c) All of the licensed dealerships for the sale of such factory's new motor vehicle in the state trade exclusively in the factory's line-make;

(d) During any period in which the entity has such ownership interest, the factory shall have no more than four franchise agreements governing such line-make with dealers licensed to do business in this state;

(e) All the factory's franchise agreements confer rights on the franchisee of the line-make to develop and operate, within a defined geographic territory or area, as many dealership facilities as the franchisee and factory shall agree are appropriate;

(f) At the time the entity first acquires an ownership interest, not fewer than seventy-five percent of the franchisees of the line-make within this state own and operate two or more dealership facilities in the geographic territory or area covered by the franchise agreement with the factory;

(g) As of January 1, 2001, there were no more than ten dealerships of such line-make licensed as a new motor vehicle dealer in this state; and

(h) Prior to the effective date of this subsection, the factory has been continuously engaged, at least since July 1, 1998, in the retail sale of motor vehicles of its own line-make through direct or indirect ownership of dealerships in at least five states.

2. A franchisor shall not sell new motor vehicles directly to any retail consumer except through a franchisee for the line-make that includes the new motor vehicle unless such consumer is an employee of the franchisor, or is a not-for-profit organization or an agency of the federal, state or local governments. This subsection shall not preclude a franchisor from providing information to consumers for the purpose of marketing or facilitating the sale of a new motor vehicle or from establishing programs to sell or offer to sell new motor vehicles through participating franchisees.

3. The remedies and relief available pursuant to section 407.835 shall apply to this section.

407.828. 1. Each franchisor shall specify in writing to each of its franchisees in this state the franchisee's obligations for preparation, delivery, and warranty service on its products. The franchisor shall compensate the franchisee for warranty service required of the franchisee by the franchisor. The franchisor shall provide the franchisee with the schedule of compensation to be paid to the franchisee for parts, work and service, and the time allowance for the performance of the work and service.

2. The schedule of compensation shall include reasonable compensation for diagnostic work, as well as repair service and labor. Time allowances for the diagnosis and performance of warranty work and service shall be reasonable and adequate for the work to be performed. In the determination of what constitutes reasonable compensation pursuant to this section, the principal factor to be given consideration shall be the prevailing wage rates being paid by franchisees in the community in which the franchisee is doing business, and in no event shall the compensation of a franchisee for warranty labor be less than the rates charged by the franchisee for like service to retail customers for nonwarranty service and repairs, provided that such rates are reasonable.

3. A franchisor shall not:

(1) Fail to perform any warranty obligation;

(2) Fail to include in written notices of franchisor recalls to new motor vehicle owners and franchisees the expected date by which necessary parts and equipment will be available to franchisees for the correction of the defects; or

(3) Fail to compensate any of the franchisees in this state for repairs effected by the recall.

4. All claims made by a franchisee pursuant to this section for labor and parts shall be paid within thirty days after their approval. All claims shall be either approved or disapproved by the franchisor within thirty days after their receipt on a proper form generally used by the franchisor and containing the usually required information therein. Any claims not specifically disapproved in writing within thirty days after the receipt of the form shall be considered to be approved and payment shall be made within thirty days. A claim which has been approved and paid may not be charged back to the franchisee unless the franchisor can show that the claim was fraudulent, false, or unsubstantiated, except that a charge back for false or fraudulent claims shall not be made more than two years after payment, and a charge back for unsubstantiated claims shall not be made more than fifteen months after payment. A franchise shall maintain all records of warranty repairs, including the related time records of its employees, for at least two years following payment of any warranty claim.

5. A franchisor shall compensate the franchisee for franchisor-sponsored sales or service promotion events, programs, or activities in accordance with established guidelines for such events, programs, or activities.

6. All claims made by a franchisee pursuant to subsection 5 for promotion events, programs, or activities shall be paid within ten days after their approval. All claims shall be either approved or disapproved by the franchisor within thirty days after their receipt on a proper form generally used by the franchisor and containing the usually required information therein. Any claim not specifically disapproved in writing within thirty days after the receipt of this form shall be considered to be approved and payment shall be made within thirty days. The franchisor has the right to charge back any claim for twelve months after the later of either the close of the promotion event, program, or activity, or the date of the payment.

