IC 9-23-3-0.3 "Broker"
Sec. 0.3. As used in this chapter, "broker" means a person who,
for a fee, a commission, or other valuable consideration, arranges or
offers to arrange a transaction involving the sale, for purposes other
than resale, of a new or used motor vehicle and who is not:
(1) a dealer or an employee of a dealer;
(2) a distributor or an employee of a distributor; or
(3) at any point in the transaction, the bona fide owner of the
vehicle involved in the transaction. As added by P.L.268-2003, SEC.28.
IC 9-23-3-0.5 "Uniform time standards manual"
Sec. 0.5. As used in this chapter, "uniform time standards
manual", for purposes of section 14(c) of this chapter, means a
schedule established by a manufacturer or distributor setting forth the
time allowances for the diagnosis and performance of warranty work
and service. As added by P.L.78-2002, SEC.5. Amended by P.L.1-2003, SEC.51.
IC 9-23-3-1 Requiring purchase of equipment, part, or accessory as condition
of sale
Sec. 1. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle, as a condition of sale and delivery of the motor
vehicle, to purchase any equipment, part, or accessory not ordered by
the purchaser unless the equipment, part, or accessory is already
installed on the motor vehicle when received by or offered for sale
by the dealer or is required by law. As added by P.L.2-1991, SEC.11.
IC 9-23-3-2 Willful failure of dealer to perform vehicle delivery and
preparation obligations
Sec. 2. It is an unfair practice for a dealer to willfully fail to
perform the obligations placed on the dealer in connection with the
delivery and preparation of a new motor vehicle for retail sale as
provided in the manufacturer's or distributor's preparation and
delivery agreement applicable to the motor vehicle. As added by P.L.2-1991, SEC.11.
IC 9-23-3-3 Willful failure of dealer to perform warranty obligations
Sec. 3. It is an unfair practice for a dealer to willfully fail to
perform the obligations placed on the dealer in connection with the
manufacturer's or distributor's warranty agreement applicable to any
motor vehicle sold by that dealer. As added by P.L.2-1991, SEC.11.
IC 9-23-3-4 Sale of vehicle having trade name or mark for which dealer lacks
franchise
Sec. 4. It is an unfair practice for a dealer to sell any new motor
vehicle having a trade name, trade or service mark, or related
characteristics for which the dealer does not have a franchise in
effect at the time of the sale. However, vehicles having more than
one (1) or more trade name, service mark, or related characteristic as
a result of modification or further manufacture by a manufacturer,
converter manufacturer, or an automotive mobility dealer licensed
under this article may be sold by a franchisee appointed by that
manufacturer, converter manufacturer, or automotive mobility dealer. As added by P.L.2-1991, SEC.11. Amended by P.L.147-2009,
SEC.13.
IC 9-23-3-5 Willful failure of dealer to perform fiduciary duty to collect and
remit gross retail tax
Sec. 5. It is an unfair practice for a dealer to willfully fail to
perform the fiduciary duty imposed upon the dealer by IC 6-2.5-2-1
with regard to the collection and remittance of the gross retail tax.
Willful violation of the fiduciary duty includes written or oral
agreements between a dealer and a prospective purchaser that would
give the appearance that a bona fide trade-in has taken place, when
in fact the purpose of the agreement is to reduce the prospective
purchaser's gross retail tax and thereby deprive the state of revenue. As added by P.L.2-1991, SEC.11.
IC 9-23-3-6 Sale, exchange, or transfer by dealer of rebuilt vehicle without
disclosure of rebuilding
Sec. 6. It is an unfair practice for a dealer to sell, exchange, or
transfer a rebuilt vehicle without disclosing in writing to the
purchaser, customer, or transferee, before consummating the sale,
exchange, or transfer, the fact that the vehicle is a rebuilt vehicle if
the dealer knows or should reasonably know the vehicle is a rebuilt
vehicle. As added by P.L.2-1991, SEC.11.
IC 9-23-3-6.5 Document preparation fees
Sec. 6.5. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle as a condition of the sale and delivery of the
motor vehicle to pay a document preparation fee, unless the fee:
(1) reflects expenses actually incurred for the preparation of
documents;
(2) was affirmatively disclosed by the dealer;
(3) was negotiated by the dealer and the purchaser;
(4) is not for the preparation, handling, or service of documents
that are incidental to the extension of credit; and
(5) is set forth on a buyer's order or similar agreement by a
means other than preprinting. As added by P.L.102-1991, SEC.1.
IC 9-23-3-7 Violation of deceptive franchise practices provisions
Sec. 7. (a) It is an unfair practice for a manufacturer or distributor
to violate IC 23-2-2.7.
(b) It is an unfair practice for a manufacturer or distributor to
enter into an agreement in which a dealer is required to waive the
provisions of:
(1) this chapter; or
(2) IC 23-2-2.7.
However, this subsection does not apply to a voluntary agreement in
which separate consideration is offered and accepted. As added by P.L.2-1991, SEC.11. Amended by P.L.17-2010, SEC.2.
IC 9-23-3-8 Manufacturer or distributor coercing dealer orders of parts,
accessories, or equipment
Sec. 8. It is an unfair practice for a manufacturer or distributor to
coerce a dealer to order from a person parts, accessories, equipment,
machinery, tools, appliances, or any other commodity. As added by P.L.2-1991, SEC.11.
IC 9-23-3-9 Manufacturer or distributor requiring changes in capital structure
or business financing of dealer
Sec. 9. It is an unfair practice for a manufacturer or distributor to
prevent or require or attempt to prevent or require by contract or
otherwise, any change in the capital structure of a dealer or the
means by or through which the dealer finances the dealer's operation,
if the dealer at all times meets any reasonable capital standards
agreed to by the dealer and the manufacturer or distributor. A change
in capital structure does not cause a change in the principal
management or have the effect of a sale of the franchise without the
consent of the manufacturer or distributor. As added by P.L.2-1991, SEC.11.
IC 9-23-3-10 Manufacturer or distributor requiring changes in dealer
management
Sec. 10. It is an unfair practice for a manufacturer or distributor
to prevent or require or attempt to prevent or require a dealer to
change the dealer's executive management, other than the principal
dealer operator or operators if the franchise was granted in reliance
upon the personal qualifications of those persons.
As added by P.L.2-1991, SEC.11.
IC 9-23-3-11 Restraint by manufacturer or distributor on sale or transfer of
interest by dealer or its officers, partners, or stockholders
Sec. 11. It is an unfair practice for a manufacturer or distributor
to prevent or require or attempt to prevent or require by contract or
otherwise, a dealer or an officer, a partner, or a stockholder of a
dealer to sell or transfer a part of the interest of any of them to any
other person or persons. A dealer, an officer, a partner, or a
stockholder may not sell, transfer, or assign the franchise or a right
under the franchise without the consent of the manufacturer or
distributor, which consent may not be unreasonably withheld. As added by P.L.2-1991, SEC.11.
IC 9-23-3-12 Manufacturer or distributor preventing dealer from receiving fair
compensation for franchised business
Sec. 12. It is an unfair practice for a manufacturer or distributor
to prevent or attempt to prevent a dealer from receiving fair and
reasonable compensation for the value of the franchised business as
a going concern. The dealer may not transfer or assign the dealer's
franchise without the consent of the manufacturer or distributor, and
the manufacturer or distributor may not unreasonably withhold
consent. As added by P.L.2-1991, SEC.11.
IC 9-23-3-13 Employment of unlicensed representative for manufacturer or
distributor
Sec. 13. It is an unfair practice for a manufacturer or distributor
to employ a person as a representative who has not been licensed
under this article. As added by P.L.2-1991, SEC.11.
IC 9-23-3-14 Payment of dealer for labor costs; uniform warranty
reimbursement policies
Sec. 14. (a) This section does not authorize a manufacturer or
distributor and its franchisees in Indiana to establish a uniform
hourly labor reimbursement rate effective for the entire state.
(b) It is an unfair practice for a manufacturer or distributor to fail
to compensate to a dealer the posted hourly labor rate for the work
and services the dealer is required to perform in connection with the
dealer's delivery and preparation obligations under any franchise or
fail to compensate to a dealer the posted hourly labor rate for labor
and other expenses incurred by the dealer under the manufacturer's
warranty agreements as long as the posted rate is reasonable.
