MARION WATERS, JR. and wife,
TAMELA S. WATERS,
Plaintiffs,
v
.
Alamance County
No. 05 CVS 1091
CHARLES WILSON and wife,
DIANA WILSON; CARPENTIER'S
EXTERMINATING SERVICE; and
THE ESTATE OF GEORGE
CARPENTIER,
Defendants.
Appeal by Plaintiffs from judgment and order entered 11 August
2006 by Judge J. B. Allen, Jr., in Alamance County Superior Court.
Heard in the Court of Appeals 10 September 2007.
Tuggle Duggins & Meschan, P.A., by J. Reed Johnston, Jr.,
Emma C. Merritt and Rebecca A. Niburg, for Plaintiffs-
Appellants.
Vernon, Vernon, Wooten, Brown, Andrews & Garrett, P.A., by
Mark A. Jones and Benjamin D. Overby, for Defendant-Appellees.
ARROWOOD, Judge.
Plaintiffs, Marion and Tamela Waters, appeal from the entry of
partial summary judgment for Defendants, and from the trial court's
order striking an affidavit from the record. We reverse.
The record establishes, in relevant part, the following:
Charles Wilson (Defendant) and his wife Diana Wilson are residents
of Alamance County, North Carolina. Defendant previously was a
general contractor, and in the 1990's he designed and built a house
located at 104 Westminster Court, Mebane, North Carolina (thehouse), where the couple lived until the house was sold. On 8
April 2004 Plaintiffs Marion and Tamela Waters signed an Offer to
Purchase and Contract (Offer to Purchase), agreeing to buy the
house from Defendant. The Offer to Purchase stated, inter alia,
that Plaintiffs had received a copy of the N.C. Residential
Property Disclosure Statement (Disclosure Statement), signed by
Defendant and his wife. In the Disclosure Statement, signed in
December 2002, Defendant checked No in response to the question
Do you know of any problem (malfunction or defect) with respect
to water seepage, leakage, dampness or standing water in the
basement, crawl space, or slab?
Plaintiff Marion Waters relied on his background in
construction to conduct a general inspection of the house himself,
rather than hiring a home inspector. However, Waters had medical
conditions that prevented him from performing a thorough
inspection beneath the house. During his limited inspection of the
crawl space, Waters saw no evidence of water damage.
In April 2004, Plaintiffs hired Carpentier's Exterminating
Service to perform an inspection for the presence of wood-
destroying insects, such as termites, and on 22 April 2004 Gerald
Carpentier (Carpentier) signed a North Carolina Wood-Destroying
Insect Information Report stating that he had found evidence of
termites under the house and consequently had treated a 30 foot
section of wall in the crawl space. The report did not indicate
any problem with excessive moisture under the house. The parties closed on the sale of the house in early May 2004.
In June 2004, Plaintiffs discovered extensive moisture problems
under the house, including rotted support beams, standing water,
and the presence of mold. Plaintiffs then obtained an inspection
by Inspector Jimmy Hall of the Structural Pest Control Division of
the North Carolina Department of Agriculture. Hall's report
included a letter stating in pertinent part that:
During my inspection I noted and photographed
wood rot[.] . . . I found no termite evidence,
and no signs of a termite treatment. Review
of the Wood Destroying Insect Report revealed
a listing of a termite treatment to the wall
areas. . . . The report did not list anything
in section #5. This section would be used to
list any conditions conducive to termites such
as excessive moisture, wood debris, or etc.
I later spoke to Gerald Carpentier, and . . .
[he] said that he told the seller Mr. Wilson
that there was a problem with excessive
moisture and rot in the crawlspace. He
suggested to him that someone needed to look
at the problem.
Hall's report also included an Inspection Report assessing
Carpentier's report to Plaintiffs, which Hall described as
inaccurate and containing discrepancies in the document.
On 9 May 2005 Plaintiffs filed suit against Charles and Diana
Wilson, Carpentier's Exterminating Service, and the estate of
George Carpentier, alleging that Defendants intentionally concealed
from Plaintiffs the fact that there was a problem with excessive
moisture under the house. Plaintiffs brought claims of fraud and
unfair or deceptive trade practices from all parties; breach of
contract against Charles and Diana Wilson; negligence and negligent
misrepresentation against Carpentier's Exterminating Service andthe estate of George Carpentier; and civil conspiracy against
Charles Wilson, Carpentier's Exterminating Service, and the estate
of George Carpentier.
Charles and Diana Wilson answered, denying the material
allegations of the complaint, asserting various defenses, and
bringing a cross-claim against the Carpentier defendants for breach
of contract. The Carpentier defendants subsequently answered,
denying the allegations of Plaintiffs' complaint and the Wilsons'
cross-claim.
