TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO.03-00-00683-CV

Great American Products, Appellant

v.

Permabond International, a Division of National Starch and

Chemical Company, Appellee

FROM THE DISTRICT COURT OF COMAL COUNTY, 22ND JUDICIAL DISTRICT

NO. C98-504A, HONORABLE DON G. HUMBLE, JUDGE PRESIDING
2

Appellant Great American Products (AGreat American@) appeals the district court=s 

judgment that Great American take nothing in its suit against appellee Permabond International

(APermabond@). Great American sued Permabond on a variety of tort, extra-contractual, statutory, and 

contract theories, claiming that Permabond sold defective adhesive which caused certain product failures 

and economic losses. The jury failed to find for Great American on any of its tort, extra-contractual, or 

statutory theories. Although the jury answered favorably for Great American on certain unconditionally 

submitted issues, the jury also affirmatively found that Great American had agreed to be bound by the 

warranty disclaimer and limited remedy provisions contained in Permabond=s invoices. Great American 

moved for judgment, asking the trial court to disregard the jury=s finding that Great American had agreed to 

the warranty disclaimer and limited remedy provisions. Permabond also moved for judgment, asserting that 

the jury finding that Great American had agreed to be bound by the warranty disclaimer and limited remedy 

provisions rendered immaterial its findings relating to any breach of warranty, breach of agreement, 

damages, and attorney=s fees. The trial court rendered judgment that Great American take nothing. After 

the court denied its motion for new trial, Great American appealed. We will affirm the judgment of the 

district court. 

FACTUAL AND PROCEDURAL BACKGROUND

This dispute arises out of the sale of an industrial adhesive by Permabond to Great 

American. Great American is a wholesale manufacturer and assembler of various gift items, including 

glassware affixed with pewter emblems. Great American uses industrial adhesive to attach pewter emblems 

to the glassware. The glassware is then placed under an ultraviolet light which cures the adhesive (UV 
3

adhesive), permanently affixing the emblem. Great American has claimed to use this process, or one similar 

to it, successfully for approximately twelve years prior to the dispute with Permabond.

Permabond is a division of National Starch and Chemical Company (ANational Starch@). 

National Starch makes a variety of industrial products that in turn are incorporated into other products. 

Permabond manufactures and sells various types of UV adhesive, including the UV adhesive at issue in this 

case.

Before the events giving rise to this suit, Great American had purchased and used other 

Permabond adhesives for several years. In December 1994, Permabond suggested that Great American 

begin purchasing a Permabond UV adhesive. However, after looking at Great American=s operation, 

Permabond=s sales engineer told Great American that it did not currently have a suitable product that would 

work with Great American=s system. 

In late 1995, Permabond informed Great American that it had developed an adhesive 

suitable for Great American. According to Great American, Permabond=s representatives consistently 

assured Great American that changing to Permabond=s adhesive would not require Great American to 

substantially modify its existing manufacturing process. Permabond delivered the adhesive for testing. After 

sampling and testing the Permabond adhesive, Great American agreed to purchase it, signing a blanket 

order agreement in March 1996.

The blanket order agreement stated in pertinent part that: AAll sales are subject to National 

Starch and Chemical Company=s standard terms and conditions as set forth in its invoices.@ According to 

Great American, Permabond did not explain those terms and conditions, but simply began shipping the 
4

adhesive. In response, Permabond contends that during the course of dealing with Great American over the 

years, it consistently communicated the fact that Permabond would not and could not be responsible for 

damages that Great American might later claim resulted from the use of Permabond=s adhesives. 

Furthermore, it claims that this limitation was conveyed in each invoice sent with the purchase of a 

Permabond product and that Great American never disputed any of the disclaimers it received from 

Permabond. 

With each shipment of its adhesive to Great American, Permabond sent a two-sided invoice 

that stated the quantity and price on the front and set out the Aterms of sale@ on the reverse side. Among the 

terms was a disclaimer of warranty which stated in pertinent part:

1. SELLER HEREBY EXCLUDES ANY AND ALL WARRANTIES,

GUARANTEES, OR REPRESENTATIONS WHATSOEVER, EXPRESS OR 

IMPLIED AND EXPRESSLY EXCLUDES ANY AND ALL WARRANTIES AS 

TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE . . . 

