Mary Alice Keyes and Sean Leo Nadeau v. David Weller and Integritech Advisors, LLC

Texas Supreme Court

Mary Alice Keyes and Sean Leo Nadeau v. David Weller and Integritech Advisors, LLC

Opinion

          Supreme Court of Texas
                           ══════════
                            No. 22-1085
                           ══════════

             Mary Alice Keyes and Sean Leo Nadeau,
                             Petitioners,

                                   v.

           David Weller and IntegriTech Advisors, LLC,
                             Respondents

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the Third District of Texas
   ═══════════════════════════════════════

                      Argued January 31, 2024

      JUSTICE LEHRMANN delivered the opinion of the Court.

      JUSTICE BUSBY filed a concurring opinion.

      JUSTICE BLAND filed a concurring opinion, in which Justice
Blacklock, Justice Huddle, and Justice Young joined.

      In this case, the plaintiffs bring fraud claims against two
individual members of a limited liability company based on their alleged
misrepresentations made while acting as agents of the company. Under
well-settled Texas common law, individuals are personally liable for
torts they commit as corporate agents. We are asked what effect, if any,
Texas Business Organizations Code Section 21.223 has on that
common-law principle when the corporate agent who allegedly commits
a tort, like each of the defendants in this case, also owns an interest in
the company. Section 21.223 shields corporate shareholders, as well as
members of a limited liability company, from liability “to the corporation
or its obligees with respect to . . . any contractual obligation of the
corporation or any matter relating to or arising from the obligation on
the basis that the [shareholder] is or was the alter ego of the corporation
or on the basis of actual or constructive fraud, a sham to perpetrate a
fraud, or other similar theory.” TEX. BUS. ORGS. CODE § 21.223(a)(2). An
exception to this limitation on liability exists when the shareholder
“caused the corporation to be used for the purpose of perpetrating and
did perpetrate an actual fraud on the obligee primarily for the direct
personal benefit of the [shareholder].” Id. § 21.223(b).
      The defendants argue that Section 21.223 shields them from
liability because they were acting as agents of the company and there is
no evidence that they were seeking a direct personal benefit. The court
of appeals rejected that argument and reversed the trial court’s
summary judgment for the defendants on the fraud claims, remanding
those claims to the trial court for further proceedings. We hold that
Section 21.223 does not limit an individual’s liability under the common
law for tortious acts allegedly committed while acting as a corporate
officer or agent, even when the individual is also a shareholder or
member. Accordingly, we agree with the court of appeals and affirm its
judgment.




                                    2
                             I. Background 1

        David Weller provides aviation consulting services through
IntegriTech Advisors, LLC, of which he is the sole member.                In
September 2017, Weller began discussing a potential employment
relationship with MonoCoque Diversified Interests, LLC, which is in the
business of buying, selling, and leasing airplane parts. MonoCoque is
wholly owned by Mary Alice Keyes and Sean Leo Nadeau. Both also
serve as agents of the company.
        Weller met with Keyes and Nadeau numerous times over several
months to discuss employment terms.          In early January 2018, the
parties exchanged emails outlining the agreed terms, including Weller’s
salary, an additional $50,000 training fee payable quarterly to
IntegriTech, and various payments based on a percentage of
MonoCoque’s revenues and investments that Weller generated. The
compensation included a payment of two percent of MonoCoque’s
company-wide gross revenue (capped at $15 million) during Weller’s
employment. Keyes and Nadeau represented to Weller that the revenue
payments would be made quarterly and were nondiscretionary.               In
reliance on the representations regarding compensation, Weller
declined    other    pending    employment       opportunities,    accepted
MonoCoque’s offer, and began working for MonoCoque on January 13,
2018.




        1Because this case involves an appeal of a summary judgment, we
recount the facts in the light most favorable to the nonmovants. Energen Res.
Corp. v. Wallace, 
642 S.W.3d 502
, 509 (Tex. 2022).



