Court Opinion

ID: 9840048
Source: CourtListenerOpinion
Date Created: 2023-09-15 05:07:31.063558+00
Date Added: 2024-06-11T10:06:16.175390
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                          STATE OF MICHIGAN

                            COURT OF APPEALS

THE DOW CHEMICAL COMPANY,                                            UNPUBLISHED
                                                                     September 14, 2023
               Plaintiff-Appellee,

v                                                                    No. 360102
                                                                     Oakland Circuit Court
AURIA SOLUTIONS USA, INC.,                                           LC No. 2021-189923-CB

               Defendant-Appellant.

Before: PATEL, P.J., and SWARTZLE and HOOD, JJ.

PER CURIAM.

       Defendant, Auria Solutions USA, Inc. (Auria Solutions), appeals as of right the trial court
order granting the motion for entry of judgment and final order of dismissal filed by plaintiff, The
Dow Chemical Company (Dow). We affirm in part, reverse in part, and remand for further
proceedings consistent with this opinion.

                                       I. BACKGROUND

        This case originates from a commercial relationship between Dow and Auria Solutions and
revolves around which terms and conditions govern that relationship. There is, however, a
question of the proper parties to that relationship. Dow is a company that produces chemicals for
use in a variety of industries. This includes a resin called Engage DA 53 (Engage) that is used, at
least here, in the automotive sector. Auria Solutions, along with its affiliates, including Auria
Sidney, LLC (Auria Sidney), is a Tier-1 supplier for the automotive industry. Auria Sidney
received Engage pellets from Dow, and processed the pellets into vinyl sheets that are used in the
production of vinyl flooring. This production occurred at a plant in Sidney, Ohio. Before
September 2017, Auria Sidney was called IAC Sidney, LLC, and was part of a separate company,
International Automotive Components Group North America, Inc. (IAC). In September 2017,
however, it spun off from IAC and became Auria Sidney.

       According to Auria Solutions, Auria Sidney is the “actual party” to the contract with Dow.
Auria Solutions asserted below that Auria Sidney issued the relevant purchase orders to Dow and
received deliveries of Engage from Dow, which it then incorporated in its products. Dow, on the

                                                -1-
other hand, argued it did not have a contract with Auria Sidney, only Auria Solutions. Dow
identified documents that it claims establish its agreement was with Auria Solutions.

        Auria Solutions has purchased Engage from Dow since 2014, according to Lawrence
Collier, a technical account manager with Dow responsible for managing Dow’s relationship with
Auria Solutions. The parties dispute the purchasing process. According to Dow, Auria Solutions
sent Dow a “forecast” of its projected needs over the span of six months, though the projections
frequently changed week-to-week. Collier indicated that the forecasts from Auria Solutions did
not include terms and conditions. Once Dow received a forecast (or any changes to one), it sent
Auria Solutions an order acknowledgement form and invoice. Both the order acknowledgement
and invoice contained nearly identical terms and conditions under which Dow agreed to do
business. Auria Solutions asserts that, before it issued the forecasts, it also issued purchase orders
that broadly covered the parties’ relationship and effectively served as a requirements contract.

        According to Auria Solutions, in early August 2017, IAC issued purchase order 1291096
(the 2017 purchase order) to Dow for Engage. The 2017 purchase order included a “Bill To
Address” referencing a post office box for IAC Sidney, LLC in Plymouth, Michigan, and a “Ship
To Address” and “Mfg Location” both referencing “IAC Sidney, LLC, 2000 Schlater Drive,
Sidney, Ohio 45365.” Dow disputes the relevance of the 2017 purchase order. The purchase order
stated:

               Supplier agrees that it will sell to IAC and IAC agrees to buy all of IAC’s
       requirements for products covered by this Purchase Order or Purchase Order
       Amendment from the Issue Date through 2022-12-31 at the prices indicated on this
       Purchase Order or Purchase Order Amendment in accordance with the firm
       quantities and delivery schedules specified in releases.

       Regarding terms and conditions, the 2017 purchase order stated:

               This purchase order, purchase order amendment or purchase order
       requisition incorporates by reference the International Automotive Components
       Group North America, Inc., (“IAC”) Purchase Order Terms and Conditions which
       are available through links provided on the IAC Web Site at
       WWW.IACGROUP.COM (THE “TERMS”). The Terms apply to all purchase by
       IAC and its affiliates under any purchase order, purchase order amendment or
       purchase requisition.

Both pages of the 2017 purchase order also indicate they are governed by the IAC terms and
conditions. Victor Gonzales, a “buyer” with Auria Solutions, indicated that Dow supplied Engage
to Auria Sidney under the 2017 purchase order “for years” based on Auria Sidney’s forecasts.
Gonzales also indicated that when Auria Sidney spun off from IAC in 2017, “Auria and its
affiliates adopted” IAC’s terms and conditions, renamed them the Auria Solutions terms and
conditions, and incorporated them into their purchase orders.

        In 2019, Auria Solutions procurement director Kevin Whitaker and Dow account executive
Jeffrey Wolok attempted to negotiate a long-term supply agreement for Engage, which would have
included agreed-upon terms and conditions. The negotiations failed to result in agreement.

