Derosia v. Liberty Mutual Insurance Co.

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 87-584


Gertrude C. Derosia, Administratrix          Supreme Court
of the Estate of Lyman R. Derosia
                                             On Appeal From
     v.                                      Windham Superior Court

Liberty Mutual Insurance Company             February Term, 1989


Arthur J. O'Dea, J.

Thomas W. Costello and Ardith L. Baldwin of Thomas W. Costello, P.C.,
  Brattleboro, for plaintiff-appellee

Plante, Richards, Hanley & Gerety, P.C., White River Junction, for
  defendant-appellant


PRESENT:  Allen, C.J., Peck, Dooley and Morse, JJ., and Barney, C.J.
          (Ret.), Specially Assigned


     ALLEN, C.J.   Defendant workers' compensation insurer appeals from a
judgment entered in the Windham Superior Court on a jury verdict for
plaintiff, who was injured in an industrial accident.  We affirm.
     On December 4, 1981, plaintiff, an employee at The Book Press in
Brattleboro, severely lacerated the tips of three fingers on his right hand
while operating a table saw.  Plaintiff sued the manufacturer of the table
saw and amended his complaint to include defendant, the workers'
compensation insurer for The Book Press.  Defendant moved for summary
judgment on grounds that 21 V.S.A. {{ 601-709 prohibited actions against an
employer's workers' compensation insurance carrier.  The trial court denied
the motion, and certified the issue to this Court, which decided the issue
in plaintiff's favor, Derosia v. Duro Metal Products Co., 147 Vt. 410, 519 A.2d 601 (1986).
     Plaintiff proceeded at trial on the theory that defendant conducted
safety inspections at the premises of plaintiff's employer in a negligent
fashion.  The undisputed evidence indicated that at the time of the accident
the table saw was being used without a safety blade guard mechanism, in
violation of applicable safety regulations.  A safety guard had been
supplied by the manufacturer of the saw, but it had been removed and stored
in a closet in the shop.
     The provision of the insurance contract between defendant and
plaintiff's employer respecting the inspection of the employer's premises
was as follows:
         INSPECTION AND AUDIT  The Company and any rating auth-
         ority having jurisdiction by law shall each be permitted
         but not obligated to inspect at any reasonable time the
         workplaces, operations, machinery and equipment covered
         by this policy.  Neither the right to make inspections
         nor the making thereof nor any report thereon shall
         constitute an undertaking on behalf of or for the bene-
         fit of the insured or others, to determine or warrant
         that such workplaces, operation, machinery or equipment
         are safe or healthful, or are in compliance with any
         law, rule or regulation.

