Stephens v. Hemyari

355 S.W.3d 10, 2010 Tex. App. LEXIS 3090, 2010 WL 1565456
CourtCourt of Appeals of Texas
DecidedApril 20, 2010
DocketNo. 05-08-01492-CV
StatusPublished
Cited by1 cases

This text of 355 S.W.3d 10 (Stephens v. Hemyari) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stephens v. Hemyari, 355 S.W.3d 10, 2010 Tex. App. LEXIS 3090, 2010 WL 1565456 (Tex. Ct. App. 2010).

Opinion

MEMORANDUM OPINION

Opinion By Justice O’NEILL.

This is the second appeal of this case. Appellants Gary Ben Stephens, Stephens Group, L.P., and Stephens Group, II, L.P., appeal a summary judgment granted in favor of appellees Kourosh Hemayari and Union Valley Ranch declaring appellees owners in fee simple to certain tracks of real property. In five issues, appellants generally contend the trial court erred in granting appellees’ motion for summary judgment because the foreclosure sale on which their title is based is void. For the following reasons, we reverse the trial court’s judgment and render judgment that the foreclosure sale was void.

This case concerns title to three tracts of land in Dallas County. Stephens Group, L.P and Stephens Group, II, L.P. purchased the tracts of land in the mid 1990s. Stephens was the general partner for the Stephens Groups, and James Murphy was a limited partner. Murphy subsequently filed for bankruptcy and, following an adversary proceeding between Stephens, the Stephens Groups and Murphy, a settlement agreement was reached. Pursuant to that agreement, Stephens would purchase Murphy’s interest in the partnerships. The agreement required Stephens to pay Murphy $50,000 at closing and additional $700,000 within 120 days of closing. Stephens signed a nonrecourse note for the $700,000 payment secured by a deed of trust and a deed in lieu of foreclosure on the three tracts of land. The agreement provided that if Stephens did not make the $700,000 payment, Murphy could foreclose on the deed of trust or record the deed in lieu of foreclosure.

Stephens made the initial $50,000 payment, but did not make the $700,000 payment as required by the agreement. When Murphy threatened foreclosure, the Stephens Groups filed for Chapter 11 bankruptcy protection, thus putting into effect the automatic bankruptcy stay. 11 U.S.C. § 362. Murphy moved to lift the automatic stay. The bankruptcy court modified the automatic stay to permit the property be sold in foreclosure under specified circumstances. The specific terms of the bankruptcy court’s order were dis[12]*12cussed in the prior appeal. See Stephens v. Hemyari, 216 S.W.3d 526, 529 (Tex. App.-Dallas 2007, pet. denied.). As we explained in that opinion, under the bankruptcy court’s order, Stephens had to pay $50,000 by noon on June 12, 2000 and $650,000 on or before August 1, 2000. Id. at 527. The order specifically permitted Murphy to post the property for foreclosure before the second payment was due so that the foreclosure sale could be conducted on August 1, 2000 if Stephens did not pay the $650,000 on or before that date. Murphy did not post the property for foreclosure in July as contemplated by the bankruptcy court’s order. Instead, only after Stephens failed to make the $700,000 payment, was the property posted for foreclosure. Hemyari purchased it at a foreclosure sale on September 5, 2000.

The issue presented in the prior appeal was whether Hemyari showed conclusively that the September 5, 2000 sale was valid. See Stephens v. Hemyari, 216 S.W.3d 526 (Tex.App.-Dallas 2007, pet. refd). We concluded he did not and reversed the trial court’s summary judgment. We explained the trial court “conditionally lifted the stay to allow foreclosure on a specific date” and that “strictly construing the order does not permit us to interpret it as allowing foreclosure after August 1, 2000.” See Stephens, 216 S.W.3d at 529. Therefore, we concluded Hemyari failed to show conclusively the validity of the foreclosure sale. We did not reach whether the converse was true-specifically, whether the sale was void, because that issue was not before us in the summary judgment proceedings. We remanded to the trial court.

Meanwhile, appellee Union Valley purchased a portion of the subject property from Hemyari and filed a petition in intervention in the trial court. Hemyari and Union Valley then filed motions for summary judgment again asserting the bankruptcy court’s order did not require the foreclosure sale to occur on August 1, 2000 and that the sale was valid as a matter of law. They also moved for summary judgment claiming appellants lacked standing to contest the sale and on various defenses, including equitable estoppel, judicial estoppel, laches, waiver, and ratification.

Appellants replied and also filed their own motion for summary judgment asserting the foreclosure sale was void as a matter of law because it did not occur on August 1, 2000 as required by the bankruptcy court’s order. It relied on the bankruptcy court’s order and our prior opinion interpreting that order. They also asserted the foreclosure sale was invalid based on various alleged defects in the foreclosure documents. They sought a judgment setting aside the foreclosure sale and cancelling the substitute trustee’s deed of trust.

The trial court again concluded that the foreclosure sale did not have to occur on August 1, 2000. It also concluded various alleged defects in the foreclosure documents did not render the sale void. The trial court granted appellees’ motions and concluded the sale was valid as a matter of law. The trial court denied Stephens and the Stephens Groups’ motions. This appeal followed. On appeal, appellants assert the trial court erred in granting ap-pellees’ motion and denying their motion because the foreclosure sale was void as a matter of law. They maintain the bankruptcy court’s order did not permit foreclosure on a date other than August 1, 2000 and therefore the sale after that date violated the automatic stay. We agree.

The standard for reviewing a summary judgment is well-established. The movant has the burden of showing no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R. Crv. P. 166a(c); Diversicare Gen. [13]*13Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex.2005); Stephens, 216 S.W.3d at 528. When both parties move for summary judgment, an appellate court reviews the summary judgment evidence presented by both parties to determine all questions presented. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Worldwide Asset Purchasing, LLC v. Rent-A-Center East, Inc., 290 S.W.3d 554, 560 (Tex.App.-Dallas 2009, no pet.). When both parties file motions for summary judgment, the appellate court considers whether either party’s motion for summary judgment should have been granted. See Howard v. INA County Mut. Ins. Co., 933 S.W.2d 212, 216 (Tex.App.-Dallas 1996, writ denied).

As stated in our prior opinion, an action taken in violation of the automatic stay is void, not merely voidable. Stephens, 216 S.W.3d at 529 (quoting Continental Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 501 (Tex.1988)).

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355 S.W.3d 10, 2010 Tex. App. LEXIS 3090, 2010 WL 1565456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephens-v-hemyari-texapp-2010.