                                                 -2-
According to Collier, Auria Solutions “remained a spot customer” and Dow refused to agree to
Auria Solutions’ terms and conditions.

       In early July 2020, Auria Sidney generated a new purchase order: purchase order AU41730
(the 2020 purchase order). Dow did not receive the 2020 purchase order until late August 2020.
An analyst with Auria Solutions, Julie Johnson, emailed Dow customer-service specialist Joshua
Bennett about the newly-generated purchase order in mid-August 2020 and indicated she would
send him a copy of the order approximately a week later. Her email indicated that the purchase
order had an order number of SI041730 and a corporate purchase-order number of AU041730.
Johnson never forwarded a copy of the purchase order to Dow. Instead, according to Collier, she
“continued to provide Dow a new [f]orecast each week.” On the day she said she would send a
copy of the 2020 purchase order, Johnson instead sent a forecast referencing the new purchase-
order number, SI041730. Neither Johnson’s emails, nor the forecast, refer to any terms and
conditions.

        In response to the mid-August 2020 forecast, Dow sent Auria Solutions an order-
acknowledgement form, which included Dow’s terms and conditions. Auria Solutions disputes
that Dow sent the order acknowledgement, asserting it was sent to email addresses associated with
IAC, not Auria Solutions, as well as to an employee no longer working for Auria Sidney.
According to Collier, Dow emailed Auria Solutions an invoice listing the new purchase-order
number (SI041730) on August 27, 2020, contemporaneous with the shipment of Engage. Collier
asserted Auria Solutions received the invoice—which contained Dow’s terms and conditions—on
August 27, 2020, before the Engage arrived at Auria Solutions. There is, however, no supporting
documentation indicating Auria Solutions received the invoice.

      On August 28, 2020, the day after Dow claims to have sent the invoice to Auria Solutions,
Gonzales sent an email to Collier attaching the 2020 purchase order. The bottom of the email from
Gonzales references Auria Solutions’ terms and conditions:

                No employee or agent of Auria Solutions, including any subsidiaries or
       affiliated legal entities, is authorized into any legally binding agreement by email.
       Agreements with Auria Solutions are those expressly confirmed in writing as part
       of a definitive agreement signed by a duly authorized representative of Auria
       Solutions or purchase orders issued by Auria Solutions. In addition, please note
       that all Auria Solutions purchases are governed by the applicable Auria Solutions
       Purchase Order Terms and Conditions available at www.auriasolutions.com and
       that all unit or sales volume numbers provided to suppliers are estimates only and
       are not commitments by Auria Solutions. Be advised that Auria Solutions reserves
       the right to terminate any and all purchase orders for convenience pursuant to Auria
       Solutions Purchase Order Terms and Conditions.

         The 2020 purchase order lists AU041730 as the purchase-order number, and indicates the
purchase order date as July 3, 2020. It also indicates that it was for a “blanket order” ranging from
July 3, 2020, to December 31, 2023. The 2020 purchase order also lists Auria Sidney under the
“Ship To” and “Bill To” sections. But under the “Bill To” section, it also provides an option to
email invoices to “USAP@auriasolutions.com.” The “Notes” section of the 2020 purchase order
states, in relevant part:

                                                -3-
                This Purchase Order, Purchase Order Amendment or Purchase Requisition
       incorporates by reference the Auria Solutions (“Auria”) Purchase Order Terms and
       Conditions which are available through links provided on the Auria Website at
       www.auriasolutions.com[.] The Terms apply to all purchases by Auria and its
       affiliates under any Purchase Order, Purchase Order Amendment or Purchase
       Requisition.

                                             * * *

       Supplier agrees that it will sell to Auria and Auria agrees to buy all of Auria’s
       requirements for products covered by this Purchase Order or Purchase Order
       Amendment from the Issue Date through xxxx/xx/xx at the prices indicated on this
       Purchase Order or Purchase Order Amendment in accordance with the firm
       quantities and delivery schedules specified in releases.

        Collier indicated that Auria Solutions never informed Dow of the 2020 purchase order’s
termination date, and noted that neither party ever signed the agreement. Collier was unaware of
any indication that Dow had agreed to the 2020 purchase order or that Auria Solutions had ever
shared the terms and conditions with Dow. According to Collier, the 2020 purchase order had “no
effect” on how the parties conducted business and they “continued to engage in the same pattern
of exchanges” as always.

        Starting in November 2020 and throughout 2021, Dow began to increase the price per
pound that it charged for Engage. Dow indicated that market conditions required it to increase its
prices for Engage. Auria Sidney disputed the price increases but continued to order, accept
delivery, and pay for Engage. In a late February 2021 letter, Whitaker, who was previously
involved in the 2019 negotiations with Dow, informed Dow that its “threat[] to stop shipment of
[Engage]” was a breach of the purchase orders. Whitaker’s letter stated that the purchase orders
incorporated the Auria Solutions terms and conditions into the contract. He also expressed Auria
Solutions’ disagreement with Dow’s contention that its order acknowledgements “in any way
amend[] or replace[] the contract that has been formed between Auria and Dow pursuant to the
Orders.” Collier indicated that, “[o]ver an 18-month period before May 2021, Auria made 134
late payments to Dow.” As a result, Collier, in late May 2021, “notified Auria that Auria’s
payment terms would be shortened from 50 days to a more standardized term of 45 days.” Collier
stated that, during this time period, “market conditions required Dow to increase the price of
Engage for its customers, including Auria, on several occasions.”

