Louisiana Senate Bill SB360 Engrossed / Bill

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Regular Session, 2012
SENATE BILL NO. 360
BY SENATOR MARTINY AND REPRESENTATIVE PONTI 
COMMERCIAL REGULATIONS.  Provides for distribution and sale of marine products,
motorcycles, all-terrain vehicles, and recreational vehicles. (8/1/12)
AN ACT1
To amend and reenact R.S. 32:1252(4) and (19), 1261, 1261.1, and 1263, to enact R.S.2
32:1252(52) through (69), 1262(C), 1264(D), 1267(C), 1268(D), and Parts II, III, and3
IV of Chapter 6 of Title 32 of the Louisiana Revised Statutes of 1950, to be4
comprised of R.S. 32:1270 through 1270.30, and to repeal R.S. 32:1257.1 and5
1268.1, relative to marine products, motorcycles, all-terrain vehicles, and6
recreational vehicles; to provide for certain terms, conditions, requirements, and7
procedures; to provide for definitions; to provide for the establishment of new8
dealerships and the relocation of existing dealerships; to provide for payment to9
dealers; to provide for unauthorized acts; to provide for warranty agreements and10
application thereof; to provide for the sale and leasing of certain marine products,11
motorcycles, all-terrain vehicles, and recreational vehicles; to provide for the12
succession of a dealer; to provide for the procedure to terminate a dealership; to13
provide for the repurchase of certain products, equipment, parts, and tools; and to14
provide for related matters.15
Be it enacted by the Legislature of Louisiana:16
Section 1. R.S. 32:1252(4) and (19), 1261, 1261.1, and 1263 are hereby amended17 SB NO. 360
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and reenacted and R.S. 32:1252(52) through (69), 1262(C), 1264(D), 1267(C), 1268(D), and1
Parts II, III, and IV of Chapter 6 of Title 32 of the Louisiana Revised Statutes of 1950, to be2
comprised of R.S. 32:1270 through 1270.30 are hereby enacted to read as follows:3
§1252. Definitions4
The following words, terms, and phrases, when used in this Chapter, shall5
have the meanings respectively ascribed to them in this Section, except where the6
context clearly indicates a different meaning:7
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(4) "Boat package" means a boat that is equipped from its manufacturer or9
distributor with an inboard, outboard, or inboard/outboard motor or engine attached10
thereto, installed thereon, or shipped or invoiced together as a package. The boat11
package may include a trailer invoiced from the manufacturer of the boat. For12
the purposes of this Chapter, the boat package brand shall be determined by the13
brand of the boat.14
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(19) "Franchise" means any written contract or 	selling agreement between16
a motor vehicle or recreational products dealer, a motor vehicle lessor, or a specialty17
vehicle dealer and a manufacturer, motor vehicle lessor franchisor, or converter of18
a new motor vehicle or specialty vehicle or its distributor or factory branch by which19
the motor vehicle or recreational products dealer, motor vehicle lessor, or specialty20
vehicle dealer is authorized to engage in the business of selling or leasing the21
specific makes, models, or classifications of new motor vehicles, recreational22
products, or specialty vehicles marketed or leased by the manufacturer, motor23
vehicle lessor franchisor, or converter and designated in the franchise agreement or24
any addendum thereto. For purposes of this Chapter, any written modification,25
amendment, or addendum to the original franchise agreement, which changes the26
rights and obligations of the parties to the original franchise agreement, shall27
constitute a new franchise agreement, effective as of the date of the modification,28
amendment, or addendum.29 SB NO. 360
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(52) "Marine product salesman" means any natural person employed2
by a licensee of the commission whose duties include the selling, leasing, or3
offering for sale or lease, financing or insuring marine products on behalf of4
said licensee and who holds a motor vehicle salesman license under the5
provisions of this Chapter.6
(53) "New marine product" means a marine product, the legal title to7
which has never been transferred by a manufacturer, distributor, or dealer to8
an ultimate purchaser.9
(54) "Selling agreement" means any written contract or agreement10
between a marine dealer and a manufacturer, or its distributor or factory11
branch, by which the marine dealer is authorized to engage in the business of12
selling or leasing the specific makes, models, or classifications of marine13
products marketed or leased by the manufacturer, and designated in the selling14
agreement or any addendum thereto. For the purposes of this Paragraph, any15
written modification, amendment, or addendum to the original selling16
agreement that changes the rights and obligations of the parties to the original17
selling agreement shall constitute a new selling agreement, effective as of the18
date of the modification, amendment, or addendum.19
(55) "Used marine product" means a marine product, the legal title of20
which has been transferred by a manufacturer, distributor, or dealer to an21
ultimate purchaser.22
(56)(a) "Used marine dealer" means any person, whose business is to23
sell, or offer for sale, display, or advertise used marine products, or any person24
who holds a license from the commission and is not excluded by Subparagraph25
(b) of this Paragraph.26
(b) "Used marine dealer" shall not include any of the following:27
(i) Receivers, trustees, administrators, executors, guardians, or other28
persons appointed by or acting under the judgment or order of any court.29 SB NO. 360
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(ii) Public officers while performing their official duties.1
(iii) Employees of persons, corporations, or associations  defined as "used2
marine dealers" when engaged in the specific performance of their duties as3
such employees.4
(iv) Mortgagees or secured parties as to sales of marine products5
constituting collateral on a mortgage or security agreement and who do not6
maintain a used car lot or building with one or more employed marine product7
salesman.8
(v) Insurance companies who sell motor vehicles to which they have9
taken title as an incident of payments made under policies of insurance and who10
do not maintain a used car lot or building with one or more employed marine11
product salesman.12
(vi) Used motor vehicle dealers licensed pursuant to R.S. 32:781 et seq.13
(57) "Used marine product facility" means any facility which is owned14
and operated by a licensee of the commission and offers for sale used marine15
products.16
(58) "Motorcycle or all-terrain vehicle dealer" means any person who,17
for a commission or with intent to make a profit or gain of money or other thing18
of value, buys, sells, brokers, exchanges, auctions, offers, or attempts to19
negotiate a sale or exchange of an interest in motorcycles or all-terrain vehicles20
and who is engaged wholly or in part in the business of buying and selling21
motorcycles or all-terrain vehicles in the state of Louisiana and who holds a22
license as a recreational products dealer under the provisions of this Chapter.23
(a) The term shall also include anyone not licensed under Chapter 6 of24
Title 32 of the Louisiana Revised Statutes of 1950, who sells motorcycles or all-25
terrain vehicles and who rents on a daily basis motorcycles or all-terrain26
vehicles, not of the current year or immediate prior year models, that have been27
titled previously to an ultimate purchaser.28
(b) "Motorcycle or all-terrain vehicle dealer" shall not include any of29 SB NO. 360
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the following:1
(i) Receivers, trustees, administrators, executors, guardians, or other2
persons appointed by or acting under the judgment or order of any court.3
(ii)  Public officers while performing their official duties.4
(iii) Employees of motorcycle or all-terrain vehicle dealers when engaged5
in the specific performance of their duties of such employees.6
(iv)  Mortgagees or secured parties as to sales of motorcycles or all-7
terrain vehicles constituting collateral on a mortgage or security agreement.8
(v)  Insurance companies.9
(vi) Auctioneers or auction houses who are not engaged in the auction10
of motorcycles or all-terrain vehicles as the principal part of their business,11
including but not limited to the following auctions: estate auctions, bankruptcy12
auctions, farm equipment auctions, or government auctions.13
(59) "Motorcycle or all-terrain vehicle salesman" means any natural14
person employed by a licensee of the commission whose duties include the15
selling, leasing, or offering for sale or lease, financing or insuring motorcycle or16
all-terrain vehicles on behalf of said licensee and who holds a motor vehicle17
salesman license under the provisions of this Chapter.18
(60) "New motorcycle or all-terrain vehicle" means a motorcycle or all-19
terrain vehicle, the legal title to which has never been transferred by a20
manufacturer, distributor, or dealer to an ultimate purchaser.21
(61) "Used motorcycle or all-terrain vehicle" means a motorcycle or all-22
terrain vehicle, the legal title of which has been transferred by a manufacturer,23
distributor, or dealer to an ultimate purchaser.24
(62)(a) "Used motorcycle or all-terrain vehicle dealer" means any25
person, whose business is to sell, or offer for sale, display, or advertise used26
motorcycles or all-terrain vehicles, or any person who holds a license from the27
commission and is not excluded by Subparagraph (b) of this Paragraph.28
(b) "Used motorcycle or all-terrain vehicle dealer" shall not include any29 SB NO. 360
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of the following:1
(i) Receivers, trustees, administrators, executors, guardians, or other2
persons appointed by or acting under the judgment or order of any court.3
(ii) Public officers while performing their official duties.4
(iii) Employees of persons, corporations, or associations enumerated in5
the definition of "used motorcycle or all-terrain vehicle dealer" when engaged6
in the specific performance of their duties as such employees.7
(iv) Mortgagees or secured parties as to sales of motorcycles or all-8
terrain vehicles constituting collateral on a mortgage or security agreement and9
who do not maintain a used car lot or building with one or more employed10
motorcycle or all-terrain vehicle salesman.11
(v) Insurance companies who sell motorcycles or all-terrain vehicles to12
which they have taken title as an incident of payments made under policies of13
insurance and who do not maintain a used car lot or building with one or more14
employed motorcycle or all-terrain vehicle salesman.15
(vi) Used motorcycle or all-terrain vehicle dealers licensed pursuant to16
R.S. 32:781 et seq.17
(63) "Used motorcycle or all-terrain vehicle facility" means any facility18
which is owned and operated by a licensee of the commission and offers for sale19
used motorcycles or all-terrain vehicles.20
(64) "New recreational vehicle" means a recreational vehicle, the legal21
title to which has never been transferred by a manufacturer, distributor, or22
dealer to an ultimate purchaser.23
(65) "Recreational vehicle dealer" means any person who, for a24
commission or with intent to make a profit or gain of money or other thing of25
value, buys, sells, brokers, exchanges, auctions, offers, or attempts to negotiate26
a sale or exchange of an interest in recreational vehicles and who is engaged27
wholly or in part in the business of buying and selling recreational vehicles in28
the state of Louisiana and who holds a license as a recreational products dealer29 SB NO. 360
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under the provisions of this Chapter.1
(a) The term shall also include anyone not licensed under Chapter 6 of2
Title 32 of the Louisiana Revised Statutes of 1950, who sells recreational3
vehicles and who rents on a daily basis recreational vehicles, not of the current4
year or immediate prior year models, that have been titled previously to an5
ultimate purchaser.6
(b) "Recreational vehicle dealer" shall not include any of the following:7
(i) Receivers, trustees, administrators, executors, guardians, or other8
persons appointed by or acting under the judgment or order of any court.9
(ii) Public officers while performing their official duties.10
(iii) Employees of recreational vehicle dealers when engaged in the11
specific performance of their duties as such employees.12
(iv) Mortgagees or secured parties as to sales of recreational vehicles13
constituting collateral on a mortgage or security agreement.14
(v) Insurance companies.15
(vi) Auctioneers or auction houses who are not engaged in the auction of16
recreational vehicles as the principal part of their business, including but not17
limited to the following auctions: estate auctions, bankruptcy auctions, farm18
equipment auctions, or government auctions.19
(66) "Recreational vehicle salesman" means any natural person20
employed by a licensee of the commission whose duties include the selling,21
leasing, or offering for sale or lease, financing or insuring recreational vehicles22
on behalf of said licensee and who holds a motor vehicle salesman license under23
the provisions of this Chapter.24
(67) "Used recreational vehicle" means a recreational vehicle, the legal25
title of which has been transferred by a manufacturer, distributor, or dealer to26
an ultimate purchaser.27
(68)(a) "Used recreational vehicle dealer" means any person, whose28
business is to sell, or offer for sale, display, or advertise used recreational29 SB NO. 360
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vehicles, or any person who holds a license from the commission and is not1
excluded by Subparagraph (b) of this Paragraph.2
(b) "Used recreational vehicle dealer" shall not include any of the3
following:4
(i) Receivers, trustees, administrators, executors, guardians, or other5
persons appointed by or acting under the judgment or order of any court.6
(ii) Public officers while performing their official duties.7
(iii) Employees of persons, corporations, or associations enumerated in8
the definition of "used recreational vehicle dealer" when engaged in the specific9
performance of their duties as such employees.10
(iv) Mortgagees or secured parties as to sales of recreational vehicles11
constituting collateral on a mortgage or security agreement and who do not12
maintain a used car lot or building with one or more employed recreational13
vehicle salesman.14
(v) Insurance companies who sell recreational vehicles to which they15
have taken title as an incident of payments made under policies of insurance16
and who do not maintain a used car lot or building with one or more employed17
recreational vehicle salesman.18
(vi) Used recreational vehicle dealers licensed pursuant to R.S. 32:781 et19
seq.20
(69) "Used recreational vehicle facility" means any facility which is21
owned and operated by a licensee of the commission and offers for sale used22
recreational vehicles.23
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§1261. Unauthorized acts25
A. It shall be a violation of this Chapter:26
(1) For a manufacturer, a distributor, a wholesaler, distributor branch, factory27
branch, converter or officer, agent, or other representative thereof:28
(a) To induce or coerce, or attempt to induce or coerce, any licensee:29 SB NO. 360
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(i) To order or accept delivery of any recreational product, motor vehicle or1
vehicles, appliances, equipment, parts or accessories therefor, or any other2
commodity or commodities which shall not have been voluntarily ordered.3
(ii) To order or accept delivery of any vehicle with special features,4
appliances, accessories, or equipment not included in the list price of said vehicles5
as publicly advertised.6
(iii) To order for any person any parts, accessories, equipment, machinery,7
tools, appliances, or any commodity whatsoever.8
(iv) To assent to a release, assignment, novation, waiver, or estoppel which9
would relieve any person from liability to be imposed by law, unless done in10
connection with a settlement agreement to resolve a matter pending a commission11
hearing or pending litigation between a manufacturer, distributor, wholesaler,12
distributor branch or factory branch, or officer, agent, or other representative thereof.13
(v) To enter into a franchise with a licensee or during the franchise term, use14
any written instrument, agreement, release, assignment, novation, estoppel, or15
waiver, to attempt to nullify or modify any provision of this Chapter, or to require16
any controversy between a dealer and a manufacturer to be referred to any person or17
entity other than the commission, or duly constituted courts of this state or the United18
States, if such referral would be binding upon the dealer. Such instruments are null19
and void, unless done in connection with a settlement agreement to resolve a matter20
pending a commission hearing or pending litigation.21
(vi) To waive the right to a jury trial.22
(vii) To participate in an advertising group or to participate monetarily in an23
advertising campaign or contest or to purchase any promotional materials,24
showroom, or other display decorations or materials at the expense of such motor25
vehicle dealer or specialty dealer.26
(viii) To adhere to performance standards that are not applied uniformly to27
other similarly situated motor vehicle dealers or specialty dealers. Any such28
performance standards shall be fair, reasonable, equitable, and based on accurate29 SB NO. 360
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information. If dealership performance standards are based on a survey, the1
manufacturer, converter, distributor, wholesaler, distributor branch, or factory branch2
shall establish the objectivity of the survey process and provide this information to3
any motor vehicle dealer or specialty vehicle dealer of the same line make covered4
by the survey request. Each response to a survey used by a manufacturer in preparing5
an evaluation or performance-rating of a motor vehicle dealer shall be made6
available to that motor vehicle dealer, or it cannot be used by the manufacturer.7
However, if a customer requests that the manufacturer or distributor not disclose the8
consumer's identity to the dealer, the manufacturer may withhold the consumer's9
identity in providing the survey response to the dealer, and the manufacturer may use10
the response. Any survey used must have the following characteristics:11
(aa) It was designed by experts.12
(bb) The proper universe was examined.13
(cc) A representative sample was chosen.14
(dd) The data was accurately reported.15
(ix) To release, convey, or otherwise provide customer information, if to do16
so is unlawful or if the customer objects in writing. This does not include17
information that is necessary for the manufacturer to meet its obligations to the18
dealer or consumers in regard to contractual responsibilities, vehicle recalls, or other19
requirements imposed by state or federal law. The manufacturer is further prohibited20
from providing any consumer information received from the dealer to any21
unaffiliated third party.22
(x) To pay the attorney fees of the manufacturer or distributor related to23
hearings and appeals brought under this Chapter.24
(b) To refuse to deliver to any licensee having a franchise or contractual25
arrangement for the retail sale of vehicles sold or distributed by such manufacturer,26
distributor, wholesaler, distributor branch or factory branch, any motor vehicle,27
publicly advertised for immediate delivery, within sixty days after such dealer's order28
shall have been received.29 SB NO. 360
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(c) To threaten to cancel any franchise or any contractual agreement existing1
between such manufacturer, distributor, wholesaler, distributor branch or factory2
branch and said dealer for any reason including but not limited to failure to meet3
performance standards.4
(d) To unfairly, without just cause and due regard to the equities of such5
dealer, cancel the franchise of any licensee. Failure to meet performance standards6
based on a survey of sales penetration in a regional, national, territorial, or other7
geographic area shall not be the sole cause for cancellation of a franchise. The8
nonrenewal of a franchise or selling agreement with such dealer or his successor9
without just provocation or cause, or the refusal to approve a qualified transferee or10
qualified successor to the dealer-operator as provided for in the franchise or selling11
agreement, or solely for failure to meet performance standards based on a survey of12
sales penetration in a regional, national, territorial, or other geographic area, shall be13
deemed an evasion of this Paragraph and shall constitute an unfair cancellation,14
regardless of the terms or provisions of such franchise or selling agreement.15
However, at least ninety-days notice shall be given to the dealer of any cancellation16
or nonrenewal of a franchise except for a cancellation arising out of the financial17
default of the motor vehicle dealer or fraudulent activity of the dealer principal18
which results in the conviction of a crime punishable by imprisonment. The19
provisions of this Subsection relating to performance standards shall not apply to20
recreational products dealers.21
(e) To refuse to extend to a licensee the privilege of determining the mode or22
manner of available transportation facility that such dealer desires to be used or23
employed in making deliveries of vehicles to him or it.24
(f) To resort to or use any false or misleading advertisement in connection25
with his business as such manufacturer of motor vehicles, distributor, wholesaler,26
distributor branch or factory branch, or officer, agent, or other representative thereof.27
(g) To delay, refuse, or fail to deliver motor vehicles in reasonable quantities28
