Appeal by plaintiffs from order entered 25 January 2005 by
Judge Narley L. Cashwell in Vance County Superior Court. Heard in
the Court of Appeals 7 December 2005.
Norman & Gardner, by Larry E. Norman, for plaintiffs-
Smith Moore LLP, by Sidney S. Eagles, Jr., Montaye Sigmon
McGee, and Elizabeth Brooks Scherer, for defendants-appellees.
Plaintiffs Timothy C. and Laurie S. Kudlinski appeal the entry
of summary judgment in favor of defendants Richard H. and Joan L.
Norwood in connection with the sale of a house by the Norwoods to
the Kudlinskis. Because the Kudlinskis have failed to forecast
sufficient evidence to support each element of their cause of
action for fraud, we affirm.
In September 1997, the Kudlinskis bought a house in Henderson,
North Carolina from the Norwoods. In connection with the sale, the
Norwoods gave the Kudlinskis a Residential Property DisclosureStatement in which the Norwoods indicated that they had no
knowledge of any "damage to or abnormality of the roof, chimneys,
floors, foundation, basement, or load-bearing walls, or any leak in
the roof or basement." After the Kudlinskis moved in, however,
they "realized that the house had serious structural and foundation
problems." A professional inspection "found major structural
damage including serious foundation damage, a failing floor system
and basement flooding."
On 23 September 2003, the Kudlinskis commenced a civil action
against the Norwoods, alleging that the Norwoods had committed
fraud by misrepresenting and concealing the true condition of the
house. On 30 December 2004, the Norwoods moved for summary
judgment. In opposition, the Kudlinskis submitted a single
affidavit signed by each of them and the Norwoods' responses to the
Kudlinskis' request for admissions. After reviewing these
materials, the trial court granted summary judgment in favor of the
Norwoods. The Kudlinskis have timely appealed to this Court.
Summary judgment is proper if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
affidavits, show that there is no genuine issue of material fact
and a party is entitled to judgment as a matter of law. N.C.R.
Civ. P. 56. The moving party bears the burden of showing a lack of
triable issues of fact. Pembee Mfg. Corp. v. Cape Fear Constr.
, 313 N.C. 488, 491, 329 S.E.2d 350, 353 (1985). Once the
moving party meets this burden, the nonmoving party must "producea forecast of evidence demonstrating that the [nonmoving party]
will be able to make out at least a prima facie case at trial."
Collingwood v. Gen. Elec. Real Estate Equities, Inc.
, 324 N.C. 63,
66, 376 S.E.2d 425, 427 (1989).
"The essential elements of fraud are: '(1) False
representation or concealment of a material fact, (2) reasonably
calculated to deceive, (3) made with intent to deceive, (4) which
does in fact deceive, (5) resulting in damage to the injured
party.'" Rowan County Bd. of Educ. v. U.S. Gypsum Co.
, 332 N.C. 1,
17, 418 S.E.2d 648, 658 (1992) (quoting Terry v. Terry
, 302 N.C.
77, 83, 273 S.E.2d 674, 677 (1981)). The Norwoods argue that the
Kudlinskis have presented no competent evidence that the Norwoods
knew of the facts they allegedly misrepresented or concealed. See
RD&J Props. v. Lauralea-Dilton Enters., LLC
, 165 N.C. App. 737,
745, 600 S.E.2d 492, 498 (2004) ("The required scienter for fraud
is not present without both knowledge and an intent to deceive,
manipulate, or defraud."); Ramsey v. Keever's Used Cars
, 92 N.C.
App. 187, 190, 374 S.E.2d 135, 137 (1988) ("[D]efendant could not,
of course, be liable for concealing a fact of which it was
As evidence of the Norwoods' knowledge, the Kudlinskis relied
exclusively upon their joint affidavit, which asserted that James
L. Thompson of Thompson Brothers Construction Co. told the
Kudlinskis that he had visited the home when it was owned by the
that he personally showed the defendants
Norwood the severe structural problems thathad developed in the house and that he
specifically discussed with the defendants
Norwood the foundation, flooring and cracking
problems and recommended making repairs. He
further stated, upon reexamining the property
after we [(the Kudlinskis)] purchased it, that
it was evident that none of the repairs he had
recommended were ever made.
In response to a request for admissions from the Kudlinskis, the
Norwoods admitted that they knew Mr. Thompson, but denied that he
had discussed water problems with them or had recommended any
Rule 56(e) of the North Carolina Rules of Civil Procedure
provides that affidavits "opposing [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."
Because hearsay is generally not admissible as evidence, "[h]earsay
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).
The Kudlinskis' statements in their affidavit swearing to what
Mr. Thompson said about his conversation with the Norwoods are
hearsay. The Kudlinskis have not made any argument that these
statements fall into any recognized exception to the hearsay rule.
Accordingly, the Kudlinskis' affidavit fails, contrary to Rule
56(e), to "set forth such facts as would be admissible in evidence"
that the Norwoods knew of the facts they had allegedly
misrepresented or concealed. As this is an essential element ofthe Kudlinskis' fraud claim against the Norwoods, the Kudlinskis
have failed to "produce a forecast of evidence demonstrating that
[they would] be able to make out at least a prima facie case at
, 324 N.C. at 66, 376 S.E.2d at 427.
(See footnote 1)
Consequently, the trial court properly granted summary judgment.
Judges HUNTER and McCULLOUGH concur.
Report per Rule 30(e).