AN ACT TO AMEND TITLE 21 OF THE DELAWARE CODE RELATING TO COMMERCE AND TRADE.

Legislation Document

SPONSOR:

Sen. Poore & Rep. Bush

Sens. Brown, Buckson, Cruce, Hansen, Hocker, Hoffner, Huxtable, Lawson, Lockman, Mantzavinos, Paradee, Pettyjohn, Pinkney, Richardson, Seigfried, Sokola, Sturgeon, Townsend, Walsh, Wilson; Rep. Hilovsky

DELAWARE STATE SENATE

153rd GENERAL ASSEMBLY

SENATE BILL NO. 286

AN ACT TO AMEND TITLE 21 OF THE DELAWARE CODE RELATING TO COMMERCE AND TRADE.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 84, Title 21 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and by redesignating accordingly:

Chapter 84

New Recreational Vehicle

, Vessel,

or New Recreational Trailer Manufacturer-Dealer Agreements [For application of this chapter, see 79 Del. Laws, c. 161, § 5]

§ 8401. Legislative intent [For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) The intent of the General Assembly is to protect the public health, safety, and welfare of the residents of the State by regulating the relationship among new recreational vehicle

and vessel

dealers, manufacturers, distributors, and suppliers; maintaining competition; and providing consumer protection and fair trade.

(b) The intent of the General Assembly is that the provisions of this chapter be applied to manufacturer-dealer agreements in regard to new recreational vehicles,

vessels,

or new recreational trailers, entered into on or after July 1, 2014.

§ 8402. Definitions [For application of this section, see 79 Del. Laws, c. 161, § 5].

As used in this chapter, the following definitions apply:

(2) “All-terrain vehicle” or “ATV” means a motorized “off-highway vehicle” or “OHV” designed to travel on 4 low-pressure tires, with a seat straddled by the operator and handlebars for steering control. For purposes of this definition, the term “ATV” also includes motorized golf carts and go-karts that are not registered for on-road use or that are operated off-road.

“ATV” does not include a farm vehicle being used for farming, a vehicle used for military, fire, emergency, or law-enforcement purposes, a construction or logging vehicle used in the performance of its common function, an electric personal assistive mobility device, or a registered aircraft.

(2)

(3)

“Distributor” means a person, firm, corporation, or business entity that purchases new recreational vehicles or new recreational trailers from a manufacturer for resale to new recreational vehicle dealers.

(3)

(4)

“Factory campaign” means an effort on the part of a warrantor to contact new recreational vehicle or new recreational trailer owners or new recreational vehicle dealers in order to address a part or equipment issue.

(4)

(5)

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

(5)

(6)

“Fifth-wheel trailer” means a vehicle, mounted on wheels, designed to provide temporary living quarters for recreational, camping, or travel use. A “fifth-wheel trailer” must be of such size and weight as to not require a special highway movement permit, and must be 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.

(6)

(7)

“Folding camping trailer” means a vehicle that is 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.

(7)

(8)

“Line-make” means a specific series of new recreational vehicles or new recreational trailers that:

a. Are identified by a common series trade name or

trademark;

trademark,

b. Are targeted to a particular market segment, as determined by their decor, features, equipment, size, weight, and price

range;

range.

c. Have lengths and interior floor plans that distinguish the new recreational vehicles or new recreational trailers from other new recreational vehicles or new recreational trailers with substantially the same decor, equipment, features, price, and

weight;

weight.

d. Belong to a single, distinct classification of new recreational vehicle or new recreational trailer types having a substantial degree of commonality in the construction of the chassis, frame, and

body; and

body.

e. The manufacturer-dealer agreement authorizes a new recreational vehicle dealer to sell.

(8)

(9)

“Manufacturer” means a person, firm, corporation, or business entity that engages in the manufacturing of new recreational vehicles or new recreational trailers.

(9)

(10)

“Manufacturer-dealer agreement” means a written agreement or contract entered into between a manufacturer and a new recreational vehicle dealer that fixes the rights and responsibilities of the parties and pursuant to which the new recreational vehicle dealer sells new recreational vehicles or new recreational trailers.