relative to the licensee's facilities and sales potential in the relevant market area. This29 SB NO. 360
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Subparagraph shall not be valid, however, if such failure is caused by acts or causes1
beyond the control of the manufacturer, distributor, or other such party.2
(h) To ship or sell motor vehicles or recreational products to a licensee prior3
to the licensee having been granted a license by the commission to sell such vehicles.4
(i) To unreasonably withhold consent to the sale, transfer, or exchange of the5
franchise to a qualified transferee capable of being licensed as a dealer in this state,6
provided the transferee meets the criteria generally applied by the manufacturer in7
approving new dealers and agrees to be bound by all the terms and conditions of the8
standard franchises.9
(j) To fail to respond in writing to a written request for consent as specified10
in Subparagraph (i) above within sixty days of receipt of a written request on the11
forms, if any, generally utilized by the manufacturer or distributor for such purposes12
and containing the information required therein. Failure to respond shall be deemed13
to be consent to the request.14
(k)(i) To sell or offer to sell a new or unused motor vehicle or recreational15
product directly to a consumer except as provided in this Chapter, or to compete with16
a licensee in the same-line makes, models, or classifications operating under an17
agreement or franchise from the aforementioned manufacturer. A manufacturer shall18
not, however, be deemed to be competing when any one of the following conditions19
are met:20
(aa) Operating a dealership temporarily for a reasonable period, not to exceed21
two years.22
(bb) Operating a bona fide retail dealership which is for sale to any qualified23
independent person at a fair and reasonable price, not to exceed two years.24
(cc) Operating in a bona fide relationship in which a person independent of25
a manufacturer has made a significant investment subject to loss in the dealership,26
and can reasonably expect to acquire full ownership of such dealership on reasonable27
terms and conditions.28
(ii) After any of the conditions have been met under Subitems (aa) and (bb)29 SB NO. 360
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of Item (i) of this Subparagraph, the commission shall allow the manufacturer to1
compete with licensees of the same-line makes, models, or classifications under an2
agreement or franchise from said manufacturer for longer than two years when, in3
the discretion of the commission, the best interest of the manufacturer, consuming4
public, and licensees are best served.5
(l) To condition the renewal or extension of a franchise on a new motor6
vehicle dealer's substantial renovation of the dealer's place of business or on the7
construction, purchase, acquisition, or rental of a new place of business by the new8
motor vehicle dealer, unless the manufacturer has advised the new motor vehicle9
dealer in writing of its intent to impose such a condition within a reasonable time10
prior to the effective date of the proposed date of renewal or extension, but in no case11
less than one hundred eighty days, and provided the manufacturer demonstrates the12
need for such demand in view of the need to service the public and the economic13
conditions existing in the motor vehicle industry at the time such action would be14
required of the new motor vehicle dealer. As part of any such condition the15
manufacturer shall agree, in writing, to supply the dealer with an adequate supply16
and marketable model mix of motor vehicles to meet the sales levels necessary to17
support the increased overhead incurred by the dealer by reason of such renovation,18
construction, purchase, or rental of a new place of business.19
(m) To fail to compensate its dealers for the work and services they are20
required to perform in connection with the dealer's delivery and preparation21
obligations according to the terms of compensation that shall be filed with the22
commission on or before October first of each year. The commission shall find the23
compensation to be reasonable or the manufacturer shall remedy any deficiencies.24
(n) To fail to designate and provide to the commission in writing the25
community or territory assigned to a licensee.26
(o) To fail or refuse to sell or offer to sell to all motor vehicle franchisees in27
a line make, every motor vehicle sold or offered for sale under a franchise to any28
motor vehicle franchisee of the same-line make, or to unreasonably require a motor29 SB NO. 360
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vehicle dealer to pay an extra fee, purchase unreasonable advertising displays or any1
other materials, or to remodel, renovate, or recondition its existing facilities as a2
prerequisite to receiving a certain model or series of vehicles. However, the failure3
to deliver any such motor vehicle shall not be considered a violation of this Section4
if the failure is due to a lack of manufacturing capacity or to a strike or labor5
difficulty, a shortage of materials, a freight embargo or other cause of which the6
franchisor has no control. This Subparagraph shall not apply to recreational product7
manufacturers.8
(p) To unreasonably discriminate among competing, similarly situated, same-9
line make dealers in the sales of vehicles, in the availability of such vehicles, in the10
terms of incentive programs or sales promotion plans, or in other similar programs.11
(q) To terminate, cancel, or refuse to continue any franchise agreement based12
upon the fact that the motor vehicle dealer owns, has an investment in, participates13
in the management, or holds a franchise agreement for the sale or service of another14
make or line of new motor vehicles at a different dealership location, or intends to15
or has established another make or line of new motor vehicles in the same dealership16
facilities of the manufacturer or distributor.17
(r) To demand compliance with facilities requirements that include any18
requirements that a motor vehicle dealer establish or maintain exclusive office, parts,19
service or body shop facilities, unless such requirements would be reasonable and20
justified by business considerations. The burden of proving that such requirements21
are reasonable and justified by business considerations is on the manufacturer. If the22
franchise agreement of the manufacturer or distributor requires the approval of the23
manufacturer or distributor for facility uses or modifications, the manufacturer or24
distributor shall approve or disapprove such a request in writing within sixty days of25
receipt of such request.26
(s) To use any subsidiary, affiliate, or any other controlled person or entity,27
or to employ the services of a third party, to accomplish what would otherwise be28
illegal conduct under this Chapter on the part of the manufacturer or distributor.29 SB NO. 360
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(t) To operate a satellite warranty and repair center, to authorize a person to1
perform warranty repairs who is not a motor vehicle dealer, or to authorize a motor2
vehicle dealer to operate a satellite warranty and repair center within the community3
or territory of a same-line or make motor vehicle dealer. This Subparagraph shall not4
apply to recreational product manufacturers.5
(u) To make a change in the area of responsibility described in the franchise6
agreement or sales and service agreement of a dealer, without the franchisor,7
converter, or manufacturer giving said dealer and the commission no less than sixty8
days prior written notice by certified or registered mail.9
(v) To attempt to induce or coerce, or to induce or coerce, any motor vehicle10
dealer to enter into any agreement with such manufacturer, distributor, wholesaler,11
distributor branch or factory branch or representative thereof, or to do any other act12
unfair to said dealer.13
(w)(i) To coerce or attempt to coerce any retail motor vehicle dealer or14
prospective retail motor vehicle dealer to offer to sell or sell any extended service15
contract or extended maintenance plan or gap product offered, sold, backed by, or16
sponsored by the manufacturer or distributor or affiliate or sell, assign, or transfer17
any retail installment sales contract or lease obtained by the dealer in connection18
with the sale or lease by him of motor vehicles manufactured or sold by the19
manufacturer or distributor, to a specified finance company or class of finance20
companies, leasing company or class of leasing companies, or to any other specified21
persons by any of the following:22
(aa) By any statement, promise, or threat that the manufacturer or distributor23
will in any manner benefit or injure the dealer, whether the statement, suggestion,24
threat, or promise is express or implied or made directly or indirectly.25
(bb) By any act that will benefit or injure the dealer.26
(cc) By any contract, or any express or implied offer of contract, made27
directly or indirectly to the dealer, for handling the motor vehicle on the condition28
that the dealer shall offer to sell or sell any extended service contract or extended29 SB NO. 360
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maintenance plan offered, sold, backed by, or sponsored by the manufacturer or1
distributor or that the dealer sell, assign, or transfer his retail installment sales2
contract on or lease of the vehicle, to a specified finance company or class of finance3
companies, leasing company or class of leasing companies, or to any other specified4
person.5
(dd) Any such statements, threats, promises, acts, contracts, or offers of6
contracts, when their effect may be to lessen or eliminate competition.7
(ii) Nothing contained in this Subparagraph shall prohibit a manufacturer or8
distributor from offering or providing incentive benefits or bonus programs to a retail9
motor vehicle dealer or prospective retail motor vehicle dealer who makes the10
voluntary decision to offer to sell or sell any extended service contract or extended11
maintenance plan offered, sold, backed, or sponsored by the manufacturer or12
distributor or to sell, assign, or transfer any retail installment sale or lease by him of13
motor vehicles manufactured or sold by the manufacturer or distributor to a specified14
finance company or leasing company.15
(2) For a motor vehicle dealer, specialty vehicle dealer, recreational product16
dealer, used motor vehicle dealer, or a motor vehicle salesman:17
(a) To require a purchaser of a vehicle, as a condition of sale and delivery18
thereof, to also purchase special features, appliances, accessories, or equipment not19
desired or requested by the purchaser; however, this prohibition shall not apply as20
to special features, appliances, accessories, or equipment which are permanently21
affixed to the vehicle.22
(b) To represent and sell as a new vehicle any vehicle, the legal title of which23
has been transferred by a manufacturer, distributor, or dealer to an ultimate24
purchaser.25
(c) To resort to or use any false or misleading advertisement in connection26
with his business as such vehicle dealer or motor vehicle salesman.27
(d) To sell or offer to sell makes, models, or classifications of new vehicles28
for which no franchise and license to sell is held.29 SB NO. 360
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(e) Except as otherwise approved by the commission, to sell or offer to sell1
a vehicle from an unlicensed location.2
(f) To deliver to a prospective purchaser a new or a used vehicle on a sale3
conditioned on financing, i.e., a spot delivery, except on the following terms and4
conditions which shall be in writing and shall be a part of the conditional sales5
contract or other written notification signed by the purchaser:6
(i) That if the sale is not concluded by the financing of the sale to the7
purchaser within twenty-five days of the delivery, the sale contract shall be null and8
void.9
(ii) That the vehicle being offered for trade-in by the purchaser shall not be10
sold by the dealer until the conditional sale is complete.11
(iii) That there shall be no charge to the purchaser should the conditional sale12
not be completed, including but not limited to mileage charges or charges to13
refurbish the vehicle offered for trade-in. However, the purchaser shall be14
responsible for any and all damages to the vehicle or other vehicles damaged by the15
fault of the purchaser and any and all liability incurred by the purchaser during the16
purchaser's custody of the vehicle to the extent provided for in R.S. 22:1296.17
(iv) That if the conditional sale is not completed, the dealer shall immediately18
refund to the purchaser upon return of the vehicle all sums placed with the dealership19
as a deposit or any other purpose associated with the attempted sale of the vehicle.20
(v) That the prospective purchaser shall return the vehicle to the dealership21
within forty-eight hours of notification by the dealer that the conditional sale will not22
be completed. If the prospective purchaser does not return the vehicle to the23
dealership within forty-eight hours of notification by the dealer, an authorized agent24
of the dealer shall have the right to recover the vehicle without the necessity of25
judicial process, provided that such recovery can be accomplished without26
unauthorized entry into a closed dwelling, whether locked or unlocked and without27
a breach of peace.28
(g) To pay a fee to any person in return for the solicitation, procurement, or29 SB NO. 360
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production by that person of prospective purchasers for new and used vehicles,1
except to a salesman licensed under the provisions of this Chapter.2
(h) To fail to fully and completely explain each charge listed on a retail3
buyer's order or vehicle invoice prior to the purchase of a vehicle.4
(i) When selling a vehicle to a consumer, to assess any consumer services5
fees, which shall include fees for treating the interior upholstery of the vehicle, oil6
changes, roadside assistance, dealer inspections, or any other service offered by the7
dealer, without allowing the buyer to refuse such services and be exempt from8
payment for such services. The provisions of this Subparagraph shall not apply to9
dealer-added options or accessories which are permanently affixed to the vehicle.10
(j) To fail to disclose to a purchaser, in writing, which components of a11
specialty vehicle are subject to a manufacturer's or distributor's warranty agreement12
and which components are subject to a specialty vehicle dealer's or other warranty13
agreement. The specialty vehicle dealer shall identify in writing the location of the14
two nearest authorized manufacturer or distributor warranty service providers.15
School bus warranty repair work, except for engine and transmission repair work,16
may also be performed by repair facilities, authorized by the manufacturer or17
distributor, which are not school bus dealers. Further, nothing in this Chapter shall18
prohibit a manufacturer of school buses licensed by the Louisiana Motor Vehicle19
Commission from authorizing warranty and other repair or maintenance services to20
be performed at any location of a motor vehicle dealer licensed under this Chapter21
which holds a franchise from any affiliate or subsidiary of the school bus22
manufacturer.23
(k)(i) To fail to disclose to a purchaser in writing on the sales contract,24
buyer's order, or any other document that the dealer may be participating in finance25
charges associated with the sale.26
(ii) To participate in a finance charge that would result in a difference27
between the buy rate and the contract rate of more than three percentage points.28
(iii) The provisions of this Subparagraph shall apply only to transactions29 SB NO. 360
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subject to the Louisiana Motor Vehicle Sales Finance Act.1
(3) For a motor vehicle or recreational product lessor or motor vehicle lessor2
agent:3
(a) To represent and sell as a new vehicle any vehicle which has been used4
or intended to be used and operated for leasing and rental purposes.5
(b) To resort to or use any false or misleading advertising in connection with6
the business of leasing or renting vehicles.7
(c) To lease, rent, sell, or offer to sell a vehicle from a location not licensed8
for such activity.9
(d) To rent or lease any vehicle which has been located within this state for10
a period of thirty days or more, unless such vehicle has been issued a Louisiana11
license plate by, and all license fees and taxes have been paid to, this state.12
(e) To pay a fee to any person in return for the solicitation, procurement, or13
production by that person of prospective lessees of vehicles, unless the person14
receiving the fee is a lease facilitator who holds a valid license as provided by this15
Chapter and a valid appointment from the motor vehicle lessor as provided by R.S.16
32:1266(B)(1). The fees prohibited by this Subparagraph shall not include amounts17
paid to a dealer as part of the consideration for the sale or assignment of a lease or18
leased vehicle or other amounts paid to the dealer who transfers the title on the19
vehicle or assigns the lease contract to the motor vehicle lessor.20
(f) To fail to fully and completely explain each charge listed on a retail21
buyer's or lessee's order or vehicle invoice or leasing agreement prior to the lease of22
a vehicle.23
(g) When leasing a vehicle to a consumer, to assess any consumer services24
fees, which shall include fees for treating the interior upholstery of the vehicle, oil25
changes, roadside assistance, dealer inspections, or any other service offered by the26
motor vehicle lessor, without allowing the consumer to refuse such services and be27
exempt from payment for such services. The provisions of this Subparagraph shall28
not apply to motor vehicle lessor-added options or accessories which are29 SB NO. 360
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permanently affixed to the vehicle.1
(4) For a lease facilitator:2
(a) To hold himself out to any person as a "leasing company", "leasing3
agent", "lease facilitator", or similar title, directly or indirectly engaged in the4
business of a lease facilitator, or otherwise engaged in the solicitation or procurement5
of prospective lessees for vehicles not titled in the name of and registered to the lease6
facilitator, without holding a valid lease facilitator license and being in compliance7
with the terms of this Chapter.8
(b) To sell or offer to sell a new vehicle.9
(c) To accept a fee from a dealer or consumer.10
(d) To sign a vehicle manufacturer's statement of origin to a vehicle, accept11
an assignment of a manufacturer's statement of origin to a vehicle, or otherwise12
assume any element of title to a new vehicle.13
(e) To procure or solicit prospective lessees for or on behalf of any person14
other than a motor vehicle lessor.15
(f) To act in the capacity of or engage in the business of a lease facilitator16
without a valid appointment from a motor vehicle lessor to act on behalf of the motor17
vehicle lessor in soliciting prospective lease clients or customers as provided by this18
Chapter.19
(5) For a broker:20
(a) To hold himself out to any person as a "broker", "purchasing company",21
"sales agent", or similar title, engaged in the business of broker, or otherwise22
engaged in the solicitation or procurement of prospective purchasers for vehicles not23
titled in the name of and registered to the broker, unless the broker holds a valid24
broker license and is in compliance with the terms of this Chapter.25
(b) To sell, or offer to sell, or display a new vehicle.26
(c) To be paid a fee by a dealer.27
(d) To sign a vehicle manufacturer's statement of origin to a vehicle, accept28
an assignment of a manufacturer's statement of origin to a vehicle, or otherwise29 SB NO. 360
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assume any element of title to a new vehicle.1
(e) To act in the capacity of or engage in the business of a broker without a2
valid license issued as provided by this Chapter and a valid appointment from a3
motor vehicle lessor to act on behalf of the motor vehicle lessor in soliciting4
prospective lease clients or customers as provided by this Chapter.5
(f) To fail to execute a written brokering agreement and provide a completed6
copy to both of the following:7
(i) Any consumer entering into the brokering agreement. The completed copy8
shall be provided prior to the consumer's signing an agreement for the purchase of9
the vehicle described in the brokering agreement, or, prior to accepting one hundred10
dollars or more from that consumer, whichever comes first.11
(ii) The selling dealer. The completed copy shall be provided prior to the12
selling dealer's entering into a purchase agreement with the consumer at the time of13
delivery.14
(g) To accept a purchase deposit from any consumer that exceeds two point15
five percent of the selling price of the vehicle described in the brokering agreement.16
(h) To fail to refund any purchase money, including purchase deposits, upon17
demand by a consumer at any time prior to the consumer's signing a vehicle purchase18
agreement with a selling dealer of the vehicle described in the brokering agreement.19
(i) To fail to cancel a brokering agreement and refund, upon demand, any20
money paid by a consumer, including any brokerage fee, under any of the following21
circumstances:22
(i) When the final price of the brokered vehicle exceeds the purchase price23
listed in the brokering agreement.24
(ii) When the vehicle delivered is not as described in the brokering25
agreement.26
(iii) When the brokering agreement expires prior to the customer's being27
presented with a purchase agreement from a selling dealer arranged through the28
brokering dealer that contains a purchase price at or below the price listed in the29 SB NO. 360
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brokering agreement.1
