Affirmed and Memorandum Opinion filed August 23, 2022.

In The

Fourteenth Court of Appeals

NO. 14-21-00082-CV

PRECISION DIRECTIONAL SERVICES, INC., Appellant

V.

CHRIS FERRON, Appellee

On Appeal from the 269th District Court

Harris County, Texas

Trial 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 appellant seeking relief for his alleged injuries. 

Appellant moved to compel the matter to arbitration. The trial court denied 

appellant’s motion. In one issue, appellant argues the trial court abused its 

discretion in denying the motion to compel arbitration. We affirm. 
2

MOTION TO COMPEL ARBITRATION

Appellant argues that the trial court abused its discretion in denying its 

motion to compel arbitration because appellee executed an agreement containing 

an arbitration provision with a separate company and appellant was a third-party 

beneficiary of the arbitration provision in that agreement. Appellant argues that it 

proved that a valid arbitration agreement exists and it is entitled to compel 

arbitration. 

A. General Legal Principles

A party seeking to compel arbitration bears the burden to establish that an 

arbitration agreement exists and that the claims presented fall within its scope. 

Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018); Nationwide Coin &

Bullion Resrv., Inc. v. Thomas, 625 S.W.3d 498, 503 (Tex. App.—Houston [14th

Dist.] 2020, pet. denied). If this burden is met, then the burden shifts to the party 

opposing arbitration to prove an affirmative defense to the provision’s enforcement

to avoid arbitration. See Henry, 625 S.W.3d at 115. “If there is conflicting

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

to conduct an evidentiary hearing to resolve the dispute.” Thomas, 625 S.W.3d at 

503.

“Whether a non-signatory can compel arbitration pursuant to an arbitration 

clause 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, ordinary principles of state contract law 

determine whether there is a valid agreement to arbitrate.” Id. The question of 

who is bound by an arbitration agreement is a function of the intent of the parties 

as expressed in the agreement. Id. Where an agreement “expressly provides that 
3

certain non-signatories are considered parties,” then such parties may compel 

arbitration. Id. at 225. 

When a motion to compel arbitration is denied, we apply an abuse-ofdiscretion standard. Thomas, 625 S.W.3d at 503. We defer to the trial court’s 

factual determinations if they are supported by the evidence and review the legal

determinations de novo. Id. Whether a valid arbitration agreement exists is a legal 

question. In re D. Wilson Constr. Co., 196 S.W.3d 774, 781 (Tex. 2006). 

B. Background 

In July 2018, appellee executed an “independent professional agreement”

(Agreement) with RigUp., Inc.

1

 RigUp has an online service where it connects 

workers with companies in the oil and gas industry. Appellee likens the platform 

to an “online job board.” Appellant uses RigUp to hire independent contractors for 

various jobs it has available. 

In August 2019, RigUp updated its “terms” to “make it clearer that its 

customers, like [appellant], are intended beneficiaries of the arbitration provision 

contained in Section 24 of the Terms.” The August 2019 Terms provided that 

continuing use of RigUp’s service after the effective date of the new terms was an 

agreement to be bound by such terms. The August 2019 Terms were posted on 

RigUp’s website.2

Sometime after August 7, 2019,3appellee applied for and accepted a job 

from appellant. While on this job for appellant, appellee was allegedly injured. 

1 The Agreement was subject to the terms on RigUp’s website at the time the Agreement 

was executed.

2 The August 2019 Terms were “last revised” on August 7, 2019. There is no indication

in the record of when the terms were posted on RigUp’s website. 

3

It is not clear from the record when appellee applied for and accepted work from 

appellant, no date is provided by either of the parties. Appellant asserts that it was after August 7, 
4

Appellee filed a lawsuit against appellant, but not RigUp, to recover damages for

his personal injuries. Appellant moved to compel arbitration pursuant to the

Agreement. 

