                                                                    FILED
                                                         United States Court of Appeals
                                                                 Tenth Circuit

                                                               August 3, 2012
                                     PUBLISH                Elisabeth A. Shumaker
                                                                Clerk of Court
                  UNITED STATES COURT OF APPEALS

                               TENTH CIRCUIT



 EUREKA WATER COMPANY, an
 Oklahoma corporation,

             Plaintiff - Appellee
             /Cross-Appellant,
       v.                                       No. 11-6104 and 11-6116
 NESTLE WATERS NORTH
 AMERICA, INC., a foreign
 corporation,

             Defendant - Appellant
             /Cross-Appellee.


        APPEAL FROM THE UNITED STATES DISTRICT COURT
           FOR THE WESTERN DISTRICT OF OKLAHOMA
                   (D.C. NO. 5:07-CV-00988-M)


Adam H. Charnes, Kilpatrick Townsend & Stockton LLP, Winston-Salem, North
Carolina, (Richard D. Dietz, Kilpatrick Townsend & Stockton LLP, and Mark S.
Grossman, Jessica L. Perry, Crowe & Dunlevy, Oklahoma City, Oklahoma, with
him on the briefs), for Defendant - Appellant/Cross-Appellee.

Ronald T. Shinn Jr. (Robert H. Gilliland, Jr. and Joshua W. Solberg, with him on
the briefs), McAfee & Taft A Professional Corporation, Oklahoma City,
Oklahoma, for Plaintiff - Appellee/Cross-Appellant.


Before LUCERO, HARTZ, and O’BRIEN, Circuit Judges.


HARTZ, Circuit Judge.
      Eureka Water Company contends that a 1975 agreement grants it the

exclusive license in 60 Oklahoma counties to sell spring water and other products

using the Ozarka trademark. It sued Nestle Waters North America, Inc., the

current owner of the Ozarka trademark, to obtain a declaratory judgment of that

right and to obtain monetary relief under several theories, including breach of

contract, tortious interference with business relations, unjust enrichment, and

promissory estoppel. A jury found for Eureka on its contract and tortious-

interference claims, and the district court entered a judgment declaring that the

1975 agreement granted Eureka the exclusive right that it claimed in the Ozarka

mark. In a postverdict ruling, the district court denied as duplicative Eureka’s

equitable claims based on unjust enrichment and promissory estoppel. After the

district court denied Nestle’s postverdict motion for judgment as a matter of law

(JMOL), Nestle appealed.

      Nestle argues on appeal that it is entitled to JMOL on the contract claim

because the unambiguous terms of the 1975 agreement do not cover Ozarka spring

water and that it is entitled to JMOL on the tortious-interference claim because its

conduct was privileged and justified as a matter of law. In the alternative it seeks

a new trial because the district court admitted a prejudicial privileged document,

and a new trial or judgment in its favor because the district court erred in

admitting testimony of Eureka’s damages expert. On cross-appeal Eureka argues


                                         -2-
that the district court erred in denying relief on its unjust-enrichment and

promissory-estoppel claims. We have jurisdiction under 28 U.S.C. § 1291.

      We agree with most of Nestle’s principal arguments. First, we reverse the

district court’s denial of Nestle’s motion for JMOL on the contract claim because

the 1975 agreement unambiguously does not cover spring water and under

Oklahoma contract law (which applies because the agreement does not come

under the Uniform Commercial Code) extrinsic evidence on the contract’s

meaning was inadmissible. Our construction of the contract also requires us to

vacate the district court’s declaratory judgment. Second, we reverse the denial of

JMOL on the tortious-interference claim because Eureka failed to show that

Nestle’s decision to charge Eureka what it charged other vendors for bottled water

was not privileged or justified. Third, we affirm the denial of Eureka’s unjust-

enrichment claim because the claim is based on the false premise that Eureka’s

license to use the Ozarka trademark covers spring water. We reverse, however,

the denial of Eureka’s promissory-estoppel claim, remanding that claim for

further consideration by the district court. Despite the remand, we need not

address Nestle’s evidentiary arguments because the document for which Nestle

claims a privilege and the testimony of Eureka’s expert witness do not appear to

be relevant to any disputed issue regarding Eureka’s promissory-estoppel claim.




                                         -3-
I.     BACKGROUND

       A.       Ozarka Spring Water and Ozarka Drinking Water

       As early as 1907 Ozarka Water Company sold water that it obtained from a

spring in Arkansas. It entered into franchise agreements to allow regional dealers

to bottle Ozarka spring water and sell it in specified territories. Eureka was such

a regional franchisee. Arrowhead Puritas Waters, Inc. purchased Ozarka in the

late 1960s.

       In 1971 Dave Raupe purchased Eureka, which sold only spring water.

Shortly thereafter, Arrowhead concluded that Ozarka’s supply of spring water was

inadequate for further expansion and informed its franchisees that it was shutting

down its springs. The franchisees could, however, start distributing facsimile

drinking water, which was to be made from purified water by adding mineral

concentrates for taste. Arrowhead ceased bottling spring water under the Ozarka

label. Eureka and Arrowhead memorialized this arrangement in a 1972 franchise

agreement, under which Eureka paid royalties on each gallon of drinking water

that it sold.

       A few years later Arrowhead and Eureka renegotiated their relationship.

Their 1975 agreement (the 1975 Agreement) called for a one-time payment of

$9,000 by Eureka in exchange for “a royalty-free, paid-up right and license to use

the said OZARKA mark in connection with the processing, bottling, sale and




                                        -4-
distribution within [Eureka’s territory] of purified water and/or drinking water

made from OZARKA drinking water concentrates.” Aplt. App., Vol. 29 at 9397.

      Arrowhead and Eureka independently began bottling spring water in 1983.

In 1987 Arrowhead was acquired by Perrier Group of America, Inc. Two years

later, Perrier began packaging Ozarka-branded water in single-serve plastic

bottles (PET 1 bottles).

