OPINION
Manfred Fink is a physics professor at The University of Texas at Austin. ’ He invented a technology that UT patented and licensed to a private entity, IsoSpec, for development and marketing. UT obtained an equity interest in IsoSpec. ,
Some of the IsoSpec investors sued Fink, alleging common-law fraud and securities fraud, for statements he allegedly made regarding the efficacy of an instrument he and his cq-inventors created that utilized their hewly discovered technology. Fink moved for dismissal under the eleetion-of-remedies provision of the Texas Tort Claims Act. His motion was denied.
Fink asserts that the trial court erred by denying his motion because (1) he established that he was within the scope of his employment when he spoke at IsoSpec meetings about his invention and (2) the claims asserted against him could have been brought under the Texas Tort Claims Act and, therefore, are subject to dismissal under Section 101.106(f) of that statute.
We reverse the trial court’s order denying Fink’s motion to dismiss and render judgment in his favor.
Background
Manfred Fink has been a physics professor at The University of Texas at Austin for more than 40 years. One of his assigned duties is to conduct research. Along with fellow UT professor, Philip Varghese, and Michigan professor, Jacek Borysow, Fink utilized the concepts underlying Ra-man Spectroscopy technology to invent a new technology he termed ANDRaS. According to an affidavit fled by Fink, the professors created prototype machines that utilizes ANDRaS technology.
The patent for the technology is not held by the individual professors, but by their institutional employers. As Professor Varghese explained: “Pursuant to UT policy, I conveyed my rights as an employee of the University to our invention and. allowed UT to file patent applications for the technology on behalf of the University.” See Regents’ Rules and Regulations, Rule 90102, sec. 2 (providing that intellectual property developed by UT System employee within- course and scope of employment is owned by UT). Though the university owned the patent rights, its rules gave Fink a right to provide input regarding his invention’s commercialization. See id., Rule 90101, sec. 7 (stating that creator of intellectual property “may give reasonable input on commercialization of inventions” but that UT has final decision authority “concerning whether and how to develop and commercialize an invention”).
IsoSpec later became the designated licensee of the ANDRaS technology in place of InnoSpec. IsoSpec issued a. Private Placement Memorandum (PPM) that sought $1,000,000 in investments in exchange for. limited partnership interest in the company. The PPM named Fink as a member of its “Technology and Business Advisory Group” and listed his relationship to IsoSpec as “Co-Inventor and Scientific Developer of the Technologies.” Fink did not receive any compensation from Isos-pec. He averred that he refused Isospec’s offer of a written consultation agreement. IsoSpec’s PPM disclosed, under the heading “Risk Factors,” the following:
IsoSpec is dependent on key relationships.
IsoSpec intends to look to the Technology Advisors as a source of counsel and development of new technologies. The Technology Advisors have been developed as a result of personal and business relationships with, the General Partners, the inventors of the technologies licensed by IsoSpec, and the Research Institutions. IsoSpec is dependent upon the involvement and contribution of the inventing scientists. The loss of these relationships could have a. materially adverse impact upon IsoSpec.
The PPM informed potential investors that “ANDRaS is rugged, inexpensive, small and portable providing'onsite analytical capabilities.” Further, “[t]wo operating prototype' instalments have proven the accuracy and operating capabilities of AN-DRaS.”
IsoSpec held various meeting with potential investors, including at least some of the plaintiffs. Fink attended at least one of these meetings. Professor Varghese also attended at least one meeting- along with -Fink and established, through documentation attached to his affidavit, that UT reimbursed some of his travel expenses to meet with IsoSpec. The UT travel voucher form states that Professor Varghese was being reimbursed for travel to IsoSpec in Houston to discuss “commercializing their technology.” The UT travel addendum states that he “is driving to Houston, TX to meet with [IsoSpec] to discuss their collaboration on -the commercialization of their- technology” and to “[h]elp accomplish research objectives.”
The role Fink played at the meetings he attended is contested. He averred that “the purpose of the meeting was only to answer technical questions about AN-DRaS technology.” While there, he “answered very specific scientific questions that certain individuals had about Raman Spectroscopy and ANDRaS technology.” Professor Varghese described his role similarly, stating that he attended the meeting to answer technical questions about the technology' they developed as UT employees.
