AN
ACT Relating to equipment dealers; amending RCW 19.98.010, 19.98.020,
19.98.030, 19.98.040, 19.98.100, 19.98.120, and 19.98.130; adding new sections
to chapter 19.98 RCW; and repealing RCW 19.98.110.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. A
new section is added to chapter 19.98 RCW to read as follows:
The
definitions in this section apply throughout this chapter unless the context
clearly requires otherwise.
(1)
"Audit" means a review by a supplier of a dealer's warranty claims
records.
(2)
"Change in competitive circumstances" means to materially impact a
specific dealer's ability to compete with similarly situated dealers selling
the same brand of equipment.
(3)
"Current net price" means the price charged to a dealer for repair
parts as listed in the printed price list, catalog, or electronic catalog of
the supplier in effect at the time a warranty claim is made and superseded
parts listed in current price lists, catalogs, or electronic catalogs when
parts had previously been purchased from the supplier and held by the dealer on
the date of the cancellation or discontinuance of a dealer agreement or
thereafter received by the dealer from the supplier.
(4)
"Dealer" means a person primarily engaged in the retail sale and
service of farm equipment, including a person engaged in the retail
sale of
outdoor power equipment who is primarily engaged in the retail sale and service
of farm equipment. Dealer does not include a person primarily engaged in the
retail sale of outdoor power equipment or a supplier.
(5)
"Dealer agreement" means an oral or written contract or agreement for
a definite or indefinite period of time in which a supplier of equipment grants
to a dealer permission to use a trade name, service mark, or related
characteristic, and where there is a community of interest in the marketing of
equipment or services related to the equipment at wholesale, retail, leasing, or
otherwise.
(6)
"Dealership" means the retail sale business engaged in by a dealer
under a dealer agreement.
(7)
"Distributor" means a person who sells or distributes new equipment
to dealers or who maintains distributor representatives within the state.
(8)
"Distributor branch" means a branch office, maintained by a
distributor, that sells or distributes new equipment to dealers.
"Distributor branch" includes representatives of the branch office.
(9)(a)
"Equipment" includes:
(i)
Farm equipment. Farm equipment includes but is not limited to tractors,
trailers, combines, tillage implements, balers, and other equipment, including
attachments and accessories that are used in the planting, cultivating,
irrigation, harvesting, and marketing of agricultural, horticultural, or
livestock products.
(ii)
Outdoor power equipment. Outdoor power equipment includes self-propelled
equipment that is used to maintain commercial, public, or residential lawns and
gardens or used in landscape, turf, or golf course maintenance.
(b)
"Equipment" does not include motor vehicles designed or intended for
use upon public roadways as defined in RCW 46.70.011 or motorcycles as defined
in RCW 46.94.010.
(10)
"Factory branch" means a branch office maintained by a manufacturer
that makes or assembles equipment for sale to distributors or dealers or that
is maintained for directing and supervising the representatives of the
manufacturer.
(11)
"Factory representative" means a person employed by a manufacturer or
by a factory branch for the purpose of selling or promoting the sale of
equipment or for supervising, servicing, instructing, or contracting with
dealers or prospective dealers.
(12)
"Free on board" or "F.O.B." has the same meaning as
described in RCW 62A.2-319.
(13)
"Geographic market area" means the geographic region for which a
particular dealer is responsible for the marketing, selling, leasing, or
servicing of equipment pursuant to a dealer agreement.
(14)
"Good cause" means failure by a dealer to comply with requirements
imposed upon the dealer by the dealer agreement, provided such requirements are
not different from those requirements imposed on other similarly situated
dealer in the state either by their terms or in the manner of their
enforcement.
(15)
"Manufacturer" means a person engaged in the business of
manufacturing or assembling new and unused equipment.
(16)
"Person" includes a natural person, corporation, partnership, trust,
or other entity, including any other entity in which it has a majority interest
or of which it has control, as well as the individual officers, directors, or
other persons in active control of the activities of each entity.