(10)

(11)

“Motor home” means a motor vehicle designed to provide temporary living quarters for recreational, camping, or travel use. A “motor home” must contain at least 4 of the following permanently installed, independent life-support systems which meet the National Fire Protection Association standard for recreational vehicles:

a. A cooking facility with an on-board fuel

source;

source.

b. A potable water supply system that includes at least a sink, a faucet, and a water tank with an exterior service supply

connection;

connection.

c. A toilet with exterior

evacuation;

evacuation.

d. A gas or electric

refrigerator;

refrigerator.

e. A heating or air conditioning system with an on-board power or fuel source separate from the vehicle

engine; or

engine.

f. A 110-125 volt electric power supply.

(11)

(12)

“New recreational trailer” means a travel trailer, fifth-wheel trailer,

or

folding camping trailer

, motorized vessel, cargo trailer, or vessel trailer

which has not been titled.

(12)

(13)

“New recreational vehicle” means a motorhome

, motorized vessel, ATV, OHV, or SSV

which has not been titled.

(13)

(14)

“New recreational vehicle dealer” means a person, firm, corporation, or business entity who is engaged in the business of buying, selling, or exchanging new recreational vehicles or new recreational trailers.

(15) “Off-highway vehicle” or “OHV” means a motor driven off-road vehicle capable of cross-country travel without benefit of a road or trail, on or immediately over land, snow, ice, marsh, swampland or other natural terrain. It includes a multi-wheel drive or low-pressure tire vehicle, an amphibious machine, a ground effect air-cushion vehicle or other means of transportation deriving motive power from a source other than muscle or wind. “OHV” does not include a farm vehicle being used for farming, a vehicle used for military, fire, emergency or law-enforcement purposes, a construction or logging vehicle used in performance of its common function, electric bicycle, electric personal assistive mobility device or a registered aircraft.

(14)

(16)

“Proprietary part” means any part manufactured by or for, and sold exclusively by, the manufacturer.

(17) "Side-by-side vehicle" or "SxS" or "SSV" means a utility vehicle with a minimum of 2 seats positioned side by side and enclosed within a roll cage structure. A side-by-side vehicle has a minimum of 4 wheels or continuous tracks and is operated by foot controls and a steering wheel. Depending on use and application, a side-by-side vehicle may also be called a utility task vehicle, utility terrain vehicle (UTV), recreational off-highway vehicle (ROV), or multipurpose off-highway utility vehicle (MOHUV).

(15)

(18)

“Supplier” means any person, firm, corporation, or business entity that engages in the manufacturing of new recreational vehicle or new recreational trailer parts, accessories, or components.

(16)

(19)

“Transient customer” means a customer who is temporarily traveling through a new recreational vehicle dealer’s area of sales responsibility.

(17)

(20)

“Travel trailer” means a vehicle, mounted on wheels, designed to provide temporary living quarters for recreational, camping, or travel use. A “travel trailer” must be of such size and weight as to not require a special highway movement permit when towed by a motorized vehicle.

(21) “Vessel” means any watercraft or artificial contrivance used for transportation on water.

(18)

(22)

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

§ 8403. Written agreements and designated territories

[For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) A manufacturer or distributor may not sell a new recreational vehicle or new recreational trailer in this State to or through a new recreational vehicle dealer without having first entered into a written and signed manufacturer-dealer agreement with a new recreational vehicle dealer.

(b) A manufacturer or distributor shall designate the area of sales responsibility exclusively assigned to a new recreational vehicle dealer in a manufacturer-dealer agreement and may not change the area or contract with another new recreational vehicle dealer for the sale of the same line-make in the designated area during the duration of the agreement, except as provided for in § 6311(b) of this title.

(c) The area of sales responsibility may not be reviewed or changed without the consent of both parties for 1 year after the execution of the manufacturer-dealer agreement.

(d) Except as provided in subsection (e) of this section, a new recreational vehicle dealer may not sell a new recreational vehicle or new recreational trailer in this State without having first entered into a manufacturer-dealer agreement with a manufacturer or distributor which has been signed by both parties.