(j) To act as a seller and provide brokering services, both in the same2
transaction.3
(k) To fail to disclose to the consumer the dollar amount of any fee that the4
consumer is obligated to pay to the broker. This arrangement shall be confirmed in5
a brokering agreement.6
(l) To fail to maintain, for a minimum of three years, a copy of the executed7
brokering agreement and other notices and documents related to each brokered8
transaction.9
(m) To fail to advise the consumer, prior to accepting any money, that a full10
refund will be given if the motor vehicle ordered through the broker is not obtained11
for the consumer.12
(6) For any person or other licensee:13
(a)(i) To modify a franchise during the term of the agreement or upon its14
renewal if the modification substantially and adversely affects the franchisee's rights,15
obligations, investment, or return on investment without giving sixty days written16
notice of the proposed modification to the licensee and the commission which17
includes the grounds upon which the modification is based, unless the modification18
is required by law, court order, or the commission. Within the sixty day notice period19
the licensee may file with the commission a complaint for a determination whether20
there is good cause for permitting the proposed modification. The party seeking to21
modify or replace an agreement shall demonstrate by a preponderance of the22
evidence that there is good cause for the modification or replacement. The23
commission shall schedule a hearing within sixty days to decide the matter. Multiple24
complaints pertaining to the same proposed modifications shall be consolidated for25
hearing. The proposed modification may not take effect pending the determination26
of the matter.27
(ii) With respect to recreational products, to modify a franchise during the28
term of the agreement or upon its renewal if the modification substantially and29 SB NO. 360
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adversely affects the franchisee's rights, obligations, investment, or return on1
investment without giving sixty-day written notice of the proposed modification to2
the licensee and the commission unless the modifications are required by law, court3
order, or the commission. Within the sixty-day notice period the licensee may file4
with the commission a complaint for a determination whether there is good cause for5
permitting the proposed modification. The party seeking to modify or replace an6
agreement shall demonstrate by a preponderance of the evidence that there is good7
cause for the modification or replacement. The commission shall schedule a hearing8
within sixty days to decide the matter. Multiple complaints pertaining to the same9
proposed modifications shall be consolidated for hearing. The proposed modification10
may not take effect pending the determination of the matter.11
(b) In making a determination of whether there is good cause for permitting12
a proposed modification, the commission may consider any relevant factor including:13
(i) The reasons for the proposed modification.14
(ii) Whether the proposed modification is applied to or affects all licensees15
in a nondiscriminating manner.16
(iii) The degree to which the proposed modification will have a substantial17
and adverse effect upon the licensee's investment or return on investment.18
(iv) Whether the proposed modification is in the public interest.19
(v) The degree to which the proposed modification is necessary to the orderly20
and profitable distribution of vehicles and other services by the licensee.21
(vi) Whether the proposed modification is offset by other modifications22
beneficial to the licensee.23
(c) The decision of the commission shall be in writing and shall contain24
findings of fact and a determination of whether there is good cause for permitting the25
proposed modification. The commission shall deliver copies of the decision to the26
parties personally or by registered mail.27
(7) For any employee of a licensee while acting in the scope of his28
employment, to accept any payment, commission, fee, or compensation of any kind29 SB NO. 360
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from any person other than the employing licensee, unless such payment is fully1
disclosed to and approved by the employing licensee.2
B. The provisions of this Section shall not apply to a dealer,3
manufacturer, distributor, wholesaler, distributor branch, factory branch, or4
convertor of marine products, motorcycles or all-terrain vehicles, or5
recreational vehicles, or any officer, agent, or other representative thereof.6
§1261.1. Indemnification of franchised dealers7
A. Notwithstanding the terms of any franchise agreement, each manufacturer8
or converter shall indemnify and hold harmless its franchised dealers against any9
judgment for damages, including but not limited to court costs and reasonable10
attorney fees of the dealer, arising out of complaints, claims, or lawsuits including11
but not limited to strict liability, negligence, misrepresentation, express or implied12
warranty, or rescission of sale to the extent that the judgment arises out of alleged13
defective or negligent manufacture, assembly, or design of motor vehicles, speciality14
vehicle, recreational product, parts, or accessories, or other functions by the15
manufacturer of converter, which are beyond the control of the dealer.16
B. The provisions of this Section shall not apply to a franchised17
recreational vehicle dealer, marine dealer, or motorcycle or all-terrain vehicle18
dealer.19
§1262. Warranty; compensation; audits of dealer records20
*          *          *21
C. The provisions of this Section shall not apply to a dealer,22
manufacturer, distributor, wholesaler, distributor branch, or factory branch of23
marine products, motorcycles or all-terrain vehicles, or recreational vehicles,24
or any officer, agent, or other representative thereof.25
§1263. Motor vehicle repairs26
A. Suppliers of mechanical repairs and services for any vehicle subject to27
regulation pursuant to this Chapter shall provide each consumer with an itemized bill28
indicating repairs and services performed, parts replaced, or materials used, the total29 SB NO. 360
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labor charge, and the identity of the mechanic, repairman, or supplier who performed1
the work.  However, nothing in this Section shall prohibit a supplier of mechanical2
repairs and services from charging a service fee for the use of shop supplies such as3
rags, fender covers, small amounts of fluid, or other items which are not itemized,4
provided that such fee does not exceed five percent of the total invoice for5
mechanical repairs or thirty-five dollars, whichever is less.6
B. The provisions of this Section shall not apply to suppliers of7
mechanical repairs and services for any recreational vehicle subject to8
regulation of this Chapter.9
§1264. Damage disclosure10
*          *          *11
D. The provisions of this Section shall not apply to marine products,12
motorcycle or all-terrain vehicles, or recreational vehicles.13
*          *          *14
§1267.  Succession; right of first refusal15
*          *          *16
C. The provisions of this Section shall not apply to the succession of any17
marine dealer, motorcycle or all-terrain vehicle, or recreational vehicle.18
§1268.  Requirements upon termination; penalty; indemnity19
*          *          *20
 D. Notwithstanding any provision of law to the contrary, the provisions21
of this Section shall not apply to a marine dealer, motorcycle or all-terrain22
vehicle dealer, or recreational vehicle dealer.23
*          *          *24
PART II.  PROVISIONS SPECIFIC TO MARINE PRODUCTS25
§1270. Establishment of new marine dealerships or relocations; protests;26
procedure27
A. Whenever the commission receives an application for a recreational28
products dealer's license that would add a new marine dealership, it shall first29 SB NO. 360
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notify the existing licensed marine dealership or dealerships selling the same-1
line makes, models, or classifications if the new dealership's proposed location2
is within the existing dealer's area of responsibility. Any same-line makes,3
models, or classifications dealership whose area of responsibility includes the4
location of the proposed new marine dealership may object to the granting of5
the license.6
B. Whenever the commission receives an application for a recreational7
products dealer's license which would relocate an existing marine dealership,8
it shall first notify the existing licensed marine dealership or dealerships selling9
the same-line makes, models, or classifications if the dealership's proposed new10
location is within the existing dealer's area of responsibility. The existing same-11
line makes, models, or classifications dealership or dealerships shall have the12
right to object to the granting of the license only if the proposed relocation is13
within a radius of seven miles of its facility. However, without regard to14
distance, whenever the commission receives an application for the relocation of15
a marine dealership which would add an additional marine dealership to an16
existing same-line makes, models, or classifications dealership's area of17
responsibility, the affected dealership shall have the right to object.18
C. The objection shall be in writing and shall be received by the19
commission within a fifteen-day period after receipt of the notice. The fifteen-20
day objection period shall be waived upon written notification to the21
commission from all licensees entitled to object that the licensees have no22
objections to the proposed change or addition for which the notice of intent was23
issued. If timely objection is lodged, and prior to the issuance of the license, the24
commission shall hold a hearing within thirty days after receipt of the objection25
and issue its decision within ninety days after date of the hearing. Notice of26
hearing and an opportunity to participate therein shall be given to the27
manufacturer or distributor, the applicant for the license as a marine dealer,28
and to the protesting dealership or dealerships.29 SB NO. 360
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D. Whenever the commission receives an objection pursuant to the1
provisions of Subsection A of this Section, or whenever the commission receives2
an objection pursuant to the assignment of the marine dealer's area of principal3
sales and service responsibility, the commission shall consider the following and4
may consider any other relevant factors in determining whether there is good5
cause to approve or reject the assignment of the marine dealer's area of6
principal sales and service responsibility, or to issue a license:7
(1) Whether the community or territory can support an additional8
marine dealership.9
(2) The financial impact on both the applicant and the existing marine10
dealership or dealerships.11
(3) Whether the existing marine dealerships of the same-line makes,12
models, or classifications in the dealership's area of responsibility are providing13
adequate representation, competition, and convenient consumer care for the14
marine products of the same-line makes, models, or classifications located15
within that area.16
(4)  Whether the issuance of the license would increase competition, be17
in the public interest, or both.18
E. In disputes between the marine dealers and manufacturers and19
distributors regarding the execution of an agreement that would add a new20
same-line make marine dealership or would add the same product line21
regardless of brand name within the area of responsibility of an existing marine22
dealer, the name brand of the boat determines whether a dealer may enter into23
a franchise for a particular boat package or boat package line. The marine24
motor, marine engine, boat trailer, or any accessory made a part of a boat25
package shall not be the subject of, or a consideration in, an area of26
responsibility dispute for violation involving the boat package.27
F. A manufacturer or distributor of a marine motor or marine engine28
may, in its discretion, enter into a warranty service agreement with a marine29 SB NO. 360
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dealer of a boat package that is packaged with its particular brand marine1
motor or engine without violating the area of responsibility of any other marine2
dealer that has a franchise of that brand marine motor or engine. However, the3
warranty service agreement shall not be construed to permit the marine dealer4
to sell the marine motor or engine separate from the boat package, and the5
marine dealer shall not hold itself out to be a full-line or loose marine motor or6
engine dealership.7
§1270.1.  Unauthorized acts; marine products8
It shall be a violation of this Part:9
(1) For a manufacturer, a distributor, a wholesaler, distributor branch,10
or factory branch of marine products or any officer, agent, or other11
representative thereof:12
(a)  To induce or coerce, or attempt to induce or coerce, any licensee.13
(i) To order or accept delivery of any marine product, appliances,14
equipment, parts or accessories therefor, or any other commodity or15
commodities which shall not have been voluntarily ordered.16
(ii) To order for any person any parts, accessories, equipment,17
machinery, tools, appliances, or any commodity whatsoever.18
(iii) To assent to a release, assignment, novation, waiver, or estoppel19
which would relieve any person from liability to be imposed by law, unless done20
in connection with a settlement agreement to resolve a matter pending a21
commission hearing or pending litigation involving a manufacturer, distributor,22
wholesaler, distributor branch or factory branch, or officer, agent, or other23
representative thereof.24
(iv) To enter into a franchise with a licensee or during the franchise25
term, use any written instrument, agreement, release, assignment, novation,26
estoppel, or waiver, to attempt to nullify or modify any provision of this27
Chapter, or to require any controversy between a marine dealer and a28
manufacturer to be referred to any person or entity other than the commission,29 SB NO. 360
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or duly constituted courts of this state or the United States, if such referral1
would be binding upon the dealer. Such instruments are null and void, unless2
done in connection with a settlement agreement to resolve a matter pending a3
commission hearing or pending litigation.4
(v)  To waive the right to a jury trial.5
(vi) To participate in an advertising group or to participate monetarily6
in an advertising campaign or contest or to purchase any promotional7
materials, showroom, or other display decorations or materials at the expense8
of such marine dealer.9
(vii) To adhere to performance standards that are not applied uniformly10
to other similarly situated marine dealers. Any such performance standards11
shall be fair, reasonable, equitable, and based on accurate information. If12
marine dealership performance standards are based on a survey, the13
manufacturer, distributor, wholesaler, distributor branch, or factory branch14
shall establish the objectivity of the survey process and provide this information15
to any marine dealer of the same-line make covered by the survey request. Each16
response to a survey used by a manufacturer in preparing an evaluation or17
performance-rating of a marine dealer shall be made available to that marine18
dealer, or it cannot be used by the manufacturer. However, if a customer19
requests that the manufacturer or distributor not disclose the consumer's20
identity to the dealer, the manufacturer may withhold the consumer's identity21
in providing the survey response to the dealer, and the manufacturer may use22
the response. Any survey used must have the following characteristics:23
(aa)  It was designed by experts.24
(bb)  The proper universe was examined.25
(cc)  A representative sample was chosen.26
(dd)  The data was accurately reported.27
(viii) To release, convey, or otherwise provide customer information, if28
to do so is unlawful or if the customer objects in writing. This does not include29 SB NO. 360
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information that is necessary for the manufacturer to meet its obligations to the1
marine dealer or consumers in regard to contractual responsibilities, marine2
product recalls, or other requirements imposed by state or federal law. The3
manufacturer is further prohibited from providing any consumer information4
received from the marine dealer to any unaffiliated third party.5
(ix) To pay the attorney fees of the manufacturer or distributor related6
to hearings and appeals brought under this Chapter.7
(x) To order or accept delivery of any vehicle with special features,8
appliances, accessories, or equipment not included in the list price of said9
vehicles as publicly advertised.10
(b) To refuse to deliver to any licensee having a franchise or contractual11
arrangement for the retail sale of marine products sold or distributed by such12
manufacturer, distributor, wholesaler, distributor branch or factory branch,13
any marine product, publicly advertised for immediate delivery, within sixty14
days after such marine dealer's order shall have been received.15
(c) To threaten to cancel any franchise existing between such16
manufacturer, distributor, wholesaler, distributor branch or factory branch17
and said marine dealer for any reason.18
(d) To unfairly, without just cause and due regard to the equities of the19
marine dealer, cancel the franchise of the licensee. The nonrenewal of a20
franchise with a marine dealer or his successor without just provocation or21
cause, or the refusal to approve a qualified transferee or qualified successor to22
the dealer-operator as provided for in the selling agreement, shall be deemed23
an evasion of this Subparagraph and shall constitute an unfair cancellation,24
regardless of the terms or provisions of such franchise. However, at least ninety25
days notice shall be given to the dealer of a cancellation or nonrenewal of a26
franchise except for a cancellation arising out of fraudulent activity of the27
dealer principal which results in the conviction of a crime punishable by28
imprisonment.29 SB NO. 360
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(e) To refuse to extend to a licensee the privilege of determining the mode1
or manner of available transportation or facility that such marine dealer desires2
to be used or employed in making deliveries of marine products to him or it.3
(f) To ship or sell marine products to a licensee prior to the licensee4
having been granted a license by the commission to sell such products.5
(g) To unreasonably withhold consent to the sale, transfer, or exchange6
of the dealership to a qualified transferee capable of being licensed as a marine7
dealer in this state, provided the transferee meets the criteria generally applied8
by the manufacturer in approving new marine dealers and agrees to be bound9
by all the terms and conditions of the standard franchises.10
(h) To fail to respond in writing to a written request for consent as11
specified in Subparagraph (g) of this Paragraph within sixty days of receipt of12
a written request on the forms, if any, generally utilized by the manufacturer13
or distributor for such purposes and containing the information required14
therein. Failure to respond shall be deemed to be consent to the request.15
(i)(i) To sell or offer to sell a new or unused marine product directly to16
a consumer except as provided in this Chapter, or to compete with a licensee in17
the same-line makes, models, or classifications operating under an agreement18
from the aforementioned manufacturer. A manufacturer shall not, however, be19
deemed to be competing when any one of the following conditions are met:20
(aa) Operating a marine dealership temporarily for a reasonable period,21
not to exceed two years.22
(bb) Operating a bona fide retail marine dealership that is for sale to any23
qualified independent person at a fair and reasonable price, not to exceed two24
years.25
(cc) Operating in a bona fide relationship in which a person independent26
of a manufacturer has made a significant investment subject to loss in the27
marine dealership, and can reasonably expect to acquire full ownership of such28
dealership on reasonable terms and conditions.29 SB NO. 360
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(ii) After any of the conditions have been met under Subitems (i)(aa) and1
(bb) of this Subparagraph, the commission shall allow the manufacturer to2
compete with licensees of the same-line makes, models, or classifications under3
an agreement from said manufacturer for longer than two years when, in the4
discretion of the commission, the best interest of the manufacturer, consuming5
public, and licensees are best served.6
(j) To fail to compensate its marine dealers for the work and services7
they are required to perform in connection with the marine dealer's delivery8
and preparation obligations according to the terms of compensation that shall9
be filed with the commission on or before October first of each year. The10
commission shall find the compensation to be reasonable or the manufacturer11
shall remedy any deficiencies.12
(k) To fail to designate and provide to the commission in writing the13
community or territory assigned to a licensee.14
(l) To unreasonably discriminate among competing, similarly situated,15
same-line make dealers in the sales of the marine products, in the availability16
of such marine products, in the terms of incentive programs or sales promotion17
plans, or in other similar programs.18
(m) To use any subsidiary, affiliate, or any other controlled person or19
entity, or to employ the services of a third party, to accomplish what would20
otherwise be illegal conduct under this Chapter on the part of the manufacturer21
or distributor.22
