Appeal by plaintiff from an order entered 3 June 2005 by Judge
W. Russell Duke, Jr. in Granville County Superior Court. Heard in
the Court of Appeals 22 February 2006.
Schiller & Schiller, PLLC, by David G. Schiller and Kathryn H.
Schiller, for plaintiff-appellant.
Attorney General Roy Cooper, by Assistant Attorney General
Angel E. Gray, for defendant-appellee.
Teresa Smith Gilreath (plaintiff) appeals from an order
entered 3 June 2005 granting summary judgment in favor of the North
Carolina Department of Health and Human Services (defendant) and
dismissing plaintiff's Complaint. The trial court found plaintiff
was overpaid for her work for defendant and ordered plaintiff to
repay $12,359.53 to the State of North Carolina. For the reasonsbelow, we reverse the order of the trial court and remand for
Plaintiff is employed by defendant as an Advocate II, working
at the Whitaker School located on the campus of John Umstead
Hospital. Whitaker School is a separate entity from John Umstead
Hospital and each facility has its own director. Beginning on or
about 21 March 2001, plaintiff began receiving $2.00 per hour for
on-call time she worked in her position at the Whitaker School. In
August 2003, plaintiff was informed that there was a question as to
whether or not she was being overpaid for her on-call time. On 25
June 2004, plaintiff received a letter from the Human Resources
Director for John Umstead Hospital informing her that defendant had
made a salary overpayment to her due to a miscalculation in her on-
call pay rate and that she was required to repay the overpayment.
On 6 August 2004, plaintiff filed a complaint in this matter,
seeking, inter alia
, a declaratory judgment that she is the
exclusive owner of the funds defendant seeks to recover from her.
Defendant answered on 27 August 2004 and filed a motion for summary
judgment on 28 April 2005. Defendant's motion for summary judgment
was heard on 9 May 2005 in Granville County Superior Court, before
the Honorable W. Russell Duke, Jr. On the same day as the hearing
on defendant's motion, plaintiff filed a cross-motion for summary
judgment and a motion to strike certain paragraphs from various
affidavits filed by defendant in support of its motion for summaryjudgment. On 3 June 2005, the trial court entered an order
granting defendant's motion for summary judgment and dismissing
plaintiff's complaint. The trial court found plaintiff was
overpaid for her work for defendant and ordered plaintiff to repay
$12,359.53 to the State of North Carolina. The trial court's order
does not explicitly address either of plaintiff's motions.
Plaintiff raises two issues on appeal: (I) whether the trial
court erred in failing to grant plaintiff's motion to strike; and
(II) whether the trial court erred in granting defendant's, and
denying plaintiff's, motion for summary judgment.
 Plaintiff first claims the trial court erred in failing to
grant her motion to strike several paragraphs from affidavits
submitted in support of defendant's motion for summary judgment.
Plaintiff filed her motion to strike portions of the affidavits on
the grounds that the affidavits failed to comply with the
requirements of Rule 56 of the North Carolina Rules of Civil
Procedure. However, the trial court's order granting defendant's
motion for summary judgment does not address plaintiff's motion to
strike and there is no indication in the record before this Court
that the trial court otherwise ruled on plaintiff's motion to
strike. Rule 10(b)(1) of the North Carolina Rules of Appellate
Procedure provides that in order to preserve a question for
appellate review, it is necessary for the complaining party toobtain a ruling upon the party's request, objection or motion.
N.C. R. App. P. 10(b)(1); see also Finley Forest Condo. Ass'n v.
, 163 N.C. App. 735, 738, 594 S.E.2d 227, 230 (2004) (holding
the Court was unable to review an issue concerning the trial
court's admission and consideration of affidavits since there was
nothing in the record indicating the trial court's ruling on the
plaintiff's objection and motion to strike). Because plaintiff
failed to obtain a ruling on her motion to strike, this assignment
of error is overruled.
 Plaintiff next argues the trial court erred in granting
defendants' motion for summary judgment and in denying her own
motion for summary judgment. Under Rule 56(c) of the North
Carolina Rules of Civil Procedure, summary judgment shall be
granted only if the trial court finds 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. Gen. Stat. § 1A-1, Rule 56(c) (2005).
