Court Opinion

ID: 9941232
Source: CourtListenerOpinion
Date Created: 2024-02-16 08:14:13.286319+00
Date Added: 2024-06-11T13:46:24.033054
License: Public Domain

In The

                               Court of Appeals

                    Ninth District of Texas at Beaumont

                             __________________

                             NO. 09-23-00028-CV
                             __________________

       AUTOMATED INGREDIENT SYSTEMS, L.L.C., Appellant

                                        V.

                      HILLER CARBON, LLC, Appellee

__________________________________________________________________

               On Appeal from the 253rd District Court
                       Liberty County, Texas
                    Trial Cause No. CV-18-13055
__________________________________________________________________

                         MEMORANDUM OPINION

       This permissive interlocutory appeal arises from a contract-formation dispute

involving a battle of forms in which appellee Hiller Carbon, LLC requested that

appellant Automated Ingredient Systems, L.L.C. (“AIS”) submit a proposal that

involved the sale of fabricated equipment. In its sole issue, AIS questions whether

Hiller Carbon agreed to the proposal in AIS’s form and to the terms and conditions

it attached to its form, which contain a provision waiving consequential damages.
                                         1
AIS and Hiller Carbon filed cross-motions for partial summary judgment on AIS’s

affirmative defense of waiver, and the trial court granted Hiller Carbon’s motion and

denied AIS’s motion. We affirm the trial court’s order.

                                   BACKGROUND

      After Hiller Carbon approached AIS about providing various equipment,

Luke Ungashick, a member of AIS, sent Hiller Carbon an email and attached

Revised AIS Proposal 216516R2-LU that described the equipment in detail, which

included components of a coke pellet manufacturing system, that AIS offered to

make and deliver, and included the price of $599,981.00, quantity, payment terms,

and delivery dates.1 Ungashick’s email stated that “[i]f this proposal is acceptable to

you and the project moves forward, would you be so kind as to simply shooting me

a text or email? If I can enter this one earlier on our schedule . . ., I’ll feel much more

comfortable with the delivery schedule.”

      However, page 17 of 17 of Proposal 216516R2-LU specifically provides the

following:

      1We note that AIS submitted several proposals, but only two of its proposals

are relevant to this appeal.
                                            2
        “Customer Acceptance of Proposal:
        I hereby accept the proposal referenced in this document prepared by
        Automated Ingredient Systems, LLC. I acknowledge receipt of and accept the
        attached proposal terms and conditions of Automated Ingredient Systems,
        LLC.

        Company: ______________________________________________

        Authorized Signature: _____________________________________
        Print Name and Title: _____________________________________

        Date: ___________________

        Please return a copy of this entire signed proposal via mail, fax or email to:
              Automated Ingredient Systems, LLC
              240 Main Street
              Grandview, MO 64030
              Fax: 816-331-1181
              Luke_ungashick@ais-kc.com

        Respectfully Submitted,
        /s/ Luke Ungashick
        Luke Ungashick, Manager
        Automated Ingredient Systems, LLC”

In addition, the bottom of each page of the proposal states that “THIS PROPOSAL

AND ACCEPTANCE ARE SUBJECT TO THE TERMS AND CONDITIONS

ATTACHED TO THE QUOTATION.”

        On the very next page, a one-page document titled: “AUTOMATED

INGREDIENT SYSTEMS, L.L.C. PROPOSAL - ADDITIONAL TERMS AND

CONDITIONS” (“T&Cs”), were also attached to the email, and section 1 provides

that:
                                           3
      [t]his proposal may be accepted by the BUYER only on the terms set
      forth herein by signing a copy of this proposal and delivering to
      SELLER at address set forth on the face hereof. No terms or conditions,
      whether written or oral, in addition to or different from those contained
      in this proposal shall be part of the agreement of the parties. …

Section 1 also states “[t]his proposal is the final, complete and exclusive statement

of the offer and its acceptance by BUYER is hereby expressly limited to the terms

and conditions hereof[,]” and “no subsequent agreements or communications in any

way modifying any provisions of this offer shall be binding unless made in writing

and signed by an authorized officer of the SELLER.” Section 9 of the T&Cs contains

a provision that expressly waives consequential damages and states as follows:

      [AIS] shall not be liable under any circumstances for any indirect,
      special, incidental or consequential loss, damage or injury of any kind
      of nature, including but not limited to . . . loss of use of goods or any
      other property of [Hiller Carbon] or others, or loss of profits, products
      or production.