(17)
"Similarly situated dealer" means a dealer of comparable geographic
location, volume, and market type.
(18)
"Supplier" means a person or other entity engaged in the
manufacturing, assembly, or wholesale distribution of equipment or repair parts
of the equipment. "Supplier" includes any successor in interest,
including a purchaser of assets, stock, or a surviving corporation resulting
from a merger, liquidation, or reorganization of the original supplier, or any
receiver or any trustee of the original supplier.
(19)
"Warranty claim" means a claim for payment submitted by a dealer to a
supplier for either service, or parts, or both, provided to a customer under a
warranty issued by the supplier.
(20)
"Wholesaler" means a person who sells or attempts to sell new
equipment exclusively to dealers or to other wholesalers.
Sec.
2. RCW
19.98.010 and 1975 1st ex.s. c 277 s 1 are each amended to read as follows:
Whenever
any person, firm, or corporation engaged in the ((retail)) sale of ((farm
implements and)) equipment, repair parts, or services
therefor enters into a written or oral contract with ((any
wholesaler, manufacturer, or distributor)) a supplier of ((farm
implements, machinery, attachments, accessories)) equipment, or
repair parts whereby ((such retailer)) the dealer agrees to
maintain a stock of parts ((or complete or whole machines, attachments, or
accessories,)) and equipment and either party to such contract
desires to cancel or discontinue the contract, unless the ((retailer)) dealer
should desire to keep such ((merchandise)) parts and equipment
the ((manufacturer, wholesaler, or distributor)) supplier shall
pay the ((retailer)) dealer for the ((merchandise. Such))
equipment and reasonable reimbursement for services performed in connection
with assembly and predelivery inspections of the equipment. The payment
shall be in the amount of one hundred percent of the net cost of all ((current))
unused complete ((farm implements, machinery, attachments, and accessories))
equipment, including transportation charges paid by the ((retailer,
and eighty-five)) dealer. Equipment purchased more than twenty‑four
months prior to the cancellation or discontinuance of the dealer agreement is
subject to a weather allowance adjustment. The supplier assumes ownership of
new unused complete equipment F.O.B. the dealer location. The supplier shall
pay the dealer in the amount of ninety‑five percent of the current
net prices on repair parts, including superseded parts listed in current price
lists ((or)), catalogs, or electronic catalogs which parts
had previously been purchased from ((such wholesaler, manufacturer, or
distributor)) the supplier and held by ((such retailer)) the
dealer on the date of the cancellation or discontinuance of such contract
or thereafter received by ((such retailer)) the dealer from the
((wholesaler, manufacturer, or distributor)) supplier. The ((wholesaler,
manufacturer, or distributor)) supplier shall also pay ((such
retailer)) the dealer a sum equal to five percent of the current net
price of all parts returned for the handling, packing, and loading of such
parts for return((: PROVIDED, That)), unless the supplier elects to
catalog or list the inventory and perform packing and loading of the parts
itself. However, the provisions of this section shall apply only to repair
parts which are new, unused, and in ((good)) resalable
condition. The provisions of this section do not apply to repair parts that
were purchased by the dealer in sets of multiple parts unless the sets are
complete and in resalable condition, or to parts the supplier can demonstrate
were identified as nonreturnable when ordered by the dealer.
Upon
the payment of such amounts, the title to ((such farm implements, farm
machinery, attachments, accessories,)) the equipment or repair
parts((,)) shall pass to the ((manufacturer, wholesaler, or
distributor)) supplier making such payment, and ((such
manufacturer, wholesaler, or distributor)) the supplier shall be
entitled to the possession of such ((merchandise)) equipment and
repair parts.
All
payments or allowances of credit due dealers under this section shall be paid
or credited by the supplier within ninety days after the return of the repair
parts or the transfer of equipment. After the ninety days, all sums of credits
due include interest at the rate of eighteen percent per year. Title to
equipment, attachments, and accessories is transferred to the supplier F.O.B.
the dealer location.