(e) A new recreational vehicle dealer may not be prohibited from selling a particular line-make after a manufacturer-dealer agreement has been terminated or not renewed under § 8404 of this title, if new recreational vehicles or new recreational trailers of the terminated line-make are not returned or required to be returned to the manufacturer. The new recreational vehicle dealer may continue to sell all

line makes

line-makes

that were subject to the manufacturer-dealer agreement and are currently in stock until those line-makes are no longer in the new recreational vehicle dealer’s inventory.

(f) A manufacturer must specify in writing to each of its new recreational vehicle dealers licensed in this State the dealer’s obligations for predelivery preparation, manufacturer-sponsored maintenance programs, manufacturer extended warranty, certified pre-owned warranty, manufacturer-issued service contracts, parts exchange programs, recall, and warranted service on its products.

(g) A manufacturer must compensate the new recreational vehicle dealer for such service required of the dealer by the manufacturer and provide the dealer with a schedule of compensation to be paid such dealer for parts, work, and services in connection therewith, and the time allowance for the performance of such work and service.

§ 8404. Termination, cancellation, nonrenewal, or alteration of a dealership [For application of this section, see 79 Del. Laws, c. 161, § 5].

(c) Except as otherwise provided in this chapter, a manufacturer or distributor shall provide a new recreational vehicle dealer with at least 120 days prior written notice of termination, cancellation, or nonrenewal of the manufacturer-dealer agreement if the new recreational vehicle dealer is being terminated, cancelled, or nonrenewed for good cause.

(2) The notice period may be reduced to 30 days if the manufacturer’s or distributor’s grounds for termination, cancellation, or nonrenewal are due to any of the following good cause factors:

a. A new recreational vehicle dealer being convicted of, or entering a plea of nolo contendere to, a

felony;

felony.

b. The abandonment or closing of the business operations of the new recreational vehicle dealer for 10 consecutive business days unless the closing is due to an act of God, strike, labor difficulty, or other cause over which the new recreational vehicle dealer has no

control;

control.

c. A significant misrepresentation by a new recreational vehicle dealer that materially affects the business relationship between the new recreational vehicle dealer and the manufacturer or

distributor;

distributor.

d. A suspension or revocation of a new recreational vehicle dealer’s license, or refusal to renew the new recreational vehicle dealer’s license, by the Division of Motor

Vehicles;

Vehicles.

e. A material violation of this chapter which the new recreational vehicle dealer does not cure within 30 days after written notice by the manufacturer or

distributor; or

distributor,

f. A declaration by a new recreational vehicle dealer of bankruptcy, insolvency, or the occurrence of an assignment for the benefit of creditors or

bankruptcy;

bankruptcy.

§ 8405. Repurchase of inventory [For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) If a new recreational vehicle dealer terminates, cancels, or fails to renew a manufacturer-dealer agreement for good cause as defined in § 8404(e) of this title and the manufacturer fails to cure the claimed deficiencies as provided in § 8404(d) of this title, at the election of the new recreational vehicle dealer and within 45 days after termination, cancellation, or nonrenewal, the manufacturer shall

, repurchase

:

(1)

All

Repurchase all

new, untitled recreational vehicles and recreational trailers that were acquired from the manufacturer or distributor within 12 months before the effective date of the notice of termination, cancellation, or nonrenewal that have not been used, except for demonstration purposes, and that have not been altered or damaged, at 100% of the net invoice cost, including transportation, less applicable rebates and discounts to the new recreational vehicle dealer. If any of the vehicles repurchased pursuant to this paragraph are damaged, but do not trigger a consumer disclosure requirement, the amount due the new recreational vehicle dealer must be reduced by the cost to repair the vehicle. Damage prior to delivery to the new recreational vehicle dealer that is disclosed at the time of delivery will not disqualify repurchase under this provision.

