City of Tulsa v. Bank of Oklahoma, N.A. ( 2011 )

REIF, J.,

dissenting, with whom KAUGER and GURICH, JJ., join.

T 1 This case concerns a claim by the Bank of Oklahoma against the City of Tulsa that arose out of the Bank's financing of Great Plains airline service at the City's municipal airport. The controversy over this claim is whether the City of Tulsa had a sufficient stake in the financing of Great Plains that would justify the City's settlement of the Bank's claim. In my opinion, the undisputed material facts surrounding the financing arrangement disclose that the City had such a stake and the trial court properly granted summary judgment approving the settlement of Bank's claim.

T2 Although not a party to the financing contracts, the City did transfer title to real property at the airport to the Tulsa Industrial Authority for the purpose of securing a loan from the Bank to finance Great Plains service. As a contingency for repayment, the Tulsa Airport Improvement Trust agreed to purchase the collateral real property and Great Plains' loan from the Bank in the event of default by Great Plains. Great Plains eventually defaulted. The Airport Improvement Trust did not fulfill its purchase agreement because the Federal Aviation Administration advised the Trust it could not use "airport revenue" for such a purpose. Litigation then ensued with the Industrial Authority and Bank of Oklahoma aligned against the Airport Improvement Trust. The Bank would later conclude that the City had been "unjustly enriched" by the Bank's financing assistance to Great Plains and the failure of the Airport Improvement Trust to purchase the collateral property and outstanding loan. Regardless of the merit of the unjust enrichment aspect of the Bank's claim, the Bank nonetheless held a mortgage on the property the City provided to the Industrial Authority as collateral for the Bank's financial commitment to the Great Plains financing plan.

T3 The City of Tulsa had a clear and substantial equitable interest in the collateral property to protect, despite having transferred legal title to the Industrial Authority. Preference to redeem the property from the Bank's mortgage, as well as the release of the mortgage itself, constituted valuable consideration for the City's settlement of Bank's claim. Such redemption and release returned the property as an asset for further development of the airport by the City and the Industrial Authority. Bringing complex litigation to an end was further consideration to support the settlement of Bank's claim. The decision to pursue such ends in the public interest is a matter that lies peculiarly within the governing judgment of the elected officials of the City of Tulsa. The remedy for taxpayers who disagree with the exercise of such judgment by their elected officials lies at the ballot box, not in the Courts.

4 I would affirm the summary judgment approving the settlement.