In Re Se. Eye Ctr. (Pending Matters)

In re Se. Eye Ctr. (Pending Matters), 2020 NCBC 58.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
WAKE COUNTY 15 CVS 1648

IN RE SOUTHEASTERN EYE ORDER AND OPINION ON KAY
CENTER-PENDING MATTERS HARRIS TURNER’S MOTION TO
INTERVENE AND TURNER’S
MOTION TO REMOVE THE $2.1
MILLION JUDGMENT AGAINST
JDPW TRUST AND TO REMOVE
JDPW TRUST FROM RECEIVERSHIP
(OLD BATTLEGROUND v. CCSEA)

1. THIS MATTER is before the Court upon the Motion of the Sole Beneficiary

of JDPW Trust, Kay Harris Turner (“Turner”), to Intervene Pursuant to Rule 24 of

the North Carolina Rules of Civil Procedure (“Motion to Intervene”), (ECF No. 1291),

and Turner’s Motion to Remove the $2.1 Million Judgment Against JDPW Trust and

to Remove JDPW Trust from Receivership Pursuant to Rule 60(b)(4)(5)(6) (“Rule

60(b) Motion”), (ECF No. 1288), (together, the “Motions”).

2. Having considered the Motions, the related briefing, and the arguments of

counsel at the hearing on the Motions, the Court GRANTS the Motion to Intervene

and DENIES the Rule 60(b) Motion.

Smith Debnam Narron Drake Saintsing & Myers, LLP, by Byron L.
Saintsing, for Plaintiffs Nivison Family Investments, LLC and Old
Battleground Properties, Inc. and Third-Party Defendant Arthur
Nivison.

Oak City Law LLP, by Robert E. Fields, III, for Receiver Gerald A.
Jeutter, Jr., as Receiver for JDPW Trust U/T/A Dated June 8, 2007,
Central Carolina Surgical Eye Associates, P.A., HUTA Leasing LLC,
Southeastern Eye Management, Inc., Southeastern Cataract Laser
Center, PLLC, EMS Partners, LLC, KEPES Newco, LLC, and DRE
Newco, LLC.
Wyatt Early Harris Wheeler, LLP, by Scott F. Wyatt and Donavan J.
Hylarides, for Defendants Richard A. Harris, Historic Castle McCulloch,
LLC, and Castle McCulloch, Inc.

Douglas S. Harris, pro se.

Walter K. Burton, PLLC, by Walter K. Burton, for Kay Harris Turner, in
her asserted capacity as the beneficiary of JDPW Trust U/T/A Dated
June 8, 2007.

Bledsoe, Chief Judge.

I.

BACKGROUND

3. Relevant background facts and procedural history for these Motions are set

forth in In re Se. Eye Ctr. - Pending Matters, 2020 NCBC LEXIS 12, at *2–4 (N.C.

Super. Ct. Jan. 30, 2020). The Court briefly summarizes those facts and history and

sets forth additional facts relevant to the Motions below.

4. On April 28, 2016, the Court entered both its Order Approving Nivison

Settlement and Related Transactions Including Release of CCSEA Sale Proceeds,

(ECF No. 471), and its Order Approving Plaintiffs’ Motion for Appointment of

Receiver for JDPW Trust (together, the “April 28, 2016 Orders”), (ECF No. 472).

Through the April 28, 2016 Orders, the Court placed the JDPW Trust U/T/A Dated

June 8, 2007 (“JDPW Trust” or the “Trust”) into receivership and approved a

settlement agreement between Old Battleground Properties, Inc. and Nivison Family

Investments, LLC (together, the “Nivison Parties”), various receivership entities, and

the Trust that allowed the Nivison Parties a $2.1 million claim against the Trust.
5. Over three years later, on August 13, 2019, Turner, as the purported

beneficiary of the Trust, and through her counsel at the time, Douglas S. Harris

(“Harris”), filed a motion to both set aside the Nivison Parties’ $2.1 million claim and

to remove the Trust from receivership (“Original Rule 60(b) Motion”). (Mot. Remove

$2.1 Million J. JDPW Trust & Remove JDPW Trust Receivership Pursuant Rule

60(b)(4)(5)(6), ECF No. 1176); see also In re Se. Eye Ctr. - Pending Matters, 2019

NCBC LEXIS 29, at *3–23 (N.C. Super. Ct. May 7, 2019) (providing further

background as to the events surrounding the creation of the Trust receivership). Soon

afterward, Turner also moved to intervene in this action (“Original Motion to

Intervene”). (Mot. Sole Beneficiary JDPW Trust, Kay Harris Turner, Intervene

Pursuant Rule 24 North Carolina Rules Civil Procedure, ECF No. 1182.)

