Mississippi Warranty Reimbursement Law

Sec. 63-17-55. The following words, terms and phrases, when used in the Mississippi Motor Vehicle Commission Law, shall have the meanings respectively ascribed to them in this section, except where the context clearly indicates a different meaning:

(a) “Motor vehicle” means any motor-driven vehicle of the sort and kind required to have a Mississippi road or bridge privilege license, and shall include, but not be limited to, motorcycles. “Motor vehicle” shall also mean an engine, transmission, or rear axle manufactured for installation in a vehicle having as its primary purpose the transport of person or persons or property on a public highway and having a gross vehicle weight rating of more than sixteen thousand (16,000) pounds, whether or not attached to a vehicle chassis.

(b) “Motor vehicle dealer” or “dealer” means any person, firm, partnership, copartnership, association, corporation, trust or legal entity, not excluded by paragraph (c) of this section, who holds a bona fide contract or franchise in effect with a manufacturer, distributor or wholesaler of new motor vehicles, and a license under the provisions of the Mississippi Motor Vehicle Commission Law, and such duly franchised and licensed motor vehicle dealers shall be the sole and only persons, firms, partnerships, copartnerships, associations, corporations, trusts or legal entities entitled to sell and publicly or otherwise solicit and advertise for sale new motor vehicles as such.

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(dd) “Pre-delivery preparation obligations” means all work and services, except warranty work, performed on new motor vehicles by motor vehicle dealers at the direction of the vehicle manufacturer prior to the delivery of such vehicles to the first retail consumer.

(ee) “Warranty work” means all labor, including that of a diagnostic character, performed, and all parts, including original or replacement parts, and components, including engine, transmission, and other parts assemblies, installed by motor vehicle dealers on motor vehicles which are reasonably incurred by motor vehicle dealers (other than the incidental expenses incurred in performing labor and installing parts on motor vehicles) in fulfilling a manufacturer’s obligations under a new motor vehicle warranty, a recall, or a certified pre-owned warranty, to consumers, including, but not limited to, the expense of shipping or returning defective parts to the manufacturer, when required by the manufacturer.

(ff) “Repair order” means an invoice, paid by a retail customer, and closed as of the time of submission, encompassing one or more repairs to a new motor vehicle, and reflecting, in the case of a parts mark-up submission, the cost of each part and the sale price thereof, and in the case of a labor rate submission, the total charges for labor and the total number of hours that produced such charges, which invoice may be submitted in electronic form.

(gg) “Qualified repair” means a repair to a motor vehicle, paid by a retail customer, which would have come within the manufacturer’s new motor vehicle warranty, but for the motor vehicle having exceeded the chronological or mileage limit of such warranty, and which does not constitute any of the work encompassed by subsection (4) of Section 63-17-86.

(hh) “Qualified repair order” means a repair order which encompasses, in whole or in part, a qualified repair or repairs.

63-17-85. The commission may deny an application for a license, or revoke or suspend a license after it has been granted, for any of the following reasons:

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(i) Being a manufacturer who fails to specify to its motor vehicle dealers the pre-delivery preparation obligations of its motor vehicle dealers prior to delivery of new motor vehicles to retail buyers , including a schedule of the compensation to be paid to its motor vehicle dealers for the work and services they shall be required to perform in connection with such pre-delivery and preparation obligations and shall constitute any such dealer’s only responsibility for product liability as between such dealer and such manufacturer. The compensation as set forth on said schedule shall be reasonable and the reasonableness thereof shall be subject to the determination by the commission as to reasonableness in the event a dealer files a verified complaint with the commission challenging the reasonableness of the pre-delivery preparation obligations or compensation. Any mechanical, body or parts defects arising from any express or implied warranties of any such manufacturer shall constitute such manufacturer’s product or warranty liability.

