#### Charles GROGAN v. Daniel UGGLA, et al.

Supreme Court of Tennessee, AT NASHVILLE.

October 6, 2016 Session

FILED 11/21/2017

*866Matthew E. Wright, Franklin, Tennessee; and Edmund J. Schmidt III, Nashville, Tennessee, for the appellant, Charles Grogan.

Daniel W. Olivas, Nashville, Tennessee, and Brian S. Faughnan, Memphis, Tennessee,. for the appellees, Jerry Black and Pillar To Post, Inc.

Leslie Curry Bay, Nashville, Tennessee; and Harry S. Rosenthal, Ambler, Pennsylvania; for the Amicus Curiae, American Society of Home Inspectors.

Roger A. Page, J.,

delivered the opinion of the court,

in which Jeffrey S. Bivins, C J., and Cornelia A. Clark, JJ. joined. Holly Kirby, J., filed a separate opinion concurring in part, dissenting in part. Sharon G. Lee, J., filed a dissenting opinion.

In this case, the plaintiff Charles Grogan was injured when he fell from a second story deck that had not been properly constructed but had recently been inspected by the defendant Jerry Black, a home inspector hired by homeowner Daniel Ugg-la. Defendant Black was a franchisee of defendant Pillar to Post, Inc. The trial court granted summary judgment in favor of the defendants, and the Court of Appeals affirmed the trial court. We granted this appeal to consider as a matter of first impression in this state whether a home inspector is subject to liability for the physical harm suffered by a social guest of the home inspector’s client. We conclude that the defendants successfully negated essential elements of the claims of negligent misrepresentation and negligent inspection such that summary judgment was appropriate in this case. Accordingly, the Court of Appeals and the trial court judgments are affirmed.

OPINION

I. Facts and Procedural History

The basic facts of this case are simply explained. Before Daniel Uggla purchased a home in Franklin, ■ Tennessee, he, through his brother, hired a home inspector to inspect the house. The home inspector noted problems with the deck flooring of the second story deck but not with the railing. As a condition of the sale, the former homeowners replaced the deck flooring. The contractor who replaced the flooring did not work on the deck railing. During a social gathering hosted by Mr. Uggla after moving into the home, the plaintiff fell from the second story deck when the deck railing collapsed, and he sustained severe injuries. A forensic examination of the railing showed that it had been improperly constructed using interior finishing nails rather than galvanized nails. The plaintiff subsequently filed a complaint against the homeowner, the previous owner, the contractor who had replaced the deck boards, the home builder, and the home inspector. The home inspector and the home inspection franchise are the defendants now before us.1

In the plaintiffs second amended complaint, he alleged that’the defendants

> knew or in the exercise of reasonable care as a professional inspector should have known that the second floor rear exterior deck railing was constructed with interior finishing nails in violation *867of local, state[,] and national building codes, and constituted an unreasonable risk of harm since it could not withstand reasonable force to prevent someone from falling from the second floor exteri- or deck.,

The plaintiff further alleged that the defendants “did not perform a pressure test in order to determine the amount of force that the second floor rear, exterior deck railing could have withstood in compliance with applicable building codes.” Finally, the plaintiff - alleged that the defendants “failed to report that the second floor exterior deck railing was negligently constructed in violation of local, state[,] and national building codes and constituted an unreasonable risk of harm” and that, their negligence caused the plaintiffs injuries.

In the course of the litigation, Daniel Uggla testified by deposition that he wanted the property inspected “to make sure that everything is okay, up-to-date. If something was not right, I wanted it fixed.... [and to] [m]ake sure it was á good buy as well.” He testified that .after the inspection, his brother told him that the inspector “recommend[ed] to change the ... deck. Said that he didn’t have to. But [the inspector] said it looked old.... [but] [d]idn’t ever say it was dangerous.” His brother Mike Uggla testified that he wanted to have an inspection to protect against “scenarios of termites ... carbon monoxide ... structural damage ... to make sure you’re buying ... a good quality house.” He agreed that he relied on the inspector to tell him “what needed to be done.”

The defendant home inspector testified in his deposition that his “job is to .provide information to [his] client sq that they can make an informed decision about the house that they want to buy.” He stated that he did not see any visual damage to the deck railings and that the deck railings felt “firm and well anchored.” He-also stated that if there had been movement, he would have reported it as “a safety risk.” The defendant home inspector agreed in response to a question on cross-examination that one purpose of a home inspection is. to assure the safety of the occupants of the home. In his report, he noted warping on the deck, .and.as a result the Ugglas requested that the owners of the :home have the deck flooring replaced. The defendant home inspector confirmed .that he was not a building codes inspector.

After filing an answer denying all liability, the defendants moved for summary judgment. In the motion for summary judgment, the defendants characterized the plaintiffs claim as negligent misrepresentation and argued that reliance on the home inspection .report was a required component of such a claim, a requirement not met by the plaintiff. The defendants added that “as a matter of law, home inspectors do not owe any duty to third parties like Mr. Grogan.” The trial court granted summary judgment to the defendants.

The plaintiff appealed to the Court of Appeals and. argued that either Restatement (Second) of Torts section 311 (1965) (Negligent Misrepresentation . Involving Risk of Physical Harm)2 or Restatement *868(Second) of Torts section 324A (1965) (Liability to Third Person for Negligent Performance of Undertaking)3 provided him a cause of action and that material facts were in dispute such that summary judgment was inappropriate. *See Grogan v. Uggla,*No. M2014-01961-COA-R3-CV, 2015 WL 5601995, at *4 (Tenn. Ct. App. Sept. 22, 2015), *perm. app. granted*(Tenn. Feb. 18, 2016). The Court of Appeals rejected the plaintiffs arguments, reasoning that section 324A was not applicable due to the limitations on the scope of a home inspector’s duty as defined by the Tennessee Home Inspector License Act, 2005 Tenn. Pub. Acts, c. 65, and the contract between the defendants and their client, Mr. Uggla. *Id.*at *4-5. The Court of Appeals declined to apply section 311 because it has not previously been adopted in this state. *Id.*at *6. The Court of Appeals then undertook an analysis of the common law factors for determining whether a duty of care had arisen and concluded that it had not. *Id.*at *6-7. Finally, the Court of Appeals determined that the facts alleged by the plaintiff to be disputed and material did not affect the conclusion that the defendants did not owe the plaintiff a duty of care. *Id.*at *8. We accepted plaintiffs application for permission to appeal.

II. Standard of Review

This is an appeal from the trial court’s grant of the defendants’ motion for summary judgment. As such, we review the trial court’s ruling de novo, with no presumption of correctness. *Bain v. Wells,*936 S.W.2d 618, 622 (Tenn. 1997). Under Tennessee Rule of Civil Procedure 56.04, summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” We must determine whether the moving party satisfied its burden of production “either (1) by affirmatively negating an essential element of the nonmoving party’s claim or (2) by demonstrating that the nonmoving party’s evidence at the summary judgment stage is insufficient to establish the nonmoving party’s claim or defense.” *Rye v. Women’s Care Ctr. of Memphis, MPLLC,*477 S.W.3d 235, 264 (Tenn. 2015) (emphasis omitted).

III. Analysis

In this case, there is a fundamental disagreement between the plaintiff and the defendants over the cause of the action raised in the complaint. The trial court identified the cause of action as negligent misrepresentation. The trial court granted summary judgment because the defendants affirmatively negated essential elements of the plaintiffs complaint, namely by showing that the plaintiff was not a person for whose benefit the defendants provided information and that the plaintiff did not rely on the defendants’ information in any form. The Court of Appeals, however, framed the cause of action in question as one of ordinary negligence, a broader and more general cause of action than negligent misrepresentation, and it relied *869on the common law factors in its analysis for determining when a duty is owed.

In his second amended complaint, the plaintiff alleged that the defendant home inspector knew or should have known that the deck railing did not meet applicable building codes and “constituted an unreasonable risk of harm since it could not withstand reasonable force to prevent someone from falling”; that the defendant home inspector “did not perform a pressure test”; that the defendant home inspector “failed to report that the second floor exterior deck railing was negligently constructed in violation of local, state[,] and national building codes and constituted an unreasonable risk of harm”; and that these actions were the proximate cause of the plaintiffs injuries.