Furthermore, section 18 of the T&Cs contains a provision that any issues were to be

governed by the laws of the State of Missouri, and “… that any claim or dispute

arising out of or relating to this agreement must be resolved by either the Circuit

Court of Jackson County, Missouri at Kansas City or the United States District Court

for the Western District of Missouri.” Finally, section 20 of the T&Cs contains a

provision that expressly waives trial by jury.

                                         4
      However, it should be noted that no corporate representative of Hiller Carbon

signed AIS’s Proposal 216516R2-LU. Instead, Jesse Perez, Hiller Carbon Chief

Financial Officer, sent Ungashick an email with an attached signed PURCHASE

ORDER in the same amount of $599,981.00 P.O. NUMBER DTX-PP-001

“pursuant to AIS’[s] revised proposal 216516R2-LU.” Perez’s email asked that

Ungashick “countersign under my signature on the attached, and we will put the

down payment in line for payment within the next 7-10 days.” Linda Ungashick,

AIS’s Manager and Chief Financial Officer, signed Hiller Carbon’s purchase order

DTX-PP-001 in the amount of $599,981.00. Purchase order DTX-PP-001 shows

Hiller Carbon agreed to purchase “AIS EQUIPMENT AND COMPONENTS” and

that the “(EQUIPMENT AND COMPONENT DETAILS ARE LISTED ON AIS

PROPOSAL 216516R2-LU[.])” Purchase order number DTX-PP-001 does not

indicate Hiller Carbon made any changes, objections, or complaints about Proposal

216516R2-LU.

      AIS sent Hiller Carbon additional proposals for equipment, including Change

Order # 01 in the additional amount of $55,500.00 (per AIS’s Proposal 216561R1-

LU) and Revised Proposal 216558R1-LU in the amount of $79,760.00, both of

which contained the same general terms as Proposal 216516R2-LU along with the

same T&Cs. Hiller Carbon sent AIS new purchase orders, Hiller Carbon’s

                                        5
PURCHASE ORDER Numbers DTX-PP-001 (Revision 1) in the same additional

amount of $55,500.00 and DTX-PP-005 in the same amount of $79,760.00, which

described the equipment as “AIS EQUIPMENT AND COMPONENTS” and

indicated the “(EQUIPMENT AND COMPONENT DETAILS ARE LISTED ON

…)” AIS Proposals 216516R2-LU, 216561R1-LU, and 216558R1-LU. Perez, Hiller

Carbon’s CFO, signed Hiller Carbon’s PURCHASE ORDER Numbers DTX-PP-

001 (Revision 1) and DTX-PP-005, but he never signed any of AIS’s proposals or

change order. That said, AIS did not countersign Hiller Carbon’s PURCHASE

ORDER Numbers DTX-PP-001 (Revision 1) or DTX-PP-005.

      After AIS designed and supplied the equipment and components for the pellet

system in Hiller Carbon’s plant, the plant exploded. After the explosion, AIS sued

Hiller Carbon for failing to fully pay Hiller Carbon’s PURCHASE ORDER

Numbers DTX-PP-001 (Revision 1) and DTX-PP-005 for services, materials, and

equipment that AIS had manufactured and delivered in accordance with AIS’s

proposals. AIS alleged causes of action for breach of contract, quantum meruit,

violating the Prompt Pay Act, to foreclose a mechanic’s and materialman’s lien

secured by a bond, and it sought a declaratory judgment. Hiller Carbon denied

liability, asserted affirmative defenses and counterclaims, and sought damages and

attorney’s fees. AIS filed a First Amended Original Answer denying liability and

                                        6
asserting, among others, the affirmative defense of express waiver, which it based

on the no-consequential damages provision in the proposal. The no-consequential

damages provision under section 9 of AIS’s T&Cs states:

      [AIS] shall not be liable under any circumstances for any indirect,
      special, incidental or consequential loss, damage or injury of any kind
      of nature, including but not limited to . . . loss of use of goods or any
      other product of [HILLER CARBON] or others, or loss of profits,
      products or production.

