WILBUR, Justice.
[¶ 1.] Roger and Dorothy Johnson appeal the circuit court's grant of summary judgment in favor of Hayman Residential Engineering Services, Inc. (Hayman). The Johnsons sued Hayman on a theory of professional negligence because Hayman made an allegedly substandard and inadequate structural engineering report on the Johnsons' home (the Home). The report was prepared for Fannie Mae, and the Johnsons alleged the report ultimately impacted the value of the Home. The circuit court, in granting Hayman's summary judgment motion, held that Hayman owed the Johnsons no duty and, therefore, a professional negligence claim could not be established. We affirm.
[¶ 2.] In 2008, Fannie Mae foreclosed upon and acquired the Home. The Home is located in Rapid City, South Dakota. Fannie Mae, through its agent/broker Cathy Brickey, hired Hayman to perform a visual inspection and prepare a report outlining any structural problems. The Hayman Report noted cracks in the drywall (both walls and ceilings), visible cracks in the foundation wall, a low spot in the garage, and several other foundational problems. The Report concluded that the "most likely cause of the uplifting is expansive soil under the foundation. The expansion is driven by water expansion." Hayman believed
[¶ 3.] Based on the Report, Fannie Mae made some, but not all, of the recommended repairs. Repairs included fixing cracked sheetrock, painting, and installing the French drainage system. Brickey testified she would not have sold the Home without a structural inspection report, and she placed a "hold-don't show" on the Home until the Hayman Report was delivered and the repairs completed. Hayman did not have anything to do with the Home or its repairs after the Report was provided. Hayman did not select the contractors or design the repair work.
[¶ 4.] Once repairs were made, Fannie Mae, through Brickey, listed the Home for sale. Ronald and Dawn Mason, through their agent Susan Raposa, expressed interest in purchasing the Home. Brickey showed Raposa the Home and informed Raposa of the repairs recently made. Brickey remembers representing to Raposa that repairs were made, based on the Hayman Report, to make the Home sellable. However, as was made clear by Brickey, "Fannie Mae did not authorize the [Hayman R]eport for the purpose of providing [it] to prospective buyers." The Masons decided to purchase the Home from Fannie Mae. Fannie Mae sold the Home to the Masons "as-is, where-is" with no warranties, either express or implied, with respect to the physical condition of the Home "including the structural integrity[,]... stability of the soil[,] ... sufficiency of drainage[,] ... or any other matter affecting the stability, integrity, or condition of the property or improvements[.]" The Masons moved into the Home in October 2009.
[¶ 5.] The Masons lived in the Home until they sold it to the Johnsons via warranty deed in May 2012. The Masons used a realtor other than Raposa to sell the Home. It is undisputed that the Johnsons did not see or even know of the Hayman Report prior to purchasing the Home. Prior to purchase on February 15, 2012, the Masons provided the Johnsons with a Seller's Property Condition Disclosure Statement. The Masons noted that there were cracks in the driveway, but did not disclose cracks in the Home, cracks in the drywall, previously repaired cracks, water leakage in the garage, or other structural problems. The Disclosure Statement did not make reference to the Hayman Report.
[¶ 6.] Prior to purchase but after the Masons gave the Johnsons the Disclosure Statement, the Johnsons submitted an offer to the Masons. The offer was contingent upon a physical inspection of the Home. The Masons and Johnsons entered into a purchase agreement. If the inspection revealed conditions unsatisfactory to the Johnsons, they had multiple options, including deeming the purchase agreement null and void in its entirety. The Johnsons performed their own visual inspection in which Mr. Johnson noticed the French drainage system and believed it was installed to alleviate a drainage issue. The Johnsons also hired Drew Inspection Services to perform an inspection. The inspection revealed significant settling and cracking in the driveway in front of the garage, a negative slope of the driveway causing pooling and run-off towards the Home, several major cracks in the garage ceiling, cracks in the garage's sheetrock,
[¶ 7.] In August 2012, the problems with the Home became more noticeable. The Johnsons hired Albertson Engineering to perform another inspection. Albertson opined that settling was the cause of the Home's movement and that the settling could create more problems in the future. As part of its review, Albertson looked at the Hayman Report from 2009. Albertson concluded the Hayman Report contained invalid assumptions regarding the cause of the Home's movement and a geotechnical investigation should have been done before suggesting repairs. Albertson further concluded the Hayman Report did not contain the level of due diligence that a professional engineer should use to reach the conclusions it did.
[¶ 8.] Albertson Engineering recommended that Terracon Consultants, Inc., perform a residential distress evaluation. Terracon found the soils below the foundation of the Home were settling and additional settling remained a concern. Terracon recommended additional foundational support with the use of micro piles or helical piers. The estimated cost of making all necessary repairs to the Home exceeded its value.
[¶ 9.] The Johnsons filed a professional negligence claim against Hayman. Hayman moved for summary judgment against the Johnsons, asserting it did not owe them a duty. The circuit court held a hearing on February 20, 2014. The court issued a memorandum decision and an order granting Hayman's motion for summary judgment. The circuit court entered its judgment on June 11, 2014. The Johnsons appeal.
