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Click here for the full text of this decision FACTS:This case concerns title to three tracts of land totaling about 835 acres in Dallas County. On June 2, 1992, Gary Ben Stephens and Stephens Group LP (group one) purchased one of the tracts at a foreclosure auction, paying $40,000 for property with a $338,982.30 mortgage attached to it. On July 8, 1993, Stephens Group II LP (group two) purchased the other two tracts for an undisclosed sum in an ordinary transaction. Group one and group two were limited partnerships in which Stephens was the general partner and Dr. James Murphy was a limited partner. In 1997, Murphy declared bankruptcy, which included an adversary proceeding against Stephens and the partnerships. In 1999, the parties settled the adversary proceeding, resulting in a compromise and settlement agreement with Stephens purchasing Murphy’s interest in the partnerships. The agreement called for Stephens to pay Murphy $50,000 at closing and an additional $700,000 within 120 days of the 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 owned by the partnerships. The agreement provided that if Stephens failed to make the $700,000 payment, Murphy could foreclose on the deed of trust or record the deed in lieu of foreclosure conveying the property to himself. The closing took place on Oct. 4, 1999, and Stephens made the $50,000 payment at that time. But Stephens later failed to make the $700,000 payment on time. On Feb. 7, 2000, Murphy wrote to Stephens demanding payment of the $700,000. He threatened to post the property for foreclosure or file the deed in lieu of foreclosure. Before Murphy could foreclose on the property or file the deed, however, group one and group two filed for Chapter 11 bankruptcy protection. Murphy then moved to lift the automatic stay. The bankruptcy court ordered a conditional lifting of the stay to allow the posting and foreclosure or recording of the deed in lieu of foreclosure unless Stephens timely made two payments totaling $700,000. Under the bankruptcy court’s order, Stephens had to pay $50,000 by noon on June 12, 2000, and $650,000 on or before Aug. 1, 2000. If Stephens timely made the first payment, then Murphy could post the property for foreclosure in July for sale on Aug. 1, 2000, but not file the deed in lieu of foreclosure. If Stephens failed to make the $650,000 payment on or before Aug. 1, 2000, then Murphy and the trustee could proceed with the foreclosure sale on Aug. 1, 2000, or record the deed in lieu of foreclosure. Stephens made the $50,000 payment on June 12, 2000, but Aug. 1 came and went without his paying the $650,000. On Aug. 15, 2000, the substitute trustee posted the property for foreclosure. On Sept. 5, 2000, the substitute trustee conducted the foreclosure sale and sold the property to Kourosh Hemyari for $651,000. The substitute trustee’s deed identified the grantor of the deed of trust as Gary Ben Stephens. On Aug. 23, 2001, American Title Co. sent a letter to the substitute trustee who conducted the foreclosure sale, Gerrit Pronske, stating that title to the tracts appeared to be in both group two and Hemyari. Pronske prepared and filed a clarification of the deed of trust, which added the following identification of capacity next to Stephens printed name below the signature line: “General Partner of the Stephens Group, L.P. and the Stephens Group II, L.P.” On May 17, 2004, Stephens, group one and group two sued Hemyari seeking to have the foreclosure sale set aside, the substitute trustee’s deed canceled and the cloud on the partnerships’ title to the property removed. Stephens, group one and group two alleged that the foreclosure sale and the substitute trustee’s deed were void, because the sale violated the bankruptcy automatic stay, the deed of trust named the wrong grantor, and the notice of substituted trustee’s sale and the substitute trustee’s deed were defective. Hemyari filed a counterclaim seeking a declaratory judgment that the foreclosure sale and substitute trustee’s deed were valid, that title was effectively conveyed to him, and that the sale vested him with full title despite any problems with the deed. Hemyari also sought to have the court order the deed reformed to show it conveyed title from group one and group two to him and that he was the full owner of the property. The trial court granted Hemyari’s motion for summary judgment and rendered the declaratory judgment Hemyari requested. The trial court’s judgment declared that Hemyari purchased and acquired fee simple title to the property free and clear of any interest of Stephens and group one and group two. HOLDING:Reversed and remanded. Stephens, group one and group two asserted that the foreclosure sale was void, because it violated the automatic bankruptcy stay. They argued that the bankruptcy court’s order conditionally lifting the automatic stay authorized posting for foreclosure in July 2001 and foreclosure sale on Aug. 1, 2001. Because the sale occurred in September, Stephens and both groups argued that the foreclosure sale violated the automatic stay and was void. An action taken in violation of the automatic stay is void, not merely voidable, the court stated. The terms of an order modifying the automatic stay must be strictly construed, the court stated. Strictly construing the order, the court found, does not permit it to interpret the order to allow foreclosure after Aug. 1, 2000. The bankruptcy court, the court stated, intended and envisioned a foreclosure sale on Aug. 1, 2000. The court held that Hemyari failed to establish as a matter of law that the Sept. 1, 2000, foreclosure sale did not violate the automatic stay. OPINION:Mazzant, J.; Wright, Bridges and Mazzant, J.J.

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