Borusan Mannesmann Pipe US, Inc. v. Hunting Energy Services, LLC ( 2023 )


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  • 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