Corporation and that Daily Corporation did not rely on these inspections.
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 safety recommendations were implemented.
Syracuse contends that there is a fact issue as to whether Allendale's recommendations were merely advisory by-products of inspections conducted (as Allendale maintains) only for its loss prevention and underwriting purposes, or whether there was the additional purpose to supply Daily Corporation with inspection services. In support of the inference that Allendale inspected for Daily, Syracuse points to the use of the term "loss prevention" and the fact that Daily was provided with copies of the loss prevention report, but Allendale's submissions to the contrary are clearly dispositive on this point. First, there is the disclaimer which appears on its Loss Prevention Report:
This report is intended to assist you in reducing the possibility of loss to the property insured with the Factory Mutual Companies by bringing to your attention hazards and lack of protection which need prompt consideration to prevent such loss to property. It is not intended to imply that all other hazards and conditions are under control at the time of this inspection. The liability of the Factory Mutual Companies is limited to that covered by their insurance policies. No other liability is assumed by reason of this report as it is only advisory in nature and the final decision must be made by you. (Emphasis added).
Second, Allendale cites para. 8 of Syracuse's Answer to the Summary Judgment Motion.
8. Factory Mutual Engineering Association (hereinafter "FMEA") (not named as a defendant in this suit) conducted periodic inspections on behalf of Allendale solely for the underwriting and loss prevention purposes of Allendale.