Judgment of the reasonableness includes consideration of charges for
similar repairs by comparable repair facilities in the local area as
well as mechanic's wages and fringe benefits.
(c) A manufacturer or distributor and at least thirty percent (30%)
of its franchisees in Indiana of the same line make may agree in an
express written contract citing this section to a uniform warranty
reimbursement policy to be used by franchisees for the performance
of warranty repairs. The contract must include the reimbursement for
parts used in warranty repairs or the use of a uniform time standards
manual, or both. The allowance for diagnosis within the uniform
time standards manual must be reasonable and adequate for the work
and service to be performed. The manufacturer or distributor shall
have:
(1) only one (1) agreement with each line make; and
(2) a reasonable and fair procedure for franchisees to request a
modification or adjustment of a standard included in the
uniform time standards manual.
(d) A contract described in subsection (c) must meet the following
criteria:
(1) Establish a uniform parts reimbursement rate that must be
greater than the manufacturer's or distributor's nationally
established parts reimbursement rate in effect at the time the
contract becomes effective. A subsequent contract must include
a uniform reimbursement rate that is equal to or greater than the
rate in the immediately prior contract.
(2) Apply to all warranty repair orders written while the
agreement is in effect.
(3) At any time during the period the contract is in effect:
(A) be available to any franchisee of the same line make as
the franchisees who entered into the contract with the
manufacturer or distributor; and
(B) be available to the franchisee of the same line make on
the same terms as apply to the franchisees who entered into
the contract with the manufacturer or distributor.
(4) Be for a term not to exceed three (3) years.
(5) Allow any party to the uniform warranty reimbursement
policy to terminate the policy with thirty (30) days prior written
notice to all parties upon the annual anniversary of the policy,
if the policy is for at least one (1) year.
(6) Remain in effect for the entire life of the original period if
the manufacturer and at least one (1) franchisee remain parties
to the policy.
(e) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (c) may only seek to recover its costs
from a franchisee that receives a higher reimbursement rate, if
authorized by law, subject to the following:
(1) Costs may be recovered only by increasing invoice prices on
new vehicles received by the franchisee.
(2) A manufacturer or distributor may make an exception for
vehicles that are titled in the name of a purchaser in another
state. However, price increases imposed for the purpose of
recovering costs imposed by this section may vary from time to
time and from model to model and must apply uniformly to all
franchisees of the same line make that have requested
reimbursement for warranty repairs at a level higher than
provided for in the agreement.
(f) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (c) shall do the following:
(1) Certify to the secretary of state under oath, in a writing
signed by a representative of the manufacturer or distributor,
that at the time the contract was entered into at least thirty
percent (30%) of the franchisees of the line make were parties
to the contract.
(2) File a copy of the contract with the bureau at the time of the
certification.
(3) Maintain a file that contains the information upon which the
certification required under subdivision (1) is based for three
(3) years after the certification is made. As added by P.L.2-1991, SEC.11. Amended by P.L.78-2002, SEC.6;
P.L.184-2007, SEC.28.
IC 9-23-3-15 Payment or disapproval of dealer claims; notice of disapproval;
audits and charge backs
Sec. 15. (a) It is an unfair practice for a manufacturer or
distributor to:
(1) fail to pay all claims made by dealers for compensation for
delivery and preparation work and warranty work within thirty
(30) days after approval;
(2) fail to approve or disapprove the claims within thirty (30)
days after receipt; or
(3) disapprove a claim without notice to the dealer in writing of
the grounds for disapproval.
(b) A manufacturer or distributor may:
(1) audit claims made by a dealer; or
(2) charge back to a dealer any amounts paid on false or
unsubstantiated claims;
for up to two (2) years after the date on which a claim is paid.
However, the limitations of this subsection do not apply if the
manufacturer or distributor can prove fraud on a claim. A
manufacturer or distributor shall not discriminate among dealers with
regard to auditing or charging back claims. As added by P.L.2-1991, SEC.11. Amended by P.L.76-2007, SEC.1.
IC 9-23-3-16 Selling motor vehicle to unlicensed person for resale
Sec. 16. It is an unfair practice for a manufacturer or distributor
to sell a motor vehicle for resale to a person not licensed under this
article. As added by P.L.2-1991, SEC.11.
IC 9-23-3-17 Failure to indemnify or hold harmless dealer for losses, costs, and
expenses from suits for defects in vehicles or other goods or
services
Sec. 17. It is an unfair practice for a manufacturer or distributor
to refuse or fail to indemnify and hold harmless a dealer, upon
written notification from the dealer, from all losses, costs, and
expenses that result or arise from or are related to a complaint, claim,
defense, or suit against the dealer that concerns defects in a motor
vehicle or other goods or services that are the responsibility of the
manufacturer. As added by P.L.2-1991, SEC.11.
IC 9-23-3-18
Repealed
(Repealed by P.L.258-1999, SEC.3.)
IC 9-23-3-19 False, deceptive, or misleading advertising; other deceptive acts or
practices
Sec. 19. It is an unfair practice for an automobile auctioneer, a
wholesale dealer, or a transfer dealer, in connection with the
auctioneer's or dealer's business, to use false, deceptive, or
misleading advertising or to engage in deceptive acts or practices. As added by P.L.2-1991, SEC.11. Amended by P.L.268-2003,
SEC.29.
IC 9-23-3-20 Employees, agents, officers, partners, or representatives of licensee
Sec. 20. It is an unfair practice for an employee, an agent, an
officer, a partner, or a representative of a licensee to engage in a
practice prohibited by this chapter. As added by P.L.2-1991, SEC.11.
IC 9-23-3-21 Franchise termination
Sec. 21. It is an unfair practice for a manufacturer to terminate a
franchise in violation of IC 23-2-2.7-3. As added by P.L.2-1991, SEC.11.
IC 9-23-3-22 Transaction conditioned upon continuation of franchise
Sec. 22. (a) A dealer may not transfer, sell, or assign the business
and assets of a dealership or an interest in the dealership to another
person that contemplates or is conditioned upon a continuation of the
franchise relationship with the manufacturer or distributor unless the
dealer first:
(1) notifies the manufacturer or distributor of the dealer's
decision to make the transfer, assignment, or sale by written
notice; and
(2) obtains the approval of the manufacturer or distributor.
The dealer must provide the manufacturer or distributor with
completed application forms and related information generally used
by the manufacturer or distributor to conduct its review of such a
proposal, and a copy of all agreements regarding the proposed
transfer, assignment, or sale.
(b) The manufacturer or distributor shall send a letter by certified
mail to the dealer within sixty (60) days of receipt of the information
specified in subsection (a). The letter must indicate any disapproval
of the transfer, assignment, or sale and must set forth the material
reasons for the disapproval. If the manufacturer or distributor does
not respond by letter within the sixty (60) day period, the
manufacturer's or distributor's consent to the proposed transfer,
assignment, or sale is considered to have been granted. A
manufacturer or distributor may not unreasonably withhold approval
of a transfer, assignment, or sale.
(c) A manufacturer or distributor has a right of first refusal as
specified in the franchise agreement to acquire the new vehicle
dealer's assets or ownership if there is a proposed change of more
than fifty percent (50%) of the dealer's ownership or the transfer of
more than fifty percent (50%) of the new vehicle dealer's assets if all
of the following are met:
(1) The manufacturer or distributor notifies the dealer in writing
of its intent to exercise its right of first refusal within the sixty
(60) day notice limit provided in subsection (b).
(2) The exercise of the right of first refusal will result in the
dealer and the dealer's owners receiving consideration, terms,
and conditions that are either the same as or better than those
they have contracted to receive under the proposed change of
more than fifty percent (50%) of the dealer's ownership or the
transfer of more than fifty percent (50%) of the new vehicle
dealer's assets.
(3) The proposed change of the dealership's ownership or the
transfer of the new vehicle dealer's assets does not involve the
transfer of assets or the transfer or issuance of stock by the
dealer or one (1) or more of the dealer's owners to any of the
following:
(A) A designated family member or members including any
of the following members of one (1) or more dealer owners:
(i) The spouse.
(ii) A child.
(iii) A grandchild.
(iv) The spouse of a child or a grandchild.
(v) A sibling.
(vi) A parent.
(B) A manager:
(i) employed by the dealer in the dealership during the
previous four (4) years; and
(ii) who is otherwise qualified as a dealer operator.
(C) A partnership or corporation controlled by any of the
family members described in clause (A).