      AIS and Hiller Carbon filed cross-motions for partial summary judgment on

AIS’s affirmative defense of express waiver, and both motions concerned whether

the parties agreed to the T&Cs attached to AIS’s proposal. In its Partial Motion for

Summary Judgment Against AIS’s Affirmative Defense of Express Waiver, Hiller

Carbon argued that it’s PURCHASE ORDER Numbers DTX-PP-001 (Revision 1)

and DTX-PP-005 are the operative contracts and that AIS’s T&Cs do not apply.

Hiller Carbon argued the contracts at issue do not provide any waiver language

limiting Hiller Carbon’s rights and remedies and that the additional T&Cs, which

are governed by Missouri law, are contrary to Texas and Missouri law. Hiller Carbon

further argued AIS accepted the one-page Purchase Orders without any changes, the

Purchase Orders address all the contract’s essential terms, AIS cannot establish that

Hiller Carbon agreed to be bound to the T&Cs or that the T&Cs were incorporated

by reference into the Purchase Orders, and that AIS’s affirmative defense of express

                                         7
waiver should be dismissed because the Purchase Orders are binding, stand-alone

contracts that do not include any waiver language.

      AIS filed a Cross-Motion for Summary Judgment, arguing that Hiller

Carbon’s Purchase Orders incorporated AIS’s proposals by direct reference and thus

incorporated the additional T&Cs. AIS argued that its Proposals were sufficiently

detailed price quotations that were firm offers under section 2.205, and the additional

T&Cs, which were attached to the Proposals, specifically rejected additional or

different terms and limited acceptance to the Proposals’ terms. See Tex. Bus. & Com.

Code Ann. § 2.205 (defining “firm offers”). AIS further argued that the contract was

formed when Hiller Carbon accepted AIS’s Proposal, which included the T&Cs,

without rejecting or limiting the T&Cs. AIS also argued the Proposals and T&Cs are

not separate documents but a single document inclusive of its attachments, and the

T&Cs are specifically referenced as an attachment and mentioned on every single

page of the Proposals.

      AIS argued the breach of contract and breach of warranty damages Hiller

Carbon seeks in its lawsuit are barred by the terms of the parties’ agreements, that

include the T&Cs, which state that AIS shall have no warranty obligations with

respect to any goods furnished but not manufactured by AIS. AIS also claims that

the remedies against AIS shall be limited to repair or replacement by AIS of any

                                          8
goods furnished and labor performed by AIS, and per AIS’s T&Cs warranty waiver

provision AIS “shall not be liable under any circumstances for any indirect,

special, incidental or consequential loss, damage or injury of any kind of nature,

including . . . loss of use of goods or any other property of BUYER or others, or

loss of profits, products or production.”

      Hiller Carbon filed a Reply in Support of its Motion for Summary Judgment

and Response to AIS’s Motion for Summary Judgment, arguing that AIS’s

affirmative defense of waiver fails because Linda Ungashick, AIS’s Manager and

Chief Financial Officer, signed Hiller Carbon’s purchase order DTX-PP-001 in the

amount of $599,981.00, and by its conduct AIS agreed to Hiller Carbon’s

PURCHASE ORDER Numbers DTX-PP-001 (Revision 1) and DTX-PP-005, even

though they were not countersigned by AIS, which are the contracts. Hiller Carbon

argued that it did not accept AIS’s Proposals by Hiller Carbon issuing its Purchase

Orders, because AIS’s Proposal and T&Cs stipulate that “[t]his proposal may be

accepted by the BUYER [HILLER CARBON] only on the terms set forth

herein by signing a copy of this proposal and delivering to SELLER [AIS] at

address set forth on the face hereof.” Hiller Carbon explained the Proposals

provided a signature block for Hiller Carbon to sign and complete, and it is

undisputed that it did not sign the Proposals as required. Hiller Carbon argued that

                                         9
its refusal to sign the Proposals is deemed a rejection of the Proposals, and its

Purchase Orders are deemed as counteroffers. Hiller Carbon further argued that

AIS’s Proposals together with the T&Cs were not incorporated by reference into the

Purchase Orders and that there is ample evidence to support its contractual and extra-

contractual claims.