407.1320. As used in sections 407.1320 to 407.1346, the following terms shall mean:

(1) "Area of sales responsibility", the geographical area agreed to by the dealer and manufacturer in the RV manufacturer/dealer agreement in which the dealer has the exclusive right to sell those vehicles identified in the dealer agreement;

(2) "Camping trailer", a vehicle mounted on wheels and constructed with collapsible partial side walls that fold for towing by another vehicle and unfold at the campsite to provide temporary living quarters for recreational, camping or travel use;

(3) "Dealer", any person, firm, corporation or business entity that engages in selling new recreation vehicles pursuant to a signed RV manufacturer/dealer agreement with a manufacturer and is licensed to conduct business in this state;

(4) "Distributor", any person, firm, corporation or business entity that purchases new RVs for resale to RV dealers;

(5) "Factory campaign", an effort on the part of a warrantor to contact recreation vehicle owners and/or dealers in order to address a part and/or equipment issues;

(6) "Family member", a spouse, child, grandchild, parent, sibling, niece, nephew and spouse of any of the above;

(7) "Fifth wheel trailer", a vehicle, mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use, of such size or weight as to not require a special highway movement permit, of gross trailer area not to exceed 400 square feet (37.2m2) in the set-up mode, and designed to be towed by a motorized vehicle that contains a towing mechanism that is mounted above or forward of the tow vehicle's rear axle;

(8) "Good cause", for purposes of determining whether there is "good cause" for a proposed action, the following factors shall be considered:

(a) The extent of the affected dealer's penetration in the relevant market area;

(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 RV warranties; and

(f) The dealer's performance under the terms of its RV dealer agreement;

(9) "Line-make", a group of recreation vehicles that have all of the following characteristics:

(a) They are offered for sale, lease, or distribution under a common name, trademark, service mark, or brand name of the manufacturer or distributor of those recreation vehicles; and

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

(c) They are all of a single, distinct classification of recreation vehicle product type having a substantial degree of commonality in construction of chassis, frame, and body; and

(d) They are all of the same model that is distinguishable by length and interior floor plan from other recreation vehicles within the same product type, notwithstanding the fact that the model may share some or most of the same decor, features, equipment, weight, and price range; and

(e) The dealer is specifically authorized to sell as new that particular line-make and model of recreation vehicle under the terms of the dealer's existing agreement with the manufacturer or distributor of that recreation vehicle;

(10) "Manufacturer", any person, firm, corporation or business entity that engages in the manufacturing of recreation vehicles;

(11) "Motorhome", a vehicle which is designed to provide temporary living quarters and which:

(a) Is built onto as an integral part of, or permanently attached to, a motor vehicle chassis; and

(b) Contains at least four of the following independent life systems if each is permanently installed and designed to be removed only for purposes of repair or replacement and meets the American National Standards Institute standards for recreation vehicles:

a. A cooking facility with an onboard fuel source;

b. A gas or electric refrigerator;

c. A toilet with exterior evacuation;

d. A heating or air conditioning system with an onboard power or fuel source separate from the vehicle engine;

e. A potable water supply system that includes at least a sink, a faucet, a water tank with an exterior service supply connection;

f. A 110-125 volt electric power supply;

(c) The three basic types of motorhomes are specified as follows:

a. Type A: a raw chassis upon which is built a driver's compartment and an entire body which provides temporary living quarters as defined above;

b. Type B: a completed van-type vehicle which has been altered to provide temporary living quarters as defined above;

c. Type C: an incomplete vehicle, upon which is permanently attached a body designed to provide temporary living quarters as defined above;

(12) "Proprietary part", any part manufactured by or for and sold exclusively by the manufacturer;

(13) "Recreation vehicle", a vehicle primarily designed as temporary living quarters for recreational, camping, travel or seasonal use that either has its own motive power or is mounted on, or towed by, another vehicle. The product types are: travel trailer, fifth wheel trailer, camping trailer, truck camper and motorhome;

(14) "Transient customer", customers who are temporarily traveling through a dealer's area of sales responsibility;

(15) "Travel trailer", a vehicle, mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use, of such size or weight as to not require a special highway movement permit when towed by a motorized vehicle, and of gross trailer area not to exceed three hundred twenty square feet (29.7m2);

(16) "Truck Camper", a portable unit constructed to provide temporary living quarters for recreational, travel or camping use consisting of a roof, floor and sides designed to be loaded onto and unloaded from the bed of a pickup truck;

(17) "Warrantor", any person, firm, corporation or business entity that gives a warranty in connection with a new recreation vehicle or parts, accessories or components thereof. Such 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.

