Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-05101/USCOURTS-ca10-89-05101-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

---

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

KEITH L. BELKNAP and CHAMPIONS ) 

ORGANIZATION, INC., an Oklahoma) 

corporation, ) 

Plaintiffs-Appellants, 

UoitedFS J LED 

tares Court of Ap ls 

Tenth Circuit pea 

AUG 15 7990 

ROBERT L. HOECKER 

Clerk 

v. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

No. 89-5101 

(D.C. No. 87-C-795-B) 

(N.D. Oklahoma) 

AMWAY CORPORATION, a Michigan 

corporation, 

Defendant-Appellee. 

ORDER AND JUDGMENT* 

Before MCKAY, MOORE, and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

*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: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 1 
Keith Belknap appeals the dismissal of his claim for wrongful 

termination of an agency relationship and the denial of his motion 

to reconsider the dismissal of his claim for tortious interference 

in a contractual relationship. Amway moves to dismiss the appeal 

for lack of appellate jurisdiction. We deny Amway's motion. We 

also reverse the district court's ruling in Amway's favor on the 

wrongful termination claim but affirm the district court's denial 

of Mr. Belknap's motion to reconsider. 

I. FACTS 

Upon becoming a distributor of Amway products in 1977, Mr. 

Belknap, like all Amway distributors, agreed in his distribution 

contract to conduct his distributorship in compliance with Amway's 

Rules of Conduct. The Rules require a distributor to requalify 

annually for his distributorship by meeting certain performance 

standards and by remaining in compliance with the Rules. Amway 

approved Mr. Belknap's annual applications for renewal through 

1984. The Rules also require a distributor to offer his 

distributorship to other distributors specified in the Rules 

before selling it to anyone else. The specified distributors may 

exercise their right of first refusal throughout the negotiations 

for the sale of a distributorship. No sale of a distributorship, 

moreover, may be consummated without Amway's approval. 

In January 1985, Mr. Belknap agreed to sell his 

distributorship to Rick Setzer for $270,000, $150,000 to be paid 

at the time of the closing and the balance to be paid in 

installments over four years. The agreement between Messrs. 

-2-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 2 
Belknap and Setzer provided that title to the distributorship 

would pass to Mr. Setzer "upon payment of the sum of ... 

($150,000.00) ... and upon execution of this [Belknap-Setzer] 

Agreement." The contract also provided that the distributorship 

would revert to Mr. Belknap if Mr. Setzer defaulted on any of the 

contractual payments and did not correct the default within ninety 

days. Before Mr. Setzer entered this contract, Amway agreed to 

help finance his purchase of Mr. Belknap's distributorship by 

guaranteeing a bank loan to him of $150,000 and by advancing him 

that sum while he awaited the closing of the bank loan. 

After signing the contract for the sale of the 

distributorship, Messrs. Belknap and Setzer got into a dispute 

over the performance of the contract. Mr. Belknap claimed that 

Mr. Setzer had failed to make timely payments on the balance due 

on the purchase price of the distributorship. Mr. Setzer 

countered that he was withholding payment until Mr. Belknap 

furnished him a list of Mr. Belknap's network of Amway 

distributors. 

While Messrs. Belknap and Setzer disputed the performance of 

their agreement, Amway exercised its right under the Rules of 

Conduct and refused to give final approval of the Belknap-Setzer 

agreement although it had financed Mr. Setzer's purchase of the 

distributorship. Instead, Amway entered into an agreement with 

Don Brannon, the distributor who had the right of first refusal 

under Amway's Rules of Conduct, in which Mr. Brannon assumed Mr. 

Setzer's obligations under the Belknap-Setzer agreement, including 

the obligation to repay the $150,000 bank loan to Mr. Setzer which 

-3-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 3 
Amway had guaranteed. In August 1985, Amway informed Mr. Belknap 

that the sale of his distributorship had been approved although it 

did not inform him of the identity of the purchaser. Mr. Belknap 

claims that he did not know that Don Brannon was the purchaser 

until March or April 1987. Mr. Belknap and Amway dispute at what 

point Mr. Setzer knew of the agreement between Amway and Mr. 