. BUYER ASSUMES RISK FOR RESULTS OBTAINED FROM USE OF 

THESE GOODS WHETHER USED ALONE OR IN COMBINATION WITH 

OTHER PRODUCTS. SELLER=S LIABILITY HEREUNDER SHALL BE

LIMITED TO REPLACEMENT OF ANY GOODS WHICH ARE NOT OF 

SELLER=S STANDARD QUALITY, AND SUCH REPLACEMENT SHALL BE 

BUYER=S EXCLUSIVE REMEDY.

As evidenced by the disclaimer, the invoice provided that replacement was the exclusive remedy for 

nonconforming adhesive.1

 

 

1 The invoice also stated:

2. While Seller may from time to time offer recommendations and advice with respect to the 

use of its products, it is understood that Buyer, in acting on any such recommendation or 

advice does so entirely at its own risk.
5

 

. . . .

9. THE GOODS COVERED BY THIS INVOICE ARE SOLD EXPRESSLY ON THE 

CONDITION OF BUYER=S ASSENT THAT THESE TERMS OF SALE,

INCLUDING THE EXCLUSION OF WARRANTIES GOVERN THIS PURCHASE 

AND SALE. BUYER=S FAILURE TO OBJECT TO THESE TERMS OF SALE 

WITHIN FIVE DAYS AFTER THE DATE OF SELLER=S ACKNOWLEDGMENT 

& TERMS OF SALE (IF SUCH AN ACKNOWLEDGMENT WAS MADE TO HIS 

ORDER) OR BUYER=S TAKING DELIVERY OF ANY GOODS SUPPLIED

HEREUNDER, WHICHEVER IS SOONER, SHALL CONSTITUTE SUCH

ASSENT.
6

Great American timely remitted the payments charged on each invoice. However, Great 

American claims it never expressly accepted the Aterms of sale@ on the invoices. Permabond contends the 

invoice disclaimer put Great American on notice that Great American would have no recourse for relying on 

the recommendations or advice of Permabond, and Great American agreed that its exclusive remedy would 

be replacement adhesive.

The parties dispute the extent of the express warranty made to Great American by 

Permabond. Great American contends Permabond expressly warranted that the adhesive it supplied would 

be suitable for use in Great American=s manufacturing process, without substantial modification, and would 

perform satisfactorily if implemented into that process. Permabond contends it made only a limited warranty 

that it would provide Great American with its standard quality adhesive.

The blanket order agreement expired on April 30, 1997. Great American continued to 

purchase adhesive from Permabond but claims that after the blanket order agreement expired, there was no 

expression, either in Great American=s purchase order or in Permabond=s response, and no other evidence 

which suggested the parties had continued to be bound by the Aterms of sale@ set forth in the invoices. 

Permabond contends that Great American never informed Permabond that it did not consider itself bound 

by the warranty exclusion and limited remedy provisions set out on each invoice. Permabond also contends 

that the exclusion of warranty provisions and limited remedy provisions in the invoices were part of the 

parties= course of dealing and course of performance and were in accord with standard industry practices. 

In July 1997, Things Remembered, a customer of Great American, reported that the pewter 

emblems on its glass mugs were falling off. The first failures reported by Things Remembered were all 
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produced at an Anchor Hocking plant in Ohio, which had been employed to do some of Great American=s 

manufacturing while the company relocated to Texas from Illinois. Great American claims that the plant had 

just begun using the Permabond adhesive and had used the lighting system that was recommended by 

Permabond to properly cure the adhesive. Subsequently, more problems were noted by Great American in 

products manufactured at its New Braunfels plant.

After Great American became aware of problems with the UV adhesive, it notified 

Permabond. Permabond dispatched representatives to the New Braunfels facility to investigate the 

problem. After running tests on the adhesive, Permabond informed Great American that it thought Great 

American=s curing light source was inadequate and this was the source of the problem. Great American 

claims that Permabond did not acknowledge its earlier assurances that its product was compatible with 

Great American=s existing manufacturing process. Furthermore, Great American claims that Permabond did 

not explain the Anchor Hocking problems which occurred despite Great American=s use of Permabond=s 

preferred fusion-lighting system.

