RANGER STEEL SERVICES LP v. MCPHERSON (2026)

OPINION

Ranger Steel Services, LP appeals a final judgment favoring appellee Jeffrey J. McPherson. McPherson, Ranger Steel's former president, sued the company, alleging, among other things, the existence of a contract pursuant to which Ranger Steel was obligated to pay him 60 percent of the company's net profits. A jury found in McPherson's favor on this claim and awarded him $4.1 million in damages. In a single issue, Ranger Steel contends that McPherson failed to present legally sufficient evidence to support the existence of a valid, enforceable contract. Concluding that the evidence supports the jury's finding, we affirm the trial court's judgment.

Background

Ranger Steel is a steel distribution company founded by Roy Whitley in 1958. Ron Whitley, Roy's son, took over as chief executive officer in 2013 and became the company's sole owner upon his father's death. Jeffrey McPherson began working for Ranger Steel as a salesman in 1980, subsequently becoming sales manager, vice president of sales, and then president when Ron went from president to CEO.

It was explained at trial that the steel distribution business can be very cyclical. Accordingly, the company typically paid its employees relatively low annual salaries but then paid large year-end bonuses if the company had performed well over the prior year. McPherson testified that he had deferred his bonus and even gone without a salary at times so that other employees could be paid. He also acknowledged that the largest annual bonus he had received prior to 2017 was probably $3 million. In 2017, the company switched to paying bonuses on a quarterly basis.

Also in 2017, Ron was diagnosed with mouth cancer and decided to undergo a serious surgical procedure as treatment. Ron's sole heir in his will was his wife Starr Whitley, who apparently had limited familiarity with how Ranger Steel was run and had never worked at the company. Concerned with what might happen to Ranger Steel if something were to happen to him, Ron drafted and signed a document entitled “Written Consent of Manager in Lieu of a Special Meeting” (the “Written Consent”). This document, which was notarized, provided instructions in the event of Ron's death.

Courtney Lyons, Ranger Steel's chief financial officer, testified that on August 14, 2017, the last day that Ron was in the office, she asked him what would happen if he ended up in a coma from his surgery. She said that upon hearing her question, Ron looked like a freight train had hit him, and she speculated that Ron had not yet thought about the fact something could go wrong with his surgery. He then prepared handwritten notes that he asked her to type up into what then became the Written Consent.

Because of the importance of the Written Consent to the issues in this appeal, we reproduce its text in full below:

WRITTEN CONSENT OF MANAGER

IN LIEU OF A SPECIAL MEETING

August 14, 2017

The undersigned, being the sole Manager (“Manager”) of Ranger Steel Management, LLC, a Texas limited liability company (the “Company”), the sole General Partner of Ranger Steel Services, LP (the “Partnership”), does hereby, pursuant to Section 101.359 of the Texas Business Organizations Code, vote for, adopt, approve and consent to the adoption of the following resolutions and the actions contemplated hereby, it being the understanding and intention that the execution of this written consent is in lieu of the holding of a meeting of the Managers of the Company. All of such resolutions shall become effective simultaneously upon the event of Ronald E. Whitley's Death. Whenever in these resolutions the actions of the Company's officers are said to be in the best interests of the Company, such actions are said to be in the best interests of the Partnership.

In the event of RON'S DEATH ONLY

Employee bonuses to be paid at the end of each quarter. Employee bonuses to be subtracted from total net profit first.

PLEASE NOTE Courtney Lyons to receive a minimum share of the quarterly bonus equal to the share Tom Eckel receives and reflective of the increased workload a company valuation would create.

Jeff McPherson, current company President to receive 60% of Ranger Steel Services NET PROFIT for each business calendar year. Jeff[']s 60% to be calculated after employee bonuses are subtracted. Payout of 60% due to Jeff to be agreed on between Jeff McPherson and Courtney Lyons in the best interest of Company cashflow. Payout may be made quarterly, at year end, or through a note with monthly interest payable at prime rate.

Starr Whitley to receive balance of 40% of Ranger Steel Services NET PROFIT for each business calendar year after employee bonuses are subtracted. Starr's portion will be converted to a long-term note. Monthly interest payable to her at 2 points over prime rate.

Starr Whitley will be sole stockholder and owner of Ranger Steel Services, LP and associated companies (Ranger Steel Management LLC, Ranger Steel Supply Management LLC, Ranger Steel Supply LP, Ranger Steel Equity LP, Whitley Management LP, and Roy E. Whitley Holdings LP).