6. Before the scheduled hearing on the Original Rule 60(b) Motion and Original

Motion to Intervene was held, the Nivison Parties moved to disqualify Harris as

counsel for Turner (“Motion to Disqualify”). (Pls.’ Mot. Disqualify Douglas S. Harris

Counsel Kay Harris Turner, ECF 1196.) After the hearing on the Original Rule 60(b)

Motion, the Original Motion to Intervene, and the Motion to Disqualify, at which

Douglas S. Harris appeared pro se and on behalf of Turner and all other parties were

represented by counsel, the Court, through an order and opinion dated January 30,

2020, (i) granted the Motion to Disqualify; (ii) disqualified Harris from acting as

counsel for Turner; (iii) struck all motions and other materials filed by Harris on

behalf of Turner, including the Original Rule 60(b) Motion and Original Motion to

Intervene; and (iv) permitted Turner to retain nonconflicted successor counsel to
represent her interests in these proceedings and, if she deemed it appropriate, seek

intervention and relief concerning the $2.1 million claim and the Trust receivership.

In re Se. Eye Ctr., 2020 NCBC LEXIS 12, at *16–17.

7. Walter K. Burton thereafter appeared as counsel for Turner on April 15,

2020 and filed both the current Rule 60(b) Motion and Motion to Intervene that same

day. (Mot. Remove $2.1 Million J. JDPW Trust & Remove JDPW Trust Receivership

Pursuant Rule 60(b)(4)(5)(6), ECF No. 1288; Mot. Sole Beneficiary JDPW Trust, Kay

Harris Turner, Intervene Pursuant Rule 24 North Carolina Rules Civil Procedure

[hereinafter “Mot. Intervene”], ECF No. 1291.)

8. The Motions have been fully briefed, and the Court held a hearing on the

Motions by videoconference on July 21, 2020 at which Douglas S. Harris appeared

pro se and all other parties were represented by counsel. The Motions are now ripe

for resolution.

II.

ANALYSIS

A. Motion to Intervene

9. Turner moves to intervene under Rule 24 of the North Carolina Rules of

Civil Procedure (“Rule(s)”) on grounds that Turner’s interests are not completely

aligned with any party to these proceedings and because such motions are seldom

denied. (Mot. Intervene 1, 5.) All parties consent to Turner’s intervention except for

the Nivison Parties. (See Mem. Law Opp’n Kay Harris Turner’s Renewed Mot.

Intervene [hereinafter “Mem. Opp’n Mot. Intervene”], ECF No. 1305.)
10. Rule 24 provides for intervention both as of right and through court

permission. Intervention as of right under Rule 24(a) is appropriate when “(1) a

statute . . . confers an unconditional right to intervene or (2) an interest in the

property or transaction . . . is the subject of the action[, and] such interest was not

adequately represented by the existing parties and would be impaired if intervention

were not granted.” Holly Ridge Assocs., LLC v. N.C. Dep’t of Env’t & Nat. Res., 361

N.C. 531, 537, 648 S.E.2d 830, 835 (2007).