      Nestle purchased Perrier in 1992 and began selling Eureka its PET spring

water at below-market prices for resale to Eureka wholesale customers. (For

convenience, we will now refer to the Perrier/Nestle entity as Nestle, even if the

described events predate Nestle’s purchase of Perrier.) In 1997, however, Eureka

discovered that Nestle had been directly shipping Ozarka PET spring water to

Sam’s Club and Wal-Mart stores within Eureka’s territory. In response to

Eureka’s claim that these sales violated the 1975 Agreement, Nestle agreed to pay

Eureka 50 cents a case on all PET spring-water products and 30 cents a case for

all bulk products (1-gallon and 2.5-gallon packages) that Nestle sold in Eureka’s

territory. The parties refer to the payments as royalties or invasion fees. Nestle

did not pay royalties to any other bottler in the country. From 1997 until October

15, 2007, Eureka received 67 royalty checks totaling about $2.5 million.




      1
          PET is apparently short for polyethylene terephthalate.

                                          -5-
      In late 2003 Nestle unilaterally reduced the royalty rates for both PET and

bulk cases to 25 cents a case. Although Eureka continued to invoice Nestle for

the difference, it was not paid.

      In a May 2007 meeting, William Pearson, Vice President and chief

financial officer of Nestle, told Steve Raupe, Eureka’s CEO, that Nestle was

losing money doing business with Eureka and that something had to change.

Three months later Pearson wrote Raupe a letter stating that as of October 15,

2007, Nestle no longer would pay royalties or offer Eureka a lower price on

Ozarka spring water than what Nestle charged comparable purchasers. This

lawsuit followed.

      B.     District Court Proceedings

      Eureka filed suit against Nestle on September 7, 2007, in the United States

District Court for the Western District of Oklahoma. Jurisdiction was based on

diversity of citizenship. See 28 U.S.C. § 1332. Eureka’s amended complaint

raised nine claims for relief. Relevant to this appeal are the claims for

declaratory judgment, breach of contract, tortious interference with contractual

and business relations, promissory estoppel, and unjust enrichment. All these

claims were brought to trial.

      Eureka’s theory at trial on the contract claim was that the 1975 Agreement

covered all Ozarka products, not just what the contract referred to as purified

water and drinking water, and that Nestle had breached the Agreement by selling

                                         -6-
Ozarka spring water to businesses within Eureka’s exclusive territory. Eureka

presented evidence that both Eureka and Arrowhead had intended the 1975

Agreement to cover all Ozarka products. Some evidence suggested that the 1975

Agreement was to be what Eureka terms a “Coke deal,” similar to those entered

into by Coca-Cola, which purportedly permit franchisees to bottle and distribute

future Coca-Cola products not mentioned in the franchise agreement. Other

evidence indicated that Nestle had believed that the 1975 Agreement covered all

Ozarka products.

      On its tortious-interference claim, Eureka argued to the jury that Nestle had

wrongfully interfered with Eureka’s relationships with wholesale customers by

raising the price charged Eureka on spring water so high that Eureka could no

longer profitably resell to those customers.

      The jury awarded Eureka $9.2 million on the contract claim and $5 million

on the tortious-interference claim. After the jury returned its verdict, the district

court entered a declaratory judgment that the 1975 Agreement applies to all

Ozarka products, including Ozarka spring water. It dismissed Eureka’s unjust-

enrichment and promissory-estoppel claims, finding that the verdict already

included the allowable damages on those claims.

II.   DISCUSSION

      On appeal Nestle argues that it is entitled to (1) JMOL on the contract

claim because the unambiguous terms of the license agreement do not cover

                                          -7-
Ozarka spring water; (2) JMOL on the tortious-interference claim because its

conduct was privileged and justified as a matter of law; (3) judgment in its favor

or a new trial because Eureka’s only evidence of damages was improperly

admitted testimony of Eureka’s damages expert; and (4) in the alternative, a new

trial because the district court admitted a highly prejudicial privileged document.

Eureka argues on cross-appeal that the district court erred in denying relief on its

unjust-enrichment and promissory-estoppel claims. We begin with Nestle’s first

two issues.

      A.      Contract Claim

      We review de novo the district court’s denial of a motion for JMOL. See

Wagner v. Live Nation Motor Sports, Inc., 586 F.3d 1237, 1243 (10th Cir. 2009).

“In a diversity case such as this one, the substantive law of the forum state

governs the analysis of the underlying claims . . . .” Id. at 1244 (internal

quotation marks omitted). We will reverse the district court’s denial of Nestle’s

motion for JMOL if “[d]rawing all reasonable inferences in favor of the

nonmoving party, . . . the evidence points but one way and is susceptible to no

reasonable inferences supporting the party opposing the motion.” Id. (internal

quotation marks omitted).

      Eureka prevailed on its claim that the 1975 Agreement granted it the

exclusive right within its territory to use the Ozarka mark in connection with all

Ozarka products, including Ozarka spring water. To convince the jury of its

                                         -8-
interpretation of the contract, it presented extrinsic evidence regarding the

parties’ course of dealing and Nestle’s understanding of the Agreement. The

district court ruled the contract facially unambiguous but admitted this extrinsic

evidence after deciding that the 1975 Agreement was a contract for the sale of

goods and therefore subject to Okla. Stat. tit. 12A, § 2-202 (part of Oklahoma’s

version of the Uniform Commercial Code (UCC)), which, it ruled, permits such

evidence even when the contract appears unambiguous on its face. Nestle argues

(1) that its agreement with Eureka was not a contract for the sale of goods and

was therefore governed by Oklahoma common law rather than the UCC; (2) that

under Oklahoma common law, extrinsic evidence is not admissible to create an

ambiguity; and (3) that the 1975 Agreement unambiguously covers only purified

water and drinking water, not spring water. We agree.

             1.     Applicability of UCC

      In our view the UCC does not govern the 1975 Agreement. Article 2 of the

Oklahoma UCC governs “transactions in goods.” Okla. Stat. tit. 12A, § 2-102.

“‘Goods’ means all things (including specially manufactured goods) which are

movable at the time of identification to the contract for sale . . . .” Okla. Stat.

tit. 12A, § 2-105(1). This circuit has held that when a contract involves the sale

of both goods and non-goods, an Oklahoma court would apply the “predominant

factor” test to determine whether the UCC governs. See Specialty Beverages,

L.L.C. v. Pabst Brewing Co., 537 F.3d 1165, 1174 (10th Cir. 2008). To explain

                                          -9-
why the Agreement is not under the UCC, we first summarize the Agreement,

which consists of the recitals and seven numbered sections.