Fink ayerred that he did not participate in drafting the PPM or other marketing materials or receive any compensation
The investors describe Fink’s role and relationship differently. In their unverified response to Fink’s motion to dismiss, they allege that Fink was involved in the development and issuance of the PPM, Fink intentionally engaged in conduct “designed to obtain investments for IsoSpec, a private company,” and such actions were not in the scope of his employment at the university. They argue that Fink’s involvement at the IsoSpec meeting was not on UT’s behalf and did not further any interest of the university. The investors contend that Fink’s role was, instead, to solicit investors for the benefit of IsoSpec and his son, Dr. Rainer Fink, who was IsoSpec’s Chief Technology Officer.
The investors asserted that Fink must have realized the actual nature of his role:
It is inconceivable to me that Dr. Manfred Fink would not have known the purpose of the meeting was to obtain investors in IsoSpec specifically based upon what was said at the meeting by IsoSpec representatives, the marketing materials distributed at the meeting, the fact that Dr. Manfred Fink’s son was part of the management team of IsoSpec and Dr. Manfred Fink’s own detailed discussion of the potential uses of the ANDRaS prototype, if commercialized by IsoSpec.
The investors further claimed that Fink made specific representations to them at IsoSpec meetings, indicating that an AN-DRaS prototype had already been created, was fully functional, and had multiple commercial applications. While Fink has confirmed by affidavit that he and his co-inventors created functional prototypes, the investors allege in their unverified response that his assertions are untrue.
After investing in IsoSpec and becoming dissatisfied with the company’s performance, the investors sued Fink and his son. They asserted several causes of action: violation of the Texas Securities Act, fraud, misrepresentation, conspiracy, and aiding and abetting securities fraud and common-law fraud.
Fink moved for dismissal under the election-of-remedies provision of the Texas Tort Claims Act, alleging that dismissal was mandatory because he was a governmental employee, he was acting in the scope of his employment at the relevant time, and suit could have been brought under the Act against his employer instead. See Tex. Civ. Prac. & Rem.Code Ann. § 101.106(f) (West 2011). The trial court denied the motion, and Fink has appealed that order.
The University of Texas has filed an amicus brief to support Fink’s contention that he was acting in the scope of his employment when he discussed ANDRaS technology at the IsoSpec meetings. However, to the extent the brief relies on an affidavit submitted after the trial court ruled on Fink’s motion, we do not consider it. See TVMAX Holdings, Inc. v. Spring Indep. Sch. Dist, No. 01-14-00304-CV,
Standard of Review
Generally, we review a trial court’s order on a motion to dismiss under an abuse of discretion standard. Am. Transitional Care Ctrs. of Tex., Inc. v. Palacios,
We may not presume the existence of subject-matter jurisdiction; the burden is on the plaintiffs to allege facts affirmatively, demonstrating the trial court’s subject-matter jurisdiction over the case. Tex. Ass’n of Bus. v. Tex, Air Control Bd.,
Sovereign Immunity and Section 101.106(f) Dismissal
The investors have alleged various tort-based claims against Fink. First, they alleged that' Fink violated the Texas Securities Act because he “engaged in fraud by intentionally 'failing to disclose material facts related to the operation and performance of ANDRaS and the future development of it into a commercial product,” and also by “misrepresenting] one or more material facts ... in connection with the offer for sale and sale of limited partnership interests” in IsoSpec. Second, they asserted common-law fraud claims for the same failures to disclose and misrepresentations. Third, they alleged that Fink conspired with the IsoSpec founders “to create IsoSpec and engage in securities fraud and common-law fraud by developing and issuing the PPM and making numerous other verbal misrepresentations- in an effort to unlawfully appropriate financial contributions from investors in exchange for limited partnership interests.” And fourth, they alleged that Fink aided and abetted the IsoSpec founders “to commit securities fraud and common law fraud.”
