Submitted: Oct. 23, 2013.
Leonard J. Feldman, argued, Seattle, WA, (Randolph Foster, Portland, OR, Thomas G. Fritz, Rapid City, SD, on the brief), for Appellant.
Alex M. Hagen, argued, Sioux Falls, SD, (Nancy Turbak Berry, Watertown, SD, on the brief), for Appellee.
Before BYE, SMITH, and BENTON, Circuit Judges.
BYE, Circuit Judge.
Tromley Industrial Holdings, Inc. (Tromley) appeals the district court's  denial of its motion to compel arbitration. We affirm.
Dakota Foundry, Inc., (Dakota) is an iron foundry located in Webster, South Dakota. Tromley is an Oregon business which sells foundry equipment and is the parent company of Kloster Foundry Products (Kloster).
This dispute centers on certain equipment Dakota purchased from the Kloster division of Tromley. Doug Valsvig, the vice president and controller of Dakota, contacted Warren Wilson, a sales representative of the Kloster division, in the Fall of 2009 about Dakota's interest in replacing a sand mixer and related equipment. The practice at the Kloster division was for Wilson to collect information from potential customers and to provide that information to Wilson's co-employee Dale Oakvik, the operations manager for Kloster. Oakvik would prepare an original quote on Kloster stationery, the reverse
side of which included the Standard Terms and Conditions of Sale. The Standard Terms and Conditions of Sale used by Kloster contained a binding arbitration clause. Oakvik then would make additional " working copies" of the quote. These working copies would not have the Standard Terms and Conditions of Sale because only the front of the Kloster stationery would be copied. Wilson would handle delivery of the quote package to the potential customer.
In December 2009, Wilson delivered the first set of price quotes to Dakota. The quotes were working copies and did not include on the reverse side the Standard Terms and Conditions of Sale. In pertinent part, the quotes contained: (1) a document entitled " STANDARD PAYMENT TERMS" ; and (2) a two-page document entitled " NOTES." The Notes section directed the reader to " [p]lease pay particular attention to the attached copy of our Standard Terms and Conditions of Sale which are an integral part of this quotation." However, no standard terms and conditions of sale were attached. Instead, only the Standard Payment Terms document was included.
On February 24, 2010, Dakota issued a purchase order to Tromley to cover the December 2009 quotes. Between February 2010 and April 2010, Tromley and Dakota exchanged several invoices, none of which contained the Standard Terms and Conditions of Sale. On April 19, 2010, Tromley issued another quotation which stated it was a " revised quotation" and had combined the December 2009 quotes " and all subsequent changes made during our meetings into one, cohesive system quote." This quote contained the same " NOTES" advising Dakota " [p]lease pay particular attention to the attached copy of our Standard Terms and Conditions of Sale which are an integral part of this quotation."
Both parties agree the Standard Terms and Conditions of Sale were never discussed. In fact, Wilson testified he was unaware there was even an arbitration provision in the Standard Terms and Conditions of Sale. Valsvig testified he thought the Notes referring to ...