IN RE SE. EYE CTR. (PENDING MATTERS); IN RE SE. EYE CTR. (JUDGMENTS); IN RE THE FORECLOSURE OF DEED OF TR. EXECUTED BY HISTORIC CASTLE MCCULLOCH, LLC DATED SEPTEMBER 30, 2004, 2024 NCBC 87

STATE OF NORTH CAROLINA
WAKE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
15 CVS 1648
IN RE SOUTHEASTERN EYE
CENTER – PENDING MATTERS
GUILFORD COUNTY 	12 CVS 11322
IN RE SOUTHEASTERN EYE
CENTER – JUDGMENTS
ORDER AND OPINION ON ACCOUNTING
(OLD BATTLEGROUND v. CCSEA)
1. 	THIS MATTER is before the Court, sitting as a master in equity and
having conducted a two-day evidentiary hearing to consider the objections filed by
Plaintiff Nivison Family Investments, LLC (“NFI”) and Plaintiff Old Battleground
Properties, Inc. (“OBP”) (together with Arthur Nivison, the “Nivison Parties”) and by
Gerald A. Jeutter, Jr. (the “Receiver”), as Receiver for JDPW Trust U/T/A Dated June
8, 2007 (“JDPW” or “JDPW Trust”), to the accounting filed on 10 October 2022 by
Douglas S. Harris (“Doug Harris”), as JDPW’s former trustee, pursuant to court order
in the above-captioned actions (the “Accounting Proceeding”).1
2. 	Having considered all of the relevant and admissible evidence presented at
the evidentiary hearing in the Accounting Proceeding, the arguments of counsel at
the evidentiary hearing, the parties’ briefs in support of and in opposition to the
1 For ease of reference, all ECF citations in this Order are to the Court’s electronic docket in
Wake County 15 CVS 1648 unless otherwise specified. 	Unless otherwise defined, the
capitalized terms in this Order and Opinion refer to those terms as used in the Purchase
Agreement, which is more specifically defined below.
In re Se. Eye Ctr. (Pending Matters); In re Se. Eye Ctr. (Judgments); In re The
Foreclosure of Deed of Tr. Executed by Historic Castle McCulloch, LLC Dated
September 30, 2004, 2024 NCBC 87.

parties’ respective positions on the matters at issue in the Accounting Proceeding, the
relevant pleadings, and other appropriate matters of record, the Court, in the exercise
of its discretion, hereby makes the following findings of fact and conclusions of law
and enters final judgment against Doug Harris as set forth below.
Smith Debnam Narron Drake Saintsing & Myers, LLP, by Byron L.
Saintsing, for Plaintiff Nivison Family Investments, LLC, Plaintiff Old
Battleground Properties, Inc., and Arthur Nivison.
Oak City Law LLP, by Robert E. Fields III and Samuel Pinero II, for
Gerald A. Jeutter, Jr., as Receiver for JDPW Trust U/T/A Dated June
8, 2007.
Douglas S. Harris, Pro se.2
Bledsoe, Chief Judge.
2 Richard L. Pinto of Pinto Coates Kyre & Bowers, PLLC stated at the evidentiary hearing in
the Accounting Proceeding on 26 September 2024 that he was “observing” the hearing for his
clients, Richard Harris, Historic Castle McCulloch, LLC, and Castle McCulloch, Inc. (the “CM
Defendants”). (Sept. 26, 2024 Hr’g Tr. 6:24–25 [hereinafter, “Acct’g Proc. Tr. Day One”], ECF
No. 1653.) Similarly, Kenneth Kyre, Jr. of the same firm stated at the evidentiary hearing
in the Accounting Proceeding on 7 November 2024 that he was an “observer” at the hearing
on behalf of the same clients. (Nov. 7, 2024 Hr’g Tr. 259:8–14 [hereinafter, “Acct’g Proc. Tr.
Day Two”], ECF No. 1666.) 	Mark McDaniel (“McDaniel”) stated at the hearing on 26
September 2024 that he was present as “a witness and assistant to Doug Harris,” (Acct’g
Proc. Tr. Day One 6:21–22), and announced at the proceeding on 7 November 2024 that he
was present “as a witness.” (Acct’g Proc. Tr. Day Two 259:6–7.) Notwithstanding the stated
appearances above, the Court notes that the CM Defendants have frequently participated in
matters in this litigation as either party-defendants or interested parties. 	McDaniel has
likewise frequently participated in these proceedings as an intervenor-defendant.

FINDINGS OF FACT3
3. 	By way of relevant background, JDPW was established on 8 June 2007 and
placed in receivership on 28 April 2016,4 at which time the Court appointed the
Receiver to serve as the receiver for JDPW.5 	Prior to the Receiver’s appointment,
Doug Harris served as trustee for JDPW from 8 June 2007 through 28 April 2016.6
4. 	In deciding various motions for summary judgment in these actions by order
and opinion dated 7 May 2019, the Court concluded that Doug Harris owed a fiduciary
duty to JDPW, noting that “[u]nder North Carolina law, a trustee under any trust is
a fiduciary and owes certain duties to the beneficiaries of that trust. A breach of these
fiduciary duties is considered a breach of trust.”7
5. 	On 21 March 2022, the Receiver filed a Motion for Doug Harris to Account.8
6. 	After full briefing and hearing, on 10 August 2022, this Court found in its
Order on the Receiver’s Motion for Doug Harris to Account (the “Order to Account”)
that “principles of equity and the interests of the administration of justice require[d]
3 Any Findings of Fact that are more appropriately deemed Conclusions of Law are
incorporated by reference into the Court’s Conclusions of Law.
4 (See generally In re Se. Eye Ctr.—Pending Matters, 2016 N.C. Super. LEXIS 43 (N.C. Super.
Ct. Apr. 28, 2016) [hereinafter, the “JDPW Receivership Order”].)
5 (JDPW Receivership Order, Order for Relief ¶ 2.)
6 (JDPW Receivership Order, Findings Fact ¶ 3.)
7 (In re Se. Eye Ctr.—Pending Matters, 2019 NCBC LEXIS 29, at *178 (¶ 293) (N.C. Super.
Ct. May 7, 2019) [hereinafter, “May 2019 Order”].)
8 (Mot. for Order for Doug Harris to Acct. (Old Battleground v. CCSEA), ECF No. 1465.)

that the Receiver’s Motion should be granted”9 and ordered Doug Harris to file an
accounting “setting forth the assets, income, and expenses of JDPW Trust during his
service 	as 	trustee 	that 	includes 	a 	statement 	of 	all 	of 	JDPW’s 	receipts 	and
disbursements, a listing of all of JDPW’s assets and liabilities, and a statement
reflecting JDPW’s acquisition and disposition of all of its assets.”10 The Court further
required Doug Harris to “submit or make available original source documents
(vouchers, bills, cancelled checks, etc.) so that the items listed in the accounting may
be verified.”11 Finally, the Court provided a timetable for objection and response and
ordered that “the Court shall sit as a master in equity to resolve any objections to
Doug Harris’s accounting in accordance with the law and the evidence[.]”12
7. 	On 10 October 2022, Doug Harris timely filed his Accounting Report
Regarding JDPW Trust (the “Accounting”).13 In that Accounting, Doug Harris stated
in 	Section I that “JDPW 	Trust 	has 	never held any funds 	or property 	in 	its
possession.”14 	In Section III.C., he elaborated that “[d]uring the period that Doug
Harris was in charge of JDPW Trust from June 8, 2007 until 28 April 2016, JDPW
9 (Order Receiver’s Mot. Doug Harris to Acct. (Old Battleground v. CCSEA) ¶ 13 [hereinafter,
“Mot. Acct. Order”], ECF No. 1503.)
10 (Mot. Acct. Order ¶ 20(a).)
11 (Mot. Acct. Order ¶ 20(a).)
12 (Mot. Acct. Order ¶¶ 20(b)–(d).)
13 (Tr. Douglas S. Harris’s Acct’g Rep. re JDPW Tr. [hereinafter, “D. Harris Acct’g”], ECF No.
1511.)
14 (D. Harris Acct’g Sec. I.)

