2006 New York Code - Dealers\' Rights To Transfer, Assign Or Dispose Of The Franchise Upon Notice To Distributor.

 
    §  199-i.  Dealers'  rights  to  transfer,  assign  or  dispose of the
  franchise upon notice to distributor. 1. Every franchise  agreement  and
  any   other  lease  or  agreement  in  connection  therewith  between  a
  distributor and a dealer shall be  transferable  or  assignable  at  the
  option   of  the  dealer  provided  the  distributor  consents  to  such
  assignment, which consent shall not be unreasonably withheld. A proposed
  assignee shall meet the reasonable standards normally  required  by  the
  distributor  or  its prospective dealers, including, but not limited to:
  (a) experience and qualifications;  (b)  credit  rating;  (c)  financial
  resources; (d) moral character; and (e) operation by the assignee of not
  more  than  two  dealerships  with  the distributor from whom consent is
  requested. Prior to any transfer or assignment, the dealer shall  notify
  the  distributor of an intention to transfer or assign such franchise by
  written notice of intent setting forth the prospective assignee's  name,
  address,  statement  of  financial qualification and business experience
  during the previous five years. The distributor shall, within sixty days
  after receipt of such notice of  intent,  give  written  notice  to  the
  dealer  of  its  consent or objection to such transfer or assignment. If
  the distributor objects to the transfer or assignment,  it  shall  state
  its  reasons  therefor.  If  the  distributor  does not reply within the
  specified sixty days, approval of the transfer or  assignment  shall  be
  deemed  granted.    Such transfer or assignment shall not be valid until
  the assignee agrees in writing to comply with all  the  requirements  of
  the  franchise  and any other lease or agreement in connection therewith
  then in effect.
    A dealer may not exercise the right of assignment or transfer after he
  has been  notified  of  termination  or  non-renewal  of  the  franchise
  agreement  for  cause  as  described  in the federal petroleum marketing
  practices act unless the notice of intent to assign  or  transfer  under
  this section has been delivered to the distributor prior to the dealer's
  receipt of such notice of termination or non-renewal.
    2.  (a)  Upon  the death of the dealer, the franchise and any lease or
  other agreement in connection therewith shall devolve to the  designated
  successor  of  such dealer, provided that prior to his death, the dealer
  has notified the  distributor  in  writing  of  the  name,  address  and
  relationship  of  the  designated successor and the designated successor
  meets the qualifications specified in subdivision one of this section at
  the time of the dealer's death. For the purpose of this subdivision, the
  term "designated successor" shall include one or more of  the  following
  persons:  (i)  the surviving spouse; (ii) the adult child or children of
  the deceased dealer; and (iii) any adult  next-of-kin  of  the  deceased
  dealer  who  has  actively  participated  in the dealership for at least
  twelve months preceding the dealer's death. The twelve month period need
  not be continuous.
    Upon the death of the dealer, the designated successor shall  promptly
  assume  operation  of  the  franchise  and  shall be responsible for the
  operation of the franchise in accordance with the terms  and  conditions
  of   the   deceased   dealer's  franchise,  pending  acceptance  by  the
  distributor of the designated successor. The distributor may assist  the
  designated  successor with the operation of the station in a supervisory
  capacity at its own expense.  Within  twenty  days  after  the  dealer's
  death,  the  designated  successor  shall  give  written  notice  to the
  distributor of his or her election to assume and operate the  franchise,
  which  shall include the information required in subdivision one of this
  section,  and  shall  also  notify  the  distributor   concerning   what
  arrangements  have  been made for the operation of the franchise pending
  the acceptance or rejection of the designated  successor.  Within  forty
  days  after such notification, the distributor shall give written notice
  to the designated successor  of  its  approval  or  disapproval  of  the
  designated successor. If the distributor does not approve the designated
  successor,  it shall state its reasons therefor. If the distributor does
  not  reply  within  the  specified  forty  day  period,  approval of the
  designated successor shall be deemed granted.