      AIS filed a Reply to Hiller Carbon’s Response to Plaintiff’s Cross-Motion for

Summary Judgment. AIS argued that Hiller Carbon was not required to sign the

Proposals because AIS allowed other “‘reasonable under the circumstances’ options

to serve as acceptance[,]” as indicated by Ungashick’s offer email, which states “[i]f

this proposal is acceptable to you and the project moved forward, would you be so

kind as to simply shooting [sic] me a text or email?” AIS explained that Hiller

Carbon responded by emailing Purchase Orders and stating that the signed Purchase

Order was pursuant to AIS revised proposal 216516R1-LU, and AIS followed by

emailing its confirmation of the order and including a copy of the T&Cs, which state

“[t]his proposal may be accepted by the BUYER only on the terms set forth herein

by signing a copy of this proposal and delivering to SELLER at address set forth on

the face hereof.” AIS argued the T&Cs are not an extraneous document but an

essential and indispensable part of the Proposal that states on every page that “THIS

PROPOSAL AND ACCEPTANCE ARE SUBJECT TO THE TERMS AND

                                         10
CONDITIONS ATTACHED TO THE QUOTATION.” AIS further argued that

Hiller Carbon incorporated the entire Proposals into the Purchase Orders, not those

that just concerned the details about the equipment and the components of the

project.

      The trial court conducted a hearing on AIS’s Cross-Motion for Summary

Judgment and Hiller Carbon’s Partial Motion for Summary Judgment, during which

AIS’s counsel argued that Hiller Carbon’s email shows it modified the method of

acceptance, which was by text or email if acceptable, and that the UCC does not

prevent such a modification because the offer and acceptance is intended to “remain

flexible in its applicability to be enlarged as new media of communication develop

or as the time-saving present day media come into general use.” AIS’s counsel noted

that the parties transacted entirely through email, which constituted their course of

dealing and established the relationship and contract. Hiller Carbon complained that

AIS was asking the trial court to strike out portions of the T&Cs, like the requirement

that Hiller Carbon sign the purchase order, despite the merger clause that states

“[t]his proposal is the final, complete, and exclusive statement of the offer and its

acceptance by the buyer[.]”

      The trial court granted Hiller Carbon’s Partial Motion for Summary Judgment

Against AIS’s Affirmative Defense of Express Waiver and denied AIS’s Cross-

                                          11
Motion for Summary Judgment. The trial court granted AIS’s Motion for Permissive

Appeal, finding that an immediate appeal of its order would likely materially

advance the ultimate termination of the lawsuit. The trial court found its order

involved the controlling question of law as to which there is a substantial ground for

difference of opinion: “Did Plaintiff and Defendant agree to the terms and conditions

attached to, and referenced in, Plaintiff’s proposal?”

                                    ANALYSIS

      In its sole issue, AIS argues that Hiller Carbon’s Purchase Orders accepted

AIS’s Proposals and the attached T&Cs and agreed to be bound by the T&Cs. AIS

argues that Hiller Carbon’s Purchase Orders stated Hiller Carbon agreed to purchase

the equipment and component details that are listed in AIS’s Proposals, and thereby

incorporated the Proposals and the attached T&Cs by reference. AIS maintains that

Hiller Carbon’s Purchase Orders are an acceptance of its Proposal under the Uniform

Commercial Code (“UCC”). See Tex. Bus. & Com. Code Ann. § 2.207.

      Hiller Carbon argues its Purchase Orders and not AIS’s Proposals are the

operative agreements and that its Purchase Orders did not incorporate AIS’s T&Cs

by reference. Hiller Carbon maintains that under the UCC and Texas common law

an offer that requires a specific method of acceptance may only be accepted by the

method provided, which in this case was by signing and returning AIS’s Proposal.

                                         12
Hiller Carbon argued that it did not accept AIS’s Proposal but sent a Purchase Order,

which was a counteroffer that AIS signed and accepted. Hiller Carbon maintains that

while its Purchase Orders reference the equipment in AIS’s Proposals, its Purchase

Orders do not incorporate by reference AIS’s Proposals or the separate T&Cs.