had no receipts and made no disbursements. During the same period, JDPW had no
income and no expenses.”15
8. 	On 9 November 2022, the Receiver16 and the Nivison Parties17 timely filed
objections to the Accounting (the “Objections”). 	The Receiver objected to Doug
Harris’s Accounting on the grounds that “Harris has not accounted for his dissipation
of [ ] four notes obtained by JDPW from NewBridge Bank without any benefit being
received by JDPW in exchange.”18 The Receiver requested that Doug Harris be held
responsible for dissipating the four notes by requiring him to pay an amount
equivalent to what would be the current outstanding balance for those four notes.19
The Nivison Parties raised substantially the same issues as the Receiver in their
objections.20
9. 	Doug Harris responded to the Objections on 30 November 2022, asserting
that (a) one of the notes, the Castle McCulloch Note (or “CM Note”),21 was a “.00
balance note” when acquired because NewBridge Bank (formerly FNB Southeast, the
15 (D. Harris Acct’g Sec. III.C.)
16 (JDPW Obj. Harris Acct’g (Old Battleground v. CCSEA) [hereinafter, “JDPW Acct’g Obj.”],
ECF No. 1520.)
17 (Resp. Nivison Parties to Tr. Douglas S. Harris’ Acct’g Rep. re JDPW Tr. [hereinafter,
“Nivison Acct’g Resp.”], ECF No. 1517.)
18 (JDPW Acct’g Obj. 1.)
19 (JDPW Acct’g Obj. 8.)
20 (See Nivison Acct’g Resp. 1–2, 4.)
21 (Def. Harris’s Resp. JDPW’s Obj. Harris’s Acct’g 6–7, ECF No. 1527; see infra ¶¶ 52–55 and
related footnotes.)

“Bank”)22 allocated to the CM Note in its internal accounting records a portion of the
approximately $2.1 million JDPW paid for the four notes that was equal to the
outstanding balance of the CM Note, and (b) after 9 January 2015, he could not collect
on the three other notes, which were owed by Central Carolina Surgical Eye
Associates, P.A. (“CCSEA”),23 because Superior Court Judge Howard Manning
ordered those notes transferred to NFI in early January 2015 (the “CCSEA Notes”;
together with the “Castle McCulloch Note” or the “CM Note,” the “Notes”).24
10. 	The Court thereafter ordered briefing on the Objections, and after briefing
was 	complete, 	the 	Court 	entered 	an 	Order 	dated 	9 	March 	202325 	deferring
consideration of the Objections pending resolution of an interlocutory appeal by Doug
Harris and Mark McDaniel (“McDaniel”)26 of the Court’s Order and Opinion entered
in these actions on 26 April 202127 and amended on 6 January 202228 resolving
22 In November 2007, NewBridge Bank formed from the merger of Lexington State Bank and
FNB Southeast.
23 CCSEA is an entity owned by Dr. C. Richard Epes and Dr. John D. Matthews. In re Se.
Eye Ctr.—Pending Matters, 2016 NCBC LEXIS 57, at *3 (N.C. Super. Ct. Jul. 22, 2016).
24 (Def. Harris’s Resp. JDPW’s Obj. Harris’s Acct’g 7–8; see Nivison Fam. Invs., LLC v. Harris,
2015 N.C. Super. LEXIS 87 (N.C. Super. Ct. Jan. 9, 2015).)
25 (Order on Objs. Harris’s Acct’g for JDPW Tr., ECF No. 1541.)
26 Between 2004 and 2015, Mark McDaniel negotiated a number of loans, payment
arrangements, and other financial matters on behalf of Dr. C. Richard Epes and his
corporations and businesses. (Aug. 22, 2024 Hr’g Tr. 100:19–101:1, ECF No. 1638.)
27 (Order & Op. on Mots. for Summ. J. or Partial Summ. J. (Old Battleground v. CCSEA),
ECF No. 1413.)
28 (In re Se. Eye Ctr.—Pending Matters, 2021 NCBC LEXIS 43 (N.C. Super. Ct. Jan. 6, 2022)
[hereinafter, the “Jan. 2022 Am. Order”].)

various motions for summary judgment and partial summary judgment as well as
certain aspects of the Receiver’s administration of the Receivership. 	The Supreme
Court dismissed the appeal on 12 October 2023.29
11. 	By order dated 15 August 2024, the Court consolidated the Accounting
Proceeding in these actions into In Re: The Foreclosure of Deed of Trust of Historic
Castle McCulloch, LLC Dated September 30, 2004 (Guilford County 23 SP 1872) (the
“Foreclosure Proceeding”) for the limited purpose of receiving evidence and argument
on and determining whether the Castle McCulloch Note has been satisfied.30 On 22
August 2024, after full briefing, the Court held a de novo hearing on the Receiver’s
Notice of Appeal from the Guilford County Clerk’s Order denying JDPW Trust’s
request to allow a foreclosure sale under the power of sale in the Castle McCulloch
Deed of Trust.31
12. 	Following additional briefing, the Court set the Objections on for an
evidentiary hearing with the Court sitting as a master in equity. 	The Parties have
made voluminous written and document submissions to the Court, and the Court held
a two-day evidentiary hearing (the “Hearing”) in this Accounting Proceeding on 26
September 2024 and 7 November 2024. 	The Receiver, the Substitute Trustee of
29 (Order, Supreme Court of North Carolina, ECF No. 1549.)
30 (Ltd. Consolidation Order & Am. Not. Hr’g, ECF Nos. 1623 (15 CVS 1648), 723 (Guilford
County 12 CVS 11322), 52 (Guilford County 23 SP 1872).)
31 (See Findings Fact, Conclusions L. & Final J. on Foreclosure Appeal (23 SP 1872), filed
contemporaneously herewith [hereinafter, “Foreclosure Proceeding Judgment”], ECF No.
1686.)

JDPW Trust, and the Nivison Parties were represented by counsel at the Hearing.
Doug Harris appeared pro se. 	The Receiver, McDaniel, Doug Harris, and Tom
Harper32 appeared and testified. 	The Court has received post-Hearing briefs and
submissions, and the matter is now ripe for determination.
13. 	After careful and deliberate review, the Court concludes that the evidence
of record establishes the following:
14. 	In 2012, Doug Harris saw JDPW as a potential vehicle to aid in a plan to
refinance the CM Note and the CCSEA Notes, specifically to help his brother, Richard
Harris, reorganize his businesses and minimize tax consequences.33 	During this
time, Richard Harris had retained Doug Harris, a licensed attorney, to represent him
and his businesses in negotiating the refinancing deal.34 Doug Harris’s plan entailed
JDPW purchasing the CM Note and CCSEA Notes from the Bank, with that purchase
to be funded by a loan from one or more of the Nivison Parties.
15. 	Accordingly, on 27 July 2012, the Bank entered into a written Note Purchase
and Sale Agreement (the “Purchase Agreement”) with JDPW Trust agreeing to
32 Thomas Oliver Harper, III is a licensed attorney who represented Arthur Nivison and his
companies during the period relevant to the matters at issue in these actions. (Acct’g Proc.
Tr. Day Two 390:19–392:4.)
33 (See Not. Filing Dep. D. Harris & Exs. [hereinafter, “Rcvr. Ex. Filing”], Dep. Doug Harris,
Vols. 1–4, Pages 1–1085, dated Mar. 19, 2015, 229:1–25, 829:17–830:14 [hereinafter, “D.
Harris Dep.”], ECF No. 1667.1.) 	The deposition of Doug Harris was taken over four non-
consecutive days: Volume 1 dated 19 March 2015, pages 1–254; Volume 2 dated 1 April 2015,
pages 255–574; Volume 3 dated 26 May 2016, pages 575–896; and Volume 4 dated 17 June
2016, pages 987-1085.
34 (See D. Harris Dep. 229:7–12; Rcvr.’s Answer to Cross-cls. of CM Entities & Cross-cls.
against D. Harris ¶ 434, ECF No. 716; D. Harris’s Answer Cross-Cls. JDPW Tr., CCSEA &
DRE & D. Harris’s Cross-cls. ¶ 434, ECF No. 739.)

