Scott v. City of Detroit

*243On Rehearing

Before: N. J. Kaufman, P.J., and M. J. Kelly and Cynar, JJ. N. J. Kaufman, P.J.

We granted defendant Employers Liability Insurance Company of Wisconsin’s (Employers) application for rehearing to consider whether our original opinion1 incorrectly concluded that the trial court erred in granting defendant Employers’ motion for summary judgment.

Employers’ motion, although misnamed, was granted under OCR 1963, 117.2(3), the trial court determining that there was no genuine issue of material fact and that Employers was entitled to judgment as a matter of law. Plaintiffs claim against Employers was that the insurer negligently failed to make a proper inspection of the work site after having undertaken the duty of inspecting the employer’s safety procedures.

In cases such as this, liability may not be imposed merely because an insurer makes inspections which fail to detect hazards ultimately resulting in injury. Rather, there is a threshold requirement of an undertaking to render services to the insured. Smith v Allendale Mutual Ins Co, 410 Mich 685, 705; 303 NW2d 702 (1981). "Absent evidence that the insurer agreed or intended to provide services for the benefit of the insured, there is no basis for a conclusion that such inspections are conducted other than to serve the insurer’s interests in underwriting, rating and loss prevention and hence there is no undertaking.” Id., 705-706. The following paragraph in Smith v Al*244lendale Mutual Ins Co, supra, is particularly instructive:

"While an undertaking which may give rise to liability under the rule of § 324A may be gratuitous as well as contractual, the evidence must show that the actor assumed an obligation or intended to render services for the benefit of another. Evidence demonstrating merely that a benefit was conferred upon another is not sufficient to establish an undertaking which betokens duty. Persons pursuing their own interests often benefit others in the process. Accordingly, where a plaintiff seeks to prove an undertaking by conduct which benefits another and that conduct is consistent with a primary purpose on the part of the actor to benefit himself, the plaintiff must offer additional evidence to create a jury question whether there was an undertaking to render services and hence a duty to one who might foreseeably be injured by the actor’s failure to perform the undertaking with reasonable care.” 410 Mich 685, 717-718.

Our prior opinion was defective for giving insufficient attention to the "undertaking” requirement.2 On rehearing, our review of the interrogatories and depositions submitted below convinces us that there is no genuine issue of material fact on this issue and that Employers did not assume an obligation of inspection or intend to render services in that regard to plaintiffs employer, Corridor Constructors.

The interrogatories of defendant Employers categorically deny that the company made any safety inspections or recommendations. Nonetheless, the record reveals conflicting evidence on the question of whether Employers’ safety consultant, James *245Jackson, visited only the offices and general work site or whether he actually inspected the tunnels where plaintiff’s injury occurred. Still, Jackson stated in his deposition that his visits were only for the purposes of gathering information for the company’s underwriting department and to check on a property damage claim made by the neighboring Bundy Corporation. Moreover, plaintiff can point to nothing to contradict Employer’s claim that these inspections were in its own interests and not for the benefit of the insured Corridor. Plaintiff’s assertion that there is a question of fact regarding the location of the inspections made by Employers misses the point. There is no dispute over the fact that any inspections were primarily for Employers’ own purposes and benefit.

Concededly, Corridor itself only maintained a pro forma safety program. However, that void was filled not by Employers, but by the city and state, who had safety inspectors on the site constantly and who made recommendations that Corridor followed. The parties’ discovery efforts have failed to produce any evidence that Employers made safety recommendations to Corridor. Again, assuming arguendo that recommendations were made (to the benefit of Corridor), such a conferral of benefit does not establish an undertaking imposing a duty upon Employers. Smith v Allendale Mutual Ins Co, supra.

Since there is no genuine issue of material fact with regard to the claim that Employers undertook to render inspection services to Corridor, it would be impossible for plaintiff to prove at trial that the insurer had a duty to conduct reasonable safety inspections. Summary judgment in favor of defendant Employers was properly granted.

We modify our original opinion in this case with *246regard to defendant Employers and now affirm the trial court’s grant of summary judgment.

Cynar, J., concurred.

107 Mich App 194; 309 NW2d 201 (1981).

In this regard we wrote: "We find that the threshold questions of an undertaking and reliance have been met in the instant case, Corridor having testified that it had only a pro forma safety program and relied on defendant Employers’ recommendations in the area of safety.” 107 Mich App 194, 206.