NO. COA03-242

BRANCH BANKING &
TRUST COMPANY,
        Plaintiff,

v .                         Johnston County
                            No. 02 CVD 1565
BETTY L. THORNTON HAYES and
RAYMOND M. HAYES, JR.
a/k/a R. M. HAYES, JR.,
        Defendants.

    Appeal by plaintiff from order entered 12 August 2002 by Judge Albert A. Corbett, Jr. in Johnston County District Court. Heard in the Court of Appeals 19 November 2003.

    Kellam & Pettit, P.A., by Michael B. Stein, for plaintiff- appellant.

    Woodruff, Reece & Fortner, by Gordon C. Woodruff, for defendant-appellee Raymond M. Hayes, Jr.

    No brief filed on behalf of defendant-appellee Betty L. Thornton Hayes.

    GEER, Judge.

    Appellant Branch Banking & Trust Company ("BB&T") sued appellees Raymond M. Hayes, Jr. and his apparently estranged wife, Betty L. Thornton Hayes, to recover the outstanding balance on a line of credit. BB&T appeals from the trial court's order grantingMr. Hayes' motion to dismiss under Rule 12(b)(6) of the Rules of Civil Procedure. Because the trial court's consideration of matters outside the pleadings converted Mr. Hayes' motion to dismiss into a motion for summary judgment and because BB&T's verified complaint raised a genuine issue of material fact, we reverse.

Facts

    Plaintiff's complaint alleges that on 26 October 1993, defendants signed an application for a line of credit and a "Preferred Credit Line Agreement" with Southern National Bank ("SNB"). SNB established a line of credit for Mr. and Mrs. Hayes in the amount of $12,000.00. The complaint alleges that defendants used the credit line, borrowing $10,178.36, then defaulted on the loan. SNB subsequently merged with BB&T and BB&T became a successor in interest to SNB. BB&T sought recovery from both defendants, jointly and severally, of the balance due on the line of credit together with interest, costs, and attorney's fees.
    BB&T's complaint was verified by Wilson J. Williams, a BB&T officer. Williams' verification stated:
            That he is an officer of Branch Banking & Trust Company, and as such, he is authorized to make this Verification; that he has read the foregoing and attached Complaint and knows the contents thereof; that the same is true of his own personal knowledge except as to matters and things therein stated uponinformation and belief; and that, as to those such matters and things, he verily believes them to be true.

A copy of the credit application, purportedly bearing both defendants' signatures, was attached to the verified complaint.
    On 23 July 2002, Mr. Hayes moved to dismiss BB&T's claim under Rule 12(b)(6) of the Rules of Civil Procedure. In connection with that motion, Mr. Hayes filed two affidavits with the trial court. The first, signed and sworn to by Mr. Hayes, alleged that he had never signed the credit application or authorized Betty L. Thornton Hayes to sign his name and that he had never used the line of credit. The second affidavit, signed by a forensic fingerprint examiner, expressed the opinion that Mr. Hayes' purported signature was a forgery. BB&T did not file any affidavits opposing Mr. Hayes' motion.
    During a hearing on Mr. Hayes' motion to dismiss, the trial judge stated that he was dismissing the complaint specifically because of the affidavit of the forensic fingerprint examiner. The court also stated that it was dismissing BB&T's claim pursuant to Rule 12(b)(6) and stressed that the court's ruling was not one for summary judgment. The written order provided, however: "BASED UPON a review of the file and upon due consideration of the arguments of counsel, the Court finds that there is no genuineissue as to any material fact, and there is good cause to allow the motion."