[I]n ruling on a motion for summary judgment the court does not
resolve issues of fact and must deny the motion if there is any
issue of genuine material fact. Singleton v. Stewart
, 280 N.C.
460, 464, 186 S.E.2d 400, 403 (1972) (citations omitted). [T]he
court may consider the pleadings, depositions, admissions,
affidavits, answers to interrogatories, oral testimony and
documentary materials[.] Dendy v. Watkins
, 288 N.C. 447, 452, 219
S.E.2d 214, 217 (1975). All such evidence must be considered ina light most favorable to the non-moving party. Howerton v. Arai
, 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004).
On appeal, this Court has the task of determining whether, on
the basis of the materials presented to the trial court, there is
a genuine issue as to any material fact and whether the moving
party is entitled to judgment as a matter of law. Eckard v.
, 166 N.C. App. 312, 318, 603 S.E.2d 134, 138 (2004) (citing
Oliver v. Roberts
, 49 N.C. App. 311, 314, 271 S.E.2d 399, 401
(1980)), aff'd per curiam
, 360 N.C. 51, 619 S.E.2d 503 (2005). We
review the trial court's grant of summary judgment de novo
Shroyer v. County of Mecklenburg
, 154 N.C. App. 163, 167, 571
S.E.2d 849, 851 (2002).
The dispositive issue in this matter is whether there is
evidence to support the trial court's determination no genuine
issue of material fact exists concerning the rate at which
plaintiff should have been paid for her on-call time. The trial
court found as fact that plaintiff was employed as an Advocate II
at the Whitaker School and that Whitaker School established an on-
call pay rate of $0.94 per hour for its eligible employees,
including the Plaintiff. Based on this finding, the trial court
held that plaintiff had been mistakenly compensated at a rate of
$2.00 per hour for her on-call time, resulting in a net overpayment
by defendant of $12,359.53. However, the only evidence as to the
on-call pay rate for employees of the Whitaker School is found in
the affidavits of Debbie Johnson, Michael Sinno, and Anna Bass,each of whom asserts that the Whitaker School had established an
on-call pay rate of $0.94 per hour for plaintiff.
On-call pay for plaintiff and other eligible employees at the
Whitaker School and John Umstead Hospital was provided under a
pilot program initiated by defendant effective 1 December 2000.
The authority to establish the on-call pay rate was vested under
the pilot program with the individual divisions within the
Department of Health and Human Services. For the Whitaker School
it is apparent from the record that this authority was vested with
the Whitaker School Management Team. There is no evidence that
Johnson, Sinno, or Bass are members of the Whitaker School
Management Team or were otherwise involved in the establishment of
the on-call pay rate for the Whitaker School. Therefore, any
knowledge they have of the on-call pay rate can only be through a
statement made by another, namely the Whitaker School Management
Team. Each of the statements made by Johnson, Sinno and Bass
establishing plaintiff's on-call pay rate in their affidavits, and
in the exhibits submitted in support of their affidavits, are
hearsay and are inadmissible to prove the on-call pay rate for
employees at the Whitaker School. These statements should not have
been considered by the trial court in ruling on defendant's motion
for summary judgment.
Affidavits supporting or opposing a motion for summary
judgment 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 thematters stated therein. N.C. Gen. Stat. § 1A-1, Rule 56(e)
(2005). Hearsay matters included in affidavits should not be
considered by a trial court in entertaining a party's motion for
summary judgment. Moore v. Coachmen Indus. Inc.
, 129 N.C. App.
389, 394, 499 S.E.2d 772, 776 (1998). Hearsay is defined as a
statement, other than one made by the declarant while testifying at
the trial or hearing, offered in evidence to prove the truth of the
matter asserted. N.C. Gen. Stat. § 8C-1, Rule 801(c) (2005).
