Oklahoma § 47-565.1 - Manufacturer's or distributor's prevention or refusal to

§ 47-565.1. Manufacturer's or distributor's prevention or refusal to

honor succession to dealership by legal heir or devisee of new motor

vehicle or new powersports vehicle dealer — Procedure.

A. For the purposes of this section, "designated successor"

means a person who the new motor vehicle dealer or new powersports

vehicle dealer has designated to take over operation of the

dealership or a legal heir or devisee under the will of a new motor

vehicle dealer or new powersports vehicle dealer or under the laws

of descent and distribution of this state.

B. Notwithstanding the terms of any franchise agreement, and

subject to the following conditions contained in paragraphs 1

through 5 of this subsection, any manufacturer or distributor who

prevents or refuses to honor the succession to the operation of a

Oklahoma Statutes - Title 47. Motor Vehicles

dealership by a designated successor without good cause or good

faith, as defined in this section, shall be subject to the following

procedure:

1. Within one hundred twenty (120) days after the death or

departure of the new motor vehicle dealer or new powersports vehicle

dealer, the manufacturer shall receive a written notice from the

dealership of the designated successor who intends to become the

successor dealership operator. If timely notice is not received,

this paragraph shall not apply, and any succession shall be governed

solely by the terms of the franchise;

2. Within thirty (30) days of receipt of the dealership's

timely written notice, the manufacturer may request, and the

designated successor shall, within a reasonable time, provide any

information which is reasonably necessary for the manufacturer to

evaluate the designated successor dealer and dealership, including

applications and financing;

3. Within sixty (60) days of receipt of such information, the

manufacturer shall approve or disapprove the designated successor

dealer, and in case of disapproval shall communicate in writing such

disapproval and grounds for disapproval to the dealership;

4. Failure of the manufacturer to act in a timely manner with

respect to any time period described above shall constitute a waiver

of the manufacturer's right to disapprove the proposed succession;

and

5. Within ten (10) days of the dealership's receipt of the

manufacturer's notice of disapproval, the dealership may file a

protest of the manufacturer's decision with the Oklahoma New Motor

Vehicle Commission and request a hearing. Such hearing shall be

heard in a substantially similar manner as provided by Section 566

of this title, except that the Commission shall render a final

decision within sixty (60) days of the filing of the protest. The

manufacturer shall have the burden of proof to show that its

disapproval was for a good cause and in good faith. A denial shall

not be for good cause and in good faith unless the factory

establishes that the designated successor is not of good moral

character or fails to meet the written, reasonable, and uniformly

applied requirements of the manufacturer or distributor relating to

financial qualifications, general business experience, and other

requirements relating to prospective franchisees. However, a

designated successor who is a family member and who is of good moral

character in accordance with reasonable factory qualifications and

meets the factory's financial qualifications may rely on controlling

executive management that is of good moral character and meets the

factory's qualifications for general business experience. Any

denial of the designated successor based upon a failure to agree to

terms other than those contained in the existing franchise

agreement, related addendums and agreements, and any written notice

Oklahoma Statutes - Title 47. Motor Vehicles

provided to the existing dealer prior to the manufacturer's or

distributor's receipt of any written notice from the existing dealer

of the proposed transfer shall not be considered good cause for such

denial. However, any proposed change to the franchise pursuant to

written notice from the manufacturer or distributor, to be valid,

must be in compliance with existing law. The disapproval by the

manufacturer shall be final if the dealership fails to file a timely

protest of the disapproval. In the event that the Commission finds

that the manufacturer's disapproval was not made for good cause,

then it shall issue a final order requiring the manufacturer to

honor the successor designated in the notice sent by the dealership.

Notwithstanding anything to the contrary in this section, a new

motor vehicle or new powersports vehicle dealer may designate any

person as successor by filing a written instrument pursuant to the

franchise with the manufacturer during the new motor vehicle or new

powersports vehicle dealer's lifetime. In such a case, the written

instrument and franchise shall govern the dealership succession.

The suspension, revocation, or refusal to issue or renew a

license or the imposition of any other penalty by the Commission

shall be in addition to any penalty which might be imposed upon any

licensee upon judgment or conviction in a court of competent

jurisdiction for any violation of the provisions of Sections 561

through 567, 572, 578.1, 579, and 579.1 of this title.

Added by Laws 1985, c. 229, § 9, eff. Nov. 1, 1985. Amended by Laws

2001, c. 148, § 4, emerg. eff. April 30, 2001; Laws 2014, c. 402, §

2, eff. Nov. 1, 2014; Laws 2023, c. 29, § 9, eff. Nov. 1, 2023; Laws

2024, c. 240, § 8, eff. Nov. 1, 2024.