Affirmed and Memorandum Opinion filed August 23 , 2022

.

In The 

## Fourteenth Court of Appeals

NO. 14

- 21

- 00082

- CV

PRECISION DIRECTIONA L SERVICES, INC. , Appellant

V.
CHRIS FERRON , Appellee

On Appeal from the 269th District Court

Harris County, Texas Tr i al Court Cause No. 2020

- 25247

MEMORANDUM OPINION
Appellee Chris Ferron was allegedly injured while working for appellant Precision Directional Services, Inc. as part of a drilling crew on an oil rig. Appellee filed suit against appella nt seeking relief for his alleged injuries. App ellant moved to co mpel the matter to arbitration

. The trial court denied appellant ’ s motion. In one issue, appellant argues the trial cou rt abused its discretion in denying the motion to compel arbi tration. We affirm.2 M OT ION TO C OMPEL A RBITRAT ION Appellant argues that the trial court abused its discretion in denying its motion to compel arbitration becau se appellee executed an a greement containing an arbitration provision with a separate company and appellant w as a thir d

- p arty b eneficiary of the arbitration provision in that agreement

. Appellant argues that it proved that a valid arbitration a greement exists and it is entitled to co mpel

a rbi tration

. A. Gene ra l L e g al Principles

A par t y seek ing to compel arbitration bears t he burd en to establish that an
arb itration agreement exists and that the claims presented fall within it s s cope. Henry v. Cash Biz, LP , 551 S.W.3d 111 , 115 (Tex . 2018) ; Nation wide C o in &
Bul lion Re s rv

. , Inc

. v . Tho mas , 625 S.W.3d 498, 503 (Tex. App.

— Housto n [14th Dist.] 2 020, pet. denied ). If this burden is met, then the b urden shifts to the party

oppo sing arb i tration to prove an affirmative defense to the pr ovision ’ s en for ce ment

t o av oi d arbitration

. See Henry , 625 S.W.3d at 115

. “ I f there i s con flictin g

ev idence as to the material facts necessary to determine the issues
, the trial court is

to conduct an eviden tiary hearing to re solve the dispu te

. ” Thomas
, 625 S.W.3d at 5 03

.

“ Whether a non

- signatory can comp el a rb itrati on pur suant to an a rbitration
clau s e questions the existence of the arbitration clause between specific parties and
is . . . a gateway matter for the court to decide. ” In re Rubiola , 334 S.W.3d 220, 224 (Tex. 2011). “ Under the FAA, or dinar y principles of state contract law
determine whet h er there is a vali d a greement to arbitr ate. ” Id

. The question of who is bound by an arbitration agreement is a function of the inte nt of the parties

as express ed in the agreement. Id . Where an agreement “ expressly p rovides that3

certain non

- signatories are considered parties
, ” then such parties may compel
arbitration. Id

. at 225.

W hen a motio n to compel arbitration is denied , we apply an abuse

- of

discretion st a ndar d

. Thomas
, 625 S.W.3d at 5 03

. We defer to the trial court ’ s factual determinations if t hey a re supported by the eviden ce and review the legal
determinations d e novo. Id

. Whether a val id ar b i tration agreement e xists i s a legal question. In re D. Wilson C onst r. Co. , 196 S.W.3d 774, 781 (Tex. 2006).

B. Background In July 2018 , appelle e ex ecuted an “ inde pendent pro fessional agreement ” (Agreement) with RigUp.
, Inc

. 1 RigUp has an onl ine service where it connec ts

wor kers with companies in th e oil and gas indust ry . Appellee likens the platform

to an “ o nline job board. ” Appell ant uses RigUp t o hi re independent contracto rs for various jobs it has available

. In August 2019, Rig Up updated its “ terms ” to “ make it clearer that its customers, like [appellant] , are inte nded beneficiaries of the arbitration provision
contained in Section 24 of t he T erms

. ” T he August 2019 Ter ms provided that continuing use of RigUp ’ s service after the effective date of the new t erms was an agreement to be bou nd by such terms. The A u gust 2019 T erms were p osted on RigUp ’ s website. 2

Some time a fter A u gust 7, 2 019, 3 app ellee applied for and accepted a job from appellant. While on this job for appellant , appellee was allegedly injured

.

1 The Agreement was subject t o the terms on RigUp ’ s website at the time the A g reement was executed.

2 The August 2019 Terms were “ la st revised ” on August 7, 2019. There is no indication in the record of when the terms w er e po sted on RigUp ’ s website.