407.1323. 1. All manufacturers and dealers doing business in this state must have a written agreement signed by both parties. This law shall supercede any conflicting statutes in states where enacted.

2. The manufacturer shall designate in writing subject to annual review the area of sales responsibility exclusively assigned to an RV dealer and shall not establish another RV dealer for the same line-make in the same area during the duration of the agreement unless the manufacturer can show good cause for the addition of the new RV dealer including reasonable evidence that the market will support the establishment of a new dealership.

3. Sales of RVs by manufacturers or distributors shall be in accordance with published prices, charges and terms of sale in effect at any given time. The manufacturer will sell products on the same basis, with respect to all rebates, discounts and programs, to all competing dealers similarly situated.

4. No manufacturer, directly or through any officer, agent or employee, may terminate an RV dealer agreement without good cause. The burden of showing good cause is on the manufacturer. Prior to the expiration of a dealer agreement, both parties shall enter into negotiations for renewal of the dealer agreement in good faith, and neither will arbitrarily require a substantial change in competitive circumstances. When taking on a competing manufacturer's lines, a dealer must notify existing manufacturers in writing, at least thirty days prior to entering into such an agreement, to sell the same type of recreational vehicle.

407.1326. 1. Except as provided in this section, a manufacturer shall provide an RV dealer at least one hundred twenty days prior written notice of termination. The notice shall state all the reasons for termination and shall further state that if, within thirty days following receipt of the manufacturer's notice, the RV dealer provides to the manufacturer a written notice of intent to cure all claimed deficiencies, the RV dealer will then have one hundred twenty days from the date of the manufacturer's notice to rectify such deficiencies. If the deficiency is rectified within one hundred twenty days, the manufacturer's notice shall be void. However, if the RV dealer fails to provide the notice of intent to cure deficiencies in the proscribed time period, the termination shall take effect thirty days after the RV dealer's receipt of the manufacturer's notice unless the dealer has new and untitled inventory on hand in which case, if requested by the dealer, it will take effect upon the sale of the remaining inventory but in no event later than one hundred twenty days from the manufacturer's notice of termination.

2. The one hundred twenty day notice may be reduced to thirty days notice if the grounds for termination is due to:

(1) Conviction of or pleas of nolo contendere to a felony of an RV dealer, or one of its owners;

(2) The business operations of the RV dealer have been abandoned or closed for ten consecutive business days unless the closing is due to an act of god, strike or labor difficulty, or other cause over which the dealer has no control;

(3) A material misrepresentation by the RV dealer; or

(4) The suspension, revocation, or refusal to renew the RV dealer's license.

3. The notice provisions of this section shall not apply if the reason for termination, is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy.

4. A dealer may terminate its dealer agreement at any time by giving written notice of such intention to manufacturer at least thirty days prior to the effective date specified for termination.

407.1329. If the RV dealer agreement is terminated, canceled or not renewed by the manufacturer for cause, the manufacturer shall, at the election of the RV dealer, within thirty days of termination, repurchase:

(1) (a) All new, untitled current model year recreation vehicle inventory, acquired from the manufacturer, which has not been used (except for demonstration purposes), altered or damaged to the extent that such damage must be disclosed to the consumer pursuant to section 407.1343, at one hundred percent of the net invoice cost, including transportation, less applicable rebates and discounts to the dealer; and

(b) All new, untitled recreation vehicle inventory of the prior model year, acquired from the manufacturer, provided the prior model year vehicles have not been altered, used (except for demonstration purposes) or damaged to the extent that such damage must be disclosed to the consumer pursuant to section 407.1343, and were drafted on the dealer's financing source or paid within one hundred twenty days prior to the effective date of the termination, cancellation, or nonrenewal.

In the event any of the vehicles repurchased pursuant to this subdivision are damaged, but do not trigger the consumer disclosure requirement, the amount due the dealer shall be reduced by the cost to repair the vehicle. Damage prior to delivery to dealer that is disclosed at the time of delivery will not disqualify repurchase under this provision;

(2) All current and undamaged manufacturer's accessories and proprietary parts sold to the dealer for resale, if accompanied by the original invoice, at one hundred five percent of the original net price paid to the manufacturer to compensate the dealer for handling, packing, and shipping the parts; and

(3) Any fully and correctly functioning diagnostic equipment, special tools, current signage and other equipment and machinery, at one hundred percent of the dealer's net cost plus freight, destination, delivery and distribution charges and sales taxes, if any, provided it was purchased by the dealer within five years before termination and upon the manufacturer's request and can no longer be used in the normal course of the dealer's ongoing business. Manufacturer shall pay dealer within thirty days of receipt of the returned items.

