Bank of Am., N.A. v. McFarland

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA18-489

Filed: 18 December 2018

Durham County, No. 16-CVD-5018

BANK OF AMERICA, N.A., Plaintiff,

v.

PHILLIP MCFARLAND, Defendant.

Appeal by Defendant from judgment entered 13 November 2017 by Judge

James T. Hill in Durham County District Court. Heard in the Court of Appeals 1

November 2018.

Sessoms & Rogers, P.A., by Andrew E. Hoke, for the plaintiff-appellee.

Coleman, Gledhill, Hargrave, Merritt & Rainsford, P.C., by Cyrus Griswold,
for defendant-appellant.

MURPHY, Judge.

Where, on a motion for summary judgment, the nonmovant fails to set forth

specific facts rebutting the movant’s showing that there is no genuine issue of

material fact, a grant of summary judgment in favor of the movant is appropriate.

Here, Plaintiff moved for summary judgment and proved there was no genuine

dispute as to any material fact. Defendant failed to set forth any specific facts

rebutting Plaintiff’s showing and therefore failed to meet his burden of production

under Rule 56(e) of the North Carolina Rules of Civil Procedure. Therefore, the trial

court’s grant of summary judgment in favor of Plaintiff is affirmed.
 BANK OF AMERICA V. MCFARLAND

Opinion of the Court

BACKGROUND

On or about 10 July 1997, Defendant, Phillip McFarland, opened a credit card

account with Plaintiff, Bank of America, N.A. Defendant agreed to repay the debt he

incurred on his credit card account and did so until 2015, when he disputed three

charges on his account totaling $23,700.00. All three disputed charges arose out of

access checks drafted from Defendant’s credit card account with Plaintiff: the first

was for $1,900.00; the second was for $18,400.00; and the third was for $3,400.00.

Defendant alleged the three access checks were the result of fraudulent activity and

disputed the charges. Plaintiff investigated the charges and determined they were

not the result of fraud—evinced by the $3,400.00 credit to Defendant’s account on 20

November 2015 for “Fraud Dispute” which was subsequently offset by a $3,400.00

debit drafted against his account on 11 December 2015.

As of the commencement of this action on 17 November 2016, Defendant’s

account had an unpaid balance of $22,756.91, and Defendant had not made any

payment since 15 December 2015. Plaintiff sued for breach of contract in Durham

County District Court and sought to recover the outstanding balance of the account.

Defendant was served with the Complaint on 3 May 2017 and filed an unverified

Answer on 16 May 2017.

On 31 October 2017, Plaintiff filed a Motion for Summary Judgment with a

number of exhibits, including discovery requests and responses, account statements

-2-
 BANK OF AMERICA V. MCFARLAND

Opinion of the Court

from Defendant’s credit card, and copies of the access checks Defendant claimed were

fraudulent. Defendant did not serve a response to Plaintiff’s Motion for Summary

Judgment and chose not to testify or proffer any documents during the 13 November

2017 summary judgment hearing in the Durham County District Court. After

hearing the parties’ arguments, the trial court granted summary judgment for the

Plaintiff, and Defendant filed timely notice of appeal.

ANALYSIS

We review decisions to grant or deny summary judgment de novo, considering

“the matter anew and freely substitut[ing our] own judgment for that of the lower

tribunal.” State v. Williams, 362 N.C. 628, 632-33, 669 S.E.2d 290, 294 (2008).

Summary judgment is appropriate “where the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that any party is entitled to

judgment as a matter of law.” Orient Point Assocs. v. Plemmons, 68 N.C. App. 472,

473, 315 S.E.2d 366, 367 (1984). “Once the movant demonstrates that no material

issues of fact exist, the burden shifts to the nonmovant to set forth specific facts

showing that genuine issues of fact remain for trial.” Id. Here, the trial court did not

err in granting summary judgment for Plaintiff, as Defendant failed to set forth

specific facts showing a genuine issue of fact remained for trial.

A. Plaintiff met its initial burden of production under Rule 56(c)

-3-
 BANK OF AMERICA V. MCFARLAND

Opinion of the Court

Plaintiff, as the party moving for summary judgment, bore the initial burden

of showing there was no genuine issue as to any material fact and that it was entitled

to judgment as a matter of law. N.C.G.S. § 1A-1, Rule 56(c) (2017). Plaintiff’s

Complaint set out a breach of contract claim against Defendant stemming from his

failure to “make periodic payments” as required by the parties’ credit agreement. To

prove a prima facie breach of contract claim, a plaintiff must show the “(1) existence

of a valid contract and (2) breach of the terms of that contract.” Poor v. Hill, 138 N.C.