Brannon. In October 1985, Mr. Belknap submitted an application to 

renew 

first 

his 

time 

distributorship. 

since 1977 

distributorship from Amway. 

Amway denied the application for the 

when Mr. Belknap purchased the 

This appeal involves only two of the four claims in Mr. 

Belknap's complaint. In the second claim, Mr. Belknap alleged 

that Amway had wrongfully denied his application to renew his 

distributorship. The third claim alleged that by offering the 

distributorship to Mr. Brannon without Mr. Belknap's knowledge or 

consent, Amway had tortiously interfered with the contractual 

relationship between Messrs. Belknap and Setzer. The district 

court granted Amway's motion for summary judgment on the wrongful 

termination claim. It also denied Mr. Belknap's motion to 

reconsider its earlier dismissal of the tortious interference 

claim. Mr. Belknap now appeals these rulings. 

II. APPELLATE JURISDICTION 

Amway moves to dismiss this appeal for lack of appellate 

jurisdiction. It contends that the order from which Mr. Belknap 

appeals was not final when he filed his notice of appeal because 

other issues in the case remained for trial. We conclude that 

-4-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 4 
even if the order from which Mr. Belknap appealed was not final 

when he filed his notice of appeal, we may still assert 

jurisdiction over this case because the notice of appeal ripened 

as of the date the district court entered final judgment on those 

orders. 

On May 23, 1989, the district court granted Amway's motion 

for summary judgment on Mr. Belknap's wrongful termination claim 

and denied Mr. Belknap's second motion for reconsideration of the 

order dismissing his tortious interference claim. Mr. Belknap and 

Amway then entered a stipulation that the only issue remaining for 

trial concerned certain bonus payments which Amway Mutual Fund, 

Inc., an entity separate from Amway, allegedly owed Mr. Belknap. 

On June 15, 1989, Mr. Belknap moved for the trial court to enter 

judgment on the wrongful termination and tortious interference 

claims pursuant to Fed. R. Civ. P. 54(b). Five days later, he 

filed a notice of appeal from the district court's May 23 order. 

The district court, however, did not grant the motion for 

certification until November 6, 1989. Mr. Belknap did not file a 

second notice of appeal. 

Before our decision in Lewis v. B.F. Goodrich Co., 850 F.2d 

641 (10th Cir. 1988), our cases held that in both consolidated and 

nonconsolidated actions, we would dismiss an interlocutory appeal 

for lack of appellate jurisdiction if the district court did not 

enter judgment pursuant to Rule 54(b) before the appellant filed 

its notice of appeal. See, e.g., A.O. Smith Corp. v. Sims 

Consol., Ltd., 647 F.2d 118 (10th Cir. 1981); Trinity Broadcasting 

Corp. v. Eller, 827 F.2d 673, 674 (10th Cir. 1987), cert. denied, 

-5-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 5 
487 U.S. 1223 (1988). Lewis overruled these cases. 850 F.2d at 

645. It holds that a premature notice of appeal, one filed after 

the announcement of an order but before the entry of that order, 

ripens and saves the appeal if the appellant obtains, prior to a 

date set by this court, belated certification under Rule 54(b) or 

an order explicitly adjudicating all remaining claims. Id. This 

holding is consistent with Fed. R. App. P. 4(a)(2) which states 

that "a notice of appeal filed after the announcement of a 

decision or order but before the entry of the judgment or order 

shall be treated as filed after such entry and on the day 

thereof." 

This case falls squarely within the scope of our holding in 

Lewis. Although Mr. Belknap prematurely filed his notice of 

appeal from the May 23 order, the district court entered final 

judgment before we addressed the merits of his appeal. As a 

result, the notice of appeal ripened and saved the appeal. 

