[486H-2] Wrongful or illegal termination; unreasonable nonrenewal; damages; defenses. (a) Except as provided in section 486H-3, a petroleum distributor shall be liable to a gasoline dealer who sells the products of the petroleum distributor under a franchise from the distributor for damages and such equitable relief as the court deems proper resulting from the wrongful or illegal termination or cancellation of the franchise during its term or the petroleum distributor's unreasonable refusal to renew the franchise.

(b) A gasoline dealer suffering damages as a result of the termination or cancellation of, or failure to renew, the dealer's franchise may bring an action under this section against the petroleum distributor who wrongfully or illegally terminated, canceled, or unreasonably refused to renew the dealer's franchise in the court of general jurisdiction in which such petroleum distributor has the distributor's principal place of business, is found, or has an agent. The action may be brought without regard to the amount in controversy. If the gasoline dealer prevails in the action, the dealer may recover actual damages sustained, the costs of the suit, including reasonable attorneys' fees, and such equitable relief as the court deems proper.

The court may also grant such temporary relief as it may deem necessary and proper.

(c) It shall be a defense to any action brought under this section that the franchise was terminated, canceled, or not renewed because:

(1) The gasoline dealer failed to comply substantially with essential and reasonable requirements of the franchise agreement;

(2) The gasoline dealer failed to act in good faith in carrying out the terms and provisions of the franchise; or

(3) Of any of the reasons enumerated in section 486H-3; or

(4) Of other legitimate business reasons; provided that a termination, cancellation, or failure to renew a franchise for the purpose of enabling the petroleum distributor to assume operation of the gasoline dealer's business shall not be considered to be a legitimate business reason unless the gasoline dealer is paid reasonable compensation for the value of the dealer's franchise, including goodwill.

(d) No action may be brought under this section for a cause of action which arose more than two years prior to the date on which the action is brought. [L 1975, c 133, pt of 1; gen ch 1985]


Previous Vol11_Ch0476-0490 Next