The opinion of the court was delivered by: LUONGO
This case arises from a fire occurring at the premises of plaintiff's employer, the Daily Corporation, in which plaintiff was severely injured. Plaintiff, alleging that the fire was caused by the ignition of a large quantity of flammable MEK liquid which had collected on the floor because of a defective self-closing drum gate or valve attached to a 55 gallon drum of MEK, sued several defendants, including Syracuse Stamping Company, Inc., manufacturer of the valve. Syracuse filed a third-party complaint against Allendale Mutual Insurance Company, the Daily Corporation's property fire insurer, seeking indemnity or contribution for Allendale's negligent inspection of Daily Corporation's facility, alleging liability under § 324A of the Restatement (Second) of Torts, which provides:
§ 324A. Liability to Third Person for Negligent Performance of Undertaking
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.
Summary judgment may be granted only if the record clearly establishes the existence of "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Because Syracuse has failed to raise an issue of fact as to the purpose of Allendale's inspections and as to Daily Corporation's reliance on those inspections, I will grant Allendale's motion.
Plaintiff's employer, Daily Corporation, is a manufacturer of steel tubing. Part of the manufacturing process is the electrostatic painting of these tubes. In the paint room where the accident happened, Daily Corporation maintained one 55 gallon drum of each of three solvents, including methylethylketone (MEK), used in the painting process. The drums were kept in a horizontal position in a wooden cradle and were equipped with Syracuse-produced self-closing gate valves. Plaintiff alleged that the failure of these valves, which allowed a large quantity of MEK to collect on the floor, was a cause of his injury. Syracuse has alleged that Allendale was negligent in failing to recommend to Daily that it limit to a one-day's supply the quantity of MEK, or of flammable solvents in general, stored within the building. Since MEK was used only to clean equipment and workers' hands, a daily supply would have been only a few gallons and this small amount, Syracuse argues, could not have caused plaintiff's injury.
Syracuse argues that Allendale's periodic inspections of Daily's premises, using Factory Mutual Engineering Association (FMEA) experts, constituted an undertaking to provide inspection services for Daily; that Daily relied upon that undertaking by implementing the safety recommendations it received from Allendale; and that Allendale's inspection was negligent.
Allendale responds that it has no duty to either Daily or plaintiff, Blalock, because the inspections were solely for its own loss prevention and underwriting purposes and there is no evidence that the inspections were undertaken to render a service to Daily. Further, Allendale argues that there is no evidence that Daily or Blalock relied on its inspections, and therefore there was no causal link between the inspections and Blalock's injuries.
The threshold issue under § 324A is whether the party charged undertook a duty to the person for whom services were allegedly performed or to an injured third-party. In Evans v. Liberty Mutual Insurance Company, 398 F.2d 665 (1968), the court considered several factors in making its determination that the insurer had assumed no duty by making inspections. First, the court found that the safety recommendations the insurer had made were merely advisory; that the insurer had no power or authority to compel its insured to act upon those recommendations; that the recommendations were not followed; and that the insurer was under no legal or contractual duty to inspect. Next, the court found that primary responsibility for the safety of the plant employees remained with the employer-insured, and finally, that the insurer had not undertaken to inspect the entire plant.
In the instant case, all but one of these findings is present. The record does show that Daily did implement many of the recommendations made by Allendale, but in my view, this one factor does not establish a duty on the part of the insurer. Evans holds that making safety recommendations does not establish a duty. It would disserve the public policy of protecting workers' safety to hold that a duty arises because ...