(D) A trust arrangement established or to be established:
(i) for the purpose of allowing the new vehicle dealer to
continue to qualify as such under the manufacturer's or
distributor's standards; or
(ii) to provide for the succession of the franchise
agreement to designated family members or qualified
management in the event of the death or incapacity of the
dealer or its principal owner or owners.
(4) Except as otherwise provided in this subsection, the
manufacturer or distributor agrees to pay the reasonable
expenses, including reasonable attorney's fees, that do not
exceed the usual, customary, and reasonable fees charged for
similar work done for other clients, and that are incurred by the
proposed owner or transferee before the manufacturer's or
distributor's exercise of its right of first refusal in negotiating
and implementing the contract for the proposed change of the
dealer ownership or the transfer of the new vehicle dealer's
assets. Payment of expenses and attorney's fees is not required
if the dealer has failed to submit an accounting of those
expenses within twenty (20) days of the dealer's receipt of the
manufacturer's or distributor's written request for such an
accounting. An expense accounting may be requested by a
manufacturer or distributor before exercising its right of first
refusal.
(d) Violation of this section by the manufacturer or distributor is
an unfair practice by a manufacturer or distributor. As added by P.L.152-1999, SEC.1.
IC 9-23-3-23 Manufacturer or distributor requiring changes in franchise or
dealership
Sec. 23. It is an unfair practice for a manufacturer, distributor,
officer, or agent to do any of the following:
(1) Require, coerce, or attempt to coerce any new motor vehicle
dealer in Indiana to:
(A) change location of the dealership;
(B) make any substantial alterations to the use of franchises;
or
(C) make any substantial alterations to the dealership
premises or facilities;
if to do so would be unreasonable or would not be justified by
current economic conditions or reasonable business
considerations. This subdivision does not prevent a
manufacturer or distributor from establishing and enforcing
reasonable facility requirements.
(2) Require, coerce, or attempt to coerce any new motor vehicle
dealer in Indiana to divest its ownership of or management in
another line or make of motor vehicles that the dealer has
established in its dealership facilities with the prior written
approval of the manufacturer or distributor.
(3) Establish or acquire wholly or partially a franchisor owned
outlet engaged wholly or partially in a substantially identical
business to that of the franchisee within the exclusive territory
granted the franchisee by the franchise agreement or, if no
exclusive territory is designated, competing unfairly with the
franchisee within a reasonable market area. A franchisor is not
considered to be competing unfairly if operating:
(A) a business for less than two (2) years;
(B) in a bona fide retail operation that is for sale to any
qualified independent person at a fair and reasonable price;
or
(C) in a bona fide relationship in which an independent
person or persons have made a significant investment subject
to loss in the business operation and can reasonably expect
to acquire majority ownership or managerial control of the
business on reasonable terms and conditions.
This subdivision shall not apply to recreational vehicle
manufacturer franchisors. As added by P.L.152-1999, SEC.2. Amended by P.L.118-2001,
SEC.3; P.L.49-2007, SEC.1.
IC 9-23-3-24 Relocation of new motor vehicle dealers
Sec. 24. (a) This section does not apply to the relocation of a new
motor vehicle dealer to a location that is not more than two (2) miles
from its established place of business.
(b) This section does not apply to the reopening or replacement in
a relevant market area of a closed dealership that has been closed
within the preceding year, if the established place of business of the
reopened or replacement dealer is within two (2) miles of the
established place of business of the closed dealership.
(c) Before a franchisor enters into a franchise establishing or
relocating a new motor vehicle dealer within a relevant market area
where the same line make is represented, the franchisor shall give
written notice to each new motor vehicle dealer of the same line
make in the relevant market area of the franchisor's intention to
establish an additional dealer or to relocate an existing dealer within
that relevant market area.
(d) Not later than thirty (30) days after:
(1) receiving the notice provided for in subsection (c); or
(2) the end of any appeal procedure provided by the franchisor;
a new motor vehicle dealer may bring a declaratory judgment action
in the circuit court for the county in which the new motor vehicle
dealer is located to determine whether good cause exists for the
establishing or relocating of a proposed new motor vehicle dealer. If
an action is filed, the franchisor may not establish or relocate the
proposed new motor vehicle dealer until the circuit court has
rendered a decision on the matter. An action brought under this
section shall be given precedence over all other civil matters on the
court's docket.
(e) In determining whether good cause exists for establishing or
relocating an additional new motor vehicle dealer for the same line
make, the court shall take into consideration the existing
circumstances, including the following:
(1) Permanency of the investment.
(2) Effect on the retail new motor vehicle business and the
consuming public in the relevant market area.
(3) Whether it is injurious or beneficial to the public welfare.
(4) Whether the new motor vehicle dealers of the same line
make in that relevant market area are providing adequate
competition and convenient consumer care for the motor
vehicles of that line make in the market area, including the
adequacy of motor vehicle sales and qualified service
personnel.
(5) Whether the establishment or relocation of the new motor
vehicle dealer would promote competition.
(6) Growth or decline of the population and the number of new
motor vehicle registrations in the relevant market area.
(7) The effect on the relocating dealer of a denial of its
relocation into the relevant market area. As added by P.L.118-2001, SEC.4.
IC 9-23-3-25 Acting, offering to act as, or professing to be a broker of vehicles
Sec. 25. It is an unfair practice for a person to:
(1) act as;
(2) offer to act as; or
(3) profess to be;
a broker in the advertising, buying, or selling of at least twelve (12)
new or used vehicles per year. As added by P.L.268-2003, SEC.30.
IC 9-23-3-0.3 "Broker"
Sec. 0.3. As used in this chapter, "broker" means a person who,
for a fee, a commission, or other valuable consideration, arranges or
offers to arrange a transaction involving the sale, for purposes other
than resale, of a new or used motor vehicle and who is not:
(1) a dealer or an employee of a dealer;
(2) a distributor or an employee of a distributor; or
(3) at any point in the transaction, the bona fide owner of the
vehicle involved in the transaction. As added by P.L.268-2003, SEC.28.
IC 9-23-3-0.5 "Uniform time standards manual"
Sec. 0.5. As used in this chapter, "uniform time standards
manual", for purposes of section 14(c) of this chapter, means a
schedule established by a manufacturer or distributor setting forth the
time allowances for the diagnosis and performance of warranty work
and service. As added by P.L.78-2002, SEC.5. Amended by P.L.1-2003, SEC.51.
IC 9-23-3-1 Requiring purchase of equipment, part, or accessory as condition
of sale
Sec. 1. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle, as a condition of sale and delivery of the motor
vehicle, to purchase any equipment, part, or accessory not ordered by
the purchaser unless the equipment, part, or accessory is already
installed on the motor vehicle when received by or offered for sale
by the dealer or is required by law. As added by P.L.2-1991, SEC.11.
IC 9-23-3-2 Willful failure of dealer to perform vehicle delivery and
preparation obligations
Sec. 2. It is an unfair practice for a dealer to willfully fail to
perform the obligations placed on the dealer in connection with the
delivery and preparation of a new motor vehicle for retail sale as
provided in the manufacturer's or distributor's preparation and
delivery agreement applicable to the motor vehicle. As added by P.L.2-1991, SEC.11.
IC 9-23-3-3 Willful failure of dealer to perform warranty obligations
Sec. 3. It is an unfair practice for a dealer to willfully fail to
perform the obligations placed on the dealer in connection with the
manufacturer's or distributor's warranty agreement applicable to any
motor vehicle sold by that dealer. As added by P.L.2-1991, SEC.11.
IC 9-23-3-4 Sale of vehicle having trade name or mark for which dealer lacks
franchise
Sec. 4. It is an unfair practice for a dealer to sell any new motor
vehicle having a trade name, trade or service mark, or related
characteristics for which the dealer does not have a franchise in
effect at the time of the sale. However, vehicles having more than
one (1) or more trade name, service mark, or related characteristic as
a result of modification or further manufacture by a manufacturer,
converter manufacturer, or an automotive mobility dealer licensed
under this article may be sold by a franchisee appointed by that
manufacturer, converter manufacturer, or automotive mobility dealer. As added by P.L.2-1991, SEC.11. Amended by P.L.147-2009,
SEC.13.