        In early July 2021, Auria Sidney filed a demand for arbitration with the American
Arbitration Association (AAA). The AAA arbitration-demand form listed the sole claimant as
Auria Solutions, but a letter from defense counsel, and a written demand for arbitration (mirroring
the format of a complaint), listed Auria Sidney as the sole claimant. The demand for arbitration
alleged that the 2020 purchase order was a binding contract that required the parties to arbitrate
their disputes related to Engage. Auria Sidney alleged two claims in the arbitration demand: (1)
breaches of contract and the duty of good faith and fair dealing; and (2) seeking a declaration of
the existence of a contract between the parties. Neither arbitration demand mentions the 2017
purchase order.

                                               -4-
        In early September 2021, Dow sued Auria Solutions in a one-count complaint seeking a
declaration from the trial court on the issue of whether an agreement to arbitrate existed between
the parties. Dow alleged that the 2020 purchase order did not govern the parties’ relationship
because every time Dow sent product to Auria Solutions, it sent an order acknowledgement form
and invoices with its own terms and conditions that rejected any conflicting terms from Auria
Solutions. The same day that it filed its complaint, Dow also moved for relief under Michigan’s
Uniform Arbitration Act (UAA), MCL 691.1681 et seq. Dow argued that the 2020 purchase order
(1) did not satisfy Michigan’s general statute of frauds or the statute of frauds in the Michigan
Uniform Commercial Code (UCC), MCL 440.1101 et seq.; (2) did not implicate the UCC because
Dow never accepted any of the purchase order’s terms and was “an attempt to transform the
parties’ relationship”; and (3) conflicted with Dow’s terms and conditions, so any proposed terms
from Auria Solutions were “knocked out,” including the arbitration provision.

        Auria Solutions responded to the motion for judicial relief under the UAA, arguing that the
Federal Arbitration Act (FAA) applied and preempted the UAA and, therefore, an arbitrator had
to decide the question of whether the parties agreed to arbitrate. Auria Solutions also argued that,
even if the trial court found that it should decide whether the parties had an agreement to arbitrate,
it should enforce the arbitration agreement and dismiss Dow’s complaint. It further argued that
the 2017 purchase order was a contract between the parties, and that Dow’s subsequent invoices
with its own terms and conditions were irrelevant. Auria Solutions also noted that Dow presented
no evidence that it sent the order acknowledgements, and, even if they were sent, they constituted
an acceptance of Auria Solutions’ terms and conditions. Auria Solutions also argued that its terms
and conditions prevented those in Dow’s order acknowledgement from becoming part of the
contract because the 2020 purchase order expressly limited acceptance to the terms of that order.
Additionally, Auria Solutions argued that Dow’s proposed terms would have materially altered the
terms of the 2020 purchase order and, therefore, could not become a part of the parties’ agreement.
Auria Solutions also answered the complaint, denying the majority of the allegations and
explaining most of the denials by stating it was “not a party to the contract . . . .”

       Following a hearing, the trial court granted Dow’s motion for judicial relief under the
UAA. The court stated: “This court, after reviewing the pleadings and hearing the arguments of
counsel this morning, agrees with the plaintiff in this matter, so I—I will grant your request and
the case will proceed before the court. Thank you.” The trial court’s mid-October 2021 order
granting the motion stated it was granted “for the reasons stated on the record.”

        In mid-November 2021, Auria Solutions moved to amend its answer to state several
counterclaims. The proposed counterclaims included (1) a declaration of the existence of a
contract, (2) a request for the court to refer the case back to arbitration, and (3) a claim of breach
of contract and breach of the duty of good faith and fair dealing. In the same filing, Auria Sidney
moved to intervene, arguing it was the proper party to the contract with Dow, not Auria Solutions.
Dow responded, arguing the proposed counterclaims were futile because the trial court’s order
granting Dow’s motion for judicial relief determined that Auria Solutions’ terms and conditions
did not apply to the parties’ relationship. Dow also argued the counterclaims were futile because
they merely restated allegations already made. Regarding the motion to intervene, Dow argued it
should be denied because Auria Sidney was not a party to a contract with Dow and, regardless,
Auria Solutions adequately represented its subsidiary. The court denied the motion to amend and

                                                 -5-
to intervene without a hearing, explaining in the order only that the motion was denied “for lack
of merit [i]n the grounds presented.”