(n) To make a change in the area of responsibility described in the23
franchise or sales and service agreement of a dealer, without the manufacturer24
or distributor giving said marine dealer and the commission no less than sixty25
days prior written notice by certified or registered mail.26
(2) For a marine dealer, used marine product dealer, marine product27
salesman:28
(a) To require a purchaser of a marine product, as a condition of sale29 SB NO. 360
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and delivery thereof, to also purchase special features, appliances, accessories,1
or equipment not desired or requested by the purchaser; however, this2
prohibition shall not apply as to special features, appliances, accessories, or3
equipment which are permanently affixed to the marine product.4
(b) To represent and sell as a new marine product any marine product,5
the legal title of which has been transferred by a manufacturer, distributor, or6
dealer to an ultimate purchaser.7
(c) To resort to or use any false or misleading advertisement in8
connection with his business as such marine dealer or marine product salesman.9
(d) To sell or offer to sell makes, models, or classifications of new marine10
products for which no franchise and license to sell is held.11
(e) Except as otherwise approved by the commission, to sell or offer to12
sell a marine product from an unlicensed location.13
(f) To deliver to a prospective purchaser a new or a used marine product14
on a sale conditioned on financing, i.e., a spot delivery, except on the following15
terms and conditions which shall be in writing and shall be a part of the16
conditional sales contract or other written notification signed by the purchaser:17
(i) That if the sale is not concluded by the financing of the sale to the18
purchaser within twenty-five days of the delivery, the sale contract shall be null19
and void.20
(ii) That the marine product being offered for trade-in by the purchaser21
shall not be sold by the marine dealer until the conditional sale is complete.22
(iii) That there shall be no charge to the purchaser should the conditional23
sale not be completed, including but not limited to mileage charges or charges24
to refurbish the marine product offered for trade-in. However, the purchaser25
shall be responsible for any and all damages to the marine product or other26
marine products damaged by the fault of the purchaser and any and all liability27
incurred by the purchaser during the purchaser's custody of the marine28
product to the extent provided for in R.S. 22:1296.29 SB NO. 360
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(iv) That if the conditional sale is not completed, the marine dealer shall1
immediately refund to the purchaser upon return of the marine product all2
sums placed with the dealership as a deposit or any other purpose associated3
with the attempted sale of the marine product.4
(v) That the prospective purchaser shall return the marine product to the5
dealership within forty-eight hours of notification by the marine dealer that the6
conditional sale will not be completed. If the prospective purchaser does not7
return the marine product to the dealership within forty-eight hours of8
notification by the marine dealer, an authorized agent of the marine dealer shall9
have the right to recover the marine product without the necessity of judicial10
process, provided that such recovery can be accomplished without unauthorized11
entry into a closed dwelling, whether locked or unlocked and without a breach12
of peace.13
(g) To pay a fee to any person in return for the solicitation, procurement,14
or production by that person of prospective purchasers for new and used15
marine products, except to a salesman licensed under the provisions of this16
Chapter.17
(h) To fail to fully and completely explain each charge listed on a retail18
buyer's order or marine product invoice prior to the purchase of a marine19
product.20
(i) When selling a marine product to a consumer, to assess any consumer21
services fees, which shall include fees for treating the interior upholstery of the22
marine product, oil changes, roadside assistance, dealer inspections, or any23
other service offered by the dealer, without allowing the buyer to refuse such24
services and be exempt from payment for such services. The provisions of this25
Subparagraph shall not apply to dealer-added options or accessories which are26
permanently affixed to the marine product.27
(3) For any person or other licensee:28
(a) To modify a franchise during the term of the agreement or upon its29 SB NO. 360
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renewal if the modification substantially and adversely affects the dealer's1
rights, obligations, investment, or return on investment without giving sixty-day2
written notice of the proposed modification to the licensee and the commission3
unless the modifications are required by law, court order, or the commission.4
Within the sixty-day notice period the licensee may file with the commission a5
complaint for a determination whether there is good cause for permitting the6
proposed modification. The party seeking to modify or replace an agreement7
shall demonstrate by a preponderance of the evidence that there is good cause8
for the modification or replacement. The commission shall schedule a hearing9
within sixty days to decide the matter. Multiple complaints pertaining to the10
same proposed modifications shall be consolidated for hearing. The proposed11
modification may not take effect pending the determination of the matter.12
(b) In making a determination of whether there is good cause for13
permitting a proposed modification, the commission may consider any relevant14
factor including:15
(i) The reasons for the proposed modification.16
(ii) Whether the proposed modification is applied to or affects all17
licensees in a nondiscriminating manner.18
(iii) The degree to which the proposed modification will have a19
substantial and adverse effect upon the licensee's investment or return on20
investment.21
(iv) Whether the proposed modification is in the public interest.22
(v) The degree to which the proposed modification is necessary to the23
orderly and profitable distribution of marine products and other services by the24
licensee.25
(vi) Whether the proposed modification is offset by other modifications26
beneficial to the licensee.27
(c) The decision of the commission shall be in writing and shall contain28
findings of fact and a determination of whether there is good cause for29 SB NO. 360
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permitting the proposed modification. The commission shall deliver copies of1
the decision to the parties personally or by registered mail.2
(4) For any employee of a licensee while acting in the scope of his3
employment, to accept any payment, commission, fee, or compensation of any4
kind from any person other than the employing licensee, unless such payment5
is fully disclosed to and approved by the employing licensee.6
§1270.2. Warranty; compensation; audits of marine dealer records7
A.(1) It shall be a violation of this Chapter for a manufacturer,8
distributor, wholesaler, distributor branch, or factory branch of marine9
products or any officer, agent or other representative thereof to fail to10
adequately and fairly compensate any marine dealer for labor, parts, and other11
expenses incurred by such dealer to perform under and comply with a12
manufacturer's or a distributor's warranty agreement.13
(2) In no event shall any manufacturer or distributor pay any marine14
dealer at a price or rate for warranty work that is less than that charged by the15
marine dealer to the retail customers of the marine dealer for nonwarranty16
work of like kind.17
(3) Warranty work includes parts and labor performed.18
(4) All claims made by the marine dealer for compensation under this19
Subsection shall be paid within thirty days after approval and shall be approved20
or disapproved within thirty days after receipt. When any claim is disapproved,21
the marine dealer shall be notified in writing of the grounds for disapproval.22
(5) The obligations set forth in this Subsection may be modified by23
contract.24
B.(1) Notwithstanding the terms of any franchise, warranty and sales,25
incentive, audits of marine dealer records may be conducted by the26
manufacturer, distributor, distributor branch, or factory branch.  Any audit for27
warranty parts or service compensation shall be for the twelve-month period28
immediately following the date of the payment of the claim by the manufacturer29 SB NO. 360
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or distributor. However, a marine dealer shall not be held liable by virtue of an1
audit for failure to retain parts for a period in excess of six months. Any audit2
for sales incentives, service incentives, rebates, or other forms of incentive3
compensation shall only be for the twelve-month period immediately following4
the date of the final payment to the marine dealer under a promotion, event,5
program, or activity. In no event shall the manufacturer, distributor,6
distributor branch, or factory branch fail to allow the marine dealer to make7
corrections to the sales data in less than one hundred twenty days from the8
program period. Additionally, no penalty other than amounts advanced on a9
marine product reported incorrectly shall be due in connection with the audit.10
With respect to marine products sold during the time period subject to the11
audit, but submitted incorrectly to the manufacturer, distributor, or wholesale12
distributor branch or factory branch, the marine dealer shall be charged back13
for the amount reported incorrectly and credited with the amount due, if14
anything, on the actual sale date.15
(2) No claim which has been approved and paid may be charged back to16
the marine dealer unless it can be shown that one or all of the following applies:17
(a) The claim was false or fraudulent.18
(b) The repairs were not properly made.19
(c) The repairs were unnecessary to correct the defective condition under20
generally accepted standards of workmanship.21
(d) The marine dealer failed to reasonably substantiate the repair in22
accordance with reasonable written requirements of the manufacturer or23
distributor, if the marine dealer was notified of the requirements prior to the24
time the claim arose and if the requirements were in effect at the time the claim25
arose.26
(3) A manufacturer or distributor shall not deny a claim solely based on27
a marine dealer's incidental failure to comply with a specific claim processing28
requirement, or a clerical error, or other administrative technicality.29 SB NO. 360
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(4) Limitations on warranty parts or service compensation, sales1
incentive audits, rebates, or other forms of incentive compensation, chargebacks2
for warranty parts or service compensation, and service incentives and3
chargebacks for sales compensation only shall not be effective in the case of4
intentionally false or fraudulent claims.5
(5) It shall be deemed an unfair act pursuant to this Chapter to audit a6
marine dealer more frequently than two sales-related and two service-related7
audits in a twelve-month period. Nothing in this Subsection shall limit a8
manufacturer's or distributor's ability to perform routine claim reviews in the9
normal course of business.10
(6) No claim may be rejected as late if it has been submitted within sixty11
days of the date the repair order was written.12
§1270.3. Sale of water-damaged marine products13
A. No person shall sell, transfer, or convey any new or used marine14
product to any person without notifying the buyer or receiver of the marine15
product in writing of the extent of any water damage from flooding which16
occurred to the marine product prior to the transaction.17
B. If a sale, transfer, or conveyance of a new or used marine product18
occurs in violation of Subsection A of this Section, the person receiving19
ownership and title to the marine product who is not otherwise aware of the20
damage at the time of the transaction may bring an action to set aside the21
transaction within one year from the date of the transaction and receive all22
monies or other property given as consideration for the marine product less a23
reasonable assessment for wear and tear.24
C. For the purposes of this Section, a "water-damaged marine product"25
means any marine product whose power train, computer, or electrical system26
has been damaged by flooding.27
§1270.4.  Succession; right of first refusal; marine dealers28
A. The terms of the franchise notwithstanding, any marine dealer may29 SB NO. 360
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appoint by will, or other written instrument, a designated successor to succeed1
in the ownership interest of the marine dealer in the marine dealership upon the2
death or incapacity of the marine dealer.3
B. Unless good cause exists for refusal to honor the succession on the4
part of the manufacturer or distributor, any designated successor of a deceased5
or incapacitated marine dealer of a marine dealership may succeed to the6
ownership of the marine dealership under the existing franchise if:7
(1) The designated successor gives the manufacturer or distributor8
written notice of his intention to succeed to the ownership of the marine dealer9
within sixty days of the marine dealer's death or incapacity.10
(2)  The designated successor agrees to be bound by all the terms and11
conditions of the franchise.12
C. The manufacturer or distributor may request, and the designated13
successor shall provide, promptly upon such request, personal and financial14
data reasonably necessary to determine whether the succession should be15
honored.16
D. If a manufacturer or distributor believes that good cause exists for17
refusing to honor the succession of a deceased or incapacitated marine dealer,18
the manufacturer or distributor may, not more than sixty days following receipt19
of notice of the designated successor's intent to succeed and receipt of such20
personal or financial data, serve upon the designated successor notice of its21
refusal to honor the succession and of its intent to discontinue the existing22
franchise with the marine dealer not earlier than six months from the date such23
notice is served.24
E. The notice must state the specific grounds for the refusal to honor the25
succession.26
F. If notice of refusal and discontinuance is not timely served upon the27
designated successor, the franchise shall continue in effect subject to28
termination only as otherwise permitted by this Part.29 SB NO. 360
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G. In determining whether good cause for the refusal to honor the1
succession exists, the manufacturer or distributor has the burden of proving2
that the designated successor is not of good moral character or does not3
otherwise meet the manufacturer's or distributor's reasonable standards as a4
marine dealer.5
H. If a manufacturer or distributor refuses to honor the succession to6
the ownership interest of a deceased or incapacitated owner for good cause, then7
and in such event the manufacturer or distributor shall allow the designated8
successor a reasonable period of time which shall not be less than six months in9
which to consummate a sale of the marine dealership. Any such sale shall be10
subject to R.S. 32:1270.1(2)(d).11
§1270.5. Manufacturer, distributor, or wholesaler repurchase; marine dealer;12
products13
A. If any marine dealer enters into a franchise with a manufacturer,14
distributor, or wholesaler wherein the marine dealer agrees to maintain an15
inventory of marine products or repair parts, the manufacturer, distributor, or16
wholesaler shall not terminate or fail to renew such franchise unless there is a17
breach of the franchise by the marine dealer and until ninety days after notice18
of such intention to terminate, including the breach of the franchise, has been19
sent by certified mail, return receipt requested, or commercial delivery service20
with verification of receipt, to the marine dealer and the marine dealer has21
failed to correct the breach within such period.22
B. If the franchise is terminated as a result of any action by the marine23
dealer and the manufacturer, distributor, or wholesaler has not given due cause,24
as provided in this Section, for termination of such franchise, the manufacturer,25
distributor, or wholesaler shall not be required to repurchase the inventory as26
provided in this Section; however, if the franchise is terminated as a result of27
any action by the marine dealer and the manufacturer, distributor, or28
wholesaler has given the marine dealer due cause, as provided in this Section,29 SB NO. 360
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to terminate the franchise, the manufacturer, distributor, or wholesaler shall1
be required to repurchase that inventory previously purchased from them,2
including any new and unused marine products of the current and immediate3
prior model or program year and new and unused parts inventory as provided4
in this Section.5
C. It shall be unlawful for the manufacturer, wholesaler, or distributor,6
without due cause and pursuant to its own initiating action, to terminate or fail7
to renew a franchise, unless the manufacturer, wholesaler, or distributor8
repurchases the new and unused inventory as provided for in this Section.9
D. It shall not be unlawful for the marine dealer with due cause and10
pursuant to the marine dealer's own initiating action to terminate or fail to11
renew a franchise with a manufacturer, wholesaler, or distributor, and the12
manufacturer, wholesaler, or distributor shall repurchase inventory as provided13
by this Section. To determine what constitutes due cause for a marine dealer to14
terminate or fail to renew a franchise, the following factors regarding the15
manufacturer, wholesaler, distributor or representative of one of the so named16
shall include whether the manufacturer, wholesaler, distributor, or one of the17
so named:18
(1) Has made a material misrepresentation in accepting or acting under19
the franchise.20
(2) Has engaged in an unfair business practice.21
(3) Has engaged in conduct which is injurious or detrimental to public22
welfare.23
(4) Has failed to comply with any applicable Section of this Chapter.24
(5) Has been convicted of a crime, the effect of which would be25
detrimental to the marine dealership or dealer.26
(6) Has violated the Louisiana marine dealers area of responsibility.27
(7) Has failed to operate in the normal course of business for thirty28
consecutive days.29 SB NO. 360
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(8) Has failed to comply with the terms of the franchise with the marine1
dealer.2
(9) Has materially misrepresented the performance or fitness for sale or3
use of a product line or products covered by the franchise.4
E. If a manufacturer, distributor, or wholesaler does not intend to renew5
a franchise, the manufacturer, distributor, or wholesaler shall give the marine6
dealer ninety days written notice prior to the effective date by certified mail,7
return receipt requested, or commercial delivery service with verification of8
receipt.9
F. As required by this Section, the manufacturer, distributor, or10
wholesaler shall repurchase that inventory which can be verified as previously11
purchased from them, including all new and unused marine products of the12
current and immediate prior model or program year and new and unused parts13
on hand and held by the marine dealer on the date of termination of the14
contract. The manufacturer, distributor, or wholesaler shall pay an amount15
equivalent to the cost actually paid by the marine dealer, including discounts16
given and rebates paid per unit for any new, unused, undamaged, and unaltered17
from original invoice and delivery, and complete marine product. The18
manufacturer, distributor, or wholesaler shall also pay an amount equal to the19
price paid by the marine dealer for any new, unused, and undamaged repair20
parts and accessories which are listed in the manufacturer's, distributor's, or21
wholesaler's prevailing parts list or were delivered in the past forty-eight22
months and are in their original packaging.23
G. The provisions of this Section shall not require the repurchase from24
a marine dealer of:25
(1) Any repair part which has a limited storage life or is otherwise26
subject to deterioration.27
(2) Any single repair part which is priced and packaged as a set of two28
or more items.29 SB NO. 360
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(3) Any repair part which, because of its condition, is not resalable as a1
new part without repackaging or reconditioning.2
(4) Any inventory for which the marine dealer cannot provide good title,3
free and clear of all claims, liens, and encumbrances.4
(5) Any inventory which the marine dealer desires to keep, provided that5
the marine dealer has a contractual right to do so.6
(6) Any marine product which is not in new, unused, undamaged, and7
complete condition.8
(7) Any repair parts which are not in new, unused, and undamaged9
condition.10
(8) Any inventory which was ordered by the marine dealer on or after11
the date of receipt of the notification of termination of the franchise.12
(9) Any inventory which was acquired by the marine dealer from any13
source other than the manufacturer, distributor, or wholesaler, or its immediate14
predecessor.15
(10) Any marine product that has been altered substantially from16
original delivery.17
H. Upon termination of the franchise, the marine dealer shall submit a18
final inventory of marine products and parts on hand to the manufacturer,19
distributor, or wholesaler by certified mail, return receipt requested, or20
commercial delivery service with verification of receipt. If a manufacturer,21
distributor, or wholesaler fails or refuses to repurchase as required by this22
Section within thirty days of the receipt of the inventory, without just cause, the23