In reviewing the trial court’s order denying Fink’s motion to dismiss under the election-of-remedies provision of the Tort Claims Act, we consider whether he conclusively proved that he met all three of the statute’s requirements: (1) he was a governmental unit employee at the relevant time; (2) the complained-of conduct was within ’the general scope of his em
A. General scope of employment
. The Tort Claims Act defines “[s]cope of employment” as.“the performance for a governmental unit of the duties of an employee’s office or employment and includes being in or about the performance of a task lawfully assigned to an employee by competent authority.” Tex Civ. Phac. & RemlCode Ann, § 101.001(5) (West Supp. 2014); City of Lancaster v. Chambers,
1. Conduct may serve any purpose of employer
Thé Texas Súpleme Court has looked to the Restatement for “additional clarity” on the term “scope of employment.” See Alexander v. Walker,
Thus, when an employee engages in conduct “for the sole purpose” of furthering someone else’s interests and not his employer’s, the conduct is outside the employee’s scope of employment. See id. cmt. b; see also Arbelaez v. Just Brakes Corp.,
2. Conduct may escalate but not deviate
Conduct that serves any purpose of the employer is within the scope of employment even if the conduct escalates beyond that assigned or permitted. See Restatement (ThiRd) of Agency ■§ 7.07(2), cmt. b. So, for example, when an employee’s job duties include making statements to prospective customers to induce them to buy from the employer, intentional misrepresentations may be within the scope of employment. Id., cf. Celtic Life Ins. Co. v. Coats,
Similarly, “if the employer ’places his employee in a position that involves the use of force, so that the act of using force is in the furtherance of the employer’s business, the . employer can be found liable ,.. even if the employee uses greater force than is necessary.” Knight v. City Sts., L.L.C.,
But conduct that is better viewed as a deviation from an assigned task instead of an escalation beyond what whs authorized is not within the employee’s scope of employment. See Zarzana v. Ashley,
3. Intentional torts can fall within scope of employment
As an initial matter, the investors argue that a fraud claim should not be subject to Section 101.106(f) dismissal because intentionally tortious conduct is “almost never” held to be within the scope of authority granted an agent by his principal. At oral argument, through hypotheti-cals, they gave two examples of intentional torts they assert would not, be subject to immunity: assault and theft.. Yet both of those intentional torts have been held to involve conduct within a governmental employee’s. scope of employment when they take place while the employee is engaged in conduct to further an interest of his employer and the tortious act is more of an escalation of—rather than a deviation from—his job duties.
a. Intentional tort of assault
In Alexander v. Walker, police officers were sued for assault, conspiracy, slander, false arrest, false imprisonment, and malicious prosecution.
Employees alleged to have committed theft have also been held to be acting within scope of employment. In Lopez v. Serna,
c. Intentional tort of fraud
In addition to these cases involving dismissal of theft and assault claims, this Court has held that fraud claims brought against university administrators were subject to Section 101.106(f) dismissal as well. In Anderson v. Bessman, UTMB medical school faculty members who had been fired following post-hurricane budget cuts brought suit against various school officials, alleging tortious interference with their employment relationships, negligent misrepresentation, negligence, fraud, and civil conspiracy.
d.Other intentional torts
This Court, likewise, has held that a mayor accused of slander and malicious prosecution—two other intentional torts— acted within his scope of employment when he made negative comments about a city employee’s job performance to another mayor because it was undisputed that responding to employment verification requests was a task generally assigned to the mayor. Hopkins v. Strickland, No. 01-12-00315-CV,
Most telling, the Texas Supreme Court has rendered judgment for a governmental employee after concluding that claims against him for intentional infliction of emotional distress and conspiracy to intentionally inflict emotional distress were subject to dismissal under Section 101.106(f). Newman v. Obersteller,
Thus, we reject the investors’ argument that an allegation of an intentional tort forecloses the possibility that Fink was acting within his scope of employment, for purposes of Section 101.106(f) dismissal analysis. We next consider whether Fink’s alleged conduct fell within his scope of employment.
4. What conduct is being evaluated
In arguing that Fink acted outside his scope of employment, the investors describe his conduct as “soliciting investments for a private company and committing fraud in the course of such solicitations.... ” The investors rely on older cases for the proposition that “unlawful or unauthorized actions” cannot be within the scope of a governmental employee’s official duties. These cases, including Bagg v. University of Texas Medical Branch,
Fink described his conduct quite differently. He contended-that, “[a]s the inventor of the ANDRaS prototypes, [he] from time to time assisted IsoSpec in answering certain questions that they had about the technology and [his] research.” These were “very specific scientific questions that certain individuals had about Raman Spectroscopy and ANDRaS technology.” He averred that “the purpose of the meeting was only to answer technical questions” about his invention. Professor Varghese averred similarly. He stated that he attended IsoSpec meetings, at least partially at UT’s expense, “to assist IsoSpec, the University’s licensee, in answering very specific scientific questions related to our invention.” ,. -
Thus, we are presented with two very different characterizations of Fink’s involvement: answering specific scientific questions about a technology developed as a UT research professor versus intentional, fraudulent solicitation of investments for the. benefit of a private company where a close family member worked.