In *U.S. v. Neustadt,*the United States Supreme Court reasoned that negligence in an inspection underlying a report was part of a claim of negligent misrepresentation. *Neustadt,*366 U.S. 696, 706-07, 81 S.Ct. 1294, 6 L.Ed.2d 614 (1961). Several years later, however, the Court acknowledged that a plaintiff might allege a separate cause of action when the negligent conduct is separate from the communication of misinformation. *See Block v. Neal,*460 U.S. 289, 296-97, 103 S.Ct. 1089, 76 L.Ed.2d 67 (1983). The United States Court of Appeals for the Eighth Circuit has interpreted *Block v. Neal*to mean that a plaintiff might allege both a negligent inspection and negligent misrepresentation. *See Appley Bros. v. U.S.,*7 F.3d 720, 728 (8th Cir. 1993). However, as the Tenth Circuit points out, the issue in *Block v. Neal*was that the governmental authority was also supervising the construction of the home, so the plaintiff alleged both negligent supervision and negligent misrepresentation, with the negligent inspection being part of each claim. *See Ecco Plains, LLC v. U.S.,*728 F.3d 1190, 1196 (10th Cir. 2013). In this case, the plaintiff has presented allegations separate from communication of misinformation. Therefore, we conclude that the plaintiffs complaint fairly raises both negligent misrepresentation (by way of his allegation that the defendant home inspector failed to report negligent construction) and ordinary negligence (by way of his other allegations that amount to a claim that the defendant home inspector negligently performed the inspection).

A. Negligent Misrepresentation

The plaintiff in this case alleges negligent misrepresentation involving the risk of physical harm,4 a tort that we have neither specifically rejected nor adopted in this state. The Restatement (Second) of *870Torts section 311 gives the following definition:

> (1) One who negligently gives false information to another is subject to liability for physical harm caused by action ■taken by the other in reasonable reliance upon such information, where such harm results

> (a) to the other, or

> (b) to such third persons as the actor should expect to be put in peril by the action taken.

> (2) Such negligence may consist of failure to exercise reasonable care

> (a) in ascertaining the accuracy of the information, or

> (b) in the manner in which it is communicated.

While we do not foreclose the possibility of recognizing the tort of negligent misrepresentation involving physical harm, we decline to .do so in this case because the plaintiff has failed to allege that the defendant negligently gave false information. Section 311 “by its own terms requires an affirmative misstatement, not just a non-disclosure.” *McLachlan v. New York Life Ins. Co.,*488 F.3d 624, 630 (5th Cir. 2007); *see also Randi W. v. Muroc Joint Unified Sch. Dist.,*14 Cal.4th 1066, 60 Cal.Rptr.2d 263, 929 P.2d 582 (1997) (holding that defendants’ letters of recommendation “constituted affirmative representations” that “were false and misleading”); *Bd. of Educ. Of City of Chicago v. A, C and S, Inc.,*131 Ill.2d 428, 137 Ill.Dec. 635, 546 N,E.2d 580, 593 (1989) (instructing that on remand the plaintiff had to show, that “the defendants knew or should have known of the dangerous propensity” of their product and that “statements made were to induce the plaintiffs to purchase the products”); *Bloskas v. Murray,*646 P.2d 907 (Colo. 1982) (holding that the evidence was sufficient to submit the claim of negligent misrepresentation to the jury when a doctor lied about having participated in ankle replacement surgery in the past and by assuring the patient that his concern about amputation was unfounded despite there being a risk of amputation); *Hall v. Ford Enterprises, Ltd.,*445 A.2d 610 (D.C. 1982) (holding that the statement “protected by Scott Detective Agency, Ltd.” on a decal on the front of an apartment building was not a guarantee of safety and that the plaintiff “failed to establish the communication of'false information”). Although the comments to section 311 include an illustration about a boiler inspection, that illustration involves the inspector issuing a certificate of safety, in other words, an affirmative false statement that the boiler was safe, when in fact it was not. Restatement (Second) of Torts § 311, cmt. d. The undisputed material facts in this case are that the home inspector failed to discover any defect in the deck railing and that as a result he did not report any defect. The home inspector did not affirmatively state that the deck railing was safé. Thus, even if we were to adopt section 311, the facts here foreclose the possibility of the plaintiff proving' that the defendant home inspector gave *false*information to his client. *See*Restatement (Second) of Torts § 311(1); *see Smith v. Brutger Companies,*569 N.W.2d 408, 413-15. (Minn. 1997) (affirming summary judgment on the plaintiffs misrepresentation claim, without affirmatively rejecting or adopting section 311).5

*871B. Negligent Inspection

The plaintiff has also alleged ordinary negligence in the form of a negligent inspection. The elements of negligence are well-established:

> In order to establish a prima facie claim of negligence, basically defined as the failure to exercise reasonable care, a plaintiff must establish the following essential elements: “(1) a duty of care owed by defendant to plaintiff; (2) conduct below the applicable standard of care that amounts to a breach of that duty; (3) an injury or loss; (4) causé in fact; and (5) proximate, or legal, cause.”

*Giggers v. Memphis Hous. Auth.,*277 5.W.3d 359, 364 (Tenn. 2009) (quoting *McCall v. Wilder,*913 S.W.2d 150, 153 (Tenn. 1995)).

“Duty is a . legal obligation to conform to a reasonable person standard of care in order to protect others against unreasonable risks of harm.” *Satterfield v. Breeding Insulation Co,,*266 S.W.3d 347, 355 (Tenn. 2008). The dissent contends that the defendants’ conduct in this case should be analyzed based on the factors considered in *Satterfield**6**;*however, the *Satterfield*Court quoted with approval the principles applicable to liability for physical harm contained in' the Restatement (Third) of Torts:

> Even when the actor and victim are complete strangers and have no relationship, the basis for. the ordinary duty of reasonable care ... is conduct that *creates*a risk to another, Thus, a relationship ordinarily is not what defines the line between duty and no-duty; conduct *creating*risk to. another is.

*Id.*at 362-63 (quoting the Restatement (Third) of Torts: Liab. for Physical and Emotional Harm § 37, Reporter’s Note, cmt. c (October 2017 Update) (hereinafter “Restatement (Third) of Torts”)) (emphasis added). Section 37 of the Restatement (Third) of Torts states that “[a]n actor whose conduct has not created a risk of physical or.emotional harm to another has no duty of care to the other unless a court determines that one of the affirmative duties provided in [other sections of the Restatement] is ¿pplicable.”

In the comments to section 37, the authors of the Restatement give an illustration that mirrors this, case: an inspector fails to identify a source of harm during an inspection, and a person is injured by that source of harm. Restatement (Third) of Torts § 37, cmt. c. In the Restatement’s illustration, the inspector’s “conduct did not create a risk of harm” to the injured person, so whether the inspector had a duty of care would be governed by the Affirmative Duties chapter of the Restatement (Third) of Torts, which includes an update to Restatement (Second) of Torts section 324A, Liability to a Third Person for Negligent Performance of an Undertaking.7*Id.,*illus. 1. Here, the inspector *872failed to identify a source of harm, and an injury resulted; thus, based on the reasoning of the Restatement, the defendant home inspector did not create a risk of harm and therefore whether he has a duty of care would be analyzed under theories of affirmative duties rather than the more generalized duty of care evaluated by the *Satterfield*duty factors.

This Court has not previously considered a case involving an allegedly negligent home inspection. In reviewing cases from other jurisdictions, if we narrow our focus to cases involving home inspections, we find few involving potential liability to a third party for a negligently-performed home inspection. *See, e.g., Oliveira v. Jensen,*No. HHDCV136045373S, 2015 WL 9809752, at *11 (Conn. Super. Ct. Dec. 7, 2015) (defendant home inspection company failed to establish that it was entitled to summary judgment).

However, if we broaden our focus slightly to include other types of contracted inspections of property, we find numerous comparable cases. In these cases, courts have considered whether one who assumes a contractual duty to inspect the property of another may be held liable for physical injuries suffered by a third party. *See generally*Frank J. Wozniak, Annotation, *Breach of Assumed Duty to Inspect Property as Ground for Liability to Third Party,*13 A.L.R. 5th 289 (originally published in 1993) (most recent case from 2014) (collecting cases). These cases involve a wide range of inspections, such as cases in which an insurance company, a liability and maintenance company, a franchisor, or the like, has inspected elevators, escalators, boilers, hotels, trailer parks, apartment buildings, stores, gaslines, appliances, trees, docks and piers. *Id.*at § 2[a] Summary and comment — Generally.