Prior to and at the time of the accident defendant maintained a department
known as the Loss Prevention Department, which had considerable expertise in
the field of workplace safety.  Department personnel knew that the table saw
at The Book Press should be used with a safety guard.  Department personnel
toured The Book Press factory on several occasions in the years prior to
the accident, including one time a few months before the accident, and made
recommendations about specific safety problems at the plant.  Shortly
before the accident, a Loss Prevention Department representative requested
an opportunity to meet with The Book Press officials to discuss the problem
of finger injuries on machinery at the plant.  Because an immediate meeting
was not feasible, the representative wrote that he would return to address
the problem with the plant's manager.  Plaintiff's accident occurred after
this correspondence but before any such meeting occurred.
     Defendant moved for a directed verdict at the close of plaintiff's case
based on plaintiff's failure to present evidence of a duty or undertaking by
defendant to conduct safety inspections, and the motion was denied.  After
the verdict was entered, defendant moved for judgment notwithstanding the
verdict and for a new trial.  Both motions were denied, and the present
appeal followed. (FN1) 
				    I.
                       A.  Undertaking by Defendant
     Defendant's central argument on the merits is that plaintiff failed to
introduce any evidence at trial that defendant had undertaken or promised to
provide safety inspection services for The Book Press or plaintiff.  The
importance of this issue was signalled in Derosia v. Duro Metal Products
Co., 147 Vt. at 413, 519 A.2d  at 604, where we concluded "that if a workers'
compensation carrier undertakes to provide, rather than pay for, benefits
and services, it should be liable in tort as 'a person other than the
employer.'  21 V.S.A. { 624."
     Section 324A of the Restatement (Second) of Torts delineates when an
undertaking to render services to another may result in liability to a third
person. (FN2) This Court has never formally adopted the language used in { 324A,
but it has expressed views consistent with the basic theory of liability as
set forth in { 324A.  See Smyth v. Twin State Improvement Corp., 116 Vt.
569, 570-71, 80 A.2d 664, 665 (1951) ("[T]he law imposes an obligation upon
everyone who attempts to do anything for another, even gratuitously, to
exercise some degree of care and skill in the performance of what he has
undertaken, for nonperformance of which duty an action lies.")  The
Restatement position is not a break from our earlier case law.  Rather, it
is a more detailed and inclusive statement of a position long taken.
Embracing { 324A formally as a focus of analysis has the great benefit of
opening for our consideration a considerable body of cases interpreting a
single and comprehensive legal formulation. (FN3)
     Under { 324A it is not an actor's undertaking alone which subjects him
to liability, but rather it is the actor's "failure to exercise reasonable
care to protect his undertaking," resulting in either (a) an increased risk
of physical harm to the third person, (b) the assumption by the actor of a
duty owed by the second person to the third person, or (c) harm to the third
person resulting from reliance on the undertaking by the second or third
person.
     Plaintiff responds that he presented sufficient evidence to allow the
jury to conclude that defendant undertook to perform inspection services for
The Book Press -- a duty that The Book Press owed to plaintiff; that
defendant failed to exercise "reasonable care to protect [its] undertaking;"
and that harm resulted from defendant's failure.  We agree.
     It is well established in reviewing the denial of a motion for a new
trial that this Court will view the evidence in the light most favorable to
the verdict and will accord the trial court all possible presumptive
support.  Lent v. Huntoon, 143 Vt. 539, 553, 470 A.2d 1162, 1171 (1983).
The record before us reveals that defendant's loss-prevention activities
were substantial.  It maintained a department expressly devoted to loss-
prevention initiatives, and Karl Jacobson, defendant's loss-prevention
manager, regularly visited The Book Press, inspecting the facilities and
making written recommendations from time to time for safety improvements.
Jacobson testified that a narrative report prepared for defendant in 1977
after a site visit indicated that The Book Press management was interested
in receiving defendant's loss-prevention services, and his observations in
working with the company corroborated the statement in the report.  The
witness agreed that "the customer [The Book Press] had no particular
expertise in safety or loss prevention" and that "[t]hat expertise was
provided by Liberty in particular, the Loss Control Department."
     Admitted into evidence was a seven-page "Progress Report" prepared by
defendant detailing The Book Press's accident record for the period January
6, 1978, to January 6, 1979.  Also admitted was a document entitled "Risk
Management Meeting -- Loss Prevention Report," in which Jacobson recounted
his meeting with Steve Medved, personnel director of The Book Press on
August 26, 1980, and which included a list of loss sources within the plant,
the "plan of action" or current status on the loss sources, and the status
of past recommendations.  Following the August, 1980 meeting, Jacobson wrote
Medved, attaching an accident analysis for the year January 6, 1979 to
January 6, 1980.  Jacobson testified that after concluding in September,
1980 that machines were a major source of injury at The Book Press, no
recommendations were made to reduce or eliminate those injuries or risks.
Jacobson further testified that his duties at The Book Press were assumed by
Ted Braun in 1980, but he recalled nothing specific about whether the
report's conclusions about the machinery hazards at The Book Press were
transmitted to Braun.
     Braun visited The Book Press on January 20, 1981, and wrote Medved on
January 28, 1981, identifying manual material handling as the predominant
source of loss and machine accidents as a "secondary source of loss."
Braun submitted the next "Risk Management Meeting -- Loss Prevention Report"
dated May 1, 1981, noting under "loss sources" the entry "Machine Accident-
Hand injuries in press room and bindery generally from feeding work into
machines and presses - No commitment."  Again, in the same report, Braun
stated, "No plan of action developed on machine injuries."  Later in May,
1981 Braun again wrote Medved, acknowledging Medved's indication that he
would prefer to have periodic loss statements on a quarterly basis and
cause-coded.
     Braun testified that during the first ten months of his responsibility
for The Book Press account he made no safety recommendations at all.  He
testified as follows:
         Q:  As of that time, as of May 1, [1981] no plan of
         action had been developed by you or by anyone else at
         Liberty to address the machine injury problem?

