HLS 10RS-1499 ORIGINAL
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Regular Session, 2010
HOUSE BILL NO. 1089
BY REPRESENTATIVE ELLINGTON
MFG/MARINE PRODUCTS: Provides relative to the repurchase of marine products
AN ACT1
To enact R.S. 32:1268.3 and to repeal R.S. 32:1268.1(B), relative to repurchase of marine2
products; to provide for the repurchase of marine products by a manufacturer,3
distributor, or wholesaler; to provide for termination agreements; to provide for4
exemptions; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 32:1268.3 is hereby enacted to read as follows: 7
ยง1268.3. Manufacturer repurchase; marine dealer8
A. If any marine dealer enters into a franchise, selling, or other contractual9
agreement with a manufacturer, distributor, or wholesaler wherein the dealer agrees10
to maintain an inventory of marine products or repair parts, the manufacturer,11
distributor, or wholesaler shall not terminate such agreement unless and until ninety12
days after notice of such intention to terminate has been sent by certified mail or13
statutory overnight delivery, return receipt requested, to the dealer and the dealer has14
failed to correct the breach within such period.15
B. If the franchise, selling, or other contractual agreement is terminated as16
a result of any action by the manufacturer and the marine dealer is not in breach of17
such agreement, the manufacturer, distributor, or wholesaler shall repurchase the18
inventory as provided in this Section. The marine dealer may keep the inventory if19
he desires. If the marine dealer has any outstanding debts to the manufacturer,20
distributor, or wholesaler, the repurchase amount may be credited to the dealer's21
account.22 HLS 10RS-1499 ORIGINAL
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C. If the franchise, selling, or other contractual agreement is terminated as1
a result of any action by the marine dealer and the manufacturer is not in breach of2
such agreement, the manufacturer shall not be required to repurchase the inventory3
as provided in this Section; however, if the franchise, selling, or other contractual4
agreement is terminated as a result of any action by the marine dealer and the5
manufacturer is in breach of such agreement, the manufacturer shall be required to6
repurchase the inventory as provided in this Section.7
D. It shall be unlawful for the manufacturer, wholesaler, distributor, or8
franchisor, without due cause and pursuant to its own initiating action, to fail to9
renew a franchise, unless the manufacturer repurchases the inventory as provided for10
in this Section. To determine what constitutes due cause for a manufacturer or11
distributor to fail to renew a franchise, selling, or other contractual agreement, the12
following factors regarding the marine dealer shall include whether the marine13
dealer:14
(1) Has made a material misrepresentation in applying for or acting under15
the franchise agreement.16
(2) Has filed a voluntary petition in bankruptcy or has had an involuntary17
petition in bankruptcy filed against the dealer which has not been discharged within18
thirty days after the filing, is in default under the provisions of a security agreement19
in effect with the manufacturer or distributor, or is in receivership.20
(3) Has engaged in an unfair business practice.21
(4) Has engaged in conduct which is injurious or detrimental to the public22
welfare.23
(5) Has failed to comply with an applicable licensing law.24
(6) Has been convicted of a crime, the effect of which would be detrimental25
to the manufacturer, distributor, or dealership.26
(7) Has failed to operate in the normal course of business for seven27
consecutive business days.28 HLS 10RS-1499 ORIGINAL
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(8) Has failed to comply with the terms of the dealership or franchise1
agreement.2
E.(1) If a manufacturer, wholesaler, distributor, or franchisor does not intend3
to renew a franchise, selling, or other contractual agreement, the manufacturer,4
wholesaler, distributor, or franchisor shall give the marine dealer sixty days written5
notice prior to the effective date by certified mail or statutory overnight delivery,6
return receipt requested.7
(2) Within thirty days of the termination of the franchise, selling, or other8
contractual agreement, the manufacturer, distributor, or wholesaler shall repurchase9
that inventory previously purchased from them, including all new and unused marine10
products of the current or immediate prior model year and parts on hand and held by11
the marine dealer on the date of termination of the contract. The manufacturer,12
distributor, or wholesaler shall pay an amount equivalent to the cost actually paid by13
the marine dealer, less discounts or rebates per unit for any new, unused, undamaged,14
and unaltered from original invoice and delivery, and complete marine vessel. The15
manufacturer shall also pay an amount equal to the price paid by the dealer for any16
new, unused, and undamaged repair parts and accessories which are listed in the17
manufacturer's current parts price list and are not more than two model years old, or18
in the case of inventory, that does not have a model year, not more than eighteen19
months old.20
(3) Whenever the marine dealer gives notice of termination of the contract,21
franchise, or other contractual agreement, the manufacturer, distributor, or22
wholesaler shall have the right to appoint an independent marine surveyor to inspect23
the marine dealer's inventory to determine whether or not the inventory has been24
substantially altered or damaged to the prejudice of the manufacturer, through25
neglect or otherwise, while in the possession of the marine dealer and shall determine26
a fair diminution of value caused by such alteration, damage, or neglect. If the27
independent marine surveyor finds that the inventory of marine products has been28
so altered, damaged, or neglected, the value assessment of the inventory of marine29 HLS 10RS-1499 ORIGINAL
