Section 5A: Termination of marketing agreement upon death of retail dealer; prohibition; successor-in-interest
Section 5A. (a) It shall be unlawful to include in any marketing agreement any term which provides for the termination of such marketing agreement by a supplier upon the death of the retail dealer if the dealer, prior to his demise, designates a successor-in-interest in a form prescribed by and delivered to the supplier.
(b) For the purpose of this section, ''successor-in-interest'' shall be restricted to either a surviving spouse or adult child of the retail dealer; provided, however, that such spouse or child, at the time of the dealer's death, shall meet the reasonable qualifications then being required of dealers by the supplier for the operation of such service stations.
(c) This section shall not apply to a marketing agreement until the retail dealer has operated a service station pursuant to such marketing agreement with the supplier for a continuous three-year period.
(d) The designated successor-in-interest shall be allowed twenty-one days after the death of the retail dealer to give written notice to the supplier of his election to assume and operate the service station. Such notification shall contain such information regarding business experience and credit history as is reasonably required by the supplier. The successor-in-interest must offer to assume the marketing agreement in writing three days, excluding Saturdays, Sundays, and holidays, after such election and must commence operation of the service station within ten days after such assumption. Within twenty-one days after the successor-in-interest has elected in writing to assume and operate the service station, the supplier shall give written notice to the successor-in-interest of its approval or disapproval of the successor-in-interest, based upon whether such successor-in-interest meets the supplier's reasonable qualifications required of dealers by the supplier for the operation of such service stations. If the supplier does not approve the successor-in-interest, it shall state its reasons therefor. If the supplier does not reply within the specified twenty-one-day period, approval of the successor-in-interest shall be deemed granted.
(e) A supplier may require that a dealer desiring to designate a successor-in-interest pursuant to this section deposit with such supplier at the time of such designation such sum of money reasonably estimated to be necessary to compensate the supplier for rent for a period of twenty-one days. Such deposit is intended to compensate the supplier in the event that the designated successor-in-interest fails for such period after the death of the dealer to assume the marketing agreement obligation. Any unearned portion of such deposit resulting from the successor-in-interest assuming responsibility for the marketing agreement sooner than twenty-one days after the date of the dealer's death, or from the temporary operation of the service station by the supplier during such twenty-one days, shall be refunded by the supplier to the estate or legal representative of the deceased dealer. In addition to such deposit, the supplier may require a dealer desiring to qualify under this section to arrange for the discharge or performance of other marketing agreement obligations such as, but not limited to, insurance, but excluding any obligation to be open to the public, for a period of up to twenty-one days after his demise.
(f) The marketing agreement available to the successor-in-interest pursuant to this section is intended to be no greater than or less than the marketing agreement as it existed in the name of the deceased dealer at the time of such dealer's death. This section is not intended to expand or diminish the rights of suppliers or dealers under either federal or state law.
(g) A retail dealer may designate a primary and one alternate successor-in-interest. The alternate, if one is designated, shall have no rights under this section in the event of any exercise of rights by the primary successor-in-interest. If an alternate desires to assume and operate the service station in the event the primary successor-in-interest fails to do so, the alternate must give notice of such election and otherwise comply with paragraph (d) of this section.
(h) Unless otherwise specifically provided herein, any actions to be performed by the supplier or by the successor-in-interest hereunder shall in each instance be performed within a reasonable time.
(i) Unless the supplier otherwise agrees in writing, there shall be no operation of the service station following the death of the retail dealer by anyone, other than the supplier for its own account, until all parts of the marketing agreement have been expressly assumed as herein provided, including, but not limited to, such items as lease or leases, products agreement, loaned equipment agreement, federal and state environmental law compliance agreements, licensing, and tax permits.
(j) Following the death of a retail dealer, and prior to the operation of the service station by the successor-in-interest as herein provided, the supplier shall have the option to operate the service station by contract or otherwise for its own account without obligation or duty to the heirs or estate of the deceased dealer or to the successor-in-interest except for the obligation to account to the heirs or the estate of the deceased dealer for the inapplicable portion of any prepaid rent or other sums prepaid to the supplier, and for any physical inventory salvaged from the service station and used or sold by the supplier.
(k) If the successor-in-interest assumes the marketing agreement and there has been no intervening operation of the service station by the supplier, the successor-in-interest shall account to the heirs or estate of the deceased dealer for the value or other disposition of personal property of the dealer located at or related to the service station.
(l) The attorney general shall enforce compliance with the provisions of this section. Upon receipt of a written notice of objection with reasons therefor, as provided in paragraph (d), the successor-in-interest may bring an action against the supplier in any court of competent jurisdiction for wrongfully impeding the transfer of the marketing agreement; provided, however, that any such action must be commenced within ninety days following receipt of such notice of objection. The court, upon finding that the stated reasons for objection are arbitrary, capricious, or unreasonable, may award money damages and grant such equitable relief as it deems proper.