The Commission may deny an application for a license, or revoke or suspend a license or impose a fine not to exceed Ten Thousand Dollars ($10,000.00) against a manufacturer or distributor or a fine not to exceed Five Hundred Dollars ($500.00) against a dealer for each day that any provision of Sections 561 through 567, 572, 578 and 579, and 579.1 of this title is violated or for any of the following reasons:

1. 1. On satisfactory proof of unfitness of the applicant in any application for any license under the provisions of this act;
2. 2. For any material misstatement made by an applicant in any application for any license under the provisions of this act;
3. 3. For any failure to comply with any provision of this act or any rule or regulation adopted and promulgated by the Commission under authority vested in it by this act;
4. 4. A change of condition after license is granted resulting in failure to maintain the qualifications for license;

5. 5. Being a new motor vehicle dealer or new motor vehicle salesperson who:

   1. a. has required a purchaser of a new motor vehicle, as a condition of sale and delivery thereof, to also purchase special features, appliances, accessories or equipment not desired or requested by the purchaser and installed by the dealer,
   2. b. uses any false or misleading advertising in connection with his business as such new motor vehicle dealer or vehicle salesperson,
   3. c. has committed any unlawful act which resulted in the revocation of any similar license in another state,
   4. d. has failed or refused to perform any written agreement with any retail buyer involving the sale of a motor vehicle,
   5. e. has been convicted of a crime involving moral turpitude,
   6. f. has committed a fraudulent act in selling, purchasing, or otherwise dealing in new motor vehicles or has misrepresented the terms and conditions of a sale, purchase, or contract for sale or purchase of a new motor vehicle or any interest therein including an option to purchase such vehicle, or
   7. g. has failed to meet or maintain the conditions and requirements necessary to qualify for the issuance of a license;
6. 6. Being a new motor vehicle salesperson who is not employed as such by a licensed new motor vehicle dealer;

7. 7. Being a new motor vehicle dealer who:

   1. a. does not have an established place of business,
   2. b. does not provide for a suitable repair shop separate from the display room with ample space to repair or recondition one or more vehicles at the same time, and which is equipped with such parts, tools and equipment as may be requisite for the servicing of motor vehicles in such a manner as to make them comply with the safety laws of this state and to properly fulfill the dealer's or manufacturer's warranty obligation,
   3. c. does not hold a franchise in effect with a manufacturer or distributor of new or unused motor vehicles for the sale of the same and is not authorized by the manufacturer or distributor to render predelivery preparation of such vehicles sold to purchasers and to perform any authorized post-sale work pursuant to the manufacturer's or distributor's warranty,
   4. d. employs unlicensed salespersons, or employs or utilizes the services of used motor vehicle lots or dealers or other unlicensed persons in connection with the sale of new motor vehicles, or
   5. e. does not properly service a new motor vehicle before delivery of same to the original purchaser thereof, or
   6. f. fails to order and stock a reasonable number of new motor vehicles necessary to meet customer demand for each of the new motor vehicles included in the new motor vehicle dealer's franchise agreement, unless the new motor vehicles are not readily available from the manufacturer or distributor due to limited production;

8. 8. Being a manufacturer, distributor, distributor branch or factory branch, or officer, agent or other representative thereof, who has:

   1. a. either induced or attempted to induce by means of coercion or intimidation, any new motor vehicle dealer:

      1. (1) to accept delivery of any motor vehicle or vehicles, parts or accessories therefor, or any other commodities including advertising material which shall not have been ordered by said new motor vehicle dealer,
      2. (2) to order or accept delivery of any motor vehicle with special features, appliances, accessories or equipment not included in the list price of said motor vehicles as publicly advertised by the manufacturer thereof, or
      3. (3) to order or accept delivery of any parts, accessories, equipment, machinery, tools, appliances or any commodity whatsoever, or
   2. b. induced under threat or discrimination by the withholding from delivery to a motor vehicle dealer certain models of motor vehicles, changing or amending unilaterally the dealer's allotment of motor vehicles and/or withholding and delaying delivery of such vehicles out of the ordinary cause of business, in order to induce by such coercion any such dealer to participate or contribute to any local or national advertising fund controlled directly or indirectly by the manufacturer or for any other purposes such as contest, "give-aways" or other so-called sales promotional devices and/or change of quotas in any sales contest; or has required motor vehicle dealers, as a condition to receiving their vehicle allotment, to order a certain percentage of the vehicles with optional equipment not specified by the new motor vehicle dealer; however, nothing in this section shall prohibit a manufacturer from supporting an advertising association which is open to all dealers on the same basis;

9. 9. Being a manufacturer, distributor, distributor branch or factory branch, or officer, agent or other representative thereof, who:

   1. a. has attempted to coerce or has coerced any new motor vehicle dealer to enter into any agreement or to cancel any agreement, or fails to act in good faith and in a fair, equitable and nondiscriminatory manner; or has directly or indirectly coerced, intimidated, threatened or restrained any motor vehicle dealer; or has acted dishonestly, or has failed to act in accordance with the reasonable standards of fair dealing,
   2. b. has failed to compensate its dealers for the work and services they are required to perform in connection with the dealer's delivery and preparation obligations according to the agreements on file with the Commission which must be found by the Commission to be reasonable, or fail to adequately and fairly compensate its dealers for labor, parts and other expenses incurred by such dealer to perform under and comply with manufacturer's warranty agreements. In determining whether the warranty compensation is adequate and fair, the Commission shall consider the amount that is charged by the dealer or dealers in their areas of responsibility to their nonwarranty work of like kind. All claims made by dealers for compensation for delivery, preparation and warranty work shall be paid within thirty (30) days after approval and shall be approved or disapproved within thirty (30) days after receipt. When any claim is disapproved, the dealer shall be notified in writing of the grounds for disapproval. The dealer's delivery, preparation and warranty obligations as filed with the Commission shall constitute the dealer's sole responsibility for product liability as between the dealer and manufacturer. A manufacturer or distributor may reasonably and periodically audit a new motor vehicle dealer to determine the validity of paid claims for dealer compensation or any charge-backs for warranty parts or service compensation. Audits of warranty payments shall only be for the one-year period immediately following the date of the payment. A manufacturer shall reserve the right to reasonable, periodic audits to determine the validity of paid claims for dealer compensation or any charge-backs for consumer or dealer incentives. Audits of incentive payments shall only be for a two-year period immediately following the date of the payment. These limitations shall not apply if the manufacturer or distributor reasonably suspects fraud, or
   3. c. unreasonably fails or refuses to offer to its same line-make franchised dealers all models manufactured for that line-make, or unreasonably requires a dealer to pay any extra fee, purchase unreasonable advertising displays or other materials, or remodel, renovate or recondition the dealer's existing facilities as a prerequisite to receiving a model or series of vehicles. However, this subparagraph shall not apply to recreational vehicles or limited production model vehicles.

Laws 1985, SB 81, c. 229, § 8, eff. November 1, 1985; Amended by Laws 1998, HB 3274, c. 269, § 3, eff. November 1, 1998 (superseded document available).