       The recitals name Arrowhead (Nestle’s predecessor) as “SUPPLIER” and

Eureka as “DISTRIBUTOR” and summarize the parties’ 1972 franchise

agreement, which licensed Eureka to use the Ozarka trademark in return for

paying royalties on each gallon of purified water and drinking water sold. Next

the recitals state:

       The parties now believe that it will be to their mutual advantage to
       terminate the continuing obligation of DISTRIBUTOR under said
       Franchise Agreement to pay said royalties in consideration of a lump
       sum payment for a paid-up license; and to discontinue all obligations
       of SUPPLIER under said Franchise Agreement except for the
       obligation to furnish OZARKA drinking water concentrates at
       SUPPLIER’s cost, the continued exercise of control over the quality
       of the drinking water sold by distributor under the OZARKA mark,
       and the maintenance of OZARKA registrations in the United States
       Patent Office for drinking water and for refrigerated and evaporative
       coolers for drinking water.

Aplt. App., Vol. 29 at 9396–97. After stating that Eureka has paid Nestle $9,000,

the Agreement sets forth the parties’ rights and obligations.

       Section 1 (“LICENSE TO DISTRIBUTE, BOTTLE, ADVERTISE, AND

SELL OZARKA PRODUCTS”) grants Eureka:

       a royalty-free, paid-up right and license to use the said OZARKA
       mark in connection with the processing, bottling, sale and
       distribution within [Eureka’s territory] of purified water and/or
       drinking water made from OZARKA drinking water concentrates and
       in connection with coolers and dispensers therefor, subject to the
       terms and conditions hereinafter set forth.


                                        -10-
Id. at 9397 (emphasis added). The section requires that “[a]ll OZARKA [purified

and] drinking water bottled or sold by DISTRIBUTOR” be labeled and produced

in accordance with specified standards, id. at 9398, and gives Nestle the right to

inspect Eureka’s production facilities and to terminate the agreement if Eureka

fails to correct any deficiencies in its production process. In addition, the section

prohibits Nestle from granting any other party within Eureka’s territory “a license

to process, bottle or sell OZARKA drinking water.” Id. at 9401–02.

      Section 2 (“THE SUPPLY OF OZARKA DRINKING WATER

CONCENTRATES TO DISTRIBUTOR”) requires that Nestle “furnish to

DISTRIBUTOR OZARKA drinking water concentrates in such quantities as may

be required by DISTRIBUTOR for production of OZARKA drinking water,

charging DISTRIBUTOR therefor at its own cost plus freight.” Id. at 9402. It

further provides, however, that “DISTRIBUTOR may obtain OZARKA drinking

water concentrates from a party other than SUPPLIER.” Id. Once Eureka

identifies the third-party supplier and Nestle is satisfied that the third party can

maintain quality standards, Nestle will provide the formulation for the

concentrates to the third party. (Nestle stopped providing the concentrates to

Eureka by 1987, and perhaps a number of years before that.)

      Under Section 3 (“TERM AND TERMINATION”) the 1975 Agreement

“shall continue in full force and effect so long as DISTRIBUTOR shall continue

the use of the OZARKA mark as licensed hereunder.” Id. Section 4

                                          -11-
(“INFRINGEMENT BY THIRD PARTY”) requires each party “to notify the other

of any infringements of the trademark OZARKA within [Eureka’s] Territory.” Id.

at 9403 (internal quotation marks omitted). Section 5 (“NOTICES”) states that

all mailings to Nestle are considered delivered when sent by registered mail to the

specified address. Id. And Section 6 (“ASSIGNMENT”) prohibits Eureka from

assigning its rights under the Agreement to anyone without Nestle’s written

consent, unless it is selling its entire business. Id. at 9404. Finally, under

Section 7 (“PRODUCT LIABILITY”) Eureka bears sole liability for any third-

party product-liability claims based on injury from the OZARKA products or their

containers. Id.

       Nestle argues that the 1975 Agreement is not a transaction in goods because

it is a license for a trademark, which it claims is not a good under the UCC. We

agree with Nestle that the Agreement includes a trademark license. Section 1

grants Eureka “a royalty-free, paid-up right and license to use the . . . OZARKA

mark in connection with the processing, bottling, sale and distribution . . . of

purified water and/or drinking water.” Id. at 9397. We also agree with Nestle

that a trademark license is not a “good” as that term is used in the UCC.

Intellectual property is not a movable thing, see Okla. Stat. tit. 12A, § 2-105

(“‘Goods’ means all things . . . which are movable at the time of identification to

the contract for sale . . . .”); rather, it is a type of intangible property, see Penguin

Group (USA) Inc. v. Am. Buddha, 609 F.3d 30, 36 n.4 (2d Cir. 2010) (“a

                                           -12-
copyright [is] . . . an intangible thing”); 1 McCarthy on Trademarks and Unfair

Competition § 2:14 (4th ed. 2012) (“[I]n discussing ‘ownership’ of a trademark,

we must recognize that we are dealing with intangible, intellectual property.”).

Although one can express the content of intellectual property in a movable

medium (such as a trademark registration form), the intellectual property remains

intangible. See United States v. Brown, 925 F.2d 1301, 1307 (10th Cir. 1991)

(“Purely intellectual property . . . can be represented physically, such as through

writing on a page, but the underlying, intellectual property itself, remains

intangible.”). Therefore, the grant of a trademark license is not a transaction in

goods under the UCC. See Lamle v. Mattel, Inc., 394 F.3d 1355, 1359 n.2 (Fed.

Cir. 2005) (“[A] license for intellectual property . . . is not a sale of goods.”);

Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 159, 161, 170 (3d Cir. 2001)

(three-year exclusive license to use a trademark); Grappo v. Alitalia Linee Aeree

Italiane, S.p.A., 56 F.3d 427, 432 (2d Cir. 1995) (nonexclusive license for

copyrighted material); JRT, Inc. v. TCBY Sys., Inc., 52 F.3d 734, 739 (8th Cir.