[¶ 10.] The Johnsons raise two issues in this appeal:
[¶ 11.] The standard of review for an appeal from summary judgment is well established:
Brandt v. Cnty. of Pennington, 2013 S.D. 22, ¶ 7, 827 N.W.2d 871, 874 (quoting Jacobson
[¶ 13.] The Johnsons argue Hayman was negligent when it failed to disclose certain structural defects and allegedly made incorrect assumptions and diagnoses concerning the cause of the Home's movement. "In order to prevail in a suit based on negligence, a plaintiff must prove duty, breach of that duty, proximate and factual causation, and actual injury." Hendrix v. Schulte, 2007 S.D. 73, ¶ 7, 736 N.W.2d 845, 847 (quoting Fisher Sand & Gravel Co. v. S.D. Dep't of Transp., 1997 S.D. 8, ¶ 12, 558 N.W.2d 864, 867); see also Lien v. McGladrey & Pullen, 509 N.W.2d 421, 423 (S.D.1993). Whether a duty exists depends on the relationship of the parties, Braun v. New Hope Twp., 2002 S.D. 67, ¶ 9, 646 N.W.2d 737, 740, and public policy considerations, Kirlin v. Halverson, 2008 S.D. 107, ¶ 52, 758 N.W.2d 436, 453; Fisher v. Kahler, 2002 S.D. 30, ¶ 6, 641 N.W.2d 122, 125. However, the lack of a relationship between the parties is not necessarily fatal to the duty determination. Mid-W. Elec., Inc. v. DeWild Grant Reckert & Assocs. Co., 500 N.W.2d 250, 254 (S.D.1993) (abolishing the privity of contract requirement). This is because "[f]oreseeability may also create a duty." Braun, 2002 S.D. 67, ¶ 9, 646 N.W.2d at 740; see also Thompson v. Summers, 1997 S.D. 103, ¶ 13, 567 N.W.2d 387, 392. "Although foreseeability is a question of fact in some contexts, foreseeability in defining the boundaries of a duty is always a question of law." Braun, 2002 S.D. 67, ¶ 9, 646 N.W.2d at 740 (quoting Smith v. Lagow Constr. & Developing Co., 2002 S.D. 37, ¶ 18, 642 N.W.2d 187, 192). "Foreseeability in the `duty' sense is different from foreseeability in fact issues bearing on negligence (breach of duty) and causation." Id. (quoting Smith, 2002 S.D. 37, ¶ 18, 642 N.W.2d at 192). We, therefore, review the foreseeability determination and, ultimately, the duty determination de novo. Janis v. Nash Finch Co., 2010 S.D. 27, ¶ 17, 780 N.W.2d 497, 503 (citing Small v. McKennan Hosp., 403 N.W.2d 410, 413 (S.D. 1987)).
[¶ 14.] The Johnsons argue they were foreseeable plaintiffs because they were subsequent purchasers and Hayman knew or should have known Fannie Mae would use the Hayman Report to make repairs and sell the Home to the public. Hayman counters it owed the Johnsons no duty when it performed a visual inspection solely for Fannie Mae's benefit. Additionally, it was not foreseeable that the Johnsons would rely on the Hayman Report and, in fact, the Johnsons did not rely on the Hayman Report.
[¶ 15.] "The risk reasonably to be perceived defines the duty to be obeyed." Id. ¶ 15, 780 N.W.2d at 502 (quoting Peterson v. Spink Elec. Coop., Inc., 1998 S.D. 60, ¶ 14, 578 N.W.2d 589, 592). "No one is required to guard against or take measures to avert that which a reasonable person under the circumstances would not anticipate as likely to happen." Peterson, 1998 S.D. 60, ¶ 14, 578 N.W.2d at 592 (quoting Wildeboer v. S.D. Junior Chamber of Commerce, Inc., 1997 S.D. 33, ¶ 18, 561 N.W.2d 666, 670). Here, based on the circumstances of the case, it was not foreseeable to a reasonable person that the Johnsons would be harmed when Hayman prepared its Report solely for the benefit of Fannie Mae. Hayman performed
[¶ 16.] The Johnsons point us to two cases supporting their position that Hayman owed them a duty, Limpert v. Bail, 447 N.W.2d 48 (S.D.1989) and Brown v. Fowler, 279 N.W.2d 907 (S.D.1979). In Limpert, we analyzed whether a duty was owed to a prospective purchaser when a veterinarian allegedly breached his duty to properly test cattle. 447 N.W.2d at 50-52. We explained:
Id. at 51 (quoting Layman v. Braunschweigische Maschinenbauanstalt, Inc., 343 N.W.2d 334, 341 (N.D.1983)). The Johnsons argue, "Just as it was foreseeable to a veterinarian that a subsequent purchaser of cattle could be injured if the veterinarian failed to adequately discharge his duty, it was foreseeable to Hayman that [its] failure to discharge [its] duty to a seller of real property could injure a subsequent purchaser of property."