IC 9-23-3-5 Willful failure of dealer to perform fiduciary duty to collect and
remit gross retail tax
Sec. 5. It is an unfair practice for a dealer to willfully fail to
perform the fiduciary duty imposed upon the dealer by IC 6-2.5-2-1
with regard to the collection and remittance of the gross retail tax.
Willful violation of the fiduciary duty includes written or oral
agreements between a dealer and a prospective purchaser that would
give the appearance that a bona fide trade-in has taken place, when
in fact the purpose of the agreement is to reduce the prospective
purchaser's gross retail tax and thereby deprive the state of revenue. As added by P.L.2-1991, SEC.11.
IC 9-23-3-6 Sale, exchange, or transfer by dealer of rebuilt vehicle without
disclosure of rebuilding
Sec. 6. It is an unfair practice for a dealer to sell, exchange, or
transfer a rebuilt vehicle without disclosing in writing to the
purchaser, customer, or transferee, before consummating the sale,
exchange, or transfer, the fact that the vehicle is a rebuilt vehicle if
the dealer knows or should reasonably know the vehicle is a rebuilt
vehicle. As added by P.L.2-1991, SEC.11.
IC 9-23-3-6.5 Document preparation fees
Sec. 6.5. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle as a condition of the sale and delivery of the
motor vehicle to pay a document preparation fee, unless the fee:
(1) reflects expenses actually incurred for the preparation of
documents;
(2) was affirmatively disclosed by the dealer;
(3) was negotiated by the dealer and the purchaser;
(4) is not for the preparation, handling, or service of documents
that are incidental to the extension of credit; and
(5) is set forth on a buyer's order or similar agreement by a
means other than preprinting. As added by P.L.102-1991, SEC.1.
IC 9-23-3-7 Violation of deceptive franchise practices provisions
Sec. 7. (a) It is an unfair practice for a manufacturer or distributor
to violate IC 23-2-2.7.
(b) It is an unfair practice for a manufacturer or distributor to
enter into an agreement in which a dealer is required to waive the
provisions of:
(1) this chapter; or
(2) IC 23-2-2.7.
However, this subsection does not apply to a voluntary agreement in
which separate consideration is offered and accepted. As added by P.L.2-1991, SEC.11. Amended by P.L.17-2010, SEC.2.
IC 9-23-3-8 Manufacturer or distributor coercing dealer orders of parts,
accessories, or equipment
Sec. 8. It is an unfair practice for a manufacturer or distributor to
coerce a dealer to order from a person parts, accessories, equipment,
machinery, tools, appliances, or any other commodity. As added by P.L.2-1991, SEC.11.
IC 9-23-3-9 Manufacturer or distributor requiring changes in capital structure
or business financing of dealer
Sec. 9. It is an unfair practice for a manufacturer or distributor to
prevent or require or attempt to prevent or require by contract or
otherwise, any change in the capital structure of a dealer or the
means by or through which the dealer finances the dealer's operation,
if the dealer at all times meets any reasonable capital standards
agreed to by the dealer and the manufacturer or distributor. A change
in capital structure does not cause a change in the principal
management or have the effect of a sale of the franchise without the
consent of the manufacturer or distributor. As added by P.L.2-1991, SEC.11.
IC 9-23-3-10 Manufacturer or distributor requiring changes in dealer
management
Sec. 10. It is an unfair practice for a manufacturer or distributor
to prevent or require or attempt to prevent or require a dealer to
change the dealer's executive management, other than the principal
dealer operator or operators if the franchise was granted in reliance
upon the personal qualifications of those persons.
As added by P.L.2-1991, SEC.11.
IC 9-23-3-11 Restraint by manufacturer or distributor on sale or transfer of
interest by dealer or its officers, partners, or stockholders
Sec. 11. It is an unfair practice for a manufacturer or distributor
to prevent or require or attempt to prevent or require by contract or
otherwise, a dealer or an officer, a partner, or a stockholder of a
dealer to sell or transfer a part of the interest of any of them to any
other person or persons. A dealer, an officer, a partner, or a
stockholder may not sell, transfer, or assign the franchise or a right
under the franchise without the consent of the manufacturer or
distributor, which consent may not be unreasonably withheld. As added by P.L.2-1991, SEC.11.
IC 9-23-3-12 Manufacturer or distributor preventing dealer from receiving fair
compensation for franchised business
Sec. 12. It is an unfair practice for a manufacturer or distributor
to prevent or attempt to prevent a dealer from receiving fair and
reasonable compensation for the value of the franchised business as
a going concern. The dealer may not transfer or assign the dealer's
franchise without the consent of the manufacturer or distributor, and
the manufacturer or distributor may not unreasonably withhold
consent. As added by P.L.2-1991, SEC.11.
IC 9-23-3-13 Employment of unlicensed representative for manufacturer or
distributor
Sec. 13. It is an unfair practice for a manufacturer or distributor
to employ a person as a representative who has not been licensed
under this article. As added by P.L.2-1991, SEC.11.
IC 9-23-3-14 Payment of dealer for labor costs; uniform warranty
reimbursement policies
Sec. 14. (a) This section does not authorize a manufacturer or
distributor and its franchisees in Indiana to establish a uniform
hourly labor reimbursement rate effective for the entire state.
(b) It is an unfair practice for a manufacturer or distributor to fail
to compensate to a dealer the posted hourly labor rate for the work
and services the dealer is required to perform in connection with the
dealer's delivery and preparation obligations under any franchise or
fail to compensate to a dealer the posted hourly labor rate for labor
and other expenses incurred by the dealer under the manufacturer's
warranty agreements as long as the posted rate is reasonable.
Judgment of the reasonableness includes consideration of charges for
similar repairs by comparable repair facilities in the local area as
well as mechanic's wages and fringe benefits.
(c) A manufacturer or distributor and at least thirty percent (30%)
of its franchisees in Indiana of the same line make may agree in an
express written contract citing this section to a uniform warranty
reimbursement policy to be used by franchisees for the performance
of warranty repairs. The contract must include the reimbursement for
parts used in warranty repairs or the use of a uniform time standards
manual, or both. The allowance for diagnosis within the uniform
time standards manual must be reasonable and adequate for the work
and service to be performed. The manufacturer or distributor shall
have:
(1) only one (1) agreement with each line make; and
(2) a reasonable and fair procedure for franchisees to request a
modification or adjustment of a standard included in the
uniform time standards manual.
(d) A contract described in subsection (c) must meet the following
criteria:
(1) Establish a uniform parts reimbursement rate that must be
greater than the manufacturer's or distributor's nationally
established parts reimbursement rate in effect at the time the
contract becomes effective. A subsequent contract must include
a uniform reimbursement rate that is equal to or greater than the
rate in the immediately prior contract.
(2) Apply to all warranty repair orders written while the
agreement is in effect.
(3) At any time during the period the contract is in effect:
(A) be available to any franchisee of the same line make as
the franchisees who entered into the contract with the
manufacturer or distributor; and
(B) be available to the franchisee of the same line make on
the same terms as apply to the franchisees who entered into
the contract with the manufacturer or distributor.
(4) Be for a term not to exceed three (3) years.
(5) Allow any party to the uniform warranty reimbursement
policy to terminate the policy with thirty (30) days prior written
notice to all parties upon the annual anniversary of the policy,
if the policy is for at least one (1) year.
(6) Remain in effect for the entire life of the original period if
the manufacturer and at least one (1) franchisee remain parties
to the policy.
(e) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (c) may only seek to recover its costs
from a franchisee that receives a higher reimbursement rate, if
authorized by law, subject to the following:
(1) Costs may be recovered only by increasing invoice prices on
new vehicles received by the franchisee.
(2) A manufacturer or distributor may make an exception for
vehicles that are titled in the name of a purchaser in another
state. However, price increases imposed for the purpose of
recovering costs imposed by this section may vary from time to
time and from model to model and must apply uniformly to all
franchisees of the same line make that have requested
reimbursement for warranty repairs at a level higher than
provided for in the agreement.
(f) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (c) shall do the following:
(1) Certify to the secretary of state under oath, in a writing
signed by a representative of the manufacturer or distributor,
that at the time the contract was entered into at least thirty
percent (30%) of the franchisees of the line make were parties
to the contract.
(2) File a copy of the contract with the bureau at the time of the
certification.
(3) Maintain a file that contains the information upon which the
certification required under subdivision (1) is based for three
(3) years after the certification is made. As added by P.L.2-1991, SEC.11. Amended by P.L.78-2002, SEC.6;
P.L.184-2007, SEC.28.