        In mid-January 2022, Dow moved for entry of judgment and final order of dismissal. Dow
argued that the trial court’s October 2021 order “resolved all outstanding issues raised” by Dow in
its complaint and motion for judicial relief and, as a result, there was “nothing left to be done in
this case.” Auria Solutions responded, urging the court to deny the motion because there was still
a dispute regarding whether an agreement to arbitrate existed. According to Auria Solutions, the
trial court had only determined that it was the proper body to evaluate whether such an agreement
existed. Auria Solutions argued there were factual disputes related to the existence of such an
agreement and, accordingly, Dow’s motion should be denied. The trial court disagreed with Auria
Solutions and entered an order granting Dow’s motion. It explained that the motion was granted
“based upon the Court having granted [Dow] all of the relief requested in its Complaint in the
Order dated October 20, 2021 (i.e., that no agreement to arbitrate exists between the parties).”
This appeal followed.

                                  II. STANDARDS OF REVIEW

        “Whether a claim is subject to arbitration is . . . reviewed de novo, as is the construction of
contractual language.” Tinsley v Yatooma, 333 Mich App 257, 261; 964 NW2d 45 (2020) (citation
omitted). This Court reviews a trial court’s findings of facts for clear error. Save Our Downtown
v Traverse City, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket No. 359536); slip op at
9. “A finding is clearly erroneous when, after reviewing the entire record, this Court is left with a
definite and firm conviction that a mistake has been made.” Id. (citation omitted).

        Under MCL 691.1687(2), “[o]n motion of a person alleging that an arbitration proceeding
has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed
summarily to decide the issue.” The trial court is, thus, essentially deciding whether to grant
summary judgment, i.e., disposition, of a claim in such an instance. This particular request from
Dow may, therefore, be viewed as a motion for summary disposition. Although the trial court did
not indicate it was granting summary disposition under a specific rule, if the court considered
evidence beyond the pleadings, we treat it as having been decided under MCR 2.116(C)(10). See
Jawad A Shah, MD, PC v State Farm Mut Auto Ins Co, 324 Mich App 182, 207; 920 NW2d 148
(2018).

         This Court reviews de novo a trial court’s decision on a motion for summary disposition.
El-Khalil v Oakwood Healthcare Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). A motion under
MCR 2.116(C)(10) “tests the factual sufficiency of a claim.” Id. at 160 (citation and emphasis
omitted). In considering a motion under MCR 2.116(C)(10), the trial court “must consider all
evidence submitted by the parties in the light most favorable to the party opposing the motion.”
Id. (citation omitted). Such a motion “may only be granted when there is no genuine issue of
material fact.” Id. (citation omitted). “A genuine issue of material fact exists when the record
leaves open an issue upon which reasonable minds might differ.” Id. (quotation marks and citation
omitted). “If there is a genuine issue of material fact as to whether there is such an agreement [to

                                                 -6-
arbitrate], that issue must be decided upon an evidentiary, albeit summary, hearing.” American
Parts Co, Inc v American Arbitration Ass’n, 8 Mich App 156, 174; 154 NW2d 5 (1967).1

       “We review a trial court’s decision on a motion to intervene for an abuse of discretion.”
Yellow Tail Ventures, Inc v Berkley, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket Nos.
357654, 357666, and 358242); slip op at 10 (citation omitted). A trial court’s decision to deny a
motion for leave to amend pleadings is also reviewed for an abuse of discretion. Jawad A Shah,
MD, PC, 324 Mich App at 208-209. An abuse of discretion occurs when the trial court chooses
an outcome outside the range of principled outcomes. Kuhlgert v Mich State Univ, 328 Mich App
357, 377-378; 937 NW2d 716 (2019).

    III. THE COURT, NOT AN ARBITRATOR, MUST DECIDE THE VALIDITY OF AN
                          ARBITRATION AGREEMENT

        Auria Solutions first argues that the trial court erred when it concluded that it was for the
court, not an arbitrator, to decide whether an enforceable arbitration agreement existed between
Dow and Auria Solutions. We disagree.

       “Arbitration is a matter of contract.” Altobelli v Hartmann, 499 Mich 284, 295; 884 NW2d
537 (2016). “[A] valid agreement must exist for arbitration to be binding.” Ferndale v Florence
Cement Co, 269 Mich App 452, 460; 712 NW2d 522 (2006). “The court shall decide whether an
agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.” MCL
691.1686(2). In Lichon v Morse, 507 Mich 424, 437; 968 NW2d 461 (2021), our Supreme Court
recognized that “[a] party cannot be required to arbitrate an issue which [it] has not agreed to
submit to arbitration.” (Alterations in original.) “The existence of an arbitration agreement and
the enforceability of its terms are judicial questions for the court, not the arbitrators.” Fromm v
Meemic Ins Co, 264 Mich App 302, 305; 690 NW2d 528 (2004).