1995) (contract for services and use of a trademark).

      Admittedly, as Eureka points out, the 1975 Agreement also contemplates

the sale of goods. Section 2 of the Agreement states that Nestle “shall furnish to

[Eureka] OZARKA drinking water concentrates in such quantities as may be

required by [Eureka] for production of OZARKA drinking water.” Aplt. App.,

Vol. 29 at 9402. Drinking water concentrates are goods. The question, then, is

                                          -13-
whether the license or the sale of goods is the predominant factor in the contract.

See Specialty Beverages, 537 F.3d at 1174.

      Here, there is little doubt that the license—not the right to purchase

drinking-water concentrates—is what motivated the transaction. Eureka’s right to

purchase drinking-water concentrates was a matter of financial indifference to

Nestle. The Agreement required Nestle to sell Eureka the concentrates at Nestle’s

cost plus freight. And from Eureka’s point of view, although the concentrates

enabled it to sell Ozarka drinking water, it could not engage in those sales without

the license granted by the Agreement. See Grappo, 56 F.3d at 432 (training

manuals would have been useless absent a copyright license to use them).

Moreover, the Agreement could be fully consummated without any sales of

concentrates from Nestle to Eureka; if Eureka found a suitable supplier, Nestle

would provide the supplier with the intellectual property (the formulation for the

concentrates) necessary to produce the concentrates for Eureka.

      Eureka relies on Pepsi-Cola Bottling Co. of Pittsburgh, Inc. v. PepsiCo,

Inc., 431 F.3d 1241 (10th Cir. 2005), where we held that New York’s version of

the UCC governed a contract granting a bottling company an exclusive territory to

bottle and distribute Pepsi-Cola. See id. at 1248, 1255–56 n.7. But Pepsi-Cola

Bottling is distinguishable. The contract in that case required the bottling

company to purchase all its Pepsi-Cola concentrate from PepsiCo, see id. at 1248

(“[T]he Company will sell to the Bottler, and the Bottler will purchase, at the

                                        -14-
Company’s then price or prices . . . at the time of each sale, the Bottler’s

requirements of Pepsi-Cola concentrate or syrup for the bottling of Pepsi-Cola

hereunder.” (internal quotation marks omitted)), and PepsiCo was not required to

sell the syrup at cost. Presumably, PepsiCo made its money by selling the syrup.

Although the bottler did not purchase the concentrate directly from PepsiCo, it

did so indirectly, as a member of a 27-bottler cooperative. See id. at 1248 n.1.

The financial core of the contract was the purchase and sale of syrup—a good.

      To be sure, we observed in Pepsi-Cola Bottling that “an overwhelming

majority of . . . jurisdictions have held that distributorship contracts are sales

contracts and thus governed by the UCC.” Id. at 1256 n.7; see also Specialty

Beverages, 537 F.3d at 1174–75 (Oklahoma Supreme Court would, in accordance

with the majority rule, apply the UCC to a distribution agreement because the sale

of goods is the predominant factor). And we recognize that the 1975 Agreement

refers to the parties as “Supplier” and “Distributor.” But it is the substance of

the Agreement that controls, and the substance is not a distribution contract. “In

the world of goods, a distribution contract is a commitment by a manufacturer to

sell products to a distributor with the expectation that the distributor will resell

them to others in the stream of commerce.” Raymond T. Nimmer, Through the

Looking Glass: What Courts and UCITA Say About the Scope of Contract Law in

the Information Age, 38 Duq. L. Rev. 255, 294–95 (2000). Under the 1975

Agreement, unlike a distribution agreement, the sale of goods from “Supplier” to

                                          -15-
“Distributor” is only an incidental, and perhaps nonexistent (Nestle quit supplying

the concentrates no later than 1987), component of the contractual relationship.

         Accordingly, we hold that the UCC does not govern the 1975 Agreement;

rather, Oklahoma common law governs.

               2.    Admissibility of Extrinsic Evidence Under Oklahoma
                     Common Law

         Eureka argues that under Oklahoma common law the circumstances

surrounding execution of a contract are admissible to establish intent. But the

most recent Oklahoma case authority that it cites is from 1980. Whatever the law

may have been then, that is not Oklahoma law now. Under current Oklahoma

common law, extrinsic evidence is not admissible to create an ambiguity in a

contract that is unambiguous on its face. In Mercury Investment Co. v. F.W.

Woolworth Company, 706 P.2d 523, 529 (Okla. 1985), the state supreme court

wrote:

         [T]he practical construction of an agreement, as evidenced by the
         acts and conduct of the parties, is available only in the event of an
         ambiguity. But where a contract is complete in itself and, as viewed
         in its entirety, is unambiguous, its language is the only legitimate
         evidence of what the parties intended. The intention of the parties
         cannot be determined from the surrounding circumstances, but must
         be gathered from a four-corners’ examination of the contractual
         instrument in question.

(emphasis omitted). See Bank of Oklahoma, N.A. v. Red Arrow Marina Sales &

Serv., Inc., 224 P.3d 685, 699 (Okla. 2009) (“Where a contract is complete in

itself and, as viewed in its entirety, contains clear and explicit language leaving it

                                          -16-
free of ambiguity, its language is the only legitimate evidence of what the parties

intended.”); Otis Elevator Co. v. Midland Red Oak Realty, Inc., 483 F.3d 1095,

1102 n.10 (10th Cir. 2007) (“[T]he Oklahoma Supreme Court’s most recent

pronouncement [is that] extrinsic evidence may not be used to interpret an

unambiguous contract in Oklahoma.”).

      We therefore turn to the question whether the 1975 Agreement is

ambiguous regarding whether it covers all Ozarka products, including spring

water, or covers only purified water and drinking water. “Whether a contract is

ambiguous and hence requires extrinsic evidence to clarify the doubt is a question

of law for the courts.” Pitco Prod. Co. v. Chaparral Energy, Inc., 63 P.3d 541,

545 (Okla. 2003); see King v. PA Consulting Group, Inc., 485 F.3d 577, 589 (10th

Cir. 2007) (“Whether a contract is ambiguous is a question of law that we review

de novo.”).

                   i.     Facial Ambiguity

      “A contract is ambiguous if it is reasonably susceptible to at least two

different constructions. To decide whether a contract is ambiguous we look to the

language of the entire agreement. A contract must be considered as a whole so as

to give effect to all its provisions.” Pitco, 63 P.3d at 545–46 (footnotes omitted).

