§ 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.