                                     3
        A few weeks later, MonoCoque presented Weller with a “term
sheet” containing confidentiality, noncompete, and nonsolicitation
provisions, as well as an alternative dispute resolution agreement. The
term sheet included a compensation provision listing Weller’s salary and
a “[d]iscretionary incentive bonus of a maximum of two percent (2%) of
gross sales revenue based upon level of activity attributed to Weller to
achieve said sale.” Weller did not sign the documents. Over the next
few months, the parties exchanged revised drafts of the various
documents but could not reach an agreement and thus never executed
them.
        In April 2018, Weller inquired about the past-due revenue
payments and training stipend for the first quarter. Keyes denied that
MonoCoque was obligated to make the revenue payments because
Weller had not executed the above-mentioned agreements. Weller then
met with Keyes, Nadeau, and MonoCoque’s lawyer. At that meeting,
Keyes and Nadeau told Weller that MonoCoque had never intended to
make the revenue payments on a quarterly basis, but they stated that
MonoCoque would pay the first-quarter training stipend and indicated
that it would make the revenue payments at some later date.
MonoCoque subsequently paid Weller the training stipend.
        On May 29, Weller resigned. Keyes then sent Weller a letter
stating that “no more funds are due to you by [MonoCoque]” because the
parties had “never reached any agreement regarding terms of
employment.” Weller responded with an invoice demanding a prorated
portion of the second-quarter training stipend and estimated amounts
for the unpaid revenue interest.       MonoCoque, through its lawyer,




                                   4
responded with a letter stating that because Weller “would never agree
to any terms of employment,” he “remained an employee at-will with no
provision made for any future payments” after his departure from the
company. The letter further stated that MonoCoque “never agreed to
pay [Weller] ‘revenue incentive’ or ‘training’ compensation” and owed
him no further payment.
       Weller and IntegriTech sued MonoCoque, Keyes, and Nadeau,
asserting a breach-of-contract claim against MonoCoque and asserting
various fraud claims and a Texas Securities Act claim against all three
defendants.    The plaintiffs alleged that Keyes and Nadeau made
fraudulent misrepresentations and omissions regarding MonoCoque’s
obligation to compensate Weller to induce him to provide employment
and consulting services and that he justifiably relied on those
misrepresentations.     The plaintiffs further alleged that Keyes and
Nadeau were individually liable for their own fraudulent and tortious
conduct that they engaged in as agents of MonoCoque. MonoCoque
brought several counterclaims.
       The defendants filed a motion for partial summary judgment,
arguing that Section 21.223 of the Texas Business Organizations Code
bars the claims against Keyes and Nadeau individually because the
complained-of acts were performed in their capacities as authorized
agents of MonoCoque. 2 The trial court granted the motion and severed



       2   The defendants also filed a separate motion for partial summary
judgment on the ground that the fraud claims, except fraudulent inducement,
are barred by the economic-loss rule. The trial court denied that motion, and
it is not before us.



                                     5
the subject claims into a separate action, resulting in a final judgment
for Keyes and Nadeau on all claims asserted against them individually.
Weller and IntegriTech appealed that judgment. 3
      The court of appeals reversed, holding that Section 21.223’s
limitations on corporate owners’ liability apply when claimants seek to
hold such owners liable for corporate obligations by piercing the
corporate veil, but that the statute does not abrogate longstanding
common law that “individuals are directly liable for their own tortious
conduct—even if committed in the course and scope of their
employment.” 
684 S.W.3d 496
, 499 (Tex. App.—Austin 2022) (citing
Miller v. Keyser, 
90 S.W.3d 712
, 717–18 (Tex. 2002)). In so holding, the
court noted that the majority of appellate courts to address the issue
have reached the same conclusion. Id. at 501 (collecting cases). A
minority of courts, however, have held that Section 21.223 can apply
regardless of whether the individual defendant’s liability is premised on
a veil-piercing theory or direct liability for his own tortious conduct as
an agent for the company. See, e.g., TecLogistics, Inc. v. Dresser-Rand
Grp., 
527 S.W.3d 589, 598
 (Tex. App.—Houston [14th Dist.] 2017, no
pet.) (holding that Section 21.223 applied where the defendant
shareholder “was the human agent through which [the company]
committed actual fraud against” its contractual obligee). We granted
Keyes and Nadeau’s petition for review to address this split.




      3   Weller and IntegriTech did not complain on appeal about the portion
of the judgment disposing of the Texas Securities Act claim.



                                     6
                             II. Discussion

      We begin with a discussion of the development of the law
regarding personal liability for corporate obligations and the related but
distinct issue of personal liability for tortious conduct in which an
individual engages as a corporate agent.