Defendant does not address any hearsay concerns in its brief,
but rather asserts that Johnson, Sinno and Bass had first-hand
personal knowledge of plaintiff's on-call pay rate which is not
hearsay. The dissent, however, creates an argument for defendant
that Johnson, Sinno and Bass' personal knowledge of plaintiff's on-
call pay rate was gathered from business records which fall under
the business records exception to the hearsay rule.
(See footnote 1)
We agreewith the dissent that [k]nowledge obtained from the review of
records, qualified under Rule 803(6), constitutes 'personal
knowledge' within the meaning of Rule 56(e). Hylton v. Koontz
138 N.C. App. 629, 635, 532 S.E.2d 252, 256 (2000). However, [i]f
. . . the affiant obtained information from a written record and
the record did not comply with requirements of the business records
exception to the hearsay rule, this information would . . . not be
based on the affiant's personal knowledge. Id.
at 635 n.3, 532
S.E.2d at 257 n.3 (citations omitted).
The dissent cites to Moore v. Coachmen Indus. Inc.
, 129 N.C.
App. 389, 499 S.E.2d 772 (1998), in support of its contention that
the affidavits in the instant case provide for the establishment of
plaintiff's on-call pay rate as acquired through business records.
However, in Moore
the affiant specifically addressed the
foundational requirements of establishing a document under the
business records exception. The affiant in Moore
I am the Senior Corporate Attorney of
[defendant Coachmen]. Prior to [defendant
Sportscoach's] corporate dissolution in 1995,
I held the same position with both
[defendants] Sportscoach and Coachmen. I have
custody and access to the business records of
[defendant] Sportscoach relating to
[plaintiffs'] vehicle[,] which is the subject
of the instant action . . . .
I am familiar with the system by which . . .
Sportscoach records were generated. The
entries in these records were made in the
regular course of [defendant] Sportscoach'sbusiness[,] at or near the time of the events
recorded[, and] based upon the personal
knowledge of the person making them, or upon
information transmitted by the person with
. . .
It was the regular business practice of
[defendant] Sportscoach to require the dealer
to deliver and have signed the Warranty
Registration and pre-delivery and acceptance
declaration, and to deliver the Owners Manual
and the New Recreational Vehicle Limited
Warranty and other information about the
Sportscoach warranty before or
contemporaneously with the delivery and sale
of the vehicle to the dealer's customer. That
this practice was followed with respect to the
sale of the vehicle to the plaintiffs is
confirmed by plaintiff Luther Deleon Moore's
signature, certifying that all warranties were
clearly explained to him.
at 395, 499 S.E.2d at 776. In the instant case, none of the
affidavits address the foundational requirements for the admission
of evidence which would establish plaintiff's on-call pay rate
through a business record, and thus do not present personal
knowledge setting forth facts admissible in evidence.
It is uncontested that Johnson is the Director of Human
Resources for John Umstead Hospital, and that office provides human
resources functions to plaintiff's employer, the Whitaker School.
While her affidavit states the facts within are based on her
personal knowledge, Johnson also states the following:
10. Effective December 1, 2000, DHHS received
approval from the Office of State Personnel to
participate in an On-Call Pilot Program. The
Pilot Program provided that certain classes
and/or specific positions were approved for
on-call consideration. Advocate II positions
were included in the list of positions
approved for on-call pay if the employingentities chose to participate in the program.
Pursuant to the pilot program, eligible
employees may be compensated at a rate ranging
from $0.94 per hour up to $2.00 per hour. The
decision about the applicable rate of on-call
pay was determined by each individual division
11. Pursuant to this pilot program, John
Umstead Hospital established an on-call pay
rate of $2.00 per hour for its eligible
employees. Whitaker School established an
on-call pay rate of $0.94 per hour for its
eligible employees, including Ms. Gilreath.
12. I informed the Payroll Office of Whitaker
School's decision to establish a $0.94 per
hour on-call rate via facsimile on January 3
1, 2001. The document attached as Exhibit 7 is
a fair and accurate copy of the facsimile I
transmitted to Payroll on January 31, 2001 and
bears my initials at the bottom.
