KRS 190.0491: "Delivery" defined -- Dealer's duties concerning vehicle damaged in

transit -- Reversion of ownership -- Certification to consumer -- Failure of

manufacturer to indemnify dealer.

(1) "Delivery" of a motor vehicle to a dealer by a manufacturer or distributor for the

purposes of this section shall be accomplished by the:

(a) Tender of the motor vehicle and any documents necessary to enable the

dealer to obtain title and possession of the motor vehicle at the dealer's

place of business or designated place of delivery, and

(b) The giving of notice of the tender of the motor vehicle and documents to

the dealer.

(2) Whenever a motor vehicle is damaged while in transit when the carrier or the

means of transportation is designated by the manufacturer or distributor, or

whenever a motor vehicle is otherwise damaged prior to delivery to the dealer,

the dealer must:

(a) Notify the manufacturer or distributor of the damage within three (3)

working days of the occurrence of the delivery of the motor vehicle as

defined in subsection (1) of this section; and

(b) Request from the manufacturer or distributor authorization to repair the

damages sustained or to replace the parts or accessories damaged.

Notification of damage by the dealer must be by certified mail, with a notice of

delivery requested to be returned to the dealer, and shall be presumed to have

occurred upon deposit of the notice with the United States Postal Service.

(3) In the event the manufacturer or distributor refuses or fails to authorize repair

or replacement of the damage within three (3) working days of notification of

damage by the dealer, ownership of the motor vehicle shall revert to the

manufacturer or distributor, and the dealer shall incur no obligations, financial

or otherwise, for the damage to the motor vehicle. In determining when the

notification of the damage by the dealer to the manufacturer or distributor

occurs, the date the notice is received by the manufacturer or distributor by the

United States Postal Service indicated on the notice of delivery returned to the

dealer shall be controlling.

(4) In computing the lapse of three (3) working days under this section, the day of

the occurrence of delivery of the motor vehicle to the dealer by the

manufacturer or distributor, as defined in subsection (1) of this section, or the

day of notification of the damage to the manufacturer or distributor by the

dealer, as described in subsection (3) of this section, shall not be included, but

the last working day of the period so computed shall be included.

(5) Prior to the sale of any motor vehicle damaged prior to delivery to the dealer as

described in subsection (2) of this section, excluding damage to glass, tires,

and bumpers when replaced by identical manufacturer's original equipment

and any damage not exceeding six percent (6%) of the sticker price of the

vehicle, the occurrence and extent of the damage must be disclosed by the

dealer to the consumer, and upon repair of the damage sustained, or

replacement of the parts or accessories damaged, the manufacturer and/or

dealer, must certify to the consumer that the motor vehicle has been repaired

or remanufactured to the manufacturer's standards; if the dealer makes the

certification he shall be indemnified by the manufacturer. Upon this

certification, liability for any concealed damages then remaining with the motor

vehicle shall lie with the manufacturer.

(6) Whenever a motor vehicle is damaged resulting in repairs, for items other than

wheels, tires, or glass, that exceed two thousand dollars ($2,000) after delivery

to the dealer by the manufacturer or distributor, as defined in subsection (1) of

this section, but before sale by the dealer to the consumer, the occurrence and

extent of the damage must be disclosed by the dealer to the consumer prior to

a sale, and upon repair of the damage sustained, or replacement of parts or

accessories damaged, the dealer must certify to the consumer that this motor

vehicle has been repaired or remanufactured according to the manufacturer's

standards. Upon this certification, liability for any concealed damages then

remaining with the motor vehicle shall lie with the dealer.

(7) Notwithstanding the terms of any franchise agreement, it shall be a violation of

this section for any new motor vehicle manufacturer to fail to indemnify and

hold harmless its franchised dealers against any judgment or settlement

agreed to in writing by the manufacturer for damages, including, but not limited

to, court costs and reasonable attorneys' fees of the new motor vehicle dealer,

arising out of complaints, claims, or lawsuits including, but not limited to, strict

liability, negligence, misrepresentation, warranty (express or implied), or

rescission of the sale as is defined in KRS 355.2-608, to the extent that the

judgment or settlement agreed to in writing by the manufacturer relates to the

alleged defective or negligent manufacture, assembly, or design of new motor

vehicles, parts, or accessories or other functions by the manufacturer, beyond

the control of the dealer.