After testing the adhesive, Permabond supplied Great American with an alternative UV 

adhesive to address the problems that Great American had experienced. Great American used this 

adhesive for a short period, but eventually returned to the original adhesive it used before the Permabond 

product.

Great American filed suit in June 1998. The case was tried before a jury. The trial court 

submitted the charge proposed by Great American which included the following liability theories: deceptive 

trade practices, breach of warranties, breach of contract, fraud, negligent misrepresentation, and negligence. 
8

 As to the deceptive trade practices claims, fraud claims, and negligent misrepresentation claims, the jury 

failed to find Permabond liable. 

When asked in Question No. 3 and Question No. 4 whether Permabond failed to comply 

with any warranty and whether this failure was a producing cause of damages to Great American, the jury 

answered affirmatively.2 The questions submitted did not differentiate between express and implied 

warranties. For the breach of warranty claim, the jury awarded Great American $70,000 for repair and 

replacement expenses and $250,000 in lost profits. 

 

 

2 Question No. 3 of the jury charge was ADo you find that Permabond failed to comply with 

any warranty? You are instructed . . . that >failed to comply= means any of the following.@ The question 

then listed and defined the following warranties: (1) express warranty; (2) the implied warranty of

merchantability; (3) the implied warranty of fitness for a particular purpose; and (4) the implied warranty of 

good and workmanlike performance. Question No. 4 of the jury charge was A Was the failure, if any, of 

Permabond to comply with a warranty a producing cause of damages to GAP?@
9

In a series of answers to the sub-parts of Question No. 7,3 the jury found that Great 

American and Permabond had agreed to the following: (A) Permabond would provide adhesive suitable for 

use in Great American=s manufacturing facility, (B) Permabond would provide technical service regarding 

adhesive supplied for use in the Great American process, (C) Great American would pay Permabond for 

adhesive it supplied that was suitable for use in Great American=s manufacturing facility, and (D) the parties 

would be bound by the standard terms and conditions as stated in Permabond=s invoices.

 

 

3 Question No. 7 of the jury charge was ADid the agreement between GAP and Permabond include any 

of the following terms: (A) Permabond would provide adhesive suitable for use in GAP=s manufacturing 

facility, (B) Permabond would provide technical service regarding adhesive supplied for use in the GAP 

process, (C) GAP would pay Permabond for adhesive it supplied that was suitable for use in GAP=s 

manufacturing facility, (D) The parties would be bound by the standard terms and conditions as stated in 

Permabond=s invoices.@ The jury answered Ayes@ to each subpart of Question No. 7. 
10

In Question No. 8,4 which dealt with the breach of contract claim, the jury found 

Permabond failed to comply with the terms of the agreement inquired about in Question No. 7. As to the 

breach of contract claim, the jury awarded Great American $70,000 for repair and replacement expenses 

and $250,000 in lost profits.

Following the return of the jury=s verdict, but before the rendition of judgment, Permabond 

moved for entry of judgment in its favor asserting that the jury=s answer to Question No. 7(D), that the 

parties were bound by the terms and conditions set forth in the invoices, negated the jury=s findings relating 

to the breach of warranty and breach of contract claims because the invoices effectively disclaimed express 

and implied warranties. Alternatively, Permabond requested that the court enter judgment non obstante 

veredicto (notwithstanding the verdict). See Tex. R. Civ. P. 301.

In response, Great American contended that the jury=s answers required judgment in its 

favor. Great American asked the trial court to disregard the jury=s finding that Great American had agreed 

to be bound by the standards and terms stated in Permabond=s invoices, which included the warranty 

disclaimer and limited remedy provision. It argued that because Permabond had expressly warranted its 

goods and services, its attempted disclaimer was ineffective.

