TITLE 31
Motor and Other vehicles

CHAPTER 31-5.1
Regulation of Business Practices Among Motor Vehicle Manufacturers, Distributors, and Dealers

SECTION 31-5.1-4.1


§ 31-5.1-4.1 Dealership – Survivorship.

(a)(1) Right of designated family member to succeed in dealership ownership. Any owner of a new motor vehicle dealership may appoint by will or any other written instrument a designated family member to succeed in the ownership interest of that owner in the new motor vehicle dealership.

(2) Unless there exists good cause for refusal to honor that succession on the part of the manufacturer or distributor, any designated family member of a deceased or incapacitated owner of a new motor vehicle dealer may succeed to the ownership of the new motor vehicle dealer under the existing franchise provided that:

(i) The designated family member gives the manufacturer or distributor written notice of his or her intention to succeed to the ownership of the new motor vehicle dealer within one hundred twenty (120) days of the owner's death or incapacity;

(ii) The designated family member agrees to be bound by all the terms and conditions of the franchise; and

(iii) The designated family member shall not operate the dealership unless he or she meets the then-current criteria generally applied by the manufacturer or distributor in qualifying dealer-operators.

(3) The manufacturer or distributor may request, and the designated family member shall provide, promptly upon the request, personal and financial data that is reasonably necessary to determine whether the succession should be honored.

(b) Refusal to honor succession to ownership – Notice required.

(1) If a manufacturer or distributor believes that good cause exists for refusing to honor the succession to the ownership of a new motor vehicle dealer by a family member of a deceased or incapacitated owner of a new motor vehicle dealer under the existing franchise agreement, the manufacturer or distributor may, not more than sixty (60) days following receipt of:

(i) Notice of the designated family member's intent to succeed to the ownership of the new motor vehicle dealer; or

(ii) Any personal or financial data which it has requested, serve upon the designated family member and the department of revenue notice of its refusal to honor the succession and of its intent to discontinue the existing franchise with the dealer no sooner than ninety (90) days from the date the notice is served.

(2) The notice must state the specific grounds for the refusal to honor the succession and of the manufacturer's or distributor's intent to discontinue the existing franchise with the new motor vehicle dealer no sooner than ninety (90) days from the date the notice is served.

(3) If notice of refusal and discontinuance is not timely served upon the family member, the franchise shall continue in effect subject to termination only as otherwise permitted by this chapter.

(c) Written designation of succession unaffected. This chapter does not preclude the owner of a new motor vehicle dealership from designating any person as the owner's successor by written instrument filed with the manufacturer or distributor and, in the event there is a conflict between that written instrument and the provisions of this section, the written instrument shall govern.

History of Section.
(P.L. 1981, ch. 346, § 3; P.L. 1982, ch. 448, § 1; P.L. 1991, ch. 44, art. 14, § 3; P.L. 2008, ch. 98, § 6; P.L. 2008, ch. 145, § 6.)