(2)

All

Repurchase all

undamaged accessories and proprietary parts sold to a new recreational vehicle dealer for resale within the 12 months prior to termination, cancellation, or nonrenewal, if accompanied by the original invoice, at 105% of the original net price paid to the manufacturer or distributor to compensate the new recreational vehicle dealer for handling, packing, and shipping the parts; and

(3)

Any

Repurchase any

properly functioning diagnostic equipment, special tools, current signage, and other equipment and machinery at 100% of the new recreational vehicle dealer’s net cost plus freight, destination, delivery, and distribution charges and sales taxes, if any, if the items were purchased by the new recreational vehicle dealer within 5 years before termination, cancellation, or nonrenewal upon the manufacturer’s or distributor’s request, and can no longer be used in the normal course of the new recreational vehicle dealer’s ongoing business.

(4) Compensate the dealer for any transporting, handling, packing, storing, and loading of any returned parts, tools, and equipment.

§ 8406. Transfer of dealership; family succession [For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) If a new recreational vehicle dealer desires to make a change in ownership by the sale of the business assets, stock transfer, or otherwise, the new recreational vehicle dealer shall give the manufacturer or distributor written notice at least 15 business days before the closing, along with all supporting documentation that may be reasonably required by the manufacturer or distributor to determine if an objection to the sale may be made. In the absence of a breach by the selling new recreational vehicle dealer of its manufacturer-dealer agreement or a provision of this chapter, the manufacturer or distributor may not object to the proposed change in ownership unless the prospective transferee:

(1) Has previously been terminated by the manufacturer for breach of its manufacturer-dealer

agreement;

agreement.

(2) Has been convicted of a felony or any crime of fraud, deceit, or moral

turpitude;

turpitude.

(3) Lacks a license required by

law;

law.

(4) Does not have an active line of credit sufficient to purchase a manufacturer’s or distributor’s

product; or

product,

(5) Has undergone in the last 10 years bankruptcy, insolvency, a general assignment for the benefit of creditors, or the appointment of a receiver, trustee, or conservator to take possession of the transferee’s business or property.

(c) It is unlawful for a manufacturer or distributor to fail to provide a new recreational vehicle dealer with an opportunity to designate, in writing, a family member as a successor to the dealership in the event of the death, incapacity, or retirement of the new recreational vehicle dealer. It is unlawful to prevent or refuse to honor the succession to a dealership by a family member of the deceased, incapacitated, or retired new recreational vehicle dealer, unless the manufacturer or distributor has provided to the new recreational vehicle dealer written notice of its objections within 10 days after receipt of the new recreational vehicle dealer’s modification of the new recreational vehicle dealer’s succession plan. In the absence of a breach of the manufacturer-dealer agreement, the manufacturer or distributor may object to the succession for the following reasons only:

(1) Conviction of the successor of a felony or any crime of fraud, deceit, or moral

turpitude;

turpitude.

(2) Bankruptcy or insolvency of the successor during the past 10

years;

years,

(3) Prior termination by the manufacturer or distributor of the successor for breach of a manufacturer-dealer

agreement;

agreement.

(4) The lack of an active line of credit for the successor sufficient to purchase the manufacturer’s or distributor’s

product; or

product.

(5) The lack of a license for the successor required by law.

§ 8407. Warranty obligations

; sales incentives

[For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) A warrantor shall:

(1) Specify in writing to each of its new recreational vehicle dealers all new recreational vehicle dealer obligations, if any, for preparation, delivery, and warranty service on its products;

(2) Compensate the new recreational vehicle dealer for performing warranty service required of the new recreational vehicle dealer by the warrantor; and

(3) Provide the new recreational vehicle dealer with a schedule of compensation to be paid and the time allowances for the performance of any work and service. The schedule of compensation must include reasonable compensation for diagnostic work as well as for warranty labor.

(b) Time allowances for the diagnosis and performance of warranty labor must 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 are the actual wage rates being paid by the new recreational vehicle dealer, and the actual retail labor rate being charged by the new recreational vehicle dealers in the community in which the new recreational vehicle dealer is doing business. The compensation of a new recreational vehicle dealer for warranty labor may not be less than the lowest retail labor rates actually charged by the new recreational vehicle dealer for like nonwarranty labor, as long as such rates are reasonable.