In our view, the 1975 Agreement is not reasonably susceptible to two different

constructions regarding the type of water that it concerns. Its plain language




                                        -17-
grants Eureka a right to use the Ozarka trademark only in connection with

purified water and what it terms drinking water.

      The language granting Eureka a license to use the Ozarka trademark is

unequivocal:

      The Franchise Agreement between the parties of [Arrowhead] and
      [Eureka] is hereby terminated and [Eureka] is granted a royalty-free,
      paid-up right and license to use the said OZARKA mark in
      connection with the processing, bottling, sale and distribution within
      [a specified region] of purified water and/or drinking water made
      from OZARKA drinking water concentrates . . . .

Aplt. App., Vol. 29 at 9397 (emphasis added). No reasonable reading of this

paragraph could extend Eureka’s right to use the Ozarka trademark to spring

water. The provision lists only “purified water” and “drinking water” without

referencing any other products.

      At least three other parts of the Agreement further support this conclusion.

First, § 1 sets forth detailed standards that Eureka must follow in producing and

labeling purified water and drinking water, with no reference to spring water or

any other Ozarka products. The purified-water provision states that “[a]ll purified

water sold under the OZARKA mark . . . shall be designated as purified water

with the method of preparation specified” and that “[t]he mineral content of any

such purified water sold . . . shall not at any time exceed ten (10) parts per

million by weight.” Id. at 9398 (emphasis added). 2 The drinking-water provision

      2
          The requirement reads in full:
                                                                          (continued...)

                                           -18-
states that “[a]ll OZARKA drinking water sold by DISTRIBUTOR shall be

produced from purified water plus OZARKA drinking water concentrates” and

that “[a]ll OZARKA drinking water bottled or sold by DISTRIBUTOR shall be

produced in accordance with the production and control specifications of drinking

water . . . supplied to DISTRIBUTOR by SUPPLIER.” Id. (emphasis added). 3


      2
          (...continued)
      All purified water sold under the OZARKA mark whether produced
      by distillation, deionization or other means of demineralization shall
      be designated as purified water with the method of preparation
      specified, i.e., “Purified Drinking Water Prepared by Distillation,” or
      by such other designation as may be approved by SUPPLIER in
      writing. The mineral content of any such purified water sold under
      the OZARKA mark shall not at any time exceed ten (10) parts per
      million by weight.

Aplt. App., Vol. 29 at 9398.
      3
          The paragraphs setting forth these requirements are as follows:

      All OZARKA drinking water sold by DISTRIBUTOR shall be
      produced from purified water plus OZARKA drinking water
      concentrates. The labeling shall conform substantially to the form of
      label annexed hereto as Exhibit I or as may be modified from time to
      time by SUPPLIER through written notice to DISTRIBUTOR.

Aplt. App., Vol. 29 at 9398.

      All OZARKA drinking water bottled or sold by DISTRIBUTOR shall
      be produced in accordance with the production and control
      specifications of drinking water effective March 7, 1972 supplied to
      DISTRIBUTOR by SUPPLIER, and DISTRIBUTOR shall conform in
      all respects to the quality control provisions respecting concentration,
      sanitation, sampling, and other procedures set forth in said
      production and control specifications.

                                                                        (continued...)

                                         -19-
Later § 1 states that “SUPPLIER . . . shall have access to the purification and

drinking water production facilities of DISTRIBUTOR at all times during normal

operations hours for the purpose of checking . . . the quality of the purified and/or

drinking water produced by DISTRIBUTOR,” id. at 9399 (emphasis added); 4 and

that “[a]ll labels employed by DISTRIBUTOR for use on or in connection with

OZARKA drinking water and/or OZARKA purified water shall first be approved




      3
          (...continued)
Id. at 9398–99.
      4
          The full text of this requirement is:

      SUPPLIER through its qualified representative shall have access to
      the purification and drinking water production facilities of
      DISTRIBUTOR at all times during normal operations hours for the
      purpose of checking the procedures employed by DISTRIBUTOR in
      the operation of such facilities and the quality of the purified and/or
      drinking water produced by DISTRIBUTOR and bottled and sold by
      it under the OZARKA trademark. SUPPLIER shall from time to time
      inspect the OZARKA water production and bottling operations of
      DISTRIBUTOR and take production line samples for tasting and
      laboratory analysis. DISTRIBUTOR will also send production line
      samples to SUPPLIER for quality control testing at least quarterly.
      Such inspections by SUPPLIER shall be in addition to any and all
      supply of written data to DISTRIBUTOR, as may be required under
      the production and control specifications, and in addition to any and
      all inspections and analyses required under United States Public
      Health drinking water regulations, as well as any state regulations of
      the state within which DISTRIBUTOR is operating, and
      DISTRIBUTOR agrees to comply with all such Federal and state
      regulations controlling the standards of drinking water, as well as the
      said production and control specifications of SUPPLIER.

Aplt. App., Vol. 29 at 9399–9400.

                                           -20-
in writing by SUPPLIER for trademark usage,” id. at 9400 (emphasis added). 5

The language of § 1 unequivocally establishes that neither purified water nor

drinking water encompasses spring water.

      Likewise, § 2 of the Agreement makes no mention of spring water. It

provides terms for the supply of materials necessary for producing drinking water,

saying that Nestle “shall furnish DISTRIBUTOR OZARKA drinking water

concentrates . . . for the production of OZARKA drinking water.” Id. at 9402

(emphasis added).

      We also note that the recitals reference only purified water and drinking

water. The summary of the 1972 franchise agreement states that under that

agreement Eureka had “installed facilities for production of OZARKA

‘scientifically prepared’ drinking water produced by adding OZARKA drinking

water concentrates to purified water” and “ha[d] been engaged in the sale of such

OZARKA drinking water and OZARKA purified water in [Eureka’s territory].”


