2016 Indiana Code
TITLE 9. MOTOR VEHICLES
ARTICLE 32. DEALER SERVICES
CHAPTER 13. UNFAIR PRACTICES
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IC 9-32-13
Chapter 13. Unfair Practices
IC 9-32-13-1
Requiring purchase of equipment, part, or accessory as a condition
of sale
Sec. 1. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle, as a condition of sale and delivery of the motor
vehicle, to purchase any equipment, part, or accessory not ordered by
the purchaser unless the equipment, part, or accessory is:
(1) already installed on the motor vehicle when the motor
vehicle is received by or offered for sale by the dealer; or
(2) required by law.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-2
Willful failure of dealer to perform vehicle delivery and
preparation obligations
Sec. 2. It is an unfair practice for a dealer to willingly fail to
perform the obligations imposed on the dealer in connection with the
delivery and preparation of a new motor vehicle for retail sale as
provided in the preparation and delivery agreement of the
manufacturer or distributor applicable to the motor vehicle.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-3
Willful failure of dealer to perform warranty obligations
Sec. 3. It is an unfair practice for a dealer to willingly fail to
perform the obligations imposed on the dealer in connection with the
warranty agreement of the manufacturer or distributor applicable to
any motor vehicle sold by the dealer.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-4
Sale of motor vehicle having trade name or mark for which dealer
lacks franchise
Sec. 4. It is an unfair practice for a dealer to sell a new motor
vehicle having a trade name, trade or service mark, or related
characteristic for which the dealer does not have a franchise in effect
at the time of the sale. However, a motor vehicle having more than
one (1) trade name, trade or service mark, or related characteristic as
a result of modification or further manufacture by a manufacturer,
converter manufacturer, or an automotive mobility dealer licensed
under this article may be sold by a franchisee appointed by that
manufacturer, converter manufacturer, or automotive mobility dealer.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.98.
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IC 9-32-13-5
Willful failure of dealer to perform fiduciary duty to collect and
remit gross retail tax
Sec. 5. It is an unfair practice for a dealer to willingly fail to
perform the fiduciary duty imposed on the dealer by IC 6-2.5-2-1
with regard to the collection and remittance of the state gross retail
tax. Willful violation of the fiduciary duty includes written or oral
agreements between a dealer and a prospective purchaser that would
give the appearance that a bona fide trade-in has taken place, when
in fact the purpose of the agreement is to reduce the prospective
purchaser's state gross retail tax and thereby deprive the state of
revenue.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-6
Sale, exchange, or transfer by dealer of rebuilt vehicle without
disclosure that vehicle was rebuilt
Sec. 6. It is an unfair practice for a dealer to sell, exchange, or
transfer a rebuilt vehicle without disclosing in writing to the
purchaser, customer, or transferee the fact that the motor vehicle is
a rebuilt vehicle if the dealer knows or should reasonably know
before consummating the sale, exchange, or transfer that the motor
vehicle is a rebuilt vehicle.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.99.
IC 9-32-13-7
Document preparation fees
Sec. 7. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle as a condition of the sale and delivery of the
motor vehicle to pay a document preparation fee, unless the fee:
(1) reflects expenses actually incurred for the preparation of
documents;
(2) was affirmatively disclosed by the dealer;
(3) was negotiated by the dealer and the purchaser;
(4) is not for the preparation, handling, or service of documents
that are incidental to the extension of credit; and
(5) is set forth on a buyer's order or similar agreement by a
means other than preprinting.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-8
Violation of deceptive franchise practices provisions
Sec. 8. (a) It is an unfair practice for a manufacturer or distributor
to violate IC 23-2-2.7.
(b) It is an unfair practice for a manufacturer or distributor to
enter into an agreement in which a dealer is required to waive the
provisions of:
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(1) this chapter; or
(2) IC 23-2-2.7.