transfer the CM Note, the CCSEA Notes, and all related loan documents (the “Loan
Documents”) to JDPW for the Original Purchase Price with a warranted Outstanding
Balance.35 The purchase was originally scheduled to close on 20 August 2012. This
agreement was executed on behalf of JDPW by Doug Harris.36
16. 	On 20 August 2012, the Bank and JDPW agreed to a Note Purchase and
Sale Modification Agreement (the “Modification Agreement”), changing the purchase
price for the Notes and Loan Documents to $2,126,834.09 (the “Purchase Price”) and
postponing the closing date to 21 September 2012. The Modification Agreement was
executed by Doug Harris on behalf of JDPW.37
17. 	The CM Note was one of the Notes to be transferred under the Purchase
Agreement. The CM Note was a promissory note dated 30 September 2004,38 which
was executed by Historic Castle McCulloch, LLC (“HCM”), Castle McCulloch, Inc.
(together with HCM, the “Castle McCulloch Entities” and with Richard Harris, the
“Castle McCulloch Defendants”), and NSITE Management LLC (“NSITE”) in the
35 (See Rcvr. Ex. Filing, Harris PX-31, Note Purchase & Sale Agreement ¶ 1, ¶ 7(d)
[hereinafter, “Note Purch. & Sale Agmt.”], ECF No, 1667.32.)
36 (Note Purch. & Sale Agmt.)
37 (Rcvr. Ex. Filing, Harris PX-32, Modification to Note Purchase & Sale Agreement
[hereinafter, “Mod. Agmt.”], ECF No, 1667.33.)
38 The Court notes that, although the Receiver has identified the date of the CM Note as 24
September 2024, (see Receiver’s & Nivison Parties’ Joint Proposed Findings of Fact &
Conclusions of L. Acct’g Proc. ¶ 5, ECF No. 1676), the Note reflects on its face that its date is
30 September 2024, (see Rcvr. Ex. Filing, Harris PX-37, Com. Promissory Note [hereinafter,
“CM Note”], ECF No. 1667.38.)

amount of $2,145,000.00. The CM Note: (a) bore number 5305802;39 (b) was executed
by McDaniel for NSITE and HCM and by Richard Harris for Castle McCulloch, Inc.
and (c) was secured by a deed of trust also dated 30 September 2004 (the “Castle
McCulloch Deed of Trust” or the “CM Deed of Trust”).40 HCM was the grantor of the
CM Deed of Trust (i.e., the mortgagor), which contained a power-of-sale provision
that allowed the lender (or holder of the Note) (i.e., the mortgagee) to foreclose on the
Castle McCulloch property (the “CM Property”)41 in the event of a default on the CM
Note.42 The Bank was the payee on the CM Note and the grantee on the CM Deed of
Trust.43
18. 	The three other Notes were executed by CCSEA. 	Two of these promissory
notes were executed on 29 October 2007 in favor of FNB Southeast, NewBridge
Bank’s predecessor. 	One was in the principal amount of $100,000 (Loan No.
6846670101),44 and the other was in the principal amount of $2,450,000 (Loan No.
6846679001).45 The third CCSEA note was executed on 6 March 2008 in favor of the
39 The Bank’s loan number for the CM Note was 04753419001.
40 (Rcvr. Ex. Filing, Harris PX-34, Assignment of Sec. Instruments [hereinafter, “Assign. Sec.
Instruments”], ECF No. 1667.35; see also Rcvr. Ex. Filing, Harris DX-145, Real Est. Deed of
Tr., ECF No. 1667.144.)
41 The CM Property is located at 3923-3925 Kivett Drive, Jamestown, North Carolina. (Aff.
Richard Harris, dated 6 Mar. 2024, ¶ 1, ECF No. 21 (23 SP 1872).)
42 (Rcvr. Ex. Filing, Harris DX-145, Real Est. Deed of Tr. ¶ 16.)
43 (See CM Note.)
44 (Note Purch. & Sale Agmt., Schedule A.)
45 (Note Purch. & Sale Agmt., Schedule A.)

Bank in the principal amount of $117,850 (Loan No. 06846679002).46 	The three
CCSEA Notes were secured by equipment and vehicles.47
19. 	The Notes and the related Loan Documents provided that, in exchange for
approximately $2.1 million48 from JDPW, the Bank would sell and assign to JDPW
the four Notes with a warranted outstanding unpaid balance as of Closing49 equal to
at least $3,350,139.39.50
20. 	On 21 September 2012, in fulfillment of its obligations under the Purchase
Agreement, the Bank executed in favor of JDPW a Bill of Sale and Assignment of
Loan Documents (“Assignment of Notes”) that included the CM Note and the CM
Deed of Trust51 and a separate Assignment of Security Interests (“Assignment of CM
Security”) for the CM Deed of Trust and related Collateral,52 which was recorded with
the Guilford County Register of Deeds. The Bill of Sale was signed by the Bank and
46 (Note Purch. & Sale Agmt. Schedule A.)
47 (Rcvr. Ex. Filing, Harris PX-35, Bill of Sale & Assignment of Loan Documents [hereinafter,
“Bill Sale Assign. Loan Docs.”], Schedule A, ECF No. 1667.36; HCM Not. Filing Ev. App. Hr’g,
Ex. 29.1, Aff. April Cassidy, dated July 19, 2016 (+2 CDs), YB 00306–07, 00309, 00314
[hereinafter, “Cassidy Aff.”], ECF No. 29.1 (23 SP 1872).)
48 The actual amount Nivison transferred to the Bank on behalf of JDPW was $2,101,834.35.
(See Rcvr. Ex. Filing, Harris 127, Closing Statement, ECF No. 1667.126.) The parties’ and
the Court’s convention in this case has been to reference the Nivison loan to JDPW as a $2.1
million loan, rather than to identify the loan by its precise amount. The Court will use this
convention from time to time in this Order and Opinion.
49 (See Note Purch. & Sale Agmt. ¶ 8.)
50 (Mod. Agmt. ¶ 2; Note Purch. & Sale Agmt. ¶ 7(d).)
51 (Bill Sale Assign. Loan Docs.)
52 (Assign. Sec. Instruments; see Note Purch. & Sale Agmt. ¶ 1.)

notarized by the Bank’s attorney, Donald VonCannon, on 21 September 2021.53 The
Assignment of Notes and the Assignment of CM Security were notarized on 21
September 2012 and, by their terms, were “as of” 21 September 2012 and “[e]ffective
as of” 21 September 2012, respectively.54
21. 	The Bank also executed an Allonge in favor of JDPW for the CM Note
“[e]ffective as of” 21 September 2012.55 The Allonge changed the “Pay to the Order
of” directions on the CM Note from the Bank to “Douglas Steven Harris, Trustee of
the JDPW Trust,” “[e]ffective as of” 21 September 2012.56 The Bank likewise issued
Allonges for each of the CCSEA Notes directing that payment on those Notes
thereafter be made to JDPW.57
22. 	In addition, the Bank issued a document titled Important Notice Regarding
Your NewBridge Bank Loan to the obligors on each of the Notes (“Notice of
Transfer”).58 Each Notice of Transfer stated, in relevant part, that:
Effective 	September 	21, 	2012 	(the 	“Transfer 	Date”), 	the 	above-
referenced loans with NewBridge Bank was [sic] sold to DOUGLAS
STEVEN 	HARRIS, 	TRUSTEE 	OF 	THE 	JDPW 	TRUST 	(the
“Purchaser”). If you request or otherwise receive from NewBridge Bank
a statement regarding your loan after the Transfer Date you might have
53 (Bill Sale Assign. Loan Docs.)
54 (Bill Sale Assign. Loan Docs.; Assign. Sec. Instruments.)
55 (Rcvr. Ex. Filing, Harris PX-33, Allonge [hereinafter, “Allonge”], ECF No. 1667.34.) 	An
allonge is a document that changes the “Pay to the Order of” directions in a promissory note.
56 (Allonge.)
57 (Rcvr. Ex. Filing, Harris PX-81–83, Allonge(s), ECF Nos. 1667.82–.84.)
58 (See Note Purch. & Sale Agmt., Ex. “E”.)