While the facts and results vary widely, the majority of these negligent-inspection eases utilize Section 324A of the Restatement (Second) of Torts as a framework for determining whether a particular defendant may be held liable to a third party for physical harm resulting from an allegedly negligent contractual inspection.8*Id.-, see also id.*at § 2[b] Summary and comment — Practice pointers (offering practice advice gleaned from the collected cases pursuant to Section 324A). Indeed, the il*873lustrations to Section 324A include two negligent-inspection cases.9

This Court has likewise applied Section 324A of the Restatement (Second) of Torts. *See Biscan v. Brown,*160 S.W.3d 462, 483 (Tenn. 2005) (holding that a parent voluntarily assumed duty of reasonable care as to minors who attended his daughter’s party at the parent’s home); *see also Wallis v. Brainerd Baptist Church,*509 S.W.3d 886, 898 n.12 (Tenn. 2016) (observing that this Court has cited section 324A of the Restatement (Second) of Torts “approvingly” but noting that the defendant in that case did not undertake any duty as to the plaintiff). The underpinning of Section 324A is a “well-worn” principle that Tennessee courts have applied “in a variety of factual contexts,” namely, “[o]ne who assumes to act, even though gratuitously, may thereby become subject to the duty of acting carefully.” *Bennett v. Trevecca Nazarene Univ.,*216 S.W.3d 293, 300 (Tenn. 2007) (holding that premises owner had assumed duty to provide information to independent contractor regarding voltage of malfunctioning switchgear in electrical equipment, so premises owner had duty of reasonable care to ensure that the information provided was accurate); *see also Stewart v. State,*33 S.W.3d 785, 793 (Tenn. 2000) (citing same principle); *Marr v. Montgomery Elevator Co.,*922 S.W.2d 526, 529 (Tenn. Ct. App. 1995) (same); *Ellington v. Jackson Bowling & Family Fun Ctr., L.L.C.,*No. W2012-00272-COA-R3-CV, 2013 WL 614502, at *11 (Tenn. Ct. App. Feb. 19, 2013) (citing *Biscan,*160 S.W.3d at 483); *Burks v. Kroger Co.,*No. M2008-02664-COA-R3-CV, 2009 WL 4059145, at *9 (Tenn. Ct. App. Nov. 23, 2009) (applying Section 324A and stating that “the provision has been extensively cited and relied upon in cases addressing the liability of a person for a breach of the assumed duty of reasonable care.”); *Collins v. Arnold,*No. M2004-02513-COA-R3-CV, 2007 WL 4146025, at *14 (Tenn. Ct. App. Nov. 20, 2007) (holding Section 324A applicable “regarding liability under a duty that is voluntarily assumed” and that the trial court erred in refusing to give jury instruction based on Section 324A); *Downs ex rel. Downs v. Bush,*263 S.W.3d 812, 823 (Tenn. 2008) (applying Section 324A, holding there was a fact issue as to whether the defendants undertook the duty to take charge of a “helpless” person).

Section 324A of the Restatement (Second) of Torts may be applied where a party has undertaken to provide services to another.10 It provides structure for de*874termining potential liability to a third party who has süfferéd physical harm from the negligent performance of the undertaking:

> § 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.-

Restatement (Second) of Torts §' 324A. “[T]he question of whether one has assumed a duty to act is ..a question of law.” *Stewart,*33 S.W.3d at 793.

The defendants insist that there was no undertaking in this case that would implicate Section 324A. They argue that a home inspection is not a safety inspection; rather, the purpose of home inspections is merely to provide information to facilitate a real estate transaction. They note that the Tennessee statutes and regulations regarding home inspections specify that the inspection is visual and not a building code inspection. In response, the plaintiff points to the same statutes and regulations, contending that they show that home inspections include safety considerations. He emphasizes that Tennessee regulations specifically require the home inspector to inspect “[d]ecks, balconies, ... and applicable railings.” Tenn. Comp. R. & Regs. 0780-05-12-.10(13)(a)(4.).

In this case, we need not make a broad determination regarding whether Tennessee statutes and regulations mandate that a home inspection include safety considerations. As outlined in the-recitation of the facts, the home inspector in this case gave deposition testimony in which he conceded that one of the goals of a home inspection is to make sure that the home is safe for the persons who will occupy it and that he specifically undertook to inspect the deck railings in the home purchased by Mr. Uggla, by visual observation and physical movement, to determine if they would be safe. But the boundaries of the defendants’ undertaking are circumscribed by the parameters of the evidence, in particular the inspection agreement and the deposition testimony, in addition to the pertinent statutes. Although the plaintiffs claim against the defendants is properly analyzed under Section 324A, the plaintiff is not entitled to relief. .

Section 324A describes the services rendered as services which the actor should recognize would be necessary for the protection of a third party. Under Restatement section 324A, a duty can only be imposed “to the extent actually assumed by the defendant.” *See Homer v. Pabst Brewing Co.,*806 F.2d 119, 121 (7th Cir. 1986) (applying Illinois law under the voluntary undertaking doctrine); *see also Evans v. Arise Inc.,*2008 WL 5429835 (W.D. Tenn. 2008) (applying Tennessee law); *Eaves Brooks Costume Co. v. Y.B.H. Realty Corp.,*76 N.Y.2d 220, 557 N.Y.S.2d 286, 556 N.E.2d 1093, 1096 (1990): In other words, “[t]he foundation of the ... rule is that the defendant specifically has undertaken-to perform the task that he or she is charged with having performed negligently.” *Patentas v. U.S.,*687 F.2d 707 (3rd Cir. 1982). In this case, the evidence of the defendant’s undertaking includes the agreement between himself and the Ug-*875glas, the deposition testimony, and the relevant statutes and regulations. *See Eaves Brooks Costume Co.,*557 N.Y.S.2d 286, 556 N.E.2d at 1096 (“While [the] plaintiff is. not bound by the provisions of a contract to which it is not a party, the limited scope of defendants’ undertaking is nonetheless relevant in determining whether a tort duty to others should arise from their performance of the contractual obligations.”).

The complaint in this case alleges that the defendant home inspector knew or should have known that the deck railing *did not meet applicable building codes.*In other words, the undertaking according to the plaintiffs allegations was that the home inspector inspected for. building code violations. Indeed, in his response to the defendant’s motion for summary judgment, the plaintiff specified that the defendant’s failure to identify defective nails that violated the local building code and his failure to determine that the railing could not withstand the 200 pounds of lateral pressure required by the local building' code amounted to a negligent home inspection. Thus, under Section 324A, the plaintiff is arguing that the defendant voluntarily assumed a duty to protect the plaintiff by performing a building codes inspection on the deck railing and should be subject to liability for the plaintiffs physical harm resulting from the defendant’s failure to exercise reasonable care in performing the building codes inspection. However, based on the statutes, regulations, deposition testimony, and agreement' between the parties, the defendant home inspector did not undertake a building codes inspection. The agreement between the defendant home inspector and his client states that the inspection is visual only and not a building code inspection. The defendant home inspector testified that he is not a building codes inspector. In addition, the statutes state that a home inspection is not “a compliance inspection for building codes.” Tenn. Code Ann. § 62-6-302(3)(B) (2009). A building codes inspection, was outside the scope of the services rendered by the defendant home inspector, and he cannot be held liable for failure to perform a building codes inspection with reasonable care.

The agreement includes other language that limits the scope of the undertaking:

> • The Inspector does not offer an opinion as to the advisability or inadvisability of the purchase of the property, its value or its potential use.

> • [I]t is a reasonable effort to disclose the condition of the house based on a .visual inspection.

> • Conditions beyond the scope of the ■ inspection will not be identified. No engineering services are offered.