The
provisions of this section shall apply to any ((annual)) part return
adjustment agreement made between a ((seller or retailer)) dealer
and a ((manufacturer, wholesaler, or distributor)) supplier.
A
supplier must repurchase specific data processing and computer communications
hardware specifically required by the supplier to meet the supplier's minimum
requirements and purchased by the dealer in the prior five years and held by
the dealer on the date of termination. The supplier must also purchase
software required by and sourced from the supplier, provided that the software
is used exclusively to support the dealer's business with the supplier. The
purchase price is the original net cost to the dealer, less twenty percent per
year.
A
supplier must repurchase, and the dealer must sell to the supplier, specialized
repair tools. As applied in this section, specialized repair tools are defined
as those tools required by the supplier and unique to the diagnosis or repair
of the supplier's products. For specialized repair tools that are in new,
unused condition and are applicable to the supplier's current products, the
purchase price is one hundred percent of the original net cost to the dealer.
For all other specialized repair tools, the purchase price is the original net
cost to the dealer less twenty percent per year.
A
supplier must repurchase, and the dealer must sell to the supplier, current
signage. As used in this section, "current signage" means the
principal outdoor signage required by the supplier that displays the supplier's
current logo or similar exclusive identifier, and that identifies the dealer as
representing either the supplier or the supplier's products, or both. The
purchase price is the original net cost to the dealer less twenty percent per
year, but may in no case be less than fifty percent of the original net cost to
the dealer.
The
provisions of this section shall be supplemental to any agreement between the
((retailer)) dealer and the ((manufacturer, wholesaler, or
distributor)) supplier covering the return of ((farm implements,
machinery, attachments, accessories,)) equipment and repair parts so
that the ((retailer)) dealer can elect to pursue either his or
her contract remedy or the remedy provided herein, and an election by the
((retailer)) dealer to pursue his or her contract remedy
shall not bar his or her right to the remedy provided herein as to ((those
farm implements, machinery, attachments, accessories,)) equipment and
repair parts not affected by the contract remedy.
The
provisions of this section shall apply to all contracts now in effect which
have no expiration date and are a continuing contract, and all other contracts
entered into or renewed after January 1, 1976. Any contract in force and
effect on January 1, 1976, which by its own terms will terminate on a date
subsequent thereto shall be governed by the law as it existed prior to this
chapter: PROVIDED, That no contract covered by this chapter may be canceled by
any party without good cause. For the purposes of this section, good
cause shall include, but shall not be restricted to, the failure of any party
to comply with the lawful provisions of the contract, the adjudication of any
party to a contract as a bankrupt, wrongful refusal of ((manufacturer,
wholesaler, or distributor)) the supplier to supply ((farm
machinery, farm implements)) equipment and repair parts therefor.
Sec.
3. RCW
19.98.020 and 2000 c 171 s 66 are each amended to read as follows:
All
repurchase payments to ((retailers and sellers)) dealers made
pursuant to RCW 19.98.010 shall be less amounts owed on any lien or claim then
outstanding upon such items covered by this section. Any ((wholesaler,
manufacturer, or distributor)) supplier making repurchase payments
covered by this chapter to any ((retailer or seller)) dealer
shall satisfy such secured liens or claims pursuant to Article ((62A.9))
62A.9A RCW less any interest owed to the lienholder arising from the
financing of such items which shall be paid to any such secured lienholder by
the ((retailer or seller)) dealer. In no case shall the ((wholesaler,
manufacturer, or distributor)) supplier, in making payments covered
by RCW 19.98.010, pay in excess of those amounts prescribed therein.
Sec.