      We review summary judgment orders de novo. Provident Life & Accident Ins.

Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). The party moving for traditional

summary judgment must establish that (1) no genuine issue of fact exists, and (2) it

is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a; Randall’s Food

Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). If the moving party

produces evidence entitling it to summary judgment, the burden shifts to the non-

movant to present evidence that raises a fact issue. Walker v. Harris, 924 S.W.2d

375, 377 (Tex. 1996). In determining whether there is a disputed material fact issue

precluding summary judgment, evidence favorable to the nonmovant will be taken

as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985). We

review the summary judgment record “in the light most favorable to the nonmovant,

indulging every reasonable inference and resolving any doubts against the motion.”

City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005); see also Mosaic

Baybrook One, L.P. v. Simien, 674 S.W.3d 234, 252 (Tex. 2023) (citation omitted).

                                         13
      When both parties move for summary judgment on the same issue and the

trial court grants one motion and denies the other, the reviewing court considers the

summary judgment evidence presented by both parties and determines all the

questions presented. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289

S.W.3d 844, 848 (Tex. 2009). If the reviewing court determines that the trial court

erred, the reviewing court renders the judgment the trial court should have rendered.

Id. We must affirm the summary judgment if any grounds asserted in the motion are

meritorious. Tex. Workers’ Comp. Comm’n v. Patient Advocates of Tex., 136 S.W.3d

643, 648 (Tex. 2004).

       Whether a contract is ambiguous is a question of law for the court and is

subject to de novo review. Bowden v. Phillips Petroleum Co., 247 S.W.3d 690, 705

(Tex. 2008). To determine whether a contract is ambiguous, a court looks at the

contract as a whole and considers the circumstances at the time of the agreement.

Sadler Clinic Ass’n, P.A. v. Hart, 403 S.W.3d 891, 895 (Tex. App.—Beaumont

2013, pet. denied) (citation omitted). A court attempts to give effect to the parties’

intent as expressed in the agreement. Id. An ambiguity does not exist simply because

the parties offer conflicting interpretations of an agreement. See id. If an agreement

can be given a clear and definite legal meaning, then it is not ambiguous as a matter

of law. See id.; see also Zarkasha Enter., Inc. v. Old Republic Title Ins. Co. of

                                         14
Conroe, No. 09-20-00057-CV, 2021 WL 3774710, at *11 (Tex. App.—Beaumont

Aug. 26, 2021, no pet.) (mem. op.) (citations omitted). However, if an agreement

contains an ambiguity, summary judgment is improper because the interpretation of

the contract is a fact issue. See Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1985);

Zarkasha Enter., Inc., 2021 WL 3774710, at *11.

      In this appeal, the parties do not agree that Texas’s version of the UCC applies

to the parties’ agreement. See Summit Glob. Contractors, Inc. v. Enbridge Energy,

Ltd. P’ship, 594 S.W.3d 693, 700 (Tex. App.—Houston [14th Dist.] 2019, no pet.)

(citing Tex. Bus. & Com. Code Ann. § 2.102) (explaining when the UCC applies).

“When the UCC applies, we do not consider common law principles that conflict

with the UCC.” See ETC Intrastate Procurement Co., LLC v. JSW Steel (USA), Inc.,

620 S.W.3d 168, 174 (Tex. App.—Houston [14th Dist.] 2021, no pet.) (citation

omitted). “To the extent there is no conflict, common law principles complement the

UCC.” Id. (citing Tex. Bus. & Com. Code Ann. § 1.103(b) (“Unless displaced by

the particular provisions of this title, the principles of law and equity   . . . shall

supplement its provisions.”)) (other citation omitted).

      The parties present alternate theories upon which to render summary

judgment, but they disagree about whether their dispute is governed by section 2.207

of the U.C.C. Tex. Bus. & Com. Code Ann. § 2.207. Yet even though Hiller Carbon

                                         15
doesn’t agree the issues involving the parties’ dispute are governed by the U.C.C., it

agrees that the parties’ dispute “is about contract formation . . . and the UCC and

Texas common law are consistent in all relevant respects.”