received inaccurate information. 	Please disregard such statement and
contact the Purchaser for your balance information.
PAYMENTS:
Please do not send any future payments to NewBridge Bank after the
Transfer Date. 	Sending payments to NewBridge Bank may delay the
date such payment is credited to your loan. The Purchaser or its agent
or affiliate will be contacting you shortly with specific instructions about
where to send your payments[.]59
23. 	There is no dispute that JDPW Trust entered into the Purchase Agreement
for the purchase of the Notes or that the Bank executed the Bill of Sale, the
Assignment of Notes, the Assignment of CM Security, or the Allonges for the Notes,
and issued the Notices of Transfer. 	It is also undisputed that subsequent to the
Transfer Date, no payments were made by anyone to JDPW as the holder of the CM
Note and the three CCSEA Notes.
24. 	JDPW borrowed the money to pay for the four Notes from one or more of the
Nivison Parties.60 	Specifically, on Friday, 21 September 2012, one of the Nivison
Parties caused $2.1 million to be wired to the Bank.61 	The purpose of this wire was
to fund, on behalf of JDPW, the Purchase Price under the Purchase Agreement to
obtain transfer of the CM and CCSEA Notes and Loan Documents with outstanding
59 (Cassidy Aff., YB 00892–95.)
60 (Rcvr. Ex. Filing, Harris PX-52, Promissory Note, ECF No. 1667.53; Receiver’s Ex. 2, Tab
7, see ECF No. 1605.10.)
61 As noted above, the actual amount Nivison transferred to the Bank on behalf of JDPW was
$2,101,834.35. 	The wire transfer amount differs from the Purchase Price of $2,126,834.09
due to a seller’s fee by NewBridge Bank of $1,834.35, (Rcvr. Ex. Filing, Harris PX-5, e-mail,
Sheridan to Beever, ECF No. 1667.6), and a $25,000 deposit previously paid to NewBridge
Bank (Mod. Agmt. ¶ 2.)

balances as warranted in the Purchase Agreement.62 Neither the Nivison Parties nor
JDPW agreed or intended for this payment to be made in satisfaction of, or payment
in whole or in part of, the then outstanding principal liability of the obligors under
the CM Note.
25. 	The wire was sent after 5:00 PM on Friday, 21 September 2012 and was not
received by the Bank until Monday, 24 September 2012.63 	The Bank delivered the
Assignment of Notes, Assignment of CM Security, and the Allonges to Doug Harris
as trustee of JDPW.64 	While there is conflicting testimony from Doug Harris as to
when he received the closing documents from the Bank,65 there is no dispute that he
did in fact receive the documents. There is no evidence that the Bank has contested
the Closing, has sought recovery of the Closing documents, or has behaved in any way
inconsistent with the Purchase Agreement transaction. 	The Court finds that the
Purchase Agreement transaction closed substantially in accordance with its terms.
26. 	On or about 25 September 2012, the Bank made entries in its internal
accounting 	records 	applying 	the 	Purchase 	Price 	proceeds 	from 	the 	Purchase
Agreement transaction to the accounts relating to the CM Note and the three CCSEA
62 (See Note Purch. & Sale Agmt., Recitals.)
63 (Rcvr. Ex. Filing, Harris PX-30, e-mail, Harper to VonCannon, ECF No. 1667.31.)
64 (Aff. Gerald A. Jeutter Jr., dated Mar. 3, 2024, ¶ 5, ECF No. 13.1 (23 SP 1872).)
65 Doug Harris testified at his deposition that he received possession of all of the original
NewBridge Bank Loan Documents as JDPW’s trustee on 21 September 2012, (see D. Harris
Dep. 242:1–10), but testified at the Hearing in September 2024 that he did not receive those
documents until several days later. 	(See Acct’g Proc. Tr. Day One 42:8–16, 48:7–20, 54:6–
16.)

Notes. Those internal accounting records show that the Bank allocated $1,692,430.39
to the internal account for the CM Note and wrote off interest and late fees of
$64,839.77 and $12,171.10, respectively.66
27. 	Although Doug Harris and McDaniel contend that JDPW did not purchase
the CM Note as part of this transaction and instead paid off the CM Note,67 they each
testified at deposition—testimony that was admitted as evidence at the Hearing—
that none of the Notes were paid off and instead that all four Notes were purchased
by and transferred to JDPW Trust. 	In particular, Doug Harris testified at his
deposition that “[n]o loans were paid off . . . [t]hey were purchased,”68 and he agreed
that “the bank in fact assigned all four notes and other documents associated with
those loans to JDPW Trust.”69 	He explained at length that the reason JDPW
purchased the Notes and did not pay the notes off was to avoid negative tax
consequences.70 	McDaniel testified to similar effect: “Well, no, [the Notes] weren’t
66 (Rcvr. Ex. Filing, Harris DX-153, NewBridge Bank Paid Note Statement, ECF No.
1667.152.)
67 (Acct’g Proc. Tr. Day One 72:20–25; Acct’g Proc. Tr. Day Two 303:6–22 (McDaniel claiming
that JDPW purchased the CM Note as a “zeroed out mortgage.”).)
68 (See D. Harris Dep. 73:11–18; Receiver’s Ex. 3, Dep. James Mark McDaniel, Jr., dated Mar.
19, 2015, 111:16–112:3.)
69 (See D. Harris Dep. 356:8–20.)
70 (See D. Harris Dep. 29:11–14 (“It has tax consequences if you just write it off, and so that
couldn’t be done. But if it could be sold to a third party, then there would be no write-off and
there would be no tax consequences.”), 48:8–11 (“But there had to be a third party involved
because my understanding is a bank can’t transfer—can’t reduce something like that directly
to the same person, at least not without tax consequences and all that”), 82:14–16 (“So the
only way this could work properly would be to sell it to some other legal entity that was not
connected to them. Otherwise they would have tax consequences.”), 248:2–9 (“the loan was

being transferred. They were purchased.”71 The Court finds that Doug Harris’s and
McDaniel’s recent testimony contradicts the testimony they previously provided the
Court, is inconsistent with the transaction documents, is self-serving, and lacks
credibility.
28. 	Similarly, 	the 	Court 	finds 	Doug 	Harris’s 	and 	McDaniel’s 	new-found
contention that JDPW paid off the CM Note and thus received from the Bank a
“zeroed out mortgage” lacking in credibility based on the documentary evidence of
record, which does not lend any support to this contention. Indeed, other than to rely
on the Bank’s post-receipt, internal accounting decisions, which do not control what
the parties agreed to in the Purchase Agreement, McDaniel and Harris have failed to
point to any credible documentary evidence that verifies their assertion that JDPW
purchased the CM Note with a zero balance. 	None of the transaction documents
support that testimony in any respect.
29. 	In 	addition, 	the 	Castle 	McCulloch 	Defendants 	sought 	and 	obtained
summary judgment on claims asserted by the Nivison Parties by claiming before this
Court that the money paid by the Nivison Parties on behalf of JDPW to the Bank was
transferred so it could be collected by Richard Harris against Castle McCulloch is how it
worked out. And once again, the purpose in that was that if it was forgiven, it would be a
taxable event. So it was important that–even though he might be paying it to himself in a
fashion, it was important that he not forgive it.”), 869:21–870:4 (“[The CM Note] was
technically speaking then owed to my brother [following the assignment]” and “I was a little
concerned about the tax consequences” of simply releasing the CM Defendants).)
71 (Receiver’s Ex. 3, Dep. James Mark McDaniel, Jr., dated Mar. 19, 2015, 111:25–112:3 (“Q:
So all CCSEA loans, however many there were, were being transferred; is that right? 	A:
Well, no, they weren’t being transferred. They were purchased.”).)

not “furnish[ed] . . . to pay off the Castle McCulloch Note[.]” 	The Court rejected the
Nivison Parties’ request to be equitably subrogated to the rights of the Bank under
the Loan Documents in reliance on the arguments asserted by the Castle McCulloch
Defendants that the Nivison Parties’ payment on behalf of JDPW did not pay off the
CM Note.72
30. 	There is no evidence that any payments on the CM Note were made by the
listed obligors (i.e., HCM, Castle McCulloch, Inc., and NSITE). 	Richard Harris
testified that he made no payments on the CM Note.73 There is no evidence that Dr.
C. Richard Epes (“Dr. Epes”)74 or McDaniel personally made any payment on the CM
Note. 	Bank records reflect various checks from CCSEA being credited by the Bank
as payments on the CM Note.75 	There is no record of any corporate resolution or
approval signed by Dr. Matthews authorizing CCSEA to pay the CM Note on behalf
of Dr. Epes, McDaniel, Richard Harris, or the obligors on the Note. 	The current
72 (See CM Defs.’ Br. Opp. Pls.’ Mot. Partial Summ. J. 19, ECF No. 881 (contending that NFI
loaned funds to JDPW, who in turned purchased the CM Note and CM Deed of Trust, as
constituting two separate transactions, and that permitting NFI’s claim against the CM
Defendants and JDPW would permit a double recovery).) 	The Court permitted the CM
Defendants to prevail on their motion for summary judgment against NFI on the ground that
JDPW was a separate and distinct entity from the CM Defendants, (see May 2019 Order
¶ 92), yet the CM Defendants seek to avoid liability now on the ground that JDPW is a “pass-
through” entity whose existence should be ignored in considering foreclosure.)
73 (CM Defs.’ Filing of Tr. Dep. Richard Harris, Ex. 1664.1, Dep. Richard Harris, dated Oct.
28, 2024, 33:3–35:22, ECF No. 1664.1.)
74 (In re Se. Eye Ctr.—Pending Matters, 2016 NCBC LEXIS 57, at *3–5 (N.C. Super. Ct. Jul.
22, 2016).)
75 (See Cassidy Aff.)