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products established by him shall be considered by the commission in determining1
the market value of the inventory.2
(3) Upon payment within a reasonable time of the repurchase amount to the3
marine dealer, the title, if any, and right of possession to the repurchased inventory4
shall transfer to the manufacturer, distributor, or wholesaler, as applicable.5
F. The provisions of this Section shall not require the repurchase from a6
marine dealer of:7
(1) Any repair part which has a limited storage life or is otherwise subject8
to deterioration.9
(2) Any single repair part which is priced as a set of two or more items.10
(3) Any repair part which, because of its condition, is not resalable as a new11
part without repackaging or reconditioning.12
(4) Any inventory for which the dealer is unable to furnish evidence that is13
reasonably satisfactory to the manufacturer, distributor, or wholesaler of good title,14
free and clear of all claims, liens, and encumbrances.15
(5) Any inventory which the dealer desires to keep, provided that the marine16
dealer has a contractual right to do so.17
(6) Any marine vessel or product which is not in new, unused, undamaged,18
and complete condition.19
(7) Any repair parts which are not in new, unused, and undamaged condition.20
(8) Any inventory which was ordered by the dealer on or after the date of21
receipt of the notification of termination of the franchise, selling, or other contractual22
agreement.23
(9) Any inventory which was acquired by the dealer from any source other24
than the manufacturer, distributor, or wholesaler.25
(10) Any boat that has been altered substantially from original delivery.26
G. If any manufacturer, distributor, or wholesaler fails or refuses to27
repurchase any inventory as required by this Section within sixty days after28
termination of a marine dealer's contract and submission by the marine dealer to the29 HLS 10RS-1499 ORIGINAL
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manufacturer, by certified mail or statutory overnight delivery, return receipt1
requested, of a final inventory of marine products and parts on hand, he shall be2
liable not only for the amounts provided in this Section but also the dealer's3
reasonable attorney's fees, court costs, and interest on the amount due for such4
inventory computed at the legal interest rate from the sixty-first day after5
termination.6
H. In the event of the death or incapacity of the dealer or the majority7
stockholder of a corporation operating as a dealer, the manufacturer, distributor, or8
wholesaler shall, at the option of the heirs at law if the dealer died intestate or the9
devisees or transferees under the terms of the deceased dealer's last will and10
testament if the dealer died testate, repurchase the inventory from the heirs or11
devisees as if the manufacturer, distributor, or wholesaler had terminated the12
contract, and the inventory repurchase provisions of this Section shall apply. The13
heirs or devisees shall have until the end of the contract term or one year from the14
date of the death of the retailer or majority stockholder, whichever comes first, to15
exercise their option under this Section; provided, however, that nothing in this16
Section shall require the repurchase of inventory if the heirs or devisees and the17
manufacturer, distributor, or wholesaler enter into a new franchise agreement to18
operate the retail dealership.19
Section 2. R.S. 32:1268.1(B) is hereby repealed in its entirety.20
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Ellington HB No. 1089
Abstract: Provides for the repurchase of marine products.
Present law (R.S. 32:1268.1(B)) provides for mandatory manufacture repurchase on marine
products when a marine dealer ceases to sell that product.
Proposed law repeals present law.
Proposed law (R.S. 32:1268.3) provides that if any marine dealer enters into a franchise,
selling, or other contractual agreement with a manufacturer, distributor, or wholesaler HLS 10RS-1499 ORIGINAL
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wherein the dealer agrees to maintain an inventory of marine products or repair parts, the
manufacturer, distributor, or wholesaler shall not terminate such agreement unless and until
90 days after notice of such intention to terminate has been sent and the dealer has failed to
correct the breach within such period.
Proposed law provides that if the franchise, selling, or other contractual agreement is
terminated as a result of any action by the manufacturer and the dealer is not in breach of
such agreement, the manufacturer, distributor, or wholesaler shall repurchase the inventory.
The dealer may keep the inventory if he or she desires. If the dealer has any outstanding
debts to the manufacturer, distributor, or wholesaler, the repurchase amount may be credited
to the dealer's account.
Proposed law provides that if the franchise, selling, or other contractual agreement is
terminated as a result of any action by the dealer and the manufacturer is not in breach of
such agreement, the manufacturer shall not be required to repurchase the inventory.
However, if the franchise, selling, or other contractual agreement is terminated as a result
of any action by the dealer and the manufacturer is in breach of such agreement, the
manufacturer shall be required to repurchase the inventory.
Proposed law provides that it shall be unlawful for the manufacturer, wholesaler, distributor,
or franchisor, without due cause and pursuant to its own initiating action, to fail to renew a
franchise, unless the manufacturer repurchases the inventory. To determine what constitutes
due cause for a manufacturer or distributor to fail to renew a franchise, selling, or other
contractual agreement, the following factors regarding the dealer shall include whether the
dealer:
(1)Has made a material misrepresentation in applying for or acting under the franchise
agreement.
