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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

DR PEPPER COMPANY, a Delaware 

corporation, 

Plaintiff-Appellee, 

FILED 

United Stat.el Court of Appeals 

Tenth circuit 

JUN 131990 

ROBERT L. HOECKER 

Clerk 

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No. 89-6322 

ADAMS INVESTMENT co., an 

Oklahoma corporation, 

Defendant-Appellant, 

v. 

PEPSICO, INC., a North 

Carolina corporation, 

Third-Party Defendant/ 

Appellee. 

(D.C. No. CIV-88-1343-P) 

(W.D. Oklahoma) 

ORDER AND JUDGMENT* 

Before MOORE, BRORBY, and EBEL, Circuit Judges. 

Adams Investment Co. appeals the district court's order 

granting summary judgment in favor of the Dr Pepper Company and 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 1 
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PepsiCo, Inc. Dr Pepper filed this declaratory judgment action to 

establish the validity of its termination of various license and 

franchise agreements between Dr Pepper and Oklahoma Beverage 

Company (OBC), formerly a wholly-owned subsidiary of Adams. Adams 

filed a counterclaim against Dr Pepper and a third-party complaint 

against PepsiCo. Because we conclude the district court applied 

the appropriate standard for summary judgment and Adams did not 

have standing to bring counterclaims and its third-party 

complaint, we affirm. 

I. 

In 1984, Dr Pepper and Oklahoma Beverage Company executed Dr 

Pepper Bottler's License Agreements (the Agreements or the Dr 

Pepper License) granting bottling and distribution rights to OBC 

in the Bartlesville, Oklahoma, area. Provision 17 of these 

Agreements reserved to Dr Pepper the right to terminate the 

Agreements upon the sale or transfer of more than ten percent of 

OBC's stock and also prohibited the assignment of the Agreements. 1 

1Provision 17 stated in relevant part: 

In granting this Agreement, Granter (Dr Pepper) relies 

to a very large extent upon the personal integrity, 

business acumen, skill and diligence, loyalty and 

cooperativeness of Grantee (OBC) . 

. . . Granter, in addition to all other rights and 

remedies ••• shall have the right, on written notice 

to Grantee, to terminate this franchise on the happening 

of the following event: Any sale, transfer or other 

disposition of more than ten percent (10%) of the stock, 

or other evidence of ownership of Grantee .... 

In no event may this Agreement or any interest therein 

be sold, sub-let, mortgaged, pledged, assigned or 

(Continued to next page.) 

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Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 2 
In late 1987, Adams decided to sell all or part of OBC, its 

wholly-owned subsidiary. In 1988, Adams proposed to sell all of 

OBC's stock and the Dr Pepper License to Great Plains Coca-Cola 

Bottling Company (Great Plains). Dr Pepper reviewed the proposed 

sale and determined it would neither approve the transaction nor 

issue a new license agreement to Great Plains. Thereafter, Adams 

renegotiated its agreement with Great Plains to exclude the Dr 

Pepper License and reduced the purchase price by approximately 

$2.5 million. On July 21, 1988, OBC executed an assignment of its 

rights under the Agreements to Adams. On July 22, 1988, a merger 

agreement was executed whereby Adams sold all of its OBC stock to 

Great Plains, and OBC merged into Great Plains. By letter dated 

July 26, 1988, Dr Pepper notified OBC that the Dr Pepper License 

and franchise held by OBC were terminated. 

In late May, Dr Pepper negotiated with PepsiCo. These 

negotiations led Dr Pepper to grant the majority of the 

Bartlesville franchise to a subsidiary of PepsiCo on July 27, 

1988. In August 1988, Dr Pepper sued Adams and Great Plains 2 

seeking declaration of its rights and duties under the Agreements, 

that Provision 17 reserving the right to terminate the Agreements 

upon sale of the stock was valid and enforceable, and that Dr 

Pepper was entitled to terminate the Agreements upon the merger of 

(Continued from prior page.) 

transferred in any manner whatsoever by Grantee, and in 

no event may this Agreement or any interest therein, be 

transferred by operation of law. 