         A:  That is correct.

         Q:  and at that time -- at least at that time, this
         particular problem had been identified and accepted by
         Liberty Mutual and by Book Press as a major source of
         loss or injury?

         A:  That is correct.

         Q:  Now, you, at that meeting, discussed the conclusions
         that that was a major source of loss?

         A:  At the risk management meeting, you are speaking of?

         Q:  Yes.

         A:  Yes.

         Q:  Did you as a result of that meeting form any
         recommendations to address this problem?

         A:  No.

         Q:  And did you subsequent to this meeting at any time
         compile or develop any recommendations to reduce the
         risk of injury or loss on account of this problem? . . .
         [A]fter that meeting, did you at any time develop any
         recommendations to address the injuries which you knew
         were occurring at that time on machines and injuries to
         hands?

         A:  No, I did not.

A letter dated October 7, 1981, from Braun to Steven Goss, The Book Press's
plant engineer, (plaintiff's Exhibit 42) was introduced.  It stated:
         I visited your plant on September 24, 1981 and spoke
         briefly with you.  My main concern was the number of
         finger injuries on machinery that we have been seeing
         since the beginning of the year.  I wanted to cover this
         in depth with you but you did not have the necessary
         time available.  I indicated that I would be phoning you
         for another appointment.

Braun's testimony confirmed that he wanted to make another appointment at
The Book Press to discuss further injuries to hands from machines but that
he "was assigned responsibility for other accounts and this account was
removed from [his] workload" on October 26, 1981.
     Defendant relies on the absence of an express promise or undertaking by
it in its insurance contract with The Book Press and on its right under that
contract to conduct inspections without reliance by The Book Press on the
results or recommendations following inspections.  We agree that the
agreement, standing alone, did not subject defendant to liability for
conducting inspections and advising The Book Press of the results of those
inspections.  See Taylor v. Aetna Casualty & Surety Co., 731 F.2d 266, 267
(5th Cir. 1984); Zamecki v. Hartford Accident & Indemnity Co., 202 Md. 54,
56-57, 95 A.2d 302, 303-04 (1953); Goodwin v. Jackson, 484 So. 2d 1041,
1043-44 (Miss. 1986).
     But we disagree with defendant that there was no evidence from which
the jury could reasonably have concluded that defendant undertook an
obligation to provide a safe workplace, notwithstanding the statements in
its written contract to the contrary.  See Thompson v. Bohlken, 312 N.W.2d 501, 507 (Iowa 1981), where the court stated:
         Travelers [defendant insurer] also argues that it cannot
         be held under a duty of inspection under its insurance
         contract with [employer].  However, its liability for
         inspections does not arise from, nor is it circumscribed
         by, the contract of insurance; it arises . . . from its
         undertaking the responsibility of making such inspec-
         tions in such a manner as to increase the risk of harm
         or create reliance to another's detriment.

