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Aflatouni v. Enclave at Grapevine, L.P.

Court of Appeals of Texas, Second District, Fort Worth

May 17, 2018

AMIR FOAD JOHN AFLATOUNI AKA JONATHAN AFLATOUNI APPELLANT
v.
ENCLAVE AT GRAPEVINE, L.P., A TEXAS LIMITED PARTNERSHIP APPELLEE

          FROM THE 342ND DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO. 342-280952-15

          PANEL: SUDDERTH, C.J.; MEIER and GABRIEL, JJ.

          MEMORANDUM OPINION [1]

          BONNIE SUDDERTH CHIEF JUSTICE

         I. Introduction

         The basis of this appeal by Appellant Amir Foad John Aflatouni aka Jonathan Aflatouni is that his property interest was erroneously extinguished through a wrongful foreclosure. Because our sister court has already decided the wrongful foreclosure issue, see Grapevine Diamond, L.P. v. City Bank, No. 05-14-00260-CV, 2015 WL 8013401, at *5-7 (Tex. App.-Dallas Dec. 7, 2015, pets. denied) (mem. op. on reh'g), cert. denied, 137 S.Ct. 250 (2016), we affirm the trial court's summary judgment for Appellee Enclave at Grapevine, L.P., a Texas Limited Partnership.

         II. Background

         Enclave is the twice-removed purchaser of real property that was foreclosed upon in 2011. Aflatouni, the property's original owner, retained a vendor's lien when he sold the property to Grapevine Diamond L.P. (GDLP) in 2007. See id. at *1. Aflatouni's vendor's lien was subordinated to the interest of City Bank, which had loaned GDLP $6, 375, 000 to buy the property.[2] See id. GDLP subsequently borrowed an additional $150, 000 from City Bank, and there were loan modification agreements in 2008 and 2009, the details of which are not before us. See id.

         GDLP defaulted and then filed for bankruptcy in 2010. Id. at *2. In its bankruptcy petition and related documents, GDLP listed the property as an asset valued at $2 million, with a $7 million corresponding "Amount of Secured Claim" (of which $5 million was also listed as unsecured), listed City Bank as a creditor with a deed of trust, and listed Aflatouni as an unsecured creditor with a $3.5 million nonpriority claim. Id.

         In November 2010, the bankruptcy court granted relief to City Bank from the automatic stay in GDLP's case, finding that the balance due City Bank was $6, 732, 506.86, secured by a first lien deed of trust, that the value of the property was insufficient to provide City Bank with adequate protection, and that GDLP had no equity in the collateral. Id. Four days before City Bank issued its December 10, 2010 notice of trustee's sale, Aflatouni filed a bankruptcy petition under chapter 13. See id.

         The foreclosure sale occurred on January 4, 2011, and as noted by the Dallas court, the automatic stay in Aflatouni's chapter 13 bankruptcy case was in effect at the time of the sale. See id. City Bank bought the property at the foreclosure sale for $3 million. See id. at *1-2. Less than two weeks later, Aflatouni's bankruptcy case was dismissed because he had failed to file the required documentation. Id. at *2.

         City Bank sued GDLP's guarantors in Collin County for the deficiency between the foreclosure sale price and GDLP's remaining indebtedness.[3] See id. at *1-2. Third-party claims were brought against GDLP and Aflatouni, and they, in turn, asserted cross-claims against City Bank for wrongful foreclosure, breach of contract, and several causes of action regarding title to the property. Id. at *2, *5. In the meantime, SPK Land Acquisition, LLC purchased the property from City Bank on September 29, 2011, and SPK sold the property to Enclave on October 5, 2012.

         After the Collin County suit was resolved in City Bank's favor on summary judgment in January 2014, Aflatouni and GDLP appealed to the Dallas Court of Appeals. Id. at *1-2 & n.2. In July 2014, the Dallas court abated the appeal because Aflatouni had another pending chapter 11 bankruptcy case. The bankruptcy court subsequently lifted the stay as to the appeal, and the Dallas court reinstated the case in October 2014.

         While the appeal remained pending in Dallas, Aflatouni and GDLP filed suit in Tarrant County against Enclave. In their original petition, Aflatouni and GDLP complained that title to the property via foreclosure was void based on the violation of the automatic stay in Aflatouni's chapter 13 bankruptcy case. They brought claims for trespass to try title and slander of title and sought to quiet title, to remove cloud from title, and to file a corrective document in the public real property records. On December 2, 2015, the trial court entered an agreed abatement order to await the Dallas appeal's resolution.

         In the Dallas appeal, several of Aflatouni and GDLP's issues pertained to challenging the foreclosure sale based on the alleged violation of Aflatouni's bankruptcy stay. Id. at *1. The court affirmed the trial court's summary judgment for City Bank. Id. The supreme court denied petition for review on April 1, 2016, ...


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