Amway contends, nonetheless, that we should not apply our 

holding in Lewis to this case because Mr. Belknap filed his notice 

of appeal after moving for entry of judgment, indicating that he 

knew at the time he filed the notice that the order from which he 

appealed was not final. Amway asserts that applying Lewis to the 

facts of this case would result in abuse of the appellate process. 

We disagree. 

The dispositive date under Lewis is the one on which the 

district court enters final judgment or an order explicitly 

adjudicating all remaining claims. As long as an appellant files 

a notice of appeal before either of those dates and before any 

-6-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 6 
deadline set by this court, it will ripen and save the appeal. 

The appellant, moreover, gains no advantage by filing a notice of 

appeal after moving for entry of judgment. We are, therefore, 

unconcerned that applying Lewis to the facts of this case will 

result in an abuse of the appellate process. Since Mr. Belknap's 

notice of appeal ripened as of the date the district court entered 

its judgment, we exercise jurisdiction over this appeal and deny 

Amway's motion to dismiss. 

III. WRONGFUL TERMINATION 

We conduct a de novo review of the district court's ruling on 

a motion for summary judgment. Osgood v. State Farm Mut. Auto. 

Ins. Co., 848 F.2d 141, 143 (10th Cir. 1988). In doing so, we 

must review the record in the light most favorable to the 

nonmoving party. R-G Denver, Ltd. v. First City Holdings, 789 

F.2d 1469, 1471 (10th Cir. 1986). The moving party is entitled to 

summary judgment only if it shows beyond a reasonable doubt that 

no genuine issue of material fact exists and that it is entitled 

to judgment as a matter of law. Ewing v. Amoco Oil Co., 823 F.2d 

1432, 1437 (10th Cir. 1987). Since we find that genuine issues of 

material fact remain in dispute, we conclude that the district 

court erred in granting Amway's motion for summary judgment. 

Under Oklahoma law, a principal who terminates an at-will 

agency agreement in bad faith breaches the covenant of good faith 

and fair dealing implied in every contract. Hall v. Farmers Ins. 

Exch., 713 P.2d 1027, 1030 (Okla. 1985). The district court 

concluded that, as a matter of law, Amway's refusal to renew Mr. 

-7-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 7 
Belknap's distributorship could not constitute a wrongful 

termination of an agency relationship. It reasoned that since Mr. 

Belknap had sold his distributorship to Mr. Setzer, he did not, at 

the time of his application for renewal, have a distributorship 

which Amway could wrongfully terminate. The court added that 

since Mr. Brannon's right of first refusal preempted any 

reversionary right that the Belknap-Setzer agreement might have 

created in Mr. Belknap, Mr. Belknap's claim that the 

distributorship reverted to him after Mr. Setzer allegedly 

defaulted is irrelevant. 

Mr. Belknap contends that the district court's reasoning is 

erroneous. He first argues that under the Belknap-Setzer 

agreement, title to the distributorship would not pass to Mr. 

Setzer until he had fully performed the terms of the agreement. 

Since Mr. Setzer defaulted on his obligation, under the terms of 

the agreement, title to the distributorship reverted to Mr. 

Belknap. Amway counters, however, that Mr. Setzer did not 

default, but rather Mr. Belknap rescinded the agreement. It also 

contends that since the agreement provided that title to the 

distributorship passed to Mr. Setzer when he paid Mr. Belknap 

$150,000 upon the signing of the contract, Mr. Belknap has no 

reversionary interest in the distributorship. 

Mr. Belknap also challenges as erroneous the trial court's 

conclusion that Mr. Brannon's right of first refusal preempts Mr. 