(c)

A warrantor shall reimburse a new recreational vehicle dealer for warranty parts at

With respect to parts reimbursement, reasonable compensation may not be less than the rate charged by the dealer for like services to nonwarranty customers for nonwarranty parts, service, or

actual wholesale cost plus a minimum

30%

40%

handling charge and the cost, if any, of freight to return warranty parts to the warrantor.

(d) Warranty audits of new recreational vehicle dealer records may be conducted by the warrantor on a reasonable basis, and new recreational vehicle dealer claims for warranty compensation may not be denied except for cause, such as performance of nonwarranty repairs, material noncompliance with the warrantor’s published policies and procedures, lack of material documentation, fraud, or misrepresentation.

(e) A new recreational vehicle dealer shall submit warranty claims within

30

180

days after completing work.

(f) A new recreational vehicle dealer shall immediately notify a warrantor, verbally or in writing, if the new recreational vehicle dealer is unable to perform any warranty repairs within

10

180

days of receipt of verbal or written complaints from a consumer.

(g)

(1)

A warrantor shall disapprove warranty claims in writing within 30 days after the work is completed and submitted by the new recreational vehicle dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within 30 days are construed to be approved and must be paid within 45 days after the work is completed and the claim submitted.

(2) All claims made by new recreational vehicle dealers pursuant to this section for compensation for labor and parts must be paid within 30 days following their approval. A warrantor retains the right to audit those claims and to charge back the dealer for claims due to fraud, work done unnecessarily, or work not properly performed for a period of 180 days following payment.

(3) Within 30 days of receiving the warrantor's notice of denial of the dealer's parts or labor submission pursuant to this subsection, a new recreational vehicle dealer may file with the Public Service Commission a protest to the warrantor's denial. If a protest is filed, the warrantor has the burden of proof to establish that the dealer's submission did not meet the respective submission requirements contained within this section. If a dealer prevails in a protest filed under this section, the dealer's increased parts or labor reimbursement shall be provided retroactive to the date the submission would have been effective pursuant to the terms of this section but for the warrantor's denial.

(h) It is a violation of this chapter for a warrantor to:

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

products;

products.

(2) Fail to include, in written notices of factory campaigns to new recreational vehicle or new recreational trailer owners and new recreational vehicle dealers, the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to new recreational vehicle dealers to perform the campaign work. A warrantor may ship parts to a new recreational vehicle dealer to effect the campaign work, and, if the parts are in excess of the new recreational vehicle dealer’s requirements, the new recreational vehicle dealer may return unused parts to the warrantor for credit after completion of the

campaign;

campaign.

(3) Fail to compensate any of its new recreational vehicle dealers for authorized repairs effected by the new recreational vehicle dealer of merchandise damaged in manufacture or transit to the new recreational vehicle dealer, if the carrier is selected by the warrantor, factory branch, distributor, or distributor

branch;

branch.

(4) Fail to compensate any of its new recreational vehicle dealers in accordance with the schedule of compensation provided to the new recreational vehicle dealer pursuant to this section, if performed in a timely and competent

manner;

manner.

(5) Intentionally misrepresent in any way to purchasers of new recreational vehicles or new recreational trailers that warranties with respect to the manufacture, performance, or design of the vehicle are made by the new recreational vehicle dealer as warrantor or

cowarrantor; or

cowarrantor.

(6) Require a new recreational vehicle dealer to make warranties to customers in any manner related to the manufacture of the new recreational vehicle or new recreational trailer.

(i) It is a violation of this chapter for a new recreational vehicle dealer to:

(1) Fail to perform predelivery inspection functions, as specified by the warrantor, in a competent and timely

manner;

manner,

(2) Fail to perform warranty service work authorized by the warrantor in a competent and timely manner on any transient customer’s vehicle of the same

line-make;

line-make.

(3) Fail to accurately document the time spent completing each repair, the total number of repair attempts conducted on a single unit, and the number of repair attempts for the same repair conducted on a single

vehicle;

vehicle.