Starr to be paid a salary of $30,000 per month and her title to be Member of Advisory Board. The management fee paid between Ranger Steel Services LP and Ranger Steel Management LLC will be discontinued upon death of Ron Whitley.

RESOLVED, that the preceding resolutions are adopted August 14, 2017 and to be used only in the event of Ron Whitley's death.

Further Authorization

RESOLVED, that the proper officers of the Company are hereby authorized and directed to take or cause to be taken all such further action and to sign, execute, acknowledge, certify, deliver, accept, record and file all such further instruments in the name and on behalf of the Company, as in their best judgment shall be necessary, desirable or advisable in order to carry out the intent, and to accomplish the purposes of the foregoing resolutions.

IN WITNESS WHEREOF, the undersigned hereby approves and adopts and consents to the foregoing resolutions, and executes this consent effective as of the date first written above and in the event of Ron Whitley's death.

McPherson testified that Ron came into McPherson's office on the last day that Ron was at work and closed the door behind him. According to McPherson, Ron said, “In case things don't work out, I have a plan. It's not perfect, but it will—it should do the trick.” Ron then handed McPherson the Written Consent. McPherson said he glanced at it, noticed the part saying 60 percent of net profits would go to him, and told Ron “that's really generous.” McPherson further testified that he agreed to follow the Written Consent.

Before his surgery, Ron also had a note distributed to all Ranger Steel employees in which he explained that he was having major surgery and would be out of the office for a while. He then said,

I have taken legal steps to address any and all contingencies that might occur. Ranger Steel will continue to operate as normal at all costs. Jeff will continue to be the President and the go-to person. As always give him your best. All company officers are remaining in place. The only thing you will notice is that I will not be in the office in the upcoming months.

Afterwards, McPherson said he received one or two text messages from Ron, but that was the last of their communication. After Ron's death due to complications from surgery, McPherson continued as president of Ranger Steel, took on numerous additional job responsibilities, and essentially became the “Number 1 guy” for the business. McPherson acknowledged, however, that he was still just an at-will employee of Ranger Steel. Additionally, after Ron's death and pursuant to his will, Starr inherited as owner of Ranger Steel, and she and James White (Ron's long-time tax accountant) became co-managers of Ranger Steel, co-trustees of the marital trust, and co-executors of the will. McPherson testified that Starr told him she had seen the Written Consent, “had no problem with it,” and was “going to go along with it.”

In the fourth quarter of 2017 and the first quarter of 2018, Ranger Steel paid McPherson 60 percent of its net profits pursuant to the Written Consent. However, as co-managers of Ranger Steel, Starr and White subsequently refused to pay McPherson a bonus for the second quarter of 2018 and thereafter revoked the Written Consent. They then terminated McPherson's employment with the company in January 2019.

In October 2019, McPherson filed the present lawsuit, asserting breach of contract against Ranger Steel and fraud against Starr and White. Question 1 in the jury charge inquired as follows:

Did Jeffrey McPherson and Ranger Steel agree that:

1. In the event of Ron Whitley's death, Jeff McPherson, company President, would receive 60% of Ranger Steel's net profit for each business calendar year?

In deciding whether the parties reached an agreement, you may consider what they said and did in light of the surrounding circumstances. You may not consider the parties' unexpressed thoughts or intentions.

In order to answer “Yes” to this Question, you must find that, at the time of the agreement, if any, between Jeffrey McPherson and Ranger Steel that either (1) Jeffrey McPherson was required to perform a certain additional act or (2) Jeffrey McPherson made a promise that consisted of either a detriment to Jeffrey McPherson or a benefit to Ranger Steel.

The jury answered this question, “Yes.” Question 2 was premised on a positive answer to Question 1 and asked if Ranger Steel failed to comply with such agreement. The jury also answered Question 2 “[y]es.” Question 3 asked, “By what date did Jeff McPherson have notice that Ranger Steel had revoked the 2017 Written Consent?” and the jury answered with “7-20-2018.” Question 4 inquired regarding benefit of the bargain damages incurred by McPherson, and the jury answered “$4.1 million.” In response to Question 5, the jury found that neither Starr nor White had committed fraud against McPherson. The trial court subsequently entered judgment awarding McPherson $4.1 million against Ranger Steel for breach of contract, and this appeal followed.