outstanding principal balance on the CM Note is $1,692,430.39, plus accrued interest
and other charges as provided in the CM Note.76
31. 	Despite receiving the Notes and related Loan Documents, including the CM
Note, the Allonges, the CM Deed of Trust, the Assignment of Notes, and the
Assignment of CM Security as trustee of JPDW, the evidence makes clear that Doug
Harris never intended to collect on the CM Note or CCSEA Notes for the benefit of
JDPW and made no effort to do so. Doug Harris instead intended to and did use his
control as trustee of JDPW over the CM Note, the CM Deed of Trust, and the CCSEA
Notes and collateral solely for the benefit of his brother, Richard Harris, and his
brother’s companies, HCM and Castle McCulloch, Inc., and for himself. 	Richard
Harris was aware of and accepted the benefit of this conduct by Doug Harris. Richard
Harris also assisted Doug Harris’s plan, on behalf of his companies and for himself,
by providing the bridge funding needed to pay deposits required by the Bank between
3 July 2012 and 21 September 2012 and by executing agreements required by the
Bank.77
32. 	The original Notes and other instruments were lost by Doug Harris. 	The
contents of the Notes have been established by the Bank’s records as well as by other
evidence of record. There is no dispute as to the contents of the Notes, the CM Deed
of Trust, or the other Loan Documents.
76 (Rcvr. Ex. Filing, Harris DX-153, NewBridge Bank Paid Note Statement.)
77 (D. Harris Dep. 196:17–197:5; see also May 2019 Order ¶ 17.)

33. 	Doug Harris was representing his brother and his brother’s companies,
including HCM, in arranging the sale of the CM Note and the CM Deed of Trust to
JDPW, which, as discussed above, was a trust controlled by Doug Harris as its
trustee.78 	As the Castle McCulloch Defendants acknowledge, in releasing the CM
Deed 	of 	Trust 	and 	assigning 	away 	the 	CM 	Note, 	“Doug 	Harris 	was 	merely
effectuating [the] intention” of the debtors, i.e. HCM, Castle McCulloch, Inc., and
NSITE.79
34. 	In 	March 	2013, 	Doug 	Harris, 	acting 	as 	JDPW’s 	trustee, 	effectively
transferred the CM Note and the related Loan Documents and Collateral to his
brother, Richard Harris.80 	Specifically, he signed over to HCM a deed (the “CM
Release Deed”), dated 15 March 2013, that released the CM Collateral—both the real
property encumbered by the CM Deed of Trust and the rights to leases and rents
under the CM Assignment of Security.81 	He also assigned to Richard Harris all of
JDPW’s rights under the CM Note.82 In Doug Harris’s words, “I assigned any and all
other rights under the note to him [Richard Harris], so he’d be in control of it instead
of anybody else. 	For whatever–since 2004, for eight years, those rights had been
78 (D. Harris Dep. 614:10–21.)
79 (CM Defs.’ Br. Supp. Mot. Summ. J. 20, ECF No. 831.)
80 (See D. Harris Dep. 34:1–11.)
81 (Rcvr. Ex Filing, Harris PX-91, Release Deed (recorded 14 April 2015) [hereinafter,
“Release Deed”], ECF No. 1667.92; D. Harris Dep. 866:19–868:25; see also Am. Cons. Compl.
Ex. YY, ECF No. 192.)
82 (See D. Harris Dep. 628:12–635:25.)

assigned to NewBridge Bank. 	It was my purpose to cancel each and every one of
those rights because that was the deal.”83 With those transfers effected, JDPW lost
all rights to the CM Note and related Loan Documents and Collateral but remained
obligated on the $2.1 million Nivison loan.84
35. 	Nevertheless, Doug Harris failed to list in his Accounting the acquisition of
the Notes and related Loan Documents as an asset of JDPW, the $2.1 million loan by
the Nivison Parties to JDPW as a liability, or the execution of a release of the CM
Deed of Trust and the transfer of the CM Note to his brother, Richard Harris, as
conveyances of assets of JDPW.
36. 	Deposition testimony also establishes that JDPW borrowed money from
Richard Harris in order to facilitate the purchase of the Notes. Like the Notes, these
liabilities were not disclosed in Doug Harris’s Accounting.85
37. 	It is undisputed that JDPW never had a bank account, never filed a tax
return, never kept any corporate documents of any nature, and never possessed any
assets until it acquired the Notes and Loan Documents from the Bank. It is further
undisputed that the CM Deed of Trust against the CM Property held substantial
value as the real estate that it encumbered was worth several million dollars.
83 (D. Harris Dep. 633:1–5; 57:12–14, “I was there to protect my brother’s interest. 	I was
retained by my brother. I went there to represent my brother.”; Jan. 2022 Am. Order ¶ 80.)
84 (Jan. 2022 Am. Order ¶ 21.)
85 (D. Harris Dep. 751:8–14.)

38. 	The CM Release Deed was recorded on 14 April 2015.86 	By Order and
Opinion entered 26 April 2021 and amended on 6 January 2022, this Court set aside
the CM Release Deed and the assignment of the CM Note to Richard Harris.87 The
Court has also previously held that Doug Harris had numerous conflicts of interests
in the subject transactions.88
39. 	Doug Harris has failed to account for the only assets ever acquired by JDPW,
namely the Notes, the CM Deed of Trust, and the related Loan Documents it acquired
from the Bank. Further, Doug Harris made no effort to attempt to collect the Notes
for JDPW, or to foreclose on the collateral which secured the Notes for JDPW. 	Nor
did he attempt to cause JDPW to repay the $2.1 million loan from the Nivison Parties.
40. 	The amount of the JDPW Allowed Claim as of 21 September 2012 was
$2,100,000. The balance due and owing with accrued interest of 6% as of the date of
this Order is $3,644,104.11.
41. 	The expected benefit of the purchase of the discounted Notes to JDPW was
$1.3 million. The balance due and owing with accrued interest of 13.6% as of the date
of this Order is $3,466,647.67.
86 (Release Deed.)
87 (Jan. 2022 Am. Order ¶ 162.)
88 (JDPW Receivership Order ¶ 7; May 2019 Order ¶ 35.)

CONCLUSIONS OF LAW89
42. 	The Supreme Court of North Carolina has long made clear that “[a]ll
fiduciaries may be compelled by appropriate proceeding to account for their handling
of properties committed to their care.” Lichtenfels v. N. Carolina Nat. Bank, 260 N.C.
146, 148 (1963). Similarly, N.C.G.S. § 36C-10-1001 provides that
To remedy a breach of trust that has occurred or may occur, the court
may:
(4) Order a trustee to account;
. . .
(9) void an act of the trustee, impose a lien or a constructive trust on
trust property, or trace trust property wrongfully disposed of and
recover the property or its proceeds; or
(10) Order any other appropriate relief.
43. 	Our Court of Appeals has described an accounting this way:
An accounting is “[a] rendition of an account, either voluntarily or by
court order. 	The term frequently refers to the report of all items of
property, income, and expenses prepared by a personal representative,
trustee, or guardian and given to heirs, beneficiaries or the probate
court.” 	Black’s Law Dictionary 22 (9th ed. 2009). 	An accounting is an
equitable remedy sometimes pled in claims of breach of fiduciary duty.
See, e.g., Toomer v. Branch Banking & Tr. Co., 171 N.C. App. 58, 70
(2005) (“Plaintiffs sought an accounting as an equitable remedy for the
alleged breaches of fiduciary duty and constructive fraud.”).
Burgess v. Burgess, 205 N.C. App. 325, 333 (2010). 	Moreover, “[t]he appropriate
method for determining the exact amount which may be due the plaintiff, if anything,
89 Any Conclusions of Law that are more appropriately deemed Findings of Fact are
incorporated by reference into the Court’s Findings of Fact.