On 20 February 2006 Charles and Diana Wilson moved for partial
summary judgment on the claims brought against them. At a hearing
conducted 6 March 2006 Plaintiffs informed the trial court that
they had an affidavit from Gerald Carpentier wherein he stated that
when he informed Wilson about the moisture problem under the house,
Wilson had directed him not to tell Plaintiffs about it. The
affidavit was signed, but not sworn or notarized. On Plaintiffs'
motion, the court continued the summary judgment hearing to allow
Plaintiffs time to obtain a properly sworn and notarized affidavit
from Carpentier and to give the parties time to depose Carpentier.
On 9 June 2006 Defendants filed a motion for suppression of
Carpentier's affidavit on the grounds that Defendants had not been
able to depose Carpentier. Defendants' motion stated that
Carpentier had retained counsel but that Carpentier's counsel told
Defendants he was unable to locate his client. Defendants also
asserted that Plaintiffs had been unable to produce Gerald
Carpentier in accordance with their representations to the Court atthe [6 March 2006] hearing. However, we have reviewed the
transcript of the 6 March hearing, and find no representations by
Plaintiffs wherein they promised to produce Carpentier, assert
that they have the authority or ability to direct Carpentier's
actions, or otherwise guarantee Carpentier's appearance in court.
The hearing on Defendants' motion for partial summary judgment
and for the exclusion of Carpentier's affidavit was held on 19 June
2006. Plaintiffs' evidence included: (1) a sworn and notarized
affidavits from Carpentier averring in pertinent part:
4. In April of 2004, I inspected a residence
located at 104 Westminster Court, in Mebane,
North Carolina. This home was being sold by
its owners, Charles and Diana Wilson, to
potential buyers, Marion and Tamela Waters.
5. Prior to the inspection, I spoke with
Charles Wilson. Charles Wilson asked me to
come see him after the inspection to discuss
what was found underneath the house.
6. In connection with this inspection, I went
into the crawlspace of the residence. While
in the crawlspace, I saw that there was
excessive moisture and rot.
7. After the inspection, I told Charles Wilson
that there was a problem with excessive
moisture and rot in the Residence's
crawlspace. In particular, I told Charles
Wilson that the center support beam was rotten
and dripping wet. I told Charles Wilson that
there was extensive rot damage in the
crawlspace. I told Charles Wilson that
someone needed to investigate these problems.
8. In response, Charles Wilson told me not to
inform Marion and Tamela Waters of the
excessive moisture and rot in the residence's
crawlspace.
9. Mr. Wilson said he would take a look at the
situation and correct it.
Plaintiffs also produced an affidavit from Jimmy Hall,
averring in pertinent part that he was an inspector for the North
Carolina Department of Agriculture & Consumer Services, Structural
Pest Control Division, that he had inspected the area under the
house, and that:
7. During my inspection, I observed and
photographed wood rot to the main center beam,
the front porch substructure, and the
surrounding area.
. . . .
9. I found no evidence of termites, and no
signs of a termite treatment.
10. In connection with my inspection, I
reviewed a Wood Destroying Insect Report,
dated April 22, 2004, that was prepared by
Carpentier's Exterminating Service
('Carpentier's WDIR').
11. Carpentier's WDIR did not list anything in
its Section 5. Section 5 is where an
inspector, such as Carpentier's Exterminating
Service, would list conditions that were
conducive to termites.
12. Excessive moisture is a condition that is
conducive to termites.
13. I later spoke by telephone with Gerald
Carpentier.
14. Gerald Carpentier told me that he
performed the inspection of the Home for the
issuance of Carpentier's WDIR.
. . . .
16. Gerald Carpentier told me that he had told
the seller of the Home - 'Mr. Wilson' - that
there was a problem with excessive moisture
and rot in the crawlspace.
17. Gerald Carpentier told me that he
suggested to 'Mr. Wilson' that someone needed
to look at the problem.
Defendants' evidence included Wilson's sworn and notarized
affidavit averring in pertinent part that the allegations of
Gerald Carpentier are false. Mr. Carpentier never informed me of
a moisture or rot problem in the residence's crawlspace. Further,
I never instructed Mr. Carpentier or any individual to withhold any
information from the Plaintiffs in connection to the purchase of
the residence. Defendants also submitted a copy of a letter from
Carpentier's attorney to Plaintiffs' counsel, referencing a
photocopy of of Carpentier's affidavit with penciled in changes
purportedly made by Carpentier. The revised affidavit was
unsigned, and was not sworn or notarized.
At the hearing, the trial court ruled that it would suppress
the sworn affidavit of Carpentier, on the grounds that it did not
know whether to believe Carpentier after receiving a photocopy of
the affidavit with corrections that Carpentier's counsel contended
were those suggested by Carpentier. After excluding the affidavit,
the trial court ruled on Defendants' motion for partial summary
judgment.