Discussion

As stated, in its sole issue, Ranger Steel challenges the legal sufficiency of the evidence to establish the existence of a valid contract between itself and McPherson. More specifically, Ranger Steel argues that there was no evidence of mutual, bargained-for consideration because the parties did not agree as to what additional act McPherson would undertake as consideration for Ranger Steel's alleged promise to pay him 60 percent of net profits. It insists that, at most, the Written Consent is evidence of a gratuitous promise Ron made to McPherson. McPherson, on the other hand, contends that the consideration he provided was his continuing to work for the company as president for a given period of time after Ron's death, and that his performance created a valid unilateral contract that Ranger Steel then breached by not paying the promised compensation. The jury, of course, found in McPherson's favor, and the evidence supports that finding.

I. Governing Law

When examining a legal-sufficiency challenge, 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. at 827. Evidence is legally sufficient if it would enable reasonable and fair-minded people to reach the conclusion under review. Id. The factfinder is the sole judge of the witnesses' credibility and the weight to be given their testimony, and we may not interfere with the factfinder's resolution of conflicts in the evidence. See id. at 819. “[I]t is the court's charge, not some other unidentified law, that measures the sufficiency of the evidence when the opposing party fails to object to the charge.” Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000) (citing Tex. R. Civ. P. 272, 274, 278, 279).

A breach of contract claim requires proof of (1) the existence of a valid contract, (2) the plaintiff's performance or tender of performance, as the contract required, (3) the defendant's breach by failure to perform, and (4) damages sustained by the plaintiff as a result of the breach. USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018). “Generally, ‘the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.’ ” Campbellton Rd., Ltd. v. City of San Antonio, 688 S.W.3d 105, 115 (Tex. 2024) (quoting Restatement (Second) of Contracts § 17(1) (Am. Law Inst. 1981)); see also Restatement (Second) of Contracts § 3 (“A bargain is an agreement to exchange promises or to exchange a promise for a performance or to exchange performances.”); Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 408 (Tex. 1997) (“A contract must be based upon a valid consideration, in other words, mutuality of obligation.”).

II. Analysis

In order to understand our resolution of this case, it is first important to understand the distinction between bilateral and unilateral contracts and how unilateral contracts may be formed. In a bilateral contract, the parties exchange mutual promises, with each party being both a promisor and a promisee. Vanegas v. Am. Energy Servs., 302 S.W.3d 299, 302 (Tex. 2009). “A unilateral contract, on the other hand, is ‘created by the promisor promising a benefit if the promisee performs. The contract becomes enforceable when the promisee performs.’ ” Id. (quoting Plano Surgery Ctr. v. New You Weight Mgmt. Ctr., 265 S.W.3d 496, 503 (Tex. App.—Dallas 2008, no pet.)); see also Richard A. Lord, Williston on Contracts § 1.17 (4th ed. 2007) (“A unilateral contract occurs when there is only one promisor and the other party accepts, not by mutual promise, but by actual performance or forbearance.”). In other words, in a unilateral contract, “[t]he requirement of mutuality is not met by an exchange of promises; rather, the valuable consideration contemplated in ‘exchange for the promise is something other than a promise,’ i.e., performance.” City of Hous. v. Williams, 353 S.W.3d 128, 136 (Tex. 2011) (quoting Restatement of Contracts § 12 cmt. a (Am. Law Inst. 1932)).

As the supreme court has noted, “[a]lmost all unilateral contracts begin as illusory promises.” Vanegas, 302 S.W.3d at 303. For example, in Vanegas, the supreme court held that a unilateral contract could be formed when an employer offered to share proceeds of a sale of the company with employees if the employees stayed employed until the sale occurred; in that situation, the promise to pay the proceeds was the offer, albeit illusory when made, and the employees accepted the offer by remaining employed until the sale. Id. “[W]hether the promise was illusory at the time it was made is irrelevant; what matters is whether the promise became enforceable by the time of the breach.” Id. (quoting 2 Joseph M. Perillo & Helen Hadjiyannakis Bender, Corbin on Contracts § 6.2 (1995)) (“[U]nilateral contract analysis is applicable to the employer's promise to pay a bonus or pension to an employee in case the latter continues to serve for a stated period.”).

