Fort Worth-based Tug Hill Inc. won its bid to have a judge toss a breach of contract lawsuit brought by a former executive.
The former executive, Todd Mehall, argued he was entitled to a lucrative payout for management incentive units, akin to stock options or profit interests, he was offered while working for the company before he left in 2017. But the company pointed out Mehall never signed an offer and it argued Mehall’s case, which relied on an alleged oral agreement and subsequent emails, failed to prove a binding agreement existed.
Judge Megan Fahey of the 348th District Court in Tarrant County, signed Tug Hill’s motion for summary judgment Monday. The judge also ordered Mehall to pay Tug Hill’s attorney fees, an amount to be determined at a later date, according to the signed order.
The judge made her ruling without a hearing.
“To me, the fact that there was just never a signed contract, there was never an agreement, was first and foremost,” said Robert Vartabedian, of Vartabedian Hester & Haynes, who represented all the defendants.
Vartabedian underscored that he and his colleagues opened their motion for summary judgment with an image of Mehall’s unsigned signature line.
Mehall, a finance and investment executive, had filed his lawsuit in 2022 against Tug Hill, its affiliated companies and president Michael Radler. Mehall’s lawyers, Jonathan R. Patton and Jeffrey M. Tillotson of Tillotson Johnson & Patton, did not respond to a request for comment.
In January 2015, Mehall and other employees were offered an MIU Award proposal. According to Mehall’s lawsuit, he and other employees relied on the MIUs “as a substantial part of their compensation.”
Mehall felt the terms were unfair and sent a memo to Radler detailing changes he thought should be made, according to the lawsuit. Radler sent a response agreeing to revise some of the proposal, the lawsuit says.
Radler met with Mehall in person in early February of that year and they agreed on terms, according to the lawsuit. But the revised documents Radler sent the following month contained errors, the lawsuit claims. Mehall pointed out the errors in an email to Radler. Radler acknowledged the errors and said he would provide another revised draft, but never did despite repeated requests from Mehall, according to the lawsuit.
Radler’s response “confirms that the drafts were merely intended to describe the terms of an agreement that had already been reached, not a condition of such agreement,” the lawsuit states.
“Mehall relied on the MIU Agreement with Radler and continued working to deliver value to the company and Radler. Significantly, when Mehall had discussions with Radler about his year-end bonus, Radler referenced and acknowledged Mehall’s MIUs as part of Mehall’s compensation and as Mehall’s primary form of incentive compensation. Radler even used the MIUs as justification for paying Mehall less in non-MIU compensation from 2014-2017,” the lawsuit states.
But Vartabedian said the emails merely show negotiations were ongoing.
“I think the idea that you could have an oral contract for a profits interest in a large oil and gas company strains credulity,” Vartabedian said.
Mehall left the company in 2017 following a multi-month transition. In his lawsuit, he characterized his split from the company as amicable. Mehall believed he would receive the MIUs based on the terms he and Radler verbally agreed to, according to the lawsuit. Based on those terms, 40 percent of the MIUs had already vested and 20 percent were set to vest in a few months.
In September 2022, natural gas producer EQT announced it was purchasing all the assets from one of Tug Hill’s affiliates for about $5.2 billion. At that price, Mehall predicted he was owed more than $10 million from vested units, according to the lawsuit. Mehall said he reached out to Radler, who did not return his call, and Tug Hill, who relayed through lawyers the company contended Mehall did not own any MIUs and was entitled to nothing.
In their motion for summary judgment, defendants argued Radler’s emails acknowledging errors did not detail what the agreement was supposed to be and they lacked essential terms to satisfy the statute of frauds. The company argued Mehall’s claims were barred by several doctrines, including the statute of frauds and statute of limitations.
“This is not a case about a breached contract. There was no contract,” the motion for summary judgment states. “It is simply a lawsuit about plaintiff Todd Mehall’s regrets.”
The case is 348-338376-22 Todd Mehall v. Michael Radler, et al.