RCB Bank v. Stitt

Kent Stitt (Kent) (defendant) as an individual, Kent D. Stitt as trustee of the 186th St. Land Trust #3240 (trust) (defendant), M. Keith Stitt & Associates (Keith) (plaintiff), and RCB Bank (RCB) (plaintiff) were parties to a mortgage arrangement involving properties in Washington County and Tulsa County, Oklahoma. The trust owned the Washington County property and granted RCB a first mortgage and Keith a second mortgage on that property. Separately, Kent granted RCB a mortgage on his property in Tulsa County. Kent and the trust executed reciprocal guarantees of each other’s obligations, which were secured by their respective mortgages. Following default on the relevant obligations, RCB and Keith both filed petitions to foreclose on the Washington County property. The cases were consolidated, and both lenders moved for summary judgment. The court entered judgment in favor of both RCB and Keith but ruled that RCB’s mortgage on the Washington County property had priority over Keith’s. The court further held that RCB’s entire judgment could be satisfied from the sale proceeds of the Washington County property before any proceeds would be distributed to Keith. Keith appealed, arguing that RCB should be required to marshal assets by first seeking satisfaction from Kent’s Tulsa County property before looking to the Washington County property, where Keith held a junior lien.