Pub. 2 2020 Issue 2

NH’s Motor Vehicle Industry Board FourthQuarter 2019 Updates PETER MCNAMARA PRESIDENT, NHADA NH’s Motor Vehicle Industry Board Here is an update on protests filed with the Motor Vehicle Industry Board (MVIB) in the last quarter of 2019. These are unofficial and simple summaries of often complex cases and complex law. This article simply restates the allega- tions and/or arguments stated in the MVIB filings and is not taking a position by writing these summaries unless indicated otherwise. AEBI New England (ANE) v. AEBI Schmidt International (Aebi) (19-2) Type of Protest: Termination Protest Filed November 27, 2019 Attorneys: Greg Holmes (Holmes Law firm), Ned Sackman and Hilary Holmes Rheaume (Bernstein Shur) Summary of protest: ANE (Alstead, NH) sells the special- ized equipment manufactured by Aebi including equip- ment used by states to mow along highways and regional ski areas for mowing slopes. A dealer since 2001, ANE’s current agreement was executed in 2013. The protest highlighted that the 2013 agreement: 1. Prohibited Aebi from selling direct to customer unless ANE refused to sell to said customers, Aebi offered to sell directly to the customer and then ANE approved of the sale; and 2. Does not mandate a minimum sales volume. Aebi tried to get ANE to sign a more restrictive agreement in 2017 and allegedly tried to trick ANE into signing the agreement by claiming a new agreement was needed because a new distributor was going to acquire the North American territory. No new agreement was signed and the 2013 agreement remains in effect. In October of 2019, Aebi filed a termination notice effective immediately claiming ANE refused to sell certain products and misrepresented its commitment to selling Aebi products when ANE signed the agreement in 2013. However, Aebi then informed ANE that it can remain in compliance if ANE agrees to sign a new non-exclusive agreement which also allows Aebi and any other person to sell in ANE’s territory. ANE claims that Aebi fails to meet the termination require- ments of 357-C in the following ways: 1. Notice: the 90-day termination notice requirements were not satisfied 2. Good Faith: it is not a good faith termination when the notice basically says, “You’re terminated unless you agree to a new agreement that makes you a non-exclusive dealer” and that also takes a signifi- cant portion of the income from ANE and gives it to Aebi. Aebi also gave identical notices to the other two Aebi dealers in the U.S. 3. Competing with dealers: the DBR has a provision that prohibits certain manufacturers from competing directly against its dealers. 4. Good cause not shown: ANE also claims that Aebi does not have good cause to terminate ANE (failure to substantially comply with those requirements imposed by the agreement that are reasonable, are of material significance, and are reasonably possible for the dealer to comply with). Aebi claims ANE violated the agreement by refusing to sell all lines, but the section of the agreement cited by Aebi has nothing to do with selling all lines. Even if the paragraph did mention selling all lines, ANE still is not in violation if it can’t reasonably sell enough equipment, especially if there is no market for the equipment. Since Aebi has alleged the same termi- nation causes for all the North American dealers, there is clearly something wrong with the product, not the dealers. 5. Waiver: A manufacturer must issue a termination notice within 180 days of becoming aware of a breach. ANE states that Aebi must show proof that it did not waive its rights to issue a termination notice. Status: No hearings or meetings are scheduled. No responses or motions are on file. Continued on Page 6 D R I V E 4