The Texas Supreme Court has noted thfe difficulty'in analyzing immunity when the challenged conduct is phrased in terms tied to the specific wrong alleged. See Chambers,
The Texas Supreme Court described the officer’s conduct broadly. Instead of asking whether the officers had discretion to driving unsafely, as the appellate court had done, the Court considered whether “engaging in a high-speed chase” 'was a discretionary act and held that it was. See id. at 653-55. The Court explained that the appellate court’s use of a more specific description linked to the alleged wrong “frustrates official immunity’s very function” because it “inexorably leads to the [at times incorrect] conclusion that an officer is not entitled to immunity if the officer is negligent.” Id. at 655.
' More recent cases likewise have broadened the focus to ask whether the general conduct was within the scope of employment instead of whether the specific act was somehow wrongful. We have already discussed several of these cases while analyzing whether intentional tort claims can fall within the scope of employment. See Alexander,
Here the pertinent question is not, as the investors state, whether fraudulent solicitation was within Fink’s scope of employment. Rather, it is whether his general conduct—speaking about his invéntion at the IsoSpec meeting—was conduct that served any purpose of his employer. See Alexander,
5. Fink established that conduct was within general scope of employment
Fink spoke at a business meeting about a technology he eo-discovered and a device he co-invented. The investors argue that speaking at investor meetings is not within the range of a university professor’s duties, but their assertion is not verified or supported by evidence. Fink’s un-rebutted evidence demonstrated that his job duties included research, creating new
We conclude that speaking at such a meeting was conduct within the general scope of Fink’s employment. Commenting on the efficacy of a UT-patented device was not “an independent course of conduct” that failed to “serve any purpose of [his] employer.” See Alexander,
Next, the investors contend that it is “inconceivable” that Fink would not have realized that the true purpose of speaking at the meeting was to obtain investors, not to provide scientific insight. Even assuming Fink spoke at the meeting with the intent to assist IsoSpec in garnering investments, given UT’s partial ownership of IsoSpec, it remained within his employer’s interest that he speak at the meetings. See Morrow v. Daniel,
Finally, the investors contend that Fink acted outside of the scope of his employment because his efforts to solicit investors were in furtherance of his personal goals- and those of his son,- an IsoS-pec officer. But co-existing motivations- do not remove an employee’s actions from the scope of his employment so long as the conduct also serves a purpose of the employer. See Anderson, 365 S.W.-3d at 125-26. An activity may serve the employer’s purposes while simultaneously benefitting the ■ employee or even a third party and still qualify as conduct within the scope of employment. See id.; Arbelaez,
In conclusion, the evidence establishes that both UT professors who created the patented technology attended IsoSpec meetings. UT was a part-owner of IsoS-pec. Fink’s discussions of the efficacy of his invention at the .IsoSpec meetings served a-purpose of his equity-interest employer, even-if they .also served his interests or those of his son. . See Anderson,
B. Claims could have been brought under Tort Claims Act
The investors brought common law tort claims against Fink, as well as a claim under the Texas Securities Act. While apparently conceding that the common-law tort claims are claims that “could have been brought under the [Tort Claims] Act,” the investors present two arguments why their Securities Act claim is different. First, they contend that Section 101.106(f) refers only to common-law tort actions, not statutory claims like violations of the Texas Securities Act. Second, they argue that the Securities Act independently waives immunity and, as a result, a claim brought under it could not have been brought under the Tort Claims Act.