        Auria Solutions asserts that the FAA preempts Michigan law and requires that an arbitrator
decide whether the parties had an agreement to arbitrate. But under federal law, as under Michigan
law, whether a party is bound by an arbitration clause generally “raises a question of arbitrability
for a court to decide.” In re Auto Parts Antitrust Litigation, 951 F3d 377, 381 (CA 6, 2020)
(quotation marks and citation omitted).2 Although parties can agree to have an arbitrator decide
“gateway” questions of arbitrability, including whether they agreed to arbitrate, Henry Schein, Inc
v Archer & White Sales, Inc, ___ US ___, ___; 139 S Ct 524, 529; 202 L Ed 2d 480 (2019)
(quotation marks and citation omitted), courts “should not assume that the parties agreed to
arbitrate arbitrability unless there is clear and unmistakable evidence that they did so,” In re Auto

1
  Although American Parts Co, Inc is not strictly binding pursuant to MCR 7.215(J)(1) because it
was issued before November 1, 1990, as a published opinion, it nevertheless “has precedential
effect under the rule of stare decisis” pursuant to MCR 7.215(C)(2). See Wells Fargo Rail Corp v
Dep’t of Treasury, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket No. 359399); slip op
at 10 n 2. This rule applies to other pre-November 1, 1990 cases referenced in this opinion.
2
 Although not binding on state courts, lower federal court decisions may be considered for their
persuasive value. Abela v Gen Motors Corp, 469 Mich 603, 607; 677 NW2d 325 (2004).

                                                -7-
Parts Antitrust Litigation, 951 F3d at 382 (quotation marks and citation omitted). Regardless,
“courts should order arbitration of a dispute only where the court is satisfied that neither the
formation of the parties’ arbitration agreement nor (absent a valid provision specifically
committing such disputes to an arbitrator) its enforceability or applicability to the dispute is in
issue.” Id. at 382-383 (quotation marks and citation omitted).

        Under state and federal law, the threshold question of whether there exists an arbitration
agreement between parties is for a court to decide. See MCL 691.1686(2); Fromm, 264 Mich App
at 305; Henry Schein, Inc, ___ US at ___; 139 S Ct at 529; In re Auto Parts Antitrust Litigation,
951 F3d at 381-382. Auria Solutions notes that its arbitration language incorporates the AAA’s
commercial rules. This can constitute clear and unmistakable evidence to delegate arbitrability to
an arbitrator. See In re Auto Parts Antitrust Litigation, 951 F3d at 382. But, here, the parties
dispute whether there is an agreement to arbitrate, and in such a case, courts should avoid ordering
arbitration. See id. at 382-383. The trial court, therefore, did not err in determining that it was the
proper body to make this decision.

        Although the trial court correctly concluded that the court, not the arbitrator, was
responsible for addressing this threshold issue, neither the trial court’s decision on the record at
the October 20, 2021 hearing, nor its corresponding order actually explained that this was the
court’s finding. At the hearing, the court simply stated that it “agree[d] with the plaintiff in this
matter” and granted Dow’s motion. In its October 20, 2021 order, the court indicated that the
motion was granted “for the reasons stated on the record.” This Court may nevertheless affirm a
trial court’s decision when it reaches the right result, even if for the wrong (or unstated) reason.
Gleason v Dep’t of Transp, 256 Mich App 1, 3; 662 NW2d 822 (2003). Although the court did
not adequately explain its basis for deciding that it was the proper body to determine the existence
of an arbitration agreement, it nevertheless reached the right result. We, therefore, affirm that
aspect of the trial court’s decision. Id.

                    IV. THE PARTIES DID NOT AGREE TO ARBITRATE

        Auria Solutions also argues that, even if the trial court correctly determined that it was the
proper body to address whether the parties had an enforceable arbitration agreement, the court
prematurely entered judgment in Dow’s favor because there were genuine issues of material fact
regarding the existence of such an agreement. We disagree. Although the trial court did not make
adequate findings, on the record before us, we are able to conclude that there were no genuine
factual disputes regarding the existence of an agreement to arbitrate. There was no agreement.

        “[W]hen interpreting an arbitration agreement, we apply the same legal principles that
govern contract interpretation.” Altobelli, 499 Mich at 295 (citation omitted). “Our primary task
is to ascertain the intent of the parties at the time they entered into the agreement, which we
determine by examining the language of the agreement according to its plain and ordinary
meaning.” Id.

       The general policy of this State is favorable to arbitration. The burden is on the
       party seeking to avoid the agreement, not the party seeking to enforce the
       agreement. In deciding the threshold question of whether a dispute is arbitrable, a
       reviewing court must avoid analyzing the substantive merits of the dispute. If the

                                                 -8-
        dispute is arbitrable, the merits of the dispute are for the arbitrator. [Id. at 295-296
        (quotation marks and citations omitted).]

        In general, Michigan’s UCC applies to the sale of goods. See MCL 440.2102. The UCC
“is to be liberally construed and applied to promote its underlying purposes and policies.” Power
Press Sales Co v MSI Battle Creek Stamping, 238 Mich App 173, 180; 604 NW2d 772 (1999)
(quotation marks and citation omitted). Absent a directly-controlling provision of the UCC,
questions are resolved with reference to general legal principles, i.e., the law of contract
interpretation. Conagra, Inc v Farmers State Bank, 237 Mich App 109, 131-132; 602 NW2d 390
(1999); MCL 440.1103.