      5
          This requirement states in full:

      All labels employed by DISTRIBUTOR for use on or in connection
      with OZARKA drinking water and/or OZARKA purified water shall
      first be approved in writing by SUPPLIER for trademark usage and
      compliance with state and Federal labeling laws, and all advertising
      and listings and printed matter of DISTRIBUTOR shall also be
      submitted for approval to SUPPLIER prior to publication where the
      mark OZARKA is included in the listing, advertisement, or other
      printed matter.

Aplt. App., Vol. 29 at 9400.

                                             -21-
Id. at 9396 (emphasis added). In short, nothing in the Agreement indicates that it

covers spring water.

      Eureka responds that the Agreement is ambiguous because on several

occasions it uses the terms Ozarka products and Ozarka waters. But “[a] contract

must be considered as a whole so as to give effect to all its provisions without

narrowly concentrating upon some clause or language taken out of context.”

Mercury Inv. Co., 706 P.2d at 529; see also Okla. Stat. tit. 15, § 157 (“The whole

of a contract is to be taken together, so as to give effect to every part, if

reasonably practicable, each clause helping to interpret the others.”). When

viewed in light of the Agreement’s focus on purified water and drinking water,

the references to Ozarka products and waters cannot reasonably be read to expand

the scope of the licensing provision beyond the only two specific products

mentioned. Rather, the unmodified terms products and waters are clearly used

only as shorthand for the products and waters specified elsewhere, just as we have

often referred to the 1975 Agreement as “the Agreement.” For example, Eureka

points to the licensing provision’s heading: “LICENSE TO DISTRIBUTE,

BOTTLE, ADVERTISE, AND SELL OZARKA PRODUCTS.” Aplt. App., Vol.

29 at 9397. But immediately following the heading is the statement that the

license granted is “in connection with the . . . distribution . . . of purified water

and/or drinking water.” Id. The only licensed Ozarka “products” are purified

water and drinking water. The heading cannot reasonably be interpreted as

                                          -22-
expanding the coverage of the provision. Similarly, the sole appearances of the

term Ozarka water(s) in the Agreement are in subsections 1(d) and 1(f), which

allow Nestle to inspect Eureka’s purification and drinking-water production

facilities and which require Eureka’s compliance with production standards that

are applicable only to purified water and drinking water—the only “waters” of

interest.

       Eureka also claims that the Agreement’s reference to trademark registration

number 836,026, which is a registration for Ozarka drinking water, creates an

ambiguity because in 1967, when Ozarka (Arrowhead’s predecessor) registered

the trademark, it sold only Ozarka spring water. 6 Eureka argues that “[i]t is

reasonable to conclude that based on the reference to this trademark, Arrowhead

and Eureka believed that spring water and drinking water are sufficiently alike

that a trademark or license for one necessarily covers the other.” Aplee. Br. at

25. Eureka’s argument fails because it relies on extrinsic evidence—evidence

       6
           The reference appears in the Agreement’s recitals:

       The parties now believe that it will be to their mutual advantage to
       terminate the continuing obligation of DISTRIBUTOR under said
       Franchise Agreement to pay said royalties in consideration of a lump
       sum payment for a paid-up license, and to discontinue all obligations
       of SUPPLIER under said Franchise Agreement except for . . . the
       maintenance of OZARKA registrations in the United States Patent
       Office for drinking water and for refrigerated and evaporative coolers
       for drinking water, Nos. 836,026 and 876,741, issued September 26,
       1967 and March 5, 1969, respectively.

Aplt. App., Vol. 29 at 9396–97.

                                          -23-
that in 1967 Ozarka sold only spring water. But even if we could consider the

evidence, and even if whoever filed the trademark thought that “drinking water”

encompassed spring water, that does not tell us the meaning of “drinking water”

in the 1975 Agreement eight years later. The Agreement specifies that the

drinking water it covers must be produced by adding concentrates to purified

water, and no one has suggested that spring water is so produced.

                   ii.    Latent Ambiguity

      Eureka seeks to escape the Oklahoma rule against the use of extrinsic

evidence to interpret an unambiguous contract by invoking an exception to the

general rule—the exception for latent ambiguities. “A ‘latent ambiguity’ is one

not evident from the face of the instrument alone but becomes apparent when

applying the instrument to the facts as they exist.” Ryan v. Ryan, 78 P.3d 961,

964 (Okla. Civ. App. 2003). “It arises when language is clear and intelligible and

suggests but a single meaning, but some extrinsic fact or some extraneous

evidence creates a necessity for interpretation or a choice between two or more

possible meanings.” Id. at 965; see id. (“Where a writing contains a reference to

an object or thing, such as a pump” but extrinsic evidence shows “that there are

two or more things or objects, such as pumps, to which it might properly apply, a

latent ambiguity arises.” (internal quotation marks omitted)). The canonical

examples of latent ambiguity are contracts (or wills) that describe a thing (or

person) with a proper noun when two such things bear the same proper noun.

                                        -24-
Many commentaries have been written on Raffles v. Wichelhaus, 2 H. & C. 906,

159 Eng. Rep. 375 (Ex. 1864), in which the contract concerned the purchase of a

shipment of cotton to be delivered from Bombay on the ship “Peerless.”

Unfortunately, two ships of that name had departed from Bombay two months

apart.

         The Oklahoma Supreme Court’s decision in Druggists’ Mutual Fire

Insurance Co. of Iowa v. Shaw, 41 P.2d 69 (Okla. 1935) (per curiam), illustrates

the point. A business that occupied two adjacent buildings on lot 10, block 7—a

two-story building and a one-story building—purchased an insurance policy

covering property “contained in the two-story non-combustible roof brick

building situated on lot 10, Block 7.” Id. at 69–70 (internal quotation marks

omitted). A fire destroyed the property in the one-story building, and the insurer

denied coverage. See id. at 70. The business argued that the policy had a latent

ambiguity and that it could therefore introduce extrinsic evidence showing that

the parties intended the contract to cover property in the one-story building. See

id. The court held that the extrinsic evidence was inadmissible because there was

no uncertainty in applying the terms of the contract to the facts as they existed;

the policy covered a two-story building on a specified lot and there was in fact a

single two-story building on that lot. See id. The court said that the situation

would have been different had there been two two-story buildings, or no two-




                                         -25-
story building. See id. But it refused to allow the parties, “under the guise of a

latent ambiguity, [to] contradict the plain terms of the written instrument.” Id.