However, this subsection does not apply to a voluntary agreement in
which separate consideration is offered and accepted.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-9
Manufacturer or distributor coercing dealers to order
Sec. 9. It is an unfair practice for a manufacturer or distributor to
coerce a dealer to order parts, accessories, equipment, machinery,
tools, appliances, or any other commodity from a person.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-10
Manufacturer or distributor requiring changes in capital structure
or financing
Sec. 10. It is an unfair practice for a manufacturer or distributor
to prevent or require, or attempt to prevent or require, by contract or
otherwise, a change in the capital structure of a dealer or the means
by or through which the dealer finances the dealer's operation, if the
dealer at all times meets reasonable capital standards agreed to by the
dealer and the manufacturer or distributor. A change in capital
structure does not cause a change in the principal management or
have the effect of a sale of the franchise without the consent of the
manufacturer or distributor.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-11
Manufacturer or distributor requiring changes in dealer
management
Sec. 11. It is an unfair practice for a manufacturer or distributor
to prevent or require, or attempt to prevent or require, a dealer to
change the dealer's executive management, other than the principal
dealer operator or operators, if the franchise was granted in reliance
upon the personal qualifications of the principal dealer operator or
operators.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-12
Restraint by manufacturer or distributor of sale or transfer of
interest by dealer
Sec. 12. It is an unfair practice for a manufacturer or distributor
to prevent or require, or attempt to prevent or require, by contract or
otherwise, a dealer or an officer, a partner, or a stockholder of a
dealer to sell or transfer a part of the interest of the officer, partner,
or stockholder to any other person. A dealer, an officer, a partner, or
a stockholder may not sell, transfer, or assign the franchise or a right
under the franchise without the consent of the manufacturer or
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distributor. This consent may not be withheld unreasonably.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-13
Manufacturer or distributor preventing dealer from fair
competition
Sec. 13. It is an unfair practice for a manufacturer or distributor
to prevent or attempt to prevent a dealer from receiving fair and
reasonable compensation for the value of the franchised business as
a going concern. The dealer may not transfer or assign the dealer's
franchise without the consent of the manufacturer or distributor, and
the manufacturer or distributor may not unreasonably withhold
consent.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-14
Employment by manufacturer or distributor of person who is not
certified
Sec. 14. It is an unfair practice for a manufacturer or distributor
to employ a person as a representative who is not certified under this
article.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.100.
IC 9-32-13-15
Retail rates
Sec. 15. (a) It is an unfair practice for a manufacturer or
distributor to fail to compensate a dealer at the dealer's retail rate for
the work and services the dealer is required to perform in connection
with the dealer's delivery and preparation obligations under any
franchise, or fail to compensate a dealer anything less than the
dealer's retail rate for labor and parts under the manufacturer's
warranty agreements as long as the dealer's retail rate is reasonable.
Judgment of the reasonableness includes consideration of charges for
similar repairs by similarly situated repair facilities in Indiana.
(b) This section does not authorize a manufacturer or distributor
and its franchisees in Indiana to establish a uniform hourly labor
reimbursement rate effective for the entire state.
(c) This section does not apply to manufacturers or distributors of
manufactured housing, heavy duty vocational vehicles (as defined in
49 CFR 523.8), or recreational vehicles.
As added by P.L.92-2013, SEC.78. Amended by P.L.167-2016,
SEC.1.
IC 9-32-13-15.5
Compensation for warranty services
Sec. 15.5. (a) This section does not apply to manufacturers or
distributors of manufactured housing, heavy duty vocational vehicles
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(as defined in 49 CFR 523.8), or recreational vehicles.
(b) Unless otherwise agreed, it is an unfair practice for a
manufacturer or distributor to fail to compensate a dealer anything
less than the dealer's retail rates for parts and labor the dealer uses in
performing the warranty services of the manufacturer or distributor,
or for a manufacturer or distributor of a separate vehicle component
or major vehicle assembly that is warranted independently of the
motor vehicle to fail to compensate a dealer anything less than the
dealer's retail rate for the parts and labor the dealer uses in
performing the warranty services of the manufacturer or distributor.
The dealer's retail rate for parts must be a percentage determined by
dividing the total charges for parts used in warranty like repairs by
the dealer's total cost for those parts minus one (1) in the lesser of
one hundred (100) customer paid sequential repair orders or ninety
(90) consecutive days of customer paid repair orders. The dealer's
retail rate for labor shall be determined by dividing the total labor
sales for warranty like repairs by the number of hours that generated
those sales in one hundred (100) customer paid sequential repair
orders or ninety (90) consecutive days of customer paid repair orders.
A retail rate may be calculated only based upon customer paid repair
orders charged within one hundred eighty (180) days before the date
the dealer submits the declaration.
(c) The dealer's submission for retail rates must include a
declaration of the dealer's retail rates for parts and labor along with
the supporting service repair orders paid by customers. A
manufacturer or distributor may challenge the dealer's declaration by
submitting a rebuttal not later than sixty (60) days after the date the
declaration was received. If the manufacturer or distributor does not
send a timely rebuttal to the dealer, the retail rate is established as
reasonable and goes into effect automatically.
(d) If a rebuttal in subsection (c) is timely sent, the rebuttal must
substantiate how the dealer's declaration is unreasonable or
materially inaccurate. The rebuttal must propose an adjusted retail
rate and provide written support for the proposed adjustments. If the
dealer does not agree with the adjusted retail rate, the dealer may file
a complaint with the dealer services division within the office of the
secretary of state.
(e) A complaint filed under subsection (d) must be filed not later
than thirty (30) days after the dealer receives the manufacturer's or
distributor's rebuttal. On or before filing a complaint, a dealer must
serve a demand for mediation upon the manufacturer or distributor.
(f) When calculating the retail rate customarily charged by the
dealer for parts and labor under this section, the following work may
not be included:
(1) Repairs for manufacturer or distributor special events,
specials, or promotional discounts for retail customer repairs.
(2) Parts sold at wholesale.