IC 9-23-3-15 Payment or disapproval of dealer claims; notice of disapproval;
audits and charge backs
Sec. 15. (a) It is an unfair practice for a manufacturer or
distributor to:
(1) fail to pay all claims made by dealers for compensation for
delivery and preparation work and warranty work within thirty
(30) days after approval;
(2) fail to approve or disapprove the claims within thirty (30)
days after receipt; or
(3) disapprove a claim without notice to the dealer in writing of
the grounds for disapproval.
(b) A manufacturer or distributor may:
(1) audit claims made by a dealer; or
(2) charge back to a dealer any amounts paid on false or
unsubstantiated claims;
for up to two (2) years after the date on which a claim is paid.
However, the limitations of this subsection do not apply if the
manufacturer or distributor can prove fraud on a claim. A
manufacturer or distributor shall not discriminate among dealers with
regard to auditing or charging back claims. As added by P.L.2-1991, SEC.11. Amended by P.L.76-2007, SEC.1.
IC 9-23-3-16 Selling motor vehicle to unlicensed person for resale
Sec. 16. It is an unfair practice for a manufacturer or distributor
to sell a motor vehicle for resale to a person not licensed under this
article. As added by P.L.2-1991, SEC.11.
IC 9-23-3-17 Failure to indemnify or hold harmless dealer for losses, costs, and
expenses from suits for defects in vehicles or other goods or
services
Sec. 17. It is an unfair practice for a manufacturer or distributor
to refuse or fail to indemnify and hold harmless a dealer, upon
written notification from the dealer, from all losses, costs, and
expenses that result or arise from or are related to a complaint, claim,
defense, or suit against the dealer that concerns defects in a motor
vehicle or other goods or services that are the responsibility of the
manufacturer. As added by P.L.2-1991, SEC.11.
IC 9-23-3-18
Repealed
(Repealed by P.L.258-1999, SEC.3.)
IC 9-23-3-19 False, deceptive, or misleading advertising; other deceptive acts or
practices
Sec. 19. It is an unfair practice for an automobile auctioneer, a
wholesale dealer, or a transfer dealer, in connection with the
auctioneer's or dealer's business, to use false, deceptive, or
misleading advertising or to engage in deceptive acts or practices. As added by P.L.2-1991, SEC.11. Amended by P.L.268-2003,
SEC.29.
IC 9-23-3-20 Employees, agents, officers, partners, or representatives of licensee
Sec. 20. It is an unfair practice for an employee, an agent, an
officer, a partner, or a representative of a licensee to engage in a
practice prohibited by this chapter. As added by P.L.2-1991, SEC.11.
IC 9-23-3-21 Franchise termination
Sec. 21. It is an unfair practice for a manufacturer to terminate a
franchise in violation of IC 23-2-2.7-3. As added by P.L.2-1991, SEC.11.
IC 9-23-3-22 Transaction conditioned upon continuation of franchise
Sec. 22. (a) A dealer may not transfer, sell, or assign the business
and assets of a dealership or an interest in the dealership to another
person that contemplates or is conditioned upon a continuation of the
franchise relationship with the manufacturer or distributor unless the
dealer first:
(1) notifies the manufacturer or distributor of the dealer's
decision to make the transfer, assignment, or sale by written
notice; and
(2) obtains the approval of the manufacturer or distributor.
The dealer must provide the manufacturer or distributor with
completed application forms and related information generally used
by the manufacturer or distributor to conduct its review of such a
proposal, and a copy of all agreements regarding the proposed
transfer, assignment, or sale.
(b) The manufacturer or distributor shall send a letter by certified
mail to the dealer within sixty (60) days of receipt of the information
specified in subsection (a). The letter must indicate any disapproval
of the transfer, assignment, or sale and must set forth the material
reasons for the disapproval. If the manufacturer or distributor does
not respond by letter within the sixty (60) day period, the
manufacturer's or distributor's consent to the proposed transfer,
assignment, or sale is considered to have been granted. A
manufacturer or distributor may not unreasonably withhold approval
of a transfer, assignment, or sale.
(c) A manufacturer or distributor has a right of first refusal as
specified in the franchise agreement to acquire the new vehicle
dealer's assets or ownership if there is a proposed change of more
than fifty percent (50%) of the dealer's ownership or the transfer of
more than fifty percent (50%) of the new vehicle dealer's assets if all
of the following are met:
(1) The manufacturer or distributor notifies the dealer in writing
of its intent to exercise its right of first refusal within the sixty
(60) day notice limit provided in subsection (b).
(2) The exercise of the right of first refusal will result in the
dealer and the dealer's owners receiving consideration, terms,
and conditions that are either the same as or better than those
they have contracted to receive under the proposed change of
more than fifty percent (50%) of the dealer's ownership or the
transfer of more than fifty percent (50%) of the new vehicle
dealer's assets.
(3) The proposed change of the dealership's ownership or the
transfer of the new vehicle dealer's assets does not involve the
transfer of assets or the transfer or issuance of stock by the
dealer or one (1) or more of the dealer's owners to any of the
following:
(A) A designated family member or members including any
of the following members of one (1) or more dealer owners:
(i) The spouse.
(ii) A child.
(iii) A grandchild.
(iv) The spouse of a child or a grandchild.
(v) A sibling.
(vi) A parent.
(B) A manager:
(i) employed by the dealer in the dealership during the
previous four (4) years; and
(ii) who is otherwise qualified as a dealer operator.
(C) A partnership or corporation controlled by any of the
family members described in clause (A).
(D) A trust arrangement established or to be established:
(i) for the purpose of allowing the new vehicle dealer to
continue to qualify as such under the manufacturer's or
distributor's standards; or
(ii) to provide for the succession of the franchise
agreement to designated family members or qualified
management in the event of the death or incapacity of the
dealer or its principal owner or owners.
(4) Except as otherwise provided in this subsection, the
manufacturer or distributor agrees to pay the reasonable
expenses, including reasonable attorney's fees, that do not
exceed the usual, customary, and reasonable fees charged for
similar work done for other clients, and that are incurred by the
proposed owner or transferee before the manufacturer's or
distributor's exercise of its right of first refusal in negotiating
and implementing the contract for the proposed change of the
dealer ownership or the transfer of the new vehicle dealer's
assets. Payment of expenses and attorney's fees is not required
if the dealer has failed to submit an accounting of those
expenses within twenty (20) days of the dealer's receipt of the
manufacturer's or distributor's written request for such an
accounting. An expense accounting may be requested by a
manufacturer or distributor before exercising its right of first
refusal.
(d) Violation of this section by the manufacturer or distributor is
an unfair practice by a manufacturer or distributor. As added by P.L.152-1999, SEC.1.
IC 9-23-3-23 Manufacturer or distributor requiring changes in franchise or
dealership
Sec. 23. It is an unfair practice for a manufacturer, distributor,
officer, or agent to do any of the following:
(1) Require, coerce, or attempt to coerce any new motor vehicle
dealer in Indiana to:
(A) change location of the dealership;
(B) make any substantial alterations to the use of franchises;
or
(C) make any substantial alterations to the dealership
premises or facilities;
if to do so would be unreasonable or would not be justified by
current economic conditions or reasonable business
considerations. This subdivision does not prevent a
manufacturer or distributor from establishing and enforcing
reasonable facility requirements.
(2) Require, coerce, or attempt to coerce any new motor vehicle
dealer in Indiana to divest its ownership of or management in
another line or make of motor vehicles that the dealer has
established in its dealership facilities with the prior written
approval of the manufacturer or distributor.
(3) Establish or acquire wholly or partially a franchisor owned
outlet engaged wholly or partially in a substantially identical
business to that of the franchisee within the exclusive territory
granted the franchisee by the franchise agreement or, if no
exclusive territory is designated, competing unfairly with the
franchisee within a reasonable market area. A franchisor is not
considered to be competing unfairly if operating:
(A) a business for less than two (2) years;
(B) in a bona fide retail operation that is for sale to any
qualified independent person at a fair and reasonable price;
or
(C) in a bona fide relationship in which an independent
person or persons have made a significant investment subject
to loss in the business operation and can reasonably expect
to acquire majority ownership or managerial control of the
business on reasonable terms and conditions.