Attached to its motion to compel arbitration was the Agreement, the August 

2019 Terms, and a declaration from Olivia Howe, the head of Legal and 

government relations at RigUp. The Agreement was the version executed by 

appellee; however, appellant did not provide the terms as they existed when 

appellee executed the Agreement. The Agreement indicated that appellee had 

“read, understood, and agreed to” the “RigUp Terms of Service located at [web

address listed] (‘Terms’)” and that such terms were “incorporated into this

Agreement by reference.” Paragraph fourteen of the Agreement, entitled “Dispute 

Resolution,” provides, “You acknowledge and agree that the terms of this

Agreement are subject to Section 24 of the Terms.” The Agreement does not 

otherwise provide or detail 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 signed

the Agreement. Section three of the August 2019 Terms provides that:

3. Changes to these Terms. We may revise these Terms at any time 

to take account of changes in the law, or for any other reason. If we 

update these Terms, we will post a new version on the Website. If a 

change materially impacts your rights or obligations, we will use 

commercially reasonable efforts to give you at least 30 days’ notice of 

the upcoming changes via email or on the Service before the change 

takes effect. Immaterial modifications are effective upon publication. 

As soon as you use the Service after the updated version of these 

Terms is posted and effective, you will be deemed to have agreed to 

the updated version. Your continued use of the Service after a change 

2019. Appellee does not dispute this. 
5

to these Terms constitutes your binding acceptance of the updated 

version. 

Howe further attested that the “prior versions of the Terms provided that disputes 

relating to work performed under the [Agreement] would be resolved by binding 

arbitration,” however the terms that were in effect when appellee signed the 

Agreement were not provided to the trial court. In the August 2019 Terms, section 

twenty-four contains the arbitration provisions. In pertinent part, it provides:

a. Generally. In the interest of resolving disputes between you and 

RigUp, or you and RigUp’s customers . . . you and RigUp agree that 

every dispute arising in connection with these Terms will be resolved 

by binding arbitration. . . . This agreement to arbitrate disputes 

includes all claims arising out of or relating to any aspect of these 

Terms, whether based in contract, tort, statute, fraud, 

misrepresentation, or any other legal theory, and regardless of whether

a claim arises during or after the termination of these Terms. YOU 

UNDERSTAND AND AGREE THAT, BY ENTERING INTO 

THESE TERMS, YOU AND RIGUP ARE EACH WAIVING THE 

RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A 

CLASS ACTION. 

Howe attested that “prior versions of the Terms provided that disputes relating to

work performed under the [Agreement] would 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 the Agreement, the August 

2019 Terms, and the affidavit of his counsel requesting a continuance. No 

additional evidence was offered by appellee. 

The trial court rendered an order denying appellant’s motion without making 

any fact findings or indicating the reason for the denial. 

C. Analysis 

Appellant argues that appellee is bound to the August 2019 Terms because 

he agreed to be bound to any changes in the terms in the Agreement and by his 
6

continued use of RigUp’s service after the August 2019 Terms went into effect. 

Because the August 2019 Terms provide for the arbitration of “disputes between 

[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 argues that he was not provided

any notice of the August 2019 Terms pursuant to the 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 

notice and appellant has not provided the original terms (or at least terms that 

appellee agreed to), appellant has failed to prove that a valid arbitration agreement 

exists between the parties. 

Howe attested that RigUp modified their terms to include appellant “more 

clearly” in the arbitration provision. See 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. The 

burden of proving modification is on appellant in this case, as the party asserting a 

modification. See id. However, “modification must satisfy the elements of a 

contract: a meeting of the minds supported by consideration.” Id. Appellee argues 

that there was no meeting of the minds because he was never provided notice of 

the change in terms. As the party asserting modification, appellant must also prove 

that appellee agreed to the modification. See id.; see also In re Halliburton, Co., 

80 S.W.3d 566, 568 (Tex. 2002) (“[T]he party asserting a change to an at-will 

employment contract must prove two things: (1) notice of the change, and (2) 

acceptance of the change.”). Whether a contract is modified depends on the 

parties’ intention and is a question of fact. Hathaway, 711 S.W.2d at 228–29. 
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 after the 

changes in August 2019, appellee has accepted the August 2019 Terms. However,

in all of appellant’s cited cases concluding that acceptance of modified contractual

terms was shown through the actions of a party (such as continued use, acceptance

of benefits, or continued employment), each of the parties had “undisputed” notice 

of the modification. See In re Halliburton, 80 S.W.3d at 568–69 (“Here, it is 

undisputed that Halliburton notified Myers of the proposed changes [to the 

contract]. . . . After receiving this notice, Myers continued to work for Halliburton

after [the effective 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 receiving 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 established her assent to its terms.”). Without 

notice, a different result is compelled. See Hathaway, 711 S.W.2d at 229 

(concluding modification 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 ignores the 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 effect to all the provisions of the contract so that 

none will be rendered meaningless.”). Section three of the terms indicates that:

If we update these Terms, we will post a new version on the Website. 

If a change materially impacts your rights or obligations, we will use 
8

commercially reasonable efforts to give you at least 30 days’ notice of 

the upcoming changes via email or on the Service before the change 

takes effect. Immaterial modifications are effective upon publication. 

Appellant provided no evidence that RigUp gave notice to appellee by email or on 

the “Service”

4 before the change took effect, let alone thirty days before the change

took effect. Thus, appellant has not shown that the notice provision for a change 

that “materially impacts” appellee’s rights was provided. Instead, 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 when the August 2019 Terms 

were posted on RigUp’s website. Even assuming RigUp posted the August 2019 

Terms on its website on or before August 7, 2019, appellant has not shown that the 

changes in the terms were immaterial and, thus, notice was effective under section 

three of the terms. 

Without the benefit of the prior terms and with no indication, evidence, or

argument from appellant whether the changes to the terms were material or 

immaterial, we cannot determine whether the notice provided through the website

was effective under the parties’ agreement. Notice of a change in terms and

acceptance is required to prove assent to the modification of the parties’

agreement. See In re Halliburton, Co., 80 S.W.3d 569–70 (rejecting contention 

that arbitration agreement was illusory because, among other things, it required ten 

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. 2003) (noting that most courts have 

considered and concluded that a contract is illusory if it provides an “unrestricted

right to terminate the arbitration agreement”); see also In re C & H News Co., 133 

4

“Service” is defined in the August 2019 Terms, but it is unknown whether this 

definition also remains unchanged from the previously effective terms. 
9

S.W.3d 642, 646–47 (Tex. App.—Corpus Christi—Edinburgh 2003, no pet.) 

(employer’s right to change, modify, delete, or amend arbitration agreement “with

or without prior notification” made the arbitration agreement illusory). 

Thus, it was appellant’s burden to show that the notice RigUp provided 

through the website was effective because the change made to the terms was 

immaterial. Conversely, if the change was material, it was appellant’s burden to 

show that RigUp provided notice in accordance with section three of the terms. 

Without the prior terms, we have no way of evaluating the materiality issue based 

on the record before us, because appellant provided no evidence. As a result, 

appellant failed to establish the existence of the August 2019 Terms and, therefore, 

the arbitration agreement.

5

 See Hathaway, 711 S.W.2d at 229 (concluding

modification not proven where notice not shown). 

Because appellant failed to prove that it provided the appropriate notice to 

appellee of the change in the terms, appellant has failed to show that appellee 

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 2013, no pet.) (“[N]othing in the record to show . . . any knowledge 

of the arbitration agreement when he accepted benefits under the . . . plan. [The 

appellant] therefore failed to show that [the appellee] ratified the arbitration 

agreement by accepting [other] benefits of the plan.”); Barrand, Inc. v. 

Whataburger, Inc., 214 S.W.3d 122, 146 (Tex. App.—Corpus Christi–Edinburgh 

2006, pet. denied) (“[I]f a party by its conduct recognizes a contract as valid, 

having knowledge of all relevant facts, it ratifies the contract.”). Having failed to 

5 Appellant further did not provide the prior terms and makes no argument that arbitration

should be compelled under the 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 compel 

arbitration. We overrule appellant’s sole issue.6 

CONCLUSION

Because appellant failed to meet its burden to show that an arbitration 

agreement exists, it has not shown that the trial court abused its discretion in 

denying the motion to compel arbitration. We affirm the trial court’s order 

denying appellant’s motion to compel arbitration.

/s/ Ken Wise

Justice

Panel consists of Justices Wise, Poissant, and Wilson.

6 Appellant presented its sole issue through three “sub-issues.” The first sub-issue we 

have resolved above against appellant. The other sub-issues regard appellant’s status as a thirdparty beneficiary. Because we resolved the first sub-issue against appellant, we do not reach the 

other sub-issues because they are not necessary to the disposition of this appeal. See Tex. R. 

App. P. 47.1.