4. RCW
19.98.030 and 1975 1st ex.s. c 277 s 3 are each amended to read as follows:
The
prices of ((farm implements, machinery)) equipment and repair
parts therefor, required to be paid to any ((retail)) dealer as provided
in RCW 19.98.010 shall be determined by taking one hundred percent of the net
cost ((on farm implements, machinery, and attachments, and eighty-five))
of the invoiced price of equipment and ninety-five percent of the
current net price of repair parts therefor as shown upon the ((manufacturer's,
wholesaler's, or distributor's)) supplier's price lists ((or)),
catalogues, or electronic catalogs in effect at the time such contract
is canceled or discontinued.
The
supplier assumes transfer of ownership of equipment F.O.B. dealer location.
Sec.
5. RCW
19.98.040 and 1975 1st ex.s. c 277 s 4 are each amended to read as follows:
In
the event that any ((manufacturer, wholesaler, or distributor of farm
machinery, farm implements,)) supplier of equipment and repair parts
((therefor)), upon cancellation or discontinuation of a contract by
either a ((retailer)) dealer or ((a manufacturer, wholesaler,
or distributor)) supplier, fails or refuses to make payment to such
dealer as is required by RCW 19.98.010, ((such manufacturer, wholesaler, or
distributor shall be)) the supplier is liable in a civil action to
be brought by ((such retailer)) the dealer for such payments as
are required by RCW 19.98.010.
Sec.
6. RCW
19.98.100 and 1990 c 124 s 1 are each amended to read as follows:
The
legislature of this state finds that the retail distribution and sales of ((agricultural))
equipment, utilizing independent ((retail business)) dealers
operating under agreements with ((the manufacturers and distributors)) suppliers,
vitally affects the general economy of the state, public interests, and public
welfare and that it is necessary to regulate the business relations between the
((independent)) dealers and the ((equipment manufacturers,
wholesalers, and distributors)) suppliers.
Sec.
7. RCW
19.98.120 and 1990 c 124 s 3 are each amended to read as follows:
It
shall be a violation of this chapter for a supplier to:
(1)
Require or attempt to require any ((equipment)) dealer to order or
accept delivery of any equipment or parts ((or any equipment with special
features or accessories not included in the base list price of such equipment
as publicly advertised by the supplier which)) that the ((equipment))
dealer has not voluntarily ordered;
(2)
Require or attempt to require any ((equipment)) dealer to enter into any
agreement, whether written or oral, supplementary to an existing dealer
agreement with the supplier, unless such supplementary agreement is imposed on
other similarly situated dealers in the state;
(3)
Refuse to deliver in reasonable quantities and within a reasonable time after
receipt of the ((equipment)) dealer's order, to any ((equipment))
dealer having a dealer agreement for the retail sale of new equipment sold or
distributed by the supplier, equipment covered by the dealer agreement
specifically advertised or represented by the supplier to be available for
immediate delivery. However, the failure to deliver any such equipment shall
not be considered a violation of this chapter when deliveries are based on
prior ordering histories, the priority given to the sequence in which the
orders are received, or manufacturing schedules or if the failure is due to
prudent and reasonable restriction on extension of credit by the supplier to
the ((equipment)) dealer, an act of God, work stoppage or delay due to a
strike or labor difficulty, a bona fide shortage of materials, freight embargo,
or other cause over which the supplier has no control;
(4)
Terminate, cancel, or fail to renew the dealer agreement of any ((equipment))
dealer or substantially change the ((equipment)) dealer's competitive
circumstances, attempt to terminate or cancel, or threaten to not renew the
dealer agreement or to substantially change the competitive circumstances
without good cause;
(5)
Condition the renewal, continuation, or extension of a dealer agreement on the
((equipment)) dealer's substantial renovation of the ((equipment))
dealer's place of business or on the construction, purchase, acquisition, or
rental of a new place of business by the ((equipment)) dealer unless:
The supplier has advised the ((equipment)) dealer in writing of its
demand for such renovation, construction, purchase, acquisition, or rental
within a reasonable time prior to the effective date of the proposed date of
renewal or extensions, but in no case less than one year; the supplier
demonstrates the need for such change in the place of business and the
reasonableness of the demand with respect to marketing and servicing the
supplier's product and any economic conditions existing at the time in the
dealer's trade area; and the ((equipment)) dealer does not make a good
faith effort to complete the construction or renovation plans within one year;
(6)
Discriminate in the prices charged for equipment of like grade ((and)),
quality, and brand sold by the supplier to similarly situated dealers in
this state. This subsection does not prevent the use of differentials which
make only due allowance for differences in the cost of manufacture, sale, or