[¶ 17.] However, in Limpert, the parties knew that a veterinarian would perform work on the cows in anticipation of the sale because it was part of the oral agreement. Id. at 49. Here, it is undisputed the Johnsons did not know of or rely on the Hayman Report, and the Hayman Report was not performed pursuant to a contract between Fannie Mae, Hayman,
[¶ 18.] In the Brown case, the Browns (the plaintiffs) brought suit against a home-construction company for negligent construction. 279 N.W.2d at 908. The Browns purchased their home from a previous owner, and the previous owner had purchased the newly constructed home from the construction company's agent. Id. After two months of living in their home, the Browns noticed structural problems and filed suit against the home-construction company. Id. The circuit court granted summary judgment for the construction company citing privity of contract, and on appeal, we reversed and remanded. Id. at 909. We concluded the construction company owed a duty to the Browns because the Browns were
Id. The Johnsons claim the same rationale applies when an inspection company negligently performs a home inspection that impacts a subsequent purchaser. We disagree.
[¶ 19.] Brown is distinguishable from this case because the action was based on a builder-vendor's negligence, not an inspector's alleged negligence. Hayman performed an inspection for the sole benefit of Fannie Mae. Hayman was not involved with any of the repairs or the Home's construction. The policy issue in Brown was to prevent "future harm ... by imposing liability on contractors who negligently construct houses." Id. The same policy rationale does not exist when a limited and qualified home inspection is done for the sole benefit of a previous owner, especially when the subsequent owner did not rely on the previous home inspection and knows or should know of structural defects through the subsequent owner's own inspection. Therefore, Brown is distinguishable.
[¶ 20.] It was not foreseeable that the Hayman Report would harm the Johnsons under the facts of this case. Both Limpert
[¶ 22.] The Johnsons claim that the circuit court added the element of reliance to the Johnsons' professional negligence claim. The Johnsons argue that reliance is not a necessary element of professional negligence and that the circuit court's alleged error is cause for reversal. Hayman counters that this Court has specifically included the need to establish reliance in a professional negligence case in order to extend liability beyond privity of contract. See Muhlenkort v. Union Cnty. Land Trust, 530 N.W.2d 658, 662-663 (S.D.1995) (finding there must be some reliance on the part of the third party to find an abstractor liable in tort to the third party); Fisher Sand & Gravel Co., 1997 S.D. 8, ¶ 12, 558 N.W.2d at 867 (noting the policy concern in third-party negligence cases is to protect those who rely on the actions of others). Additionally, Hayman argues reliance is pivotal to the Johnsons' negligence claim.
[¶ 23.] First, we note that the circuit court did not add "reliance" as an element to the Johnsons' professional negligence claim. The circuit court's analysis in its memorandum decision cites lack of reliance as an additional reason why Hayman did not owe a duty to the Johnsons, i.e., reliance was indicative of, but not necessary to, establishing a duty. Second, we discussed reliance in Muhlenkort when we analyzed whether an abstractor owed a third party a duty of professional care. 530 N.W.2d at 662-63. We said, "To establish a duty on the part of the defendant, it must be foreseeable that a party would be injured by the defendant's failure to discharge that duty." Id. at 662. In analyzing foreseeability, we looked at the extent of an abstractor's liability in relation to a third party's reasonable reliance on the part of the professional. Id. We held, "[T]o hold an abstractor liable in tort to a third party there must be some reliance on the part of the third party[.]" Id. at 663. We followed the Florida Supreme Court's rationale:
Id. (quoting 1st Am. Title Ins. Co. v. 1st Title Serv. Co. of the Fla. Keys, Inc., 457 So.2d 467, 472 (Fla.1984)). Thus, we extended an abstractor's duty of professional care to foreseeable third parties who rely on an abstractor's professional report. Id. However, we did not hold that reliance is an element of professional negligence. See id. Reliance is helpful in analyzing foreseeability and, thus, duty, but it is not an element of a professional negligence claim. See id.; Fisher Sand & Gravel Co., 1997 S.D. 8, ¶ 12, 558 N.W.2d at 867. The circuit court analyzed reliance and foreseeability consistent with this approach.
[¶ 24.] In this case, Hayman could not reasonably expect a subsequent purchaser of the Home to rely on its visual inspection when Fannie Mae hired Hayman strictly for its benefit. The Johnsons were not "known" to Hayman, and the Hayman Report
[¶ 25.] Lastly, we note reliance is an element of negligent misrepresentation, see Kahler, 2002 S.D. 30, ¶ 10, 641 N.W.2d at 126, which in some cases, may also be asserted in addition to a professional negligence claim. However, negligent misrepresentation was not pleaded or argued in this case.
[¶ 26.] Hayman did not owe a professional duty to the Johnsons because they did not suffer a foreseeable harm stemming from Hayman's alleged negligence. Consequently, the Johnsons' professional negligence claim fails for want of a duty. We affirm the circuit court's grant of summary judgment.
[¶ 27.] GILBERTSON, Chief Justice, and ZINTER, SEVERSON, and KERN, Justices, concur.