The Texas Supreme Court has held that a claim is considered one that “could have been brought” under the Tort Claims Act if it (1) “is in tort” and (2) is not brought “under another statute that independently waives immunity,” even if the particular tort alleged is one for which immunity has not been waived. Fmnka,
1. Securities Act violation is a tort claim
The Section 101.106(f) requirement that the claim be a “tort claim” is not limited to negligence and other common law torts. See Tex. Adjutant Gen.’s Office v. Ngakoue,
The focus is on whether the claim “sounds in tort,” not the mechanism for prosecuting the claim. See Rodriguez v. Christus Spohn Health Sys.,
Artful pleading will not change the tort nature of the claim. See Mason,
The investors sued Fink for misrepresentation and fraud, which are tort theories of liability. They also sued for violation of the Securities Act based on the same misrepresentations and omissions. We conclude that the allegation that Fink violated the Securities Act by making material misrepresentations about the AN-DRaS technology “sounds in tort” and is, therefore, considered a tort claim, for purposes of Section 101.106(f) dismissal analysis, even though the allegation is pleaded as a statutory violation. Cf. Navarro v. Grant Thornton, LLP,
2. Securities Act does not independently waive immunity
The second requirement for a Securities Act violation to be a claim that could have been brought under the Tort Claims Act is that the statute not contain an independent waiver of immunity. Alexander,
The Texas Supreme Court has consistently maintained that it is within the Legislature’s sole province to waive sovereign immunity. Tex. Natural Res. Conservation Comm’n v. IT-Davy,
At times the Legislature has clearly stated its intent to waive immunity. See, e.g., Tex. Civ. Peac. & Rem. Code Ann. § 110.008 (West 2011) (providing that “sovereign immunity to suit and from liability is waived_”). But “magic words” are not required. Taylor,
1) An indication that the Legislature requires -that the State be joined in a lawsuit for which immunity would otherwise attach indicates a waiver of immunity;
2)'The Legislature often enacts measures that provide an objective limitation on the State’s potential liability when waiving immunity;
3) Waiver must be “beyond doubt” even if it is not “a model of ‘perfect clarity”’; and
4) Ambiguities are resolved to retain immunity.
Id. at 697-98; see Magnolia Petroleum Co. v. Walker,
The Securities Act does not contain a provision requiring that the State be joined in a suit brought under the Act. Neither does the statute contain a provision limiting the amount of damages that may be recovered from a governmental entity. See Taylor,
Further, 'the Act provides that any rights and remedies it provides are in addition to other existing remedies, including exemplary or punitive damages. Id. art. 581-33(M). The Texas Supreme' Court has expressed “skepticism that the Legislature intended to waive sovereign immunity by mere implication” when the statute being analyzed provides for exemplary damages. Taylor,
The two remaining factors consider whether waiver is established '“beyond doubt” or, instead, if there is an ambiguity in the statute. The investors argue that the Securities Act clearly waives immunity through incorporation of a defined term. The Act provides that a “person” who sells securities can be liable for misrepresentations of material facts. Tex. Rev. Crv. Stat. Ann. art. 581-33(A)(2). The Act defines “person” to include “a government, or a political subdivision or agency thereof.” Id. art. 581-4(B). However, Government Code Section 311.034 strongly negates this definition’s relevance by providing that inclusion of a governmental entity within a “person” definition “does not indicate legislative intent to waive sovereign immunity unless the context of the statute indicates po other reasonable construction.” Tex. Gov’t Code Ann. § 311.034 (West 2013). The Section 4 “person” definition does not establish a waiver. “beyond doubt” under the third Taylor factor. At most, it creates an ambiguity and, under the final Taylor factor, counsels against a conclusion' of waiver. See Taylor,
Because a violation of the Securities Act “sounds in tort” and the four Taylor factors do not support the conclusion that the Legislature waived immunity under the statute, we conclude that a violation of the Securities Act is a claim that “could have been brought under [the Tort. Claims Act]” for purposes of analyzing a Section 101.106(f) motion to dismiss, just like the investors’ other claims.
Conclusion
Having concluded that Fink established that he was within the scope of his employment and that the claims against him are ones that could have been brought under the Tort Claims Act, we sustain his first and second issues. Because the evidence established Fink’s right to dismissal and the investors failed to raise a fact issue on
Notes
. Fink asked us to take judicial notice of these 'rules and regulations. The investors filed no
. Interlocutory appeal is available for the denial of a state employee’s motion for summary judgment asserting immunity. Tex. C iv. Prac. & Rem.Code Ann. § 51.014(a)(5) (West 2015).
. In assault cases outside of the context of governmental immunity, the results have been the same. In these cases, the issue is whether the employer can escape liability under normal respondeat superior principles by arguing that intentional torts do not fall within the scope of employment. Courts have held that the employer is liable if the tortious conduct “is of the same general nature as that authorized or incidental to the conduct authorized.” Durand v. Moore,
• However, an assault that is unrelated to the assigned duties of the employee is ¡ -not within the scope of employment. See Ogunbanjo v.