delivery resulting from the differing methods or quantities in which such
commodities are sold or delivered: PROVIDED, That nothing shall prevent a ((seller))
supplier from offering a lower price in order to meet an equally low
price of a competitor, or the services or facilities furnished by a competitor;
(7)
((Unreasonably withhold consent for an equipment dealer to change the
capital structure of the equipment dealership or the means by which it is
financed: PROVIDED, That the equipment dealer meets the reasonable capital
requirements of the manufacturer;
(8)
Prevent, by contract or otherwise, any equipment dealer or any officer, member,
partner, or stockholder of any equipment dealer from selling or transferring
any part of the interest in the equipment dealership of any of them to any
other person or persons or party or parties. However, no equipment dealer,
officer, partner, member, or stockholder shall have the right to sell,
transfer, or assign the equipment dealership or power of management or control
thereunder without the written consent of the supplier. Such consent shall not
be unreasonably withheld if the person or persons or party or parties meets the
reasonable financial, business experience, and character standards of the
supplier;
(9))) Prevent,
by contract or otherwise, any equipment dealer from changing the capital
structure of the equipment dealership or the means by which the equipment
dealership is financed, provided the equipment dealer at all times meets any
reasonable capital standards imposed by the supplier or as otherwise agreed to
between the equipment dealer and supplier, and provided this change by the
equipment dealer does not result in a change of the controlling interest in the
executive management or board of directors, or any guarantors of the equipment
dealership;
(8)
Prevent, by contract or otherwise, any equipment dealer or any officer, member,
partner, or stockholder of any equipment dealer from selling or transferring
any part of the interest of any of them to any other party or parties.
However, no equipment dealer, officer, partner, member, or stockholder has the
right to sell, transfer, or assign the equipment dealership or power of
management or control of the dealership without the written consent of the
supplier. Should a supplier determine that the designated transferee is not
acceptable, the supplier shall provide the equipment dealer with written notice
of the supplier's objection and specific reasons for withholding its consent;
(9)
Withhold consent to a transfer of interest in an equipment dealership unless,
with due regard to regional market conditions and distribution economies, the
dealer's area of responsibility or trade area does not afford sufficient sales
potential to reasonably support a dealer. In any dispute between a supplier
and an equipment dealer, the supplier bears the burden of proving that the
dealer's area of responsibility or trade area does not afford sufficient sales
potential to reasonably support a dealer. The proof offered must be in
writing. The provisions of this subsection do not preclude any other basis for
a supplier to withhold consent to a transfer of interest in an equipment
dealer;
(10)
Fail to compensate a dealer for preparation and delivery of equipment that the
supplier sells or leases for use within this state and that the dealer prepares
for delivery and delivers;
(11)
Require ((an equipment)) a dealer to assent to a release,
assignment, novation, waiver, or estoppel that would relieve any person from
liability imposed by this chapter; or
(((10)))
(12)(a) Unreasonably withhold consent, in the event of the death of the
((equipment)) dealer or the principal owner of the ((equipment))
dealership, to the transfer of the ((equipment)) dealer's interest in
the ((equipment)) dealership ((to a member or members of the family
of the equipment dealer, the principal owner of the equipment dealership, or))
to another qualified individual if the ((family member or other))
qualified individual meets the reasonable financial, business experience, and
character standards required by the supplier. Should a supplier determine that
the designated ((family member or other)) qualified individual does not
meet those reasonable written standards, it shall provide the ((equipment))
dealership, heirs to the dealership, or the estate of the dealer with
written notice of its objection and specific reasons for withholding its
consent. A supplier shall have sixty days to consider ((an equipment)) a
dealer's request to make a transfer ((to a family member or other qualified
individual)). If the ((family member or other)) qualified
individual reasonably satisfies the supplier's objections within sixty days,
the supplier shall approve the transfer. ((As used in this section,
"family" includes a spouse, parents, siblings, children,
stepchildren, sons-in-law, daughters-in-law, and lineal descendants, including
those by adoption, of the equipment dealer or principal owner of the equipment
dealership.)) Nothing in this section shall entitle a ((family member
or other)) qualified individual ((of a deceased dealer or principal
owner of the equipment dealership)) to continue to operate the dealership
without the consent of the supplier.