 

 

4

 Question No. 8 of the jury charge was A Did Permabond fail to comply with the agreement?@

The trial court rendered judgment that Great American take nothing. Great American then 

moved to modify the judgment and alternatively for a new trial, but the court denied the motion. In five 

issues on appeal, Great American contends that: (1) the trial court erred in rendering judgment that Great 
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American take nothing because the blanket order agreement had expired at the time of the breach and a 

proper construction of the verdict entitles Great American to recover damages for both breach of warranty 

and breach of contract; (2) even if there were an effective disclaimer of implied warranty, the trial court 

erred in not rendering judgment that Great American recover for breach of express warranty, because the 

disclaimer was legally inoperative as to the express warranty; (3) even if there were an effective disclaimer 

of warranty, the trial court erred in not rendering judgment that Great American recover for breach of 

contract, because, as a matter of law, Permabond=s invoices did not disclaim responsibility for breach of the 

agreement; (4) even if there were an effective limitation of remedy, the trial court erred in not rendering 

judgment that Great American recover damages, because, as a matter of law, the limitation of remedy 

provision in Permabond=s invoices failed of its essential purpose; and (5) the trial court erred in not 

rendering judgment that Great American recover attorney=s fees awarded by the jury.

DISCUSSION

Breach of Express Warranty

In its second issue, Great American complains that the trial court erred in not rendering 

judgment that it recover for breach of express warranty. Great American asserts that the jury=s affirmative 

answer to Question No. 3 regarding breach of any warranty necessarily means that the jury found that 

Permabond breached an express warranty. We disagree.

The question regarding breach of warranty submitted to the jury states in pertinent part:

Do you find that Permabond failed to comply with any warranty?
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You are instructed in answering this Question that the term Afailed to comply@ means any of 

the following:

$ Failing to comply with an express warranty 

$ Implied Warranty of Merchantability

$ Implied Warranty of Fitness for Particular Purpose

$ Implied Warranty of Good and Workmanlike Performance

Answer AYes@ or ANo.@

Because of the ambiguous nature of the jury question, one cannot discern whether the jury=s affirmative 

answer relates to one or more of the implied warranties or to the express warranty. Based on the plain 

meaning of the instruction, an affirmative answer to Aany of the following@ is not a finding of breach of 

express warranty.

In order to recover for the breach of an express warranty, a plaintiff must prove: (1) an 

express affirmation of fact or promise by the seller relating to the goods; (2) that such affirmation of fact or 

promise became a part of the basis of the bargain; (3) that the plaintiff relied upon said affirmation of fact or 

promise; (4) that the goods failed to comply with the affirmations of fact or promise; (5) that the plaintiff was 

injured by such failure of the product to comply with the express warranty; and (6) that such failure was the 

proximate cause of plaintiff=s injury. Morris v. Adolph Coors Co., 735 S.W.2d 578, 587 (Tex. 

App.CFort Worth 1987, writ ref=d n.r.e.). Great American had the burden to plead, prove, and submit all 

elements but failed to do so. In essence, Great American is asking this Court to deem a finding of breach of 

express warranty based on an ambiguous jury submission so as to invalidate the trial court=s judgment. This 

we will not do. 
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Great American requested Jury Question No. 3, and the trial court submitted it over 

Permabond=s objections. The jury answered this question in the affirmative. It is unknown whether the jury 

found an express warranty by Permabond. Even assuming the validity of Great American=s argument 

regarding express warranties, where a jury=s findings are capable of two constructions and one would 

reconcile the findings in favor of the judgment, reconciliation in favor of the judgment that was rendered on 

the jury verdict is mandatory. Materials Mktg. Corp. v. Spencer, 40 S.W.3d 172, 176 (Tex. 

App.CTexarkana 2001, no pet.). We overrule issue two.

Disregarding Jury Findings

In issues one and three, Great American argues that the trial court erred by disregarding, or 

failing to reconcile, certain jury findings in support of the jury=s verdict. Underlying these issues is the 

apparent conflict between the jury=s answers to Questions Nos. 3 and 8 (that Permabond breached a 

warranty and breached its agreement) and the jury=s answer to Question No. 7(D) (that Great American 

agreed to be bound by the standard terms and conditions in Permabond=s invoices).5 As discussed, the 

 

 