3 It is not clear from the record when appellee applied f o r and accepted w ork from appellant, no date is provided by either of the par ties. Appellant asserts that it was after August 7,4

A p pellee filed a lawsuit against appellant, but not RigU p, to recover damages for his personal injuries . A p pellant moved to co mp el arbi tration pursuant to the
A g reement

. Attached to its motion to compel arb itration was the Agreement, the August
2019 Terms, and a declaration from Olivia Howe, the h ead of L egal and

g ove rnment re lations at RigUp. The Agreement was the version e xecuted by appellee; however, appellant did not provide the t er ms as they existe d when appellee executed the A g reement. The Agreement indicated that appellee ha d

“ r ead, understood , and ag reed to ” the “ Rig U p Terms of Service located at [ web
addre ss listed] ( ‘ Terms ’ ) ” an d that such terms were “ inco rporated into this
A greement by referen ce. ” Paragraph fourteen of the Agreement
, entitled “ Dispute
Resolution
, ” provides
, “ You ackn o wledge and agree that the terms of this Agreement are subject to Section 24 of the Terms. ” The A greement does not otherwise pr ovide or de tail any terms or agreement to arbitration.

In her declaration
, Howe attested that “ Section 3 of the Terms have not been revised since at least February 12, 2016 ” and was in place when appellee sig ned the Agr eement. Section three of the August 2019 Terms provides th at:

3. C hanges to the se Terms

. We may revi se these Terms at any time to t ake account of changes in the law , or for any other reason. If we update these Te rms, we will post a new ve rsion o n the We bsite. I f a change materially impacts your rights or obligations, we will use

commer cially reasonable efforts to give you at l east 30 days ’ notice of the upcoming changes via email or on the Ser vice before the change takes effect. Immateri al modi fication s are effective upon publication. As so on as you use the Ser vice after t he updated version of these Terms is posted and effective, you will be deemed to have agreed to the updated version. You r continued use of the Ser vice af ter a cha nge

2019. Appellee does not disput e thi s.5

t o these Terms c onstitutes your binding acceptance of the updated version. Howe further attested that the “ prior versions of the Terms p rovided that disputes
relat ing to work performed under the [Agreement ] wou ld be resolved by binding
arbitration
, ” howev er the t erms th at were in effect when appellee signed the
A g reement were not provided to the trial court. In the August 2019 Terms, section

twe nty

- four contains the arbitration provision s. In pertinent part, it provides:

a. Generally. In the interest of resolv ing d isp utes between you and Rig Up , or you and RigUp ’s customers . . . you and RigUp agree that

eve ry dispute arising in co nnection wit h these Terms will be resolved by binding arbitration. . . . This agreement to a rbitrate disputes includes all cla ims ari sing out of or relating to any aspect of these Terms, whe ther based in contract, tort, statute, fraud, misrepresen tation, or any other legal theory, and regardless of whether a claim aris e s during or after the termination of th ese Terms. YOU UNDERS TAND AN D AGREE THAT, BY ENTERING INTO THESE TERMS, YOU AND RIGUP ARE E ACH WAIVING THE RIGHT TO A TRI AL BY JURY OR TO PARTICIPATE IN A CLASS ACTION. Ho we attested that “ prior ver sions of the Terms provided that disputes relating to work performed under the [Agree ment] wo uld be resolved by binding arbitration ”
but did not attest as to the prior terms and did not provide them.
Appellee filed a response , attaching as exhibits t he Agreement , t he August
2019 Terms , and th e affidavit of his counsel reques ting a con tinua nce. No additional evidence was offered by appellee.

The trial court render ed an order deny i ng appellant ’ s motion without making

an y fact findings or in dicating the reason for the denial.