(b)
If a supplier and ((equipment)) dealer have duly executed an agreement
concerning succession rights prior to the ((equipment)) dealer's death
and the agreement has not been revoked, the agreement shall be observed even if
it designates someone other than the surviving spouse or heirs of the decedent
as the successor.
Sec.
8. RCW
19.98.130 and 1990 c 124 s 4 are each amended to read as follows:
(1)
Except where a grounds for termination or nonrenewal of a dealer agreement or a
substantial change in ((an equipment)) a dealer's competitive
circumstances are contained in subsection (2)(a), (b), (c), (d), (e), or (f) of
this section, a supplier shall give ((an equipment)) a dealer
ninety days' written notice of the supplier's intent to terminate, cancel, or
not renew a dealer agreement or substantially change the ((equipment))
dealer's competitive circumstances. The notice shall state all reasons
constituting good cause for termination, cancellation, or nonrenewal and shall
provide, except for termination pursuant to subsection (2)(a), (b), (c), (d),
or (e) of this section, that the ((equipment)) dealer has sixty days in
which to cure any claimed deficiency. If the deficiency is rectified within
sixty days, the notice shall be void. The contractual terms of the dealer
agreement shall not expire or the ((equipment)) dealer's competitive
circumstances shall not be substantially changed without the written consent of
the ((equipment)) dealer prior to the expiration of at least ninety days
following such notice.
(2)
As used in RCW 19.98.100 through 19.98.150 and 19.98.911, a termination by a
supplier of a dealer agreement shall be with good cause when the ((equipment))
dealer:
(a)
Has transferred a controlling ownership interest in the ((equipment))
dealership without the supplier's consent;
(b)
Has made a material misrepresentation to the supplier;
(c)
Has filed a voluntary petition in bankruptcy or has had an involuntary petition
in bankruptcy filed against the ((equipment)) dealer which has not been
discharged within sixty days after the filing, is in default under the
provisions of a security agreement in effect with the supplier, or is insolvent
or in receivership;
(d)
Has been convicted of a crime, punishable for a term of imprisonment for one
year or more;
(e)
Has failed to operate in the normal course of business for ten consecutive
business days or has terminated the business;
(f)
Has relocated the ((equipment)) dealer's place of business without
supplier's consent;
(g)
Has consistently engaged in business practices that are detrimental to the
consumer or supplier by way of excessive pricing, misleading advertising, or
failure to provide service and replacement parts or perform warranty
obligations;
(h)
Has inadequately represented the supplier over a measured period causing lack
of performance in sales, service, or warranty areas and failed to achieve
market penetration at levels consistent with similarly situated ((equipment))
dealerships in the state based on available record information;
(i)
Has consistently failed to meet building and housekeeping requirements or
failed to provide adequate sales, service, or parts personnel commensurate with
the dealer agreement;
(j)
Has consistently failed to comply with the applicable licensing laws pertaining
to the products and services being represented for and on supplier's behalf; or
(k)
Has consistently failed to comply with the terms of the dealer agreement.
(3)(a)
Notwithstanding the provisions of subsections (1) and (2) of this section,
before the termination or nonrenewal of a dealer agreement based upon a
supplier's claim that the dealer has failed to meet reasonable marketing
criteria or market penetration, the supplier shall provide written notice of
its intention at least one year in advance.