5

 In issue one, Great American specifically claims that because the blanket order agreement had expired 

at the time of breach, the jury findings of breach of warranty and breach of agreement can be reconciled by 

construing the answer to Question No. 7(D) as a finding that the parties had once agreed to be bound, but 

that the agreement was not in force when the breach occurred. However, that is not how the jury charge 

reads. The jury was instructed that the parties had Aentered into an agreement regarding the purchase and 

sale@ of the Permabond adhesive. The jury was asked whether that agreement included the agreement to be 

bound by the standard terms contained in Permabond=s invoices. In answering Question No. 7, the jury 

was directed to consider the parties= course of dealing, usage of trade, and course of performance. There is 

nothing in the charge or question that referenced the blanket order agreement. In addition, there is nothing 

to indicate the jury was thinking about some prior, expired blanket order agreement when it answered 

Question No. 7. In answering Question No. 7(D) affirmatively, the jury expressly found that Great 

American had agreed to be bound by the terms and conditions stated in the invoices; therefore, the terms 
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standard terms and conditions in Permabond=s invoices disclaimed all warranties and limited Great 

American=s remedy to replacement of the glue.

 

and conditions in the invoices were found to be part of the parties= agreement.

A trial court may disregard a jury=s answers that have no support in the evidence or when 

the answers to the questions are immaterial. Southeastern Pipe Line Co., Inc. v. Tichacek, 997 S.W.2d 

166, 172 (Tex. 1997); see also Southwestern Bell Tel. Co. v. FDP Corp., 811 S.W.2d 572, 577 (Tex. 

1991) (rendering take nothing judgment and holding that limited warranty and limited remedy provision 

rendered irrelevant any jury finding regarding lost profits). A question is immaterial when it should not have 

been submitted, it calls for a finding beyond the province of the jury, e.g., a question of law, or when it was 

properly submitted but has been rendered immaterial by other findings. Id. A trial court may disregard a 

finding on an immaterial issue and render judgment on the remaining findings; such a judgment is not 

considered a judgment notwithstanding the verdict. Kuenhoefer v. Welch, 893 S.W.2d 689, 692 (Tex. 

App.CTexarkana 1995, writ denied). 

In the instant case, Permabond filed a motion for judgment in which it urged the trial court to 

disregard the jury=s findings of breach of warranty and breach of agreement based on the jury=s affirmative 

answer to Question No. 7(D), finding that Great American agreed to be bound by the standard terms and 

conditions, i.e., the disclaimer of warranties contained in its invoices. In the alternative, Permabond asked 

for a judgment notwithstanding the verdict based on insufficient evidence. The trial court ultimately rendered 

final judgment for Permabond that Great American take nothing by its suit.
15

We agree with Permabond that the jury=s answer to Question No. 7(D) rendered its 

answers relating to breach of warranty immaterial. In answering Question No. 7(D), the jury impliedly 

found that Great American agreed to be bound by the standard terms and conditions, including the 

disclaimer and limitation of remedy, contained in its sales invoices. Once the jury found that Great American 

agreed to be bound by the standard terms and conditions on Permabond=s invoices, the jury=s findings of 

breach of warranty became immaterial. A disclaimer of warranty is an affirmative defense. Tex. R. Civ. P. 

94; Johnston v. McKinney Am., Inc., 9 S.W.3d 271, 280 (Tex. App.CHouston [14th Dist.] 1999, pet. 

denied). An affirmative defense is by its nature Aone of confession and avoidance@ which seeks to establish 

an independent reason why the plaintiff should not prevail. Texas Beef Cattle Co. v. Green, 921 S.W.2d 

203, 212 (Tex. 1996) (jury=s finding of affirmative defense of justification rendered immaterial finding of 

actual malice).

In addition, the jury=s answer to Question No. 7(D) rendered its answer to Question No. 8 

immaterial because Permabond expressly provided in its invoices that a buyer=s exclusive remedy for 

substandard goods was limited to replacement of the goods. By answering all sub-parts to Question No. 7 

in the affirmative, the jury specifically found: (1) Permabond agreed to provide suitable adhesive and 

technical service to Great American; (2) Great American agreed to pay Permabond for the adhesive if 

suitable; and (3) both parties agreed to be bound by the terms included in Permabond=s invoices. In 

answering Question No. 8 affirmatively, the jury found that Permabond had failed to comply with its part of 

the agreement, specifically, providing suitable adhesive and technical service to Great American. At the 

same time, by finding that the parties agreed to be bound by the terms and conditions of the invoices, the 
16

jury also found that the remedy for failure to comply with the agreement was limited to replacement of the 

defective product.