      A legally enforceable contract consists of: (1) an offer; (2) acceptance in strict

compliance with the offer’s terms; (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. Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d

68, 72 (Tex. App.—Houston [14th Dist.] 2010, pet. denied) (citations omitted); see

also USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018);

Sullivan v. Smith, 110 S.W.3d 545, 548 (Tex. App.—Beaumont 2003, no pet.). To

form a binding contract, the party to whom the offer is made must accept the offer

in strict compliance with its terms and communicate such acceptance to the party

making the offer for the acceptance to be binding. See Parker Drilling Co., 316

S.W.3d at 73–74 (explaining that purported acceptance that changes or qualifies

material terms constitutes a rejection and counteroffer instead of acceptance);

Advantage Physical Therapy, Inc. v. Cruse, 165 S.W.3d 21, 25–26 (Tex. App.—

Houston [14th Dist.] 2005, no pet.).

      On the other hand, the formation of a contract under the UCC occurs “in any

manner sufficient to show agreement, including conduct by both parties which

                                          16
recognizes the existence of such a contract” and “[a]n agreement sufficient to

constitute a contract for sale may be found even though the moment of its making is

undetermined.” Tex. Bus. & Com. Code Ann. § 2.204(a), (b). “Unless otherwise

unambiguously indicated by the language or circumstances[,] . . . an offer to make a

contract shall be construed as inviting acceptance in any manner and by any medium

reasonable in the circumstances[.]” Id. § 2.206(a)(1).

      However, the broad acceptance allowed under the UCC set forth above is not

applicable in this appeal because AIS’s Proposals required strict performance in

order to be accepted by Hiller Carbon. Here, the summary judgment evidence does

not establish that Hiller Carbon accepted AIS’s Proposals in strict compliance with

the Proposals’ terms and communicated such acceptance to the party making the

offer such that acceptance was binding. See Parker Drilling Co., 316 S.W.3d at 73–

74; Advantage Physical Therapy, Inc., 165 S.W.3d at 25–26; see also In re Beyond

The Arches, Inc., No. 09-04-126-CV, 2004 WL 1699900, at *3 (Tex. App.—

Beaumont July 29, 2004, orig. proceeding) (mem. op.). AIS’s Proposals, which

included pricing, quantity, equipment descriptions, payment terms, and Luke

Ungashick’s signature, were sufficiently detailed to qualify as firm offers. See ETC

Intrastate Procurement Co., LLC, 620 S.W.3d at 174 (citation omitted); Tubelite,

819 S.W.2d at 804; see also Tex. Bus. & Com. Code Ann. § 2.205. Yet, AIS’s

                                        17
Proposals unambiguously provided that Hiller Carbon could accept the Proposal

“only on the terms set forth herein by signing a copy of this proposal and

delivering to SELLER[,]” and thus, did not invite acceptance in any manner and

by any medium reasonable under the circumstances. Cf. Tubelite, 819 S.W.2d at 803

(citing Tex. Bus. & Com. Code Ann. § 2.206(a)(1)). While AIS’s Proposals are

offers capable of acceptance by Hiller Carbon, the Proposals limited acceptance only

to Hiller Carbon signing and returning the Proposal. See Crest Ridge Constr. Grp.,

Inc. v. Newcourt Inc., 78 F.3d 146, 153 (5th Cir. 2011) (Benavides, J., concurring).

      The record shows that AIS’s Proposals limited acceptance to a specified

manner and that Hiller Carbon never accepted AIS’s Proposals because it did not

perform the specific mode of acceptance; thus, no contract was formed. See Criswell

v. Deutsche Bank Nat’l Tr. Co. as Trustee for FFMLT Tr. 2005-FF2, 747 F. App’x

984, 985 (5th Cir. 2019) (stating where an offer prescribes the manner of acceptance,

its terms in this respect must be complied with to create a contract); see also J.D.

Fields & Co. v. U.S. Steel Int’l, Inc., 426 F. App’x 271, 280 (5th Cir. 2011)

(reasoning that a price quote was an offer because it was void of any conditional

language and did not limit acceptance to a specified manner); J.D. Fields & Co. v.

