NY Veh & Traf L § 465 (2021)
2021 New York Laws VAT - Vehicle and Traffic Title 4 - Registration of Vehicles Article 17-A - Franchised Motor Vehicle Dealer Act 465 - Procedures Relating to Warranties and Sales Incentives.

§ 465. Procedures  relating  to  warranties and sales incentives.   1.   Every franchisor shall properly fulfill any  warranty  agreement  and/or   franchisor's   service   contract  and  shall  compensate  each  of  its   franchised motor vehicle dealers for warranty parts and labor in amounts   which reflect reasonable compensation for such work. All warranty claims   and/or claims under a franchisor's service contract made  by  franchised   motor  vehicle  dealers shall be paid within thirty days following their   approval. For  parts  reimbursement,  other  than  components,  systems,   fixtures,  appliances,  furnishings, accessories and features of a house   coach that are designed, used and maintained primarily for  nonvehicular   residential   purposes,   and   for   labor   reimbursement,  reasonable   compensation shall not be less than the price and rate  charged  by  the   franchised motor vehicle dealer for like services to non-warranty and/or   non-service  contract customers. For purposes of this section, the price   and rate charged by the franchised motor vehicle dealer for parts may be   established by submitting  to  the  franchisor  one  hundred  sequential   nonwarranty  customer-paid  service  repair  orders  or  the  number  of   sequential  nonwarranty  customer-paid  service  repair  orders  written   within  a ninety day period, whichever is less, covering repairs made no   more than one hundred eighty days before the submission,  and  declaring   the  price  and  rate, including average markup for the franchised motor   vehicle dealer as its reimbursement  rate.  The  reimbursement  rate  so   declared  shall go into effect thirty days following the declaration and   shall be presumed to be reasonable, however a franchisor may rebut  such   presumption  by showing that such rate so established is unreasonable in   light of the practices of all other franchised motor vehicle dealers  in   the  vicinity  offering the same line make. The franchised motor vehicle   dealer shall not request a change in the reimbursement rate  more  often   than once in each calendar year. In establishing the labor reimbursement   rate, the franchisor shall not require a franchised motor vehicle dealer   to  establish  said  rate by a methodology, or by requiring information,   that is unduly burdensome or time consuming to provide,  including,  but   not  limited  to,  a  transaction  by  transaction  calculation. For the   purposes of this section, the following parts or types of repairs  shall   be   excluded   from   the  parts  and/or  labor  calculations  and  the   franchisor's reimbursement requirements under this  section:  (a)  parts   sold  at wholesale; (b) tires; (c) routine maintenance not covered under   any retail customer warranty such  as  fluids,  filters  and  belts  not   provided  in  the course of repairs; (d) vehicle reconditioning; and (e)   batteries replaced as part of a routine maintenance  operation.  If  the   franchisor  rejects the declaration or attempts to rebut the declaration   because of an error in the dealer's  submission,  the  franchisor  shall   identify  with  specificity  the  reason  for rejection and identify the   error or errors within the  submission.  In  the  event  the  franchisor   rejects  or  rebuts  the  dealer's initial declaration, the dealer shall   have the opportunity,  within  sixty  days  to  resubmit  the  full  and   corrected  declaration addressing the alleged error or errors identified   by the franchisor. The franchisor shall respond within sixty  days.  The   one hundred eighty day requirement for the repair orders shall be stayed   from  the  date  of initial submission. In any action or proceeding held   pursuant to this subdivision, the franchisor shall have  the  burden  of   proving  that  the  rate  declared  by  the  dealer  was unreasonable as   described in this subdivision and that the proposed  adjustment  of  the   average  percentage  markup or rejection of the submission is reasonable   pursuant to the provisions of this subdivision.2. All warranty or sales incentive claims shall be either approved  or   disapproved  within thirty days after their receipt. When any such claim   is disapproved the franchised motor vehicle dealer shall be notified  in    writing  of  its  disapproval within said period. Each such notice shall   state the specific grounds upon which the disapproval is based.  Failure   to disapprove a claim within thirty days shall be deemed approval.3.  No  franchisor  shall conduct an audit or charge back any warranty   payment, or  any  sales,  advertising  or  marketing  incentive  payment   ("incentive  payments")  or  otherwise  hold  a franchised motor vehicle   dealer liable for charges more than one year, or five years in the  case   of fraud, after the date the franchisor made such payment to the dealer,   without providing a notice to a franchised motor vehicle dealer of, or a   mechanism  that  makes  available  to a franchised motor vehicle dealer,   information regarding errors or issues regarding such dealer's warranty,   sales, advertising or marketing incentive claims that are the subject of   the audit or chargeback. Nothing in this  section  shall  be  deemed  to   grant  a  dealer  the  right to access any file held by the manufacturer   evaluating  such  dealer.  In  connection  with  a  claim  for  warranty   reimbursements,  the dealer's failure to document properly one part of a   warranty repair that contains more than one part shall not be  the  sole   basis  to charge back the entire repair. A manufacturer shall not deny a   claim submitted under this section based solely on a dealer's incidental   failure to comply  with  a  specific  claim  processing  requirement,  a   clerical  error, or other administrative technicality, provided that the   failure does not call into question the legitimacy of the claim and that   the dealer corrects the claim according to franchisor guidelines.4. A franchisor shall not charge  a  dealer  back  subsequent  to  the   payment  of  a warranty, sales, advertising or marketing incentive claim   unless a representative of the franchisor  has  met  in  person  at  the   dealership,  or  by telephone, with an officer or employee of the dealer   designated by the dealer and explained in detail the basis for  each  of   the   proposed   charge   backs   and   thereafter  given  the  dealer's   representative a reasonable opportunity at the meeting,  or  during  the   telephone call, to explain the dealer's position relating to each of the   proposed charge backs. In the event the dealer was selected for audit or   review  on the basis that some or all of the dealer's claims were viewed   as  excessive  in  comparison  to  average,  mean  or   aggregate   data   accumulated  by  the franchisor, or in relation to claims submitted by a   group of other franchisees, the franchisor shall, at  or  prior  to  the   meeting  or telephone call with the dealer's representative, provide the   dealer with a written statement containing the basis or methodology upon   which the dealer was selected for audit or review.5. A franchisor shall not deny or charge back a payment  for  warranty   work claimed by the dealer unless the franchisor satisfies its burden of   proof  that  the  dealer did not make a good faith effort to comply with   the reasonable written procedures of the franchisor or that  the  dealer   did not actually perform the work.6.  A franchisor shall not deny or charge back a sales, advertising or   marketing incentive payment made  to  a  dealer  unless  the  claim  was   materially  false  or  fraudulent  or  the  dealer  failed to reasonably   substantiate the claim in accordance with the manufacturer's  reasonable   procedures.7.  After  all  internal dispute resolution processes provided through   the franchisor have been resolved, the franchisor shall give  notice  to   the   dealer  of  the  final  amount  of  a  proposed  warranty,  sales,   advertising or marketing incentive charge back. If the dealer institutes   an action pursuant to this article within thirty days of receipt of such   notice, the proposed charge back shall be stayed, without  bond,  during   the  pendency  of  such  action  and  until  the final judgment has been   rendered in an adjudicatory proceeding or action as provided in  section   four hundred sixty-nine of this article. The franchisor shall not impose    the  chargeback, debit the dealer's account, or otherwise seek to obtain   all or any part of the chargeback  funds  from  the  dealer  during  the   thirty-day  period  in  which  the dealer has the opportunity to file an   action as set forth above.