The record reveals that the issue of disclaimer was addressed throughout the trial, during 

closing arguments, and was raised by Permabond in its pleadings below. Permabond=s general manager 

testified that Permabond=s disclaimer of warranty and limitation of remedy language was standard in the 

chemical industry, or a Ausage of trade.@ Additionally, from the testimony of Great American=s CEO and 

purchasing agent, the jury could infer that Great American, based on its prior course of dealing with 

Permabond, should have been aware of the disclaimer language contained on Permabond=s invoices and 

correspondence. Furthermore, the preface to Question No. 7 of the court=s charge specifically instructed 

the jury on course of dealing and usage of trade:

A Acourse of dealing@ is a sequence of previous conduct between the parties to a 

particular transaction which is fairly to be regarded as establishing a common basis of 

understanding for interpreting their expressions or other conduct.

A Ausage of trade@ is any practice or method of dealing having such regularity of 

observance in place, vocation or trade as to justify an expectation that it will be observed 

with respect to the transaction in question.

Where an agreement for sale involves repeated occasions for performance by 

either party with knowledge of the nature of the performance and opportunity for objection 

to it by the other, any course of performance accepted or acquiesced in without objection 

shall be relevant to determine the meaning of the agreement.

Finally, we note that Great American requested the charge of which it now complains. In 

summary, we hold that the trial court did not err by disregarding the jury=s answers to the breach of 

warranty and breach of agreement questions. We overrule issues one and three.
17

Limited Remedy Failed of Essential Purpose?

In issue four, Great American urges that, as a matter of law, the limited remedy Permabond 

provided in its invoices failed of its essential purpose and that the jury=s inconsistent answers can be 

reconciled on this basis. Permabond responds that Great American failed to submit a jury question on the 

issue or raise the issue in its pleadings below and thus has waived it on appeal. Great American counters 

that its failure to submit a jury question on whether Permabond=s limited remedy failed of its essential 

purpose is not fatal to its pursuit of this issue on appeal. See Mercedes Benz of N. Am., Inc. v. 

Dickenson, 720 S.W.2d 844 (Tex. App.CFort Worth 1986, no writ). In Mercedes Benz, the court of 

appeals considered the issue of whether a limited remedy failed of its essential purpose, reasoning that the 

defendant could not complain of the plaintiff=s failure to plead the issue or to submit a jury question on the 

issue in the absence of special exceptions to the plaintiff=s pleadings. Id. at 853-54. The court relied on 

Roark v. Allen in which the supreme court rejected the appellate court=s determination that the plaintiffs=

petition was insufficient to support the submission of special issues to the jury on the issue of negligence. 

663 S.W.2d 804, 809-10 (Tex. 1982). However, unlike the instant case, the Roark plaintiffs submitted a 

jury question on the issue of negligence, although they did not plead it specifically in their petition. Id. at 

809. In the instant case, Great American not only failed to plead but also failed to submit a jury question on 

the issue of whether the limited remedy failed of its essential purpose; therefore, we hold it has waived this 

issue on appeal. Tex. R. App. P. 33.1; see also Henderson v. Ford Motor Co., 547 S.W.2d 663, 668-

69 (Tex. App.CAmarillo 1977, no writ).
18

Attorney=s fees

In issue five, Great American claims the trial court erred in not rendering judgment on the 

jury=s award of attorney=s fees to Great American. To recover attorney=s fees under Section 38.001 of the 

Texas Civil Practice and Remedies Code, a party must (1) prevail on a cause of action for which attorney=s 

fees are recoverable, and (2) recover damages. See Tex. Civ. Prac. & Rem. Code Ann. ' 38.001 (West 

1997); Green Int=l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (citing State Farm Life Ins. Co. v. 

Beaston, 907 S.W.2d 430, 437 (Tex. 1995)). Great American has neither prevailed on any cause of 

action for which attorney=s fees are recoverable, nor has it recovered any damages. Issue five is overruled. 

CONCLUSION

Having overruled all of Great American=s issues on appeal, we affirm the judgment of 

the district court.

 

David Puryear, Justice

Before Chief Justice Aboussie, Justices B. A. Smith and Puryear

Affirmed

Filed: October 10, 2002

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