2Great Plains was initially a 

declaratory action. The court 

prejudice on September 15, 1988. 

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codefendant in Dr Pepper's 

dismissed Great Plains without 

Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 3 
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OBC with Great Plains. In defense, Adams claimed Provision 17 was 

unconscionable and invalid as an unreasonable restraint of trade. 

Adams counterclaimed and alleged Dr Pepper breached the contract 

and an implied covenant of good faith and fair dealing with Adams. 

Adams also filed a third-party complaint against PepsiCo alleging 

PepsiCo was unjustly enriched and therefore owed Adams 

approximately two million dollars. The district court granted 

summary judgment in favor of Dr Pepper and PepsiCo. This appeal 

followed. 

II. 

We review a district court order granting summary judgment de 

novo, applying the same standard applied by the district court, 

that is, whether there is a genuine issue of material fact and 

whether the movant is entitled to judgment as a matter of law. 

Abercrombie v. City of Catoosa, Okla., 896 F.2d 1228, 1230 (10th 

Cir. 1990); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 

242, 247-48 (1986); Fed. R. Civ. P. 56(c). We view the facts and 

inferences to be drawn from the record in the light most favorable 

to the non-moving party. Burnette v. Dow Chemical Co., 849 F.2d 

1269, 1273 (10th Cir. 1988). 

The district court found the essential facts of this case 

were undisputed. Contending the district court misapplied the 

standard for summary judgment, Adams claims there was genuine 

issue of material fact because it alleges a jury could infer that 

an improper or wrongful act occurred. Although we view the facts 

and inferences in the light most favorable to the non-moving 

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Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 4 
party, there are still cases where the evidence is so weak that 

the case does not raise a genuine issue of fact. Burnette, 849 

F.2d at 1273. "The mere existence of a scintilla of evidence in 

support of the plaintiff's position will be insufficient; there 

must be evidence on which the jury could reasonably find for the 

plaintiff." Anderson, 477 U.S. at 252. 

When opposing a summary judgment motion, the non-moving party 

cannot rely on conclusory allegations, rather it must set forth 

specific facts showing that there is a genuine issue for trial. 

Lake Hefner Open Space Alliance v. Dole, 871 F.2d 943, 945 (10th 

Cir. 1989); Instructional Systems Dev. Corp. v. Aetna Cas. & Sur. 

Co., 817 F.2d 639, 644 (10th Cir. 1987). In this case, the 

"inferences" which Adams claims a 

conclusory allegations which are not 

Adams provides no facts to support 

jury could make are merely 

supported by the record. 

any inference that the 

Agreements were terminated in bad faith, nor does Adams explain 

the reasonableness of an inference. Therefore, we conclude the 

district court properly applied the standard for summary judgment, 

and we affirm that court's conclusion that there was no genuine 

issue of material fact in dispute in this case. 

III. 

Concluding that Adams was not the real party in interest, the 

district court held that Adams did not have standing to assert any 

rights under the Agreements between OBC and Dr Pepper. We affirm 

and hold that Adams did not have standing to assert its claims 

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Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 5 
against Dr Pepper for breach of contract and implied duties of 

good faith and fair dealing. 

In this appeal, Adams claims it is the real party in interest 

because on July 21, 1988, OBC executed an assignment to Adams of 

OBC's rights under the Agreements. However, the assignment was 

invalid under the Agreements themselves and under Texas law. 

Generally under Texas law, all contracts are assignable. 

Cloughly v. NBC Bank-Seguin, N.A., 773 S.W.2d 652, 655 (Tex. Ct. 