This subdivision shall not apply to recreational vehicle
manufacturer franchisors. As added by P.L.152-1999, SEC.2. Amended by P.L.118-2001,
SEC.3; P.L.49-2007, SEC.1.
IC 9-23-3-24 Relocation of new motor vehicle dealers
Sec. 24. (a) This section does not apply to the relocation of a new
motor vehicle dealer to a location that is not more than two (2) miles
from its established place of business.
(b) This section does not apply to the reopening or replacement in
a relevant market area of a closed dealership that has been closed
within the preceding year, if the established place of business of the
reopened or replacement dealer is within two (2) miles of the
established place of business of the closed dealership.
(c) Before a franchisor enters into a franchise establishing or
relocating a new motor vehicle dealer within a relevant market area
where the same line make is represented, the franchisor shall give
written notice to each new motor vehicle dealer of the same line
make in the relevant market area of the franchisor's intention to
establish an additional dealer or to relocate an existing dealer within
that relevant market area.
(d) Not later than thirty (30) days after:
(1) receiving the notice provided for in subsection (c); or
(2) the end of any appeal procedure provided by the franchisor;
a new motor vehicle dealer may bring a declaratory judgment action
in the circuit court for the county in which the new motor vehicle
dealer is located to determine whether good cause exists for the
establishing or relocating of a proposed new motor vehicle dealer. If
an action is filed, the franchisor may not establish or relocate the
proposed new motor vehicle dealer until the circuit court has
rendered a decision on the matter. An action brought under this
section shall be given precedence over all other civil matters on the
court's docket.
(e) In determining whether good cause exists for establishing or
relocating an additional new motor vehicle dealer for the same line
make, the court shall take into consideration the existing
circumstances, including the following:
(1) Permanency of the investment.
(2) Effect on the retail new motor vehicle business and the
consuming public in the relevant market area.
(3) Whether it is injurious or beneficial to the public welfare.
(4) Whether the new motor vehicle dealers of the same line
make in that relevant market area are providing adequate
competition and convenient consumer care for the motor
vehicles of that line make in the market area, including the
adequacy of motor vehicle sales and qualified service
personnel.
(5) Whether the establishment or relocation of the new motor
vehicle dealer would promote competition.
(6) Growth or decline of the population and the number of new
motor vehicle registrations in the relevant market area.
(7) The effect on the relocating dealer of a denial of its
relocation into the relevant market area. As added by P.L.118-2001, SEC.4.
IC 9-23-3-25 Acting, offering to act as, or professing to be a broker of vehicles
Sec. 25. It is an unfair practice for a person to:
(1) act as;
(2) offer to act as; or
(3) profess to be;
a broker in the advertising, buying, or selling of at least twelve (12)
new or used vehicles per year. As added by P.L.268-2003, SEC.30.
IC 9-23-3-0.3 "Broker"
Sec. 0.3. As used in this chapter, "broker" means a person who,
for a fee, a commission, or other valuable consideration, arranges or
offers to arrange a transaction involving the sale, for purposes other
than resale, of a new or used motor vehicle and who is not:
(1) a dealer or an employee of a dealer;
(2) a distributor or an employee of a distributor; or
(3) at any point in the transaction, the bona fide owner of the
vehicle involved in the transaction. As added by P.L.268-2003, SEC.28.
IC 9-23-3-0.5 "Uniform time standards manual"
Sec. 0.5. As used in this chapter, "uniform time standards
manual", for purposes of section 14(c) of this chapter, means a
schedule established by a manufacturer or distributor setting forth the
time allowances for the diagnosis and performance of warranty work
and service. As added by P.L.78-2002, SEC.5. Amended by P.L.1-2003, SEC.51.
IC 9-23-3-1 Requiring purchase of equipment, part, or accessory as condition
of sale
Sec. 1. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle, as a condition of sale and delivery of the motor
vehicle, to purchase any equipment, part, or accessory not ordered by
the purchaser unless the equipment, part, or accessory is already
installed on the motor vehicle when received by or offered for sale
by the dealer or is required by law. As added by P.L.2-1991, SEC.11.
IC 9-23-3-2 Willful failure of dealer to perform vehicle delivery and
preparation obligations
Sec. 2. It is an unfair practice for a dealer to willfully fail to
perform the obligations placed on the dealer in connection with the
delivery and preparation of a new motor vehicle for retail sale as
provided in the manufacturer's or distributor's preparation and
delivery agreement applicable to the motor vehicle. As added by P.L.2-1991, SEC.11.
IC 9-23-3-3 Willful failure of dealer to perform warranty obligations
Sec. 3. It is an unfair practice for a dealer to willfully fail to
perform the obligations placed on the dealer in connection with the
manufacturer's or distributor's warranty agreement applicable to any
motor vehicle sold by that dealer. As added by P.L.2-1991, SEC.11.
IC 9-23-3-4 Sale of vehicle having trade name or mark for which dealer lacks
franchise
Sec. 4. It is an unfair practice for a dealer to sell any new motor
vehicle having a trade name, trade or service mark, or related
characteristics for which the dealer does not have a franchise in
effect at the time of the sale. However, vehicles having more than
one (1) or more trade name, service mark, or related characteristic as
a result of modification or further manufacture by a manufacturer,
converter manufacturer, or an automotive mobility dealer licensed
under this article may be sold by a franchisee appointed by that
manufacturer, converter manufacturer, or automotive mobility dealer. As added by P.L.2-1991, SEC.11. Amended by P.L.147-2009,
SEC.13.
IC 9-23-3-5 Willful failure of dealer to perform fiduciary duty to collect and
remit gross retail tax
Sec. 5. It is an unfair practice for a dealer to willfully fail to
perform the fiduciary duty imposed upon the dealer by IC 6-2.5-2-1
with regard to the collection and remittance of the gross retail tax.
Willful violation of the fiduciary duty includes written or oral
agreements between a dealer and a prospective purchaser that would
give the appearance that a bona fide trade-in has taken place, when
in fact the purpose of the agreement is to reduce the prospective
purchaser's gross retail tax and thereby deprive the state of revenue. As added by P.L.2-1991, SEC.11.
IC 9-23-3-6 Sale, exchange, or transfer by dealer of rebuilt vehicle without
disclosure of rebuilding
Sec. 6. It is an unfair practice for a dealer to sell, exchange, or
transfer a rebuilt vehicle without disclosing in writing to the
purchaser, customer, or transferee, before consummating the sale,
exchange, or transfer, the fact that the vehicle is a rebuilt vehicle if
the dealer knows or should reasonably know the vehicle is a rebuilt
vehicle. As added by P.L.2-1991, SEC.11.
IC 9-23-3-6.5 Document preparation fees
Sec. 6.5. It is an unfair practice for a dealer to require a purchaser
of a motor vehicle as a condition of the sale and delivery of the
motor vehicle to pay a document preparation fee, unless the fee:
(1) reflects expenses actually incurred for the preparation of
documents;
(2) was affirmatively disclosed by the dealer;
(3) was negotiated by the dealer and the purchaser;
(4) is not for the preparation, handling, or service of documents
that are incidental to the extension of credit; and
(5) is set forth on a buyer's order or similar agreement by a
means other than preprinting. As added by P.L.102-1991, SEC.1.
IC 9-23-3-7 Violation of deceptive franchise practices provisions
Sec. 7. (a) It is an unfair practice for a manufacturer or distributor
to violate IC 23-2-2.7.
(b) It is an unfair practice for a manufacturer or distributor to
enter into an agreement in which a dealer is required to waive the
provisions of:
(1) this chapter; or
(2) IC 23-2-2.7.
However, this subsection does not apply to a voluntary agreement in
which separate consideration is offered and accepted. As added by P.L.2-1991, SEC.11. Amended by P.L.17-2010, SEC.2.
IC 9-23-3-8 Manufacturer or distributor coercing dealer orders of parts,
accessories, or equipment
Sec. 8. It is an unfair practice for a manufacturer or distributor to
coerce a dealer to order from a person parts, accessories, equipment,
machinery, tools, appliances, or any other commodity. As added by P.L.2-1991, SEC.11.