(b)
Upon the end of the one‑year period established in this subsection (3),
the supplier may terminate or elect not to renew the dealer agreement only upon
written notice specifying the reasons for determining that the dealer failed to
meet reasonable marketing criteria or market penetration. The notice must
specify that termination or nonrenewal is effective one hundred eighty days
from the date of the notice.
NEW
SECTION. Sec. 9. A
new section is added to chapter 19.98 RCW to read as follows:
When
a supplier enters into an agreement to establish a new dealer or dealership or
to relocate a current dealer or dealership for a particular product line or
make of equipment, the supplier must give written notice of such an agreement
by certified mail to all existing dealers or dealerships whose assigned area of
responsibility is contiguous to the new dealer or dealership location. If no
area of responsibility has been assigned then the supplier must give written
notice of such an agreement by certified mail to the dealers or dealerships
within a seventy‑five mile radius of the new dealer location. The
supplier must provide in its written notice the following information about the
proposed new or relocated dealer or dealership:
(1)
The proposed location;
(2)
The proposed date for commencement of operation at the new location; and
(3)
The identities of all existing dealers or dealerships or dealerships whose
assigned area of responsibility is contiguous to the new dealer or dealership
location. If no area of responsibility has been assigned then the supplier
must give written notice of such an agreement by certified mail to the dealers
or dealerships located within a seventy‑five mile radius of the new
dealer location.
NEW
SECTION. Sec. 10. A
new section is added to chapter 19.98 RCW to read as follows:
(1)
In the event a warranty claim is submitted by a dealer to a supplier while a
dealer agreement is in effect, or after the termination of a dealer agreement,
if the claim is for work performed before the effective date of the dealer
agreement termination:
(a)
A supplier shall fulfill any warranty agreement with each of its dealers for
labor and parts relative to repairs of equipment covered by the terms of such
an agreement.
(b)
The supplier must approve or disapprove, in writing, any claim submitted by a
dealer for warranty compensation for labor or parts within thirty days of
receipt of such a claim by the supplier.
(c)
The supplier must pay to the submitting dealer any approved dealer claim within
thirty days following approval of such a claim.
(d)
If a supplier disapproves a dealer warranty claim, the supplier must state the
specific reasons for rejecting the claim in its written notification required
by (b) of this subsection.
(e)
A claim that is disapproved by the supplier based upon the dealer's failure to
properly follow the procedural or technical requirements for submission of
warranty claims may be resubmitted in proper form by the dealer within thirty
days of receipt by the dealer of the supplier's notification of such a
disapproval.
(f)
A claim that is not specifically disapproved, in writing, by the supplier
within thirty days following the supplier's receipt of such a claim is
conclusively deemed to be approved and must be paid to the submitting dealer
within thirty days following expiration of the notification period established
in (b) of this subsection.
(g)
A supplier may audit warranty claims submitted by its dealers for a period of
up to one year following payment of the claims, and may charge back to its
dealers any amounts paid based upon claims shown by audit to be false. The
supplier has the right to adjust claims for errors discovered during the audit,
and if necessary, to adjust claims paid in error.
(2)
A supplier must compensate its dealers for warranty claims pursuant to the
following schedule:
(a)
Reasonable compensation must be made by the supplier for costs associated with
diagnostic work, repair service, parts, and labor that are related to warranted
repairs;
(b)
Time allowances for diagnosis and performance of warranty work and service must
be adequate for the work being performed;
(c)
The hourly labor rate for which the dealer is compensated may not be less than
the rate charged by the dealer for like services provided to nonwarranty
customers for nonwarranted service; and
(d)
Compensation for parts used in the performance of a warranted repair may not be
less than the amount paid by the dealer to obtain the parts, plus a reasonable
allowance for shipping and handling.