(3) Routine maintenance not covered under a retail customer
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warranty, such as fluids, filters, and belts not provided in the
course of repairs.
(4) Nuts, bolts, fasteners, and similar items that do not have an
individual part number.
(5) Vehicle reconditioning.
(g) If a manufacturer or distributor furnishes a part or component
to a dealer at no cost to use in performing repairs under a recall,
campaign service, or warranty repair, the manufacturer or distributor
shall compensate the dealer for the part or component in the same
manner as warranty parts compensation under this section by
compensating the dealer the average markup on the cost for the part
or component as listed in the manufacturer's or distributor's initial or
original price schedule minus the cost for the part or component.
(h) A manufacturer or distributor may not require a dealer to
establish the retail rate customarily charged by the dealer for parts
and labor by an unduly burdensome or time consuming method or by
requiring information that is unduly burdensome or time consuming
to provide, including part by part or transaction by transaction
calculations. A dealer may not declare an average percentage parts
markup or average labor rate more than once in a twelve (12) month
period. A manufacturer or distributor may perform annual audits to
verify that a dealer's effective rates have not decreased. If a dealer's
effective rates have decreased, a manufacturer or distributor may
reduce the warranty reimbursement rate prospectively. A dealer may
elect to revert to the nonretail rate reimbursement for parts and labor
not more than once in a twelve (12) month period.
(i) A manufacturer or distributor is permitted to recover its costs,
as defined under this section, only from a dealer that receives retail
reimbursement for parts or labor, or both parts and labor. This
subsection does not prohibit a manufacturer or distributor from
increasing the wholesale price of a vehicle or part in the ordinary
course of business.
(j) If a dealer files a complaint with the dealer services division
within the ofice of the secretary of state, the warranty reimbursement
rate in effect before any mediation or complaint remains in effect
until thirty (30) days after:
(1) a final decision has been issued by a court with jurisdiction;
and
(2) all appeals have been exhausted.
As added by P.L.167-2016, SEC.2.
IC 9-32-13-16
Contract for uniform warranty reimbursement policy
Sec. 16. (a) A manufacturer or distributor and at least thirty
percent (30%) of its franchisees in Indiana of the same line make
may agree in an express written contract citing this section to a
uniform warranty reimbursement policy to be used by franchisees for
the performance of warranty repairs. The contract must include
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reimbursement for parts used in warranty repairs or the use of a
uniform time standards manual, or both. The allowance for diagnosis
within the uniform time standards manual must be reasonable and
adequate for the work and service to be performed. The manufacturer
or distributor:
(1) may have only one (1) contract with regard to each line
make; and
(2) must have a reasonable and fair procedure for franchisees to
request a modification or adjustment of a standard included in
the uniform time standards manual.
(b) A contract described in subsection (a) must meet the following
criteria:
(1) Establish a uniform parts reimbursement rate that must be
greater than the manufacturer's or distributor's nationally
established parts reimbursement rate in effect at the time the
contract becomes effective. A subsequent contract must include
a uniform reimbursement rate that is equal to or greater than the
rate in the immediately prior contract.
(2) Apply to all warranty repair orders written while the
agreement is in effect.
(3) At any time during the period the contract is in effect:
(A) be available to any franchisee of the same line make as
the franchisees that entered into the contract with the
manufacturer or distributor; and
(B) be available to a franchisee of the same line make on the
same terms as apply to the franchisees that entered into the
contract with the manufacturer or distributor.
(4) Be for a term not to exceed three (3) years.
(5) Allow any party to the uniform warranty reimbursement
policy to terminate the policy with thirty (30) days prior written
notice to all parties upon the annual anniversary of the policy,
if the policy is for at least one (1) year.
(6) Remain in effect for the entire original period if the
manufacturer and at least one (1) franchisee remain parties to
the policy.
(c) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (a) may seek to recover only its costs
from a franchisee that receives a higher reimbursement rate, if
authorized by law, subject to the following:
(1) Costs may be recovered only by increasing invoice prices on
new motor vehicles received by the franchisee.
(2) A manufacturer or distributor may make an exception for
motor vehicles that are titled in the name of a purchaser in
another state. However, price increases imposed for the purpose
of recovering costs imposed by this section may vary from time
to time and from model to model and must apply uniformly to
all franchisees of the same line make that have requested
reimbursement for warranty repairs at a level higher than
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provided for in the contract.
(d) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (a) shall do the following:
(1) Certify to the secretary under oath, in a writing signed by a
representative of the manufacturer or distributor, that at the time
the contract was entered into at least thirty percent (30%) of the
franchisees of the line make were parties to the contract.
(2) File a copy of the contract with the bureau at the time of the
certification.
(3) Maintain a file that contains the information upon which the
certification required under subdivision (1) is based for three
(3) years after the certification is made.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.101.
