477 S.W.3d 460
Tex. App.2015Background
- Manfred Fink, a long‑time UT Austin physics professor, co‑developed ANDRaS technology; UT owns the patent and licensed it to a private company (IsoSpec/InnoSpec), in which UT received equity.
- Fink attended IsoSpec investor meetings as a member of its advisory group; he answered technical questions about the technology but received no compensation or consulting agreement from IsoSpec. UT reimbursed a co‑inventor’s travel to similar meetings to "commercialize" the technology.
- Some IsoSpec investors sued Fink (and his son) alleging securities violations, common‑law fraud, conspiracy, and aiding/abetting based on Fink’s statements about the prototype’s efficacy.
- Fink moved to dismiss under the Texas Tort Claims Act election‑of‑remedies provision, Tex. Civ. Prac. & Rem. Code §101.106(f), arguing: (1) he was a governmental employee acting within the scope of employment when he spoke at the meetings; and (2) the claims could have been brought against UT under the Tort Claims Act. The trial court denied dismissal.
- The court of appeals reviewed subject‑matter jurisdiction de novo, concluded Fink established both scope of employment and that the claims (including the Securities Act claim) “sound in tort” and could have been brought under the Tort Claims Act, and reversed, rendering judgment for Fink.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fink was acting within the general scope of his UT employment when he spoke at IsoSpec meetings | Fink solicited investors and committed fraud for IsoSpec (a private purpose) and for his son; not acting for UT | Fink attended to answer technical questions about a UT‑owned invention and to assist commercialization—duties within his employment | Held: Fink met his burden; speaking about the UT‑patented technology at IsoSpec meetings served a purpose of UT and was within general scope of employment |
| Whether the claims against Fink could have been brought under the Texas Tort Claims Act (§101.106(f)) | The Securities Act claim is statutory, not a tort, and may independently waive immunity | The Securities Act claim is tort‑sounding (misrepresentation/fraud) and does not independently waive sovereign immunity | Held: The Securities Act claim “sounds in tort” and does not clearly and unambiguously waive immunity; the claims could have been brought under the Tort Claims Act |
| Whether a statutory claim pleaded under the Securities Act is excluded from §101.106(f) dismissal because it waives immunity | The Securities Act’s definition of “person” (to include government) demonstrates waiver | Legislative waiver must be clear; Securities Act lacks unmistakable waiver language or caps/other indicators of waiver | Held: No independent waiver shown; incorporation of "person" does not establish waiver beyond doubt under Gov’t Code §311.034 and Taylor factors |
| Whether dismissal under §101.106(f) was required | Plaintiffs argued factual disputes (unverified allegations) precluded dismissal | Fink argued he conclusively proved the three §101.106(f) elements and dismissal was mandatory | Held: Because Fink established all statutory elements and plaintiffs failed to raise a material fact issue on those elements, dismissal and rendition for Fink were proper |
Key Cases Cited
- Alexander v. Walker, 435 S.W.3d 789 (Tex. 2014) (analyzing scope of employment by asking whether conduct served any purpose of the employer)
- Franka v. Velasquez, 332 S.W.3d 367 (Tex. 2011) (defining whether a claim is one that could have been brought under the Tort Claims Act)
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (subject‑matter jurisdiction and review standards for governmental immunity)
- Anderson v. Bessman, 365 S.W.3d 119 (Tex. App.—Houston [1st Dist.] 2011) (fraud claims against university officials held subject to §101.106(f) when within general duties)
- Chambers v. City of Lancaster, 883 S.W.2d 650 (Tex. 1994) (broader framing of challenged conduct for immunity/scope analysis)
- Lopez v. Serna, 414 S.W.3d 890 (Tex. App.—San Antonio 2013) (statutory theft claim deemed one that could have been brought under Tort Claims Act)
- Newman v. Obersteller, 960 S.W.2d 621 (Tex. 1997) (intentional torts can be subject to §101.106(f) dismissal)
- Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692 (Tex. 2003) (standards for finding a clear and unambiguous legislative waiver of sovereign immunity)