      Here, Eureka has failed to identify any latent ambiguity in the 1975

Agreement. Perhaps the latent-ambiguity doctrine might allow Eureka to prove

that the parties understood the term purified water or drinking water in the 1975

Agreement to mean something broader than the purified water or drinking water

described in that Agreement, although one could doubt whether such proof would

be possible in light of the precise language of the Agreement defining purified

water and drinking water. In any event, all that is referred to in Eureka’s brief on

appeal to show a latent ambiguity is the following:

      (1) Trademark No. 836,026 suggests that Arrowhead believed that
      drinking water and spring water were functionally interchangeable;
      (2) Nestle aggressively sought to buy from Eureka a right which it
      now claims Eureka did not possess under the 1975 Bottling
      Agreement and that it could regain by merely terminating a
      supplemental agreement with reasonable notice; (3) for nearly two
      decades, Nestle extended special pricing and paid invasion fees to
      Eureka for sales made into its territory, all applicable to Ozarka
      spring water; and (4) for nearly thirty years, Nestle and its
      predecessors-in-interest were aware of and acquiesced to Eureka’s
      continued expansion of Ozarka products in Oklahoma.

Aplee. Br. at 40. We have previously concluded, however, that the trademark

application does not indicate that the term drinking water as defined in the 1975

Agreement encompasses spring water. And items 2, 3, and 4 do not show how the

parties defined the terms purified water or drinking water (as extrinsic evidence

might show which ship named “Peerless” the parties were referring to) but are

                                         -26-
simply evidence of the parties’ general intent in entering into the Agreement.

This evidence was used at trial to prove that the agreement was meant to include

more than the purified water and drinking water specified in the Agreement, not

that the term purified water or drinking water actually encompassed spring water.

Such evidence of general intent, not tied to the specific usage of a particular word

or term, does not establish a latent ambiguity. If it did, the latent-ambiguity

exception would swallow the general rule barring extrinsic evidence.

      Thus, we hold that the 1975 Agreement applies only to purified water and

drinking water. The declaratory judgment and the jury’s verdict to the contrary

(including the damages award) must be reversed. We remand to the district court

for entry of judgment in favor of Nestle on the contract claim.

      B.     Tortious Interference Claim

      From 1990 until 2007 Eureka supplied PET spring water to several

wholesale customers after purchasing that water from Nestle at a below-market

price. Eureka contends that in October 2007 Nestle began tortiously interfering

with its customer relationships in two ways: (1) by ceasing to offer the

discounted price, which made it impossible for Eureka to sell to wholesalers at a

profit, and (2) by selling directly to Eureka’s customers.

      The cause of action for tortious interference with a contractual or business

relationship has four elements that must be proved by the plaintiff: “(1) the

interference was with an existing contractual or business right; (2) such

                                         -27-
interference was malicious and wrongful; (3) the interference was neither

justified, privileged nor excusable; and (4) the interference proximately caused

damage.” Wilspec Techs., Inc. v. DunAn Holding Grp., Co., 204 P.3d 69, 74

(Okla. 2009). Nestle argues that it is entitled to JMOL on Eureka’s tort claim

because Eureka failed to satisfy the first, third, and fourth elements. Because we

agree that Eureka failed to carry its burden on the third element, we need not

address the others.

      It is undisputed that the increase in price charged by Nestle to Eureka for

PET spring water brought the price in line with what Nestle charged other

wholesale customers. Nestle’s opening brief on appeal contends that the price

increase was justified and privileged. In response, Eureka makes two arguments.

Neither is persuasive.

      First, Eureka asserts that “[e]ven assuming arguendo that Nestle’s decision

to raise Eureka’s prices was justified, its subsequent sales into Eureka’s exclusive

territory surely were not. Nestle had no legitimate interest in having relationships

with Ozarka customers in Eureka’s territory.” Aplee. Br. at 46. But we have

already held that Eureka did not have any exclusive territory with respect to

spring water. Moreover, the only evidence relating to sales of PET spring water

by Nestle to former Eureka wholesale customers is that the customers contacted

Nestle after Eureka quit selling them the PET spring water and advised them to

call Nestle to obtain the product.

                                        -28-
      Eureka’s second argument is two-sentences long: “Nestle justified its price

increase on false pretenses, telling Eureka it was losing money on Ozarka sales in

Eureka’s territory. Nestle actually profited there.” Id. It is not uncommon,

however, for a business to speak in terms of “losing” money when it is missing

out on an opportunity to make more money. And as Eureka itself states in its

opening brief, “[B]y selling at prices necessary to provide [an] incentive to

Eureka, Nestle was sacrificing margins that it realized in other markets where it

operated without Eureka.” Id. at 11 n.8. In any event, any “false pretense” was

not wrongful to Eureka. The decision to raise the prices to Eureka was not

negotiated but was a unilateral act by Nestle. Eureka does not make, and could

not make, any claim that it relied on the alleged false pretense. In short, Eureka

has failed to show why Nestle did not have the same right as any other seller of

goods to treat all similarly situated customers the same, absent a contractual

obligation to the contrary. We therefore reverse the judgment on the tortious-

interference claim and remand to the district court to grant JMOL to Nestle on

this claim.

      C.      Equitable Claims

      After the jury returned its verdict in favor of Eureka, the district court

dismissed Eureka’s equitable claims of unjust enrichment and promissory

estoppel on the ground that the jury’s verdict had afforded Eureka full relief.

Eureka cross-appeals that decision. Because we reverse the jury verdict on the

                                        -29-
contract and tortious-interference claims, the basis for the district court’s denial is

no longer sound. We therefore consider whether we should remand these claims

for further consideration by the district court.

             1.     Unjust Enrichment

      Eureka claims that Nestle was unjustly enriched by not paying Eureka the

royalty owed on Nestle’s sales of PET spring water to Sam’s Clubs within

Eureka’s territory. We affirm the district court’s dismissal of the claim because

the claim is based on a premise we have just held to be false. Eureka’s opening

brief states its theory to support the claim: “Because Eureka has a license for all

Ozarka products, Nestle has indisputably been unjustly enriched by all

unauthorized sales occurring prior to October 15, 2007.” Id. at 71. But Eureka

had no such license for spring water, so the claim must fail.