> • This Inspection Report is based on the condition of the Property existing and apparent as of the time and date of the inspection. Not all conditions may be apparent on the inspection date due to weather conditions, inoperable systems, inaccessibility of areas of the Property, etc. A defect that was apparent on any date prior to the inspection date may not be apparent on the inspection date. Without dismantling the house or its systems, there are limitations to the inspection. Throughout any inspection, inferences are drawn which cannot be confirmed by direct observation. Clues and symptoms often do not reveal the extent or severity of problems. Therefore, the inspection and subsequent Inspection Report may help reduce the risk of purehas- ’ ing the property; however, an inspection does not eliminate such risk nor does the Inspector assume such risk. While some of the less important deficiencies are addressed, an' all inclusive list of Minor building flaws is not provided. Inspector is neither re*876sponsible nor liable for the non-discovery of any patent or latent defects in materials, workmanship, or other conditions of. the Property, or any other problems which may occur or may become evident after the inspection time and date. Inspector is neither an insurer nor guarantor against defects in the building and improvements, systems or components inspected. Inspector makes no warranty, express or implied, as to the fitness for use or condition of the systems or components inspected. Inspector assumes no responsibility for the cost of repairing or replacing any unreported defects or conditions, nor is Inspector responsible or liable for any future failures or repairs.

In addition, the defendant home inspector testified that the agreement was to inspect the property *for the client.*The inspection agreement evidences an expectation by the home inspector that the inspection was for the benefit of the client only. The agreement is between the defendant home inspector and his client and is addressed to the client while also noting that the inspection report would be provided to the client’s representative and his real estate agent. The agreement states that “[t]he inspection report is provided solely for the benefit of the Client and may not be relied upon by any other person.” The statutes, rules, and regulations governing home inspections also indicate that inspections are for the client’s benefit. For example, the standards of practice state that a home inspection “performed according to this rule shall provide the *client*with an understanding of the property conditions at the time of the home inspection.” Tenn. Comp. R. *&*Regs. 0780-05-12-,10(3)(a) (emphasis added). Tennessee Code Annotated section 62-6-808 (2009 & 2017 Supp.) provides that a home inspector can be disciplined for failing to disclose to his client any financial interest or relationship that would affect the client’s interest and for disclosing the results of a home inspection to anyone without the client’s approval. Thus, the defendant home inspector’s duty as circumscribed by the agreement and the relevant statutes is owed to the client. While the defendant home inspector agreed during his deposition that the inspection was partly to identify safety risks for the eventual occupiers of the house, nothing in the defendant home inspector’s deposition testimony or any other evidence presented indicated that he undertook an additional duty to protect third parties.

The defendant home inspector did not undertake a building codes inspection, and there is no evidence that he voluntarily assumed a duty beyond what he owed to his client. Therefore, we conclude that the defendants did not render services that they knew or should have known was for the protection of third parties because their services were for the benefit of their client alone and that they therefore did not assume a duty to the plaintiff. Accordingly, the defendants have negated the essential element of duty, and summary judgment was appropriate.

CONCLUSION

We conclude that summary judgment on the negligent misrepresentation claim was appropriate because the plaintiff has not alleged facts that would constitute an actionable claim of negligent misrepresentation involving the risk of physical harm. We also conclude that the defendants did not owe or assume a duty of care toward the plaintiff and thus that summary judgment was appropriate with regard to the negligent inspection claim. Therefore, we affirm the decision of the trial court and the Court of Appeals. Costs are assessed to the plaintiff, Charles Grogan.

*877Holly Kirby, J., filed a separate opinion concurring in part, dissenting in part.

Sharon G. Lee, J., filed a dissenting opinion.

1

. The record shows that the home builder, the previous homeowner, and the present homeowner settled the claims against them, and the plaintiff voluntarily dismissed his claim against the contractor who replaced the deck boards.

2

. Restatement (Second) of Torts section 311 states:

> (1) One who negligently gives false information to another is subject to liability for physical harm caused by action táken by the other in reasonable reliance upon such information, where such harm results

> (a) to the other, or

> (b) to such third persons- as the actor should expect to be put in peril by the action taken.

> (2) Such negligence may consist of failure to exercise reasonable care - (a) in ascertaining ■ the accuracy of the information, or

> (b) in the manner in which it is communicated.

3

. Restatement (Second) of Torts section 324A states:

> One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessaiy 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.

4

. The concurring opinion contends that the plaintiff has not asserted a claim of negligent misrepresentation but rather a failure-to-wam claim. Home inspectors are professionals in the business of "selling] their expert analysis and opinion.” *Russell v. Bray,*116 S.W.3d 1, 6 (Tenn. Ct. App. 2003). In other words, they are in the business of obtaining and communicating information, and negligent misrepresentation may be defined as the negligent failure to "use due care in obtaining and communicating information upon which [the recipient] may reasonably be expected to rely,” *Neustadt,*366 U.S. at 706, 81 S.Ct. 1294, either in the course of his economic affairs as encompassed by the Restatement (Second) of Torts section 552 (1977) or in any other situation that results in physical harm under Restatement (Second) of Torts section 311. Thus, negligent misrepresentation is the gravamen of the plaintiffs contention that the home inspector failed to report the defect. In addition, even if a failure-to-wam claim were presented by the complaint, such a claim would be subsumed in the negligent inspection claim because the same duty analysis would apply. *See Bradshaw v. Daniel,*854 S.W.2d 865, 872-73 (Tenn. 1993) (imposing "upon a physician an affirmative duty to warn identifiable third persons in the patient’s immediate family against foreseeable risks emanating from a patient’s illness” based upon “the existence of the physician-patient relationship.”).

5

. We have recognized the tort of negligent misrepresentation in cases involving pecuniary harm. *John Martin Co., Inc. v. Morse/Diesel, Inc.,*819 S.W.2d 428, 431 (Tenn. 1991) .(citing Restatement (Second) of Torts section 552). "Tennessee has adopted, the Restatement (Second) of Torts § 552 as the guiding principle in negligent misrepresentation actions against other professionals and business persons.” *Bethlehem Steel Corp. v. Ernst & Whinney,*822 S.W.2d 592, 595 (Tenn. 1991). However, the plaintiff has not alleged pecuniary harm in this case. In addition, relief under section 352 requires justifiable reliance *871on the part of the plaintiff, and contrary to the plaintiff's assertion that the reliance element is met when a home inspector's client relies on the home inspector’s information, *Bethlehem Steel*indicates that it is the injured plaintiff who is the party that must show 'reliance on the information. *Id.*at 596; *see also John Martin Co., Inc.,*819 S.W.2d at 431-32.

6

. The *Satterfield*court listed the following non-exclusive factors for determining the existence of a duty of care:

> (1) the foreseeable probability of the harm or injury occurring; (2) the possible magnitude of the potential harm or injury; (3) the importance or social value of the activity engaged in by the defendant; (4) the usefulness of the conduct to the defendant; (5) the feasibility of alternative conduct that is safer; (6) the relative costs and burdens associated with that safer conduct; (7) the relative usefulness of the safer conduct; and (8) the relative safety of alternative conduct.

*Satterfield,*266 S.W.3d at 365 (citations omitted).

7

. The parties have not suggested that this Court should adopt Restatement (Third) of Torts section 43, the update to Section 324A. *872For the purposes of this case, adoption of section 43 would not change the outcome, and therefore, it is unnecessary at this time to decide whether it should be adopted, especially when the caselaw relied upon herein is based on section 324A.

8

. Numerous state courts have cited Section 324A in their analysis of negligent inspection claims. *See, e.g., Commercial Union Ins. Co. v. DeShazo,*845 So.2d 766, 769 (Ala. 2002); *Van Biene v. ERA Helicopters, Inc.,*779 P.2d 315, 322 (Alaska 1989); *Patton v. Simone,*626 A.2d 844, 849 (Del. Super. Ct. 1992); *Huggins v. Aetna Cas. & Sur. Co.,*245 Ga. 248, 264 S.E.2d 191, 192 (1980) (describing Section 324A as the “majority rule” in negligent inspection cases); *Thompson v. Bohlken,*312 N.W.2d 501, 507 (Iowa 1981) (adopting Section 324A in negligent inspection cases); *Gooch v. Bethel A.M.E. Church,*246 Kan. 663, 792 P.2d 993, 998 (1990); *Smith*v. *Allendale Mut. Ins. Co.,*410 Mich. 685, 303 N.W.2d 702, 706 (1981); *In re Norwest Bank Fire Cases,*410 N.W.2d 875, 878 (Minn. Ct. App. 1987); *Brown v, Michigan Millers Mut. Ins. Co.,*665 S.W.2d 630, 632 (Mo. Ct. App. 1983); *Dieter v. Hand,*214 Neb, 257, 333 N.W.2d 772, 775 (1983); *Corson v. Liberty Mut. Ins. Co.,*110 N.H. 210, 265 A.2d 315, 318-19 (1970); *Beury v. Hicks,*227 Pa.Super. 476, 323 A.2d 788, 789-90 (1974); *Schoenwald v. Farmers. Co-op. Ass'n of Marion,*474 N.W.2d 519, 520-21 (S.D. 1991); *Seay v. Travelers Indem. Co., 730*S.W.2d 774, 775-76 (Tex. App. 1987); *Murphy v. Sentry Ins.,*196 Vt. 92, 95 A.3d 985, 991-97 (2014). The home inspection case cited above similarly analyzes the potential liability of the defendant home inspector under the Section 324A framework. *See Oliveira,*2015 WL 9809752, at *6 (relying on *Gazo v. Stamford,*255 Conn. 245, 765 A.2d 505, 510 (2001) (citing § 324A of the Restatement (Second) of Torts)).