                   A. Piercing the Corporate Veil

      Under longstanding Texas common law, corporate shareholders,
officers, and directors are generally shielded from liability for corporate
obligations. Willis v. Donnelly, 
199 S.W.3d 262, 271
 (Tex. 2006). But
“courts will disregard the corporate fiction”—i.e., pierce the corporate
veil—and hold such agents individually liable for those corporate
obligations when the agents “abuse the corporate privilege.” 
Id.
 A
veil-piercing doctrine is not a substantive cause of action but “a method
to impose personal liability on shareholders and corporate officers who
would otherwise be shielded from liability for corporate debts.”
Shandong Yinguang Chem. Indus. Joint Stock Co. v. Potter, 
607 F.3d 1029, 1035
 (5th Cir. 2010) (applying Texas law); see also Cox v.
S. Garrett, L.L.C., 
245 S.W.3d 574, 582
 (Tex. App.—Houston [1st Dist.]
2007, no pet.).
      Two oft-invoked common-law veil-piercing theories are (1) alter
ego, which is triggered “when there is such unity between corporation
and individual that the separateness of the corporation has ceased”; and
(2) when the corporate form is used as “a sham to perpetrate a fraud.”
Castleberry v. Branscum, 
721 S.W.2d 270, 271
 (Tex. 1986). As to the
latter, in Castleberry this Court concluded that to prove there has been
a sham to perpetrate a fraud, and thereby pierce the corporate veil, a



                                    7
claimant need not show “actual fraud” (defined as “dishonesty of purpose
or intent to deceive”) but may show “only constructive fraud.” 4 
Id. at 273
. That holding corresponded with the Court’s “flexible fact-specific
approach” to veil piercing “focusing on equity.” 
Id.
       The Legislature responded in 1989 by amending Article 2.21 of
the Texas Business Corporation Act—the predecessor to the Business
Organizations Code provisions at issue—which took “a stricter approach
to disregarding the corporate structure.” SSP Partners v. Gladstrong
Invs. (USA) Corp., 
275 S.W.3d 444, 455
 (Tex. 2008).                Article 2.21
insulated shareholders 5 from liability with respect to “any contractual
obligation of the corporation on the basis of actual or constructive fraud,
or a sham to perpetrate a fraud, unless [the shareholder] caused the
corporation to be used for the purpose of perpetrating and did perpetrate
an actual fraud on the obligee primarily for the direct personal benefit
of the [shareholder].” Act of May 16, 1989, 71st Leg., R.S., ch. 217, § 1,
1989 Tex. Gen. Laws 974
, 974 (amended 1993, 1997; recodified 2003).
The statute also wholly foreclosed shareholder liability based on the
corporation’s failure to observe any corporate formality. 
Id.
 at 974–75.
Excepted from the liability limitations were corporate obligations for




       4 We described “constructive fraud” as “the breach of some legal or
equitable duty which, irrespective of moral guilt, the law declares fraudulent
because of its tendency to deceive others, to violate confidence, or to injure
public interests.” Castleberry, 
721 S.W.2d at 273
.
       5 We use “shareholder” to encompass the statute’s applicability to “[a]

holder of shares, an owner of any beneficial interest in shares, or a subscriber
for shares whose subscription has been accepted.” TEX. BUS. ORGS. CODE
§ 21.223(a).



                                       8
which the shareholder had expressly assumed personal liability or was
otherwise liable by statute. Id. at 975.
       Over the years, Article 2.21’s provisions have been amended,
expanded, and recodified, and they are now housed in Sections 21.223,
21.224, and 21.225 of the Business Organizations Code. Though the
provisions themselves reference only corporations, they apply to limited
liability companies as well. 6      The current version of Section 21.223
provides in pertinent part:
       (a) A holder of shares, an owner of any beneficial interest
           in shares, or a subscriber for shares . . . or any affiliate
           of such a holder, owner, or subscriber or of the
           corporation, may not be held liable to the corporation or
           its obligees with respect to:

              ....

           (2) any contractual obligation of the corporation or any
               matter relating to or arising from the obligation on
               the basis that the holder, beneficial owner,
               subscriber, or affiliate is or was the alter ego of the
               corporation or on the basis of actual or constructive
               fraud, a sham to perpetrate a fraud, or other similar
               theory; or




       6 The provisions apply to a limited liability company and its “members,

owners, assignees, affiliates, and subscribers.” TEX. BUS. ORGS. CODE
§ 101.002(a). Further, “a reference to ‘shares’ includes ‘membership interests’;”
“a reference to ‘holder,’ ‘owner,’ or ‘shareholder’ includes a ‘member’ and an
‘assignee’;” “a reference to ‘corporation’ or ‘corporate’ includes a ‘limited
liability company’;” and “a reference to ‘directors’ includes ‘managers’ of a
manager-managed limited liability company and ‘members’ of a
member-managed limited liability company.” Id. § 101.002(b)(1)–(4).



                                       9
          (3) any obligation of the corporation on the basis of the
              failure of the corporation to observe any corporate
              formality . . . .