(j) On satisfactory proof that any manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesaler branch or division has unfairly and without due regard to the equities of the parties or to the detriment of the public welfare failed to properly fulfill any warranty agreement or to adequately and fairly compensate any of its motor vehicle dealers for labor and parts incurred by any such dealer with regard to warranty work performed by any such dealer, and upon the written request of a dealer using a format provided by the manufacturer, which is consistent with the requirements of Section 63-17-86. In no event shall any such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesaler branch or division pay to the requesting motor vehicle dealer an hourly labor rate and parts mark-up for warranty work that is less than that charged by such dealer to its retail customers in accordance with Section 63-17-86. Time allowances for the diagnosis and performance of warranty work shall be reasonable and adequate for such work to be performed using the actual time required by a qualified technician of ordinary skill to perform such work. No such dealer shall charge to its manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesaler branch or division, a labor rate in excess of the rate charged to its retail customers. All claims made by motor vehicle dealers hereunder for such labor and/or parts shall be paid within thirty (30) days following their approval. All such claims shall be either approved or disapproved within thirty (30) days after their receipt, and when any such claim is disapproved the motor vehicle dealer who submits it shall be notified in writing of its disapproval within said period, and each such notice shall state the specific grounds upon which the disapproval is based.

(k) For the commission of any act prohibited by Sections 63-17-73 through 63-17-86 or the failure to perform any of the requirements of said sections.

If the commission finds, after notice and hearing in the manner provided for under the Mississippi Motor Vehicle Commission Law, that there is sufficient cause upon which to base the revocation of the license of any licensee involved in the hearing, the commission may in lieu of revoking such license assess a civil penalty against the guilty licensee not to exceed Ten Thousand Dollars ($10,000.00). If the commission finds, after such notice and hearing, that sufficient cause exists for the suspension only of the license of any licensee, the commission may in lieu of suspending such license assess a civil penalty against the guilty licensee of not less than Fifty Dollars ($50.00) nor more than Five Hundred Dollars ($500.00) per day for each day such license would otherwise be suspended. However, the amount of such penalty shall not exceed an aggregate of Seven Thousand Five Hundred Dollars ($7,500.00). Failure of the licensee to pay all penalties so assessed within the time allowed by the commission for the payment thereof, which time shall in no case exceed ninety (90) days from the date of the commission’s order making such assessment, shall, unless an appeal is taken and perfected within the time and in the manner provided by the Mississippi Motor Vehicle Commission Law, result in an automatic revocation of such licensee’s license. Any such penalties assessed by the commission remaining unpaid at the expiration of the time for payment may be recovered by an action in the name of the commission. All such actions shall be brought by the Attorney General of the State of Mississippi upon the written request of the commission to do so, and shall be brought in the chancery court of the county or the chancery court of the judicial district of the county to which the commission’s order making such assessment is appealable under the provisions of Section 63-17-99. All civil penalties assessed and collected by the commission under the authority of this subsection shall be deposited in the General Fund of the State Treasury.

63-17-86. Obligations of manufacturers, distributors and motor vehicle dealers. Establishment of rate for parts and labor. Establishment, rebuttal and protest.

(1) The mark-up customarily charged by the dealer for parts or its labor rate may be established at the election of the dealer by the dealer submitting to the manufacturer, either by electronic transmission or tangible delivery, and in accordance with Section 63-17-85(j), all consecutive repair orders that include one hundred (100) sequential repair orders reflecting qualified repairs, or all repair orders closed during any period of ninety (90) consecutive days, whichever produces the fewer number of repair orders, covering repairs made no more than one hundred eighty (180) days before the submission, and declaring the parts mark-up or labor rate.

(2) The dealer shall calculate its labor rate by determining the total charges for labor from the qualified repairs submitted and dividing that amount by the total number of hours that produced such charges. The dealer shall calculate its parts mark-up by determining the total charges for parts from the qualified repairs submitted, dividing that amount by its total cost of the purchase of such parts, subtracting one from that amount, and multiplying by one hundred (100) to produce a percentage.

(3) A motor vehicle dealer seeking to establish or modify its warranty reimbursement labor rate, parts mark-up, or both shall no more frequently than once per twelve-month period, submit to the manufacturer:

(a) A single set of repair orders for purposes of calculating both its labor rate and parts mark-up; or

(b) A set of repair orders for purposes of calculating only its labor rate or for purposes of calculating only its parts mark-up.