9

. The illustrations in the comments to Section 324A include the following:

> 2. The A Telephone Company employs B to inspect its telephone poles. B negligently inspects and approves a pole adjoining the public highway. Because of its defective condition the pole falls upon and injures a traveler upon the highway. B is subject to liability to the traveler.

> 4. A Company employs B Company to inspect the elevator in its office building. B Company sends a workman, who makes a negligent inspection and reports that the elevator is in good condition. Due to defects in the elevator, which a proper inspection would have disclosed, the elevator falls and injuries C, a workman employed by A Company. B Company is subject to liability to C. Restatement (Second) of Torts § 324A, illus. 2 and 4. We note that the defendants contend that Section 324A has no application to cases involving commercial transactions. Illustrations such as the one quoted above in the comments to Section 324A, as well as the wide variety of negligent-inspection cases that utilize the Section 324A structure for analysis, demonstrate that this contention has no merit.

10

. The comments to Section 324A explain that the rule stated in Section 324A "parallels the one stated in § 323, as to the liability of the actor to the one to whom he has undertaken to render services.” Restatement (Second) of Torts § 324A, cmt a.

Holly Kirby, J.,

concurring in part and dissenting in part.

I write separately in this case because I concur with part of the majority’s analysis and disagree with other parts of it.

I concur in the majority’s recognition that Mr. Grogan states in his complaint a cause of action based on ordinary negligence, in the form of a claim that the defendant home inspectors negligently performed the inspection of the home purchased by Mr. Uggla. As noted by the majority, the defendant home inspectors have sought to portray Mr. Grogan’s cause of action as comprised of one claim, a claim of negligent misrepresentation, and the majority resisted the defendants’ attempt at misdirection. Framing the cause of action appropriately is key to any court’s analysis of a motion for summary judgment, and it is important in this case that the majority accurately discerns that Mr. Grogan has asserted two claims, one of which is a claim of negligent inspection.

I also concur wholeheartedly in the majority’s decision to use Section 324A of the Restatement (Second) of Torts (1965) as the appropriate analytical framework for evaluating Mr. Grogan’s negligent inspection claim. This decision places Tennessee among the vast majority of jurisdictions that utilize Section 324A to analyze a claim of negligent inspection resulting in physical harm to a third party. *See generally*Frank J. Wozniak, Annotation, *Breach of Assumed Duty to Inspect Property as Ground for Liability to Third Party,*13 A.L.R. 5th 289 (originally published in 1993) (updated 2017) (collecting cases).

Unfortunately, after wisely recognizing a claim of negligent inspection and deciding to use Section 324A as the framework by which to analyze it, the majority goes off track. As explained below, the majority’s application of the law to this claim results in-flawed analysis.

The majority’s analysis begins well enough. Evaluating Mr. Grogan’s negligent inspection claim, the majority observes that the defendants’ home inspection was conducted for the client and for the benefit of the client, and it notes that the home inspection agreement was “to inspect the property *for the client.”*The majority also cites statutes indicating that a home inspection is intended to provide the client with an understanding of the condition of the property. I have no quarrel with these observations; by its terms, Section 324A contemplates a factual situation in which the defendant “undertakes, gratuitously or for consideration, to render services *to another.*...” Restatement (Second) of Torts § 324A (emphasis added). Even the illustrations to Section 324A include two negligent-inspection cases involving inspections done for a client who was not the injured party.1 The facts pointed out by the majority are entirely consistent with the theory *878of Mr. Grogan’s negligent inspection claim against the defendant home inspectors: Mr. Grogan, argues that, had the defendants done a proper home inspection, for their client — one that informed the client of the unsafe condition of the. deck — the client in turn would have acted on this information to take precautions to prevent Mr. Grogan ijrom sustaining the grievous injuries for which he seeks damages.

At this .point, however, 'the majority’s analysis goes awry. The' majority asserts that “the defendant home inspector’s duty as circumscribed by the agreement and the relevant statutes is owed to the client.” The majority then arrives at the unexpected conclusion that, as a matter of law, the defendant home inspectors “did not render services that they knew or should have known was for the protection of third parties because their services were for the benefit of their client alone and ... they therefore did not assume a duty to the plaintiff.” This analysis is wrong for several reasons.

’First, the majority’s reasoning is internally inconsistent and at odds with Section 324A. As noted above, Section 324A is premised' on the fact that the defendant’s services are rendered to “another,” not to the third party who suffers the physical harm. *See*Restatement (Second) of Torts § 324A. For the majority to say that it is analyzing the negligent inspection claim under Section 324A, premised on the defendant’s rendering of services to another, and then turn around and hold that the defendant had no duty to the plaintiff because the home inspection was rendered for another, is paradoxical.

Second, the majority’s analysis is inconsistent with prior Tennessee cases. The majority in effect holds that the lack of any direct relationship between the defendants and Mr. Grogan is a *per se*bar to liability. In contrast, this Court has on several occasions held a defendant liable for physical harm even where the defendant had no direct relationship with the plaintiff. For example, in *Satterfield v. Breeding Insulation Co.,*this Court held that the defendant employer had a duty to warn of asbestos exposure, owed to those who regularly came in close contact with the employee’s contaminated work clothes over a long period of time, regardless of whether they were a family member of the employée or whether they lived with the employee. 266 S.W.3d 347, 374 (Tenn. 2008). *See also, e.g., Burroughs v. Magee,*118 S.W.3d 323, 335 (Tenn. 2003) (holding that physician owed duty of care to passenger and her husband to warn patient truck driver of possible side effects of medications prescribed by physician to truck driver); *Estate of Amos v. Vanderbilt Univ.,*62 S.W.3d 133, 138 (Tenn. 2001) (holding that hospital owed duty of care to former patient and to' general public to warn former patient of her possible exposure to HIV); *Turner v. Jordan,*957 S.W.2d 815, 820 (Tenn. 1997) (holding that physician owed duty to hospital nurse to protect her from violent and intentional acts of hospitalized mentajly-ill patient); *Bradshaw v. Daniel,*854 S.W.2d 865, 872-73 (Tenn. 1993) (holding that physician of patient who died of Rocky Mountain Spotted Fever had duty to warn patient’s, wife of,.her risk of contracting same disease); *Wharton Transp. Corp. v. Bridges,*606 S.W.2d 521, 527-28 (Tenn. 1980) (holding that physician who performed mandatory pre-employment physical exam of prospective truck driver owed duty of care to motoring public). The majority’s holding is in direct contradiction- to these Tennessee cases.2

*879Third, the majority’s conclusion — that the defendants could not have recognized that the home inspection was for the protection of third parties — does not follow logically from the fact that the defendants’ home inspection was rendered to the client. It is a *non sequitur,*an inference that does not follow" from the premise.

Fourth, the question under Section 324A of whether the home inspection constitutes “services to another which [the defendants] should recognize as necessary for the protection of a third person” is a classic fact question for the jury to decide. It is worth emphasizing that this case presents to us on a motion for summary judgment. The majority has usurped the role of the jury to decide a disputed question of fact.