App. 1989). However a contract can provide that a money claim or 

a right to payment arising under it is non-assignable, and the 

provision must be given full force and effect. Id.; see also 

Island Recreational Dev. Corp. v. Republic of Texas Sav. Ass'n, 

710 S.W.2d 551, 556 (Tex. 1986} (attempted assignment of loan 

commitment letter providing that commitment unassignable without 

bank's consent held invalid}. Similarly, contracts based upon 

personal trust, acquaintance, and confidence between parties are 

considered contracts for personal services and cannot be assigned 

without agreement of the parties. Peniche v. Aeromexico, 580 

S.W.2d 152, 156 (Tex. Civ. App. 1979). 

In this case, the 

prohibiting assignment 

Agreements themselves 

of all interests. 

contain a clause 

Provision 17 of the 

Agreements clearly states that, "In no event may this agreement or 

any interest therein be assigned ••• in any manner 

whatsoever by grantee." We conclude this provision is valid, 

especially considering the franchise agreement was akin to a 

contract for personal services. In Provision 17 containing the 

non-assignment clause, the Agreements expressly provide: 

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Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 6 
In granting this Agreement, Granter relies to a very 

large extent upon the personal integrity, business 

acumen, skill and diligence, loyalty and cooperativeness 

of the Grantee. 

Thus, we affirm the district court's conclusion that in this 

instance Texas law will not force an assignment upon an unwilling 

party such as Dr Pepper. 

Further, we reject Adams' arguments that the assignment was 

valid because OBC assigned only a cause of action to Adams, not an 

obligation for personal service. OBC had no causes of action to 

assign because the assignment happened before the alleged claim 

arose. An assignee obtains only the right, title, and interest of 

the assignor at the time of assignment, and no more. Kirby Forest 

Indus., Inc. v. Dobbs, 743 S.W.2d 348, 354 (Tex. Ct. App. 1987); 

State Fidelity Mortgage Co. v. Varner, 740 S.W.2d 477, 480 (Tex. 

Ct. App. 1987). In this case, the purported assignment to Adams 

of all of OBC's claims against Dr Pepper occurred on July 21, 

1989, five days before Dr Pepper terminated the Agreements. 

Adams' counterclaims for breach of contract and an implied duty of 

good faith and fair dealing arise out of the termination of the 

Agreements, thus OBC had no claim against Dr Pepper which it could 

have assigned to Adams. 

Therefore, we affirm the district court's holding that only 

OBC has standing to bring an action under the Agreements. Because 

we conclude Adams is not the real party in interest under the 

Agreements, we hold that Adams does not have standing to bring its 

claim of a breach of an implied covenant of good faith and fair 

dealing in the distribution Agreements. Even when such a duty is 

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Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 7 
found to exist, it extends only to the contracting parties. 3 See, 

~, United Fire Ins. Co. v. McClelland, 780 P.2d 193, 197 (Nev. 

1989) (no recovery for implied-in-law covenant of good faith and 

fair dealing when no contractual relationship exists); Roach v. 

Atlas Life Ins. Co., 769 P.2d 158, 161 (Okla. 1989) (contractual 

or statutory relationship must exist before duty of good faith and 

fair dealing arises in insurance context); Soto v. Royal Globe 

Ins. Corp., 184 Cal. App. 3d 420, 430, 229 Cal. Rptr. 192, 197 

(Cal. Ct. App. 1986) (one who is not a party to an insurance 

contract may not bring an action for breach of the accompanying 

implied covenant of good faith and fair dealing). 

III. 

The district court rejected Adams' claim that Dr Pepper 

wrongfully interfered with advantageous economic relations when Dr 

Pepper refused to consent to the transfer of the Agreements. 

Applying Oklahoma law, the district court concluded Adams had not 

raised even an inference that Dr Pepper's actions were malicious 

and had no justification. We agree. 

In order to state a cause of action for tortious interference 

with a prospective economic advantage, most courts require a 

claimant to show ''some intentional or improper conduct or means 

exist on the part of the defendant." Overbeck v. Quaker Life Ins. 

