City National Bank v. Rojas

EAGLES, Judge. Defendant contends that the trial court erred in granting summary judgment on plaintiffs complaint and in dismissing defendant’s counterclaim. We disagree. Summary judgment is properly granted when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C. R. Civ. P. 56(c). For a moving party’s motion for summary judgment to be granted, the movant must produce a forecast of evidence which is sufficient, if considered alone, to compel a verdict in his favor as a matter of law. Failure of the non-moving party to counter the effect of the mov-ant’s forecast by his own forecast of evidence will result in a [349] judgment against him. Cockerham v. Ward and Astrup Co. v. West Co., 44 N.C. App. 615, 618, 262 S.E. 2d 651, 654 (1980). Defendant contends that there is an issue of fact concerning plaintiff bank’s “good faith,” which is necessary to establish the bank’s status as a holder in due course of the $2,500.00 check. To qualify as a holder in due course, plaintiff bank must have been a holder who took the check for value, in good faith, and without notice that it was overdue, had been dishonored, or of any defense against or claim to it. G.S. 25-3-302. If the plaintiff bank was a holder in due course, then it took the check free of all claims to it by any person and free of all defenses of any party to the check (except for real defenses, which do not apply here). G.S. 25-3-305. In its pleadings and affidavits, plaintiff bank presented a forecast of evidence which when considered alone, would compel a verdict in its favor as a matter of law. Defendant then was required to produce a forecast of evidence to show a genuine issue of fact concerning plaintiff bank’s status as a holder in due course of the $2,500.00 check. If defendant failed to do so, plaintiff bank took the check free of all claims and defenses, and summary judgment would have been properly granted. Regarding plaintiff bank’s status as a holder in due course, defendant questions only the issue of good faith. A bank has exercised good faith if it has exercised honesty in fact in the conduct or transaction concerned. G.S. 25-1-201(19). In support of its motion for summary judgment, plaintiff bank produced the affidavit of James Watters, showing that Mr. Watters acted as a representative of the bank “for the purpose of representing to the defendant Major Industries’ financial position.” Mr. Watters gave defendant “the full benefit of any knowledge (he) had with respect to the financial position of Major Industries.” Defendant produced no affidavits or other forecast of evidence to rebut plaintiffs forecast. Defendant relied on allegations in his answer that Mr. Watters, a bank officer, “by reason of his fiduciary relationship with the defendant persuaded and induced defendant” to invest in Majors’ corporation and that Majors was a “banking and personal friend of Mr. Watters.” There were no allegations of bad faith and no forecast of evidence presented by defendant that plaintiff bank failed to exercise honesty in fact in this transaction. To rebut the movant’s claim that there is no genuine issue of material fact presented, the non-moving party may not rest on [350] the allegations of his pleadings, but must, by affidavits or otherwise, set forth specific facts to show that there is an issue for trial. Cockerham, 44 N.C. App. at 618, 262 S.E. 2d at 654. Defendant failed to respond to plaintiff bank’s forecast of evidence with his own forecast and instead rested on the allegations of his pleadings. Defendant failed to set forth specific facts to show that there was a genuine issue as to plaintiff bank’s good faith. Since there was no genuine issue of material fact as to good faith and there were no other facts in dispute regarding plaintiff bank’s status as a holder in due course, plaintiff bank took the check as a holder in due course free of all claims and defenses (except real defenses) as a matter of law. Summary judgment against defendant and dismissal of defendant’s counterclaim were properly granted. Affirmed. Judges ARNOLD and WELLS concur.