407.831. Indemnification and hold harmless requirements.

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407.831. Indemnification and hold harmless requirements. — 1. Notwithstanding the terms of any franchise agreement to the contrary, each franchisor, including any successor manufacturer of that franchisor, shall indemnify and hold harmless each franchisee obtaining a new motor vehicle from the franchisor from and against any liability, including reasonable attorney's fees, expert witness fees, court costs, and other expenses incurred in the litigation, so long as such fees and costs are reasonable, that the franchisee may be subjected to by the purchaser of the vehicle because of damage to the motor vehicle that occurred before delivery of the vehicle to the franchisee and that was not disclosed in writing to the franchisee prior to delivery of the vehicle.

This indemnity obligation of the franchisor applies regardless of whether the damage falls below the six percent threshold under subsection 2 of this section. The failure of the franchisor to indemnify and hold harmless the franchisee is a violation of this section.

2. If the cost of repairing damage to a new motor vehicle that occurs before delivery to the franchisee's location exceeds six percent of the manufacturer's suggested retail price, as measured by retail repair costs, the franchisee may reject or, if title has passed to the franchisee, require the franchisor who delivered the vehicle to repurchase the vehicle within ten business days after delivery, unless the damage occurred during shipment and the method of transportation, carrier, or transporter of the motor vehicle was designated by the franchisee.

Upon repurchase, the franchisor shall be subrogated to all of the franchisee's rights against the carrier or transporter of the motor vehicle regarding damage. The cost of repairing glass, tires, bumpers, moldings, and audio equipment with identical manufacturer's original equipment shall not be included in determining the cost of repairing damage under this subsection.

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(L. 2010 H.B. 2198)