(4) Fail to notify the warrantor within 10 days of a second repair attempt which impairs the use, value or safety of the

vehicle;

vehicle,

(5) Fail to maintain written records, including a consumer’s signature, regarding the amount of time a unit is stored for the consumer’s convenience during a

repair; or,

repair.

(6) Make fraudulent warranty claims or misrepresent the terms of a warranty.

(j) A schedule of compensation for services identified in paragraph (a)(1) of this section must include reasonable compensation for diagnostic work, parts, repair service, and labor. With respect to manufacturer-sponsored maintenance programs, manufacturer extended warranty, certified pre-owned warranty, manufacturer-issued service contracts, parts exchange programs, recall and warranty parts, and labor reimbursement, reasonable compensation may not be less than the rate charged by the dealer for like services to nonwarranty customers for nonwarranty parts, services, and repairs. If a manufacturer furnishes a part of a component to a dealer at no cost or a reduced cost to use in performing repairs under a recall, campaign service action, or warranty repair, the manufacturer must compensate the dealer for the part or component in the same manner as warranty parts compensation under paragraph (a)(1) of this section, less the dealer cost for the part or component as listed in the manufacturer’s price schedule.

(1) For the purposes of this section, the dealer's rate charged to nonwarranty customers for parts and labor are established by the dealer submitting to the warrantor 100 sequential customer paid service repair orders or 90 days of customer paid service repair orders, whichever is less, covering like repairs made no more than 180 days before the submission of such customer paid service repair orders and declaring the schedule of compensation. The new schedule of compensation will take effect within 30 days after the initial submission to the warrantor and shall be presumed to be fair and reasonable.

(2) Within 30 days following receipt of the declared schedule of compensation from the dealer, the warrantor may make reasonable requests for additional information supporting the declared schedule of compensation. The 30-day time frame in which the warrantor shall make the schedule of compensation effective commences following receipt from the dealer of any reasonably requested supporting information. No warrantor may require a recreational vehicle dealer to establish a schedule of compensation by requiring supportive information that is unduly burdensome or time consuming to provide, including part-by-part or transaction-by-transaction calculations. The dealer may not request a change in the schedule of compensation more than once every 9 months.

(k) A warrantor may not take or threaten to take adverse action against a dealer who seeks to obtain compensation pursuant to this section, including by creating or implementing an obstacle or process that is inconsistent with the warrantor's obligations to the dealer under this section.

(l) Any audit for sales incentives, service incentives, rebates or other forms of incentive compensation may only be for a period of 180 days following the date of the termination of the sales incentives program, service incentives program, rebate program or other form of incentive compensation program. These limitations shall not be in effect in the case of fraudulent claims.

§ 8409. Inspection and rejection by the dealer [For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) If a new recreational vehicle or new recreational trailer is damaged prior to transit to a new recreational vehicle dealer or is damaged in transit to the new recreational vehicle dealer when the carrier or means of transportation has been selected by the manufacturer or distributor, the new recreational vehicle dealer shall notify the manufacturer or distributor of the damage within the timeframe specified in the manufacturer-dealer agreement and:

(1) Shall request from the manufacturer or distributor authorization to replace the components, parts, and accessories damaged or to otherwise correct the

damage; or

damage.

(2) Shall reject the vehicle within the timeframe set forth in subsection (d) of this section.

§ 8410. Coercion of new recreational vehicle dealer prohibited [For application of this section, see 79 Del. Laws, c. 161, § 5].

(a) A manufacturer or distributor may not coerce or attempt to coerce a new recreational vehicle dealer to:

(1) Purchase a product that the new recreational vehicle dealer did not

order;

order.

(2) Enter into an agreement with the manufacturer or

distributor; or

distributor.

(3) Enter into an agreement that requires the new recreational vehicle dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under this chapter.

§ 8413. Association standing.

