Pub. 1 2019 Issue 3

Voluntary and Involuntary Terminations Under the Dealer Bill of Rights W hen a New Hampshire automobile or equipment dealer is having trouble with the manufacturer, it is common to look to the New Hampshire Dealer Bill of Rights ( RSA, Ch. 357-C). For example, a dealer may invoke certain statutory protections, in the event the manufacturer attempts to terminate a franchise. Before a dealer’s franchise may be terminated, the Dealer Bill of Rights requires a manufacturer to: (1) provide proper notice to the dealer and an opportunity to cure, (2) act in good faith, (3) act with good cause, and (4) obtain either the dealer’s consent or a determination of good cause by the Motor Vehicle Industry Board (“MVIB”). RSA, § 357- C:7(I). It is possible for the dealer to lose its rights in front of the MVIB by failing to file a timely protest of the manu- facturer’s actions, but so long as a protest is filed on time, the MVIB will likely invalidate any attempt to terminate a franchise absent these four factors. Even where a manufacturer succeeds in terminating a franchise, dealers still have additional protections. For example, the manufacturer must buy back specific items from the dealer, including, but not limited to, certain inven- tory, signage, tools and automotive service equipment. RSA, § 357-C:7(VI). There are, however, times when it is the dealer who wants to terminate a franchise. For example, a power sports dealer may choose to forego a certain product line and terminate its dealer agreement with respect to that line. Under such circumstances, is the dealer entitled to invoke the statutory protections that apply to terminations under the Dealer Bill of Rights? The answer is “yes.” In 2013, the New Hampshire Supreme Court analyzed the statutory protections that apply to voluntary terminations under the Dealer Bill of Rights. See Strike Four, LLC v. Nissan North America, Inc., 164 N.H. 729 (2013). The Court explained that the protections afforded by the Dealer Bill of Rights apply with equal force to both voluntary and involuntary terminations. (id. at 742-43). This means that the manufacturer must satisfy the four prerequisites for a termination, even if the termination is voluntary, although the dealer’s consent to terminate the dealer agreement will satisfy the fourth prerequisite. Further, the dealer is entitled to invoke the mandatory buyback requirements during a voluntary termination. Thus, the Dealer Bill of Rights protects dealers even in the case of a voluntary termination. The manufacturer must act with good faith, and it must provide proper notice to the dealer of its intended actions regardless of whether a termination is voluntary or involuntary. NED SACKMAN AND HILARY HOLMES RHEAUME PlatinumPartner Gordon-Darby NHOST, INC Emissions & safety inspection equipment provider Gordon-Darby NHOST Services’service and operation extend to two parallel industries: the vehicle emissions inspection technology and the license sales systems. We provide the design, development, construction, implementa- tion, operation and management of vehicle inspection networks, vehicle emissions testing systems, point of sale systems, electronic communication networks, data management and central database services (data warehous- ing, administrative and reporting functions, etc.) In addition, we provide comprehensive call center services to the public and system users, a license sales service depot, and field support services to vehicle inspection stations and license sales agents. For more information, please visit their website at www.gordon-darby.com Online automotive information & communications platform TrueCar, Inc. is an online automotive information and communica- tions platform that provides unbiased market information on new and used car transactions and supplies an online communications platform where dealers and consumers can communicate. Some of the nation’s largest and most well-respected membership and service organizations rely on websites powered by TRUECar. For more information, please contact Bill Hanlon at 617-634-2926 or email bhanlon@truecar.com TRUECar PlatinumPartner D R I V E 6