Here, McPherson acknowledged that he was still an at-will employee even after Ron signed and presented to him the Written Consent and he agreed to abide by it; thus, any promise to pay him compensation contingent on his remaining employed was illusory because Ranger Steel retained the right to simply fire McPherson and thus avoid the obligation. See Boucher v. Warrior Crane Serv., LLC, 698 S.W.3d 344, 355 (Tex. App.—Eastland 2024, pet. denied). However, once McPherson accepted the promise or offer by performing (i.e., continuing to work for Ranger Steel) for the period contemplated by the promise or offer, a unilateral contract was formed. See Williams, 353 S.W.3d at 136 (“[A] unilateral employment contract is created when an employer promises an employee certain benefits in exchange for the employee's performance, and the employee performs.”).

That said, Ranger Steel's contention regarding the alleged formation of a contract in this case has less to do with the unilateral nature of it and more to do with the absence of an explicit statement in the Written Consent, or between Ron and McPherson, that in exchange for the 60 percent of net profits, McPherson was required to continue working for Ranger Steel for the period covered by the compensation. In other words, Ranger Steal contends that the alleged contract failed because it contained no agreement as to what consideration McPherson was to provide. See Fed. Sign, 951 S.W.2d at 408 (“A contract must be based upon a valid consideration, [i.e.], mutuality of obligation.”).

While Ranger Steel acknowledges that the jury charge in this case permitted the jury to consider “what [Ron and McPherson] said and did in light of the surrounding circumstances,” it argues the circumstances here indicated no more than that Ron intended to give his long-time associate a gift, describing the 60 percent of net profits from his company as “a gift from a scared man about to undergo serious surgery.” The jury, however, was free to conclude that rather than a gift, the promise of a share in net profits was aimed at keeping McPherson— clearly the person most knowledgeable about running the company with the exception of perhaps Ron himself—working for the company during a difficult transition period. The jury could have concluded that the amount of the additional compensation said less about Ron's generosity and more about what Ron feared might happen to the company if McPherson left.

And, the record contains substantial evidence to support that conclusion, including evidence regarding McPherson's decades long importance to the company; evidence indicating the new co-managers, Starr and White, had little knowledge of how the company was run; and evidence that after Ron's death, McPherson did in fact become the “Number 1 guy” for the business, effectively running the company and running it very profitably. The record also contains testimony that Ron said, regarding the Written Consent, that “[i]n case things don't work out, I have a plan. It's not perfect, but it will—it should do the trick.” That comment does not make sense if the plan was to give McPherson a gift. Additionally, we note that the language in the Written Consent regarding the 60 percent of net profits to McPherson was in the portion discussing compensation to be paid to certain employees, including Starr, thus suggesting that the 60 percent to McPherson should also be considered compensation for work done in the relevant time period. Lastly, the jury could have interpreted the email Ron had sent to all employees as referencing the Written Consent when it stated: “I have taken legal steps to address any and all contingencies that might occur. Ranger Steel will continue to operate as normal at all costs. Jeff will continue to be the President and the go-to person.” This note does not make sense if Ron intended to give McPherson a gift of most of the company's profits and did not believe he had a deal with McPherson to keep him working for the company.

While we agree with Ranger Steel that the Written Consent did not explicitly state that McPherson was required to continue working for Ranger Steel for the duration of a given period to receive the additional compensation, the record contains substantial evidence supporting the conclusion that continued work for the period was implied consideration. It is well-established in Texas that the lack of an explicit recital of consideration is not necessarily fatal to the formation of a contract. See, e.g., Caufmann v. Schroer, No. 03-08-00517-CV, 2010 WL 668869, at *2 & n.10 (Tex. App.—Austin Feb. 26, 2010, no pet.) (mem. op.); Vass v. Fisher, 405 S.W.2d 866, 867 (Tex. Civ. App.—Houston [1st Dist.] 1966, no writ); see also N. Nat. Gas Co. v. Conoco, Inc., 986 S.W.2d 603, 608 (Tex. 1998) (“Mutuality may result from an implied obligation on the part of one of the parties.”) (quoting Portland Gasoline Co. v. Superior Mktg. Co., 150 Tex. 533, 536, 243 S.W.2d 823, 825 (1951)); 17 Am. Jur. 2d, Contracts, § 90, p. 432 (“It is the general rule that a consideration for a contract need not be recited or expressed in the writing, since, if not expressed, consideration may be implied by or inferred from the terms and obvious import of the contract, or it may be proved by parol evidence.”). “Terms are implied not because they are just or reasonable, but rather for the reason that the parties must have intended them and have only failed to express them ․ or because they are necessary to give business efficacy to the contract as written.” Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 850 (Tex. 2009) (quoting 2 Corbin on Contracts § 5.27, and citing 11 Richard A. Lord, Williston on Contracts § 31:7 (4th ed. 1999) (“[T]erms are to be implied in contract, not because they are reasonable, but because they are necessarily involved in the contractual relationship, such that the parties must have intended them and must have failed to express them only because of sheer inadvertence or because they are too obvious to need expression.”)).

