TITLE 6

ACTIONS IN PARTICULAR CASES

CHAPTER 14

PRODUCT LIABILITY

6-1407.  Individual rights and responsibilities of product sellers other than manufacturers. (1) In the absence of express warranties to the contrary, product sellers other than manufacturers shall not be subject to liability in circumstances where they do not have a reasonable opportunity to inspect the product in a manner which would or should, in the exercise of reasonable care, reveal the existence of the defective condition which is in issue; or where the product seller acquires the product in a sealed package or container and sells the product in the same sealed package or container. The liability limitation of this subsection shall not apply if:

(a)  The product seller had knowledge or reason to know of the defect in the product;

(b)  The product seller altered, modified, or installed the product, and such alteration, modification or installation was a substantial proximate 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;

(c)  The product 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.

(d)  The product seller is a wholly-owned subsidiary of the manufacturer, or the manufacturer is a wholly-owned subsidiary of the product seller.

(e)  The product seller sold the product after the expiration date placed on the product or its package by the manufacturer.

(2)  In an action where the liability limitation of subsection (1) applies, any manufacturer who refuses to accept a tender of defense from the product seller, shall indemnify the product seller for reasonable attorney’s fees and costs incurred by the product seller in defending such action.

(3)  In any product liability action, the manufacturer of the product shall be indemnified by the product seller of the product for any judgment rendered against the manufacturer and shall also be reimbursed for reasonable attorney’s fees and costs incurred in defending such action:

(a)  If the product seller provided the plans or specifications for the manufacture or preparation of the product;

(b)  If such plans or specifications were a substantial cause of the product’s alleged defect; and

(c)  If the product was manufactured in compliance with and according to the plans or specifications of 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.

(4)  A product seller, other than a manufacturer, is also subject to the liability of manufacturer if:

(a)  The manufacturer is not subject to service of process under the laws of the claimant’s domicile; or

(b)  The manufacturer has been judicially declared insolvent in that the manufacturer is unable to pay its debts as they become due in the ordinary course of business; or

(c)  The court outside the presence of a jury determines that it is highly probable that the claimant would be unable to enforce a judgment against the product manufacturer.

History:

[(6-1407) 6-1307, added 1980, ch. 225, sec. 1, p. 503; am. and redesig. 2005, ch. 25, sec. 9, p. 87.]