See also Hartford Steam Boiler Inspection and Insurance Co. v. Pabst Brewing
Co., 201 F. 617, 629 (7th Cir. 1912); Fireman's Fund American Insurance Co.
v. Coleman, 394 So. 2d 334, 338-39, 349-50 (Jones, J., concurring) (Ala.
1980); Corson v. Liberty Mutual Insurance Co., 110 N.H. 210, 212, 265 A.2d 315, 318 (1970); American Mutual Liability Insurance Co. v. St. Paul F. & M.
Insurance  Co., 48 Wis. 2d 305, 313, 179 N.W.2d 864, 868 (1970).
     Defendant's citations do not compel a contrary conclusion.  In Goodwin
v. Jackson the court, without indicating whether it was adopting { 324A and
without any analysis of that section, rejected plaintiff's claim because the
insureds testified that they had not relied on the insurer at all.  484 So. 2d  at 1043-44.  In Otto v. American Mutual Insurance Company, the court
dismissed the plaintiff's claim because, contrary to the present case, the
plaintiff "failed to plead sufficient material facts" to establish that the
defendant insurer owed any duty to the plaintiff.  241 Pa. Super. 423, 434,
361 A.2d 815, 821 (1976).  Similarly, Zamecki v. Hartford Accident &
Indemnity Co., which was decided before the promulgation of { 324A, hinged
on the plaintiff's failure to even assert that the defendant owed any duty
to the plaintiff.  202 Md. at 59, 95 A.2d  at 305.
     Taylor v. Aetna Casualty & Surety Co., alone among cases cited by
defendant, is sufficiently similar to support defendant's position as a
matter of general tort law.  There the court relied upon prior Louisiana
decisions which had specifically rejected application of { 324A to such
cases.  731 F.2d  at 267.  In contrast, the position espoused in a majority
of cases follows the standards of the Restatement, which more closely
adhere to principles long followed in this State.  Liability is not absolute
for the insurer which undertakes an accident-avoidance program and is
negligent in administering that program.  The negligent inspection must
result either in an increase in the risk of harm, in an undertaking to
perform a duty owed by another to a third person,  or in reliance by the
insured or the employee of the insured upon the undertaking.  This is a fair
and administrable assignment of risk and one that is well within the
competence of the trier of fact.  We decline to follow the narrower position
taken by the Louisiana intermediate court of appeals upon which the Fifth
Circuit relied in Taylor.
     There was sufficient evidence of an undertaking to perform the duty
owed by The Book Press, within the meaning of { 324A(b) of the Restatement,
to support the jury verdict.  Defendant's own loss-prevention personnel
conceded that The Book Press lacked safety expertise and that defendant
offered to fill that gap.  The personnel director of The Book Press
confirmed that the company "relied on Liberty for particular expertise in
safety matters."  It was not necessary, in order to demonstrate defendant's
undertaking, to establish that The Book Press was totally uninvolved with
safety matters at its plant.  As the court said in Santillo v. Chambersburg
Engineering Co., 603 F. Supp. 211, 215 (E. D. Pa. 1985), appeal dismissed,
802 F.2d 448 (3d Cir. 1986):
         In order for such a duty to arise, one does not have to
         assume the entire responsibility of another party.
         Employers have the duty to provide safe workplaces for
         their employees. . . . This duty could never, in
         reality, be fully delegated and assumed by another
         party . . . .
                          B. Proximate Causation
     Defendant also argues that plaintiff did not prove that The Book Press
would have responded to defendant's recommendations had they been made.
Defendant misperceives the basis for recovery.  We have concluded that the
trial court did not err in letting the jury determine if defendant had
undertaken to perform a duty owed by The Book Press to plaintiff within the
meaning of { 324A(b) of the Restatement.  Once the jury decided that
defendant had undertaken that duty, it was free to conclude that defendant
had not performed the duty with reasonable care, resulting in physical harm
to plaintiff.  Ted Braun of defendant's loss-prevention unit testified that
if he had been aware of the absence of the guard he would have made a
recommendation for its replacement.  The speculation that The Book Press
might not have acted on the recommendation does not interrupt the chain of
causation.  There may be more than one proximate cause of injury, Choiniere
v. Sulikowski, 126 Vt. 274, 278, 229 A.2d 305, 308 (1967), and recovery may
lie against any defendant whose negligence resulted in injury.  Tufts v.
Wyand, 148 Vt. 528, 530, 536 A.2d 541, 542 (1987); see also Nelson v. Union
Wire Rope Corp., 31 Ill. 2d 69, 88, 199 N.E.2d 769, 780 (1964).
                                    II.
     Having concluded that the evidence was sufficient to go to the jury on
the issues of defendant's undertaking to inspect and its negligence in
performing that undertaking -- { 324A(b) of the Restatement -- it is not
necessary to assess defendant's claim that the evidence was insufficient to
allow the jury to consider defendant's liability under { 324A(a) and (c).
Reading { 324A(a) as a section intended to describe negligent conduct that
directly increases risk of harm, we agree that there is no evidence, for
example, that defendant caused or sanctioned the removal of the saw guard.
The failures were ones of fulfillment -- undertaking safety reviews and
inspections, and then allowing those salutary activities to abate before
completion with no warning to the employer that they would not be finished.
But the three subsections of the Restatement are disjunctive, and it was
sufficient that plaintiff produced enough evidence to go to the jury on {
324A(b).  Johnson v. Abbe Engineering Co., 749 F.2d 1131, 1133 (5th Cir.
1984).
                                   III.
     Defendant raises two issues concerning the admission of samples of
defendant's advertisements, internal procedures, and company creed as
evidence over defendant's objections.  Defendant argued that the
advertisements were irrelevant and that plaintiff failed to lay a proper
foundation for their introduction because there was no evidence that
plaintiff or The Book Press ever saw or relied on the advertising
statements.  In one instance, plaintiff justified the introduction of
advertisements to impeach the testimony of one of defendant's employees.
In another, Plaintiff justified introduction to corroborate plaintiff's
contention that defendant undertook to provide a safe workplace for its
insureds and their employees and to challenge defendant's basic trial
position that the inspections did not represent any undertaking, but rather,
that they were for the defendant's purposes alone.
     "[T]he trial court has broad discretion in the admission and exclusion
of evidence."  Brown v. Whitcomb, 150 Vt. 106, 111, 550 A.2d 1, 4 (1988).  A
review of the record makes clear that plaintiff did not, in fact, establish
his case for reliance by The Book Press or himself on the basis of the
advertisements, and if the advertisements had been the sole evidence on that
issue, we might well conclude the issue in defendant's favor.  See DeJesus
v. Liberty Mutual Insurance Co., 423 Pa. 198, 200, 223 A.2d 849, 850 (1966)
(where sole basis of claim was advertising by insured's worker's
compensation carrier that it provided loss-prevention service and safety
counseling to policyholder, no duty was established to employee of insured).
However, the disjunctive nature of {324A does not require evidence to be
relevant to all three of its subsections.  The advertisements at the very
least were relevant demonstrating what defendant declared publicly that it
customarily undertook to do for policyholders and their employees, where
arguably that public declaration was contrary to defendant's formal position
at trial and to the testimony it presented in support of that position.
See Nelson v. Union Wire Rope Corp., 31 Ill. 2d 69, 115, 199 N.E.2d 769, 794
(1964) (citations omitted) where the court said:
            As a general rule any statement, written or not, made
         by a party or in his behalf which is inconsistent with
         his present position may  be introduced in evidence
         against him.  Where the question has arisen, authorities
         are in accord that advertisements, brochures, newspaper
         items, catalogs, and the like are admissible and
         relative [sic] to the subject matter of the suit where
         they contain statements of a party inconsistent with a
         claim or a position asserted by such party in the
         action.  In the present case the scope and purposes of
         the visits of defendant's safety engineers as alleged in
         its answer to the complaint were completely inconsistent
         with its representations in the advertisements.  Under
         the rule stated above, the advertisements became
         relevant and material and were properly admitted into
         evidence.