We additionally note that under Ranger Steel's reasoning, every time an employer informed an employee that he would be getting a raise or a bonus after a period of time but did not use the magic words “for continuing to work for the company,” the employer could not be held liable for a breach of contract if the employee worked the additional period of time and the employer did not pay the additional compensation. As discussed above, this is not the law in Texas.¹

Conclusion

Because the record contains legally sufficient evidence to support the jury's finding that a contract was formed between the parties, we overrule Ranger Steel's sole issue.

We affirm the trial court's judgment.

FOOTNOTES

1.   Ranger Steel cites several cases that it argues are instructive to the analysis in the present case. We, however, do not find any of these cases particularly compelling.Spakes v. Weber involved a question of whether title to property that Spakes had bought and then put in another party's name should be returned to him pursuant to an alleged contract. No. 10-08-00313-CV, 2010 WL 139955, at *1–2 (Tex. App.—Waco Jan. 13, 2010, pet. denied) (mem. op.). The Tenth Court of Appeals affirmed a grant of summary judgment against Spakes because the agreement was silent regarding any act required of him, and there was no evidence that the other party requested Spakes to perform any act or that Spakes performed any act which he believed would constitute acceptance of an offer. Id. at *4–5. Here, in contrast, the evidence supports the conclusion that McPherson's continuing as president, and essentially running Ranger Steel, constituted acceptance of the offer under which he was entitled to a share of the net profits.Weersing v. OneTouchPoint Southwest Corp. concerned an alleged contract to pay commissions for bringing in an account. No. 03-22-00031-CV, 2024 WL 378221, at *3–4 (Tex. App.—Austin Jan. 31, 2024, pet. denied) (mem. op.). Weersing alleged that a “rehire payroll form” constituted a written contract to pay commissions at a certain rate, but the form stated that the rate at issue would apply until the company transitioned to a different commissions plan and the record was silent regarding what performance Weersing had to complete for the higher commission to vest. Id. at *3. Additionally, the company presented evidence that it long had a policy, known to all salespeople at the company, of reducing commissions based on profitability of an account. Id. A dissenting justice complained that the majority had improperly shifted the summary judgment burden to nonmovant Weersing to prove the existence of a contract. Id. at *5–8 (Triana, J., dissenting). The justice further explained that under the correct standard of review, the evidence supported the conclusion Weersing performed under the unilateral contract by bringing in the account in question and working as an account executive for the company. Id. Although Weersing is an interesting case, it is distinguishable from the circumstances presented here. Importantly, the company in Weersing did not deny he was entitled to a commission, it simply argued there was no contract that guaranteed the higher rate. Id. at *3–4. Here, Ranger Steel denies McPherson was entitled to any share of net profits, calling Ron's promise a mere gratuitous gift.Lamajak, Inc. v. Frazin, 230 S.W.3d 786 (Tex. App.—Dallas 2007, no pet.), is readily distinguishable. In Lamajak, the plaintiff alleged an oral contract under which he would receive all of Lamajak's profits from the sale of Beanie Babies that exceeded $6 million. Id. at 791. In the appeal of a jury verdict for breach of contract in the plaintiff's favor, the Dallas Court of Appeals reversed, holding that the plaintiff had presented no evidence regarding what his obligations were under the alleged contract. Id. at 794. The court, however, rendered judgment in the plaintiff's favor on his quantum meruit claim. Id. at 798. In contrast, here, the record is replete with evidence regarding what McPherson did for the company and was expected to continue doing under the new compensation agreement.Johnston v. Kruse—where the court concluded there was no evidence the plaintiff performed under an oral employment contract—is also readily distinguishable. 261 S.W.3d 895, 899–900 (Tex. App.—Dallas 2008, no pet.). Here, the record is replete with evidence McPherson performed as Ron intended he would.

Maritza M. Antú, Justice