IC 9-32-13-17
Payment or disapproval of dealer claims; notice of disapproval;
audits and chargebacks
Sec. 17. (a) It is an unfair practice for a manufacturer or
distributor to:
(1) fail to pay a claim made by a dealer for compensation for:
(A) delivery and preparation work;
(B) warranty work; and
(C) incentive payments;
not later than thirty (30) days after the claim is approved;
(2) fail to approve or disapprove a claim not later than thirty
(30) days after receipt of the claim; or
(3) disapprove a claim without notice to the dealer in writing of
the grounds for disapproval.
(b) A manufacturer or distributor may:
(1) audit a claim made by a dealer; or
(2) charge back to a dealer any amounts paid on a false or
unsubstantiated claim;
for up to one (1) year after the date on which the claim is paid.
However, the limitations of this subsection do not apply if the
manufacturer or distributor can prove fraud on a claim. A
manufacturer or distributor shall not discriminate among dealers with
regard to auditing or charging back claims.
(c) If the motor vehicle dealer has properly submitted the claim in
accordance with the manufacturer's or distributor's warranty or
incentive program guidelines, a manufacturer or distributor may not
deny a claim based solely on a motor vehicle dealer's incidental
failure to comply with a specific claim processing requirement,
including a clerical error or other administrative technicality that
does not call into question the legitimacy of a claim. A motor vehicle
dealer may submit an amended or supplemental claim within the time
and manner required by the manufacturer for:
(1) sales incentives;
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(2) service incentives;
(3) rebates; or
(4) other forms of incentive compensation;
for up to sixty (60) days from the date on which such a claim was
submitted, could have been submitted, or was charged back. For
purposes of this section, a failure to obtain a required signature may
not be considered to be a clerical error or administrative technicality.
As added by P.L.92-2013, SEC.78. Amended by P.L.167-2016,
SEC.3.
IC 9-32-13-18
Selling motor vehicle to unlicensed person for resale; adverse
action or discrimination against customer when customer intends
to resell motor vehicle or export to foreign country
Sec. 18. (a) It is an unfair practice for a distributor to sell a motor
vehicle for resale to a person not licensed under this article.
(b) This subsection applies if a dealer sells or leases a motor
vehicle to a customer that resells the motor vehicle or exports the
motor vehicle to a foreign country. A manufacturer or distributor
may not take or threaten to take adverse action or otherwise
discriminate against the dealer unless the dealer knew or reasonably
should have known before the dealer sold or leased the motor vehicle
to the customer that the customer intended to resell or export the
motor vehicle. Titling and registering a motor vehicle in any state in
the name of the customer to whom the dealer sold or leased the
motor vehicle establishes a rebuttable presumption that the dealer did
not know or should not reasonably have known that the customer
intended to resell or export the motor vehicle.
(c) For purposes of subsection (b), adverse actions by a
manufacturer or distributor include the following conduct by a
manufacturer or distributor, whether actual or threatened:
(1) Failing or refusing to allocate, sell, or deliver a motor
vehicle to the dealer.
(2) Discriminating against the dealer in the allocation of motor
vehicles.
(3) Charging back or withholding payments or other
consideration for which a dealer is eligible under a warranty
reimbursement, sales promotion, incentive program, or contest.
(4) Disqualifying a dealer from participating in a sales
promotion, incentive program, or contest.
(5) Terminating a franchise.
As added by P.L.92-2013, SEC.78. Amended by P.L.152-2013,
SEC.1; P.L.151-2015, SEC.74.
IC 9-32-13-19
Failure to indemnify and hold harmless dealer for losses, costs, and
expenses from suit for defect
Sec. 19. It is an unfair practice for a manufacturer or distributor
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to refuse or fail to indemnify and hold harmless a dealer, upon
written notification from the dealer, from all losses, costs, and
expenses that result or arise from or are related to a complaint, claim,
defense, or suit against the dealer that concerns defects in a motor
vehicle or other goods or services that are the responsibility of the
manufacturer or distributor.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-20
False, deceptive, or misleading advertising; deceptive acts or
practices
Sec. 20. It is an unfair practice for any person required to be
licensed under this article, in connection with the person's business,
to use false, deceptive, or misleading advertising or to engage in
deceptive acts or practices.
As added by P.L.92-2013, SEC.78. Amended by P.L.151-2015,
SEC.75.
IC 9-32-13-21
Unfair practices of employees, agents, officers, partners, or
representatives
Sec. 21. It is an unfair practice for an employee, an agent, an
officer, a partner, or a representative of a licensee to engage in a
practice prohibited by this chapter.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-22
Franchise termination; right of first refusal
Sec. 22. (a) It is an unfair practice for a manufacturer to terminate
a franchise in violation of IC 23-2-2.7-3. A dealer may not transfer,
assign, or sell the business and assets of a dealership or an interest in
the dealership to another person under an agreement that
contemplates or is conditioned on a continuation of the franchise
relationship with the manufacturer or distributor unless the dealer
first:
(1) notifies the manufacturer or distributor of the dealer's
decision to make the transfer, assignment, or sale by written
notice; and
(2) obtains the approval of the manufacturer or distributor.