manufacturer, distributor, or wholesaler shall be subjected to a penalty of the24
marine dealer's reasonable attorney fees, court costs, and interest on the25
inventory value of returnable marine products and parts required to be26
purchased computed at the rate of one and one-half percent per month from the27
thirty-first day, as long as such repurchase is not made.28
I. Notwithstanding any other provision of law to the contrary, it shall be29 SB NO. 360
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unlawful for a manufacturer, distributor, or wholesaler, either by contract or1
practice, to assess repurchase or restocking charges, freight charges except for2
return charges, reimbursement of interest charges paid, and any similar3
charges to the marine dealer.4
J. If a marine dealer completes a bona fide, orderly, and permanent5
closure of the marine dealership, which does not involve a sale of the dealership,6
and provides at least ninety days notice to the manufacturer, wholesaler, or7
distributor, the marine products and parts inventory shall be repurchased by8
the manufacturer, wholesaler, or distributor in the manner provided for in this9
Section, when a franchise is terminated as result of action by the manufacturer,10
wholesaler, or distributor.11
K. In the event of the death or incapacity of the marine dealer or the12
majority owner of a person operating as a marine dealer, the manufacturer,13
distributor, or wholesaler shall, at the option of the heirs, if the marine dealer14
died intestate, or the legatees or transferees under the terms of the deceased15
marine dealer's last will and testament if the marine dealer died testate,16
repurchase the inventory from the heirs, legatees, or transferees as if the17
manufacturer, distributor, or wholesaler had terminated the contract, and the18
inventory repurchase provisions of this Section shall apply. The heirs or legatees19
shall have until the end of the contract term or one year from the date of the20
death of the marine dealer or majority owner of a person, whichever comes21
first, to exercise their option pursuant to this Section. However,  nothing in this22
Section shall require the repurchase of inventory if the heirs, legatees, or23
transferees and the manufacturer, distributor, or wholesaler enter into a new24
franchise to operate the marine dealership.25
§1270.6.  Manufacturer termination of line-make; manufacturer bankruptcy;26
license27
Notwithstanding the terms of any franchise or provision of law, if the28
termination, cancellation, or nonrenewal of a licensee's selling agreement is the29 SB NO. 360
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result of the termination, elimination, or cessation of a line-make by the1
manufacturer, distributor, or factory branch, whether by bankruptcy or2
otherwise, the license issued by the commission may remain in effect at the3
discretion of the commission pursuant to its rules.4
§1270.7. Indemnification of marine dealers5
Notwithstanding the terms of any franchise agreement, each6
manufacturer or converter shall indemnify and hold harmless its franchised7
marine dealers against any judgment for damages, including but not limited to8
court costs and reasonable attorney fees of the marine dealer, arising out of9
complaints, claims, or lawsuits including but not limited to strict liability,10
negligence, misrepresentation, express or implied warranty, or rescission of sale11
to the extent that the judgment arises out of alleged defective or negligent12
manufacture, assembly, or design of marine products, parts, or accessories, or13
other functions by the manufacturer or converter, which are beyond the control14
of the marine dealer.15
§1270.8.  Marine products repairs16
Suppliers of mechanical repairs and services for any marine product17
subject to regulation pursuant to this Part shall provide each consumer with an18
itemized bill indicating repairs and services performed, parts replaced, or19
materials used, the total labor charge, and the identity of the mechanic,20
repairman, or supplier who performed the work. However, nothing in this21
Section shall prohibit a supplier of mechanical repairs and services from22
charging a service fee for the use of shop supplies such as rags, fender covers,23
small amounts of fluid, or other items which are not itemized, provided that24
such fee does not exceed five percent of the total invoice for mechanical repairs25
or thirty-five dollars, whichever is less.26
§1270.9.  Damage disclosure27
A. Whenever a new marine product subject to regulation pursuant to28
this Chapter is sold to any person, the seller shall notify the purchaser of any29 SB NO. 360
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body damage or mechanical damage which the marine product has sustained1
that exceeds six percent of the manufacturer's suggested retail price.  Such2
notice shall be in writing and a copy thereof shall be delivered to the purchaser3
prior to or simultaneous with transfer of the vehicle title.4
B. This Section shall apply to all instances of vehicular body or5
mechanical damage to marine products and to all actions involving such6
damage, notwithstanding the application of other codal, statutory, or regulatory7
provisions, including but not limited to Civil Code Articles 2520 et seq.8
PART III.  PROVISIONS SPECIFIC TO MOTORCYCLES AND9
ALL-TERRAIN VEHICLES10
§1270.10. Establishment of new motorcycle or all-terrain vehicle dealerships or11
relocations; protests; procedure12
A. Whenever the commission receives an application for a recreational13
products dealer's license which would add a new motorcycle or all-terrain14
vehicle dealership, it shall first notify the existing licensed motorcycle or all-15
terrain vehicle dealership or dealerships selling the same-line makes, models,16
or classifications if the new dealership's proposed location is within the existing17
dealer's area of responsibility. Any same-line makes, models, or classifications18
dealership whose area of responsibility includes the location of the proposed19
new motorcycle or all-terrain vehicle dealership may object to the granting of20
the license.21
B. Whenever the commission receives an application for a recreation22
products dealer's license which would relocate an existing motorcycle or all-23
terrain vehicle dealership, it shall first notify any existing licensed motorcycle24
or all-terrain vehicle dealership selling the same-line makes, models, or25
classifications if the dealership's proposed new location is within the existing26
dealer's area of responsibility. Any existing same-line makes, models, or27
classifications dealership shall have the right to object to the granting of the28
license only if the proposed relocation is within a radius of seven miles of its29 SB NO. 360
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facility. However, without regard to distance, whenever the commission receives1
an application for the relocation of a motorcycle or all-terrain vehicle2
dealership which would add an additional franchise to an existing same-line3
makes, models, or classifications dealership's area of responsibility, the affected4
motorcycle or all-terrain vehicle dealership shall have the right to object.5
C. The objection shall be in writing and shall be received by the6
commission within a fifteen-day period after receipt of the notice. The fifteen-7
day objection period shall be waived upon written notification to the8
commission from all licensees entitled to object that the licensees have no9
objections to the proposed change or addition for which the notice of intent was10
issued. If timely objection is lodged, and prior to the issuance of the license, the11
commission shall hold a hearing within thirty days after receipt of the objection12
and issue its decision within ninety days after date of the hearing. Notice of13
hearing and an opportunity to participate therein shall be given to the14
manufacturer or distributor, the applicant for the license as a motorcycle or all-15
terrain vehicle dealer, and to the protesting motorcycle or all-terrain vehicle16
dealership or dealerships.17
D. Whenever the commission receives an objection pursuant to the18
provisions of Subsection A of this Section, the commission shall consider the19
following and may consider any other relevant factors in determining whether20
there is good cause to issue a license:21
(1) Whether the community or territory can support an additional22
motorcycle or all-terrain vehicle dealership.23
(2) The financial impact on both the applicant and the existing24
motorcycle or all-terrain vehicle dealership or dealerships.25
(3) Whether the existing motorcycle or all-terrain vehicle dealerships of26
the same-line makes, models, or classifications in the dealership's area of27
responsibility are providing adequate representation, competition, and28
convenient consumer care for the motorcycle or all-terrain vehicles of the same-29 SB NO. 360
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line makes, models, or classifications located within that area.1
(4) Whether the issuance of the license would increase competition, or be2
in the public interest, or both.3
§1270.11. Unauthorized acts4
It shall be a violation of this Part:5
(1) For a manufacturer, distributor, wholesaler, distributor branch,6
factory branch, converter or officer, agent, or other representative thereof:7
(a) To induce or coerce, or attempt to induce or coerce, any licensee:8
(i) To order or accept delivery of any motorcycle or all-terrain vehicle,9
appliances, equipment, parts or accessories therefor, or any other commodity10
or commodities which shall not have been voluntarily ordered.11
(ii) To order or accept delivery of any motorcycle or all-terrain vehicle12
with special features, appliances, accessories, or equipment not included in the13
list price of said vehicles as publicly advertised.14
(iii) To order for any person any parts, accessories, equipment,15
machinery, tools, appliances, or any commodity whatsoever.16
(iv) To assent to a release, assignment, novation, waiver, or estoppel17
which would relieve any person from liability to be imposed by law, unless done18
in connection with a settlement agreement to resolve a matter pending a19
commission hearing or pending litigation between a manufacturer, distributor,20
wholesaler, distributor branch or factory branch, or officer, agent, or other21
representative thereof.22
(v) To enter into a franchise with a licensee or during the franchise term,23
use any written instrument, agreement, release, assignment, novation, estoppel,24
or waiver, to attempt to nullify or modify any provision of this Chapter, or to25
require any controversy between a dealer and a manufacturer to be referred to26
any person or entity other than the commission, or duly constituted courts of27
this state or the United States, if such referral would be binding upon the28
motorcycle or all-terrain vehicle dealer. Such instruments are null and void,29 SB NO. 360
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unless done in connection with a settlement agreement to resolve a matter1
pending a commission hearing or pending litigation.2
(vi) To waive the right to a jury trial.3
(vii) To release, convey, or otherwise provide customer information, if4
to do so is unlawful or if the customer objects in writing. This does not include5
information that is necessary for the manufacturer to meet its obligations to the6
motorcycle or all-terrain vehicle dealer or consumers in regard to contractual7
responsibilities, motorcycle or all-terrain vehicle recalls, or other requirements8
imposed by state or federal law. The manufacturer is further prohibited from9
providing any consumer information received from the motorcycle or all-10
terrain vehicle dealer to any unaffiliated third party.11
(viii) To pay the attorney fees of the manufacturer or distributor related12
to hearings and appeals brought under this Chapter.13
(b) To threaten to cancel any franchise or any contractual agreement14
existing between such manufacturer, distributor, wholesaler, distributor branch15
or factory branch and motorcycle or all-terrain vehicle dealer for any reason.16
(c) To unfairly, without just cause and due regard to the equities of the17
motorcycle or all-terrain vehicle dealer, cancel the franchise of the licensee. The18
nonrenewal of a franchise with such dealer or his successor without just19
provocation or cause, or the refusal to approve a qualified transferee or20
qualified successor to the dealer-operator as provided for in the franchise shall21
be deemed an evasion of this Subparagraph and shall constitute an unfair22
cancellation, regardless of the terms or provisions of such franchise. However,23
at least ninety days notice shall be given to the dealer of a cancellation or24
nonrenewal of franchise except for a cancellation arising out of fraudulent25
activity of the dealer principal which results in the conviction of a crime26
punishable by imprisonment.27
(d) To refuse to extend to a licensee the privilege of determining the28
mode or manner of available transportation facility that the motorcycle or all-29 SB NO. 360
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terrain vehicle dealer desires to be used or employed in making deliveries of1
motorcycles or all-terrain vehicles to him or it.2
(e) To ship or sell motorcycles or all-terrain vehicles to a licensee prior3
to the licensee having been granted a license by the commission to sell4
motorcycles or all-terrain vehicles.5
(f) To unreasonably withhold consent to the sale, transfer, or exchange6
of the franchise to a qualified transferee capable of being licensed as a7
motorcycle or all-terrain vehicle dealer in this state, provided the transferee8
meets the criteria generally applied by the manufacturer in approving new9
motorcycle or all-terrain vehicle dealers and agrees to be bound by all the terms10
and conditions of the standard franchises.11
(g) To fail to respond in writing to a written request for consent as12
specified in Subparagraph (f) of this Paragraph above within sixty days of13
receipt of a written request on the forms, if any, generally utilized by the14
manufacturer or distributor for such purposes and containing the information15
required therein. Failure to respond shall be deemed to be consent to the16
request.17
(h)(i) To sell or offer to sell a new or unused motorcycle or all-terrain18
vehicle directly to a consumer except as provided in this Chapter, or to compete19
with a licensee in the same-line makes, models, or classifications operating20
under an agreement or franchise from the aforementioned manufacturer. A21
manufacturer shall not, however, be deemed to be competing when any one of22
the following conditions are met:23
(aa) Operating a motorcycle or all-terrain vehicle dealership temporarily24
for a reasonable period, not to exceed two years.25
(bb) Operating a bona fide retail dealership which is for sale to any26
qualified independent person at a fair and reasonable price, not to exceed two27
years.28
(cc) Operating in a bona fide relationship in which a person independent29 SB NO. 360
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of a manufacturer has made a significant investment subject to loss in the1
dealership, and can reasonably expect to acquire full ownership of such2
dealership on reasonable terms and conditions.3
(ii) After any of the conditions have been met under Subitems (i)(aa) and4
(bb) of this Subparagraph, the commission shall allow the manufacturer to5
compete with licensees of the same-line makes, models, or classifications under6
an agreement or franchise from said manufacturer for longer than two years7
when, in the discretion of the commission, the best interest of the manufacturer,8
consuming public, and licensees are best served.9
(i) To fail to compensate its motorcycle or all-terrain vehicle dealers for10
the work and services they are required to perform in connection with the11
motorcycle or all-terrain vehicle dealer's delivery and preparation obligations12
according to the terms of compensation that shall be filed with the commission13
on or before October first of each year. The commission shall find the14
compensation to be reasonable or the manufacturer shall remedy any15
deficiencies.16
(j) To fail to designate and provide to the commission in writing the17
community or territory assigned to a licensee.18
(k) To unreasonably discriminate among competing, similarly situated,19
same-line make dealers in the sales of motorcycles or all-terrain vehicles, in the20
availability of motorcycles or all-terrain vehicles, in the terms of incentive21
programs or sales promotion plans, or in other similar programs.22
(l) To use any subsidiary, affiliate, or any other controlled person or23
entity, or to employ the services of a third party, to accomplish what would24
otherwise be illegal conduct under this Chapter on the part of the manufacturer25
or distributor.26
(m) To make a change in the area of responsibility described in the27
franchise agreement or sales and service agreement of a motorcycle or all-28
terrain vehicle dealer, without the franchisor, converter, or manufacturer29 SB NO. 360
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giving said motorcycle or all-terrain vehicle dealer and the commission no less1
than sixty days prior written notice by certified or registered mail.2
(n) To refuse to deliver to any licensee having a franchise or contractual3
arrangement for the retail sale of motorcycles or all-terrain vehicles sold or4
distributed by such manufacturer, distributor, wholesaler, distributor branch5
or factory branch, any motorcycle or all-terrain vehicle, publicly advertised for6
immediate delivery, within sixty days after such dealer's order shall have been7
received.8
(2) For a motorcycle or all-terrain vehicle dealer, used motorcycle or all-9
terrain vehicle dealer, or a motorcycle or all-terrain vehicle salesman:10
(a) To require a purchaser of a motorcycle or all-terrain vehicle, as a11
condition of sale and delivery thereof, to also purchase special features,12
appliances, accessories, or equipment not desired or requested by the13
purchaser; however, this prohibition shall not apply as to special features,14
appliances, accessories, or equipment which are permanently affixed to the15
motorcycle or all-terrain vehicle.16
(b) To represent and sell as a new motorcycle or all-terrain vehicle any17
motorcycle or all-terrain vehicle, the legal title of which has been transferred18
by a manufacturer, distributor, or dealer to an ultimate purchaser.19
(c) To resort to or use any false or misleading advertisement in20
connection with his business as such motorcycle or all-terrain vehicle dealer or21
motorcycle or all-terrain vehicle salesman.22
(d) To sell or offer to sell makes, models, or classifications of new23
motorcycles or all-terrain vehicles for which no franchise and license to sell is24
held.25
(e) Except as otherwise approved by the commission, to sell or offer to26
sell a motorcycle or all-terrain vehicle from an unlicensed location.27
(f) To deliver to a prospective purchaser a new or a used motorcycle or28
all-terrain vehicle on a sale conditioned on financing, i.e., a spot delivery, except29 SB NO. 360
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on the following terms and conditions which shall be in writing and shall be a1
part of the conditional sales contract or other written notification signed by the2
purchaser:3
(i) That if the sale is not concluded by the financing of the sale to the4
purchaser within twenty-five days of the delivery, the sale contract shall be null5
and void.6
(ii) That the motorcycle or all-terrain vehicle being offered for trade-in7
by the purchaser shall not be sold by the motorcycle or all-terrain vehicle dealer8
until the conditional sale is complete.9
(iii) That there shall be no charge to the purchaser should the conditional10
sale not be completed, including but not limited to mileage charges or charges11
to refurbish the motorcycle or all-terrain vehicle offered for trade-in. However,12
the purchaser shall be responsible for any and all damages to the motorcycle or13
all-terrain vehicle or other motorcycles or all-terrain vehicles damaged by the14
fault of the purchaser and any and all liability incurred by the purchaser during15
the purchaser's custody of the vehicle to the extent provided for in R.S. 22:1296.16
(iv) That if the conditional sale is not completed, the motorcycle or all-17
terrain vehicle dealer shall immediately refund to the purchaser upon return18
of the motorcycle or all-terrain vehicle all sums placed with the dealership as19
a deposit or any other purpose associated with the attempted sale of the20
motorcycle or all-terrain vehicle.21
(v) That the prospective purchaser shall return the motorcycle or all-22
terrain vehicle to the dealership within forty-eight hours of notification by the23
dealer that the conditional sale will not be completed. If the prospective24
purchaser does not return the motorcycle or all-terrain vehicle to the dealership25
within forty-eight hours of notification by the motorcycle or all-terrain vehicle26
dealer, an authorized agent of the motorcycle or all-terrain vehicle dealer shall27
have the right to recover the motorcycle or all-terrain vehicle without the28
necessity of judicial process, provided that such recovery can be accomplished29 SB NO. 360
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without unauthorized entry into a closed dwelling, whether locked or unlocked1
and without a breach of peace.2
(g) To pay a fee to any person in return for the solicitation, procurement,3
or production by that person of prospective purchasers for new and used4
motorcycles or all-terrain vehicles, except to a motorcycle or all-terrain vehicle5
salesman licensed under the provisions of this Chapter.6
(h) To fail to fully and completely explain each charge listed on a retail7
buyer's order or motorcycle or all-terrain vehicle invoice prior to the purchase8
of a motorcycle or all-terrain vehicle.9
(i) When selling a motorcycle or all-terrain vehicle to a consumer, to10