(Emphasis added). The facsimile attached as Exhibit 7 to Johnson's
affidavit is merely the cover page of a seven-page set of
documents. According to the handwritten note on the cover page,
All these memos were sent to Payroll and Timekeeping to inform you
of the rate changes. It is official @ JUH that Physicians make
$5.00/hr and others are in the 1/8/01 memo. Whitaker and Town are
still .94./hr. DSJ. None of the supporting memos mentioned in
the fax cover sheet are included in the record before this Court
and it appears none were submitted to the trial court for its
review of this matter.
There is nothing in Johnson's affidavit to establish the
foundation that the facsimile cover page is a record of regularly
conducted activity which would fall under the business records
exception to the hearsay rule, as required by Rule 803(6). At
best, Johnson's affidavit could be interpreted to find that themissing memos following the facsimile cover page would so qualify,
but those documents are not attached in support of the affidavit.
Instead, Johnson relies on a hand-written note on a cover page that
purports to summarize the contents of the missing memos. Thus,
Johnson's written note on the facsimile cover page is hearsay and
as that is the only support for Johnson's personal knowledge of the
on-call rate for employee's at the Whitaker School, the cover page
and her statements as to the on-call rate contained in her
affidavit cannot be considered by the court when ruling on
defendant's motion for summary judgment.
No other competent evidence exists in the record to support a
finding that plaintiff's proper on-call pay rate was $0.94/hour and
plaintiff offers no uncontested evidence, other than the fact of
her actual payments, to establish her proper on-call pay rate.
Therefore, a genuine issue of material fact exists as to the on-
call pay rate to which plaintiff was entitled and, considering the
facts on record, the trial court erred in granting defendant's
motion for summary judgment. Further, as a genuine issue of
material fact exists in this matter, the trial court did not err in
not granting plaintiff's motion for summary judgment.
Reversed and remanded for further proceedings.
Judge HUDSON concurs.
Judge HUNTER concurs in part and dissents in part in a
HUNTER, Judge, concurring in part and dissenting in part.
Although I concur with the majority opinion that plaintiff
failed to preserve her assignment of error as to the motion to
strike, I respectfully dissent from the majority's holding that
defendant's affidavits should have been excluded as hearsay.
As noted by the majority, the dispositive issue in this matter
is whether an issue of material fact exists concerning the rate at
which plaintiff should have been paid for her on-call time. The
trial court found as fact that the pay rate for on-call employees
of the Whitaker School, which included plaintiff, was set at $0.94
per hour. The finding is based on the affidavit of Debbie Johnson
(Johnson), the Director of Human Resources at John Umstead
Hospital, and an exhibit attached to her affidavit.
The majority finds that the affidavit of Johnson, as well as
those of two other affiants who stated that the pay rate for
Whitaker was $0.94, do not appear to be based on personal
knowledge, as they are not members of the Whitaker School
Management Team and were not involved in the establishment of the
pay rate. The majority thus concludes that such statements must be
hearsay and therefore should not be considered by the trial court
in a motion for summary judgment.
The North Carolina Rules of Civil Procedure state that
affidavits in support of a motion for summary judgment 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.
N.C. Gen. Stat. § 1A-1, Rule 56(e) (2005). This Court has heldthat when a Rule 56 affidavit does not specifically state that it
is based on personal knowledge, it may still be sufficient if its
content and context show its material parts are founded on the
affiant's personal knowledge. Hylton v. Koontz, 138 N.C. App. 629,
634, 532 S.E.2d 252, 256 (2000). We note that in the instant case
it is unnecessary to consider the context and content in an attempt
to determine if Johnson had personal knowledge. Unlike in Hylton,
Johnson specifically averred personal knowledge of the contents of
Despite Johnson's averment of personal knowledge, however, the
majority's analysis assumes that as Johnson did not herself set the
rate, her knowledge of that information was not personal and must
be hearsay. In Moore v. Coachmen Industries, Inc., 129 N.C. App.