The dealer must provide the manufacturer or distributor with
completed application forms and related information generally used
by the manufacturer or distributor to conduct a review of such a
proposal and a copy of all agreements regarding the proposed
transfer, assignment, or sale.
(b) The manufacturer or distributor shall send a letter by certified
mail to the dealer not later than sixty (60) days after the manufacturer
or distributor receives the information specified in subsection (a).
The letter must indicate any disapproval of the transfer, assignment,
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or sale and must set forth the material reasons for the disapproval. If
the manufacturer or distributor does not respond by letter within
sixty (60) days after the manufacturer or distributor receives the
information under subsection (a), the manufacturer's or distributor's
consent to the proposed transfer, assignment, or sale is considered to
have been granted. A manufacturer or distributor may not
unreasonably withhold approval of a transfer, assignment, or sale
under this section.
(c) A manufacturer or distributor has a right of first refusal as
specified in the franchise agreement to acquire the new motor vehicle
dealer's assets or ownership if there is a proposed change of more
than fifty percent (50%) of the dealer's ownership or proposed
transfer of more than fifty percent (50%) of the new motor vehicle
dealer's assets, and all the following are met:
(1) The manufacturer or distributor notifies the dealer in writing
of the intent of the manufacturer or distributor to exercise the
right of first refusal within the sixty (60) day notice period
under subsection (b).
(2) The exercise of the right of first refusal will result in the
dealer and the dealer's owners receiving consideration, terms,
and conditions that are either the same as or better than those
they have contracted to receive under the proposed change of
more than fifty percent (50%) of the dealer's ownership or
transfer of more than fifty percent (50%) of the new motor
vehicle dealer's assets.
(3) The proposed change of the dealership's ownership or
transfer of the new motor vehicle dealer's assets does not
involve the transfer of assets or the transfer or issuance of stock
by the dealer or one (1) or more of the dealer's owners to any of
the following:
(A) A designated family member or members, including any
of the following members of one (1) or more dealer owners:
(i) The spouse.
(ii) A child.
(iii) A grandchild.
(iv) The spouse of a child or a grandchild.
(v) A sibling.
(vi) A parent.
(B) A manager:
(i) employed by the dealer in the dealership during the
previous four (4) years; and
(ii) who is otherwise qualified as a dealer operator.
(C) A partnership or corporation controlled by any of the
family members described in clause (A).
(D) A trust arrangement established or to be established:
(i) for the purpose of allowing the new motor vehicle
dealer to continue to qualify as such under the
manufacturer's or distributor's standards; or
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(ii) to provide for the succession of the franchise
agreement to designated family members or qualified
management in the event of the death or incapacity of the
dealer or the principal owner or owners.
(4) Except as otherwise provided in this subsection, the
manufacturer or distributor agrees to pay the reasonable
expenses, including reasonable attorney's fees, that do not
exceed the usual, customary, and reasonable fees charged for
similar work done for other clients, and that are incurred by the
proposed owner or transferee before the manufacturer's or
distributor's exercise of the right of first refusal in negotiating
and implementing the contract for the proposed change of the
dealer ownership or the transfer of the new motor vehicle
dealer's assets. Payment of expenses and attorney's fees is not
required if the dealer has failed to submit an accounting of
those expenses not later than twenty (20) days after the dealer
receives the manufacturer's or distributor's written request for
such an accounting. An expense accounting may be requested
by a manufacturer or distributor before exercising the right of
first refusal.
(d) Violation of this section by a manufacturer or distributor is an
unfair practice by the manufacturer or distributor.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.102.
IC 9-32-13-23
Unfair practices by manufacturer, distributor, officer, or agent
Sec. 23. (a) It is an unfair practice for a manufacturer, distributor,
officer, or agent to do any of the following:
(1) Require, coerce, or attempt to coerce a new motor vehicle
dealer in Indiana to:
(A) change the location of the dealership;
(B) make any substantial alterations to the use of franchises;
or
(C) make any substantial alterations to the dealership
premises or facilities;
if to do so would be unreasonable or would not be justified by
current economic conditions or reasonable business
considerations. This subdivision does not prevent a
manufacturer or distributor from establishing and enforcing
reasonable facility requirements. However, a new motor vehicle
dealer may elect to use for the facility alteration locally sourced
materials or supplies that are substantially similar to those
required by the manufacturer or distributor, subject to the
approval of the manufacturer or distributor, which may not be
unreasonably withheld.
(2) Require, coerce, or attempt to coerce a new motor vehicle
dealer in Indiana to divest ownership of or management in
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another line or make of motor vehicles that the dealer has
established in its dealership facilities with the prior written
approval of the manufacturer or distributor.
