2023 Oklahoma Statutes
Title 47. Motor Vehicles
§47-565.1. Manufacturer's or distributor's prevention or refusal to honor succession to dealership by legal heir or devisee of new motor vehicle dealer - Procedure.

A. For the purposes of this section, “designated successor” means a person who the new motor vehicle dealer has designated to take over operation of the dealership or a legal heir or devisee under the will of a new motor vehicle dealer or under the laws of descent and distribution of this state.

B. Notwithstanding the terms of any franchise agreement, and subject to the following conditions contained in paragraphs 1 through 5 of this subsection, any manufacturer or distributor who prevents or refuses to honor the succession to the operation of a dealership by a designated successor without good cause or good faith, as defined in this section, shall be subject to the following procedure:

1. Within one hundred twenty (120) days after the death or departure of the new motor vehicle dealer, the manufacturer shall receive a written notice from the dealership of the designated successor who intends to become the successor dealership operator. If timely notice is not received, this paragraph shall not apply, and any succession shall be governed solely by the terms of the franchise;

2. Within thirty (30) days of receipt of the dealership’s timely written notice, the manufacturer may request, and the designated successor shall, within a reasonable time, provide any information which is reasonably necessary for the manufacturer to evaluate the designated successor dealer and dealership, including applications and financing;

3. Within sixty (60) days of receipt of such information, the manufacturer shall approve or disapprove the designated successor dealer, and in case of disapproval shall communicate in writing such disapproval and grounds for disapproval to the dealership;

4. Failure of the manufacturer to act in a timely manner with respect to any time period described above shall constitute a waiver of the manufacturer’s right to disapprove the proposed succession; and

5. Within ten (10) days of the dealership’s receipt of the manufacturer’s notice of disapproval, the dealership may file a protest of the manufacturer’s decision with the Oklahoma New Motor Vehicle Commission and request a hearing. Such hearing shall be heard in a substantially similar manner as provided by Section 566 of this title, except that the Commission shall render a final decision within sixty (60) days of the filing of the protest. The manufacturer shall have the burden of proof to show that its disapproval was for a good cause and in good faith. A denial shall not be for good cause and in good faith unless the factory establishes that the designated successor is not of good moral character or fails to meet the written, reasonable, and uniformly applied requirements of the manufacturer or distributor relating to financial qualifications, general business experience, and other requirements relating to prospective franchisees. However, a a designated successor who is a family member and who is of good moral character in accordance with reasonable factory qualifications and meets the factory’s financial qualifications may rely on controlling executive management that is of good moral character and meets the factory’s qualifications for general business experience. Any denial of the designated successor based upon a failure to agree to terms other than those contained in the existing franchise agreement, related addendums and agreements, and any written notice provided to the existing dealer prior to the manufacturer’s or distributor’s receipt of any written notice from the existing dealer of the proposed transfer shall not be considered good cause for such denial. However, any proposed change to the franchise pursuant to written notice from the manufacturer or distributor, to be valid, must be in compliance with existing law. The disapproval by the manufacturer shall be final if the dealership fails to file a timely protest of the disapproval. In the event that the Commission finds that the manufacturer’s disapproval was not made for good cause, then it shall issue a final order requiring the manufacturer to honor the successor designated in the notice sent by the dealership. Notwithstanding anything to the contrary in this section, a new motor vehicle dealer may designate any person as successor by filing a written instrument pursuant to the franchise with the manufacturer during the new motor vehicle dealer’s lifetime. In such a case, the written instrument and franchise shall govern the dealership succession.

The suspension, revocation, or refusal to issue or renew a license or the imposition of any other penalty by the Commission shall be in addition to any penalty which might be imposed upon any licensee upon judgment or conviction in a court of competent jurisdiction for any violation of the provisions of Sections 561 through 567, 572, 578.1, 579, and 579.1 of this title.

Added by Laws 1985, c. 229, § 9, eff. Nov. 1, 1985. Amended by Laws 2001, c. 148, § 4, emerg. eff. April 30, 2001; Laws 2014, c. 402, § 2, eff. Nov. 1, 2014; Laws 2023, c. 29, § 9, eff. Nov. 1, 2023.