2009 Louisiana Laws TITLE 32 Motor vehicles and traffic regulation :: RS 32:1262 Warranty; compensation; audits of dealer records

§1262.  Warranty; compensation; audits of dealer records

A.(1)  It shall be a violation of this Chapter for a manufacturer of motor vehicles, a distributor, a wholesaler, distributor branch or factory branch, or officer, agent or other representative thereof to fail to adequately and fairly compensate its dealers for labor, parts, and other expenses incurred by such dealer to perform under and comply with a manufacturer's or a distributor's warranty agreement.

(2)  In no event shall any manufacturer or distributor pay its dealers at a price or rate for warranty work that is less than that charged by the dealer to the retail customers of the dealer for nonwarranty work of like kind.

(3)  Warranty work includes parts and labor performed.

(4)  All claims made by the dealer for compensation under this Subsection shall be paid within thirty days after approval and shall be approved or disapproved within thirty days after receipt.  When any claim is disapproved, the dealer shall be notified in writing of the grounds for disapproval.

(5)  The obligations in this Subsection as they relate to recreational products may be modified by contract.

B.(1)  Notwithstanding the terms of any franchise agreement, warranty and sales incentive audits of dealer records may be conducted by the manufacturer, distributor, distributor branch, or factory branch.  Any audit for warranty parts or service compensation shall be for the twelve-month period immediately following the date of the payment of the claim by the manufacturer or distributor.  However, a dealer shall not be held liable by virtue of an audit for failure to retain parts for a period in excess of six months.  Any audit for sales incentives, service incentives, rebates, or other forms of incentive compensation shall only be for the twelve-month period immediately following the date of the close of the promotion, event, program, or activity.  In no event shall the manufacturer, distributor, distributor branch, or factory branch fail to allow the dealer to make corrections to the sales data in less than one hundred twenty days from the program period.  Additionally, no penalty other than amounts advanced on a vehicle reported incorrectly shall be due in connection with the audit.  With respect to vehicles sold during the time period subject to the audit, but submitted incorrectly to the manufacturer, distributor, or wholesale distributor branch or factory branch, the dealer shall be charged back for the amount reported incorrectly and credited with the amount due, if anything, on the actual sale date.

(2)  No claim which has been approved and paid may be charged back to the dealer unless it can be shown that one or all of the following applies:

(a)  The claim was false or fraudulent.

(b)  The repairs were not properly made.

(c)  The repairs were unnecessary to correct the defective condition under generally accepted standards of workmanship.

(d)  The dealer failed to reasonably substantiate the repair in accordance with reasonable written requirements of the manufacturer or distributor, if the dealer was notified of the requirements prior to the time the claim arose and if the requirements were in effect at the time the claim arose.

(3)  A manufacturer or distributor shall not deny a claim solely based on a motor vehicle dealer's incidental failure to comply with a specific claim processing requirement, or a clerical error, or other administrative technicality.

(4)  Limitations on warranty parts or service compensation, sales incentive audits, rebates, or other forms of incentive compensation, chargebacks for warranty parts or service compensation, and service incentives and chargebacks for sales compensation only shall not be effective in the case of intentionally false or fraudulent claims.

Acts 2005, No. 500, §1, eff. July 12, 2005; Acts 2008, No. 233, §1; Acts 2009, No. 403, §1, eff. July 7, 2009.