IC 9-23-3-9 Manufacturer or distributor requiring changes in capital structure
or business financing of dealer
Sec. 9. It is an unfair practice for a manufacturer or distributor to
prevent or require or attempt to prevent or require by contract or
otherwise, any change in the capital structure of a dealer or the
means by or through which the dealer finances the dealer's operation,
if the dealer at all times meets any reasonable capital standards
agreed to by the dealer and the manufacturer or distributor. A change
in capital structure does not cause a change in the principal
management or have the effect of a sale of the franchise without the
consent of the manufacturer or distributor. As added by P.L.2-1991, SEC.11.
IC 9-23-3-10 Manufacturer or distributor requiring changes in dealer
management
Sec. 10. It is an unfair practice for a manufacturer or distributor
to prevent or require or attempt to prevent or require a dealer to
change the dealer's executive management, other than the principal
dealer operator or operators if the franchise was granted in reliance
upon the personal qualifications of those persons.
As added by P.L.2-1991, SEC.11.
IC 9-23-3-11 Restraint by manufacturer or distributor on sale or transfer of
interest by dealer or its officers, partners, or stockholders
Sec. 11. It is an unfair practice for a manufacturer or distributor
to prevent or require or attempt to prevent or require by contract or
otherwise, a dealer or an officer, a partner, or a stockholder of a
dealer to sell or transfer a part of the interest of any of them to any
other person or persons. A dealer, an officer, a partner, or a
stockholder may not sell, transfer, or assign the franchise or a right
under the franchise without the consent of the manufacturer or
distributor, which consent may not be unreasonably withheld. As added by P.L.2-1991, SEC.11.
IC 9-23-3-12 Manufacturer or distributor preventing dealer from receiving fair
compensation for franchised business
Sec. 12. It is an unfair practice for a manufacturer or distributor
to prevent or attempt to prevent a dealer from receiving fair and
reasonable compensation for the value of the franchised business as
a going concern. The dealer may not transfer or assign the dealer's
franchise without the consent of the manufacturer or distributor, and
the manufacturer or distributor may not unreasonably withhold
consent. As added by P.L.2-1991, SEC.11.
IC 9-23-3-13 Employment of unlicensed representative for manufacturer or
distributor
Sec. 13. It is an unfair practice for a manufacturer or distributor
to employ a person as a representative who has not been licensed
under this article. As added by P.L.2-1991, SEC.11.
IC 9-23-3-14 Payment of dealer for labor costs; uniform warranty
reimbursement policies
Sec. 14. (a) This section does not authorize a manufacturer or
distributor and its franchisees in Indiana to establish a uniform
hourly labor reimbursement rate effective for the entire state.
(b) It is an unfair practice for a manufacturer or distributor to fail
to compensate to a dealer the posted hourly labor rate for the work
and services the dealer is required to perform in connection with the
dealer's delivery and preparation obligations under any franchise or
fail to compensate to a dealer the posted hourly labor rate for labor
and other expenses incurred by the dealer under the manufacturer's
warranty agreements as long as the posted rate is reasonable.
Judgment of the reasonableness includes consideration of charges for
similar repairs by comparable repair facilities in the local area as
well as mechanic's wages and fringe benefits.
(c) A manufacturer or distributor and at least thirty percent (30%)
of its franchisees in Indiana of the same line make may agree in an
express written contract citing this section to a uniform warranty
reimbursement policy to be used by franchisees for the performance
of warranty repairs. The contract must include the reimbursement for
parts used in warranty repairs or the use of a uniform time standards
manual, or both. The allowance for diagnosis within the uniform
time standards manual must be reasonable and adequate for the work
and service to be performed. The manufacturer or distributor shall
have:
(1) only one (1) agreement with each line make; and
(2) a reasonable and fair procedure for franchisees to request a
modification or adjustment of a standard included in the
uniform time standards manual.
(d) A contract described in subsection (c) must meet the following
criteria:
(1) Establish a uniform parts reimbursement rate that must be
greater than the manufacturer's or distributor's nationally
established parts reimbursement rate in effect at the time the
contract becomes effective. A subsequent contract must include
a uniform reimbursement rate that is equal to or greater than the
rate in the immediately prior contract.
(2) Apply to all warranty repair orders written while the
agreement is in effect.
(3) At any time during the period the contract is in effect:
(A) be available to any franchisee of the same line make as
the franchisees who entered into the contract with the
manufacturer or distributor; and
(B) be available to the franchisee of the same line make on
the same terms as apply to the franchisees who entered into
the contract with the manufacturer or distributor.
(4) Be for a term not to exceed three (3) years.
(5) Allow any party to the uniform warranty reimbursement
policy to terminate the policy with thirty (30) days prior written
notice to all parties upon the annual anniversary of the policy,
if the policy is for at least one (1) year.
(6) Remain in effect for the entire life of the original period if
the manufacturer and at least one (1) franchisee remain parties
to the policy.
(e) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (c) may only seek to recover its costs
from a franchisee that receives a higher reimbursement rate, if
authorized by law, subject to the following:
(1) Costs may be recovered only by increasing invoice prices on
new vehicles received by the franchisee.
(2) A manufacturer or distributor may make an exception for
vehicles that are titled in the name of a purchaser in another
state. However, price increases imposed for the purpose of
recovering costs imposed by this section may vary from time to
time and from model to model and must apply uniformly to all
franchisees of the same line make that have requested
reimbursement for warranty repairs at a level higher than
provided for in the agreement.
(f) A manufacturer or distributor that enters into a contract with
its franchisees under subsection (c) shall do the following:
(1) Certify to the secretary of state under oath, in a writing
signed by a representative of the manufacturer or distributor,
that at the time the contract was entered into at least thirty
percent (30%) of the franchisees of the line make were parties
to the contract.
(2) File a copy of the contract with the bureau at the time of the
certification.
(3) Maintain a file that contains the information upon which the
certification required under subdivision (1) is based for three
(3) years after the certification is made. As added by P.L.2-1991, SEC.11. Amended by P.L.78-2002, SEC.6;
P.L.184-2007, SEC.28.
IC 9-23-3-15 Payment or disapproval of dealer claims; notice of disapproval;
audits and charge backs
Sec. 15. (a) It is an unfair practice for a manufacturer or
distributor to:
(1) fail to pay all claims made by dealers for compensation for
delivery and preparation work and warranty work within thirty
(30) days after approval;
(2) fail to approve or disapprove the claims within thirty (30)
days after receipt; or
(3) disapprove a claim without notice to the dealer in writing of
the grounds for disapproval.
(b) A manufacturer or distributor may:
(1) audit claims made by a dealer; or
(2) charge back to a dealer any amounts paid on false or
unsubstantiated claims;
for up to two (2) years after the date on which a claim is paid.
However, the limitations of this subsection do not apply if the
manufacturer or distributor can prove fraud on a claim. A
manufacturer or distributor shall not discriminate among dealers with
regard to auditing or charging back claims. As added by P.L.2-1991, SEC.11. Amended by P.L.76-2007, SEC.1.
IC 9-23-3-16 Selling motor vehicle to unlicensed person for resale
Sec. 16. It is an unfair practice for a manufacturer or distributor
to sell a motor vehicle for resale to a person not licensed under this
article. As added by P.L.2-1991, SEC.11.
IC 9-23-3-17 Failure to indemnify or hold harmless dealer for losses, costs, and
expenses from suits for defects in vehicles or other goods or
services
Sec. 17. It is an unfair practice for a manufacturer or distributor
to refuse or fail to indemnify and hold harmless a dealer, upon
written notification from the dealer, from all losses, costs, and
expenses that result or arise from or are related to a complaint, claim,
defense, or suit against the dealer that concerns defects in a motor
vehicle or other goods or services that are the responsibility of the
manufacturer. As added by P.L.2-1991, SEC.11.
IC 9-23-3-18
Repealed
(Repealed by P.L.258-1999, SEC.3.)
IC 9-23-3-19 False, deceptive, or misleading advertising; other deceptive acts or
practices
Sec. 19. It is an unfair practice for an automobile auctioneer, a
wholesale dealer, or a transfer dealer, in connection with the
auctioneer's or dealer's business, to use false, deceptive, or
misleading advertising or to engage in deceptive acts or practices. As added by P.L.2-1991, SEC.11. Amended by P.L.268-2003,
SEC.29.
IC 9-23-3-20 Employees, agents, officers, partners, or representatives of licensee
Sec. 20. It is an unfair practice for an employee, an agent, an
officer, a partner, or a representative of a licensee to engage in a
practice prohibited by this chapter. As added by P.L.2-1991, SEC.11.