See also Smith v. Allendale Mutual Insurance Co., 410 Mich. 685, 719, 303 N.W.2d 702, 712 (1981) ("if the insurer's advertising or communications with
its policyholders represent that its inspection services will relieve the
insured of the burden of monitoring its own facilities, it . . . is subject
to liability if it fails to exercise reasonable care in performing that
undertaking") (footnote omitted).  In the present case plaintiff adequately
set forth a disparity between the position taken by defendant in its answer
and at trial and the apparent posture of defendant as revealed in its
advertisements.  For example, plaintiff's exhibit 52 was a full-page print
advertisement that appeared on March 20, 1978, in Forbes Magazine.  It
depicted a man in a suit and tie wearing a hard hat, with a building work
site in the background.  The headline at the top of the page stated:
            Help keep your workers safe, and that could help you
         save on Workers' Compensation.

The advertising copy below the headline stated:
            I'm a Liberty Mutual loss prevention specialist.
         And my specialty is helping companies control the
         Workers' Compensation Insurance costs by helping them
         control their losses.

            I go into our policyholders' factories, out to their
         construction sites, into their offices.

            The things I recommend and the changes our
         policyholders make can lower the risk of a loss.  And
         lower losses lead to lower premiums.

           All of which is good for your workers and good for
         you.

                                      * * *

         [In smaller typeface] (The company reserves the right to
         determine the scope of its loss prevention service for
         each policyholder.)