(3) Establish or acquire wholly or partially a franchisor owned
outlet engaged wholly or partially in a substantially identical
business to that of the franchisee within the exclusive territory
granted the franchisee by the franchise agreement or, if no
exclusive territory is designated, competing unfairly with the
franchisee within a reasonable market area. A franchisor is not
considered to be competing unfairly if operating:
(A) a business for less than two (2) years;
(B) in a bona fide retail operation that is for sale to any
qualified independent person at a fair and reasonable price;
or
(C) in a bona fide relationship in which an independent
person has made a significant investment subject to loss in
the business operation and can reasonably expect to acquire
majority ownership or managerial control of the business on
reasonable terms and conditions.
(4) Require a dealer, as a condition of granting or continuing a
franchise, approving the transfer of ownership or assets of a
new motor vehicle dealer, or approving a successor to a new
motor vehicle dealer to:
(A) construct a new dealership facility;
(B) modify or change the location of an existing dealership;
or
(C) grant the manufacturer or distributor control rights over
any real property owned, leased, controlled, or occupied by
the dealer.
(5) Prohibit a dealer from representing more than one (1) line
make of motor vehicles from the same or a modified facility if:
(A) reasonable facilities exist for the combined operations;
(B) the dealer meets reasonable capitalization requirements
for the original line make and complies with the reasonable
facilities requirements of the manufacturer or distributor;
and
(C) the prohibition is not justified by the reasonable business
considerations of the manufacturer or distributor.
Subdivisions (3) through (5) do not apply to recreational vehicle
manufacturer franchisors.
(b) This section does not prohibit the enforcement of a voluntary
agreement between the manufacturer or distributor and the franchisee
where separate and valuable consideration has been offered and
accepted.
As added by P.L.92-2013, SEC.78. Amended by P.L.152-2013,
SEC.2; P.L.2-2014, SEC.48; P.L.167-2016, SEC.4; P.L.174-2016,
SEC.103.
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IC 9-32-13-24
Relocation of new motor vehicle dealers
Sec. 24. (a) This section does not apply to the relocation of a new
motor vehicle dealer to a location that is not more than two (2) miles
from its established place of business.
(b) This section does not apply to the reopening or replacement in
a relevant market area of a closed dealership that was closed within
the preceding three hundred sixty-five (365) days, if the established
place of business of the reopened or replacement dealer is within two
(2) miles of the established place of business of the closed
dealership.
(c) This section does not apply to a new motor vehicle dealer
located in a county having a population of more than one hundred
thousand (100,000) if:
(1) the new motor vehicle dealer relocates to a site that is
located at a distance greater than the existing distance of
another new motor vehicle dealer of the same line make before
the relocation; and
(2) the site of the relocation is outside an area that is within a
radius of four (4) miles from another new motor vehicle dealer
of the same line make;
but does apply to a new motor vehicle dealer that, before January 1,
2013, had been engaged in the process of relocating but had not
physically relocated to the new intended site by January 1, 2013, and
to a new motor vehicle dealer that began engaging in the process of
relocating on or after January 1, 2013.
(d) Before a franchisor enters into a franchise establishing or
relocating a new motor vehicle dealer within a relevant market area
where the same line make is represented, the franchisor shall give
written notice to each new motor vehicle dealer of the same line
make in the relevant market area of the franchisor's intention to
establish an additional dealer or to relocate an existing dealer within
that relevant market area.
(e) Not later than thirty (30) days after:
(1) receiving the notice provided for in subsection (d); or
(2) the end of any appeal procedure provided by the franchisor;
a new motor vehicle dealer may bring a declaratory judgment action
before the division to determine whether good cause exists for the
establishing or relocating of a proposed new motor vehicle dealer. If
an action is filed under this section, the franchisor may not establish
or relocate the proposed new motor vehicle dealer until the division
has rendered a decision on the matter. An action brought under this
section shall be given precedence over all other matters pending
before the division.
(f) In determining whether good cause exists for establishing or
relocating an additional new motor vehicle dealer for the same line
make, the division shall take into consideration the existing
circumstances, including the following:
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(1) Permanency of the investment.
(2) Effect on the retail new motor vehicle business and the
consuming public in the relevant market area.
(3) Whether it is injurious or beneficial to the public welfare.
(4) Whether the new motor vehicle dealers of the same line
make in that relevant market area are providing adequate
competition and convenient consumer care for the motor
vehicles of that line make in that market area, including the
adequacy of motor vehicle sales and qualified service
personnel.
(5) Whether the establishment or relocation of the new motor
vehicle dealer would promote competition.
(6) Growth or decline of the population and the number of new
motor vehicle registrations in the relevant market area.
(7) The effect on the relocating dealer of a denial of its
relocation into the relevant market area.
As added by P.L.92-2013, SEC.78.
IC 9-32-13-25
Acting, offering to act as, or professing to be a broker of motor
vehicles
Sec. 25. It is an unfair practice for a person to:
(1) act as;
(2) offer to act as; or
(3) profess to be;
a broker in the advertising, buying, or selling of a new or used motor
vehicle.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.104.
