Wisconsin Statutes & Annotations
Chapter 218 - Finance companies, auto dealers, adjustment companies and collection agencies.
218.0134 - Dealership changes.

218.0134 Dealership changes.
(1) In this section, “affected grantor" means a manufacturer on direct dealerships, a distributor on indirect dealerships or an importer on direct dealerships that has entered into an agreement with a motor vehicle dealer and that is directly affected by an action proposed to be undertaken by the dealer under this section.
(2)
(a) If a motor vehicle dealer's agreement with an affected grantor requires the grantor's prior approval of an action proposed to be undertaken by the dealer under this section, a dealer may not voluntarily change its ownership or executive management, transfer its dealership assets to another person, add another franchise at the same location as its existing franchise or relocate a franchise without giving prior written notice of the proposed action to the affected grantor and to the department of transportation. Within 20 days after receiving the notice, the affected grantor may serve the dealer with a written list of the information not already known or in the possession of the grantor that is reasonably necessary in order for the grantor to determine whether the proposed action should be approved. The grantor shall, in good faith, confirm in writing to the dealer the date on which it has received from the dealer or from other sources all the information specified on the list.
(b) An affected grantor who does not approve of the proposed action shall, within 30 days after receiving the dealer's written notice of the proposed action or within 30 days after receiving all the information specified in a written list served on the dealer under par. (a), whichever is later, file with the department of transportation and serve upon the dealer a written statement of the reasons for its disapproval. The publication of the reasons given for the disapproval or any explanation of those reasons by the manufacturer, distributor or importer shall not subject the manufacturer, distributor or importer to any civil liability unless the reasons given or explanations made are malicious and published with the sole intent to cause harm to the dealer or a transferee of the dealer. Failure to file and serve a statement within the applicable period shall, notwithstanding the terms of any agreement, constitute approval of the proposed action by the grantor. If an affected grantor files a written statement within the applicable period, the dealer may not voluntarily undertake the proposed action unless it receives an order permitting it to do so from the division of hearings and appeals under sub. (3) (b).
(c) A dealer who is served with a written statement by an affected grantor under par. (b) may file with the department of transportation and the division of hearings and appeals and serve upon the affected grantor a complaint for the determination of whether there is good cause for not permitting the proposed action to be undertaken. The burden of proof for showing there is good cause for not permitting the proposed action shall be on the affected grantor. The division of hearings and appeals shall promptly schedule a hearing and decide the matter. The proposed action may not be undertaken pending the determination of the matter.
(3)
(am) The division of hearings and appeals may determine there is good cause for not permitting a proposed action to be undertaken only if the prospective benefits to the affected grantor, the dealer, the public, and other dealers if the proposed action is not undertaken outweigh the prospective harms to the dealer, the affected grantor, the public, and other dealers if the proposed action is not undertaken.
(b) The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for not permitting the proposed action to be undertaken. The decision shall include an order that the dealer be allowed or is not allowed to undertake the proposed action, as the case may be. The order may require fulfillment of appropriate conditions before and after the proposed action is undertaken.
(4) This section does not apply to:
(b) A proposed action that would require an affected grantor to give notice under s. 218.0116 (7) (a), except that the dealer must have the affected grantor's written approval before undertaking any such proposed action.
(c) The exercise by an affected grantor under an agreement of the right of first refusal to acquire the dealer's assets in the event of a proposed change of ownership or transfer of dealership assets, if all of the following requirements are met:
1. The exercise of the right of first refusal will result in the dealer and the dealer's owners receiving the same or greater consideration as they have contracted to receive in connection with the proposed change of ownership or transfer of dealership assets.
2. The proposed change of ownership or transfer of dealership assets does not involve the transfer of assets or the transfer or issuance of stock by the dealer or one or more dealer owners to one or more immediate family members of one or more dealer owners or to a qualifying member of the dealer's management or to a partnership, limited liability company or corporation controlled by those persons. In this subdivision:
a. “Immediate family member" means the spouse, child, grandchild, spouse of a child or grandchild, brother, sister or parent of the dealer owner.
b. “Qualifying member of the dealer's management" means an individual who has been employed by the dealer for at least 2 years and who otherwise qualifies as a dealer operator.
3. The affected grantor agrees to pay the reasonable expenses, including reasonable attorney fees that do not exceed the usual, customary and reasonable fees charged for similar work done for other clients, incurred by the proposed new owner or transferee before the grantor's exercise of its right of first refusal in negotiating and implementing the contract for the proposed change of ownership or transfer of dealership assets. Notwithstanding this subdivision, no payment of expenses and attorney fees shall be required if the dealer has not submitted or caused to be submitted an accounting of those expenses within 7 days after the dealer's receipt of the affected grantor's written request for an accounting.
(d) An action, if a proposed new owner or transferee does not agree to comply with the agreement between the affected grantor and dealer or with a new agreement containing substantially the same terms.
History: 1999 a. 31 ss. 235 to 246; 2001 a. 31; 2005 a. 256; 2007 a. 32.
The application of s. 218.01 (3x) [now s. 218.0134] to a contract executed prior to the enactment of sub. (3x) did not violate the contracts clause of the U.S. constitution. Chrysler Corp. v. Kolosso Auto Sales, Inc. 148 F.3d 892 (1998).
Section 218.01 (3x) [now s. 218.0134] provides an exclusive remedy for evaluating a manufacturer's proposal regarding additions or changes of franchises. The immunity provided by this section is intended to protect against “end runs" around the administrative procedures provided and instead proceeding directly to court. Ray Hutson Chevrolet, Inc. v. General Motors Corp. 235 F.3d 348 (2000).

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