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    Rule 12(b) of the Rules of Civil Procedure provides:
        If, on a motion asserting the defense numbered (6), to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

N.C. Gen. Stat. § 1A-1, Rule 12(b) (2003). Because the trial court considered affidavits filed by Mr. Hayes, the motion to dismiss was converted to one for summary judgment. See Stanback v. Stanback, 297 N.C. 181, 205, 254 S.E.2d 611, 627 (1979) ("A Rule 12(b)(6) motion to dismiss for failure to state a claim is . . . converted to a Rule 56 motion for summary judgment when matters outside the pleadings are presented to and not excluded by the court.").
    The party moving for summary judgment must establish that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Morrison v. Sears, Roebuck & Co., 319 N.C. 298, 300, 354 S.E.2d 495, 497 (1987). Rule 56 "does not authorize the court to decide an issue of fact. It authorizes the court to determine whether a genuine issue of factexists." Vassey v. Burch, 301 N.C. 68, 72, 269 S.E.2d 137, 140 (1980) (emphasis original).
    Our review of a ruling on summary judgment requires a two-part analysis of whether (1) the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact; and (2) the moving party is entitled to judgment as a matter of law. Von Viczay v. Thoms, 140 N.C. App. 737, 738, 538 S.E.2d 629, 630 (2000), aff'd per curiam, 353 N.C. 445, 545 S.E.2d 210 (2001). All inferences must be drawn in the favor of the non- moving party. Morrison, 319 N.C. at 300, 354 S.E.2d at 497.
    The non-moving party may not rest on the allegations in its pleadings to create an issue of fact. Smiley's Plumbing Co. v. PFP One, Inc., 155 N.C. App. 754, 761, 575 S.E.2d 66, 70, disc. review denied, 357 N.C. 166, 580 S.E.2d 698 (2003). A verified complaint may, however, be treated as an affidavit if it complies with the requirements of Rule 56(e); it must (1) be made on personal knowledge, (2) set forth such facts as would be admissible in evidence, and (3) show affirmatively that the affiant is competent to testify to the matters stated therein. Page v. Sloan, 281 N.C. 697, 705, 190 S.E.2d 189, 194 (1972). See also Schoolfield v. Collins, 281 N.C. 604, 612, 189 S.E.2d 208, 213 (1972) (quoting 6 James W. Moore et al., Moore's Federal Practice, § 56.11[3], at2176 (2d ed. 1965)) ("'To the extent that a verified pleading meets [the requirements of Rule 56(e)] then it may properly be considered as equivalent to a supporting or opposing affidavit . . . .'").
    Because the record shows that defendant did not move to strike BB&T's verification or otherwise object to the validity of the verification, we do not consider on appeal whether the verification complies with the requirements of Rule 56(e). Any possible objections have been waived. Whitehurst v. Corey, 88 N.C. App. 746, 748, 364 S.E.2d 728, 729-30 (1988) ("[W]hile defendants' verified pleadings arguably do not conform to the formal requirements of Rule 56(e), plaintiff's failure to move to strike these allegations waives any objection to their formal defects."). See also Mozingo v. Pitt County Memorial Hospital, Inc., 101 N.C. App. 578, 584, 400 S.E.2d 747, 750 (1991) (Because the record showed "no prior objection to the defendant's affidavit on the grounds of a lack of personal knowledge[,]" the plaintiffs "waived any objection they may have had regarding it."), aff'd on other grounds, 331 N.C. 182, 415 S.E.2d 341 (1992).
    The trial court should have treated the verified complaint as an affidavit. The verified complaint sets forth specific facts that contradict those contained in the affidavits presented by Mr. Hayes. Paragraph 3 of the complaint states that both Mr. Hayes and Betty L. Thornton Hayes applied for the line of credit and signedthe credit application that was attached to the complaint. Paragraphs 6 and 7 state that both defendants utilized the credit line, incurred the debt, and defaulted on the loan. These verified allegations were sufficient to create a genuine issue of material fact. As a result, the trial court erred in entering judgment in favor of Mr. Hayes.
    Because of the disposition of this case, it is unnecessary to address BB&T's argument that the trial court erred in failing to provide BB&T a reasonable opportunity to present affidavits to refute those of Mr. Hayes.

    Reversed.
    Judges MCGEE and HUNTER concur.
    Report per Rule 30(e).

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