1. Before any dealer’s license, dealer’s plate, special dealer’s plate, rebuilder’s license or rebuilder’s plate, distributor’s license or distributor’s plate or manufacturer’s license or manufacturer’s plate is furnished to a manufacturer, distributor, dealer or rebuilder as provided in this chapter, the Department shall require that the applicant make an application for such a license and plate upon a form to be furnished by the Department, and the applicant shall furnish such information as the Department requires, including proof that the applicant has an established place of business in this State, procure and file with the Department a good and sufficient bond with a corporate surety thereon, duly licensed to do business within the State of Nevada, approved as to form by the Attorney General, and conditioned that the applicant or any employee who acts on behalf of the applicant within the scope of his or her employment shall conduct business as a dealer, distributor, manufacturer or rebuilder without breaching a consumer contract or engaging in a deceptive trade practice, fraud or fraudulent representation, and without violation of the provisions of this chapter. The bond must be:

(a) For a manufacturer, distributor, rebuilder or dealer who manufactures, distributes or sells motorcycles, $50,000.

(b) For a manufacturer, distributor, rebuilder or dealer who sells vehicles other than motorcycles, trailers or travel trailers, $100,000.

(c) For a manufacturer, distributor, rebuilder or dealer who sells travel trailers or other dual purpose trailers that include living quarters in their design, $100,000.

(d) For a manufacturer, distributor, rebuilder or dealer who sells horse trailers designed without living quarters or special purpose trailers with an unladen weight of 3,501 pounds or more, $50,000.

(e) For a manufacturer, distributor, rebuilder or dealer who sells utility trailers or other special use trailers with an unladen weight of 3,500 pounds or less or trailers designed to carry boats, $10,000.

2. The Department may, pursuant to a written agreement with any manufacturer, distributor, rebuilder or dealer who has been licensed to do business in this State for at least 5 years, allow a reduction in the amount of the bond of the manufacturer, distributor, rebuilder or dealer, if the business has been conducted in a manner satisfactory to the Department for the preceding 5 years. No bond may be reduced to less than 50 percent of the bond required pursuant to subsection 1.

3. The Department may allow a manufacturer, distributor, rebuilder or dealer who sells more than one category of vehicle as described in subsection 1 at a principal place of business or at any branch location within the same county as the principal place of business to provide a good and sufficient bond for a single category of vehicle and may consider that single bond sufficient coverage to include all other categories of vehicles.

4. The bond must be continuous in form, and the total aggregate liability on the bond must be limited to the payment of the total amount of the bond.

5. The undertaking on the bond is for the use and benefit of the consumer and includes any breach of a consumer contract, deceptive trade practice, fraud, fraudulent representation or violation of any of the provisions of this chapter or chapter 41, 97, 104, 104A or 598 of NRS by the representative of any licensed distributor or the salesperson of any licensed dealer, manufacturer or rebuilder who acts for the dealer, distributor, manufacturer or rebuilder on his or her behalf and within the scope of the employment of the representative or salesperson.

6. The bond must provide that it is for the use and benefit of any consumer of the dealer, distributor, rebuilder, manufacturer, representative or salesperson for any loss or damage established, including, without limitation:

(a) Actual damages;

(b) Consequential damages;

(c) Incidental damages;

(d) Statutory damages;

(e) Damages for noneconomic loss; and

(f) Attorney’s fees and costs.

The surety issuing the bond shall appoint the Commissioner of Insurance as its agent to accept service of notice or process for the surety in any action upon the bond brought in a court of competent jurisdiction or brought before the Director.

7. If a consumer has a claim for relief against a dealer, distributor, rebuilder, manufacturer, representative or salesperson, the consumer may:

(a) Bring and maintain an action in any court of competent jurisdiction. If the court enters:

(1) A judgment on the merits against the dealer, distributor, rebuilder, manufacturer, representative or salesperson, the judgment is binding on the surety.

(2) A judgment other than on the merits against the dealer, distributor, rebuilder, manufacturer, representative or salesperson, including, without limitation, a default judgment, the judgment is binding on the surety only if the surety was given notice and an opportunity to defend at least 20 days before the date on which the judgment was entered against the dealer, distributor, rebuilder, manufacturer, representative or salesperson.

(b) Apply to the Director, for good cause shown, for compensation from the bond. The Director may determine the amount of compensation and the consumer to whom it is to be paid. The surety shall then make the payment.

(c) Settle the matter with the dealer, distributor, rebuilder, manufacturer, representative or salesperson. If such a settlement is made, the settlement must be reduced to writing, signed by both parties and acknowledged before any person authorized to take acknowledgments in this State, and submitted to the Director with a request for compensation from the bond. If the Director determines that the settlement was reached in good faith and there is no evidence of collusion or fraud between the parties in reaching the settlement, the surety shall make the payment to the consumer in the amount agreed upon in the settlement.

8. Any judgment entered by a court in favor of a consumer and against a dealer, distributor, rebuilder, manufacturer, representative or salesperson may be executed through a writ of attachment, garnishment, execution or other legal process, or the consumer in whose favor the judgment was entered may apply to the Director for compensation from the bond of the dealer, distributor, rebuilder, manufacturer, representative or salesperson.

9. The Department shall not issue a license or plate pursuant to subsection 1 to a manufacturer, distributor, rebuilder or dealer who does not have and maintain an established place of business in this State.

10. As used in this section, “consumer” means any person who comes into possession of a vehicle as a final user for any purpose other than offering it for sale.

[Part 16:202:1931; A 1937, 330; 1951, 165; 1953, 280; 1955, 468] — (NRS A 1957, 507; 1960, 345; 1961, 80; 1963, 261; 1965, 1475; 1971, 1304; 1973, 39; 1977, 644; 1981, 190; 1983, 1003; 1987, 1144; 1993, 2342; 2001, 1889; 2005, 1241; 2007, 3209; 2013, 482; 2017, 805)