       Under the UCC, “[a] contract for sale of goods may be made in any manner sufficient to
show agreement, including conduct by both parties which recognizes the existence of such a
contract.” MCL 440.2204(1). “An agreement sufficient to constitute a contract for sale may be
found even though the moment of its making is undetermined.” MCL 440.2204(2). One of the
main issues here is what constituted the offer and acceptance of the contract terms. In that regard,
MCL 440.2206(1) provides:

               (1) Unless otherwise unambiguously indicated by the language or
        circumstances

              (a) an offer to make a contract shall be construed as inviting acceptance in
        any manner and by any medium reasonable in the circumstances;

               (b) an order or other offer to buy goods for prompt or current shipment shall
        be construed as inviting acceptance either by a prompt promise to ship or by the
        prompt or current shipment of conforming or nonconforming goods, but such a
        shipment of nonconforming goods does not constitute an acceptance if the seller
        seasonably notifies the buyer that the shipment is offered only as an
        accommodation to the buyer.

         “An offer is defined as the manifestation of willingness to enter into a bargain, so made as
to justify another person in understanding that his assent to the bargain is invited and will conclude
it.” Kloian v Domino’s Pizza, LLC, 273 Mich App 449, 453; 733 NW2d 766 (2006) (quotation
marks and citation omitted). “[A]n acceptance sufficient to create a contract arises where the
individual to whom an offer is extended manifests an intent to be bound by the offer, and all legal
consequences flowing from the offer, through voluntarily undertaking some unequivocal act
sufficient for that purpose.” Id. at 453-454 (quotation marks and citation omitted). In determining
which document is an offer and which is an acceptance, “[c]ourts must often look beyond the
words employed in favor of a test which examines the totality of the circumstances.” Challenge
Machinery Co v Mattison Machine Works, 138 Mich App 15, 21; 359 NW2d 232 (1984).

       Here, the critical issue is the significance of the additional or different terms that the parties
added or disputed in the relevant purchase orders, order acknowledgements, and invoices. MCL
440.2207, which addresses such terms, provides:

               (1) A definite and seasonable expression of acceptance or a written
        confirmation which is sent within a reasonable time operates as an acceptance even

                                                  -9-
       though it states terms additional to or different from those offered or agreed upon,
       unless acceptance is expressly made conditional on assent to the additional or
       different terms.

              (2) The additional terms are to be construed as proposals for addition to the
       contract. Between merchants such terms become part of the contract unless:

               (a) the offer expressly limits acceptance to the terms of the offer;

               (b) they materially alter it; or

              (c) notification of objection to them has already been given or is given
       within a reasonable time after notice of them is received.

               (3) Conduct by both parties which recognizes the existence of a contract is
       sufficient to establish a contract for sale although the writings of the parties do not
       otherwise establish a contract. In such case the terms of the particular contract
       consist of those terms on which the writings of the parties agree, together with any
       supplementary terms incorporated under any other provisions of this act.

“[A] party who has entered into an agreement cannot,” however, change those portions of an
already-agreed-upon contract “by the simple expedient of sending a written ‘confirmation’
containing additional or different terms . . . .” American Parts Co, Inc, 8 Mich App at 174. “[A]
party, except a merchant in the case of an immaterial term, may ignore additional terms, and
proceed with performance of the agreement actually negotiated by the parties without fear that
such performance will be interpreted by court or jury as acceptance of the other party’s additional
terms.” Id. at 173.

       The fact that . . . one or both of the parties resorts to what some call the battle of
       forms, does not, under section 2207, change the agreement or prevent the formation
       of the contract, or place one party or another in the position of waiving the benefit
       of the agreement or becoming bound to unagreed small or large print by proceeding
       with performance of those terms upon which the parties, in fact, did orally agree.
       [Id.]

      Despite its laconic order,3 the trial court correctly concluded that that there was no
agreement to arbitrate between Dow and Auria Solutions. This Court can affirm the trial court

3
  The trial court’s orders in this case are inadequate. The October 20, 2021 order was supported
only by the trial court’s statement on the record that it simply agreed with Dow and was granting
the motion. The January 19, 2022 order fares no better, and merely stated that it granted Dow’s
motion for entry of judgment because the court had earlier granted “all of the relief requested in
its Complaint in the Order dated October 20, 2021 (i.e., that no agreement to arbitrate exists
between the parties).” This statement in the January 19, 2022 order, that the October 20, 2021
order found “no agreement to arbitrate exists between the parties,” is unsupported by the record.

                                                  -10-
when it reaches the correct result, albeit for the wrong (or unstated) reason. Gleason, 256 Mich
App at 3. The so-called knock-out rule, MCL 440.2207(3), applies in Dow’s favor. Although the
parties dispute which terms and documents control, there is no genuine factual dispute about
whether the parties agreed to arbitrate. They did not.

         Here, for an arbitration agreement to exist, it would have to stem from either the 2017
purchase order or the 2020 purchase order. Auria Solutions asserts that the terms and conditions
in its 2017 and 2020 purchase orders control, that it never received the order acknowledgements
from Dow containing its terms and conditions (and suggests that Dow never actually sent them),
and that Dow performed under the purchase orders before sending the invoices. Auria Solutions
supports many of these assertions with the affidavit of Gonzales. Auria Solutions also questioned
whether the order acknowledgement conditioned Dow’s acceptance on Auria Solutions’
agreement to Dow’s terms, and asserted that Dow’s proposed terms materially altered Auria
Solutions’ terms. Dow, on the other hand, asserted that it never agreed to the 2020 purchase order,
that it sent the order acknowledgements to Auria Solutions, and that, regardless, it sent an invoice
containing the terms and conditions, and rejecting any conflicting terms, to Auria Solutions. Dow
supported many of these assertions with an affidavit from Collier.