      (b) Subsection (a)(2) does not prevent or limit the liability
          of a holder, beneficial owner, subscriber, or affiliate if
          the obligee demonstrates that the holder, beneficial
          owner, subscriber, or affiliate caused the corporation to
          be used for the purpose of perpetrating and did
          perpetrate an actual fraud on the obligee primarily for
          the direct personal benefit of the holder, beneficial
          owner, subscriber, or affiliate.
TEX. BUS. ORGS. CODE § 21.223(a)(2)–(3), (b). Section 21.224 confirms
that liability for an obligation limited by Section 21.223 “is exclusive and
preempts any other liability imposed for that obligation under common
law or otherwise.” Id. § 21.224. Section 21.225 carries forward the
original statute’s exceptions for liability expressly assumed or imposed
by statute. Id. § 21.225.

     B. Liability of Corporate Agents for Tortious Conduct

      Independent of the “vicarious” liability that may be imposed on
corporate shareholders and officers based on veil-piercing theories, we
have also long held that corporate agents are “personally liable for
[their] own fraudulent or tortious acts” “even though they were acting
on behalf of the corporation.” Miller, 
90 S.W.3d at 717
 (citing Weitzel v.
Barnes, 
691 S.W.2d 598, 601
 (Tex. 1985); Leyendecker & Assocs. v.
Wechter, 
683 S.W.2d 369, 375
 (Tex. 1984)); see also Walker v. F.D.I.C.,
970 F.2d 114, 122
 (5th Cir. 1992) (applying Texas law) (“If a corporate
officer knowingly participates in a tortious act, there is no need to pierce
the corporate veil in order to impose personal liability.”). Leyendecker,
for example, involved a dispute between a subdivision developer and the



                                    10
Wechters, to whom the developer sold a townhouse. 
683 S.W.2d at 371
.
The Wechters sued the developer under the Deceptive Trade Practices
Act and asserted a libel claim against both the developer and its
employee, Chris Hilliard, premised on Hilliard’s sending a letter to
multiple recipients falsely accusing the Wechters of having asked the
developer to make fraudulent insurance claims. 
Id.
 at 371–72. The trial
court rendered judgment holding the developer and Hilliard jointly and
severally liable for damages on the libel claim. 
Id. at 372
. In this Court,
Hilliard argued that he could not be held liable for a tort committed
while acting within the scope of his employment. 
Id. at 375
. We rejected
that argument, holding that “[a] corporation’s employee is personally
liable for tortious acts which he directs or participates in during his
employment.” 
Id.
 7
       Reaffirming this principle in Miller, 8 we also cited with approval
a Restatement provision on agency that provides: “An agent who
fraudulently makes representations, uses duress, or knowingly assists
in the commission of tortious fraud or duress by his principal or by
others is subject to liability in tort to the injured person although the



       7 In the negligence context, a corporate officer’s or agent’s “individual

liability arises only when the officer or agent owes an independent duty of
reasonable care to the injured party apart from the employer’s duty.” Leitch v.
Hornsby, 
935 S.W.2d 114, 117
 (Tex. 1996). For example, an employee who
negligently causes a car accident while driving within the scope of his
employment is subject to liability along with the employer. 
Id.
       8 Keyes and Nadeau note that Miller involved an analysis of a corporate

owner’s liability under a separate statute, the DTPA. Nevertheless, Miller
expressly recognized the “longstanding rule that a corporate agent is
personally liable for his own fraudulent or tortious acts.” 
90 S.W.3d at 717
.



                                      11
fraud or duress occurs in a transaction on behalf of the principal.”
RESTATEMENT (SECOND) OF AGENCY § 348 (AM. L. INST. 1958), cited in
Miller, 
90 S.W.3d at 717
 n.29. And just two terms ago, we yet again
made clear that “the fact that an individual was acting in a corporate
capacity,” i.e., “acting as an agent, employee, or representative of a
corporation,” “does not prevent the individual from being held
personally—or ‘individually’—liable for the harm caused by those acts.”
Transcor Astra Grp. S.A. v. Petrobras Am., Inc., 
650 S.W.3d 462
, 478
(Tex. 2022), cert. denied, 
143 S. Ct. 2493
 (2023).

                  C. Scope of Statutory Protections

       Here, we are asked what effect, if any, the provisions of the
Business Organizations Code discussed above have on this longstanding
common-law principle. On this issue, the courts of appeals and federal
district courts are divided. As noted, a majority have held, consistent
with the court of appeals’ decision in this case, that Section 21.223
applies only “to veil piercing theories (for both contract and related tort
claims), . . . not to direct liability claims for an individual’s own tortious
conduct.” Bates Energy Oil & Gas v. Complete Oilfield Servs., 
361 F. Supp. 3d 633
, 672–73 (W.D. Tex. 2019). 9 Others hold, however, that the
statute applies to liability for all tort claims if the claims arise from or


