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Kourosh Hemyari and Union Valley Ranch, L.P v. Gary Ben Stephens, Stephens Group, L.P., and Stephens Group Ii, L.P

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In this case we are called upon to decide whether a foreclosure sale violated the automatic stay attendant to all bankruptcy proceedings. James Murphy, pursuant to a bankruptcy court order authorizing the sale of property owned by the Stephens Groups on August 1, 2000, foreclosed on a deed of trust and posted the property for sale on September 5, 2000. Some five years later, the Stephens Groups challenged the sale on the grounds that it violated the automatic stay. The court of appeals agreed, concluding that the violation made the foreclosure void. Because we conclude that the order permitted a sale on or after August 1, 2000, we reverse the court of appeals’ judgment without hearing oral argument, pursuant to Texas Rule of Appellate Procedure 59.1.

In the 1990s, Stephens Group, L.P. and Stephens Group II, L.P. (collectively “Stephens Groups”) purchased three tracts of land in Dallas County. Gary Ben Stephens was the general partner, and James Murphy was the limited partner. In 1997, Murphy agreed to sell his interest in the property to the Stephens Groups. The agreement called for the Stephens Groups to provide Murphy with the initial sum of $50,000, then an additional sum of $700,000 within 120 days. The Stephens Groups’ obligation to pay $700,000 was secured by a deed of trust and a deed in lieu of foreclosure. The Stephens Groups satisfied the initial payment required, but failed to make the $700,000 payment.

When Murphy threatened to foreclose on the deed of trust, the Stephens Groups sought bankruptcy protection. The bankruptcy court entered an order in which it established a procedure for the Stephens Groups to fulfill its original obligations. The order provided that the Stephens Groups were to make payment of $50,000 to Murphy by June 12, 2000, which they did. The order further provided that, after the initial payment, a conditional lift of the automatic stay would “allow [Murphy] to post the property for foreclosure in July, 2000, for a sale on August 1, 2000.” Finally, the order provided that if the Stephens Groups did not pay the remaining $650,000 on or before August 1, Murphy could “proceed with the foreclosure sale on August 1, 2000.” Murphy did not schedule the foreclosure sale in July, as allowed by the order, but waited until after the Stephens Groups missed the second payment to schedule the sale for September 5, 2000.

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