Regarding Diana Wilson, who is not a party to this appeal, the
Plaintiffs conceded that she was entitled to summary judgment on
all claims against her. The court granted summary judgment for
Charles Wilson on Plaintiffs' claims for fraud, conspiracy, and
unfair or deceptive trade practices. Plaintiffs subsequently took
a voluntary dismissal of their breach of contract claim against
Wilson, and their claims against Carpentier and Carpentier's
Exterminating Service. Plaintiffs then appealed from the court'sentry of partial summary judgment and its order striking of
Carpentier's affidavit.
(a) That the Affidavit of Gerald Carpentier
filed with the Court on March 6,2006 is an
inaccurate Affidavit of Gerald Carpentier
based on statements to the Court and documents
produced by Carpentier's own counsel.
(b) That based on the conflict in Affidavits
presented to the Court, the Court concludes
that the March, 2006 Affidavit of Gerald
Carpentier does not appear to be made of
Gerald Carpentier's own knowledge and appears
to be inherently reliable and is therefore
stricken from the Court's consideration
pursuant to Rule 56(e] of the North Carolina
Rules of Civil Procedure [and] Defendants'
Motion for Partial Summary Judgment.
(c) That based on the late service of the
Affidavit to counsel for Defendants Wilson
under North Carolina Rule of Civil Procedure
5, and the conflicts in the various Affidavits
of Gerald Carpentier, the court in its
inherent power in Rule 56(c), hereby concludesthat the Affidavit is stricken and that the
Court will not consider the Affidavit in
regards to Defendants' Motion For Partial
Summary Judgment.
Conclusions (a) and (b) represent resolution of a factual issue,
the credibility of Plaintiffs' affidavit of Carpentier in the face
of later documents proffered by Defendants. Nor does Rule 56(e),
cited by the trial court in Conclusion (b) as its authority for
exclusion of the affidavit, provide a basis for this ruling, as it
does not allow the trial court to go behind the facial language of
an affidavit in order to assess the credibility of the affiant.
Conclusion (c) is contradicted by the record evidence, and is
premised on a misreading of Rule 56. The trial court cites its
inherent power under Rule 56(c) as authority to exclude the
affidavit. N.C. Gen. Stat. § 1A-1, Rule 56(c) (2005) states in
relevant part that:
. . . The [summary judgment] motion shall be
served at least 10 days before the time fixed
for the hearing. The adverse party may serve
opposing affidavits at least two days before
the hearing. If the opposing affidavit is not
served on the other parties at least two days
before the hearing on the motion, the court
may continue the matter for a reasonable
period to allow the responding party to
prepare a response, proceed with the matter
without considering the untimely served
affidavit, or take such other action as the
ends of justice require. . . .
In the instant case, Plaintiffs asked for a continuance of the
hearing, in order to replace their unsigned and unsworn affidavit
with a properly authenticated affidavit. The trial court granted
their request and on 6 March 2006 it continued the case to allow
time for Plaintiffs to obtain a proper affidavit, and to allow bothparties time to depose the affiant. Plaintiffs obtained a signed
and sworn affidavit within a few days, and served it on Defendants
well before the June 2006 hearing. Thus, their affidavit was not
served late, and should not have been excluded on this basis. Nor
does Rule 56(c) grant the trial court inherent authority to rule
that a timely filed affidavit was filed late.
Defendants argue that the trial court's decision to exclude or
consider evidence at a summary judgment hearing is an exercise of
its discretion. However, it is an abuse of discretion for a court
to decide a factual issue on a motion for summary judgment. We
conclude that, on the facts of this case, the trial court erred by
excluding the affidavit of Carpentier because the exclusion was
based on determination of its credibility. This in no way
diminishes a trial court's authority to exercise discretion in
conducting a summary judgment hearing or in the exercise of its
gate-keeper functions under Rule 104 of the Rules of Evidence.
We also conclude that exclusion of this affidavit was
prejudicial to Plaintiffs and dispositive of the outcome of the
hearing. During the arguments of counsel, the trial court and
Plaintiffs' counsel again discussed Carpentier's affidavit:
PLAINTIFFS' COUNSEL: . . . On these claims,
there are genuine issues of material fact. I
would certainly argue that the issues over Mr.
Carpentier's affidavit show that there are
genuine issues of material fact. But that's
not all that we have in this particular case.
In regards to the common law fraud, there is
an affidavit _
THE COURT: Well, you understand me, now, I
suppressed Carpentier's affidavits. So I
won't consider that on this issue whether ornot they're entitled to partial summary
judgment.
PLAINTIFFS' COUNSEL: I understand that, Your
Honor.
THE COURT: Certainly, with that affidavit
admitted into evidence and considered as
evidence, the motion would be denied in a
heartbeat.
We conclude that the trial court erred by excluding from its
consideration the affidavit of Carpentier, and that this was
determinative of the court's ruling on the summary judgment motion.
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