      Eureka’s reply brief on cross-appeal raises an additional theory. It suggests

that the unjust-enrichment claim is not based on the 1975 Agreement but on a

later “invasion fee agreement,” Aplee. Reply Br. at 9, an alleged promise by

Nestle in 1997 to pay a royalty on its sales to customers in Eureka’s territory

(purportedly because such sales invaded Eureka’s rights under the 1975

Agreement). Eureka claims that Nestle failed to comply fully with its promise.

But this contention is not stated sufficiently clearly in Eureka’s opening brief on

cross-appeal to preserve the issue. See Becker v. Kroll, 494 F.3d 904, 913 n.6

(10th Cir. 2007) (“An issue or argument insufficiently raised in the opening brief

                                          -30-
is deemed waived.”). Although the brief refers to the 1997 promise, it relies on

Eureka’s license, not the invasion-fee agreement, to establish the unjust-

enrichment claim, stating that the money saved by Nestle by not paying the

agreed-upon royalties “came at the expense of Eureka’s exclusive rights.” Aplee.

Br. at 72.

      Further, Eureka does not point to where this theory was raised below.

Eureka’s statement of legal issues in the final pretrial order says almost nothing

about the unjust-enrichment claim, merely reciting a two-sentence statement of

the general principle, and certainly does not raise this specific theory. Eureka’s

proposed jury instructions on the unjust-enrichment claim, which were ultimately

not given to the jury, clearly based the claim on Eureka’s license rights, stating as

the first element of the claim: “[Eureka] owns the right to the Ozarka mark.”

Aplt. App., Vol. 3 at 834. Likewise, at the hearing on Nestle’s Rule 50 motion

(held after the close of evidence but before closing arguments), it said that its

unjust-enrichment claim was “based on the license agreement.” Id., Vol. 27 at

8979. And Eureka’s postjudgment brief on its equitable claims also relies on the

license agreement. Although it mentions the alleged 1997 promise by Nestle, the

reference is only to justify an award based on promissory estoppel. As we have

repeatedly declared, we will not consider theories not advanced in the lower

court. See ClearOne Commc’ns, Inc. v. Biamp Sys., 653 F.3d 1163, 1182 (10th

Cir. 2011) (“This court will generally not consider an argument that was not

                                         -31-
raised in the district court.”). Ordinarily we rely on the opposing party to raise

failure to preserve an argument, see Westefer v. Snyder, 422 F.3d 570, 584 n.20

(7th Cir. 2005) (“a defense of waiver may itself be waived if not raised”); but

Nestle had no opportunity to brief the matter after Eureka’s reply brief.

             2.     Promissory Estoppel

      Eureka’s promissory-estoppel claim is based on Nestle’s alleged failure to

fulfill two promises. First, Eureka claims that in 1997 Nestle agreed to

compensate Eureka for each case of Ozarka product that Nestle shipped directly

into Eureka’s territory—50 cents for PET products and 30 cents for bulk products.

Over the next 10 years Nestle sent Eureka 67 checks totaling about $2.5 million.

But Eureka claims that Nestle still owes it $1,056,474 because in late 2003 Nestle

unilaterally reduced the royalty rates for both PET and bulk cases to 25 cents a

case. Nestle never paid as originally promised, even though Eureka sent invoices

for the difference. Second, in the early 1990s Eureka began invoicing Nestle for

pickup allowances, billbacks, promotions, and trade discounts, and up until 2007

Nestle reimbursed Eureka for those fees. But Eureka claims that Nestle has

refused to reimburse it for 29 invoices totaling approximately $298,000.

      A claim for promissory estoppel has four elements: “(1) a clear and

unambiguous promise, (2) foreseeability by the promisor that the promisee would

rely upon it, (3) reasonable reliance upon the promise to the promisee’s detriment

and (4) hardship or unfairness can be avoided only by the promise’s

                                         -32-
enforcement.” Garst v. Univ. of Okla., 38 P.3d 927, 931 (Okla. Civ. App. 2001)

(internal quotation marks omitted). Nestle does not contend that Eureka failed to

establish any of the four elements listed above. Instead, it argues that Eureka

cannot recover under promissory estoppel because Eureka’s evidence failed to

satisfy a fifth element—that Nestle made false representations or concealed facts.

But, as Eureka points out, Nestle failed to raise its “misrepresentation” argument

below. Therefore, we will not consider it, see ClearOne, 653 F.3d at 1182, and

we remand for further proceedings on the claim.

      D.     Evidentiary Issues

      Nestle also raises two evidentiary issues on appeal. It argues that the

district court erroneously admitted at trial a privileged document and Eureka’s

expert testimony on damages. The arguments are not frivolous, but we need not

address them. The only claim remaining on remand is Eureka’s promissory-

estoppel claim, and the challenged evidence is irrelevant to that claim. The

expert testimony concerned only the value of Eureka’s business, not the value of

the unpaid royalties and other fees sought under the promissory-estoppel claim

(and which can be computed without the aid of an expert). As for the allegedly

privileged document, Eureka introduced it at trial as extrinsic evidence of the

meaning of the 1975 Agreement. Although it may marginally support one

element of Eureka’s promissory-estoppel claim—that Nestle had promised Eureka

to make royalty and other payments—Eureka did not rely on the document in its

                                        -33-
motion below for judgment on the promissory-estoppel claim. We do not expect

the document to be material to the district court’s consideration of the

promissory-estoppel claim on remand.

III.   CONCLUSION

       We REVERSE the district court’s denial of Nestle’s motion for judgment as

a matter of law on Eureka’s contract and tortious-interference claims, REVERSE

the declaratory judgment, and REMAND to the district court with instructions to

enter judgment in favor of Nestle on the contract and tortious-interference claims.

We REVERSE the district court’s denial of Eureka’s promissory-estoppel claim

and REMAND that claim to the district court for further consideration in light of

this opinion. We AFFIRM the district court’s denial of relief on Eureka’s unjust-

enrichment claim.




                                        -34-