IC 9-32-13-26
Fraud or deceit, untrue statements of material fact or omission
Sec. 26. It is an unfair practice for a dealer to, in connection with
the offer, sale, or purchase of a motor vehicle, directly or indirectly:
(1) employ a device, scheme, or artifice to defraud;
(2) make an untrue statement of a material fact or omit to state
a material fact necessary to make the statement made, in light
of the circumstances under which the statement was made, not
misleading; or
(3) engage in an act, practice, or course of business that
operates or would operate as a fraud or deceit upon another
person.
As added by P.L.92-2013, SEC.78. Amended by P.L.174-2016,
SEC.105.
IC 9-32-13-27
Canceling, terminating, or refusing to renew franchise; renewal,
replacement, or succeeding franchise
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Sec. 27. (a) It is an unfair practice for a manufacturer or
distributor to do the following:
(1) Cancel or terminate a franchise of a franchisee, or fail or
refuse to extend or renew a franchise upon the franchise's
expiration, without good cause and notice to the franchisee by
certified mail, return receipt requested:
(A) at least ninety (90) days before the cancellation or
termination; or
(B) at least ten (10) days before the cancellation or
termination if any of the following apply:
(i) The franchisee has abandoned business operations or
otherwise failed to conduct sales and service operations
during regular business hours for at least seven (7)
consecutive business days, unless the abandonment or
closure is due to an act of God or another act over which
the franchisee has no control.
(ii) The franchisee or another operator of the franchise has
been convicted of or pled guilty to an offense punishable
by at least one (1) year of imprisonment.
(iii) The dealer files for bankruptcy or enters into
receivership.
(iv) The license of the dealer is revoked under IC 9-32-11
or IC 9-32-16.
(v) The dealer commits fraud.
(2) Offer a renewal, replacement, or succeeding franchise that
substantially changes or modifies the sales and service
obligations, facilities standards, capital requirements, or other
terms of the original franchise or agreement of a franchisee
without notice to the franchisee by certified mail, return receipt
requested, at least ninety (90) days before the expiration or
termination of the original franchise or agreement.
(3) Terminate a dealer for the dealer's failure to meet a
performance standard that is not statistically valid, reliable, and
reasonable.
Notice provided under this subsection must include a detailed
statement setting forth the specific grounds for the proposed action.
(b) For purposes of subsection (a)(1), the following do not
constitute good cause, provided that no unfair practice is committed
under IC 9-32-13-12 and no transfer, sale, or assignment is made in
violation of IC 9-32-13-22:
(1) A change of ownership or executive management of a
dealership.
(2) Requiring the appointment of an individual to an executive
management position in a dealership.
(3) Ownership of, investment in, participation in the
management of, or holding a license for the sale of any line
make of new motor vehicles by a franchisee or an owner of an
interest in a franchise.
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(c) Good cause exists under subsection (a)(1) with respect to all
franchisees of a line make if the manufacturer of the line make
permanently discontinues the manufacture or assembly of the line
make.
(d) Not more than thirty (30) days after a franchisee receives
notice under subsection (a), the franchisee may protest the proposed
action by bringing a declaratory judgment action before the division.
(e) If a franchisee makes a timely and proper request under
subsection (d) for declaratory judgment to protest a proposed action
under subsection (a)(1), the division shall schedule an administrative
hearing. The administrative hearing must comply with IC 4-21.5. The
declaratory judgment action must include a determination of whether
good cause exists for the proposed action.
As added by P.L.152-2013, SEC.3. Amended by P.L.174-2016,
SEC.106.
IC 9-32-13-28
Dealer requesting payment for manufacturer or distributor
following termination, cancellation, or nonrenewal of franchise;
discontinuance of line make
Sec. 28. (a) This section applies when a dealer requests payment
from a manufacturer or distributor following:
(1) the termination, cancellation, or nonrenewal by the
manufacturer or distributor of a franchise between the dealer
and the manufacturer or distributor; or
(2) the discontinuance of a line make by the manufacturer or
distributor.
(b) Not more than ninety (90) days after a manufacturer or
distributor receives a request for payment from a dealer described in
subsection (a), the manufacturer or distributor shall pay to the dealer
the following amounts for items that are in the dealer's inventory or
possession at the time of termination, cancellation, nonrenewal, or
discontinuance, that the dealer delivers to the manufacturer or
distributor, and as to which the dealer conveys clear title to the
manufacturer or distributor under subsection (c):
(1) For:
(A) current model year motor vehicles; or
(B) immediately preceding model year motor vehicles with
less than three hundred (300) miles;
acquired from the manufacturer or distributor in the usual
course of business, the cost at acquisition less any discounts or
allowances received from the manufacturer or distributor.