11. Permissive intervention under Rule 24(b) is appropriate “[w]hen an

applicant’s claim or defense and the main action have a question of law or fact in

common[.]” Hinton v. Hinton, 250 N.C. App. 340, 346, 792 S.E.2d 202, 206 (2016)

(quoting N.C. R. Civ. P. 24(b)(2)). Unlike intervention as of right, “Rule 24(b)(2) does

not require a permissive intervenor to show ‘a direct personal or pecuniary interest

in the subject of the litigation.’ ” Koenig v. Town of Kure Beach, 178 N.C. App. 500,

507, 631 S.E.2d 884, 889 (2006) (quoting In re Baby Boy Scearce, 81 N.C. App. 531,

541, 345 S.E.2d 404, 410 (1986)). “[P]ermissive intervention by a private party under

Rule 24(b) rests within the sound discretion of the trial court and will not be disturbed

on appeal unless there was an abuse of discretion.” Holly Ridge Assocs., 361 N.C. at

538–39, 648 S.E.2d at 836 (quoting Virmani v. Presbyterian Health Servs. Corp., 350

N.C. 449, 460, 515 S.E.2d 675, 683 (1999)). Nevertheless, “Rule 24(b)(2) expressly

requires that in exercising discretion as to whether to allow permissive intervention,

‘the court shall consider whether the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties.’ ” Virmani, 350 N.C. at 460, 515

S.E.2d at 683 (quoting N.C. R. Civ. P. 24(b)).

12. Whether intervention is as of right or permissive, the successful intervenor

has the same rights as any party in the litigation. See Holly Ridge Assocs., 361 N.C.

at 535, 648 S.E.2d at 834 (“Rule 24 has long been interpreted to mean that a

successful intervenor under subsection (a) or (b) enters the case as a party.”

(emphasis added)); Leonard E. Warner, Inc. v. Nissan Motor Corp., 66 N.C. App. 73,

78, 311 S.E.2d 1, 4 (1984) (“After intervention, an intervenor is as much a party to

the action as the original parties are and has rights equally as broad.” (citing 59 Am.

Jur. 2d Parties §§ 177, 181 (1971)). 1

13. In support of her Motion to Intervene, Turner argues that she has an

interest in property at issue in this lawsuit, particularly in regard to the Nivison

Parties’ $2.1 million claim against the Trust, that would “denigrate [her] small claim

of $126,000 almost out of existence if paid proportionately.” (Br. Supp. Mot. Sole

Beneficiary JDPW Trust, Kay Harris Turner, Intervene Pursuant Rule 24 North

Carolina Rules Civil Procedure 8, ECF No. 1287.) As a result, Turner claims she may

intervene as of right.

14. The Nivison Parties contend otherwise and advance several compelling

arguments against intervention. They argue it is undisputed that because Turner

1 Even though Turner has suggested her intervention is “for the . . . purpose of making a Rule

60(b)(4)(5)(6) Motion to Set Aside or otherwise declare as void portions of the Court’s 28 April
2016 Order Approving Pls.’ Mot. For Appointment of Receiver for JDPW Trust[,]” (Mot.
Intervene 1), the Court will not limit Turner’s rights as a party in this case upon intervention,
see Leonard E. Warner, 66 N.C. App. at 79, 311 S.E.2d at 5 (“Once an intervenor becomes a
party, he should be a party for all purposes.”).
was named the beneficiary of the Trust by her ex-husband, the Trust grantor, prior

to their subsequent divorce, N.C.G.S. § 36C-6-606 applies to revoke her designation

as a Trust beneficiary. 2 (Mem. Opp’n Mot. Intervene 2–5.) The Nivison Parties also

contend that Turner should be estopped from intervening because she received

numerous e-mails and oral communications concerning this matter before and after

the receivership was created in April 2016 yet waited over three years to seek the

relief she requests in the Motions. (Mem. Opp’n Mot. Intervene 8–10.) The Nivison

Parties further assert that even if Turner is somehow deemed a Trust beneficiary,

she is not a necessary party to these proceedings since no North Carolina case has

held that a trust beneficiary—like Turner alleges she is here—is a necessary party to

a suit by a trust creditor—like the Nivison Parties are here—against the trust to

enforce a trust debt incurred by the trustee. (Mem. Law Opp’n Kay Harris Turner’s

Renewed Mot. Remove NFI $2.1 Million Judgment JDPW Trust & Remove JDPW

Trust Receivership 7–9, ECF No. 1306; see also Mem. Opp’n Mot. Intervene 11.)