(3)
Notwithstanding the provisions of subsections (1) and (2) of this section, a
supplier may withhold payment of a warranty claim as setoff against reasonable
obligations otherwise owed by the dealer to the supplier.
(4)
Notwithstanding the provisions of subsection (2) of this section, a dealer may
accept the supplier's reimbursement terms and conditions in lieu of the terms
and conditions set forth in subsection (2) of this section.
NEW
SECTION. Sec. 11. A
new section is added to chapter 19.98 RCW to read as follows:
A
supplier may not audit a dealer's records with respect to any warranty claim
submitted more than one year before the audit, unless a false claim is
disclosed. However, the supplier has the right to audit warranty claims
submitted more than one year before the audit when the audit discloses a false
claim.
NEW
SECTION. Sec. 12. A
new section is added to chapter 19.98 RCW to read as follows:
(1)
In the event that the supplier fails to make payment in accordance with the
terms of section 10 of this act or violates any other provisions of section 10
or 11 of this act, a dealer may bring an action in a court of competent
jurisdiction to obtain payment of a warranty claim submitted to a supplier.
(2)
In the event that the court finds that the supplier has failed to make payment
in accordance with the terms of section 10 of this act or has violated any
other provisions of section 10 or 11 of this act, the court shall award the
dealer costs and reasonable attorneys' fees.
NEW
SECTION. Sec. 13. A
new section is added to chapter 19.98 RCW to read as follows:
(1)
In the event a supplier requires the dealer to work on equipment to enhance the
safe operation of the equipment, the supplier must reimburse the dealer for
parts, labor, and transportation of equipment or personnel to perform the work
on equipment covered by the requirements of the supplier.
(2)
In the event a supplier requires the dealer to perform product improvement work
on equipment, the supplier must reimburse the dealer for parts and labor.
(3)
For purposes of this section, a supplier must compensate its dealers pursuant
to the following schedule:
(a)
The hourly labor rate for which the dealer is compensated may not be less than
the rate charged by the dealer for like services provided; and
(b)
Compensation for parts used in the performance of safety enhancements or
product improvements as requested by the supplier may not be less than the
amount paid by the dealer to obtain the parts, plus a reasonable allowance for
shipping and handling.
(4)
Notwithstanding the provisions of subsection (3) of this section, a dealer may
accept the supplier's reimbursement terms and conditions in lieu of the terms
and conditions set forth in subsection (3) of this section.
NEW
SECTION. Sec. 14. A
new section is added to chapter 19.98 RCW to read as follows:
(1)
Any party to a dealer agreement aggrieved by the conduct of the other party to
the agreement with respect to the provisions of this chapter may seek
arbitration of the issues involved in the decision of the other party under the
provisions of RCW 7.04.010 through 7.04.210. The arbitration is pursuant to
the commercial arbitration rules of the American arbitration association. The
findings and conclusions of the arbitrator or panel of arbitrators is binding
upon both parties. Upon demand for arbitration by one party, it is presumed
for purposes of the provisions of RCW 7.04.010 through 7.04.210 that the
parties have consented to arbitration, and that the costs of witness fees and
other fees in the case, together with reasonable attorneys' fees, must be paid
by the losing party.
(2)
Notwithstanding subsection (1) of this section, any dealer has a cause of
action against a supplier for damages sustained by the dealer as a consequence
of the supplier's violation of any provisions of RCW 19.98.120 or 19.98.130,
together with the actual costs of such action, including reasonable attorneys'
fees.
(3)
The dealer may also be granted injunctive relief against unlawful termination,
cancellation, nonrenewal, or change in competitive circumstances as determined
under subsection (1) of this section or by a court.
(4)
The remedies set forth in this section may not be considered exclusive and are
in addition to any other remedies permitted by law, unless the parties have
chosen binding arbitration under subsection (1) of this section.
NEW
SECTION. Sec. 15. RCW
19.98.110 (Definitions) and 2000 c 171 s 67 & 1990 c 124 s 2
are each repealed.
