(a) No manufacturer or distributor shall conduct a warranty or incentive audit on previously paid claims or chargeback any warranty or incentive payment previously made more than one year after the date the manufacturer or distributor made the payment to the dealer. This section shall not apply to fraudulent claims.
Terms Used In Hawaii Revised Statutes 437-57
Dealer: includes "auction" as defined in this section or any person or entity not expressly excluded by this chapter who sells three or more vehicles within a calendar year, or who is engaged in the business of selling, soliciting, offering, or attempting to negotiate sales, purchases, or exchanges of motor vehicles or any interest therein, including options to purchase motor vehicles. See Hawaii Revised Statutes 437-1.1
(b) A manufacturer or distributor shall not chargeback a dealer for sales or warranty payments unless the manufacturer or distributor can satisfy its burden of proof that the dealer’s claim was fraudulent or that the dealer did not substantially comply with the reasonable written procedures of the manufacturer or distributor.(c) The manufacturer or distributor shall provide the dealer a written notice thirty days before imposing a proposed chargeback. The dealer may protest the imposition of a proposed chargeback prior to the imposition of a proposed chargeback. The dealer, manufacturer, or distributor shall conduct any internal dispute resolution process in accordance with the franchise agreement. After the internal dispute resolution process is concluded, the dealer may file a petition in the manner prescribed in § 437-51 protesting the proposed chargeback amount. If a petition is filed, the proposed chargeback shall be stayed during the entirety of the action and until a final judgment has been rendered.