Defendant's answer, its emphasis at trial on the lack of an express
undertaking in the agreement with the insured, and the testimony it
presented, all stressed the absence of any "undertaking."  Plaintiff
attempted to contrast defendant's stated position with evidence of more
active and involved conduct on the part of its loss-prevention personnel, as
reflected in letters, reports, and other documents sent to the insured.  To
the extent that the advertisements tended to demonstrate this disparity and
confirm the existence of an undertaking in fact, it was open to the trial
court to find the exhibits relevant and admissible.
     Defendant also claims error in the refusal of the trial court to
instruct the jury that the advertisement evidence be limited to impeachment
of defendant's witnesses, and not allowed as evidence of an undertaking by
defendant.  The court properly refused the request.  The issue the
advertisements addressed was broader than the impeachment of witnesses.
They addressed the substantive question of whether defendant's entire course
of conduct represented an undertaking to conduct an active loss-prevention
program at The Book Press, so that negligent performance of such undertaking
might give rise to liability.  In any case, the trial court was not obliged
to limit the jury's consideration of the evidence to impeachment, but could
allow it to be considered as evidence of the fact admitted.  Hall v. Royce,
109 Vt. 99, 108, 192 A. 193, 196 (1937).
                                    IV.
     Finally, defendant argues that the trial court should have allowed
evidence that it paid plaintiff's medical expense claim to cure an asserted
erroneous impression "that the Defendant had not discharged its statutory
obligation to the plaintiff to pay workmen's compensation benefits."
Defendant contends, perhaps with merit, that no prejudice could possibly
have resulted to plaintiff if the evidence had been admitted.  But that is
not grounds for appeal.  Again, it is the trial court that must decide
initially what evidence is relevant and admissible.  See Bradley v. Buck,
131 Vt. 368, 371, 306 A.2d 98, 101 (1973).  We do not agree with plaintiff
that the evidence was properly barred under this Court's general admonition
against bringing the jury's attention to the fact that an insurance company
is a party defendant, Bliss v. Moore, 112 Vt. 185, 187, 22 A.2d 315, 316
(1941), since in the present case the jury was very well aware that Liberty
Mutual was a defendant.  But the relevance of the evidence was at most
tangential, and the court acted well within its discretion to exclude it.
     Affirmed.


                                        FOR THE COURT:




                                        Chief Justice




FN1.    This Court sua sponte ordered the parties to show cause why the
appeal should not be dismissed for failure to file a timely notice of
appeal.  The motions under V.R.C.P. 59 and 50(b) were served within 10 days
after entry of judgment, but were not filed with the court until a day
later.  We conclude that the language of Rule 59 is clear and only requires
service within 10 days and filing a reasonable time thereafter.  The motion
for a new trial was timely.  Clayton v. Douglas, 670 F.2d 143, 144 (10th
Cir.) (motion served ten days after, but filed 12 days after entry of
judgment), cert. denied, 457 U.S. 1109 (1982); Sadoswki v. Bombardier Ltd.,
527 F.2d 1132, 1134 (7th Cir. 1975) (service made 8 days and Rule 59 motion
filed 18 days after entry of judgment).

     V.R.C.P. 50(b) requires that "[n]ot later than 10 days after entry of
judgment, a party who has moved for a directed verdict may move to have the
verdict and any judgment entered thereon set aside . . . ."  The rule is
silent as to whether the ten-day time limit applies to filing or to service
of the motion, or both.  This Court has not addressed the question, but the
argument in favor of reading the rule consistently with the interpretation
of Rule 59 is strong.  See 9 C. Wright & A. Miller, Federal Practice and
Procedure { 2537, at 602 (1971).  But see Hahn v. Becker, 551 F.2d 741, 744
(7th Cir. 1977); United States v. Valdosta/Lowndes County Hosp. Auth., 91 F.R.D. 521, 523-24 (M.D. Ga. 1981); McConnell v. United States, 50 F.R.D. 499, 501-02 (E.D. Tenn. 1970).  While it can be argued that a motion is
"made" in the courtroom, not in correspondence between the parties, that
argument is overwhelmed by the case for uniformity of construction.
     In sum, both motions were timely and terminated the time for filing a
notice of appeal until the entry of orders thereon.  V.R.A.P. 4.  Thus, the
present appeal was timely.

FN2.    Restatement (Second) of Torts { 324A (1965) states:
	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.

FN3.      Defendant does not contend that we should not adopt { 324A as the
touchstone of analysis, but rather argues that plaintiff's evidence does not
satisfy { 324A's requirements.