15. Notwithstanding these arguments, and without deciding the merits of any

of them, the Court concludes that, in the current circumstances, Turner should be

permitted to intervene under Rule 24(b). The Court does so, however, expressly

reserving for later determination the arguments the Nivison Parties have raised in

opposition to Turner’s intervention should Turner’s claim against the Trust be

2 The Nivison Parties argue that “pursuant to N.C. Gen. Stat. § 36C-6-606, dissolution of the

settlor’s marriage by absolute divorce after executing a revocable trust revokes all provisions
of the trust in favor of the settlor’s former spouse.” (Mem. Opp’n Intervene 3.) Thus, the
Nivison Parties contend that Turner’s absolute divorce from the Trust’s grantor, her former
spouse, revoked her designation as a beneficiary of the Trust.
advanced for judicial determination or Turner otherwise seeks relief in this action.

The Court concludes that proceeding in this fashion will not prejudice any party to

the litigation and will allow Turner to seek to protect her claimed interest in the Trust

as she deems appropriate.

16. The Court does note that to the extent that Turner is not a proper

beneficiary of the Trust by operation of section 36C-6-606 and thus lacks standing to

advance her claim against the Trust or seek other relief, lack of standing does not

necessarily defeat her request for permissive intervention. See, e.g., Bruggeman v.

Meditrust Co., 165 N.C. App. 790, 796, 600 S.E.2d 507, 511 (2004) (“[W]hether a party

has standing is merely a factor courts may consider in exercising their discretion to

grant permissive intervention once the requirements for permissive intervention are

satisfied.” (quoting 59 Am. Jur. 2d Parties § 207 (2003))); see also Koenig, 178 N.C.

App. at 507, 631 S.E.2d at 889 (holding that while a “potential intervenor’s alleged

claim or defense must have a question of law or fact in common with the pending

action[,]” that inquiry is separate from whether the parties have standing to bring

such claim or defense).

17. Here, Turner has alleged that she is a beneficiary of the Trust with a

financial interest in prosecuting her claim for $126,000 against the Trust and in

defending against the Nivison Parties’ $2.1 million claim against the Trust. (See Dep.

Kay Turner 20:1–19, 77:9–21, ECF No. 1205.1; Exs. Receiver’s Resp. Mot. Intervene

Ex. B, ECF No. 1201.1.) In addition, it appears to the Court that Turner’s asserted

grounds for intervention “and the main action have a question of law or fact in
common.” Sloan v. Inolife Techs., 2018 NCBC LEXIS 181, at *2 (N.C. Super. Ct. Jan.

18, 2018); (see also Castle McCulloch Suppl. Br. Regarding Issues Trial, ECF No.

1224; Joint Statement Clarifying Remaining Issues Trial, ECF No. 1225; Douglas S.

Harris Suppl. Br. Regarding Issues Trial, ECF No. 1226). As a result, the Court

concludes that the requirements of Rule 24(b) are satisfied and that Turner’s

permissive intervention is appropriate. Accordingly, in the exercise of the Court’s

discretion, Turner shall be permitted to intervene in this action under Rule 24(b). 3

B. Rule 60(b) Motion

18. Turner argues through her Rule 60(b) Motion that she was not provided

notice that a motion had been filed seeking to place the Trust into receivership or to

permit a $2.1 million claim against it. She further contends that changed

circumstances since the receivership was created and the $2.1 million claim was

allowed should cause the Court to vacate its previous orders regarding the

receivership and void the $2.1 million claim in favor of the Nivison Parties. (Br. Supp.

Movant’s Mot. Remove NFI’s $2.1 Million J. JDPW Trust & Remove JDPW Trust

Receivership 1–7, ECF No. 1289.)

19. Rule 60(b) states that “[o]n motion and upon such terms as are just, the

court may relieve a party . . . from a final judgment, order, or proceeding[.]” Our

courts have recognized that “[t]o proceed under Rule 60(b) . . . requires an initial

determination of whether a [procedural act] constitutes a ‘judgment, order[,] or

3 In light of the Court’s conclusion that permissive intervention under Rule 24(b) is
appropriate and shall be granted, the Court need not address Turner’s contention that she
should be permitted to intervene as of right under Rule 24(a).
proceeding.’ ” Carter v. Clowers, 102 N.C. App. 247, 252, 401 S.E.2d 662, 665 (1991)

(quoting N.C. R. Civ. P. 60(b)). Our courts have further concluded that “Rule 60(b)

‘has no application to interlocutory judgments, orders, or proceedings of the trial

court. It only applies, by its express terms, to final judgments.’ ” Kingston v. Lyon

Constr., Inc., 207 N.C. App. 703, 709, 701 S.E.2d 348, 353 (2010) (quoting Sink v.