(4) In calculating the rate customarily charged by the dealer for parts and labor for purposes of this paragraph, the following shall not be included:

(a) Repairs which are the subject of manufacturer discounts, such as special events, specials, promotions, coupons, or service campaigns.

(b) Parts sold at wholesale.

(c) Repairs of motor vehicles owned by the dealer.

(d) Routine maintenance, including, but not limited to, replacements of fluids, filters, batteries, bulbs, belts, nuts, bolts, or fasteners, unless provided in the course of, and related to, an otherwise qualified repair.

(e) Installations of accessories.

(f) Replacements of or work on tires, wheels, or brakes, including alignments, wheel or tire rotations, or replacements of brake drums, rotors, shoes, or pads.

(g) Vehicle reconditioning.

(h) Safety or emission inspections required by law.

(i) Repairs for which volume discounts have been negotiated with government agencies or insurers.

(j) Bodyshop repairs of conditions caused by collision, road hazard, the force of the elements, vandalism, theft, or owner, operator, or third-party negligence or deliberate act.

(k) Parts that do not have individual part numbers.

(l) Manufacturer approved and reimbursed goodwill repairs or reimbursements.

(m) Window replacement, window etching, window tint, protective film, or other masking products.

(5) The submitted parts mark-up or labor rate shall each be presumed to be reasonable, and shall go into effect forty-five (45) days after the manufacturer’s receipt of its submission, unless, within such period, the manufacturer rebuts that presumption, by reasonably substantiating that such submission is materially incomplete, materially inaccurate or is materially unreasonable and providing a full explanation of any and all reasons that such submitted mark-up or rate is materially incomplete, materially inaccurate or materially unreasonable, evidence validating each such reason, a copy of all calculations used by it demonstrating any material inaccuracy, and a proposed adjusted mark-up or rate provided that the dealers submission is materially accurate, based upon the qualified repair orders submitted by the dealer. In such event, the manufacturer may not submit more than one (1) such rebuttal to the dealer, and may not thereafter add to, expand, supplement, or otherwise modify any element thereof, including, but not limited to, its grounds for contesting such parts mark-up or labor rate. If a manufacturer determines from any set of repair orders submitted under this subsection and Section 63-17-86 that the labor rate or parts mark-up calculated under this subsection is substantially higher or lower than the rate currently on record with the manufacturer for labor and/or parts, the manufacturer may, in accordance with this subsection, request additional repair orders for a period of either sixty (60) days prior to or sixty (60) days subsequent to the time period for which the repair orders were submitted for purposes of an alteration, and shall have forty-five (45) days from receiving the additional repair orders to rebut the presumption that the dealer’s proposed mark-up and labor rates are reasonable.

(6) If the dealer and the manufacturer do not agree on the parts mark-up or labor rate, as the case may be, then the dealer may file a protest with the commission within sixty (60) days of receiving the manufacturer’s written rejection of the dealer’s proposed parts mark-up or labor rate. If such a protest is filed, the commission shall inform the manufacturer thereof and that a hearing will be held thereon. In any such hearing, the manufacturer shall have the burden of proving by a preponderance of the evidence that the dealer’s submitted parts mark-up or labor rate or both was materially incomplete, materially inaccurate or was unreasonable as described in subsection (5). Upon a commission decision in favor of the dealer, any increase in the dealer’s parts mark-up or labor rate arising from such proceeding shall be effective retroactively to the date forty-five (45) days following the manufacturer’s receipt of the original submission to the manufacturer.

(7) If a manufacturer furnishes a part or component to a dealer, at reduced or no cost, to use in performing warranty work, the manufacturer shall compensate the dealer for the part or component in the same manner as warranty parts compensation under this section by compensating the dealer on the basis of the dealer’s mark-up on the cost for the part or component as listed in the manufacturer’s price schedule less the cost for the part or component.

(8) A manufacturer may not require a dealer to establish the rate customarily charged by the dealer for parts and labor by an unduly burdensome or time-consuming method or by requiring information that is unduly burdensome or time-consuming to provide.

Although the statutory text provided above represented that codified and in effect in the respective state at the time of publication of the above, Armatus Dealer Uplift, LLC bears no responsibility for deviations of the above from versions thereof subsequently in effect as a result of future statutory amendments.