assess any consumer services fees, which shall include fees for treating the11
interior upholstery of the vehicle, oil changes, roadside assistance, dealer12
inspections, or any other service offered by the dealer, without allowing the13
buyer to refuse such services and be exempt from payment for such services.14
The provisions of this Subparagraph shall not apply to dealer-added options or15
accessories which are permanently affixed to the motorcycle or all-terrain16
vehicle.17
(j)(i) To fail to disclose to a purchaser in writing on the sales contract,18
buyer's order, or any other document that the motorcycle or all-terrain vehicle19
dealer may be participating in finance charges associated with the sale.20
(ii) To participate in a finance charge that would result in a difference21
between the buy rate and the contract rate of more than three percentage22
points.23
(iii) The provisions of this Subparagraph shall apply only to transactions24
subject to the Louisiana Motor Vehicle Sales Finance Act.25
(3) For any person or other licensee:26
(a) To modify a franchise during the term of the agreement or upon its27
renewal if the modification substantially and adversely affects the franchisee's28
rights, obligations, investment, or return on investment without giving a sixty-29 SB NO. 360
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day written notice of the proposed modification to the licensee and the1
commission unless the modifications are required by law, court order, or the2
commission. Within the sixty-day notice period the licensee may file with the3
commission a complaint for a determination whether there is good cause for4
permitting the proposed modification. The party seeking to modify or replace5
an agreement shall demonstrate by a preponderance of the evidence that there6
is good cause for the modification or replacement. The commission shall7
schedule a hearing within sixty days to decide the matter. Multiple complaints8
pertaining to the same proposed modifications shall be consolidated for hearing.9
The proposed modification may not take effect pending the determination of the10
matter.11
(b) In making a determination of whether there is good cause for12
permitting a proposed modification, the commission may consider any relevant13
factor including:14
(i) The reasons for the proposed modification.15
(ii) Whether the proposed modification is applied to or affects all16
licensees in a nondiscriminating manner.17
(iii) The degree to which the proposed modification will have a18
substantial and adverse effect upon the licensee's investment or return on19
investment.20
(iv) Whether the proposed modification is in the public interest.21
(v) The degree to which the proposed modification is necessary to the22
orderly and profitable distribution of vehicles and other services by the licensee.23
(vi) Whether the proposed modification is offset by other modifications24
beneficial to the licensee.25
(c) The decision of the commission shall be in writing and shall contain26
findings of fact and a determination of whether there is good cause for27
permitting the proposed modification. The commission shall deliver copies of28
the decision to the parties personally or by registered mail.29 SB NO. 360
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(4) For any employee of a licensee while acting in the scope of his1
employment, to accept any payment, commission, fee, or compensation of any2
kind from any person other than the employing licensee, unless such payment3
is fully disclosed to and approved by the employing licensee.4
§1270.12. Indemnification of motorcycle and all-terrain vehicle franchised5
dealers6
Notwithstanding the terms of any franchise agreement, each7
manufacturer or converter shall indemnify and hold harmless its franchised8
motorcycle or all-terrain vehicle dealers against any judgment for damages,9
including but not limited to court costs and reasonable attorney fees of the10
motorcycle or all-terrain vehicle dealer, arising out of complaints, claims, or11
lawsuits including but not limited to strict liability, negligence,12
misrepresentation, express or implied warranty, or rescission of sale to the13
extent that the judgment arises out of alleged defective or negligent14
manufacture, assembly, or design of motorcycles or all-terrain vehicles, parts,15
or accessories, or other functions by the manufacturer or converter, which are16
beyond the control of the motorcycle or all-terrain vehicle dealer.17
§1270.13. Warranty; compensation; audits of motorcycle or all-terrain vehicle18
dealer records19
A.(1) It shall be a violation of this Chapter for a manufacturer, a20
distributor, a wholesaler, distributor branch or factory branch of motorcycles21
or all-terrain vehicles, or officer, agent, or other representative thereof to fail22
to adequately and fairly compensate its motorcycle or all-terrain vehicle dealers23
for labor, parts, and other expenses incurred by such motorcycle or all-terrain24
vehicle dealer to perform under and comply with a manufacturer's or a25
distributor's warranty agreement.26
(2) In no event shall any manufacturer or distributor pay its motorcycle27
or all-terrain vehicle dealers at a price or rate for warranty work that is less28
than that charged by the motorcycle or all-terrain vehicle dealer to the retail29 SB NO. 360
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customers of the motorcycle or all-terrain vehicle dealer for nonwarranty work1
of like kind.2
(3) Warranty work includes parts and labor performed.3
(4) All claims made by the motorcycle or all-terrain vehicle dealer for4
compensation under this Subsection shall be paid within thirty days after5
approval and shall be approved or disapproved within thirty days after receipt.6
When any claim is disapproved, the motorcycle or all-terrain vehicle dealer7
shall be notified in writing of the grounds for disapproval.8
(5) The obligations in this Subsection as they relate to motorcycles or all-9
terrain vehicles may be modified by contract.10
B.(1) Notwithstanding the terms of any franchise, warranty, and sales11
incentive, audits of motorcycle or all-terrain vehicle dealer records may be12
conducted by the manufacturer, distributor, distributor branch, or factory13
branch. Any audit for warranty parts or service compensation shall be for the14
twelve-month period immediately following the date of the payment of the claim15
by the manufacturer or distributor. However, a motorcycle or all-terrain16
vehicle dealer shall not be held liable by virtue of an audit for failure to retain17
parts for a period in excess of six months. Any audit for sales incentives, service18
incentives, rebates, or other forms of incentive compensation shall be only for19
the twelve-month period immediately following the date of the final payment to20
the motorcycle or all-terrain vehicle dealer under a promotion, event, program,21
or activity. In no event shall the manufacturer, distributor, distributor branch,22
or factory branch fail to allow the motorcycle or all-terrain vehicle dealer to23
make corrections to the sales data in less than one hundred twenty days from24
the program period. Additionally, no penalty other than amounts advanced on25
a motorcycle or all-terrain vehicle reported incorrectly shall be due in26
connection with the audit. With respect to motorcycles or all-terrain vehicles27
sold during the time period subject to the audit, but submitted incorrectly to the28
manufacturer, distributor, or wholesale distributor branch or factory branch,29 SB NO. 360
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the motorcycle or all-terrain vehicle dealer shall be charged back for the1
amount reported incorrectly and credited with the amount due, if anything, on2
the actual sale date.3
(2) No claim which has been approved and paid may be charged back to4
the motorcycle or all-terrain vehicle dealer unless it can be shown that one or5
all of the following applies:6
(a) The claim was false or fraudulent.7
(b) The repairs were not properly made.8
(c) The repairs were unnecessary to correct the defective condition under9
generally accepted standards of workmanship.10
(d) The motorcycle or all-terrain vehicle dealer failed to reasonably11
substantiate the repair in accordance with reasonable written requirements of12
the manufacturer or distributor, if the motorcycle or all-terrain vehicle dealer13
was notified of the requirements prior to the time the claim arose and if the14
requirements were in effect at the time the claim arose.15
(3) A manufacturer or distributor shall not deny a claim solely based on16
a motorcycle or all-terrain vehicle dealer's incidental failure to comply with a17
specific claim processing requirement, or a clerical error, or other18
administrative technicality.19
(4) Limitations on warranty parts or service compensation, sales20
incentive audits, rebates, or other forms of incentive compensation, chargebacks21
for warranty parts or service compensation, and service incentives and22
chargebacks for sales compensation only shall not be effective in the case of23
intentionally false or fraudulent claims.24
(5) It shall be deemed an unfair act pursuant to this Chapter to audit a25
motorcycle or all-terrain vehicle dealer more frequently than two sales-related26
and two service-related audits in a twelve-month period. Nothing in this27
Subsection shall limit a manufacturer's or distributor's ability to perform28
routine claim reviews in the normal course of business.29 SB NO. 360
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(6) No claim may be rejected as late if it has been submitted within sixty1
days of the date the repair order was written.2
§1270.14. Damage disclosure3
A. Whenever a new motorcycle or all-terrain vehicle subject to4
regulation pursuant to this Chapter is sold to any person, the seller shall notify5
the purchaser of any body damage or mechanical damage which the motorcycle6
or all-terrain vehicle has sustained that exceeds six percent of the7
manufacturer's suggested retail price or, in the case of recreational vehicles, six8
percent of the manufacturer's wholesale price. Such notice shall be in writing9
and a copy thereof shall be delivered to the purchaser prior to or simultaneous10
with transfer of the motorcycle or all-terrain vehicle title.11
B. This Section shall apply to all instances of vehicular body or12
mechanical damage to motorcycles or all-terrain vehicles and to all actions13
involving such damage, notwithstanding the application of other codal,14
statutory, or regulatory provisions, including but not limited to Civil Code15
Articles 2520 et seq.16
§1270.15. Sale of water-damaged motorcycles or all-terrain vehicles17
A. No person shall sell, transfer, or convey any new or used motorcycle18
or all-terrain vehicle to any person without notifying the buyer or receiver of19
the motorcycle or all-terrain vehicle in writing of the extent of any water20
damage from flooding which occurred to the motorcycle or all-terrain vehicle21
prior to the transaction.22
B. If a sale, transfer, or conveyance of a new or used motorcycle or all-23
terrain vehicle occurs in violation of Subsection A of this Section, the person24
receiving ownership and title to the motorcycle or all-terrain vehicle who is not25
otherwise aware of the damage at the time of the transaction may bring an26
action to set aside the transaction within one year from the date of the27
transaction and receive all monies or other property given as consideration for28
the motorcycle or all-terrain vehicle less a reasonable assessment for miles29 SB NO. 360
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driven.1
C. For the purposes of this Section, a "water-damaged motorcycle or all-2
terrain vehicle" means any motorcycle or all-terrain vehicle whose power train,3
computer, or electrical system has been damaged by flooding.4
§1270.16. Succession; right of first refusal5
A. The terms of the franchise notwithstanding, any motorcycle or all-6
terrain vehicle dealer may appoint by will, or other written instrument, a7
designated successor to succeed in the ownership interest of the motorcycle or8
all-terrain vehicle dealer in the dealership upon the death or incapacity of the9
motorcycle or all-terrain vehicle dealer.10
B. Unless good cause exists for refusal to honor the succession on the11
part of the manufacturer or distributor, any designated successor of a deceased12
or incapacitated motorcycle or all-terrain vehicle dealer may succeed to the13
ownership of the dealership under the existing franchise if:14
(1) The designated successor gives the manufacturer or distributor15
written notice of his intention to succeed to the ownership of the motorcycle or16
all-terrain vehicle dealer within sixty days of the motorcycle or all-terrain17
vehicle dealer's death or incapacity.18
(2) The designated successor agrees to be bound by all the terms and19
conditions of the franchise.20
C. The manufacturer or distributor may request, and the designated21
successor shall provide, promptly upon such request, personal and financial22
data reasonably necessary to determine whether the succession should be23
honored.24
D. If a manufacturer or distributor believes that good cause exists for25
refusing to honor the succession of a deceased or incapacitated motorcycle or26
all-terrain vehicle dealer, the manufacturer or distributor may, not more than27
sixty days following receipt of notice of the designated successor's intent to28
succeed and receipt of such personal or financial data, serve upon the29 SB NO. 360
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designated successor notice of its refusal to honor the succession and of its intent1
to discontinue the existing franchise with the motorcycle or all-terrain vehicle2
dealer not earlier than six months from the date such notice is served.3
E. The notice must state the specific grounds for the refusal to honor the4
succession.5
F. If notice of refusal and discontinuance is not timely served upon the6
designated successor, the franchise shall continue in effect subject to7
termination only as otherwise permitted by this Chapter.8
G. In determining whether good cause for the refusal to honor the9
succession exists, the manufacturer or distributor has the burden of proving10
that the designated successor is not of good moral character or does not11
otherwise meet the manufacturer's or distributor's reasonable standards as a12
franchisee.13
H. If a manufacturer or distributor refuses to honor the succession to14
the ownership interest of a deceased or incapacitated owner for good cause, then15
and in such event:16
(1) The manufacturer or distributor shall allow the designated successor17
a reasonable period of time which shall not be less than six months in which to18
consummate a sale of the dealership. Any such sale shall be subject to R.S.19
32:1270.11(1)(c).20
(2) Upon termination of the franchise pursuant to such refusal, the21
provisions of R.S. 32:1270.17 shall apply.22
§1270.17. Requirements upon termination; penalty; indemnity; motorcycle or23
all-terrain vehicle dealers24
A.(1) In the event the licensee ceases to engage in the business of being25
a motorcycle or all-terrain vehicle dealer, or ceases to sell a particular make of26
motorcycle or all-terrain vehicle and after notice to the manufacturer,27
converter, distributor, or representative by certified mail or commercial28
delivery service with verification of receipt, within thirty days of the receipt of29 SB NO. 360
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the notice by the manufacturer, converter, distributor, or representative, the1
manufacturer, converter, distributor, or representative shall repurchase:2
(a) All new motorcycles or all-terrain vehicles of the current and last3
prior model year delivered to the licensee and parts on hand that have not been4
damaged or substantially altered to the prejudice of the manufacturer while in5
the possession of the licensee. As to motorcycle or all-terrain vehicle dealers,6
the repurchase of parts shall be limited to those listed in the manufacturer's7
price book. The motorcycle or all-terrain vehicles and parts shall be8
repurchased at the cost to the licensee which shall include without limitation9
freight and advertising costs, less all allowances paid to the motorcycle or all-10
terrain vehicle dealer.11
(b) At fair market value, each undamaged sign owned by the motorcycle12
or all-terrain vehicle dealer which bears a trademark or trade name used or13
claimed by the manufacturer, converter, distributor, or representative if the14
sign was purchased from or purchased at the request of the manufacturer,15
distributor, or representative. Fair market value shall be no less than cost of16
acquisition of the sign by the motorcycle or all-terrain vehicle dealer.17
(c) At fair market value, all special tools and automotive service18
equipment owned by the motorcycle or all-terrain vehicle dealer which were19
recommended in writing and designated as special tools and equipment and20
purchased from or purchased at the request of the manufacturer, converter,21
distributor, or representative, if the tools and equipment are in usable and good22
condition except for reasonable wear and tear. Fair market value shall be no23
less than cost of acquisition of special tools and automotive service equipment24
by the motorcycle or all-terrain vehicle dealer.25
(2) The manufacturer, converter, distributor, or representative shall pay26
to the motorcycle or all-terrain vehicle dealer the costs of transporting,27
handling, packing, and loading of motorcycles or all-terrain vehicles, or parts,28
signs, tools, and equipment subject to repurchase.29 SB NO. 360
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(3) The manufacturer or converter shall make the required repurchase1
after the dealer terminates his franchise and within sixty days of the submission2
to it, by certified mail, return receipt requested, or commercial delivery service3
with verification of receipt, of a final inventory of motorcycles, all-terrain4
vehicles, and parts on hand.5
B. Failure to make such repurchase without just cause shall subject the6
manufacturer or converter to a penalty of one and one-half percent per month,7
or fraction thereof, of the inventory value or returnable motorcycles or all-8
terrain vehicles, and parts, signs, special tools, and automotive service9
equipment, payable to the dealer, as long as the repurchase is not made.10
§1270.18. Manufacturer termination of line-make; manufacturer bankruptcy;11
license; motorcycle or all-terrain vehicle franchise12
Notwithstanding the terms of any franchise or provision of law, if the13
termination, cancellation, or nonrenewal of a licensee's franchise is the result14
of the termination, elimination, or cessation of a line-make by the manufacturer,15
distributor, or factory branch, whether by bankruptcy or otherwise, the license16
issued by the commission may remain in effect at the discretion of the17
commission pursuant to its rules.18
§1270.19.  Motorcycle or all-terrain vehicle repairs19
Suppliers of mechanical repairs and services for any motorcycle or all-20
terrain vehicle subject to regulation pursuant to this Chapter shall provide each21
consumer with an itemized bill indicating repairs and services performed, parts22
replaced, or materials used, the total labor charge, and the identity of the23
mechanic, repairman, or supplier who performed the work. However, nothing24
in this Section shall prohibit a supplier of mechanical repairs and services from25
charging a service fee for the use of shop supplies such as rags, fender covers,26
small amounts of fluid, or other items which are not itemized, provided that27
such fee does not exceed five percent of the total invoice for mechanical repairs28
or thirty-five dollars, whichever is less.29 SB NO. 360
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PART IV.  PROVISIONS SPECIFIC TO RECREATIONAL VEHICLES1
§1270.20.  Unauthorized acts; recreational vehicles2
It shall be a violation of this Chapter:3
(1) For a manufacturer, a distributor, a wholesaler, factory branch, or4
officer, agent, or other representative thereof:5
(a)  To induce or coerce, or attempt to induce or coerce, any licensee:6
(i) To order or accept delivery of any recreational vehicles, appliances,7
equipment, parts or accessories therefor, or any other commodity or8
commodities which shall not have been voluntarily ordered.9
(ii) To order or accept delivery of any recreational vehicle with special10
features, appliances, accessories, or equipment not included in the list price of11
said recreational vehicles as publicly advertised.12
(iii) To order for any person any parts, accessories, equipment,13
machinery, tools, appliances, or any commodity whatsoever.14
(iv) To assent to a release, assignment, novation, waiver, or estoppel15
which would relieve any person from liability to be imposed by law, unless done16
in connection with a settlement agreement to resolve a matter pending a17
commission hearing or pending litigation between a manufacturer, distributor,18
wholesaler, or factory branch, or officer, agent, or other representative thereof.19
(v) To enter into a franchise with a licensee or during the franchise term,20
use any written instrument, agreement, release, assignment, novation, estoppel,21
or waiver, to attempt to nullify or modify any provision of this Chapter, or to22
require any controversy between a recreational vehicle dealer and a23
manufacturer to be referred to any person or entity other than the commission,24
or duly constituted courts of this state or the United States, if such referral25
would be binding upon the recreational dealer. Such instruments are null and26
void, unless done in connection with a settlement agreement to resolve a matter27
pending a commission hearing or pending litigation.28
(vi) To waive the right to a jury trial.29 SB NO. 360
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(vii) To participate in an advertising group or to participate monetarily1