Shoring Engineers, 391 F. Supp. 3d 698, 704 (S.D. Tex. 2019) (explaining that offer

                                         18
in form of email did not limit acceptance to a particular method so assent to email

would conclude the deal).

      Additionally, contracts require mutual assent to be enforceable, and without

evidence that Hiller Carbon signed and delivered the Proposals to AIS with the intent

to be bound, AIS has failed to show its Proposals were binding contracts. See Baylor

University v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007). The summary judgment

evidence includes the affidavit of Martin Hiller, Hiller Carbon’s CEO, who averred

that after reviewing AIS’s Proposal, Hiller Carbon issued a PURCHASE ORDER

Number DTX-PP-001 as a counteroffer to AIS and asked that AIS accept the

Purchase Order by providing a copy with a countersignature to indicate acceptance.

Linda Ungashick, who was acting for AIS, signed and dated Hiller Carbon’s

PURCHASE ORDER Number DTX-PP-001. Hiller also explained that it issued

PURCHASE ORDER Numbers DTX-PP-001 (Revision 1) and DTX-PP-005 as

offers to AIS and that all the Purchase Orders identified the agreed-to terms, such as

pricing, quantity, payout details, and completion deadlines. Hiller averred that Hiller

Carbon never signed AIS’s Proposals and never signed or consented to AIS’s T&Cs.

      Based on this record, we conclude that AIS’s Proposals are not enforceable

contracts, that Hiller Carbon’s Purchase Orders are offers that AIS accepted, and that

Hiller Carbon’s PURCHASE ORDER Numbers DTX-PP-001, DTX-PP-001

                                          19
(Revision 1) and DTX-PP-005 are enforceable, and are the legally enforceable

contracts at issue. 2 See Parker Drilling Co., 316 S.W.3d at 72–74; Advantage

Physical Therapy, Inc., 165 S.W.3d at 25–26; see also Maverick Int’l, Ltd. v.

Occidental Mukhaizna LLC, No. 1:10CV782, 2011 WL 13134197, at *3 (E.D. Tex.

Mar. 1, 2011) (“A buyer’s purchase order submitted in response to a price quotation

is usually deemed to be an offer.”).

      Further, we note that Hiller Carbon’s Purchase Orders do not adopt or

incorporate AIS’s Proposals or the attached T&Cs, but instead merely describe the

equipment as “AIS EQUIPMENT AND COMPONENTS” and indicate the

“(EQUIPMENT AND COMPONENT DETAILS ARE LISTED ON …)” AIS

Proposals 216516R2-LU, 216561R1-LU, and 216558R1-LU. The doctrine of

incorporation by reference provides that “an unsigned paper may be incorporated by

reference in the paper signed[.]” Owen v. Hendricks, 433 S.W.2d 164, 166 (Tex.

1968); see also Trico Marine Servs. Inc. v. Stewart & Stevenson Tech. Servs., Inc.,

73 S.W.3d 545, 549 (Tex. App.—Houston [1st Dist.] 2002, orig. proceeding [mand.

      2Although Linda Ungashick only countersigned Hiller Carbon’s PURCHASE

ORDER Number DTX-PP-001 on AIS’s behalf, Hiller Carbon has shown that by
AIS’s conduct it agreed to Hiller Carbon’s PURCHASE ORDER Numbers DTX-
PP-001 (Revision 1) and DTX-PP-005, even though they were not countersigned by
AIS, and AIS does not dispute that it performed under these other two Purchase
Orders.
                                       20
denied]). “The language used is not important provided the document signed by the

defendant plainly refers to another writing.” Owen, 433 S.W.2d at 166. Plainly

referring to a document requires more than merely mentioning the document. Bob

Montgomery Chevrolet, Inc. v. Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App.—

Dallas 2013, no pet.) (holding that unsigned document may be incorporated by

reference into signed contract by referring to unsigned contract, however plainly

referring to a document requires more than merely mentioning that document). The

language in the signed document must show the parties intended for the other

document to become part of the agreement. Id. Furthermore, the incorporated

document must be referenced by name. Stewart & Stevenson, LLC v. Galveston

Party Boats, Inc., No. 01-09-00030-CV, 2009 WL 3673823, at *11 (Tex. App.—

Houston [1st Dist.] Nov. 5, 2009, no pet.) (mem. op.); Gray & Co. Realtors, Inc. v.

