Opinion ID: 1319750
Heading Depth: 1
Heading Rank: 3

Heading: Liability to Third Person for Negligent Performance of Undertaking

Text: 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 (1965); see Huggins v. Aetna Casualty & Surety Co., 245 Ga. 248, 264 SE2d 191 (1980) (adopting section 324A). In this case, Smith argues that Universal may be held liable for its negligent inspections under subpart (c) of section 324A. Clearly, the Georgia courts hold that under subpart (c) an employee who suffers harm because of his reliance on safety inspections performed by his employer's general liability insurance carrier can seek recovery against the carrier without showing that his employer also relied on the inspections. See Huggins, 245 Ga. at 248, 264 SE2d at 192 (`reliance by either the employee or the employer . . . is sufficient. . . .') Just as clearly, however, this circuit has interpreted Georgia law to require that an employer's reliance be shown by evidence of change in position. Thus, we were unable to find employer reliance where `there was no indication that the employer had neglected or reduced its own safety program because of the carrier's [inspections].' Bussey v. Travelers Insurance Co., 643 F2d 1075, 1077 (5th Cir. 1981); see also Tillman v. Travelers Indemnity Co., 506 F2d 917, 921 (5th Cir. 1975) (same requirement under Mississippi law); Stacy v. Aetna Casualty & Surety Co., 484 F2d 289, 295 (5th Cir. 1973) (same).