Chrysler Credit Corp. v. Belk

MORRIS, Chief Judge. Defendant has assigned error solely to the granting of plaintiff’s motion for summary judgment. Defendant argues that he presented evidence at the summary judgment hearing which tended to show that he was not in default on the promissory note. The North Carolina Supreme Court has held that when unpleaded defenses (such as payment on a note) are later raised by the evidence, they should be considered when resolving a motion for summary judgment. Bank v. Gillespie, 291 N.C. 303, 230 S.E. 2d 375 (1976). In accord with Gillespie, this Court has emphasized that “the nature of summary judgment procedure (G.S. 1A-1, Rule 56), coupled with our generally liberal rules relating to amendment of pleadings, require that unpleaded affirmative defenses be deemed part of the pleadings where such defenses are raised in a hearing on motion for summary judgment. (Citations omitted.)” Cooke v. Cooke, 34 N.C. App. 124, 125, 237 S.E. 2d 323, 324, disc. rev. denied, 293 N.C. 740, 241 S.E. 2d 513 (1977). In Gillespie, supra, defendant executed five demand notes to plaintiff. In his affidavit, defendant swore that the notes were executed contemporaneously with an oral agreement as to the mode of payment and the fund from which the notes would be paid. He further swore that he had been engaged in a course of dealings with plaintiff and its predecessor which was pursuant to the oral agreement. The Supreme Court held: Defendant’s evidence, when taken in the light most favorable to him, establishes the execution of certain notes and security instruments accompanied by a prior or contemporaneous parol agreement as to the mode of payment and the fund from which it would be paid. The evidence tending to show a continued course of dealings pursuant to this oral agreement was sufficient to have affected the result of the [90] action, thereby creating a conflict between plaintiff’s evidence and defendant’s evidence as to a material fact. Thus, a jury question was presented and the trial judge erred when he granted plaintiff’s motion for summary judgment. Gillespie at 310, 230 S.E. 2d at 379-80. Plaintiff attempts to distinguish Gillespie from the case on appeal by emphasizing that Gillespie dealt with an oral agreement, concerning a change in the mode of payment, which was contemporaneous with the contract. Such an agreement was deemed an exception to the parol evidence rule. Plaintiff argues that, in contrast, the case sub judice deals with a later modification of the terms of the note which was not shown to have been by mutual consent or made upon additional consideration. We disagree. There was no modification of the terms of the note. Instead defendant’s evidence, like that of the defendant in Gillespie, merely shows that the parties entered into an oral agreement to change the mode of payment. The averments in Frank Wilson’s affidavit, filed on defendant’s behalf, supports this conclusion. Wilson’s affidavit also raises the affirmative defense of payment and meets the requirements of Rule 56(e) of the North Carolina Rules of Civil Procedure. Pursuant to Rule 56(e), “[supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” Wilson swore that he, acting as defendant’s agent, was advised by Bill Robinson, plaintiff’s Branch Manager, that $20,000 due from plaintiff to the dealership would be applied to the initial payments owing on the note. The evidence in the record on appeal indicates that this sum would cover at least the first three payments under the note. These facts asserted by defendant’s agent must be accepted as true by the trial court when considering plaintiff’s motion for summary judgment. Schoolfield v. Collins, 281 N.C. 604, 189 S.E. 2d 208 (1972). The law as to summary judgment also requires the court to construe all the evidence in the light most favorable to the non-moving party. Any doubt as to whether a genuine issue of material fact exists must be resolved in the favor of the non-moving party. Miller v. Snipes, 12 N.C. App. 342, 183 S.E. 2d 270, cert. denied, 279 N.C. 619, 184 S.E. 2d 883 (1971). Application of this law to the case on appeal compels us to reverse the judgment of the trial court [91] awarding summary judgment in plaintiff’s favor. We note that since the averments in Wilson’s affidavit are deemed true in considering plaintiff’s motion for summary judgment, it would appear that plaintiff then had the duty to transfer the $20,000 credit to the debt owing on the promissory note. Evidence of such a transfer would be solely within the personal knowledge of plaintiff. Since there exists a genuine issue of material fact as to whether or not payments were made pursuant to the promissory note, summary judgment was not appropriate. In light of our decision, we need not consider whether defendant’s amended answer, which arguably could have been considered as an affidavit, raised a genuine issue of material fact. Reversed. Judges Hedrick and Martin (Robert M.) concur.