        Regarding the 2020 purchase order, there is no genuine factual dispute: its terms did not
create an agreement to arbitrate between Auria Solutions and Dow for two reasons. First, applying
the so-called “knock-out” rule to the uncontested material facts indicates that there was no
agreement to arbitrate. There is no dispute that the parties negotiated but failed to reach a long-
term supply agreement in 2019. In early July 2020, Auria Sidney generated but did not send the
2020 purchase order. Instead it continued to provide Dow with weekly forecasts, and Dow
supplied product. The arbitration clause did not appear until late August 2020, when Gonzales
sent an email attaching the 2020 purchase order and referencing Auria Solutions’ terms and
conditions at the bottom of the email. The arbitration clause was a material alteration to their
agreement for the sale Engage at an agreed upon quantity and price. See MCL 440.2207(2)(b). It
was also a term that Dow had previously rejected in prior invoices and confirmations. See MCL
440.2207(2)(c). The knock-out rule applies leaving the agreement to purchase in place, but not
the proposal to add an arbitration agreement. Second, even if it survived the knock-out rule, the
uncontroverted facts indicate that the agreement did not satisfy the statute of frauds. The 2020
purchase agreement was an unsigned agreement that contemplated multi-year obligations with no
end-date. This violated the statute of frauds. See MCL 440.2201(1) (UCC statute of frauds
requiring signature by the party against whom enforcement is sought). See also MCL
566.132(1)(a) (providing that an agreement that is not to be performed within one year from the
making of the agreement is void if not in writing and signed with an authorized signature).

         Alternatively, Auria Solutions relies on the 2017 purchase order, which fares no better.
First, there is no competent evidence that the 2017 purchase order contained an arbitration clause.
Auria Solutions claims the 2017 purchase order incorporated IAC’s terms and conditions by
reference, including an arbitration clause, but the only terms and conditions that Auria Solutions

There is no indication in either order, or in the transcript of the October 20, 2021 hearing, of how
the trial court reached its conclusion that there was no agreement to arbitrate between the parties.

                                               -11-
provided to Dow or the trial court was a version dated approximately one month after the date
listed on the 2017 purchase order. The only evidence of an arbitration agreement in the terms and
conditions on the date listed on the 2017 purchase order is the Gonzales affidavit, but Gonzales
provided no foundation for his knowledge and did not work for Auria until 2019. Second, to the
extent the arbitration agreement in the 2017 purchase order was valid at all, it was not an agreement
between Dow and Auria Solutions; rather, it was an agreement between Dow and IAC, which
Auria Solutions acknowledges was a different company. Third, evidence of Dow’s terms and
conditions in its order acknowledgements and invoices indicated that it unequivocally rejected the
arbitration clause.

        In sum, neither the 2017 purchase order, nor the 2020 purchase order, created an agreement
to arbitrate between Dow and Auria Solutions. Although the trial court did not clearly state its
findings, it correctly concluded that no arbitration agreement existed.

                        V. COUNTERCLAIMS AND INTERVENTION

       Auria Solutions next argues that the trial court abused its discretion when it denied its
motion for leave to amend its answer to add counterclaims. We agree.

        Trial courts have discretion to grant or deny a motion for leave to amend, but generally
should only deny leave for specific reasons, such as undue delay, bad faith or dilatory motive,
repeated failure to cure deficiencies by previously-allowed amendments, undue prejudice to the
nonmoving party, and futility. Weymers v Khera, 454 Mich 639, 658; 563 NW2d 647 (1997)
(citation omitted). An amendment is not warranted if it would be futile. Id. at 658. “An
amendment would be futile if it is legally insufficient on its face, and the addition of allegations
that merely restate those allegations already made is futile.” Wormsbacher v Seaver Title Co, 284
Mich App 1, 8-9; 772 NW2d 827 (2009). See also Dowerk v Charter Twp of Oxford, 233 Mich
App 62, 75; 592 NW2d 724 (1998) (“An amendment is futile where the paragraphs or counts the
plaintiff seeks to add merely restate, or slightly elaborate on, allegations already pleaded.”). “The
trial court must specify its reason for denying the motion; failure to do so requires reversal unless
the amendment would be futile.” Dowerk, 233 Mich App at 75.

        The trial court abused its discretion when it denied the motion for leave to amend to add
counterclaims. The court provided no explanation for its denial of the motion, other than stating
there was a “lack of merit [i]n the grounds presented.” This was insufficient. See Dowerk, 233
Mich App at 75. The trial court’s explanation provides nothing for this Court to review in terms
of why leave to amend was denied—whether that be for undue delay, bad faith or dilatory motive,
undue prejudice to Dow, or futility. See Weymers, 454 Mich at 658. Accordingly, the trial court
abused its discretion in denying leave to amend without adequately explaining the basis for its
denial.