Fifth, as acknowledged by the majority, the home inspector in this case, Mr. Black, gave deposition testimony in which he conceded that one of the goals of a home inspection is to make sure that the home is safe for the persons who will occupy it, that a home inspector must check the safety of deck railings, that the national organization of home inspectors educates its members on how to inspect a 'deck railing for safety, and that he inspected the deck railings in Mr. Uggla’s home for safety. In the face of this testimony, I do not see how the majority can hold, *as a matter of law,*that “the defendants did not render services that they knew or should have known was for the protection of third parties.”

For all of these reasons, I disagree with the majority’s analysis of Mr. Grogan’s negligent inspection claim.

Next, as to Mr. Grogan’s other claim; I agree with some parts of the majority’s analysis but disagree with most of it.‘As noted by the majority, the defendant home inspectors have consistently characterized Mr. Grogan’s claim as one of negligent misrepresentation. As such, the defendants urged this Court to “use this case as an opportunity” to adopt Section 552 of the Restatement (Second) of Torts as a framework for analysis in negligent misrepresentation cases that involve physical harm.3 ... .

For the reasons explained below, I disagree with the majority’s acceptance of the defendants’ characterization of Mr, Gro-gan’s claim as one of negligent misrepresentation. First, however, it is important to point put that the majority wisely rejects the defendants’ “invitation” to extend Section 552 to factual situations it was never intended to address.

*880The Defendants acknowledged that Section 552 of the Restatement (Second) of Torts states explicitly that it is limited to cases involving only “pecuniary loss,” but nevertheless urged the Court to “extend” Section 552 to cases involving physical harm. In support, the Defendants cited only a few inconclusive California cases.4 The Defendants in fact pointed to *no state*that has rejected the Section 324A analytical framework and instead affirmatively adopted Section 552 as the appropriate analytical structure for negligent misrepresentation cases that result in physical harm to a third party, and I have found none.5 The majority in this case correctly decided to reject the invitation to “extend” Section 552 to analyze a claim of negligent misrepresentation resulting *in*physical harm.

I also agree with the majority’s decision not to foreclose the possibility of recognizing the tort of negligent misrepresentation resulting in physical harm, as set forth in Section 311 of the Restatement (Second) of Torts (1965). I agree with the majority that we do not need to resolve that issue in this case, but I do so for a different reason, námely, because Mr. Grogan does not assert a claim of negligent misrepresentation.

The majority accepts the defendant home inspectors’ mischaracterization of the plaintiffs claim as one of negligent misrepresentation. It is not. In the amend*881ed complaint, after claiming that the defendant negligently performed the home inspection, the plaintiff asserts that the home inspector “failed to report that the second floor exterior deck railing was negligently constructed ... and constituted an unreasonable risk of harm.” [¶ 72, second amended complaint] This clearly states a failure-to-wam claim, not negligent misrepresentation.

In a footnote, the majority opinion explains briefly that it deemed Mr. Grogan’s claim as one of negligent misrepresentation based on language contained in *U.S. v. Neustadt,*366 U.S. 696, 81 S.Ct. 1294, 6 L.Ed.2d 614 (1961). The Court in *Neustadt*generally described the tort of negligent misrepresentation, citing Section 562 of the Restatement (Second) of Torts. *Id.*at 706, 81 S.Ct. 1294 n. 16. Respectfully, *Neustadt*is inapposite; it involved an affirmative misrepresentation in an FHA appraisal as to the value of a home, disclosed directly to the plaintiff purchasers.6 The case in no way supports the majority’s decision to accept the defendant home inspectors’ mis-description of Mr. Grogan’s claim as one of negligent misrepresentation.

In the same footnote, the majority adds an aside that, “even if a failure-to-warn claim were presented by the complaint, such a claim would be subsumed in the negligent inspection claim -because the same duty analysis would apply.” This too is faulty reasoning. Negligent inspection and failure-to-warn are two different claims. A failure-to-warn claim might be based, for example, on the home inspector performing an excellent inspection but inadvertently leaving out of the report the inspector’s findings on the deck railing. Particularly since we are evaluating a grant of summary judgment, it is unsettling that the majority gives no explanation for why Mr. Grogan’s claim should *not*be considered failure-to-warn.

The majority’s mistaken designation of Mr. Grogan’s claim is a serious misstep, As noted above, one of this Court’s most important functions is to frame questions accurately, and sometimes to re-frame them if the parties and courts below have viewed them incorrectly. *See, e.g., Moorer-Pennoyer v. State,*515 S.W.3d 271, 276 (Tenn. 2017) (where the lower courts, focused on the statutory waiver issue raised by the parties, the Supreme Court re-framed the *882question as one of failure to state a claim upon which relief could be granted).

Here, the result of the majority’s erroneous labelling of Mr. Grogan’s claim is to set up a logical fallacy. The majority first mischaracterizes Mr. Grogan’s claim as one of negligent misrepresentation, observes that the tort of negligent misrepresentation requires an affirmative misstatement rather than an omission, and then dismisses Mr. Grogan’s claim because he did not allege an affirmative, misstatement,7 “In the vernacular, this is known as erecting a strawman and then striking it down.” *Kobell v. Suburban Lines, Inc.,*781 F.2d 1076, 1100 (3d Cir. 1984) (Aldisert, J., concurring).

Respectfully, after observing that the plaintiff in this case does not allege ,an affirmative misstatement by the defendant home inspectors, the'appropriate response would be to conclude that the claim asserted *is not one of negligent misrepresentation,*It is instead a claim of failure-to-warn, which by its very nature involves an omission by the defendant, in this case, á failure to warn the client of the condition of the deck railing.

This Court has in fact already recognized that a third party may, in some circumstances, assert a failure-to-warn claim, under facts that are somewhat analogous to those alleged by Mr. Grogan in this case. *In Estate of Amos v. Vanderbilt Univ., 62*S.W.3d 133 (Term. 2001), Vanderbilt hospital did not inform a patient, Mrs. Amos, .that she had been exposed to the human immunodeficiency virus (HIV) during surgery. This eventually resulted in HIV infection of the patient’s husband and her infant daughter. The daughter died of conditions related to her HIV, and the patient and her husband sued Vanderbilt, alleging that the hospital “was negligent in failing to warn [the patient] that she was at risk for contracting HIV due to her blood transfusion. during surgery at Vanderbilt.” *Id.*at 135.

The *Amos*Court analyzed the husband’s failure-to-warn claim by a straight duty/foreseeability analysis:

> “The foreseeable victim is one who is said to be within the zone of danger.” *Turner v. Jordan,*957 S.W.2d 815, 819 (Tenn. 1997).... [T]he identifiable third parties may be extended beyond the patient’s immediate family members. • “The imposition of a legal duty reflects society’s contemporary policies and social requirements concerning the right’of individuals and the general public to be protected from another’s act or conduct.” *Bradshaw,*854 S.W.2d at 870. It was reasonably 'foreseeable that Mrs. Amos would one day marry and have a family. Her future husband and daughter were within the class of identifiable third persons at risk for. exposure to *883HIV.... The duty contemplated here is not one to warn Mr. Amos himself of Mrs. Amos’s exposure to, HIV but to warn Mrs. Amos so that she might take adequate precautions to prevent transmission of the disease to Mr. Amos: and their child. Vanderbilt’s breach of that duty caused the reasonably foreseeable injuries suffered by Mr. Amos.

*Id.*at 138 (citations and footnote omitted). As in *Amos,*Mr. Grogan does not allege that the defendant home inspectors should have warned *him*of the dangerous condition of the deck railing, but instead asserts that they should have warned their client, to enable the client to “take adequate precautions to prevent” the injuries Mr. Gro-gan suffered when he fell through the deck railing to the concrete below. This Court should evaluate Mr. Grogan’s failure-to-warn claim by the same duty/foreseeability analysis it employed in *Amos*and other similar cases.

The facts in this case are peculiar and do not arise often. Indeed, after a fifty-state search, .we have .identified only two cases in which a third party has asserted a claim arising out of an allegedly negligent home inspection. *See Oliveira v. Jensen,*No. HHDCV136045373S, 2015 WL 9809752, at *11 (Conn. Super. CL Dec. 7, 2015) (finding a duty); *Verdin v. Rogers,*926 So.2d 603, 606 (La. Ct. App.), *writ denied,*930 So.2d 978 (La. 2006) (finding no duty). However, even though this case arises under unique facts, the troublesome aspects of the majority’s analysis could end up being cited as precedent in a wide range of fact patterns for many years to come.