is to require the defendant, who is in possession of the essential information, to render
an accounting.” Watson v. Fulk, 19 N.C. App. 377, 380 (1973).
44. 	Various courts have fleshed out what must be shown to entitle a party to an
accounting. 	“Ordinarily, in an action for accounting, the plaintiff must prove
something is due him by defendant before plaintiff is entitled to an accounting.”
Gibson v. Deuth, 220 N.W.2d 893, 897 (Iowa 1974); accord Physicians & Hosps.
Supply Co. v. Johnson, 231 Minn. 548, 559 (1950) (“The rule is that the principal
(used in the agency sense) must establish by a fair preponderance of the evidence that
the agent has actually received the particular thing for which he is sought to be held.”
(citation omitted)); Hodson v. Hodson, 292 So. 2d 831, 835 (La. Ct. App. 1974) (“In an
action against a fiduciary for an accounting, the burden is upon the principal to show
that the fiduciary received the funds or property and the 	amount or quality
thereof[.]”).
45. 	These considerations have been established here. 	Indeed, as the Court
found in its Order to Account, it is an undisputed fact that Doug Harris received
property while acting as trustee for JDPW90 and that Doug Harris breached his
fiduciary duty as trustee of JDPW.91
46. 	The Illinois courts have provided useful guidance to assist trial courts in
structuring an accounting proceeding:
The accounting should contain a statement of all of the receipts and
disbursements of the entity in question and should list the financial
contributions made to that entity and the current assets and liabilities
90 (May 2019 Order ¶¶ 18–19; Jan. 2022 Am. Order ¶ 21.)
91 (Jan. 2022 Am. Order ¶¶ 81–95.)

of that entity. The original source documents (vouchers, bills, cancelled
checks, and etc.) should be tendered or made available so that the items
listed in the accounting may be verified. 	A party is not relieved of its
burden to produce a true and full accounting merely because the task is
difficult or because the work is voluminous. 	Any doubt or uncertainty
created by the lack of adequate records or by errors or omissions in the
accounting itself will be construed against the party whose burden it is
to 	produce 	the 	accounting. 	A 	party 	seeking 	credits 	against 	an
accounting has the burden of proving that those credits are justified.
Pluciennik v. TCB Univ. Park Cold Storage, LLC, 2013 Ill. App. 3d 120026, ¶ 15 (Ill.
App. Ct. 2013) (citations omitted).
47. 	As trustee of JDPW Trust during the relevant time period, Doug Harris
bears the burden of production and persuasion in disclosing the assets and liabilities
of JDPW Trust while he served as its trustee. See, e.g., Watson v. Watson, 144 Idaho
214, 219 (2007) (“The party called upon to render an accounting bears the burdens of
production and persuasion.”).
48. 	Doug Harris failed to carry his burden to disclose the assets and liabilities
of JDPW Trust while he served as its trustee in response to the Court’s Order to
Account. To the contrary, Doug Harris has failed to identify in his Accounting any of
JDPW’s assets or liabilities identified above. 	In particular, Doug Harris failed to
account for his failure to collect on the four Notes JDPW acquired on 21 September
2012. As this Court has noted previously, “Harris’[s] obligation was not just to avoid
harm to the [JDPW] Trust. 	His obligation was to obtain those benefits that were
available to the [JDPW] Trust.”92 	Among the benefits available to JDPW were the
four Notes acquired from NewBridge Bank. 	Doug Harris should have collected on
92 (Jan. 2022 Am. Order ¶ 98.)

these Notes to enable JDPW to meet its obligations, including repaying the Nivison
Parties for their $2.1 million loan to JDPW, and to secure the resulting profit for the
benefit of JDPW Trust.
49. 	Any doubt or uncertainty created by the lack of adequate records or by errors
or omission in the Accounting are to be construed against Doug Harris, the party
whose burden it was to produce the Accounting.
50. 	Doug Harris breached his duties to JDPW, damaging JDPW and its assets,
and failed to properly account for that damage.
51. 	The CM Deed of Trust provided sufficient collateral to JDPW for JDPW to
collect on the CM Note. However, instead of collecting on the CM Note, Doug Harris
transferred the Collateral securing the CM Note to his brother, Richard Harris,
putting it beyond the reach of JDPW as well as the Nivison Parties, JDPW’s creditor,
among others. As a result, JDPW could not collect on the CM Note or foreclose on the
CM Deed of Trust, rendering this asset worthless to JDPW. 	Additionally, Doug
Harris made no efforts to collect on the CCSEA Notes in JDPW’s possession. At the
same time, Doug Harris caused JDPW to borrow $2.1 million from the Nivison Parties
to purchase the CM Note and CCSEA Notes, leaving JDPW indebted to the Nivison
Parties in that amount.
52. 	Much of the evidence Doug Harris relies upon to support his Accounting
appears intended to establish that: (1) the proceeds from the Nivison Parties’ loan to
JDPW to facilitate this transaction were to be used to pay off the CM Note and cause

the release of the CM Property as security for all Epes-related loans;93 (2) the Order
by Judge Manning in 2015 satisfied JDPW’s obligations with respect to the CCSEA
Notes;94 (3) JDPW was simply a pass-through entity Doug Harris used to facilitate
the Bank’s request that, to comply with banking regulations, a neutral third-party
receive the CM Note and CM Deed of Trust;95 (4) McDaniel negotiated for Dr. Epes
and his companies, including CCSEA, a 39.5% reduction in the $3.4 million in loans
then owing to the Bank;96 and (5) the CM Note and CM Deed of Trust were to have
been paid off and have no value when they were transferred to JDPW.97
53. 	Doug Harris ignores, however, the structure of the transaction as set forth
in the transaction documents and that he had a fiduciary duty as JDPW’s trustee to
act in furtherance of JDPW’s best interests. 	The evidence before the Court affirms
the Court’s earlier conclusion on summary judgment that, by purchasing the CM Note
and CM Deed of Trust and thereafter cancelling the Notes and releasing the CM Deed
93 (Douglas Harris’s Acct’g Hr’g Br. 6 [hereinafter, “D. Harris Acct’g Hr’g Br.”], ECF No. 1672.)
94 (D. Harris. Acct’g Hr’g Br. 9, 20.)
95 (D. Harris Acct’g Hr’g Br. 2–6.)
96 (D. Harris Acct’g Hr’g Br. 10–11.)
97 (D. Harris Acct’g Hr’g Br. 6–7.) Doug Harris also advances arguments that the Receiver
has negotiated a double recovery for the $2.1 million loan, (D. Harris Acct’g Hr’g Br. 11–13),
and that the Receiver has made false statements during these proceedings. (D. Harris Acct’g
Hr’g Br. 23–28.) After careful consideration, the Court concludes that neither argument has
merit.

of Trust on the CM Property, Doug Harris breached his fiduciary duty as JDPW’s
trustee.98
54. 	More 	specifically, 	there 	is 	no 	dispute 	that 	the 	Purchase 	Agreement,
including 	the 	written 	and 	signed 	modification 	thereof, 	the 	Bill 	of 	Sale 	and
Assignment of Notes, and the Allonges were executed properly, knowingly and with
intent to be bound thereby.99 These documents conclusively establish that the $2.1
million wire transfer to the Bank that was initiated on 21 September 2012 was to
serve as the Purchase Price to buy the four Notes.100 	These documents also
conclusively establish that the Bank no longer had the right to accept payments on
the Notes effective as of 21 September 2012 and that the Bank knew that the money
was provided by a fiduciary and that the money was intended for the account of the
trust represented by that fiduciary.101
55. 	Doug 	Harris’s 	contention 	that 	the 	CM 	Note 	was 	paid 	before 	it 	was
transferred to JDPW102 is without merit. Harris relies upon the Bank’s post-receipt
98 (Jan. 2022 Am. Order ¶¶ 91–99.)
99 (See Note. Purch. & Sale Agmt.; Mod. Agmt; Bill Sale Assign. Loan Docs.; Allonge.)
100 (See Rcvr. Ex. Filing. PX-28, e-mail, Beever to Harper and Nicholson, ECF No. 1667.29;
Rcvr. Ex. Filing. PX-21, e-mail, Harper to Nicholson, ECF No. 1667.22; Rcvr. Ex. Filing. PX-
22, e-mail, Nicholson to Harper, ECF No. 1667.23; Rcvr. Ex. Filing. PX-18, e-mail, Harper
Beever, and Sheridan, ECF No. 1667.19; Rcvr. Ex. Filing. PX-10, e-mail, Harper to Beever
and Sheridan, ECF No. 1667.11; Rcvr. Ex. Filing. PX-9, e-mail, Beever to Sheridan, ECF No.
1667.10; Rcvr. Ex. Filing. PX-5, e-mail, Sheridan to Beever, ECF No. 1667.6.)
101 (See supra notes 54–55.)
102 (See, e.g., D. Harris Dep. 1029:5–9; Acct’g Proc. Tr. Day One 29:23–25, 72:20–73:1, 236:12–
25, 244:2–9.)