(2)Has filed a voluntary petition in bankruptcy or has had an involuntary petition in
bankruptcy filed against the dealer which has not been discharged within thirty days
after the filing, is in default under the provisions of a security agreement in effect
with the manufacturer or distributor, or is in receivership.
(3)Has engaged in an unfair business practice.
(4)Has engaged in conduct which is injurious or detrimental to the public welfare.
(5)Has failed to comply with an applicable licensing law.
(6)Has been convicted of a crime, the effect of which would be detrimental to the
manufacturer, distributor, or dealership.
(7)Has failed to operate in the normal course of business for 7 consecutive business
days.
(8)Has failed to comply with the terms of the dealership or franchise agreement.
Proposed law provides that if a manufacturer, wholesaler, distributor, or franchisor does not
intend to renew a franchise, selling, or other contractual agreement, the manufacturer,
wholesaler, distributor, or franchisor shall give the dealer 60 days written notice prior to the
effective date by certified mail or statutory overnight delivery, return receipt requested.
Proposed law provides that within 30 days of the termination of the franchise, selling, or
other contractual agreement, the manufacturer, distributor, or wholesaler shall repurchase
that inventory previously purchased from them, including all new and unused marine
products of the current or immediate prior model year and parts on hand and held by the
dealer on the date of termination of the contract. The manufacturer, distributor, or HLS 10RS-1499 ORIGINAL
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wholesaler shall pay an amount equivalent to the cost actually paid by the dealer, less
discounts or rebates per unit for any new, unused, undamaged, and unaltered from original
invoice and delivery, and complete marine vessel. The manufacturer shall also pay an
amount equal to the price paid by the dealer for any new, unused, and undamaged repair
parts and accessories which are listed in the manufacturer's current parts price list and are
not more than 2 model years old, or in the case of inventory, that does not have a model year,
not more than 18 months old.
Proposed law provides that when the marine dealer gives notice of termination of the
contract, franchise, or selling agreement, the manufacturer, distributor, or wholesaler shall
have the right to appoint an independent marine surveyor to inspect the marine dealer's
inventory to determine whether or not the inventory has been substantially altered or
damaged to the prejudice of the manufacturer, through neglect or otherwise, while in the
possession of the marine dealer and shall determine a fair diminution of value caused by
such alteration, damage, or neglect. If the independent marine surveyor finds that the
inventory of marine products has been so altered, damaged, or neglected, the value
assessment of the inventory of marine products established by him shall be considered by
the commission in determining the market value of the inventory.
Proposed law provides that upon payment within a reasonable time of the repurchase amount
to the dealer, the title, if any, and right of possession to the repurchased inventory shall
transfer to the manufacturer, distributor, or wholesaler, as applicable.
Proposed law provides the provisions of proposed law shall not require the repurchase from
a dealer of:
(1)Any repair part which has a limited storage life or is otherwise subject to
deterioration.
(2)Any single repair part which is priced as a set of two or more items.
(3)Any repair part which, because of its condition, is not resalable as a new part without
repackaging or reconditioning.
(4)Any inventory for which the dealer is unable to furnish evidence that is reasonably
satisfactory to the manufacturer, distributor, or wholesaler of good title, free and
clear of all claims, liens, and encumbrances.
(5)Any inventory which the dealer desires to keep, provided that the dealer has a
contractual right to do so.
(6)Any marine vessel or product which is not in new, unused, undamaged, and complete
condition.
(7)Any repair parts which are not in new, unused, and undamaged condition.
(8)Any inventory which was ordered by the dealer on or after the date of receipt of the
notification of termination of the franchise, selling, or other contractual agreement.
(9)Any inventory which was acquired by the dealer from any source other than the
manufacturer, distributor, or wholesaler.
(10)Any boat that has been altered substantially from original delivery.
Proposed law provides that if any manufacturer, distributor, or wholesaler shall fail or refuse
to repurchase any inventory as required by this article within 60 days after termination of a
dealer's contract, he shall be civilly liable for the amounts expressed in proposed law and the HLS 10RS-1499 ORIGINAL
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dealer's reasonable attorney's fees, court costs, and interest on the amount due for such
inventory computed at the legal interest rate from the 61st day after termination.
Proposed law provides that in the event of a death or incapacity of a dealer, the
manufacturer, distributor, or wholesaler shall, at the option of the heirs at law if the dealer
died intestate or the devisees or transferees if the dealer died testate, repurchase the
inventory from the heirs or devisees as if the manufacturer, distributor, or wholesaler had
terminated the contract, and the inventory repurchase provisions of proposed law shall apply.
The heirs or devisees shall have until the end of the contract term or one year from the date
of the death of the retailer or majority stockholder, whichever comes first, to exercise their
option; provided that nothing shall require the repurchase of inventory if the heirs or
devisees and the manufacturer, distributor, or wholesaler enter into a new franchise
agreement to operate the retail dealership
(Adds R.S. 32:1268.3; Repeals R.S. 32:1268.1(B))