C. Analysis

A p pellant argues that appellee i s bound to the A u g ust 2 019 Terms because
he agreed to be bound to any changes in the terms in the A g reement and by his6

continued use of RigU p ’ s service after the August 2019 Terms went into effect

. Because the Augu st 2019 Terms provide for the arbitration of “ dis putes betw een [ appellee] and . . . RigUp ’ s customers . . . every dispute arising in connection with
these Terms will be resolved by binding arbitration
, ” appellant argues it has shown that arbitration should be compelled. Appellee ar gues that he was not p rovided

an y not ice of the August 2019 Terms pursuant to t he Agreement , so he cannot be
bound to the arbitration provision therein due to a lack of mutual assent . Appellee argues that because he is not bound by the August 2019 Terms due to the lack of
noti ce and app ellant has not provided the ori gi nal terms (or at least terms that appellee a gree d to) , appellant has failed to pro ve that a valid a rbitration agreement
exists between the parties.
Howe attested that RigUp m odifi ed their terms to include appell ant “ more clear ly ” i n the arbitration provision. S ee Hathaway v. General Mills, Inc. , 711
S.W. 2d 227, 228 (Tex. 1986) ( “ Parties have the power to modify their contracts. ” )

. It is through this modification that appellant seeks to compel arbitration. T h e burden of proving mod if

ication i s on appellant in this cas e, as the party asserting a
modifi cation

. See id

. H o wever, “ m odification must satisfy the elements of a

contract : a meeting of the minds supported by consider ation. ” Id. A ppellee argues
that the re was no meeting of the minds because he was never provided notice of the change in ter ms

. As the party asserting modification , appellant must also prove
that appellee agreed to the modification. See i d

. ; see also In re Halliburto n, Co. , 80 S.W.3d 566, 568 (Tex. 2002) ( “ [T]he party asserting a change to an at

- wil l employment contract must prove two things: (1) notice of the change, and (2) acceptance of the change. ” ). Whe ther a contract is mod ified depends on t he parties ’ intention and is a ques tion of fact. Hat haw ay , 711 S.W

. 2d a t 22 8

– 29.7

Appellant argues that because appellee agreed that RigUp could change the

terms at any time and because appellee continued to use RigUp ’s service a fter t he change s in Augu st 2019 , appellee has accepted the A u gust 2019 Terms

. H o wever, in all of appellant ’s ci ted cases concludi ng that acceptance of modified contractual

terms was shown t hrough the actions of a party ( such as cont inued u se , acceptance of bene fits, or co ntinued e mployment ), each of the parties had “ undisputed ” n ot ice
of the modification

. See In re Halliburton
, 80 S.W.3d at 568

– 69 ( “Here , it is undisputed that Halli burton notifie d Myers of the proposed changes [to the contract] . . . . After receiving this notice, Myers continued to work for Halliburton after [the e ffective date of the changes], thus accepting the changes as a matter of
law. ”) ; Koontz v. Citibank (S. Dakota), N.A. , No. 01

- 08

- 00495

- CV, 2010 WL 2545583, at *3 (Tex. App.

— Houston [1st Dist.] June 24, 2010, no pet .) (mem. op.) ( “[I] t is undisputed that after receivi ng the Notice of Change in Terms and the accompanying arbitration agreement, Koontz continued to use the card and did not

‘ opt out ’ of the arbitration agreement. Koontz ’ s continued use of the card after receiving the arbitration agreement est ablished her assent to its terms

. ”). W ithout notice, a different result is compelled. See Hat haway , 711 S.W.2d at 229 ( co nc luding modific ation not proven where notice not shown ) ; Price Pfister, Inc. v. Moore & Kimmey, Inc. , 48 S.W.3d 341, 350 (Tex. App.

— Houston [14th Dist.] 2001, pet. denied) ( same).
Appellant ’s argument further i g nores th e contract ’s requirement to provide
notice of changes to appellee. See Seagull Energy E&P, Inc. v . Eland Energy , Inc. , 207 S.W.3d 342, 345 (Tex. 2006) ( “[W]e examine and consider the entire writing
in an effort to harmonize and give ef fec t to all the provisions of the co ntract so that
none will be rendered me aningless. ”). Se ction three of the terms indicates that:
If we update these Te rms, we will post a new version o n the We bsite

. I f a change materially impacts your rights or obligations, we will use8

commer cially reasonable efforts to give you at l east 30 days ’ notice of the upcoming changes via email or on the Ser vice before the change takes effect. Immaterial modi fication s are effective upon publication. Appellant provided no evidence that RigUp gave notice to appellee by email or on
the “ Ser vice ” 4 before the change took effect , let alone thirty days before the change
took effect. Thus
, appellant has not shown t hat the notic e provision for a change
that “ materially im

pacts ” appellee ’ s rights was provided. Inst ead, Howe attested in
her affidavit that “ when the Terms are revised, RigUp posts a new version of the
Terms on its website. ” There is no indication of wh en the August 2019 Terms were posted on RigUp ’ s website