407.1332. 1. If a recreation vehicle dealer desires to make a change in its ownership by the sale of the business assets, stock transfer, or otherwise, the recreation vehicle dealer must give the manufacturer thirty days written notice prior to the closing including all supporting documentation as may be required by the manufacturer. The manufacturer shall not refuse to agree to such proposed change or sale and may not disapprove or withhold approval of such change or sale unless the manufacturer can show that its decision is based on manufacturer's reasonable criteria, which may include the prospective transferee's business experience, moral character, financial qualifications and any criminal record.

2. If the manufacturer rejects a proposed change or sale, the manufacturer shall give written notice of its reasons to the recreation vehicle dealer within thirty days after receipt of the dealer notification and complete documentation. If no such notice is given to the recreation vehicle dealer, the change or sale shall be deemed approved.

3. The manufacturer shall have the burden in showing that its rejection of the transfer or sale is reasonable.

407.1335. It is unlawful for any manufacturer to fail to provide a dealer an opportunity to designate, in writing, a member of the dealer's family as a successor to the dealership in the event of the death, incapacity, or retirement of the dealer. It shall be unlawful to prevent or refuse to honor the succession to a dealership by a member of the family of the deceased, retired or incapacitated dealer unless the manufacturer has provided to the dealer written notice of its objections. Grounds for objection shall be lack of creditworthiness, conviction of a felony, lack of required licenses or business experience or other conditions which make such succession unreasonable under the circumstances, but the manufacturer shall bear the burden of showing the unreasonableness of such succession. However, no member of the family may succeed to an RV dealership if the succession to the RV dealership involves, without the manufacturer's consent, a relocation of the business or an alteration of the terms and conditions of the written agreement.

407.1338. 1. Each warrantor shall specify in writing to each of its RV dealers, obligations, if any, for preparation, delivery and warranty service on its products; shall compensate the dealer for warranty service required of the dealer by the warrantor; and shall provide the dealer the schedule of compensation to be paid; and the time allowances for the performance of such work and service. In no event shall such schedule of compensation fail to include reasonable compensation for diagnostic work as well as warranty labor.

2. Time allowances for the diagnosis and performance of warranty labor shall be reasonable for the work to be performed. In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration shall be the actual wage rates being paid by the dealer, and the actual retail labor rate being charged by the dealers in the community in which the dealer is doing business. In no event shall such compensation of a dealer for warranty labor be less than the lowest retail labor rates actually charged by the dealer for like nonwarranty labor as long as such rates are reasonable.

3. The warrantor shall reimburse dealer for warranty parts at actual wholesale cost, plus a minimum thirty percent handling charge and the cost, if any, of freight to return warranty parts to the warrantor.

4. Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis, and dealer claims for warranty compensation shall not be denied except for cause, such as performance of nonwarranty repairs, material non-compliance with warrantors published policies and procedures, lack of material documentation, fraud, or misrepresentation.

5. Dealer must submit warranty claims within thirty days of completing work.

6. Dealer must notify the warrantor verbally or in writing if the RV dealer is unable to perform material or repetitive warranty repairs as soon as reasonably possible.

7. Warrantor must disapprove warranty claims in writing within thirty days of the date of submission by the dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within thirty days shall be construed to be approved and shall be paid within forty-five days.

8 It is a violation of this chapter for any warrantor to:

(1) Fail to perform any of its warranty obligations with respect to its warranted product;

(2) Fail to include in written notices of factory campaigns to vehicle owners and dealers the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the campaign work. The manufacturer may ship parts in quantity to the dealer to effect such campaign work, and if such parts are in excess of the dealer's requirements, the dealer may return unused parts to the manufacturer for credit after completion of the campaign;

(3) Fail to compensate any of its RV dealers for authorized repairs effected by such dealer of merchandise damaged in manufacture or transit to the dealer, if the carrier is designated by the manufacturer, factory branch, distributor or distributor branch;

(4) Fail to compensate its RV dealers for authorized warranty service in accordance with the schedule of compensation provided the dealer pursuant section 407.1338, if performed in a timely and competent manner;

(5) Intentionally misrepresent in any way to purchasers of RVs that warranties with respect to the manufacture, performance or design of the vehicle are made by the dealer either as warrantor or co-warrantor; or

(6) Require the dealer to make warranties to customers in any manner related to the manufacture of the RV.