application in its internal records of part of the $2.1 million wired to the Bank by the
Nivison Parties on behalf of JDPW on or about 21 September 2012 as a payment for
the benefit of the obligors on the CM Note.103 This reliance is misplaced. 	The wire
transfer was the payment of the Purchase Price for JDPW to buy the Notes with their
warranted outstanding balance. 	The Bank’s internal accounting does not establish
otherwise. HCM did not demonstrate that the Bank’s internal accounting would have
been any different whether a Note was satisfied or purchased. Moreover, the Bank’s
post-receipt, internal accounting decisions have no bearing on what the parties
agreed to do under the Purchase Agreement several months before. 	Therefore, the
Court concludes that the internal accounting records are neither determinative nor
instructive as to the legal effect of the Bank’s application of its receipt of the $2.1
million from the Nivison Parties on behalf of JDPW.
56. 	Moreover, once the Bank executed the CM Allonge and Assignment of Notes
on 21 September 2012, the Bank ceased to be a holder of the CM Note. 	Since the
Bank was no longer a holder of the CM Note as of 21 September 2012, the Bank had
no authority or power to accept payments on the CM Note after that date. As a result,
the receipt of $2.1 million by the Bank on 24 September 2012 was not payment on
the CM Note. 	To the contrary, the evidence establishes that Nivison’s $2.1 million
payment on behalf of JDPW was made to effect JDPW’s purchase of the Notes and
related Loan Documents, including the CM Deed of Trust, under the Purchase
Agreement with the warranted Outstanding Balance.
103 (See e.g., Acct’g Proc. Tr. Day One 236:12–25; D. Harris Acct’g Hr’g Br. 13.)

57. 	More fundamentally, Doug Harris’s obligation was to obtain the benefit of
the bargain offered to JDPW by the Purchase Agreement,104 which was acquired on
21 September 2012 through the Bill of Sale on that same date.105 To the extent Doug
Harris is correct that he caused JDPW to borrow $2.1 million from the Nivison Parties
only to purchase worthless or devalued notes with the borrowed funds, he has only
offered further proof of his breach of fiduciary duty to JDPW and the resulting
damage the Receiver claims on behalf of JDPW Trust.
58. 	Harris’s argument based on Judge Manning’s order in January 2015 is
equally unavailing. Judge Manning entered his January 2015 order over two years
after JDPW acquired the CCSEA Notes in September 2012. Doug Harris has offered
no evidence that he took any action to collect on the CCSEA Notes at any time during
the two years they were in JDPW’s possession before Judge Manning ordered their
transfer to the Nivison Parties. His only explanation is that it was always the “plan”
not to do so.106 As the Court has previously held, however, “[t]he question of breach
looks to Doug Harris’s conduct vis-à-vis his duties to JDPW, not whether the plan
‘worked’ vis-à-vis his personal interests and the other parties’ intentions.”107
59. 	Had Doug Harris chosen a different entity to implement his plan—one to
which he did not owe a fiduciary duty—then perhaps his plan may have worked as
104 (Note Purch. & Sale Agmt.; Mod. Agmt.)
105 (Bill Sale Assign. Loan Docs.)
106 (See e.g., Acct’g Proc. Tr. Day One 849:3–19.)
107 (Jan. 2022 Am. Order ¶ 94.)

he, McDaniel, and Richard Harris had hoped. 	However, by choosing JDPW, a trust
for which he served as trustee and to which he owed fiduciary duties, the plan he
conceived required him to ignore those fiduciary duties so that JDPW could pass
through to his brother, his brother’s companies, and himself the benefits of the
transactions his plan made available to JDPW. North Carolina law simply does not
permit a trustee to engage in such conduct to the detriment of the trust. 	See, e.g.,
Miller v. McLean, 252 N.C. 171, 174 (1960) (“Trustees . . . must act in good faith.
They can never paramount their personal interest over the interest of those for whom
they have assumed to act.”) (citations omitted).
60. 	Doug Harris and McDaniel also make much of the fact that, in March 2016,
the Receiver’s counsel stated in open court that JDPW served as a “pass-through
entity” in the transactions at issue,108 suggesting that this acknowledgment is a
smoking gun that somehow justifies Doug Harris’s conduct. 	But what Doug Harris
and McDaniel fail to apprehend—in this Accounting Proceeding and throughout the
litigation of this matter—is that, by using JDPW as a pass-through entity in the
transactions at issue, Doug Harris has admitted, and the evidence of record now
conclusively shows, that, while serving as JDPW’s trustee, he caused JDPW to
relinquish benefits (i.e., the right to collect on the four Notes) and incur obligations
(i.e., the $2.1 million Nivison loan) that harmed JDPW and benefited only himself,
his brother, and his brother’s companies. A trustee of a trust cannot prefer his family
members and himself to the detriment of the trust’s beneficiary. See, e.g., Fox v. Fox,
108 (Acct’g Proc. Tr. Day One 42:1–7, 131:13–133:25, 226:7–18.)

283 N.C. App. 336, 348 (2022) (“[A] trustee must ‘maintain complete loyalty to the
interests of his beneficiaries’ ”) (citing Howe v. Links Club Condo. Ass’n, 263 N.C.
App. 130, 149 (2018)); Melvin v. Home Fed. S&L Ass’n, 125 N.C. App. 660, 664 (1997)
(“[I]t is clear that the trustee of a trust has a fiduciary obligation to the beneficiary of
the trust. N.C. Gen. Stat. § 32-25[.]”)
61. 	JDPW has been damaged by the actions and omissions of Doug Harris, and
Doug Harris has failed to properly account for his actions and omissions on behalf of
JDPW Trust. As described above, Doug Harris undertook these actions solely for the
benefit of himself and his brother and never held the Notes and related Loan
Documents with the intent to exercise them for the benefit of JDPW. Nor did he take
any action to ensure that the debt JDPW incurred to acquire the Notes was repaid.
62. 	In defiance of the Order to Account, and by way of summary of the above,
Doug Harris did not include or address in his Accounting (i) the four Notes, (ii) the
Loan Documents accompanying the Notes, (iii) the $2.1 million loan from the Nivison
Parties (despite filing with his Accounting an Unconditional Guaranty109 and a
Pledge Agreement,110 each of which reference a loan to JDPW by the Nivison Parties
109 (Index Exs. Cited Harris Acct’g Rep. for JDPW Tr. Ex. 6, Unconditional Guar. of Payment,
ECF No. 1512.6.)
110 (Index Exs. Cited Harris Acct’g Rep. for JDPW Tr. Ex. 7, Pledge Agreement, ECF No.
1512.7.)

and a promissory note provided by JDPW to the Nivison Parties),111 or (iv) the monies
loaned by Richard Harris to JDPW.112
63. 	To justify his actions, Doug Harris appears to claim that he arranged for
JDPW to receive $126,000 for its role in these transactions. 	But the basis for that
claim is undocumented, and while Doug Harris and McDaniel now offer conflicting
testimony on how that alleged fee was derived,113 at least until the Accounting
Proceeding was initiated, it appears this figure was intended to reflect a “2 percentage
point spread on the difference between the interest rate of money owed--borrowed by
the trust and money that the trust was in effect lending to others.”114 The evidence
111 Although Doug Harris now argues that “Dr. Epes and his related companies are the actual
debtors rather than JDPW Trust” in connection with the Nivison loan, (D. Harris Acct’g ¶ I.I),
he referenced in the claim he filed for JDPW in this action a “loan to JDPW Trust” by “Old
Battleground Properties, Inc.” and included in the Accounting a closing statement from 12
September 2021 that states:
*$2.1 from total payoff of $6,744,546.75 due Nivison Family Investments LLC,
which 	$2.1 	million 	is 	a 	loan 	from 	Nivison 	Family 	Investments 	LLC
to . . . JDPW Trust . . . as evidenced by loan documents of even date herewith;
$1,834,35 from Seller’s Proceeds.
(Index Exs. Cited Harris Acct’g Rep. for JDPW Tr. Ex. 4, Old Republic Nat’l Title Ins. Co.
Closing Statement, ECF No. 1512.4.) Doug Harris did not include in his Accounting any of
the loan documents referenced in the closing statement quoted above or the Note that is
referenced in the Unconditional Guaranty and in the Pledge Agreement.
112 See supra ¶ 36.
113 Compare McDaniel’s testimony (Acct’g Proc. Tr. Day Two 321:23–322:4, 366:9–367:7, ECF
No. 1666) and Doug Harris’s testimony (Acct’g Proc. Tr. Day One 94:25–18, 100:1–101:11)
with Doug Harris’s Deposition (D. Harris Dep. 829:4–831:16.)
114 (D. Harris Dep. 829:4–831:16.)

