Opinion ID: 1717400
Heading Depth: 1
Heading Rank: 4

Heading: Compensation Carrier's Liability

Text: Next, I turn to the criteria for liability of the insurer. Although a complex question, it nevertheless lends itself to traditional tort analysis. Was there a duty? If so, what was the scope of that duty? Was that duty breached? Was there damage or injury? Was the injury proximately caused by that breach? Whether a carrier has any duty concerning the safety of the work place depends upon the individual circumstances in each case. One must look to duties assumed by contract and duties assumed voluntarily. Where the duty is contractual, the scope of such duty is usually defined by the terms of the contract and the subsequent conduct of the parties pursuant thereto. It is in the voluntary undertaking where the parameters of the duty must be established through close scrutiny of the circumstances. This issue will generally be a question of fact. The rule is well established that common law liability to third parties can arise from the negligent performance of even a voluntary undertaking. Beasley v. MacDonald Engineering Co., 287 Ala. 189, 249 So.2d 844 (1971); Parker & Brothers v. Hodgson, 172 Ala. 632, 55 So. 818 (1911); Coggs v. Bernard, 2 Lord Raymon 909. As was stated by Mr. Justice Cardozo and quoted in Beasley, 287 Ala. at 193, 249 So.2d at 847: `... It is ancient learning that one who assumes to act, even though gratuitously, may thereby become subject to the duty of acting carefully, if he acts at all.' Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922). In defining the nature of the duty undertaken by a voluntary inspection, two aspects must be consideredthe physical scope of the undertaking and the degree of scrutiny and action mandated by conditions observed or reasonably observable. Both the actual physical area required to be inspected in a reasonable survey of the premises and the appropriate action to be taken by the inspecting party as a result of the survey must be determined to establish the standard of care which the inspecting party must observe in order to discharge its duty. This standard of care requires that the area inspected be of such a size and nature as to constitute a representative sampling of the work place, that the inspection be done with reasonable care, that hazards observed and appreciated, or which should have been observed and appreciated, be reported with the promptness commensurate with the degree of danger perceived or which reasonably should have been perceived; and that any corrective action within the inspector's ambit of authority or within the scope of its undertaking be instituted with appropriate haste. Section 324A, The Restatement 2d of Torts, states: One who undertakes gratuitously or for consideration to render services to another which he would 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. The Restatement recognizes that if a duty exists and is breached, then, liability may be found if this breach increases the risk of harm to a third person and such harm occurs as a proximate result therefrom. In making this determination, the finder of fact must proceed on the assumption that persons with a duty to act will act reasonably. Therefore, consistent with the principles of joint tortfeasor liability, one cannot assume that an employer would fail to correct hazards reported pursuant to a diligent inspection, and, thus, through such an assumption, exonerate an inspecting party which has failed to discharge its duty. Conversely, the inspector may be relieved of liability by discharging its duty as described herein whether or not the employer fails to act on the results of the inspection and injury to a third party occurs. The test is whether the conduct of the carrier rises to the level required of it, under the particular circumstances and according to the undertaking assumed, thereby discharging its duty and relieving itself of liability. [3] V.