(2) For all new, unused, and undamaged parts in original
packaging that were purchased from the manufacturer or
distributor:
(A) the cost listed in the manufacturer's or distributor's parts
catalog in effect at the time of termination, cancellation,
nonrenewal, or discontinuance; minus
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(B) any allowances authorized by the manufacturer or
distributor.
(3) For required special tools, equipment, or computer
equipment that was used for reporting financial data to the
manufacturer or distributor, used solely for the franchise being
terminated, and purchased by the dealer during the two (2)
years immediately preceding the termination, cancellation,
nonrenewal, or discontinuance, fair market value.
(4) For signs that bear a trademark or trade name, that the dealer
was required by the manufacturer or distributor to purchase, and
that the dealer purchased within three (3) years of the
termination, cancellation, nonrenewal, or discontinuance, fair
market value.
For purposes of this subsection, fair market value is determined on
the date of termination, cancellation, nonrenewal, or discontinuance.
(c) Title to items described in subsection (b) transfers from a
dealer to a manufacturer or distributor on the date of termination,
cancellation, nonrenewal, or discontinuance. The dealer has an
enforceable security interest in the transferred items.
(d) It is an unfair practice for a manufacturer or distributor to
violate this section.
As added by P.L.152-2013, SEC.4.
IC 9-32-13-29
Manufacturer or distributor terminates, cancels, or fails to renew
a franchise between the manufacturer or distributor and dealer;
exceptions
Sec. 29. (a) This section applies when a manufacturer or
distributor terminates, cancels, or fails to renew a franchise between
the manufacturer or distributor and a dealer, unless the termination,
cancellation, or failure to renew is due to any of the following:
(1) The dealer files for bankruptcy or enters into receivership.
(2) The dealer's license is revoked under IC 9-32-11 or
IC 9-32-16.
(3) The dealer has been convicted of or pled guilty to a felony.
(4) The dealer commits fraud.
(5) The dealer has abandoned business operations or otherwise
failed to conduct sales and service operations during regular
business hours for at least seven (7) consecutive days, unless
the abandonment or closure is due to an act of God or another
act over which the franchise has no control.
(b) Except as provided in subsection (c), upon termination,
cancellation, or nonrenewal, a manufacturer or distributor shall pay
to a dealer the following amounts:
(1) If the dealer is leasing the dealership facilities from a person
other than the manufacturer or distributor, the lesser of:
(A) the total lease payments remaining unpaid on the date of
termination, cancellation, or nonrenewal; or
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(B) the total annual lease payments for one (1) year;
subject to damages mitigated by the dealer under the terms of
the lease.
(2) If the dealer owns the dealership facilities, an amount equal
to the reasonable rental value of the facilities for the one (1)
year period beginning on the date of termination, cancellation,
or nonrenewal, subject to damages mitigated by the dealer.
(c) A manufacturer or distributor may discharge the
manufacturer's or distributor's obligations under a lease with a dealer
by negotiating with the dealer a lease termination payment, a
sublease, or a new lease.
(d) The manufacturer or distributor is entitled to possession of the
dealership facilities during the time period for which the
manufacturer or distributor makes any lease payments.
(e) It is an unfair practice for a manufacturer or a distributor to
violate this section.
As added by P.L.152-2013, SEC.5.
IC 9-32-13-30
Manufacturer or distributor may not require or coerce
improvements to dealer's facilities or signs or franchisor image
elements; exceptions
Sec. 30. (a) A manufacturer or distributor may not coerce or
require a dealer to:
(1) make an improvement to the dealer's facilities; or
(2) install signs or other franchisor image elements;
that would result in replacing or substantially altering improvements
or image elements that the dealer made or installed during the
immediately preceding seven (7) years as required by the
manufacturer or distributor, unless the improvement or installation
of signs or visual elements is necessary to comply with the health or
safety laws of the state or to sell, service, or display a new motor
vehicle due to the unique technology of the new motor vehicle.
(b) It is an unfair practice for a manufacturer or distributor to
violate this section.
(c) This section does not apply to a recreational vehicle
manufacturer franchisor.
As added by P.L.152-2013, SEC.6.
IC 9-32-13-31
Complaint of unfair practice; investigation
Sec. 31. (a) A dealer that alleges the commission of an unfair
practice by a manufacturer or distributor in violation of section 8, 9,
10, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, 28, 29, or 30 of this
chapter may file a complaint with the division under IC 9-32-16-15.
(b) Upon receipt of a complaint under subsection (a), the division
may conduct an investigation under IC 9-32-16-14.
(c) If the division determines that a manufacturer or distributor
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has committed a violation, including an unfair practice described in
subsection (a), the division may take action against the manufacturer
or distributor under IC 9-32-16 and IC 9-32-17.
(d) A person that performs an act that is an unfair practice under
this chapter commits a Class A infraction.
(e) This section does not limit the ability of a dealer,
manufacturer, or distributor to request a hearing under IC 9-32-16-2.
As added by P.L.217-2014, SEC.174. Amended by P.L.174-2016,
SEC.107.
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