shows, however, that JDPW already had the right to collect the interest rate spread,
and the $126,000 did not compensate JDPW for anything it did not already have.
64. 	Doug 	Harris 	also 	argues 	that 	he 	negotiated 	a 	limitation 	of 	liability
concerning the three CCSEA Notes and that this, too, should absolve him of liability
as to these three Notes in his Accounting.115 The Court has already concluded as a
matter of law, however, that “[t]he conflict of interest that permeated the Nivison
loan renders it a breach of trust without any need to assess the limitation of liability”
and “a conflict of interest transaction is voidable regardless of its benefit—or as Doug
Harris contends in this case, absence of harm—to the trust.”116 	Doug Harris’s
limitation of liability argument is therefore without merit.
65. 	The Receiver provided a spreadsheet to the Court that contains two theories
of calculations of the damages incurred by JDPW as a result of Doug Harris’s actions
and omissions.117 The first theory the Receiver advances maintains that the damages
incurred by JDPW is equal to the outstanding amounts, plus interest and late
charges, that should have been collected on the Notes on behalf of JDPW. The second
theory, alternatively, maintains the damages incurred by JDPW is equal to the sum
of JDPW’s liability to Nivison ($2.1 million plus accrued interest; the “JDPW Allowed
115 (Index Exs. Supp. Mot. Partial Summ. J. by Receiver JDPW Tr. (Old Battleground v.
CCSEA) Ex. 2, Agreement, ECF No. 1384.2.)
116 (Jan. 2022 Am. Order ¶ 97.)
117 (See Notice of Submission of Unsupported Files (.xlsx & .olm), ECF No. 1674.)

Claim”)118 and the expected benefit of the purchase of the discounted Notes to JDPW
($1.3 million plus accrued interest; the “$1.3 Million Discount”).119 	Other than the
assertions by McDaniel and Doug Harris that the Notes were satisfied, assertions the
Court has rejected as discussed above,120 no evidence has been offered by any party
that undermines or contradicts the Receiver’s calculations under either theory
advanced in the spreadsheet.
66. 	As stated above, as trustee of JDPW Trust during the relevant time period,
Doug Harris bears the burden of production and persuasion in disclosing the assets
and liabilities of JDPW Trust while he served as its trustee. 	See, e.g., Pluciennik,
2013 Ill. App. 3d 120026, ¶ 15; Watson, 144 Idaho at 219. Doug Harris failed to carry
his disclosure burden and, in an accounting proceeding, “[a]ny doubt or uncertainty
created by the lack of adequate records or by errors or omissions in the accounting
118 In the January 2022 Amended Order, this Court held that “JDPW’s liability to Nivison
has been established at $2.1 million plus accrued interest, attorney’s fees, and costs and, as
a result, no issue concerning the amount of JDPW’s liability to Nivison remains for
determination by a jury.” 	(See Order Setting Claims & Matters for Trial by Jury (Old
Battleground v. CCSEA), ECF No. 1444.)
119 In the January 2022 Amended Order, this Court concluded that “[h]ad Doug Harris not
committed a breach by transferring away the CM Note and Release Deed and failing to
enforce JDPW’s rights to the CM Loan, JDPW would not only have been able to repay the
Nivison Loan, but it would have also profited from the CM Loan by receiving the difference
($1.3 million) between what JDPW could have collected on the CM Loan and what it owed on
the Nivison Loan.” (Jan. 2022 Am. Order ¶ 143.)
120 See supra ¶¶ 54–55. The Court also incorporates herein by reference its findings of fact
and conclusions of law set forth in the Foreclosure Proceeding Judgment concluding that the
CM Note was not satisfied at the time JDPW purchased the Note from the Bank. 	(See
Foreclosure Proceeding Judgment ¶¶ 3–43, 46–49, 51–52, 58–61).

itself 	will 	be construed against 	the party 	whose 	burden 	it is 	to 	produce 	the
accounting.” Pluciennik, 2013 Ill. App. 3d 120026, ¶ 15.
67. 	Since Doug Harris has failed to properly account for JDPW’s assets during
the time he was its trustee, and because the Receiver’s calculations are based upon
undisputed facts admitted into evidence, the Court, after careful review and in the
exercise of its discretion, adopts the Receiver’s second theory of damages with the
following exception.121 The Court declines to adopt the Receiver’s proposed interest
rate of 15% on the $1.3 Million Discount. 	The Receiver’s proposed interest rate on
the $1.3 Million Discount appears to be based on the default rate of interest on the
CM Note. 	The Court finds that, because the value of the $1.3 Million Discount is
predicated on all four Notes and not merely on the CM Note, the interest rate should
be calculated as a weighted average (which equals 13.6%) and elects to apply this
interest rate to the $1.3 Million Discount.
121 (See supra note 117.) 	The Court finds the second theory of damages advanced by the
Receiver more accurately reflects the actual damages incurred by JDPW as a result of Doug
Harris’s actions and omissions. 	This second theory is also consistent with the Court’s
holdings in the January 2022 Amended Order (see supra note 107) and its Order Setting
Claims & Matters for Trial by Jury (see supra note 118).

Total Allowed Claim Plus Discount: $7,110,751.78
68. 	Based on the above calculations, the Court hereby enters judgment against
Doug Harris in the amount of $7,110,751.78 (i.e, $3,644,104.11 + $3,466,647.67), as
of 19 December 2024. Post-judgment interest shall accrue at the legal rate of 8.00%
per annum from the date of this Order until this judgment is paid in full. 122
69. 	WHEREFORE, the Court, hereby ENTERS FINAL JUDGMENT against
Doug Harris in accordance with the findings of fact and conclusions of law set forth
above. 	Pursuant to Rule 54(b), the Court enters this Order as a final judgment
because there is no just reason for delay in entering the judgment as a final judgment
122 On 30 July 2024, the Receiver filed a Motion for Entry of Judgment Against Douglas
Harris in favor of JDPW Trust under Rules 54 and 58 of the North Carolina Rules of Civil
Procedure (the “Rule(s)”) with supporting brief (the “Rule 54/58 Motion”). (ECF No. 1605.)
Based on the Court’s determination of the issues in the Accounting Proceeding and its entry
of judgment against Harris as provided herein, which the Court concludes is identical to the
judgment sought through the Receiver’s Rule 54/58 Motion, the Court will deny the Receiver’s
Rule 54/58 Motion as moot.
JDPW Allowed Claim $2,100,000 See ECF 1444
Principal Balance as of Sept 21, 2012: 	$2,100,000.00
Interest (4473 days at 6%) 	$1,544,104.11
Total Due as of December 19, 2024 	$3,644,104.11
Value of $1.3 million discount See ECF 1444
Principal Balance as of Sept 21, 2012: 	$1,300,000.00
Interest (4473 days at 13.6%) 	$2,166,647.67
Total Due as of December 19, 2024 	$3,466,647.67

and permitting appellate review of this Order and the other orders that the Court is
entering contemporaneously herewith.123
SO ORDERED, this 19th day of December 2024.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge
123 	On 3 December 2024, Doug Harris filed an Objection to Submission of New Data Not
Previously Made Available to Defendant and Not Previously Filed in Court (the “Objection”).
(ECF No. 1680.) 	The premise of Harris’s Objection is that the Receiver has attempted to
provide to the Court 6.9 MB of electronic documents that were not admitted into evidence
during the Hearing and therefore should not be considered in connection with the Accounting
Proceeding. 	The Court has reviewed the documents the Receiver has submitted, however,
and has determined that they are identical to those that were introduced into evidence at the
Hearing. Since Harris’s Objection has no basis in fact, the Court hereby overrules Harris’s
Objection.