Belknap's reversionary interest in the distributorship. He argues 

that since the holder of a right of first refusal cannot compel an 

unwilling owner to sell, Mr. Brannon could not exercise his right 

-8-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 8 
of first refusal once the distributorship reverted to Mr. Belknap 

unless Mr. Belknap offered to sell the distributorship to someone 

else. He adds that while his contract with Amway does require him 

to offer his distributorship to Mr. Brannon before selling it to 

another, it does not authorize Amway to offer the distributorship 

to Mr. Brannon without Mr. Belknap's knowledge or consent. Amway 

contends that it was obligated to enforce Mr. Brannon's right of 

first refusal to protect its distributors from sales of 

distributorships when the sales do not conform to the Rules of 

Conduct. 

Our review of the record in the light most favorable to Mr. 

Belknap indicates that the district court improperly resolved 

issues of fact when it granted summary judgment in Amway's favor. 

The court concluded, for instance, that Mr. Belknap had no 

contractual relationship with Amway when he applied to renew his 

distributorship although the parties dispute whether Mr. Setzer 

defaulted on the Belknap-Setzer agreement, resulting in a 

reversion of the distributorship to Mr. Belknap. The district 

court also determined that Mr. Brannon's right of first refusal 

preempted any reversionary interest in the distributorship 

although the parties dispute whether Amway had the right to offer 

the distributorship to Mr. Brannon after Mr. Belknap had failed to 

1 do so. These factual disputes are material, moreover, because 

Mr. Belknap's claim of wrongful termination is premised on the 

existence of a contract between him and Amway when he filed his 

1

That dispute turns in part on a factual determination whether 

Amway's conduct in financing the Belknap-Setzer agreement estops 

it from enforcing Mr. Brannon's right of first refusal. 

-9-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 9 
application for the renewal of his distributorship. Since genuine 

issues of material fact remain in dispute, we reverse the district 

court's granting summary judgment on Mr. Belknap's claim of 

wrongful termination. 

IV. TORTIOUS INTERFERENCE 

After the district court dismissed Mr. Belknap's claim of 

tortious interference as time barred, Mr. Belknap filed 

consecutive motions for reconsideration of that ruling. In the 

second motion, filed on April 7, 1989, Mr. Belknap contended that 

the trial court should reconsider its dismissal of the tortious 

interference claim because Amway's fraudulent concealment of the 

facts which were the basis of the claim tolled the statute of 

limitations. The district court denied this motion as untimely 

because Mr. Belknap knew of the alleged fraudulent concealment in 

March or April 1987, approximately seven months before filing his 

complaint and two years before filing his second motion to 

reconsider, but had failed to raise the allegation despite ample 

opportunity to do so. 

Under Fed. R. Civ. P. 60(b)(6), a trial court may reconsider 

a final judgment or order for "any ... reason justifying relief 

from the operation of the judgment." The rule requires that the 

motion be filed "within a reasonable time." We review the 

district court's denial of relief under Rule 60(b)(6) for a 

manifest abuse of discretion. Security Mut. Casualty Co. v. 

Century Casualty Co., 621 F.2d 1062, 1068 (10th Cir. 1980). Our 

review, moreover, is limited to the order denying relief and does 

-10-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 10 
• 

not extend to the underlying judgment. V.T.A., Inc. v. Airco, 

Inc., 597 F.2d 220, 224 (10th Cir. 1979). 

The district court dismissed Mr. Belknap's motion for 

reconsideration because Mr. Belknap did not file it within a 

reasonable time. After reviewing the record, we agree with the 

district court that Mr. Belknap did not file his motion for 

reconsideration within a reasonable time as Rule 60(b) requires. 

We, therefore, affirm the district court's denial of Mr. Belknap's 

motion to reconsider. 

V. CONCLUSION 

We REVERSE the district court's granting summary judgment in 

Amway's favor but AFFIRM its denial of Mr. Belknap's motion for 

reconsideration. 

Entered for the Court 

John P. Moore 

Circuit Judge 

-11-

Appellate Case: 89-5101 Document: 010110040883 Date Filed: 08/15/1990 Page: 11