in an advertising campaign or contest or to purchase any promotional2
materials, showroom, or other display decorations or materials at the expense3
of such recreational vehicle dealer.4
(viii) To release, convey, or otherwise provide customer information, if5
to do so is unlawful or if the customer objects in writing. This does not include6
information that is necessary for the manufacturer to meet its obligations to the7
recreational vehicle dealer or consumers in regard to contractual8
responsibilities, recreational vehicle recalls, or other requirements imposed by9
state or federal law. The manufacturer is further prohibited from providing any10
consumer information received from the recreational vehicle dealer to any11
unaffiliated third party.12
(ix) To pay the attorney fees of the manufacturer or distributor related13
to hearings and appeals brought under this Chapter.14
(b) To refuse to deliver to any licensee having a franchise or contractual15
arrangement for the retail sale of recreational vehicles sold or distributed by16
such manufacturer, distributor, wholesaler, or factory branch, any recreational17
vehicle, publicly advertised for immediate delivery, within sixty days after such18
recreational vehicle dealer's order shall have been received.19
(c) To threaten to cancel any franchise or any contractual agreement20
existing between such manufacturer, distributor, wholesaler, or factory branch21
and said recreational vehicle dealer for any reason.22
(d) To unfairly, without just cause and due regard to the equities of such23
recreational vehicle dealer, cancel the franchise of any licensee.  The24
nonrenewal of a franchise with such recreational vehicle dealer or his successor25
without just provocation or cause, or the refusal to approve a qualified26
transferee or qualified successor to the dealer-operator as provided for in the27
franchise agreement, shall be deemed a violation of this Paragraph and shall28
constitute an unfair cancellation, regardless of the terms or provisions of such29 SB NO. 360
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franchise. However, at least ninety-days notice shall be given to the recreational1
vehicle dealer of any cancellation or nonrenewal of a franchise except for a2
cancellation arising out of the financial default of the recreational vehicle dealer3
or fraudulent activity of the recreational vehicle dealer principal which results4
in the conviction of a crime punishable by imprisonment.5
(e) To refuse to extend to a licensee the privilege of determining the mode6
or manner of available transportation facility that such recreational vehicle7
dealer desires to be used or employed in making deliveries of recreational8
vehicles to him or it.9
(f) To use any false or misleading advertisement in connection with his10
business as such manufacturer of recreational vehicles, distributor, wholesaler,11
or factory branch, or officer, agent, or other representative thereof.12
(g) To delay, refuse, or fail to deliver recreational vehicles in reasonable13
quantities relative to the licensee's facilities and sales potential in the relevant14
market area. This Subparagraph shall not be valid, however, if such failure is15
caused by acts or causes beyond the control of the manufacturer, distributor,16
or other such party.17
(h) To ship or sell recreational vehicles to a licensee prior to the licensee18
having been granted a license by the commission to sell such recreational19
vehicles.20
(i) To unreasonably withhold consent to the sale, transfer, or exchange21
of the franchise to a qualified transferee capable of being licensed as a22
recreational vehicle dealer in this state, provided the transferee meets the23
criteria generally applied by the manufacturer in approving new recreational24
vehicle dealers and agrees to be bound by all the terms and conditions of the25
standard franchises.26
(j) To fail to respond in writing to a written request for consent as27
specified in Subparagraph (i)of this Paragraph within sixty days of receipt of28
a written request on the forms, if any, generally utilized by the manufacturer29 SB NO. 360
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or distributor for such purposes and containing the information required1
therein. Failure to respond shall be deemed to be consent to the request.2
(k)(i) To sell or offer to sell a new or unused recreational vehicle directly3
to a consumer except as provided in this Chapter, or to compete with a licensee4
in the same-line makes, models, or classifications operating under an agreement5
or franchise from the aforementioned manufacturer. A manufacturer shall not,6
however, be deemed to be competing when any one of the following conditions7
are met:8
(aa) Operating a dealership temporarily for a reasonable period, not to9
exceed two years.10
(bb) Operating a bona fide retail dealership which is for sale to any11
qualified independent person at a fair and reasonable price, for a period not to12
exceed two years.13
(cc) Operating in a bona fide relationship in which a person independent14
of a manufacturer has made a significant investment subject to loss in the15
dealership, and can reasonably expect to acquire full ownership of such16
dealership on reasonable terms and conditions.17
(ii) After any of the conditions have been met under Subitems (i)(aa) and18
(bb) of this Subparagraph, the commission shall allow the manufacturer to19
compete with licensees of the same-line makes, models, or classifications under20
an agreement or franchise from said manufacturer for longer than two years21
when, in the discretion of the commission, the best interest of the manufacturer,22
consuming public, and licensees are best served.23
(l) To condition the renewal or extension of a franchise on a new24
recreational vehicle dealer's substantial renovation of the recreational vehicle25
dealer's place of business or on the construction, purchase, acquisition, or rental26
of a new place of business by the new recreational vehicle dealer, unless the27
manufacturer has advised the new recreational vehicle dealer in writing of its28
intent to impose such a condition within a reasonable time prior to the effective29 SB NO. 360
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date of the proposed date of renewal or extension, but in no case less than one1
hundred eighty days, and provided the manufacturer demonstrates the need for2
such demand in view of the need to service the public and the economic3
conditions existing in the recreational vehicle industry at the time such action4
would be required of the new recreational vehicle dealer. As part of any such5
condition the manufacturer shall agree, in writing, to supply the recreational6
dealer with an adequate supply and marketable model mix of recreational7
vehicles to meet the sales levels necessary to support the increased overhead8
incurred by the recreational vehicle dealer by reason of such renovation,9
construction, purchase, or rental of a new place of business.10
(m) To fail to compensate its recreational vehicle dealers for the work11
and services they are required to perform in connection with the recreational12
vehicle dealer's delivery and preparation obligations according to the terms of13
compensation that shall be filed with the commission on or before October first14
of each year. The commission shall find the compensation to be reasonable or15
the manufacturer shall remedy any deficiencies.16
(n) To fail to designate and provide to the commission in writing the17
community or territory assigned to a licensee.18
(o) To unreasonably discriminate among competing, similarly situated,19
same-line make dealers in the sales of recreational vehicles, in the availability20
of such recreational vehicles, in the terms of incentive programs or sales21
promotion plans, or in other similar programs.22
(p) To terminate, cancel, or refuse to continue any franchise agreement23
based upon the fact that the recreational vehicle dealer owns, has an investment24
in, participates in the management, or holds a franchise agreement for the sale25
or service of another make or line of new recreational vehicles at a different26
dealership location, or intends to or has established another make or line of new27
recreational vehicles in the same dealership facilities of the manufacturer or28
distributor.29 SB NO. 360
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(q) To demand compliance with facilities requirements that include any1
requirements that a recreational vehicle dealer establish or maintain exclusive2
office, parts, service or body shop facilities, unless such requirements would be3
reasonable and justified by business considerations. The burden of proving that4
such requirements are reasonable and justified by business considerations is on5
the manufacturer. If the franchise agreement of the manufacturer or6
distributor requires the approval of the manufacturer or distributor for facility7
uses or modifications, the manufacturer or distributor shall approve or8
disapprove such a request in writing within sixty days of receipt of such request.9
(r) To use any subsidiary, affiliate, or any other controlled person or10
entity, or to employ the services of a third party, to accomplish what would11
otherwise be illegal conduct under this Chapter on the part of the manufacturer12
or distributor.13
(s) To make a change in the area of responsibility described in the14
franchise agreement or sales and service agreement of a recreational vehicle15
dealer, without the franchisor or manufacturer giving said recreational vehicle16
dealer and the commission no less than sixty days prior written notice by17
certified or registered mail.18
(t) To induce or coerce, or attempt to induce or coerce, any recreational19
vehicle dealer to enter into any agreement with such manufacturer, distributor,20
wholesaler, distributor branch or factory branch or representative thereof, or21
to do any other act unfair to said recreational vehicle dealer.22
(u)(i) To coerce or attempt to coerce any retail recreational vehicle23
dealer or prospective retail recreational vehicle dealer to offer to sell or sell any24
extended service contract or extended maintenance plan or gap product offered,25
sold, backed by, or sponsored by the manufacturer or distributor or affiliate or26
sell, assign, or transfer any retail installment sales contract or lease obtained by27
the dealer in connection with the sale or lease by him of recreational vehicles28
manufactured or sold by the manufacturer or distributor, to a specified finance29 SB NO. 360
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company or class of finance companies, leasing company or class of leasing1
companies, or to any other specified persons by any of the following:2
(aa) By any statement, promise, or threat that the manufacturer or3
distributor will in any manner benefit or injure the dealer, whether the4
statement, suggestion, threat, or promise is express or implied or made directly5
or indirectly.6
(bb) By any act that will benefit or injure the dealer.7
(cc) By any contract, or any express or implied offer of contract, made8
directly or indirectly to the dealer, for handling the recreational vehicle on the9
condition that the recreational vehicle dealer shall offer to sell or sell any10
extended service contract or extended maintenance plan offered, sold, backed11
by, or sponsored by the manufacturer or distributor or that the dealer sell,12
assign, or transfer his retail installment sales contract on or lease of the13
recreational vehicle, to a specified finance company or class of finance14
companies, leasing company or class of leasing companies, or to any other15
specified person.16
(dd) Any such statements, threats, promises, acts, contracts, or offers of17
contracts, when their effect may be to lessen or eliminate competition.18
(ii) Nothing contained in this Subparagraph shall prohibit a19
manufacturer or distributor from offering or providing incentive benefits or20
bonus programs to a retail recreational vehicle dealer or prospective retail21
recreational vehicle dealer who makes the voluntary decision to offer to sell or22
sell any extended service contract or extended maintenance plan offered, sold,23
backed, or sponsored by the manufacturer or distributor or to sell, assign, or24
transfer any retail installment sale or lease by him of recreational vehicles25
manufactured or sold by the manufacturer or distributor to a specified finance26
company or leasing company.27
(2) For a recreational vehicle dealer or a recreational vehicle salesman:28
(a) To require a purchaser of a recreational vehicle, as a condition of sale29 SB NO. 360
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and delivery thereof, to also purchase special features, appliances, accessories,1
or equipment not desired or requested by the purchaser; however, this2
prohibition shall not apply as to special features, appliances, accessories, or3
equipment which are permanently affixed to the recreational vehicle.4
(b) To represent and sell as a new recreational vehicle any vehicle, the5
legal title of which has been transferred by a manufacturer, distributor, or6
dealer to an ultimate purchaser.7
(c) To use any false or misleading advertisement in connection with his8
business as such recreational vehicle dealer or recreational vehicle salesman.9
(d) To sell or offer to sell makes, models, or classifications of new10
recreational vehicles for which no franchise and license to sell is held.11
(e) Except as otherwise approved by the commission, to sell or offer to12
sell a recreational vehicle from an unlicensed location.13
(f) To deliver to a prospective purchaser a new recreational vehicle on14
a sale conditioned on financing, i.e., a spot delivery, except on the following15
terms and conditions which shall be in writing and shall be a part of the16
conditional sales contract or other written notification signed by the purchaser:17
(i) That if the sale is not concluded by the financing of the sale to the18
purchaser within twenty-five days of the delivery, the sale contract shall be null19
and void.20
(ii) That the recreational vehicle being offered for trade-in by the21
purchaser shall not be sold by the recreational vehicle dealer until the22
conditional sale is complete.23
(iii) That there shall be no charge to the purchaser should the conditional24
sale not be completed, including but not limited to mileage charges or charges25
to refurbish the recreational vehicle offered for trade-in. However, the26
purchaser shall be responsible for any and all damages to the recreational27
vehicle or other vehicles damaged by the fault of the purchaser and any and all28
liability incurred by the purchaser during the purchaser's custody of the29 SB NO. 360
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recreational vehicle to the extent provided for in R.S. 22:1296.1
(iv) That if the conditional sale is not completed, the recreational vehicle2
dealer shall immediately refund to the purchaser upon return of the3
recreational vehicle all sums placed with the dealership as a deposit or any4
other purpose associated with the attempted sale of the vehicle.5
(v) That the prospective purchaser shall return the recreational vehicle6
to the dealership within forty-eight hours of notification by the recreational7
vehicle dealer that the conditional sale will not be completed. If the prospective8
purchaser does not return the recreational vehicle to the dealership within9
forty-eight hours of notification by the recreational vehicle dealer, an10
authorized agent of the recreational vehicle dealer shall have the right to11
recover the recreational vehicle without the necessity of judicial process,12
provided that such recovery can be accomplished without unauthorized entry13
into a closed dwelling, whether locked or unlocked and without a breach of14
peace.15
(g) To pay a fee to any person in return for the solicitation, procurement,16
or production by that person of prospective purchasers for new and used17
recreational vehicles, except to a recreational vehicle salesman licensed under18
the provisions of this Chapter.19
(h) To fail to fully and completely explain each charge listed on a retail20
buyer's order or recreational vehicle invoice prior to the purchase of a21
recreational vehicle.22
(i) When selling a recreational vehicle to a consumer, to assess any23
consumer services fees, which shall include fees for treating the interior24
upholstery of the recreational vehicle, oil changes, roadside assistance, dealer25
inspections, or any other service offered by the recreational vehicle dealer,26
without allowing the buyer to refuse such services and be exempt from payment27
for such services. The provisions of this Subparagraph shall not apply to dealer-28
added options or accessories which are permanently affixed to the recreational29 SB NO. 360
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vehicle.1
(j)(i) To fail to disclose to a purchaser in writing on the sales contract,2
buyer's order, or any other document that the recreational vehicle dealer may3
be participating in finance charges associated with the sale.4
(ii) To participate in a finance charge that would result in a difference5
between the buy rate and the contract rate of more than three percentage6
points.7
(iii) The provisions of this Subparagraph shall apply only to transactions8
subject to the Louisiana Motor Vehicle Sales Finance Act.9
(3) For any person or other licensee:10
(a) To modify a franchise during the term of the agreement or upon its11
renewal if the modification substantially and adversely affects the franchisee's12
rights, obligations, investment, or return on investment without giving sixty-day13
written notice of the proposed modification to the licensee and the commission14
unless the modifications are required by law, court order, or the commission.15
Within the sixty-day notice period the licensee may file with the commission a16
complaint for a determination whether there is good cause for permitting the17
proposed modification. The party seeking to modify or replace an agreement18
shall demonstrate by a preponderance of the evidence that there is good cause19
for the modification or replacement. The commission shall schedule a hearing20
within sixty days to decide the matter. Multiple complaints pertaining to the21
same proposed modifications shall be consolidated for hearing. The proposed22
modification may not take effect pending the determination of the matter.23
(b) In making a determination of whether there is good cause for24
permitting a proposed modification, the commission may consider any relevant25
factor including:26
(i) The reasons for the proposed modification.27
(ii) Whether the proposed modification is applied to or affects all28
licensees in a nondiscriminating manner.29 SB NO. 360
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(iii) The degree to which the proposed modification will have a1
substantial and adverse effect upon the licensee's investment or return on2
investment.3
(iv) Whether the proposed modification is in the public interest.4
(v) The degree to which the proposed modification is necessary to the5
orderly and profitable distribution of recreational vehicles and other services6
by the licensee.7
(vi) Whether the proposed modification is offset by other modifications8
beneficial to the licensee.9
(c) The decision of the commission shall be in writing and shall contain10
findings of fact and a determination of whether there is good cause for11
permitting the proposed modification. The commission shall deliver copies of12
the decision to the parties personally or by registered mail.13
(4) For any employee of a licensee while acting in the scope of his14
employment, to accept any payment, commission, fee, or compensation of any15
kind from any person other than the employing licensee, unless such payment16
is fully disclosed to and approved by the employing licensee.17
§1270.21. Indemnification of franchised recreational vehicle dealers18
Notwithstanding the terms of any franchise agreement, each19
manufacturer or converter shall indemnify and hold harmless its franchised20
recreational vehicle dealers against any judgment for damages, including but21
not limited to court costs and reasonable attorney fees of the recreational22
vehicle dealer, arising out of complaints, claims, or lawsuits including but not23
limited to strict liability, negligence, misrepresentation, express or implied24
warranty, or rescission of sale to the extent that the judgment arises out of25
alleged defective or negligent manufacture, assembly, or design of recreational26
vehicles, parts, or accessories, or other functions by the manufacturer of27
converter, which are beyond the control of the recreational vehicle dealer.28
§1270.22. Payment to recreational vehicles dealers; penalties29 SB NO. 360
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It shall be a violation of this Chapter for a recreational vehicle1
manufacturer, distributor, wholesaler, factory branch, officer, agent or other2
representative thereof, to fail to pay a recreational vehicle dealer all monies due3
the recreational vehicle dealer, except manufacturer hold-back amounts, within4
thirty days of the date of completion of the transactions or submissions of the5
claims giving rise to the payments to the recreational vehicle dealers. Failure to6
make payments shall subject the manufacturer, distributor, wholesaler, factory7
branch, officer, agent, or other representative thereof, to a penalty of the one8
and one-half percent interest per month, or fraction thereof, until sums due the9
recreational vehicle dealer are fully paid.10
§1270.23. Warranty; compensation; audits of recreational vehicle dealer11
records12
A.(1) It shall be a violation of this Chapter for a manufacturer, a13
distributor, a wholesaler, or factory branch, or officer, agent or other14
representative thereof, to fail to adequately and fairly compensate its15
recreational vehicle dealers for labor, parts, and other expenses incurred by16