For these reasons, I concur in part and dissent in part from the majority opinion.

1

. The illustrations in the comments to Section 324A include the following:

> 2. The A Telephone Company employs B to inspect its telephone poles. B negligently inspects and approves a pole adjoining the public highway. Because of its defective condition the pole falls upon and injures a traveler upon the highway. B is subject to liability to the traveler.

> 

> 4. A Company employs B Company to inspect the elevator in its office building. B Company sends a workman, who makes a negligent inspection and reports that the elevator is in good condition. Due to defects in the elevator, which a proper inspection would have disclosed, the elevator falls and injuries C, a workman employed by A Company. B Company is subject to liability to C.

Restatement (Second) of Torts § 324A, illustr. 2 and 4.

2

. Numerous negligent inspection cases in other jurisdictions, applying Section 324A, have found liability based on an inspection done pursuant to a contract with another that re-suits in injury to a third party. See *generally*Frank J. Wozniak, Annotation, *Breach of*Assumed *Duty to Inspect Property as Ground for**879*Liability to Third Party,*13 A.L.R. 5th 289 (originally published in 1993) (updated 2017) (collecting cases).

3

. Section 552 states:

> § 552 Information Negligently Supplied for the Guidance of Others

> (1) One who, in the course of ’his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for *pecuniary loss*caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

> (2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to

> loss suffered (a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and .(b) through reliance upon it in a transaction that he intends .the information to influence or knows that the recipient so intends or in a substantially similar transaction.

> (3). The liability of one who is under a public duty to give the information extends to loss suffered by any of the class of persons for whose benefit-the duty is created, in any of the transactions in which it is intended to protect them.

Restatement (Second) of Torts § 552 (1977) (emphasis added).

4

. In support of their argument, the Defendants cited several California cases that apply Section 552. *See Formetv. Lloyd Termite Control Co,,*185 Cal.App.4th 595, 110 Cal.Rptr.3d 551 (2010); *Coldwell Banker Residential Brokerage Co. v. Superior Court,*117 Cal.App.4th 158, 11 Cal.Rptr.3d 564 (2004); *FSR Brokerage, Inc. v. Superior Court.,*35 Cal.App.4th 69, 41 Cal.Rptr.2d 404 (1995). None of these cases discuss Section 324A, and none reject the Section 324A framework in favor of Section 552. In fact, California’s Supreme Court recognizes the "negligent undertaking” theory of liability and utilizes Section 342A for analyzing such claims. *See, e.g., Paz*v. *State of California,*22 Cal.4th 550, 93 Cal.Rptr.2d 703, 994 P.2d 975, 980 (2000) ("Section 324A’s negligent undertaking theory of liability subsumes the well-known elements of any negligence action, viz., duty, breach of duty, proximate cause, and damages.”). California courts have applied Section 324A in negligent inspection cases. *See e.g., Dekens v. Underwriters Labs. Inc.,*107 Cal.App.4th 1177, 132 Cal. Rptr.2d 699, 700-701 (2003) (plaintiff small appliance repairman sued company that tested appliances for asbestos and certified them as safe after plaintiff developed asbestos-related cancer, analyzed under Section 324A). Thus, the authority cited by the Defendants in support of adopting Section 552 is unconvincing.

5

. The comments to Section 552 explain why the standards for cases involving only pecuniary losses should be treated differently from those involving physical harm:

> Although liability under the rule stated in this Section is based upon negligence of the actor in failing to exercise reasonable care or competence in supplying correct information, the scope of his liability is not determined by the rules that govern liability for the negligent supplying of chattels that imperil the security of the person, land or chattels of those to whom they are supplied (see §§ 388-402), or other negligent misrepresentation that results in physical harm. (See § 311). When the harm that is caused is only pecuniary loss, the courts have found it necessary to adopt a more restricted rule of liability, because of the extent to which misinformation may be, and may be expected to be, circulated, and the magnitude of the losses which may follow from reliance upon it.

Restatement (Second) of Torts § 552 cmt a. Therefore, when a negligent misrepresentation involves pecuniary loss, the danger of a cascading number of claimants increases exponentially, so the Restatement provisions for claims involving pecuniary loss appropriately provide for a narrower scope of liability. Specifically, Section 552 requires "reliance” by the injured party; obviously, the defendant home inspectors urged the Court to use Section 552 in this case precisely because Mr. Grogan cannot show reliance on the defendants' home inspection.

6

. In *Neustadt,*the plaintiff home purchasers sued the United States under the Federal Tort Claims Act based on a faulty Federal Home Administration (FHA) appraisal. They asserted that, because the FHA inspector failed to notice foundation problems in the house, the plaintiffs purchased the property for more than its fair market value. *Neustadt,*366 U.S. at 700-01, 81 S.Ct. 1294 (“The complaint alleged that the FHA’s inspection and appraisal of the property for mortgage insurance purposes had been conducted negligently; that respondents were justified in relying upon the results of that inspection and appraisal; and that they 'would not have purchased the property for $24,000 but for the carelessness and negligence of (FHA).’ ”). The FHA’s appraisal in that case was done for the mortgage company, not directly for the plaintiffs. The plaintiff did not assert that the FHA should have communicated specific information to the mortgage company about the house’s foundation problem. Rather, the plaintiff claimed that the FHA appraisal was disclosed to them, as required by law, *id.*at 709-710, 81 S.Ct. 1294, and they relied on the FHA valuation of the properly in agreeing to a purchase price for the home, The Court framed the question before it as "whether the United States may be held liable, under the Federal Tort Claims Act ... to a purchaser of residential property who has been furnished a statement reporting the results of an inaccurate FHA inspection and appraisal, and who, in reliance thereon, has been induced by the seller to pay a purchase price in excess of the property’s fair market value.” *Id.*at 697-98, 81 S.Ct. 1294. The Court ultimately held that limiting language in the Federal Tort Claims Act precluded the plaintiffs from suing based on the FHA appraisal. *Id.*at 710-11, 81 S.Ct. 1294.

7

. The majority opinion states:

> Section 311 “by its own terms requires an affirmative misstatement, not just a nondisclosure.” [citations omitted] Although the comments to section 311 specifically include an illustration about a boiler inspection, that illustration involves the inspector issuing a certificate of,safety, in other words, an affirmative false statement that the boiler was safe, when in fact it was not. Restatement (Second) of Torts § 311; *cmi,*d. The undisputed material facts in this case are that the home inspector failed to discover any defect in the deck railing and that as a result he did not report any defect. The home inspector did not affirmatively state that the deck railing was safe. Thus, even if we were to adopt section 311, the facts here foreclose the possibility of the plaintiff proving that the defendant home inspector gave *false*information to his client.

The majority then concludes that "summary judgment on the negligent misrepresentation claim was appropriate because the plaintiff has not alleged facts that would constitute an actionable claim of negligent misrepresentation involving the risk of physical harm.”

Sharon G. Lee, J.,

dissenting.

The primary issue is whether a home inspector owes a duty of reasonable care to a homeowner’s guest. Viewing the facts in the light most favorable to the guest, as is required at the summary judgment stage, it was foreseeable that a negligent inspection of the home, and particularly the second-story deck railing, could result in a significant injury to a guest. The foreseeability and gravity of the harm outweighs the burden on the home inspector to protect against the harm. Due to the importance of home inspections, public policy favors the imposition of a duty of care on the home inspector. Therefore, a home inspector, as a matter of law, owes a duty of reasonable care to a guest of the homeowner. Here, a jury should have had the opportunity to decide whether the home inspector breached his duty of care. For these reasons, I dissent from the dismissal of the guest’s claim against the home inspector.

An essential element of a negligence claim is duty — the defendant’s legal obligation to “conform to. a reasonable person’s standard of care to protect against unreasonable risks of harm.” *Giggers v. Memphis Hous. Auth,*277 S.W.3d 359, 364 (Tenn. 2009) (citing *Burroughs v. Magee,*118 S.W.3d 323, 328-29 (Tenn. 2003); *McClung v. Delta Square Ltd. P’ship.,*937 S.W.2d 891, 894 (Tenn. 1996)).

