(1)Before any motor vehicle dealer's,
wholesaler's, wholesale motor vehicle auction dealer's, business disposal, or used
motor vehicle dealer's license is issued by the board through the executive director
to an applicant, the applicant must procure and file with the board evidence of a
savings account, deposit, or certificate of deposit meeting the requirements of
section 11-35-101 or a good and sufficient bond with corporate surety duly licensed
to do business within the state, approved as to form by the attorney general of the
state, and conditioned that the applicant must not practice fraud or violate any
provision of this part 1 related to fraud that is designated by the board by rule in
conducting the business for which the applicant is licensed. A motor vehicle dealer,
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(1) Before any motor vehicle dealer's,
wholesaler's, wholesale motor vehicle auction dealer's, business disposal, or used
motor vehicle dealer's license is issued by the board through the executive director
to an applicant, the applicant must procure and file with the board evidence of a
savings account, deposit, or certificate of deposit meeting the requirements of
section 11-35-101 or a good and sufficient bond with corporate surety duly licensed
to do business within the state, approved as to form by the attorney general of the
state, and conditioned that the applicant must not practice fraud or violate any
provision of this part 1 related to fraud that is designated by the board by rule in
conducting the business for which the applicant is licensed. A motor vehicle dealer,
business disposer, or used motor vehicle dealer need not furnish an additional bond,
savings account, deposit, or certificate of deposit under this section if the dealer
furnishes a bond, savings account, deposit, or certificate of deposit under section
44-20-412.
(2) (a) The purpose of the bond procured by the applicant in accordance with
subsection (1) of this section and section 44-20-114 (1) is to provide for the
reimbursement for any loss or damage suffered by any retail consumer caused by
fraud or a violation of this part 1 related to fraud by a motor vehicle dealer, used
motor vehicle dealer, wholesale motor vehicle auction dealer, business disposer, or
wholesaler. For a wholesale transaction, the bond is available to each party to the
transaction; except that, if a retail consumer is involved, the consumer has priority
to recover from the bond. The amount of the bond must be fifty thousand dollars for
a motor vehicle dealer applicant, used motor vehicle dealer applicant, wholesale
motor vehicle auction dealer applicant, business disposal applicant, or wholesaler
applicant; except that the amount of the bond must be five thousand dollars for
those dealers who sell only small utility trailers that weigh less than two thousand
pounds. The aggregate liability of the surety for all transactions is limited to the
amount of the bond, regardless of the number of claims or claimants.
(b) No corporate surety shall be required to make any payment to any person
claiming under the bond until a final determination of fraud has been made by the
board or by a court of competent jurisdiction.
(3) All bonds required pursuant to this section shall be renewed annually at
such time as the bondholder's license is renewed. The renewal may be done
through a continuation certificate issued by the surety.
(4) Nothing in this part 1 shall interfere with the authority of the courts to
administer and conduct an interpleader action for claims against a licensee's bond.