such dealer to perform under and comply with a manufacturer's or a17
distributor's warranty agreement.18
(2) In no event shall any manufacturer or distributor pay its recreational19
vehicle dealers at a price or rate for warranty work that is less than that20
charged by the recreational vehicle dealer to the retail customers of the21
recreational vehicle dealer for nonwarranty work of like kind.22
(3) Warranty work includes parts and labor performed.23
(4) All claims made by the recreational vehicle dealer for compensation24
under this Subsection shall be paid within thirty days after approval and shall25
be approved or disapproved within thirty days after receipt. When any claim26
is disapproved, the recreational vehicle dealer shall be notified in writing of the27
grounds for disapproval.28
(5) The obligations in this Subsection may be modified by contract.29 SB NO. 360
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B.(1) Notwithstanding the terms of any franchise agreement, warranty,1
and sales incentive, audits of recreational vehicle dealer records may be2
conducted by the manufacturer, distributor, or factory branch. Any audit for3
warranty parts or service compensation shall be for the twelve-month period4
immediately following the date of the payment of the claim by the manufacturer5
or distributor. However, a recreational vehicle dealer shall not be held liable by6
virtue of an audit for failure to retain parts for a period in excess of six months.7
Any audit for sales incentives, service incentives, rebates, or other forms of8
incentive compensation shall be only for the twelve-month period immediately9
following the date of the final payment to the recreational vehicle dealer under10
a promotion, event, program, or activity. In no event shall the manufacturer,11
distributor, or factory branch fail to allow the recreational vehicle dealer to12
make corrections to the sales data in less than one hundred twenty days from13
the program period. Additionally, no penalty other than amounts advanced on14
a recreational vehicle reported incorrectly shall be due in connection with the15
audit. With respect to recreational vehicles sold during the time period subject16
to the audit, but submitted incorrectly to the manufacturer, distributor, or17
wholesale distributor branch or factory branch, the recreational vehicle dealer18
shall be charged back for the amount reported incorrectly and credited with the19
amount due, if anything, on the actual sale date.20
(2) No claim which has been approved and paid may be charged back to21
the recreational vehicle dealer unless it can be shown that one or all of the22
following applies:23
(a) The claim was false or fraudulent.24
(b) The repairs were not properly made.25
(c) The repairs were unnecessary to correct the defective condition under26
generally accepted standards of workmanship.27
(d) The recreational vehicle dealer failed to reasonably substantiate the28
repair in accordance with reasonable written requirements of the manufacturer29 SB NO. 360
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or distributor, if the recreational vehicle dealer was notified of the requirements1
prior to the time the claim arose and if the requirements were in effect at the2
time the claim arose.3
(3) A manufacturer or distributor shall not deny a claim solely based on4
a recreational vehicle dealer's incidental failure to comply with a specific claim5
processing requirement, or a clerical error, or other administrative technicality.6
(4) Limitations on warranty parts or service compensation, sales7
incentive audits, rebates, or other forms of incentive compensation, chargebacks8
for warranty parts or service compensation, and service incentives and9
chargebacks for sales compensation only shall not be effective in the case of10
intentionally false or fraudulent claims.11
(5) It shall be deemed an unfair act pursuant to this Chapter to audit a12
recreational vehicle dealer more frequently than two sales-related and two13
service-related audits in a twelve-month period. Nothing in this Subsection shall14
limit a manufacturer's or distributor's ability to perform routine claim reviews15
in the normal course of business.16
(6) No claim may be rejected as late if it has been submitted within sixty17
days of the date the repair order was written.18
§1270.24. Recreational vehicle repairs19
Suppliers of mechanical repairs and services for any recreational vehicle20
subject to regulation pursuant to this Chapter shall provide each consumer with21
an itemized bill indicating repairs and services performed, parts replaced, or22
materials used, the total labor charge, and the identity of the mechanic,23
repairman, or supplier who performed the work. However, nothing in this24
Section shall prohibit a supplier of mechanical repairs and services from25
charging a service fee for the use of shop supplies such as rags, fender covers,26
small amounts of fluid, or other items which are not itemized, provided that27
such fee does not exceed five percent of the total invoice for mechanical repairs28
or thirty-five dollars, whichever is less.29 SB NO. 360
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§1270.25. Damage disclosure; recreational vehicles1
A. Whenever a new recreational vehicle subject to regulation pursuant2
to this Part is sold to any person, the seller shall notify the purchaser of any3
body damage or mechanical damage which the recreational vehicle has4
sustained that exceeds six percent of the manufacturer's wholesale price. Such5
notice shall be in writing and a copy thereof shall be delivered to the purchaser6
prior to or simultaneous with transfer of the recreational vehicle title.7
B. Replacement of a new recreational vehicle's instrument panels,8
appliances, furniture, cabinetry, televisions, audio equipment, or similar9
residential components shall not be deemed "damage" pursuant to this Section10
if such items are replaced with original manufacturers' parts and materials.11
C. This Section shall apply to all instances of vehicular body or12
mechanical damage to recreational vehicles and to all actions involving such13
damage, notwithstanding the application of other codal, statutory, or regulatory14
provisions, including but not limited to Civil Code Articles 2520 et seq.15
§1270.26.  Notice regarding recalls; recreational vehicles16
It shall be a violation of this Part for a recreational vehicle dealer to sell17
a new recreational vehicle without first supplying a prospective buyer with the18
following notice:  "A new recreational vehicle may have been subject to a19
National Highway Traffic Safety Administration required recall which would20
be repaired in accordance with manufacturer standards approved by the21
National Highway Traffic Safety Administration. If such a repair is a concern22
before you purchase, please ask for a copy of the recall notice, if applicable, to23
the recreational vehicle being sold." This notice shall be included on the buyer's24
order in a box and in bold print which is signed by the buyer and the seller or25
his representative next to the box. If the buyer requests the recall notice, the26
recall notice shall be included in the sales transaction. If the selling recreational27
vehicle dealer performed the repair, the documents supporting the repair shall28
also be included in the sales transaction.29 SB NO. 360
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§1270.27. Sale of water-damaged recreational vehicles1
A. No person shall sell, transfer, or convey any new or used recreational2
vehicle to any person without notifying the buyer or receiver of the recreational3
vehicle in writing of the extent of any water damage from flooding which4
occurred to the recreational vehicle prior to the transaction.5
B. If a sale, transfer, or conveyance of a new or used recreational vehicle6
occurs in violation of Subsection A of this Section, the person receiving7
ownership and title to the recreational vehicle who is not otherwise aware of the8
damage at the time of the transaction may bring an action to set aside the9
transaction within one year from the date of the transaction and receive all10
monies or other property given as consideration for the vehicle less a reasonable11
assessment for miles driven.12
C. For the purposes of this Section, a "water-damaged vehicle" means13
any recreational vehicle whose power train, computer, or electrical system has14
been damaged by flooding.15
§1270.28. Succession; right of first refusal; recreational vehicle dealer16
A.(1) The terms of the franchise notwithstanding, any recreational17
vehicle dealer may appoint by will, or other written instrument, a designated18
successor to succeed in the ownership interest of the recreational vehicle dealer19
in the dealership upon the death or incapacity of the recreational vehicle dealer.20
(2) Unless good cause exists for refusal to honor the succession on the21
part of the manufacturer or distributor, any designated successor of a deceased22
or incapacitated recreational vehicle dealer of a dealership may succeed to the23
ownership of the dealership under the existing franchise if:24
(a) The designated successor gives the manufacturer or distributor25
written notice of his or her intention to succeed to the ownership of the26
recreational vehicle dealer within sixty days of the recreational vehicle dealer's27
death or incapacity.28
(b) The designated successor agrees to be bound by all the terms and29 SB NO. 360
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conditions of the franchise.1
(3) The manufacturer or distributor may request, and the designated2
successor shall provide, promptly upon such request, personal and financial3
data reasonably necessary to determine whether the succession should be4
honored.5
(4) If a manufacturer or distributor believes that good cause exists for6
refusing to honor the succession of a deceased or incapacitated recreational7
vehicle dealer, the manufacturer or distributor may, not more than sixty days8
following receipt of notice of the designated successor's intent to succeed and9
receipt of such personal or financial data, serve upon the designated successor10
notice of its refusal to honor the succession and of its intent to discontinue the11
existing franchise with the dealer not earlier than six months from the date such12
notice is served.13
(5) The notice must state the specific grounds for the refusal to honor the14
succession.15
(6) If notice of refusal and discontinuance is not timely served upon the16
designated successor, the franchise shall continue in effect subject to17
termination only as otherwise permitted by this Chapter.18
(7) In determining whether good cause for the refusal to honor the19
succession exists, the manufacturer or distributor has the burden of proving20
that the designated successor is not of good moral character or does not21
otherwise meet the manufacturer's or distributor's reasonable standards as a22
franchisee.23
(8) If a manufacturer or distributor refuses to honor the succession to the24
ownership interest of a deceased or incapacitated owner for good cause, then25
and in such event:26
(a) The manufacturer or distributor shall allow the designated successor27
a reasonable period of time which shall not be less than six months in which to28
consummate a sale of the dealership. Any such sale shall be subject to R.S.29 SB NO. 360
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32:1270.20(1)(d).1
(b) Upon termination of the franchise pursuant to such refusal, the2
provisions of R.S. 32:1270.29 shall apply.3
B. In the event of a proposed sale or transfer of a recreational vehicle4
dealership and if the franchise agreement has a right of first refusal in favor of5
the manufacturer or distributor, then, notwithstanding the terms of the6
franchise agreement, the manufacturer or distributor shall be permitted to7
exercise a right of first refusal to acquire the recreational vehicle dealer's assets8
or ownership if all of the following requirements are met:9
(1) In order to exercise its right of first refusal, the manufacturer or10
distributor shall notify the recreational vehicle dealer in writing within sixty11
days of his receipt of the completed proposal for the proposed sale or transfer12
and all related agreements.13
(2) The applicability of R.S. 32:1270.20(1)(l) shall not be expanded or14
changed.15
(3) The exercise of the right of first refusal will result in the recreational16
vehicle dealer receiving the same or greater consideration as he has contracted17
to receive in connection with the proposed change of ownership or transfer.18
(4) The proposed sale or transfer of the dealership's assets does not19
involve the transfer or sale to a member or members of the family of one or20
more recreational vehicle dealers, or to a qualified manager with at least two21
years management experience at the dealership of one or more of these22
recreational vehicle dealers, or to a partnership or corporation controlled by23
such persons.24
(5)(a) The manufacturer or distributor agrees to pay the reasonable25
expenses, including attorney fees which do not exceed the usual, customary, and26
reasonable fees charged for similar work done for other clients, incurred by the27
proposed owner or transferee prior to the manufacturer's or distributor's28
exercise of its right of first refusal in negotiating and implementing the contract29 SB NO. 360
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for the proposed sale or transfer of the dealership or dealership assets. Such1
expenses and attorney fees shall be paid to the proposed new owner or2
transferee at the time of closing of the sale or transfer for which the3
manufacturer or distributor exercised its right of first refusal.4
(b) No payment of such expenses and attorney fees shall be required if5
the new owner or transferee has not submitted or caused to be submitted an6
accounting of those expenses within thirty days of the recreational vehicle7
dealer's receipt of the manufacturer's or distributor's written request for such8
an accounting. A manufacturer or distributor may request such accounting9
before exercising his right of first refusal.10
(6) The recreational vehicle dealer shall not have any liability to any11
person as a result of a manufacturer's exercising its right of first refusal and the12
manufacturer or distributor shall assume the defense of the selling dealer for13
any claim by the proposed owner or transferee arising from the exercise of the14
right of first refusal.15
§1270.29. Requirements upon termination; penalty; indemnity; recreational16
vehicles17
A.(1) In the event the licensee ceases to engage in the business of being18
a recreational vehicle dealer, or ceases to sell a particular recreational vehicle,19
and after notice to the manufacturer, converter, distributor, or representative20
by certified mail or commercial delivery service with verification of receipt,21
within thirty days of the receipt of the notice by the manufacturer, converter,22
distributor, or representative, the manufacturer, converter, distributor, or23
representative shall repurchase:24
(a) All new recreational vehicles of the current and last prior model year25
delivered to the licensee and parts limited to those listed in the manufacturer's26
price book. The recreational vehicles and parts shall be repurchased at the cost27
to the licensee which shall include without limitation freight and advertising28
costs, less all allowances paid to the recreational vehicle dealer.29 SB NO. 360
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(b) At fair market value, each undamaged sign owned by the recreational1
vehicle dealer which bears a trademark or trade name used or claimed by the2
manufacturer, distributor, or representative if the sign was purchased from or3
purchased at the request of the manufacturer, distributor, or representative.4
Fair market value shall be no less than cost of acquisition of the sign by the5
recreational vehicle dealer.6
(c) At fair market value, all special tools and automotive service7
equipment owned by the recreational vehicle dealer which were recommended8
in writing and designated as special tools and equipment and purchased from9
or purchased at the request of the manufacturer, converter, distributor, or10
representative, if the tools and equipment are in usable and good condition11
except for reasonable wear and tear. Fair market value shall be no less than cost12
of acquisition of special tools and automotive service equipment by the13
recreational vehicle dealer.14
(d) The manufacturer, converter, distributor, or representative shall pay15
to the recreational vehicle dealer the costs of transporting, handling, packing,16
and loading of recreational vehicles, or parts, signs, tools, and equipment17
subject to repurchase.18
(2) The manufacturer or converter shall make the required repurchase19
after the recreational vehicle dealer terminates his franchise and within sixty20
days of the submission to it, by certified mail, return receipt requested, or21
commercial delivery service with verification of receipt, of a final inventory of22
recreational vehicles and parts on hand.23
B. Failure to make such repurchase without just cause shall subject the24
manufacturer or converter to a penalty of one and one-half percent per month,25
or fraction thereof, of the inventory value or returnable recreational vehicles,26
and parts, signs, special tools, and automotive service equipment, payable to the27
dealer, as long as the repurchase is not made.28
C.(1) Upon the involuntary termination, nonrenewal, or cancellation of29 SB NO. 360
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any franchise by the manufacturer or converter, except for termination,1
nonrenewal, or cancellation resulting from a felony conviction, notwithstanding2
the terms of any franchise, whether entered into before or after the enactment3
of this Chapter or any of its provisions, the new recreational vehicle dealer shall4
be allowed fair and reasonable compensation by the manufacturer or converter5
as agreed by the parties, or lacking agreement, as determined by the6
commission, for the dealership facilities if the facilities were required to be7
purchased or constructed as a precondition to obtaining the franchise or to its8
renewal; provided that if such facilities were leased and the lease were required9
as a precondition to obtaining the franchise or to its renewal, then the10
manufacturer shall be liable for one year's payment of the rent or the11
remainder of the term of the lease, whichever is less.12
(2) Payment under this Section shall entitle the manufacturers,13
converters, or distributors to possession and use of the facility.14
(3) As used in this Section, "manufacturer" shall include a15
manufacturer, a converter, a distributor, a factory branch, distributor branch,16
or other subsidiary thereof.17
(4) The obligation of the manufacturer or converter to purchase a18
dealership facility, pursuant to this Section, is equally applicable if an entity or19
person affiliated with the dealer is the owner or lessor of the facility.20
§1270.30. Recreational vehicle manufacturer termination of line-make;21
manufacturer bankruptcy; license22
Notwithstanding the terms of any franchise or other provision of law, if23
the termination, cancellation, or nonrenewal of a licensee's franchise is the24
result of the termination, elimination, or cessation of a line-make by the25
manufacturer, distributor, or factory branch, whether by bankruptcy or26
otherwise, the license issued by the commission may remain in effect at the27
discretion of the commission pursuant to its rules.28
Section 2.  R.S. 32:1257.1 and 1268.1 are hereby repealed.29 SB NO. 360
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Section 3. The Louisiana State Law Institute is hereby directed to redesignate R.S.1
32:1251 through 1269 of Chapter 6 of Title 32 of the Louisiana Revised Statues of 1950, as2
Part I of Chapter 6 of Title 32 of the Louisiana Revised Statues of 1950. Part I shall be3
entitled "GENERAL PROVISIONS APPLICABLE TO MOTOR VEHICLES AND4
RECREATIONAL PRODUCTS".5
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Michelle Ducharme.
DIGEST
Martiny (SB 360)
Present law provides for the regulation of motor vehicles, specialty vehicles, and recreational
products under the governance of the Motor Vehicle Commission ("commission").
Present law provides for definitions governing the regulation of motor vehicles, recreational
products, and specialty vehicles.
Proposed law changes the definition of "boat package" and "franchise".
Proposed law defines the following terms: "marine product salesman", "new marine
product", "selling agreement", "used marine product", "used marine product dealer", "used
marine product facility", "motorcycle or all-terrain vehicle dealer","motorcycle or all-terrain
vehicle salesman", "new motorcycle or all-terrain vehicle", "used motorcycle or all-terrain
vehicle", "used motorcycle or all-terrain vehicle dealer", "used motorcycle or all-terrain
vehicle facility", "new recreational vehicle", "recreational vehicle dealer", "recreational
vehicle salesman", "used recreational vehicle", "used recreational vehicle dealer","used
recreational vehicle facility".
Proposed law replicates certain provisions of present law in new sections of law and limits
the application of such provisions to marine products, motorcycles, all-terrain vehicles, or
recreational vehicles.
Effective August 1, 2012.
(Amends R.S. 32:1252(4) and (19), 1261, 1261.1, and 1263; adds R.S. 32:1252(52)-(69),
1262(C), 1264(D), 1267(C), 1268(D), and 1270-1270.30; repeals R.S. 32:1257.1 and 1268.1)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Commerce, Consumer
Protection, and International Affairs to the original bill
1. Deletes certain definitions.
2. Adds provisions relative to certain unauthorized acts.
3. Removes provisions relative to venue.
4.  Adds provisions relative to marine products and motorcyc les or all-terrain
vehicles.
5.  Adds technical amendments.
6. Changes the phrase "selling agreement" to "franchise".