12-684. Indemnification; tender of defense;
execution
A. In any product liability action where the manufacturer refuses to accept a
tender of defense from the seller, the manufacturer shall indemnify the seller for any
judgment rendered against the seller and shall also reimburse the seller for reasonable
attorneys' fees and costs incurred by the seller in defending such action, unless either
paragraph 1 or 2 applies:
1. The seller had knowledge of the defect in the product.
2. The seller altered, modified or installed the product, and such alteration,
modification or installation was a substantial cause of the incident giving rise to the
action, was not authorized or requested by the manufacturer and was not performed in
compliance with the directions or specifications of the manufacturer.
B. If a judgment is rendered in favor of the plaintiff and a seller is granted
indemnity against a manufacturer, the plaintiff shall first attempt to satisfy the
judgment by levying execution upon the manufacturer in this state or in the state where
the manufacturer's principal place of business is located and by making demand upon any
liability insurance carrier of the manufacturer whose identity is known to plaintiff
before attempting to collect the judgment from the seller or the seller's liability
insurance carrier. The return of a writ of execution partially or wholly unsatisfied or
the failure of the manufacturer's insurance carrier to pay the judgment upon demand shall
be deemed full compliance with the plaintiff's obligation to attempt to collect from the
manufacturer.
C. In any product liability action the manufacturer of the product shall be
indemnified by the seller of the product for any judgment rendered against the
manufacturer and shall also reimburse the manufacturer for reasonable attorneys' fees and
costs incurred in defending such action, if the seller provided the plans or
specifications for the manufacture or preparation of the product and such plans or
specifications were a substantial cause of the product's alleged defect and if the
product was manufactured in compliance with and according to the plans or specifications
of the seller. If a judgment is rendered in favor of the plaintiff and a manufacturer is
granted indemnity against a seller, the plaintiff shall first attempt to satisfy the
judgment by levying execution upon the seller in this state or in the state where the
seller's principal place of business is located and by making demand upon any liability
insurance carrier of the seller whose identity is known to plaintiff before attempting to
collect the judgment from the manufacturer or manufacturer's liability insurance
carrier. The return of a writ of execution partially or wholly unsatisfied or the
failure of the seller's insurance carrier to pay the judgment upon demand shall be deemed
full compliance with the plaintiff's obligation to attempt to collect from the
seller. The provisions of this subsection shall not apply if the manufacturer had
knowledge or with the exercise of reasonable and diligent care should have had knowledge
of the defect in the product.
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