A risk of harm is unreasonable when the ■foreseeability and- gravity -.of potential harm outweigh the burden imposed on the defendant to protect against the harm. *See Satterfield v. Breeding Insulation Co.,*266 S.W.3d 347, 365 (Tenn. 2008) (citing *West v. E. Tenn. Pioneer Oil Co.,*172 S.W.3d 545, 551 (Tenn. 2005); *Burroughs,*118 S.W.3d at 329; *McCall v. Wilder,*913 S.W.2d 150, 153 (Tenn. 1995)); *see also Downs ex rel. Downs v. Bush,*263 S.W.3d 812, 820 (Tenn. 2008) (citing *McCall,*913 S.W.2d at 153).

' A duty of care does not arise unless the plaintiffs injury is reasonably foreseeable. *Satterfield,*266 S.W.3d at 366 (citing *Doe**884*v. Linder Constr. Co.,*845 S.W.2d 173, 178 (Tenn. 1992)). But foreseeability alone is not sufficient. *Id.*(citing *McClung,*937 S.W.2d at 904). The probability or likelihood of harm must be significant enough to induce a reasonable person to avoid the conduct. *Id.*at 367 (citing *Lopez v. Three Rivers Elec. Co-op., Inc.,*26 S.W.3d 151, 156 (Mo. 2000); *Knoll v. Bd. of Regents of Univ. of Neb.,*258 Neb. 1, 601 N.W.2d 757, 763 (1999)). Therefore, we focus on foreseeability and gravity of harm and whether these factors outweigh the burden on the defendant to protect against the harm. *See Downs, 263*S.W.3d at 820 (citing *McCall,*913 S.W.2d at 153). We then consider if imposing a duty accords with “society’s contemporary policies and social requirements concerning the right of individuals and the general public to be protected from another’s act or conduct.” *Satterfield, 266*S.W.3d at 364 (quoting *Bradshaw v. Daniel,*854 S.W.2d 865, 870 (Tenn. 1993)) (internal quotation marks omitted).

In reviewing the home inspector’s motion for summary judgment, we view the facts in the light most favorable to the guest. *Parker v. Holiday Hospitality Franchising, Inc.,*446 S.W.3d 341, 347 (Tenn. 2014) (citing *Mills v. CSX Transp., Inc.,*300 S.W.3d 627, 632 (Tenn. 2009)).

In 2010, Daniel Uggla authorized his brother to locate and purchase a home for him in Franklin, Tennessee. After finding a suitable home, Mr. Uggla’s brother signed a sales contract contingent on a home inspection. Mr. Uggla hired Jerry Black of Pillar to Post, Inc., to inspect the home. On September 8, 2010, Mr. Black inspected the home and issued a report, listing several areas requiring repairs, including the wooden flooring on the home’s second-story exterior deck. He did not report any defect in the deck railing. After the sellers repaired the flooring, Mr. Ugg-la purchased the home.

On October 8, 2010, Mr. Uggla hosted a housewarming party. During the party, Charles Grogan walked out onto the home’s second-story exterior deck and leaned on the deck’s wooden railing. The railing broke. Mr. Grogan fell to the ground level, sustaining serious injuries.

Mr. Grogan sued, alleging that Mr. Black breached his duty to use reasonable care in conducting the home inspection by failing to discover the defective deck railing. Mr. Grogan’s second amended complaint alleged that Mr. Black should have known that the deck railing was not properly constructed and that its construction was not in compliance with applicable building codes.1 The allegations of negligence, however, were not limited only to Mr. Black’s failure to discover building code violations.

Mr. Black denied liability and asserted in a motion for summary judgment that he owed no duty to Mr. Grogan, who was not a party to the contract with Mr. Uggla and did not rely on the inspection report. Mr. Black admitted in deposition testimony that one of the goals of a home inspection is to make sure that the home is safe for future occupants of the home. He agreed that “someone might get hurt if you don’t know whether there’s a potential problem with that railing.” Mr. Black also agreed *885that railing attachments should be inspected, corroded railing attachments should be reported, and exterior railings should be attached with galvanized nails. The deck railing that broke did not have galvanized nails or any visible railing attachment beyond small, corroded finishing nails. Mr. Black did not note these deficiencies in his home inspection report.

It is undisputed that Mr. Grogan neither contracted with Mr. Black for the home inspection nor relied on the inspection report. Instead, Mr. Grogan visited the home as Mr. Uggla’s guest, leaned on the deck railing, fell to the concrete surface below when the railing broke, and sustained serious injuries. It is foreseeable that a homeowner will invite guests to his home. It is foreseeable that a home inspector’s failure to discover or report a dangerous defect in a second-story deck railing could lead to a serious injury to a guest of the homeowner.

Next, we consider whether the foreseeability and gravity of potential harm outweighed the burden imposed on the home inspector by requiring alternative, preventive conduct. There was no evidence of any alternative measure or that a home inspection performed with due care would have been burdensome or costly to accomplish.

Finally, we consider whether imposing a duty is consistent with public policy. Here, public policy reflects a strong interest in home inspector regulation and accountability. “[Ijnspections of residential property are of great importance to the public,” as most Tennesseans rely on home inspectors’ specialized skills when purchasing a home, which is “generally one of the largest and most important investments” of their lives. *Russell v. Bray,*116 S.W.3d 1, 6 (Tenn. Ct. App. 2003) (voiding home inspection indemnification clause on public policy grounds).

The Tennessee General Assembly enacted the Tennessee Home Inspector License Act of 2005, 2005 Tenn. Pub. Acts, c. 65, to standardize home inspector education, licensing requirements, and duties. *See*Tenn. Code Ann. §§ 62-6-301 to-308 (2009 & 2017 Supp.). Under this act, an applicant for a home inspector’s license must have graduated from high school or received an equivalency degree, completed a ninety-hour course focusing on home inspections and the preparation of home inspection reports, and passed a standardized state test. *See*Tenn. Code Ann. § 62-6-305; *see also*Tenn. Comp. R. & Regs. 0780-05-12-.04(2). The home inspection is defined as “a visual analysis, for the purpose of providing a professional opinion” on a building’s condition. Tenn. Code Ann. § 62-6-302(3)(A). This visual examination must include exterior components such as “[d]ecks ... and applicable *railings."*Tenn. Comp. R. & Regs. 0780-05-12-.10(13)(a)(4) (listing mandatory areas to be inspected) (emphasis added). The inspection report must note areas not inspected and deficient components. Tenn. Code Ann. § 62-6-302(4)(A), (B); Tenn. Comp. R. & Regs. 0780-05-12-.10(5)(a)(l), (2). Failing to fulfill these requirements can result in professional discipline, including revocation of the home inspector’s license. *See*Tenn. Code Ann. § 62-6-308(a)(7), (9). Home inspectors must have $500,000 in insurance coverage for “general liability as well as errors and omissions to cover all activities contemplated under [the Act].” Tenn. Code Ann. § 62-6-305(7); *accord*Tenn. Comp. R. *.&*Regs. 0780-05-12-.04(2)(g), (h); 0780-05-12-.13(1).

Another court has considered the issue of a home inspector’s duty to a social guest under similar facts. In *Oliveira v. Jensen,*No. HHDCV136045373S, 2015 WL 9809752, at *1 (Conn. Super. Ct. Dec. 7, 2015), a guest, attending a housewarming party, was injured when a second-story deck collapsed. A home inspector hired by the homeowner had recently inspected the *886home and noted no defects. The guest sued the home inspector for negligence. The trial court denied summary judgment, reasoning that the foreseeability of the guest’s injury, public policy, and unresolved factual issues all favored allowing the jury to hear the claim. *Id.*at *8-9. >,

Under our traditional duty analysis, Mr. Black owed Mr. Grogan a duty to exercise reasonable care in conducting the home inspection. The trial court should have denied summary judgment and allowed the case to proceed. For these reasons, I dissent.

1

. Mr. Grogan alleged, in part, that:

> [Mr. Black] knew or in the exercise of reasonable care as a professional inspector should have known that the second floor rear exterior deck railing was constructed with interior finishing nails in violation of local, state and national building codes, and constituted an unreasonable risk of harm since it could not withstand reasonable force to prevent someone from falling from the second floor exterior deck.... [and] failed to report that the second floor exteri- or deck railing was negligently constructed in violation of local, state and national building codes and constituted an unreasonable risk of harm.