389, 499 S.E.2d 772 (1998), this Court held that [t]he fact that
an affiant's knowledge was gathered from business records or
communications is not fatal to the Rule 56(e) requirement that an
affidavit be based on the personal knowledge of the affiant. Id.
at 394, 499 S.E.2d at 776. In Moore, the challenged affidavit was
from a senior corporate attorney employed by the defendant who made
statements regarding the business practices of the defendant with
regards to warranties. The affiant in Moore stated that the vehicle
sold to the plaintiff by a third-party dealer was covered by no
warranty from the defendant other than the new vehicle limited
warranty. Although the affiant had not personally handled the sale
of the vehicle, since [b]oth of the affidavits were made upon [the
senior corporate attorney's] personal knowledge, acquired throughreview of his employer's business records[,] Moore found the
affidavits to be competent evidence. Moore, 129 N.C. App. at 396,
499 S.E.2d at 777.
Here, similarly, Johnson averred that she was the Director of
Human Resources for John Umstead Hospital and had previously been
the Assistant Director of Human Resources. Johnson stated that the
Umstead Human Resources office also provided human resources
functions for the Whitaker School, including distribution of pay
stubs to employees. Johnson stated that on 31 January 2001, she
informed the Payroll Office of Whitaker School's decision to
establish a $0.94 per hour on-call rate via facsimile[.] A copy
of the facsimile, dated 1-31-01 was attached to Johnson's
affidavit as Exhibit 7, and stated [i]t is official . . . Whitaker
& Town are still .94./hr[,] followed by Johnson's initials. An
additional exhibit, a memorandum to Institution Human Resources
Managers from the Department of Health and Human Services, dated 22
May 2000, directs the human resource managers to determine
eligibility for on-call pay and report the information to the
Department. Here, in addition to Johnson's clear averment that the
pay rate for Whitaker was within her personal knowledge, it is
apparent that Johnson's review and reporting of business records for
Whitaker provides an appropriate basis for her personal knowledge
of that information. See Moore, 129 N.C. App. at 396, 499 S.E.2d
Moreover, Rule 56(e) states that:
When a motion for summary judgment is made and
supported as provided in this rule, an adverseparty may not rest upon the mere allegations or
denials of his pleading, but his response, by
affidavits or as otherwise provided in this
rule, must set forth specific facts showing
that there is a genuine issue for trial. If he
does not so respond, summary judgment, if
appropriate, shall be entered against him.
N.C. Gen. Stat. § 1A-1, Rule 56(e); see also Brown v. City of
Winston-Salem, 171 N.C. App. 266, 275, 614 S.E.2d 599, 604-05 (2005)
(holding summary judgment was properly granted when the plaintiff
failed to file affidavits contradicting factual matters established
by the defendant's affidavits).
I note that here, plaintiff, in her own motion for summary
judgment, does not contest that the correct pay rate for Whitaker
school was established at $0.94 per hour. Rather, plaintiff's own
affidavit states only that she was told that she would be paid
between $0.94 and $2.00/hour for my on-call time[,] but does not
aver that she was told she would be paid at the higher $2.00 per
hour rate. Further, the letter included by plaintiff in support of
her motion to dismiss from Ray Newman (Newman), the Director of
the Whitaker School, also indicates that the pay rate was not, in
fact, $2.00. The letter was dated 4 September 2003, more than two
years after plaintiff began being paid for on-call time. Newman
implied that the School Management team, after learning of the
overpayment to plaintiff, had determined that in the future all
clinical on-call staff at Whitaker should be paid the same $2.00
rate as the Umstead staff. Newman also acknowledged that he had
also been overpaid for his on-call hours. Newman's letter indicates
an acknowledgment by the Whitaker School that the initial pay rateestablished for on-call employees was not $2.00 an hour. Plaintiff
fails to assert any factual basis for her claim that $0.94 was not
the correct rate of pay for on-call Whitaker employees.
As the evidence in support of defendant's motion for summary
judgment is competent, and as no material issue of fact exists as
to the correct rate of on-call pay for plaintiff's position at the
Whitaker school, the trial court's grant of summary judgment should
be affirmed. See Brown, 171 N.C. App. at 275, 614 S.E.2d at 604-05.