. Even assuming RigUp posted the August 20 19
Terms on its we bsite on or before August 7, 2019 , appellant has n ot shown that the changes in t he terms were immaterial and , thus
, notice was effective und er section
three of the terms.
Without the benefit of the prior terms a nd with no indication , evidence , or argument from appell ant whether the changes to the terms were material or immaterial, we c annot determine whether the not ic e p rovided through the w ebsite
was effective under the parties ’ agr e ement

. N otice of a change in terms and

acce ptance is required to prove assent to the modi fi cation of the parties ’ agreement. See In re Halliburto n, Co. , 80 S.W.3d 5 69

– 70 (rejecting con te nti on that arbitration a greement was illusory because , among other things, it required t e n days’ notice of any modification or termination and stated that any such amendment would apply prospectively only) ; see also J.M. Davidson , Inc. v.
Webster , 128 S. W. 3d 223 , 229

– 230 (Tex. 20 0 3) (noting that most courts have

cons i dered and concluded that a contract is illusory if it provides an “ unrestricted right to terminate the arbitration agreement ” ) ; s ee also In re C & H News Co. , 133

4 “ Service ” is defin ed in the August 2019 Terms, but it is unknown wh ether th is def inition also remains unchange d from the pr eviously effective terms.9

S.W.3d 642, 646

–

47 (Tex. App

. — Cor

pus Christi

—

Edinburgh 2003, no pet. ) (empl oyer ’ s right to change, modify, delete , or am end arbitration agreement “ with

o r without prior notification” made the arbitration agreement illusory).
Thus, it was appellant ’ s burden to show that the notice R ig Up provided through the website was effective beca use the change made to the terms was
immaterial. Conversely , if the change was material, it was appellant ’ s burden to
show that Rig Up provided noti ce in accordance with section three of the terms

. Witho ut th e prior terms, we hav e no way of evaluating th e materiality issue based
on the record before us
, because a p pellant provided no evidence

. A s a result,

a ppellant failed to e stablish the existence of the August 2019 Terms and, therefore,
the arbitration a gree ment

. 5 See Hat haway , 711 S.W.2d at 229 ( co nc luding
modific ation not proven where notice not shown ). Because appellant fail ed to prove tha t it prov ided the appropriate notice to appellee of the change in the terms , appellant ha s failed to show that a ppel lee
assented to the modification when he continued to use the service. Failure to demonstrate notice disposes of any claim that a party ratified the agreement by
continued use. See Big Bass Towing Co. v. Akin , 409 S.W.3d 835, 842 (Tex. App.

— Dallas 20 13, no pet.) ( “ [N]ot hing in the record to show . . . any knowledge of the arbitration agreement w hen he accepted benefits under the . . . plan

. [The appellant] therefore failed to show that [the app ellee] ratified the arbitration agreement by accepting [ ot her] benefits of the pla n. ” ) ; Barrand , Inc. v. Whataburger, Inc. , 214 S.W.3d 122, 146 (Tex. App.

— Corpus Christi

– Edinburgh 2006, pet. denied) ( “ [I]f a party b y it s conduct recognizes a contract as valid, having knowledge of all relevant facts, it ratifies t he c ontract. ” ). Having failed to

5 Appellan t further did not provide the prior terms a nd makes no argument that arbitration should be com pelled under th e prior terms

.10

prove the existence of the August 2019 Terms , appellant has not shown that the
trial court abused its discretion in denying appellant ’ s motion to compe l
arbitration. W e ov errule appellant ’ s sole issue. 6

C ONCLUSION

Bec au se a ppellant failed to m eet its burden to show that an arbitration agreement exists, it has not shown that the trial court abused its dis cretion in denying the motion to co mpel arbitration. We affirm the trial court ’ s order denying appellant ’ s motion to c ompe l arbitra tion.

/s/ Ken Wise Justice

Panel consists of Justices Wise
, Poissant , an d Wilson

.

6 Appellant presented its sole issue through three “ sub

- issues. ” The first sub

- issue we have resolved above against app ellant. T he other sub

- issues regard appellant ’ s statu s as a third

party beneficiary

. B ecause we re so lved th e first sub

- issue against appell ant , we do not reach the other sub

- issues because they are not necessary to the dispos ition of th is appeal. See Tex. R. App. P . 47.1.