App. 19, 26, 530 S.E.2d 838, 843 (2000). Plaintiff satisfied its initial burden of proving

there was no genuine issue of material fact by showing the parties had a valid

contract and Defendant was in breach.

A party moving for summary judgment has met its burden under Rule 56(c)

where that party has “submitted its verified complaint including an itemized

statement of the account, defendant’s answers to interrogatories,” and the affidavit

of an employee with knowledge of the underlying debt. U.S. Steel Corp. v. Lassiter,

28 N.C. App. 406, 408, 221 S.E.2d 92, 94 (1976). Along with its verified Complaint

and Motion for Summary Judgment, Plaintiff submitted an affidavit from a corporate

officer with personal knowledge of the status of Defendant’s account and records

showing that: (1) the parties had a valid contract; (2) Defendant breached that

contract by ceasing payments after 15 December 2015; and (3) Defendant owed an

outstanding balance of $22,756.91 on his credit account with Plaintiff at the time this

-4-
 BANK OF AMERICA V. MCFARLAND

Opinion of the Court

action was commenced.1 Therefore, the trial court correctly determined Plaintiff met

its initial burden of proof as a movant under Rule 56(c).

Defendant argues Plaintiff’s “moving papers affirmatively disclose an actual

dispute” because the amount of damages is uncertain and that he was not in breach

at all because the balance due is entirely attributable to fraudulent access checks

drafted from his credit account. Defendant further argues the account statements

included in Plaintiff’s Motion for Summary Judgment allow a reasonable mind to

infer that Defendant does not owe the full $22,756.91 Plaintiff seeks in this action.

To this end, Defendant argues three access checks drafted from his account may have

been fraudulently signed, and this specter of fraud should foreclose the possibility of

summary judgment. However, this argument was not presented below, and is

therefore not preserved for our review. Piraino Bros., LLC v. Atl. Fin. Grp., Inc., 211

N.C. App. 343, 348, 712 S.E.2d 328, 332, disc. review denied, 365 N.C. 357, 718 S.E.2d

391 (2011) (“Our Supreme Court has long held that where a theory argued on appeal

was not raised before the trial court, the law does not permit parties to swap horses

between courts in order to get a better mount in the appellate courts.”).

1 Plaintiff also attached Defendant’s discovery responses to its summary judgment motion.
However, those responses are unverified in violation of the North Carolina Rules of Civil Procedure.
N.C.G.S. §1A-1, Rule 33(a) (2017) (“[e]ach interrogatory shall be answered . . . under oath, unless it is
objected to[.]”). As such, we do not consider them.

-5-
 BANK OF AMERICA V. MCFARLAND

Opinion of the Court

Plaintiff met its initial burden under Rule 56(c) by presenting evidence that

the parties had a contract and Defendant was in breach. Consequently, the burden

shifted to Defendant to demonstrate a genuine issue of fact remained for trial.

B. Defendant failed to meet his burden of production under Rule 56(e)

Defendant failed to meet his burden of production under Rule 56(e) because he

failed to respond to Plaintiff’s filings, instead resting on the allegations and denials

included in his unverified answer. A party opposing summary judgment “may not

rest upon the mere allegations or denials of his pleading[,]” but “must set forth

specific facts showing that there is a genuine issue for trial,” either by affidavit, sworn

or certified documents, or verified answers to interrogatories. N.C.G.S. § 1A-1, Rule

56(e) (2017). The record does not indicate that Defendant filed any affidavits, verified

pleadings, or verified answers to interrogatories opposing Plaintiff’s Motion for

Summary Judgment, and Defendant does not present an argument to the contrary in

his brief.

Defendant cites a single case where a party survived summary judgment

without submitting a verified complaint or affidavit opposing summary judgment.

See Page v. Sloan, 281 N.C. 697, 190 S.E.2d 189 (1972). However, that decision was

predicated on the Supreme Court’s finding that the movant had not met its initial

burden of production under Rule 56(c). Id. at 706, 190 S.E.2d at 194. Here, Plaintiff

met its initial burden of production, as is discussed above; thus, the holding and

-6-
 BANK OF AMERICA V. MCFARLAND

Opinion of the Court

reasoning from Page is inapposite to this case and has no bearing on our decision.

Defendant failed to meet his burden of production under Rule 56(e).

CONCLUSION

Where, on a motion for summary judgment, the nonmovant fails to set forth

specific facts rebutting the movant’s showing that there was no genuine issue of

material fact, a grant of summary judgment in favor of the movant is appropriate.

Here, Defendant failed to meet his burden of production under Rule 56(e).

AFFIRMED.

Judges HUNTER, JR. and DAVIS concur.

-7-