IC 9-23-3-21 Franchise termination
Sec. 21. It is an unfair practice for a manufacturer to terminate a
franchise in violation of IC 23-2-2.7-3. As added by P.L.2-1991, SEC.11.
IC 9-23-3-22 Transaction conditioned upon continuation of franchise
Sec. 22. (a) A dealer may not transfer, sell, or assign the business
and assets of a dealership or an interest in the dealership to another
person that contemplates or is conditioned upon a continuation of the
franchise relationship with the manufacturer or distributor unless the
dealer first:
(1) notifies the manufacturer or distributor of the dealer's
decision to make the transfer, assignment, or sale by written
notice; and
(2) obtains the approval of the manufacturer or distributor.
The dealer must provide the manufacturer or distributor with
completed application forms and related information generally used
by the manufacturer or distributor to conduct its review of such a
proposal, and a copy of all agreements regarding the proposed
transfer, assignment, or sale.
(b) The manufacturer or distributor shall send a letter by certified
mail to the dealer within sixty (60) days of receipt of the information
specified in subsection (a). The letter must indicate any disapproval
of the transfer, assignment, or sale and must set forth the material
reasons for the disapproval. If the manufacturer or distributor does
not respond by letter within the sixty (60) day period, the
manufacturer's or distributor's consent to the proposed transfer,
assignment, or sale is considered to have been granted. A
manufacturer or distributor may not unreasonably withhold approval
of a transfer, assignment, or sale.
(c) A manufacturer or distributor has a right of first refusal as
specified in the franchise agreement to acquire the new vehicle
dealer's assets or ownership if there is a proposed change of more
than fifty percent (50%) of the dealer's ownership or the transfer of
more than fifty percent (50%) of the new vehicle dealer's assets if all
of the following are met:
(1) The manufacturer or distributor notifies the dealer in writing
of its intent to exercise its right of first refusal within the sixty
(60) day notice limit provided in subsection (b).
(2) The exercise of the right of first refusal will result in the
dealer and the dealer's owners receiving consideration, terms,
and conditions that are either the same as or better than those
they have contracted to receive under the proposed change of
more than fifty percent (50%) of the dealer's ownership or the
transfer of more than fifty percent (50%) of the new vehicle
dealer's assets.
(3) The proposed change of the dealership's ownership or the
transfer of the new vehicle dealer's assets does not involve the
transfer of assets or the transfer or issuance of stock by the
dealer or one (1) or more of the dealer's owners to any of the
following:
(A) A designated family member or members including any
of the following members of one (1) or more dealer owners:
(i) The spouse.
(ii) A child.
(iii) A grandchild.
(iv) The spouse of a child or a grandchild.
(v) A sibling.
(vi) A parent.
(B) A manager:
(i) employed by the dealer in the dealership during the
previous four (4) years; and
(ii) who is otherwise qualified as a dealer operator.
(C) A partnership or corporation controlled by any of the
family members described in clause (A).
(D) A trust arrangement established or to be established:
(i) for the purpose of allowing the new vehicle dealer to
continue to qualify as such under the manufacturer's or
distributor's standards; or
(ii) to provide for the succession of the franchise
agreement to designated family members or qualified
management in the event of the death or incapacity of the
dealer or its principal owner or owners.
(4) Except as otherwise provided in this subsection, the
manufacturer or distributor agrees to pay the reasonable
expenses, including reasonable attorney's fees, that do not
exceed the usual, customary, and reasonable fees charged for
similar work done for other clients, and that are incurred by the
proposed owner or transferee before the manufacturer's or
distributor's exercise of its right of first refusal in negotiating
and implementing the contract for the proposed change of the
dealer ownership or the transfer of the new vehicle dealer's
assets. Payment of expenses and attorney's fees is not required
if the dealer has failed to submit an accounting of those
expenses within twenty (20) days of the dealer's receipt of the
manufacturer's or distributor's written request for such an
accounting. An expense accounting may be requested by a
manufacturer or distributor before exercising its right of first
refusal.
(d) Violation of this section by the manufacturer or distributor is
an unfair practice by a manufacturer or distributor. As added by P.L.152-1999, SEC.1.
IC 9-23-3-23 Manufacturer or distributor requiring changes in franchise or
dealership
Sec. 23. It is an unfair practice for a manufacturer, distributor,
officer, or agent to do any of the following:
(1) Require, coerce, or attempt to coerce any new motor vehicle
dealer in Indiana to:
(A) change location of the dealership;
(B) make any substantial alterations to the use of franchises;
or
(C) make any substantial alterations to the dealership
premises or facilities;
if to do so would be unreasonable or would not be justified by
current economic conditions or reasonable business
considerations. This subdivision does not prevent a
manufacturer or distributor from establishing and enforcing
reasonable facility requirements.
(2) Require, coerce, or attempt to coerce any new motor vehicle
dealer in Indiana to divest its ownership of or management in
another line or make of motor vehicles that the dealer has
established in its dealership facilities with the prior written
approval of the manufacturer or distributor.
(3) Establish or acquire wholly or partially a franchisor owned
outlet engaged wholly or partially in a substantially identical
business to that of the franchisee within the exclusive territory
granted the franchisee by the franchise agreement or, if no
exclusive territory is designated, competing unfairly with the
franchisee within a reasonable market area. A franchisor is not
considered to be competing unfairly if operating:
(A) a business for less than two (2) years;
(B) in a bona fide retail operation that is for sale to any
qualified independent person at a fair and reasonable price;
or
(C) in a bona fide relationship in which an independent
person or persons have made a significant investment subject
to loss in the business operation and can reasonably expect
to acquire majority ownership or managerial control of the
business on reasonable terms and conditions.
This subdivision shall not apply to recreational vehicle
manufacturer franchisors. As added by P.L.152-1999, SEC.2. Amended by P.L.118-2001,
SEC.3; P.L.49-2007, SEC.1.
IC 9-23-3-24 Relocation of new motor vehicle dealers
Sec. 24. (a) This section does not apply to the relocation of a new
motor vehicle dealer to a location that is not more than two (2) miles
from its established place of business.
(b) This section does not apply to the reopening or replacement in
a relevant market area of a closed dealership that has been closed
within the preceding year, if the established place of business of the
reopened or replacement dealer is within two (2) miles of the
established place of business of the closed dealership.
(c) Before a franchisor enters into a franchise establishing or
relocating a new motor vehicle dealer within a relevant market area
where the same line make is represented, the franchisor shall give
written notice to each new motor vehicle dealer of the same line
make in the relevant market area of the franchisor's intention to
establish an additional dealer or to relocate an existing dealer within
that relevant market area.
(d) Not later than thirty (30) days after:
(1) receiving the notice provided for in subsection (c); or
(2) the end of any appeal procedure provided by the franchisor;
a new motor vehicle dealer may bring a declaratory judgment action
in the circuit court for the county in which the new motor vehicle
dealer is located to determine whether good cause exists for the
establishing or relocating of a proposed new motor vehicle dealer. If
an action is filed, the franchisor may not establish or relocate the
proposed new motor vehicle dealer until the circuit court has
rendered a decision on the matter. An action brought under this
section shall be given precedence over all other civil matters on the
court's docket.
(e) In determining whether good cause exists for establishing or
relocating an additional new motor vehicle dealer for the same line
make, the court shall take into consideration the existing
circumstances, including the following:
(1) Permanency of the investment.
(2) Effect on the retail new motor vehicle business and the
consuming public in the relevant market area.
(3) Whether it is injurious or beneficial to the public welfare.
(4) Whether the new motor vehicle dealers of the same line
make in that relevant market area are providing adequate
competition and convenient consumer care for the motor
vehicles of that line make in the market area, including the
adequacy of motor vehicle sales and qualified service
personnel.
(5) Whether the establishment or relocation of the new motor
vehicle dealer would promote competition.
(6) Growth or decline of the population and the number of new
motor vehicle registrations in the relevant market area.
(7) The effect on the relocating dealer of a denial of its
relocation into the relevant market area. As added by P.L.118-2001, SEC.4.
IC 9-23-3-25 Acting, offering to act as, or professing to be a broker of vehicles
Sec. 25. It is an unfair practice for a person to:
(1) act as;
(2) offer to act as; or
(3) profess to be;
a broker in the advertising, buying, or selling of at least twelve (12)
new or used vehicles per year. As added by P.L.268-2003, SEC.30.