3Because we affirm the district court's holding that Adams does 

not have standing to bring claims under the Agreements, we need 

not address whether Texas courts would imply a covenant of good 

faith and fair dealing to a franchiser-franchisee relationship or 

whether the Texas Uniform Commercial Code applies to the 

Agreements. 

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Appellate Case: 89-6322 Document: 010110036188 Date Filed: 06/13/1990 Page: 8 
Co., 757 P.2d 846, 848 (Okla. Ct. App. 1984). In Overbeck, the 

court held that a plaintiff did not state a cause of action 

because there was no evidence the defendant's conduct was "illegal 

or malicious" or that the defendant engaged in any improper means. 

Id. at 849. Likewise, in this case there is no evidence that Dr 

Pepper acted improperly or maliciously when it refused to consent 

to the transfer to Great Plains. Therefore, we conclude summary 

judgment was properly granted on this claim. 4 

IV. 

As a defense to Dr Pepper's declaratory action, Adams 

contended the termination and non-assignment clauses in the 

Agreements were unconscionable. The district court rejected this 

defense, concluding there was an "absence of any evidence 

reflecting unconscionability of these provisions either as written 

or procured." In this appeal, Adams simply repeats its 

contentions, without providing any facts or law to support its 

assertions, that Dr Pepper acted unreasonably. Therefore, we 

affirm the district cou~t's conclusion that these provisions were 

valid and enforceable. 

In addition, Adams claims Dr Pepper waived its right to 

termination when, upon notification of Adams' intention to sell 

the capital stock of OBC, Dr Pepper undertook a market survey to 

determine whether prospective purchasers were qualified to become 

Dr Pepper franchisees. Dr Pepper repeatedly asserted its right to 

4Because we are not reinstating this or any other tort theory, we 

do not need to address Adams' request to proceed on its punitive 

damage claim at trial. 

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terminate the Agreement upon the transfer of OBC stock and 

exercised that right immediately following the merger of OBC into 

Great Plains. Thus, we agree with the district court that Adams' 

contention of waiver fails. 

v. 

Finally, we affirm the district court's rejection of Adams' 

claim that PepsiCo was unjustly enriched when Dr Pepper granted to 

PepsiCo's subsidiary the right to sell and distribute Dr Pepper 

brand products in the Bartlesville area. The district court 

concluded that because OBC breached the contract by selling its 

stock and assigning its interest to Adams, Dr Pepper terminated 

the franchise held by OBC in good faith and in a commercially 

reasonable manner. Thus, the court concluded no discernible 

interest was assigned to Adams and the good will developed by OBC 

was thus forfeited. We agree. 

An essential element of an action based on unjust enrichment 

is that the plaintiff must have conferred a benefit on the 

defendant. Cargill, Inc. v. Stafford, 553 F.2d 1222, 1224 (10th 

Cir. 1977) (applying Colorado law). In this case, Dr Pepper 

granted the license for the Bartlesville area, not Adams. Unlike 

Wattie Wolf Co. v. Superior Contractors, Inc., 417 P.2d 302 (Okla. 

1966), cited by Adams, there is no direct relationship and no 

transfer of benefits from OBC or Adams to PepsiCo. Further, 

PepsiCo acquired no interest owned by Adams since Dr Pepper 

already terminated its license agreements with OBC. Reversion to 

the licensor of benefits previously held by the licensee following 

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proper termination does not give rise to a claim for unjust 

enrichment. Bonanza Int'l, Inc. v. Restaurant Management 

Consultants, Inc., 625 F. Supp. 1431, 1449 (E.D. La. 1986); 

Dunkin' Donuts of Am, Inc. v. Middletown Donut Corp., 495 A.2d 66, 

75 (N.J. 1985). Therefore, we affirm summary judgment for PepsiCo 

on the unjust enrichment claim. 

The order of the district court is AFFIRMED. 

Entered for the Court 

John P. Moore 

Circuit Judge 

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