(a) In order to prevent injury or harm to all or a substantial number of its members or to the franchise distribution system of new recreational vehicles within this State, any association that has as members at least 4 recreational vehicle dealers, substantially all of whom are new recreational vehicle dealers located within the State, and that represents the collective interests of its members, has standing to file a petition or a civil action against a manufacturer regulated under this chapter to enforce the provisions of this chapter in any court of competent jurisdiction for itself, or on behalf of any or all of its members, seeking declaratory and injunctive relief. Any such association also has standing to intervene as a party in an action against a manufacturer regulated under this chapter previously filed by an individual member or members of the association to enforce the provisions of this chapter. This section does not authorize an association to file a petition, civil action, or administrative proceeding, or to intervene in any civil action or administrative proceeding, with or against the State or any of its agencies.

(b) An action brought pursuant to this section may seek a determination of whether 1 or more manufacturers, factory branches, distributors, or distributor branches doing business in this State have violated any of the provisions of this chapter, or for the determination of any rights created or defined by this chapter, so long as the association alleges an injury to the collective interest of its members cognizable under this section.

SYNOPSIS

This Act clarifies portions of Chapter 84 of Title 21 of the Delaware Code pertaining to new recreational vehicle, vessel, or new recreational trailer manufacturer-dealer agreements. The Act includes the following provisions:

Definitions.

The Act amends § 8401 of Title 21 and clarifies the definitions of "new recreational trailer" and "new recreational vehicle" and adds definitions of "all-terrain vehicle," "off-highway vehicle," "side-by-side vehicle," and "vessel."

Written agreements.

Manufacturers are required to specify in writing to their new recreational vehicle dealers licensed in the state the dealers' obligations for pre-delivery preparation, manufacturer-sponsored maintenance programs, manufacturer extended warranty, certified pre-owned warranty, manufacturer-issued service contracts, parts exchange programs, recall, and warranted service on the dealers' products. In addition, manufacturers must compensate their new recreational vehicle dealers for these services and provide the dealers with a schedule of compensation and the time allowances for the performance of the work and services.

Termination, cancellation, nonrenewal, or alteration of a dealership.

In the event a new recreational vehicle dealer terminates, cancels, or fails to renew a manufacturer-dealer agreement for good cause, and the manufacturer fails to cure the deficiencies, at the new recreational vehicle dealer's election and within 45 days of the termination, cancellation, or nonrenewal, the manufacturer must, in addition to its existing obligations, compensate the dealer for any transporting, handling, packing, storing, and loading of any returned parts, tools, and equipment.

Warranty obligations.

With respect to parts reimbursement, reasonable compensation to a new recreational vehicle dealer may not be less than the rate charged by the dealer for like services to nonwarranty customers for nonwarranty parts, service, or actual wholesale cost, plus a minimum 40% handling and the cost of any freight to return the warranty parts to the warrantor. A new recreational vehicle dealer must notify the warrantor within 180 days if it is unable to perform any warranty repairs.

In addition, a schedule of compensation for warranty services must include reasonable compensation for diagnostic work, parts, repair service, and labor. Time allowances for the diagnosis and performance of warranty work and services must be reasonable and adequate. With respect to manufacturer-sponsored maintenance programs, manufacturer extended warranty, certified pre-owned warranty, manufacturer-issued service contracts, parts exchange programs, recall and warranty parts, and labor reimbursement, reasonable compensation may not be less than the rate charged by the dealer for like service to non-warranty customers for nonwarranty parts, services, and repairs. If a manufacturer furnishes a part of a component to a dealer at no or a reduced cost, the manufacturer must compensate the dealer in the same manner as warranty parts compensation, less the dealer cost for the part or component as listed in the manufacturer's price schedule.

Association standing.

An association that has at least 4 recreational vehicle dealers as members, substantially all of whom are new recreational vehicle dealers within the State, and that represents the collective interests of its members, has standing to file a petition or civil action against a manufacturer regulated under this chapter for itself or on behalf of any or all of its members. Such an association also has standing to intervene in an action against a manufacturer regulated under this chapter previously filed by an individual member or members of the association to enforce the provisions of this chapter.

This Act also makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.

Author: Senator Poore