9. It is a violation of this chapter for any RV dealer to:

(1) Fail to perform "pre-delivery inspection" (PDI) functions, if required, in a competent and timely manner;

(2) Fail to perform warranty service work, authorized by the warrantor, in a reasonably timely and competent manner on any transient customer's vehicle whether sold by that dealer or not;

(3) Misrepresent the terms of any warranty.

407.1340. Notwithstanding the terms of any RV manufacturer/dealer agreement, it shall be a violation of this chapter for:

(1) Any warrantor to fail to indemnify and hold harmless its dealer against any losses or damages, to the extent such losses or damages are caused by the negligence or willful misconduct of the warrantor. The dealer shall provide to the warrantor a copy of pending suits in which allegations are made that come within this subsection within ten days of receiving such suit;

(2) Any dealer to fail to indemnify and hold harmless its warrantor against any losses or damages, to the extent such losses or damages are caused by the negligence or willful misconduct of the dealer. The warrantor shall provide to the dealer a copy of pending suits in which allegations are made that come within this subsection within ten days of receiving such suit.

407.1343. 1. On any new RV, any uncorrected, significant damage or any corrected damage exceeding five hundred dollars or ten percent of the dealer's invoice, whichever is greater, must be disclosed to the dealer in writing prior to delivery. The dealer is responsible for disclosing such damage to the consumer in writing and must obtain a written acknowledgment of such damage from the consumer. A copy of the consumer's acknowledgment must be provided to the manufacturer. Factory or dealer repairs to glass, tires, wheels, bumpers, audio/video equipment, in-dash components, instrument panels, decorating items, appliances, furniture and components, are excluded from disclosure when properly replaced by substantially similar manufacturer's or distributor's original equipment, materials or parts.

2. Whenever a new RV is damaged prior to transit to the dealer, or is damaged in transit to the dealer when the carrier or means of transportation has been determined by the manufacturer, or distributor, the dealer shall:

(1) Notify the manufacturer or distributor of such damage by the next business day after the date of delivery of such new RVs to the new RV dealership or within such additional time as specified in the RV manufacturer/dealer agreement; and

(2) Either:

(a) Request from the manufacturer or distributor authorization to replace the components, parts and accessories damaged or otherwise correct the damage; or

(b) Reject the vehicle by the next business day after delivery.

3. If the manufacturer or distributor refuses or fails to authorize repair of such damage within ten days after receipt of notification, or if the dealer rejects the RV because of damage, ownership of the new RV shall revert to the manufacturer or distributor. Dealer will exercise due care in custody, but the RV dealer shall have no other obligations, financial or otherwise, with respect to such RV.

407.1346. 1. A manufacturer shall be prohibited from owning or operating a new RV dealership in this state. It is not a violation of this section for a manufacturer to own or operate a new RV dealership:

(1) For a temporary period of not more than sixty months if the dealership is for sale at a reasonable price and on reasonable terms and conditions to an independent qualified buyer; or

(2) In a bona fide relationship with an independent person who:

(a) Is required to make a significant investment in the new RV dealership subject to loss; and

(b) Operates the dealership and can reasonably expect to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions; or

(3) If the manufacturer has no other dealers of the same line-make in this state.

2. Nothing in this section shall be deemed to prohibit a manufacturer from owning a minority interest in an entity that owns RV dealerships of the same line-make manufactured and sold through dealers in this state by the manufacturer, provided that all of the following conditions are met at the time of acquisition and continue to be met during the time the entity maintains ownership:

(1) The interest owned by the manufacturer in said entity shall not exceed forty-five percent of the total ownership;

(2) All the manufacturer's dealer agreements confer rights on the dealer of the line-make to develop and operate, within a defined geographic territory or area, in as many dealership facilities as the dealer and manufacturer shall agree are appropriate.

3. Subsections 1 and 2 of this section shall not apply to manufacturers that own or operate an RV dealership in this state as of August 28, 2001.

Section B. The provisions of sections 407.1320 to 407.1346 shall be effective on August 1, 2002.



Missouri House of Representatives