        Dow argues that the amendment would have been futile and, thus, reversal for the trial
court’s failure to adequately explain its denial is not required. We disagree. Dow contends that
“each of [Auria Solutions’] proposed claims rises and falls with the terms of the [2020 purchase
order] in conflict with those in Dow’s [terms and conditions]” and the “conflicting terms are not
part of the parties’ agreement.” Dow asserts that this “is what the [t]rial [c]ourt determined in its
October 20[, 2021] order, which ‘granted’ Dow’s motion seeking a declaration that no agreement

                                                -12-
to arbitrate exists.” As discussed earlier, however, the trial court did not make adequate findings
related to the parties’ agreement. This inadequacy necessarily requires the trial court to re-
address—with explanation—whether leave to amend is warranted.

       Finally, Auria Solutions argues that the trial court abused its discretion when it denied
Auria Sidney’s motion to intervene without a hearing and by explaining only that it lacked merit.
We agree.

        Intervention is governed by MCR 2.209. MCR 2.209(A), which governs intervention of
right, provides:

              Intervention of Right.      On timely application a person has a right to
       intervene in an action:

              (1) when a Michigan statute or court rule confers an unconditional right to
       intervene;

               (2) by stipulation of all the parties; or

               (3) when the applicant claims an interest relating to the property or
       transaction which is the subject of the action and is so situated that the disposition
       of the action may as a practical matter impair or impede the applicant’s ability to
       protect that interest, unless the applicant’s interest is adequately represented by
       existing parties.

MCR 2.209(B), on the other hand, governs permissive intervention and provides:

               Permissive Intervention. On timely application a person may intervene in
       an action

              (1) when a Michigan statute or court rule confers a conditional right to
       intervene; or

              (2) when an applicant’s claim or defense and the main action have a
       question of law or fact in common.

              In exercising its discretion, the court shall consider whether the intervention
       will unduly delay or prejudice the adjudication of the rights of the original parties.

       An overly-technical reading of MCR 2.209 is not appropriate. See SCD Chem Distrib, Inc
v Maintenance Research Laboratory, Inc, 191 Mich App 43, 45; 477 NW2d 434 (1991), citing
SNB Bank & Trust v Kensey, 145 Mich App 765, 772; 378 NW2d 594 (1985). The burden of
demonstrating inadequate representation is “minimal,” Karrip v Cannon Twp, 115 Mich App 726,
731-732; 321 NW2d 690 (1982), and “need not definitely be established,” Vestevich v West
Bloomfield Twp, 245 Mich App 759, 761-762; 651 NW2d 646 (2001). Instead, “the concern of
inadequate representation of interests need only exist[.]” Id. at 762 (emphasis added).

                                                 -13-
        Dow contends on appeal that Auria Sidney is not a party to any contract with Dow, noting
various documents listing Auria Solutions as the relevant party. These include the 2020 purchase
order, which was issued by Auria Solutions; the arbitration demand, which listed Auria Solutions
as the claimant; Dow’s invoices, which identified Auria Solutions as the ordering party; Dow’s
order acknowledgement, which identified Auria Solutions as the buyer; and letters from Auria’s
attorney identified Auria Solutions as the aggrieved party, not Auria Sidney. Dow’s assertions on
these points are somewhat misleading.

        First, although the order acknowledgement and invoice list Auria Solutions as the buyer of
the Engage, the address provided for Auria Solutions on those documents is 2000 Schlater Drive,
Sidney, Ohio 45365-8094. This is the same address listed for Auria Sidney in the 2020 purchase
order, and the same address listed in the 2017 purchase order for IAC Sidney, LLC. The 2017
purchase order indicates that IAC Sidney was to be billed for the order and, as the parties have
acknowledged, IAC Sidney eventually became Auria Sidney. Moreover, the forecasts sent to Dow
with order number SI041730 listed Auria Sidney as the “Ship To” entity, and listed 2000 Schlater
Drive as the shipping address. Second, it is true that the AAA arbitration demand form lists Auria
Solutions as the claimant. But the written arbitration demand, which is formatted similar to a
complaint, references Auria Sidney as the sole claimant. Third, although the letters Dow
references indicate that Bodman PLC represented Auria Solutions, the letters also indicate that
Bodman represented Auria Solutions’ affiliates. This includes Auria Sidney. These discrepancies
demonstrate that there is a dispute regarding the proper party to this contract, and raise a question
of whether Auria Solutions could adequately represent Auria Sidney’s interests. The trial court
did not address any of these discrepancies, nor explain the reason that it denied Auria Sidney’s
request to intervene, other than saying the motion lacked merit. This, too, was inadequate. We,
therefore, remand for the trial court to more fully address this issue.

                                       VI. CONCLUSION

         We affirm in part, reverse in part, and remand for further proceedings consistent with this
opinion. On remand, the trial court must re-evaluate the requests for leave to amend and
intervention. In considering these issues, the trial court must provide explanations sufficient to
facilitate any further appellate review. We do not retain jurisdiction.

                                                              /s/ Sima G. Patel
                                                              /s/ Brock A. Swartzle
                                                              /s/ Noah P. Hood

                                                -14-