Easter, 288 N.C. 183, 196, 217 S.E.2d 532, 540 (1975)); see also Sides v. Reid, 35 N.C.

App. 235, 237, 241 S.E.2d 110, 111 (1978) (“Motions to set aside a final judgment are

governed by Rule 60(b) of the Rules of Civil Procedure.” (emphasis added)).

20. Under North Carolina law, “a final judgment [i]s ‘one which disposes of the

cause as to all the parties, leaving nothing to be judicially determined between them

in the trial court.’ ” State v. Singleton, 201 N.C. App. 620, 626, 689 S.E.2d 562, 566

(2010) (quoting Veazey v. City of Durham, 231 N.C. 357, 361–62, 57 S.E.2d 377, 381

(1950)). Such is clearly not the situation here, and Turner makes no argument to the

contrary.

21. The April 28, 2016 Orders did not dispose of this case, and much remains to

be judicially determined in this action, including claims that must be resolved by a

factfinder at trial. (See, e.g., Joint Statement Clarifying Remaining Issues Trial.)

Indeed, the Supreme Court of North Carolina dismissed the appeal of the April 28,

2016 Orders after oral argument, opining that “Appellants have failed to demonstrate

grounds for appellate review under N.C.G.S. [§] 7A-27(a)(3)[,]” In re Se. Eye Ctr. -

Pending Matters, 809 S.E.2d 582, 582 (N.C. 2018), thus determining that the April

28, 2016 Orders were interlocutory and did not “[a]ffect[ ] a substantial right[,] [i]n
effect determine[ ] the action and prevent[ ] a judgment from which an appeal might

be taken[,] [d]iscontinue[ ] the action[, or] [g]rant[ ] or refuse[ ] a new trial[,]”

N.C.G.S. § 7A-27(a)(3). The Supreme Court made clear, and this Court agrees, that

neither of the April 28, 2016 Orders constituted a final judgment under law.

22. Where, as here, “there has not been an adjudication and disposition of all

claims,” our appellate courts have instructed trial courts that relief under Rule 60(b)

is unavailable. Blyth v. McCrary, No. COA09-163, 2009 N.C. App. LEXIS 2197, at *5

(N.C. Ct. App. Dec. 8, 2009). As summarized by the Court of Appeals, “[u]ntil the

trial court enters a final judgment, there is no order from which plaintiffs can seek

relief pursuant to Rule 60(b).” Id. Accordingly, the Court concludes that Turner’s

Rule 60(b) must be denied on this ground.

C. Further Review of Previous Orders

23. “Trial courts are vested with broad authority to supervise receivers[,]”

Bandy v. Gibson, 2017 NCBC LEXIS 57, at *8 (N.C. Super. Ct. June 29, 2017), which

includes the authority to “make such orders and decrees with respect to the discharge

of their trust as justice and equity may require[,]” Lambeth v. Lambeth, 249 N.C. 315,

321, 106 S.E.2d 491, 495 (1959). Although Turner, Harris, and the Castle McCulloch

Defendants urge the Court to set aside the $2.1 million claim and dissolve the

receivership over the Trust, and while this Court recognizes that it has broad

authority to review and amend both of the April 28, 2016 Orders, the Court concludes,

in the exercise of its discretion, that such a course is neither necessary nor
appropriate on the facts of record in this case or required by applicable law at this

time.

III.

CONCLUSION

24. WHEREFORE, based on the foregoing, the Court hereby ORDERS as

follows:

a. Turner’s Motion to Intervene is hereby GRANTED, and Turner shall be

added as an intervenor-party for all purposes in this action; and

b. Turner’s Rule 60(b) Motion is hereby DENIED.

SO ORDERED, this 17th day of August, 2020.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge