Court Opinion

ID: 9745698
Source: CourtListenerOpinion
Date Created: 2023-08-27 10:13:46.226326+00
Date Added: 2024-06-11T12:26:35.024197
License: Public Domain

Affirmed in Part, Reversed in Part, and Memorandum Opinion filed August
24, 2023.

                                      In The

                    Fourteenth Court of Appeals

                              NO. 14-21-00694-CV

           BORUSAN MANNESMANN PIPE US, INC., Appellant
                                        V.

               HUNTING ENERGY SERVICES, LLC, Appellee

                    On Appeal from the 80th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2020-38984

                          MEMORANDUM OPINION

      Appellant Borusan Mannesmann Pipe US, Inc. (“Borusan”) appeals a
judgment in favor of appellee Hunting Energy Services, LLC (“Hunting”)
following a bench trial. In six issues, Borusan argues the trial court erred when it
(1) found that Hunting did not owe Borusan defense and indemnity; (2) denied
Borusan’s claims for breach of contract and breach of warranty; (3) granted
Hunting’s claim for breach of contract; (4) granted Hunting’s claims for negligence
and negligent representation; (5) found that Borusan must indemnify Hunting; and
(6) awarded expert witness and mediation fees to Hunting. We affirm in part and
reverse in part.

                                 I.   BACKGROUND

         Borusan manufactures steel pipes by sourcing flat, raw steel material and
forming it into a rounded, longitudinal tube. The abutting edges of the tube are
then fused together through a process called electronic resistance welding
(“ERW”), which uses a high frequency electric current, creating a weld seam or
fusion line that runs longitudinally across the entire length of the pipe. Borusan
then sells these steel pipes, sometimes with a threaded connection added to the
pipes.

         Hunting offers a service whereby it swages (or expands) and threads steel
pipe with its proprietary threaded connection called Tec-Lock Wedge (“TLW”).
Hunting’s TLW connection does not require an external coupling to connect joints
of pipe because the connection consists of expanding one end of the pipe and
threading it on the inside of the pipe body (the “box end”), and then connecting the
box end to a corresponding end of pipe that has been threaded on the outside of the
pipe body (the “pin end”).

         Borusan markets and sells a turnkey, finished-end steel pipe product finished
with Hunting’s proprietary TLW connection, specifically: 5 1/2” 23.00# 0.415W
P110CY ERW R2 Casing Hunting Tec-Lock Wedge Special Clearance Borusan
Reg Mil and 5 1/2” 20.00# 0.361W P110CY ERW R3 Casing Hunting Tec-Lock
Wedge Borusan Reg Mil. Borusan sold this finished-end pipe with Hunting’s TLW
proprietary connection to its customer Sooner Pipe LLC (“Sooner”). Sooner is a
pipe distributor; the end user of the steel pipe underlying this dispute is Concho
Resources, Inc. (“Concho”).
                                           2
A.    THE LAWSUIT

      On June 30, 2020, Hunting filed the underlying lawsuit against Borusan. In
its live pleading, Hunting alleged that, “[a]s part of manufacturing and selling its
turnkey product, Borusan guarantees the quality of its manufacturing processes and
steel, and certifies that its pipe, among other things, satisfies API 5CT and is fit for
intended purposes, including swaging.” Hunting further alleged:

      In early 2020, Borusan suffered a number of failures with its products,
      all of which were conclusively caused by defects in Borusan’s steel
      and manufacturing processes. Borusan’s defective products and
      manufacturing process not only caused harm to Borusan’s customer,
      but also caused harm to Hunting and reflected poorly on Hunting and
      Hunting’s intellectual property. Borusan’s defective products and
      manufacturing processes also constituted a breach and default of the
      Parties’ written Purchase Orders and a breach of the representations
      and warranties that Borusan made to Hunting about its product.
      Hunting asserted causes of action for breach of contract based on the written
purchase orders between Borusan and Hunting; declaratory judgment, seeking in
relevant part declarations that Hunting has no obligation to indemnify Borusan and
that Borusan is required to indemnify Hunting; negligence based on Borusan
providing Hunting with defective, negligently manufactured pipe and by
misrepresenting the quality of the pipe it provided, as well as the risks associated
with its defective and substandard pipe; fraud and fraudulent inducement, based on
false, material misrepresentations by Borusan to Hunting concerning Borusan’s
pipe and its manufacturing process; fraud by non-disclosure; negligent
misrepresentation; breach of implied warranties of fitness; breach of implied
warranty of merchantability; and “marketing defect.”

      Borusan filed an answer and asserted counterclaims for breach of contract
and declaratory judgment. In Borusan’s amended answer, it asserted counterclaims
for breach of contract, breach of warranty, and declaratory relief, seeking
                                           3
declarations that Borusan’s terms and conditions of purchase applied to the pipe at
issue, that Hunting is responsible for providing a defense to Borusan for any claims
by Sooner or Concho, and that Hunting is responsible for indemnifying Borusan.

       On September 2, 2021, the parties’ claims were tried to the bench. After
Hunting rested its case in chief, the trial court granted Borusan’s motion for
directed verdict on Hunting’s claims of fraud, fraudulent inducement, and fraud by
nondisclosure. On November 3, 2021, the trial court signed findings of fact and
conclusions of law, which we summarize below.

B.     FINDINGS OF FACT

       This dispute concerns a turnkey, finished-end pipe that was sourced,
manufactured, marketed, sold, and put into the stream of commerce by Borusan.
Finished-end pipe means that the plain-end pipe has been “finished” with a
connection, and Borusan markets and sells the product as being finished with
Hunting’s proprietary TLW connection. In late 2019 and early 2020, Borusan
issued several written purchase orders (“POs”) to Hunting, pursuant to which
Borusan sold the turnkey, finished-end product to Sooner.1

       Borusan certifies and promises that its steel complies with both the testing
and performance requirements of the American Petroleum Institute’s Specification
5CT (“API 5CT”),2 as well as Borusan’s promised performance requirements,

       1
         The record includes several relevant documents of the relationship between Hunting and
Sooner. Hunting issued Borusan quotes for the cost of applying its TLW connections to
Borusan’s pipe to satisfy Concho and Sooner’s orders to Borusan. Borusan would subsequently
issue a threading purchase order (“PO”) to Hunting, which included Borusan’s terms and
conditions attached. Hunting would ultimately issue Borusan an invoice, which stated that
Hunting’s terms and conditions applied.
       2
         Andrea Romero, Hunting’s corporate metallurgical engineer and the group general
manager for quality assurance for proprietary products, testified that “API 5CT is an industry
standard that gives you the performance and testing requirements for casing and tubing.”
Borusan’s material test report provides “WE CERTIFY THE ABOVE MATERIAL HAS BEEN
                                              4
which are set forth both in API 5CT and in Borusan’s commercial documents and
representations. Hunting’s only role with regard to Borusan’s product is as a third-
party vendor. Hunting was hired by Borusan for “threading services”—the
application of Hunting’s TLW connection to “finish” Borusan’s plain-end pipe—
so that Borusan can sell the turnkey, finished-end product to Sooner.

       As part of Hunting’s “threading services,” Borusan requires that Hunting
expand Borusan’s pipe to a certain degree. Hunting plays no role in the
manufacturing or certification of Borusan’s plain-end pipe and has no
responsibility for the metallurgy or integrity of Borusan’s steel, the performance of
Borusan’s steel, or Borusan’s compliance with any of Borusan’s promised
performance standards. In the threading POs, Borusan represents that its plain-end
pipe will meet certain minimum performance standards, including the standards set
forth in API 5CT.

       Borusan also promises that its plain-end pipe satisfies the express
representations made by Borusan in the performance data sheets that Borusan
provides to Hunting. Specifically, Borusan promises that its plain-end P110 pipe
has a minimum yield strength of 110,000 PSI, a maximum yield strength of
125,000 PSI, and a minimum tensile strength of 125,000 PSI. Hunting’s
connection and threading process operates within these promised performance
criteria.

       Hunting represents that its TLW connection will meet the standards set forth
in the data connection sheets it provides to Borusan. There is no dispute that
Hunting’s TLW connection met all criteria and specifications set forth by Hunting.

MANUFACTURED, PROCESSED, SAMPLED, TESTED AND INSPECTED TO MEET THE
REQUIREMENTS OF API 5CT . . . .” Likewise, Borusan’s data sheets for its steel pipes
provide that “[p]roprietary grade manufactured to guidelines of API 5CT, bears the API
monogram.”

                                          5
Borusan’s representations regarding the quality and performance capabilities of its
plain-end pipe were false and material. As agreed by Borusan, and as confirmed by
express incorporation into the Borusan-Sooner POs, both Hunting’s standard terms
and conditions and Borusan’s standard terms and conditions of purchase apply to
the threading POs.

      In February, April, and May of 2020, a number of Borusan’s finished-end
products failed in the field. When Borusan notified Hunting of the pipe failures,
Hunting hired third-party expert Element Materials Technology (“Element”) to
perform an investigation and conduct testing to determine the root cause of the
pipe failures. Element issued reports on April 29, 2020 and May 12, 2020. Both
reports conclude that the pipe failures were caused by Borusan’s defective steel
sourcing and/or defective manufacturing processes that necessarily resulted in
plain-end pipe and turnkey, finished-end pipe that did not meet the standards
Borusan represented it would, including those set forth in API 5CT and/or
Borusan’s performance data sheets.

      At the same time, Sooner and Concho investigated the pipe failures by hiring
another third party, Viking Engineering (“Viking”), to perform a failure analysis
and publish reports documenting its testing and inspection results, findings, and
conclusions. Like the Element reports, the Viking reports conclude that the cause
of the pipe failures was Borusan’s defective products and substandard
manufacturing processes and not Hunting’s work. Various forms of testing and
examination by Viking revealed several types of metallurgical defects in Borusan’s
steel. The Viking reports conclude that Borusan’s steel contains excessive levels of
inclusions that prevent the weld line from fusing together in random, intermittent
areas, resulting in a very brittle material that is susceptible to failure when loads
are applied, and that these metallurgical defects were the result of Borusan’s

                                         6
defective sourcing of raw material, Borusan’s defective ERW manufacturing
process, or both. Thus, Viking concluded in its reports that Borusan’s steel was
unfit for its intended purposes, including swaging.

      Borusan also conducted an internal micro examination on ten samples of
Borusan’s pipe that had cracked during Hunting’s swaging operations. Borusan’s
micro examination confirmed the presence of the same metallurgical defects
identified by Viking and Element. Borusan’s metallurgist concluded that Borusan’s
pipe is metallurgically defective in ways that were necessarily caused by Borusan’s
defective manufacturing process.

      The trial court found that these metallurgical defects caused the pipe failures
and that they were not caused by Hunting’s work in any way, directly or indirectly.
Metallurgical flaws, anomalies, and defects in Borusan’s plain-end pipe made
Borusan’s plain-end pipe weaker than Borusan promised, incapable of performing
to Borusan’s promised performance standards, and not suitable for Hunting’s
process, as Borusan had promised. The metallurgical defects in Borusan’s steel can
only be introduced and caused by Borusan, before the plain-end pipe is ever
provided to Hunting for threading. Correspondingly, but for the metallurgical
flaws, anomalies, and defects in Borusan’s plain-end pipe, Borusan’s plain-end
pipe would have been suitable for Hunting’s process, as promised by Borusan.
Hunting’s process did not and could not cause Borusan’s finished-end product to
fail to comply with the API 5CT standard or Borusan’s performance data sheet,
because the pipe already failed to comply with these standards when Borusan
delivered it to Hunting.

C.    CONCLUSIONS OF LAW

      The trial court concluded that Borusan breached its contract with Hunting
and that Hunting was entitled to judgment in its favor in the amount of
                                         7
$1,931,291.86. The trial court concluded, in the alternative, that Hunting prevailed
against   Borusan    on   Hunting’s    claims    for   negligence    and   negligent
misrepresentation. The trial court concluded that Borusan was not entitled to
declaratory relief against Hunting and that Hunting was entitled to a declaratory
judgment in relevant part that Hunting had no obligation to indemnify Borusan and
that Borusan is required to indemnify Hunting pursuant to (1) Hunting’s terms and
conditions and (2) Texas Civil Practice and Remedies Code § 82.002. See Tex.
Civ. Prac. & Rem. Code § 82.002 (providing that a manufacturer has a duty to
indemnify a seller from losses arising out of a products liability action). Finally,
the trial court concluded that Borusan take nothing by its remaining claims and that
all claims and damages pursued by Borusan are denied in their entirety.

D.    JUDGMENT

      On May 25, 2022, the trial court entered a final judgment in favor of
Hunting in the amount of $1,931,291.86. The trial court awarded Hunting
$1,622,363.00 for the amount improperly withheld by Borusan on contracts wholly
unrelated to the pipe failures at issue; $308,928.86 for testing and related expenses
incurred by Hunting associated with the pipe failures; all applicable pre and post
judgment interest; $881,489.21 in reasonable and necessary attorney’s fees;
$8,105.42 in reasonable expenses; $173,009.72 in reasonable expert witness fees;
and appellate attorney’s fees. The trial court also ordered that Hunting has no
obligation to indemnify Borusan; that Borusan is required to indemnify Hunting
from actions, claims, costs, damages, demands, fines, interest, judgments,
liabilities, losses, penalties, proceedings, suits, and expenses arising from the
failures of Borusan’s products in February, April, and May 2020; and that Borusan
has no contractual right to set off against the $1,622,363.00 currently due and
owed to Hunting. Finally, the trial court rendered judgment that Borusan take

                                         8
nothing on its claims and denied Borusan’s claims in their entirety.

      This appeal followed.

                                 II.   DISCUSSION

      In its first issue, Borusan argues that the trial court erred when it concluded
that Hunting did not owe Borusan defense and indemnity because there is legally
insufficient evidence supporting the trial court’s findings that Hunting’s work did
not cause the pipe failures and that Borusan gave Hunting pipe that was defective
or weaker than promised.

A.    STANDARD OF REVIEW

      When specific findings of fact and conclusions of law are filed and a
reporter’s record is before the appellate court, the findings will be sustained if there
is evidence to support them, and the appellate court will review the legal
conclusions drawn from the facts found to determine their correctness. Trelltex,
Inc. v. Intecx, L.L.C., 494 S.W.3d 781, 789 (Tex. App.—Houston [14th Dist.]
2016, no pet.). Findings of fact have the same force and dignity as a jury’s verdict
and are reviewable under the same standards of legal and factual sufficiency. Id.;
Foley v. Capital One Bank, N.A., 383 S.W.3d 644, 646 (Tex. App.—Houston [14th
Dist.] 2012, no pet.).

      When reviewing the legal sufficiency of the evidence, we review the
evidence in the light most favorable to the challenged finding and indulge every
reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d
802, 822 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could
and disregard contrary evidence unless a reasonable factfinder could not. Id.

      When a legal sufficiency challenge concerns an issue on which the appellant
does not bear the burden of proof, we review it under a “no evidence” standard.

                                           9
See id. at 810. A no-evidence challenge will be sustained when (a) there is a
complete absence of evidence of a vital fact, (b) the court is barred by rules of law
or of evidence from giving weight to the only evidence offered to prove a vital
fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla,
or (d) the evidence conclusively establishes the opposite of the vital fact. Serv.
Corp. Intern. v. Guerra, 348 S.W.3d 221, 228 (Tex. 2011).

      Evidence is more than a scintilla if it “rises to a level that would enable
reasonable and fair-minded people to differ in their conclusions.” Ford Mtr. Co. v.
Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). If, however, the evidence does no
more than create a mere surmise or suspicion and is so slight as to necessarily
make any inference a guess, then it is no evidence. Id.

      We review a trial court’s conclusions of law de novo. State v. Heal, 917
S.W.2d 6, 9 (Tex. 1996); Potcinske v. McDonald Prop. Inv., Ltd., 245 S.W.3d 526,
529 (Tex. App.—Houston [1st Dist.] 2007, no pet.). When performing a de novo
review, we exercise our own judgment and redetermine each legal issue. Trelltex,
Inc., 494 S.W.3d at 790. To make this determination, we consider whether the
conclusions are correct based on the facts from which they are drawn. Potcinske,
245 S.W.3d at 529.

B.    INDEMNITY

      The obligation to indemnify is a creature of contract and defined according
to the terms therein. Wagner v. Exxon Mobil Corp., 654 S.W.3d 613, 627–28 (Tex.
App.—Houston [14th Dist.] 2022, no pet.). Whether indemnity exists is a rule of
contract interpretation and should be determined by the court as a matter of law.
Griffin Indus., Inc. v. Foodmaker, Inc., 22 S.W.3d 33, 36 (Tex. App.—Houston
[14th Dist.] 2000, pet. denied). “An indemnity provision does not apply to claims
between the parties to the agreement; instead, it obligates the indemnitor to protect
                                         10
the indemnitee against claims brought by a person not a party to the agreement.”
Coastal Transp. Co. v. Crown Central Petrol. Corp., 20 S.W.3d 119, 130 (Tex.
App.—Houston [14th Dist.] 2000, pet. denied).

      1.    Analysis

      Borusan bore the burden to prove it was entitled to indemnity from Hunting.
Borusan’s POs to Hunting include an indemnity provision, which states:

      10. INDEMNIFICATION. Seller shall indemnify, defend, and hold
      Buyer and its affiliates and customers harmless from and against any
      and all losses, claims, damages or expense (including any reasonable
      attorney’s fees) including those arising or related to bodily injury,
      death or damages to property, arising directly or indirectly from: (a)
      Seller’s manufacture and/or supply of the Goods, (b) Seller’s
      performance of Services, (c) any defect or alleged defect in the
      Goods, including but not limited to costs of investigation and defense,
      and consequential damages arising as a result of such defect or alleged
      defect (including, without limitation rig down time, cancelled or
      reduced orders, and chargebacks to Seller from Seller’s end
      customer), (d) the negligence or willful misconduct of Seller, its
      agents or employees, (e) the infringement of any third party
      proprietary rights with respect to the Goods and/or Services, and/or (f)
      Seller’s violation of any provision of the Purchase Order or these
      Terms and Conditions.
Borusan focuses on the language “arising directly or indirectly” in the indemnity
provision and argues that Hunting’s work was a but-for cause of the pipe failures.

      The trial court made the following relevant findings of fact concerning
Borusan’s claim that Hunting owed it defense and indemnity:

      4. Borusan breached the Threading POs by providing defective and
      sub-standard plain-end pipe that was defectively sourced, defectively
      manufactured, and did not meet the requirements of the API 5CT
      standard, the representations in Borusan’s Performance Data Sheet, or
      both.
      ...

                                        11
29. Borusan also promises that its plain-end pipe satisfies the express
representations made by Borusan in Borusan’s Performance Data
Sheets that it provides to Hunting. Specifically, Borusan promises that
its plain-end P110 pipe has a Minimum Yield Strength of 110,000
PSI, a Maximum Yield Strength of 125,000 PSI, and a Minimum
Tensile Strength of 125,000 PSI. Hunting’s connection and threading
process operates within these promised performance criteria.
...
39. Element issued two reports, on April 29, 2020 and May 12, 2020
(the “Element Reports”). Both reports conclude that the Pipe Failures
were caused by Borusan’s defective steel sourcing and/or defective
manufacturing processes that necessarily resulted in plain-end pipe
and turnkey, finished-end pipe that did not meet the standards
Borusan represented it would, including those set forth in API
5CTand/or Borusan’s Performance Data Sheets. The Element Reports
are admissible expert testimony, are admissible business records, and
are persuasive.
...
41. Viking issued four reports in June and August 2020 (the “Viking
Reports”). Like the Element Reports, the Viking Reports conclude
that the cause of the Pipe Failures was Borusan’s defective products
and substandard manufacturing processes, and not Hunting’s work.
42. Various forms of testing and examination by Viking revealed
several types of metallurgical defects in Borusan’s steel.
43. The Viking Reports conclude that Borusan’s steel contains
excessive levels of inclusions that prevent the weld line from fusing
together in random, intermittent areas, resulting in a very brittle
material that is susceptible to failure when loads are applied. The
Viking reports conclude that these metallurgical defects were the
result of Borusan’s defective sourcing of raw material, Borusan’s
defective ERW manufacturing process, or both.
...
52. The Pipe Failures were not caused by Hunting’s work in any way,
directly or indirectly. Hunting’s process did not and could not cause
Borusan’s finished-end product to fail to comply with the API 5CT
standard or Borusan’s Performance Data Sheet, because the pipe
already failed to comply with these standards when Borusan delivered
                                  12
       it to Hunting.
       ....
       63. Borusan’s Terms and Conditions do not require Hunting to
       indemnify Borusan for the Pipe Failures.
       64. Hunting’s work did not breach any requirement or obligation of
       Borusan’s Terms and Conditions.
       Borusan argues that there was no evidence that it gave Hunting pipe that was
defective or weaker than promised. Borusan also implicitly argues that there was
no evidence that Borusan’s defective or weaker pipe was the cause of the pipe
failures and no evidence that Hunting was not responsible for the pipe failures.3
However, as discussed below, the trial court’s finding of fact number fifty-two—
that the pipe failures were not caused by Hunting’s work in any way, directly or
indirectly—is supported by legally sufficient evidence. The record also includes
legally sufficient evidence supporting the trial court’s finding of fact number
four—that Borusan provided Hunting with sub-standard and defective pipe that did
not meet the representations in Borusan’s data sheets.

       Hunting presented the testimony of Gary Wooley, Ph. D. (“Dr. Wooley”), an
expert in engineering metallurgy. Dr. Wooley testified that the examinations of
Borusan pipes revealed that “the manufacturing defects, the inclusions and the lack
of fusion were created during the manufacturing process by Borusan.” He
explained that inclusions are imperfections in the steel created or included at the
time of manufacturing and that “[t]hey’re unacceptable weak spots in the steel that
do not have the properties that you would like in the steel.” These focalized weak
points cannot take the stresses applied by an expanding process like Hunting’s and

       3
          Specifically, Borusan argues that “[t]he trial evidence conclusively proved that
Hunting’s work was a but-for cause of the Pipe Failures.” However, the trial court found that
Hunting’s work did not in any way directly or indirectly cause the pipe failures, a finding that
supports the conclusion that Hunting is not required to indemnify Borusan.

                                              13
“the stresses create a crack because that weak point can’t bear any load.”

      Dr. Wooley further explained that a lack of fusion or lack of bonding occurs
during the ERW process and results in “a poor bonding point that may not be
continuous throughout the weld . . . .” He testified that the impact of these
inclusions and lack of bonding is that “the pipe now has weak spots, weak spots in
the weld line and weak spots in the inclusions, and those weak spots mean that the
pipe will not be able to withstand the stress levels that it is expected to withstand.”

      Dr. Wooley testified that Borusan’s data sheets provide that Borusan’s steel
pipes will have a minimum yield strength of 110,000 psi—that is, “stress level
needs to be at least 110,000 psi before the material will begin to yield or deform
plastically or permanently.” Because Hunting’s threading connection requires the
pipe to be expanded, “everybody understands 110 is exceeded in the swaging
process.” Borusan’s data sheet also states that the steel will have a maximum yield
strength of 125,000 psi—that is, it is the upper limit of stress that the steel can take
before becoming too brittle.

      Dr. Wooley maintained that Hunting’s swaging process did not apply stress
greater than 125,000 psi, and thus, Borusan’s pipe “didn’t do what it was supposed
to do.” Dr. Wooley concluded in his report that “the pipe was not fit for swaging
because of the anomalies that were found . . . .”

      Hunting also presented the testimony of Andrea Romero (“Romero”),
Hunting’s corporate metallurgical engineer and the group general manager for
quality assurance for proprietary products. Romero explained that the application
of Hunting’s TLW connection involves a three-step process: (1) the pipe is
expanded for the box end; (2) the box end is stress relieved; and (3) the box end is
threaded. Romero testified that Viking analyzed two groups of material: (1) pipe
that actually failed in the field, and (2) pipe that Concho had in inventory. Romero
                                          14
testified that she saw consistent metallurgical defects along the weld fusion line of
Borusan’s pipe in the raw data in Viking’s reports.

      Romero also testified that Hunting hired Element to perform a root cause
analysis of the pipe failures and that Element concluded that the root cause of the
failures was the presence of penetrators—i.e., an indication of lack of fusion at the
weld line. Romero explained “because there was [sic] these penetrations present in
the weld—this affected the entirety of the weld and, therefore, ultimately had a
brittle effect on the material, which ultimately means it was weaker than what was
stated on” Borusan’s data sheets. Romero testified that Hunting “determined pretty
much the same thing that Element did, that there was a lack of fusion at the weld
line that ultimately weakened the material because of a loss of plasticity.” Romero
stated that a lack of fusion “will occur during the welding process at the pipe
manufacturing mill” and it is “metallurgically impossible for [Hunting] to have
anything to do with the weld line.”

      Hunting also presented the testimony of Amanda Malinoff (“Malinoff”), the
material and processes engineer for Hunting’s connection technology division.
Malinoff testified that the cause of the pipe failures was “intermittent weld line
defects” and metallurgical defects, including “evidence of inclusions, of lack of
fusion, and temper embrittlement.” Malinoff testified that these metallurgical
defects “would come from the actual welding process” and that there is nothing
that Hunting does to the pipe that can cause the pre-existing inclusions to grow or
to get bigger; “[t]hese are pre-existing from, say, the manufacturing process or as
received in the raw material.”

      Borusan presented the testimony of Todd Reeves (“Reeves”), Borusan’s
director of quality. Reeves testified that Borusan is responsible for the weld in the
pipe and that Borusan’s pipe subject to the dispute—P110-CY—is pipe with

                                         15
specific testing characteristics as well as specific performance characteristics.
Reeves explained that Borusan’s data sheets state that its P110-CY pipe has a
minimum yield strength of 110,000 psi and a minimum tensile strength of 125,000
psi and that this means that all of the pipe has those performance characteristics.

      This is legally sufficient evidence to support the trial court’s findings
number four and fifty-two noted above. See Ford Mtr. Co., 135 S.W.3d at 601.
Based on these findings, we cannot conclude that the trial court erred when it
concluded that Hunting did not owe Borusan indemnity. See id.

      We overrule Borusan’s first issue.

C.    BREACH OF CONTRACT

      In its second issue, Borusan argues the trial court erred when it denied its
breach of contract and breach of warranty claims. Borusan argues that “[t]he
evidence . . . conclusively established that Hunting’s connection manufacturing did
not comply with the Threading POs’ specifications and its promised level or
performance” because Hunting’s connection brought Borusan’s pipe out of
compliance with API 5CT. In its third issue, Borusan argues that the trial court
erred when it granted Hunting’s claim for breach of contract. We address these
issues together.

      What constitutes a breach of contract is a question of law, but whether the
breaching conduct occurred is a question of fact. See Bartush-Schnitzius Foods v.
Cimco Refrigeration, Inc., 518 S.W.3d 432, 436 (Tex. 2017) (per curiam).

      The trial court made the following conclusions of law concerning the breach
of contract claims:

      1. The Threading POs are valid and enforceable contracts.
      2. Hunting fully performed its obligations under the Threading POs

                                           16
       and is a proper party to sue for breach of the Threading POs.
       3. Borusan breached the Threading POs by refusing to pay Hunting
       the $1,622,363 it admittedly owed, because it had no valid legal
       justification under the Threading POs for withholding payment.
       4. Borusan breached the Threading POs by providing defective and
       sub-standard plain-end pipe that was defectively sourced, defectively
       manufactured, and did not meet the requirements of the API 5CT
       standard, the representations in Borusan’s Performance Data Sheet, or
       both.
       ...
       9. Hunting did not breach the Threading POs. Hunting’s performance
       met the requirements of the Threading POs and Borusan’s Terms and
       Conditions. Moreover, neither the Threading POs nor Borusan’s
       Terms and Conditions require Hunting to indemnify Borusan for the
       Pipe Failures, so its refusal to do so is not a breach of contract.
       As noted above, there is legally sufficient evidence supporting the trial
court’s finding that the pipe failures were caused by imperfections and defects
created during Borusan’s manufacturing process and not by any of Hunting’s
work. There is also legally sufficient evidence that Borusan’s pipes did not meet
the performance specifications in Borusan’s data sheets for the pipes and that
nothing Hunting did during its threading process could cause Borusan’s pipe to fail
to comply with Borusan’s performance data sheet for the pipes. Finally, there is
legally sufficient evidence that Hunting’s connection complied with the Threading
POs specifications and promised level or performance and that that the connection
worked as intended and did not fail.

       We conclude that the trial court did not err when it concluded that Borusan
breached the contract between Borusan and Hunting and that Hunting did not
breach the contract. We overrule Borusan’s second and third issues.4

       4
         Because we overrule Borusan’s third issue, we need not address its fourth issue
challenging the trial court’s ruling on Hunting’s negligence and negligent representation claims,
                                               17
D.     DECLARATORY JUDGMENT

       In its fifth issue, Borusan argues the trial court erred when it entered a
declaratory judgment that Borusan must indemnify Hunting. Borusan presents two
arguments: (1) it is not bound by the indemnity provision in Hunting’s terms and
conditions; and (2) it does not owe a statutory indemnity under the Texas Products
Liability Act.

       A person interested under a written contract, or whose rights, status, or other
legal relations are affected by a contract, may have determined any question of
construction or validity arising under the instrument or contract and obtain a
declaration of rights, status, or other legal relations thereunder. Tex. Civ. Prac. &
Rem. Code Ann. § 37.004(a). We review declaratory judgments under the same
standards as other judgments. Id. § 37.010. We look to the procedure used to
resolve the issue below to determine the standard of review on appeal. Lidawi v.
Progressive Cty. Mut. Ins., 112 S.W.3d 725, 730 (Tex. App.—Houston [14th Dist.]
2003, no pet.). The elements of a valid contract are (1) an offer, (2) an acceptance,
(3) a meeting of the minds, (4) each party’s consent to the terms, and (5) execution
and delivery of the contract with the intent that it be mutual and binding. Tyco
Valves & Controls, L.P. v. Colorado, 365 S.W.3d 750, 771 (Tex. App.—Houston
[1st Dist.] 2012), aff’d, 432 S.W.3d 885 (Tex. 2014).

       1. Indemnity Provision in Hunting’s Terms & Conditions

       Borusan argues that it is not bound by the indemnity provision in Hunting’s
terms and conditions because Borusan’s own terms and conditions state that
Borusan’s terms and conditions are the only applicable terms between the parties,
unless Borussan expressly agreed in writing to other terms. Borusan argues that

which are an alternative basis for Borusan’s liability. See Tex. R. App. P. 47.4.

                                                18
there is no evidence “that Borusan ever bound itself to the Hunting [terms and
conditions], much less expressly agreed to them in writing as the Threading POs
require.”5

       The trial court made the following additional relevant findings of fact:

       24. Hunting is not a party to the Borusan-Sooner POs. However, the
       Borusan-Sooner POs are subject to Hunting’s Terms and
       Conditions and Borusan’s Standard Terms and Conditions of
       Purchase . . . apply to the Threading POs.
       ...
       33. As agreed by Borusan, and as confirmed by express incorporation
       into the Borusan-Sooner POs, both Hunting’s Standard Terms and
       Conditions and Borusan’s Standard Terms and Conditions of
       Purchase . . . apply to the Threading POs.
       34. The Threading POs from Borusan to Hunting and the Invoices
       from Hunting to Borusan, as well as the corresponding Borusan-
       Sooner POs are the commercial documents that govern the
       relationship between the parties, whereby Borusan manufactures and
       sells its turnkey, finished-end product-BMP P110 CY, 5.5 inch, 20
       pound and 23 pound pipe with Tec-Lock Wedge Connection
       ([Borusan’s] “Products”)—to its customer Sooner.
The trial court then made the following conclusions of law:
       1. The Threading [Purchase Orders (“POs”)] are valid and enforceable
       contracts.
       ...
       12. Because Borusan’s plain-end pipe failed to meet its promised
       performance requirements:
               ...

       5
           Hunting’s General Terms and Conditions of Sale provide “These terms and conditions
apply to all sales of products by Hunting . . . . Acceptance of Buyer’s Order is expressly limited
to these terms and conditions, and the quotation, if any, and order acceptance issued by
Seller . . . .” Travis Kelly, Hunting’s sale and marketing manager, testified that Hunting would
issue quotes to Borusan and then Borusan would issue a purchase order to Hunting. Hunting’s
quotes for services issued to Borusan do not provide that Hunting’s terms and conditions apply.
Hunting’s invoices indicate that they are issued after the purchase order has been received.

                                               19
             b. Pursuant to both Hunting’s Terms and Conditions and Texas
             Civil Practice and Remedies Code § 82.002, Borusan is
             required to defend, indemnify, release, and hold Hunting
             harmless from and against any and all actions, claims, costs
             (including without limitation, costs of investigation, litigation,
             and court costs), damages, demands, fines, interest, judgments,
             liabilities, losses, penalties, proceedings, suits (including
             appeal), and expenses (including without limitation, reasonable
             attorneys’ fees) arising from the failures of Borusan’s products
             in February, April, and May of 2020.
      On appeal, Borusan argues that “[t]he Threading POs—including the
attached Borusan [terms and conditions]—are undisputedly the parties’ binding
contract” and points our attention to the trial court’s findings of fact filed prior to
the judgment. Borusan then argues that “[n]othing [in the threading POs] obligates
Borusan to indemnify Hunting; the contract obligates Hunting to indemnify
Borusan.” (emphasis in original).

      However, contrary to Borusan’s argument, the trial court also included a
finding of fact in its final judgment that both the invoices from Hunting to Borusan
relating to the pipe at issue and the purchase order from Borusan to Hunting are
valid and enforceable contracts. If there is a conflict between the findings of fact
recited in a judgment and the findings of fact issued separately by the trial court,
then the latter findings will control for appellate purposes. Tex. R. Civ. P. 299a.
Here, the trial court’s finding in the judgment controls because the judgment was
issued after its findings of fact and conclusions of law. See id.

      On appeal, Borusan does not challenge this finding by the trial court
included in the judgment, nor does it argue that Hunting’s invoices are not valid
and enforceable contracts. If the invoices are valid and enforceable contracts or
part of the parties’ valid and enforceable contracts, then Borusan is subject to
Hunting’s terms and conditions, including Hunting’s indemnity provision.

                                          20
      Borusan cites no authority in support of its argument that it does not owe
Hunting contractual indemnity and provides no legal analysis as to why the
invoices are not valid and enforceable contracts. See Tex. Bus. & Com. Code Ann.
§ 2.207(b) (“The additional terms are to be construed as proposals for addition to
the contract. Between merchants such terms become part of the contract unless: (1)
the offer expressly limits acceptance to the terms of the offer; (2) they materially
alter it; or (3) notification of objection to them has already been given or is given
within a reasonable time after notice of them is received.”); Long Island Pipe, Inc.
v. QT Trading, LP, No. 01-18-00012-CV, 2018 WL 3353015, at *5–6 (Tex.
App.—Houston [1st Dist.] July 10, 2018, no pet.) (mem. op.) (“[U]nlike the
‘mirror image’ rule at common law, the mere fact that a merchant’s acceptance
form contains materially different terms than the offer does not mean that it will be
considered a rejection or counter-offer.” (quoting Stelluti Kerr, L.L.C. v. Mapei
Corp., 703 Fed. App’x 214, 225 (5th Cir. 2017) (per curiam))); see also Tex. R.
App. P. 38.1(i). We decline to perform the research and analysis for Borusan to
argue whether Hunting’s invoices were valid and enforceable contracts. See Tex.
R. App. P. 38.1(i) (“The brief must contain a clear and concise argument for the
contentions made, with appropriate citations to authorities and to the record.”);
Canton-Carter v. Baylor College of Med., 271 S.W.3d 928, 931 (Tex. App.—
Houston [14th Dist.] 2008, no pet.) (“Failure to cite legal authority or to provide
substantive analysis of the legal issues presented results in waiver of the
complaint.”); Grimm v. Grimm, 864 S.W.2d 160, 163 (Tex. App.—Houston [14th
Dist.] 1993, no writ) (“The burden of showing reversible error is on appellant as
the complaining party.”). Thus, we conclude that Borusan has failed to show on
appeal that the trial court erred when it found that the Hunting invoices are valid
and enforceable contracts. See Grimm, 864 S.W.2d at 163. Because this finding by
the trial court remains unchallenged, we cannot conclude that the trial court erred
                                         21
when it held that Borusan owed Hunting indemnity pursuant to Hunting’s terms
and conditions.

       Borusan further argues that there is no evidence that Hunting’s terms and
conditions in the record that include the indemnity provision are the terms and
conditions referenced in Hunting’s invoices. Travis Kelley, Hunting’s sales and
marketing manager, testified concerning a copy of an invoice from Hunting to
Borusan and explained that the copy was a typical invoice. This invoice states at
the bottom “TERMS AND CONDITIONS APPLY AS STATED AT HUNTING-
INTL.COM.” There is also evidence of email communications between Borusan
and Sooner in the record in which Borusan attaches Hunting’s terms and
conditions. This is some evidence supporting the trial court’s implicit finding that
Hunting’s terms and conditions in the record are those referenced in the invoices to
Borusan. See Ford Mtr. Co., 135 S.W.3d at 601. Hunting’s terms and conditions
provide that the buyer of Hunting’s services must indemnify Hunting.

       We conclude that the trial court did not err when it entered judgment
declaring that Borusan must indemnify Hunting pursuant to Hunting’s terms and
conditions.

       2. Duty to Indemnify Pursuant to Texas Civil Practice & Remedies
          Code § 82.002
       Borusan also argues that it does not owe statutory indemnity under the Texas
Products Liability Act.6

       A manufacturer shall indemnify and hold harmless a seller against
       loss arising out of a products liability action, except for any loss
       caused by the seller’s negligence, intentional misconduct, or other act
       6
         Although the trial court’s declaration that Borusan must indemnify Hunting is affirmed
based on the indemnity provision in Hunting’s terms and conditions, the resolution of Borusan’s
argument concerning a manufacturer’s statutory duty to indemnify pursuant to § 82.002 is
necessary for the disposition of part of Borusan’s sixth issue.

                                              22
      or omission, such as negligently modifying or altering the product, for
      which the seller is independently liable.
Tex. Civ. Prac. & Rem. Code Ann. § 82.002(a); see Petrol. Sols., Inc. v. Head, 454
S.W.3d 482, 491 (Tex. 2014). This duty to indemnify is triggered by the injured
claimant’s pleadings. Petrol. Sols., 454 S.W.3d at 492; Gen Motors Corp. v.
Hudiburg Chevrolet, Inc., 199 S.W.3d 249, 256 (Tex. 2006) (“[W]e have stated
that ‘the duty is imposed only on the manufacturer of a product claimed in a
petition or complaint to be defective.’” (quoting Fitzgerald v. Advanced Spine
Fixation Sys., Inc., 996 S.W.3d 864, 866 (Tex. 1999))). “Specifically, the duty is
triggered by allegations of a defect in the manufacturer-indemnitor’s product and is
not dependent on an adjudication of the indemnitor’s liability.” Petrol. Sols., 454
S.W.3d at 492.

      Here, there is no evidence of any pleading by any claimant asserting a
products liability action against Hunting based on Borusan’s pipe failures. On
appeal, Hunting points to a demand letter from Sooner to Hunting and Borusan,
which states:

      The purpose of this letter is to formally provide you with notice of a
      number of recent failures COG Operating LLC ("Concho") has
      experienced involving casing supplied by Sooner Pipe. The casing
      was manufactured by Borusan Mannesmann and had Hunting Energy
      Services TEC-LOCK Wedge connections. By copy of this letter, we
      are also providing notice to Borusan Mannesmann and Hunting
      Energy Services. However, we ask that you also notify them of this
      claim.
      ...
      We believe that Sooner Pipe, Borusan Mannesmann, and Hunting
      Energy Services failed to comply with their warranties with respect to
      these materials, and that the materials supplied to Concho were
      defective. As a result, Concho has sustained significant damage,
      which it hereby demands compensation for.
      Please let us how you intend to proceed at your earliest convenience.
                                        23
      Thank you for your consideration.

      Contrary to Hunting’s argument, a demand letter is not a “products liability
action” nor a pleading. See Tex. Civ. Prac. & Rem. Code Ann. § 82.001(2)
(defining “products liability action” as “any action against a manufacturer or seller
for recovery of damages arising out of personal injury, death, or property damage
allegedly caused by a defective product whether the action is based in strict tort
liability, strict products liability, negligence, misrepresentation, breach of express
or implied warranty, or any other theory or combination of theories”); see Zachry
Eng’g Corp. v. Encina Dev. Grp., LLC, No. 14-22-00265-CV, __ S.W.3d __, __
(Tex. App.—Houston [14th Dist.] May 18, 2023, pet. filed) (“The term ‘action’ is
generally synonymous with ‘suit,’ which is a demand of one’s rights in court.”
(quoting Jaster v. Comet II, Const., Inc., 438 S.W.3d 556, 563 (Tex. 2014)
(plurality op))); see also Fresh Coat, Inc. v. Parexlahabra, Inc., 424 S.W.3d 237,
243 (Tex. App.—Beaumont 2014, no pet.) (“[A]s commonly used, ‘action’ is
generally used to refer to a legal proceeding. Courts, considering the meaning of
the term ‘action’ in other statutes, have construed ‘action’ to mean a ‘suit.’”). Nor
does a demand letter support an inference that a product-liability claim has been
filed. Accordingly, we conclude that there is no evidence in this record that
Borusan owes a statutory-indemnity duty to Hunting pursuant to § 82.002. See
Tex. Civ. Prac. & Rem. Code Ann. §§ 82.001(1)–(2), 82.002(a); Jaster, 438
S.W.3d at 568 (stating that “claimant” is defined as someone “who asserts a claim
for relief within a lawsuit”); Gen Motors Corp., 199 S.W.3d at 256 (“[A] product
manufacturer has a statutory duty to indemnify a seller only if a claimant alleges
that the product is defective, and an allegation of a defective finished product
includes a component only if the allegation can fairly be read as being directed to
the component as well . . . .”).

                                          24
       We sustain Borusan’s fifth issue in part and overrule it in part.

E.     AWARDS IN THE JUDGMENT

       In its sixth issue, Borusan argues that the trial court’s attorney fee awards
and award of witness and mediation fees must be reversed. The trial court awarded
Hunting $881,489.21 in reasonable and necessary attorney’s fees; $8,105.42 in
reasonable expenses; $173,009.72 in reasonable expert witness fees; and appellate
attorney’s fees.

       1. Attorney’s Fees

       Borusan first argues that we should reverse the award of fees and costs to
Hunting because the trial court erred when it ruled in Hunting’s favor on Hunting’s
claims for declaratory judgment and breach of contract.

       Hunting may recover reasonable attorney’s fees if it prevailed in its breach
of contract claim. See Tex. Civ. Prac. & Rem. Code Ann. § 38.001(b)(8). As
previously concluded, the trial court did not err when it entered judgment in favor
of Hunting on its breach of contract claim. Thus, there is a basis for the trial court’s
award of attorney’s fees, and we reject this argument.

       2. Expert Witness Fees

       Borusan argues next that the award of $170,859.72 to Hunting for
reasonable expert witness fees must be reversed because these fees are not taxable
court costs.7 Hunting argues that the expert witness fees are recoverable pursuant
to Borusan’s indemnity obligations found by the trial court.

       We review the trial court’s award of costs for an abuse of discretion. See

       7
         The trial court awarded Hunting $173,009.72 in “reasonable expert witness fees.” On
appeal, Hunting agrees with Borusan that $170,859.72 of this award was for expert witness fees
and $2,150.00 was for mediation services.

                                             25
Simon v. York Crane & Rigging Co., 739 S.W2d 793, 795 (Tex. 1987). A trial
court abuses its discretion when it acts arbitrarily or unreasonably or without
reference to guiding rules or principles. Worford v. Samper, 801 S.W.2d 108, 109
(Tex. 1990) (per curiam).

      “Generally speaking, the fee of an expert witness constitutes an incidental
expense in preparation for trial and is not recoverable as court costs.” Messier v.
Messier, 458 S.W.3d 155, 168 (Tex. App.—Houston [14th Dist.] 2015, no pet.);
May v. Ticor Title Ins., 422 S.W.3d 93, 106 (Tex. App.—Houston [14th Dist.]
2014, no pet.). In some instances, however, expert witness fees are recoverable
under statutes permitting courts to award expenses in addition to costs and
attorney’s fees. Messier, 458 S.W.3d at 168.

      Hunting’s general terms and conditions of sale provide:
      B. To the extent permitted by applicable law, Buyer agrees to
      indemnify and hold harmless all members of the Seller Group for any
      damages paid by the Seller Group in excess of the limitation of
      liability set forth in Section 11.A.
      ...
      12. Indemnification: BUYER SHALL BE LIABLE FOR, AND
      SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS
      SELLER AND ITS AFFILIATES AND EACH OF THEIR
      RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND
      AGENTS (“SELLER GROUP”) FROM AND AGAINST ANY AND
      ALL CLAIMS WHICH ARISE OUT OF THE PERFORMANCE OF
      THE CONTRACT TO THE FOLLOWING: (I) LOSS OF OR
      DAMAGE TO ANY WELL OR HOLE OR ANY THIRD PARTY
      OIL AND GAS PRODUCTION FACILITIES; (II) RESERVOIR
      SEEPAGE OR POLLUTION ORIGINATING UNDERGROUND
      OR FROM THE PROPERTY OF BUYER OR ANY THIRD PARTY
      HOWSOEVER,        (III) BLOW-OUT,  FIRE,  EXPLOSION,
      CRATERING OR ANY WELL OR RESERVOIR OR ANY OTHER
      UNCONTROLLED WELL CONDITION (INCLUDING THE
      COSTS TO CONTROL A WILD WELL AND THE REMOVAL OF

                                        26
      DEBRIS); (IV) DAMAGE TO OR ESCAPE OF PRODUCT, OR
      SUBSTANCE FROM ANY FACILITY, INCLUDING ANY
      PIPELINE OR OTHER SUBSURFACE FACILITY; AND/OR (V)
      BODILY INJURY, PROPERTY DAMAGE AND ANY RELATED
      DAMAGES TO THIRD PARTIES. IT IS THE EXPRESS
      INTENTION OF BOTH BUYER AND SELLER THAT THE
      INDEMNITY PROVIDED FOR IN THIS PARAGRAPH IS AN
      INDEMNITY BY BUYER TO INDEMNIFY AND PROTECT
      SELLER GROUP FROM THE CONSEQUENCES OF SELLER
      GROUP’S OWN NEGLIGENCE, FAULT OR STRICT LIABILITY,
      WHETHER THAT NEGLIGENCE, FAULT OR STRICT
      LIABILITY IS THE JOINT OR CONCURRING CAUSE OF A
      CLAIM, LOSS OR EXPENSE (BUT EXPRESSLY EXCLUDING
      THE SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL
      MISCONDUCT OF SELLER GROUP).
      Contrary to Hunting’s argument, Hunting’s indemnity provision does not
provide that Borusan is to indemnify Hunting for all costs, expenses, or incidental
expenses in pursuing Hunting’s claims; instead, the provision declares that
Borusan is to indemnify Hunting for claims arising out of the performance of the
contract. See Wagner, 654 S.W.3d at 627–28; Coastal Transp. Co., 20 S.W.3d at
130; see also DBHL, Inc. v. Moen Inc., 312 S.W.3d 631, 635 (Tex. App.—Houston
[1st Dist.] 2009, pet. denied) (“Courts may not expand the parties’ rights and
responsibilities beyond the limits defined in an indemnity contract.”).
Accordingly, we reject Hunting’s argument that the indemnity provision allowed
the trial court to award the expert witness fees.

      Hunting argues next that the award of expert witness fees may be affirmed
based on the trial court’s finding that Borusan must indemnify Hunting pursuant to
§ 82.002. However, we previously concluded that the trial court erred when it
rendered judgment declaring that Borusan must indemnify Hunting pursuant to
§ 82.002.

      We conclude that the trial court erred when it awarded Hunting $173,009.72

                                          27
in reasonable expert witness fees.

      3. Mediation Fees

      As to the award of $2,150.00 in mediation fees, Borusan argues that they are
not recoverable as court costs unless mediation was court ordered. Hunting argues
that the trial court had discretion to award mediation fees as court costs pursuant to
Rule 141 of the Texas Rules of Civil Procedure and that they can be recovered as
“other reasonable expenses” under Hunting’s contractual indemnity provision or
§ 82.002.

      When a mediator is appointed by the court, the trial court may set a
reasonable fee for the services of the mediator and tax the fee as costs of suit. See
Tex. Civ. Prac. & Rem. Code Ann. § 154.054; Decker v. Lindsay, 824 S.W.2d 247,
249 (Tex. App.—Houston [1st Dist.] 1992, orig. proceeding). Here, there is no
evidence in the record indicating that the trial court appointed a mediator for which
the $2,150.00 in mediation fees was assessed.

      Additionally, “[t]he court may, for good cause, to be stated on the record,
adjudge the costs otherwise than as provided by law or these rules.” Tex. R. Civ. P.
141. “Rule 141 has two requirements—that there be good cause and that it be
stated on the record.” Furr’s Supermkts., Inc. v. Bethune, 53 S.W.3d 375, 376–77
(Tex. 2001). Here, the trial court did not state anywhere in the on the record that it
was awarding the mediation fees for good cause or what good cause existed to
serve as the basis for such an award. See Tex. R. Civ. P. 141.

      Finally, as noted above, Hunting’s indemnity provision does not state that
Borusan must indemnify Hunting for all reasonable expenses arising out of the
performance of contract, and the trial court erred when it declared that Borusan
must indemnify Hunting pursuant to § 82.002. Thus, we conclude the trial court

                                         28
erred when it awarded Hunting $2,150.00 for mediation fees.

      We sustain Borusan’s sixth issue in part and overrule it in part.

                              III.   CONCLUSION

      We reverse the portion of the trial court’s judgment ordering Borusan to
indemnify Hunting pursuant to Texas Civil Practice and Remedies Code § 82.002
and the award to Hunting of $173,009.72 for expert witness fees and mediation
fees. We affirm the remainder of the judgment.

                                              /s/ Margaret “Meg” Poissant
                                              Justice

Panel consists of Justices Wise, Jewell, and Poissant.

                                         29