    (b) In the event that the  distributor  has  timely  objected  to  the
  designated  successor, the personal representative or next-of-kin of the
  deceased dealer may, within sixty days from receipt  by  the  designated
  successor  of the notice of disapproval, elect to transfer or assign the
  franchise in accordance with the provisions of subdivision one  of  this
  section.  Such an election shall be made by giving written notice to the
  distributor of the election within twenty days after the receipt by  the
  designated  successor of the notice of disapproval. Written notice shall
  be given to the distributor of the intention to transfer or  assign  the
  franchise  in  accordance with the provisions of subdivision one of this
  section prior to the expiration of such sixty day period.  Pending  such
  a  transfer  or assignment, the distributor may assume full operation of
  the franchise for its own account, in which event it  shall  account  to
  the  personal  representative  of the deceased dealer for any inventory,
  assets and personal property of any kind on the premises at the time the
  distributor accepts possession of the franchise.
    (c) In the event  that  the  deceased  dealer  has  not  designated  a
  successor  or  the  designated  successor  has not elected to assume and
  operate the franchise, the personal representative or next-of-kin of the
  deceased dealer may, within one hundred twenty days after  the  dealer's
  death, elect to transfer the franchise in accordance with the provisions
  of  subdivision  one  of this section. Such an election shall be made by
  giving written notice to the distributor  of  such  an  election  within
  twenty  days  after the dealer's death. Written notice shall be given to
  the distributor of the intention to transfer or assign the franchise  in
  accordance  with the provisions of subdivision one of this section prior
  to the expiration of such one hundred twenty day period.  Within  twenty
  days   after   the   dealer's  death,  the  personal  representative  or
  next-of-kin shall also give written notice to the distributor concerning
  what arrangements have been made for  the  operation  of  the  franchise
  pending   the  transfer  or  assignment.  Pending  such  a  transfer  or
  assignment, the distributor may elect to assume full  operation  of  the
  franchise  for  its  own account, in which event it shall account to the
  personal representative of the deceased dealer for any inventory, assets
  and personal property of any kind  on  the  premises  at  the  time  the
  distributor accepts possession of the franchise.
    (d)  No franchise by succession or assignment pursuant to this section
  shall be valid unless and until the  designated  successor  or  assignee
  agrees  in  writing  to  comply  with  all  of  the  requirements of the
  franchise and any other lease or agreement in connection therewith  then
  in effect.
    3.  This section shall not apply to any franchise until the dealer has
  operated the service station pursuant to a franchise agreement with  the
  distributor  for  a  continuous  three  year  period, which period shall
  include the term of any franchise in effect prior to or on the effective
  date of this section and the term of  any  franchise  transferred  to  a
  designated  successor  pursuant  to  paragraph  (a)  of  subdivision two
  hereof.
    4. Notice of transfer or assignment and notice of  objections  stating
  the  reasons  therefor  may  be  transmitted  by  any method of personal
  service established under article three of the civil  practice  law  and
  rules,  or  by mailing same by certified or registered mail to the party
  to be notified at their actual place  of  business.  Notice  by  mailing
  shall  be  deemed  made  when  deposited  in  a  post office or official
  depository of the United States postal service.
    5.  Upon  receipt  of  the  written  notice  of objection with reasons
  therefor, as provided in subdivisions one and two  of  this  section,  a
  dealer,   designated   successor   or  the  personal  representative  or
  next-of-kin of the  deceased  dealer  may  bring  an  action  against  a
  distributor  in  any  court  of  competent  jurisdiction  for wrongfully
  impeding the transfer or assignment of a franchise,  provided  that  any
  such  action must be commenced within one year following receipt of such
  notice of objection. The court, upon finding that the stated reasons for
  objection are arbitrary, capricious or  unreasonable,  may  award  money
  damages and grant such equitable relief as it deems proper.
    6.  In  the  event that any of the time periods referred to herein are
  not  met  by  a  dealer,  assignee,   designated   successor,   personal
  representative or next-of-kin, the franchise shall terminate.