Atl. Hous. Found. Inc., 228 S.W.3d 431, 436 (Tex. App.—Dallas 2007, no pet.).

      “[A]s a matter of contract law, incorporation by reference is generally

effective to accomplish its intended purpose where, . . . the provision to which

reference is made has a reasonably clear and ascertainable meaning.” JS & H Constr.

Co. v. Richmond Cnty. Hosp. Auth., 473 F.2d 212, 215 (5th Cir. 1973). “However,

merely referencing another document, without more, ‘does not incorporate the entire

document when the language used in the incorporation clause does not indicate the

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parties’ intent to do so.’” Ihde v. HME, Inc., No. 4:15-CV-00585-CAN, 2016 WL

11372445, at *4–5 (E.D. Tex. June 16, 2016) (citation omitted) (holding a

Subcontract Agreement’s Arbitration Clause was not incorporated by reference

because the Purchase Order’s language limited the Subcontract Agreement to the

job’s specifications); see Valero Mktg. & Supply Co. v. Baldwin Contracting Co.,

Inc., No. CIVA-H-09-2957, 2010 WL 1068105, at *4 (S.D. Tex. Mar. 19, 2010)

(holding that Sales Acknowledgment that makes reference to the General Terms and

Conditions does not contain language that clearly and expressly state that the

agreement is subject to the General Terms but reflects an objective intent to

incorporate the General Terms only for a limited purpose that all quoted prices are

subject to the General Terms); cf. Castillo Info. Tech. Servs., LLC v. Dyonyx, L.P.,

554 S.W.3d 41, 46–47 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (explaining

that parties intended to enter into an agreement consisting of three documents and

construed those documents together where parties executed a Consultant Agreement,

which included an attached Statement of Work, and the Purchase Order referenced

the Consulting Agreement and included language mirroring the statement of work).

      Hiller Carbon’s Purchase Orders describe the equipment to be purchased as

“AIS EQUIPMENT AND COMPONENTS” and merely reference that the

“(EQUIPMENT AND COMPONENT DETAILS ARE LISTED ON …)” AIS

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Proposals 216516R2-LU, 216561R1-LU, and 216558R1-LU. Hiller Carbon’s

Purchase Orders reference to noncontractual materials, such as equipment and

component details listed on AIS’s Proposals, is not enough to establish that the

parties intended to incorporate by reference AIS’s entire Proposal that Hiller Carbon

never signed or its attached T&Cs, which are not referenced by name in the Purchase

Orders. See Bob Montgomery Chevrolet, Inc., 409 S.W.3d at 189; Stewart &

Stevenson, LLC, 2009 WL 3673823, at *11; Gray & Co. Realtors, Inc., 228 S.W.3d

at 436. Rather, Hiller Carbon’s Purchase Orders reference AIS’s Proposals for the

limited purpose of identifying the particular equipment and components that Hiller

Carbon was offering to purchase. Without a clear manifestation that the parties

intended for AIS’s Proposals and attached T&Cs to become part of the contract, we

cannot conclude that AIS’s Proposals and attached T&Cs, which include the express

waiver of consequential damages, were incorporated into the agreed terms of the

parties’ contract by reference. See Ihde, 2016 WL 11372445, at *4–5; Valero Mktg.

& Supply Co., 2010 WL 1068105, at *4.

                                 CONCLUSION

      We hold the trial court correctly determined that Hiller Carbon’s Purchase

Orders do not incorporate by reference AIS’s Proposals and attached T&Cs.

Accordingly, since Hiller Carbon is not bound by AIS’s T&Cs that include the

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express waiver of consequential damages, we overrule AIS’s sole issue and affirm

the trial court’s order granting Hiller Carbon’s motion for partial summary judgment

on AIS’s affirmative defense of express waiver and denying AIS’s motion.

      AFFIRMED.

                                                        W. SCOTT GOLEMON
                                                            Chief Justice

Submitted on December 8, 2023
Opinion Delivered February 15, 2024

Before Golemon, C.J., Horton and Wright, JJ.

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