       9 See also 684 S.W.3d at 501; Texienne Oncology Ctrs., PLLC v. Chon,

No. 09-19-00356-CV, 
2021 WL 4994622
, at *7 (Tex. App.—Beaumont Oct. 28,
2021, pet. denied); Clements v. HLF Funding, No. 05-19-01295-CV, 
2021 WL 3196962
, at *10 (Tex. App.—Dallas July 28, 2021, pet. denied); Spicer v. Maxus
Healthcare Partners, 
616 S.W.3d 59
, 117–19 (Tex. App.—Fort Worth 2020, no
pet.); Kingston v. Helm, 
82 S.W.3d 755
, 764–67 (Tex. App.—Corpus Christi–
Edinburg 2002, pet. denied); In re Technicool Sys., Inc., 
594 B.R. 663
, 671–72
(Bankr. S.D. Tex. 2018).



                                     12
relate to a corporate obligation. E.g., TecLogistics, 
527 S.W.3d at 591
. 10
Under that reasoning, shareholder liability for such claims—even if
arising from the shareholder’s own tortious conduct—is barred unless
the shareholder “caused the corporation to be used for the purpose of
perpetrating and did perpetrate an actual fraud on the obligee primarily
for the direct personal benefit of the holder.” TEX. BUS. ORGS. CODE
§ 21.223(b).    For the reasons discussed below, we hold that
Section 21.223 does not apply to, and thus does not limit liability for,
claims against corporate shareholders and officers premised on their
alleged tortious conduct as agents of the company. 11
      We begin with familiar principles of statutory interpretation,
which require us to look to the statute’s plain language and to analyze
that language contextually and in light of the statute as a whole. CHCA
Woman’s Hosp. L.P. v. Lidji, 
403 S.W.3d 228
, 231–32 (Tex. 2013).
According to the statute’s language, the following questions determine
whether the general nonliability rule of Section 21.223(a)(2) applies:
(1) is the plaintiff a corporation or LLC or its obligee, and is the




      10 See also Tex.-Ohio Gas, Inc. v. Mecom, 
28 S.W.3d 129, 137
 (Tex.
App.—Texarkana 2000, no pet.); R.P. Small Corp. v. Land Dep’t, Inc., 
505 F. Supp. 3d 681
, 698–99 (S.D. Tex. 2020); Saeed v. Bennett-Fouch Assocs.,
No. 3:11-CV-01134-F, 
2012 WL 13026741
, at *3 (N.D. Tex. Aug. 26, 2012).
      11   A shareholder or LLC member is not a corporate agent or
representative merely by virtue of being a shareholder or member. But often,
particularly in small businesses, shareholders and members also serve as
officers or managers of the company. It is those shareholders and members
who may act as corporate agents and, in doing so, are not protected by
Section 21.223 for their own tortious conduct as agents.



                                    13
defendant a shareholder in the entity 12 or an affiliate of such a
shareholder or of the entity; and (2) does the plaintiff’s claim (a) seek to
recover for a contractual obligation of the entity or a matter relating to
or arising from such an obligation and (b) seek to hold the defendant
liable for that recovery on the basis of alter ego, actual or constructive
fraud, a sham to perpetrate a fraud, or other similar theory? See TEX.
BUS. ORGS. CODE § 21.223(a)(2). If all these requirements are met, the
nonliability rule applies unless the plaintiff establishes the exception in
Section 21.223(b). 13
       Another part of statutory context is statutory history—“the
statutes repealed or amended by the statute under consideration.”
Brown v. City of Houston, 
660 S.W.3d 749
, 755 (Tex. 2023); see 
id.
(“Statutory history concerns how the law changed, which can help clarify
what the law means.” (emphasis omitted)).            When Article 2.21 was
amended in 1989, close on the heels of Castleberry’s emphasis on a
“flexible” approach to veil piercing, 
721 S.W.2d at 273
, it applied only to
efforts to impose liability on shareholders with respect to “any
contractual obligation of the corporation” based on “actual or
constructive fraud,” “a sham to perpetrate a fraud,” or “failure of the


       12 Again, we use “shareholder” to encompass the statute’s applicability

to “[a] holder of shares, an owner of any beneficial interest in shares, or a
subscriber for shares whose subscription has been accepted,” TEX. BUS. ORGS.
CODE § 21.223(a), as well as a member of a limited liability company, id.
§ 101.002(a).
       13  Section 21.225, which contains additional exceptions from the
liability limits in Sections 21.223 and 21.224 when a person assumes,
guarantees, or agrees to be personally liable for the obligation or is otherwise
statutorily liable, is not at issue here. Id. § 21.225.



                                      14
corporation to observe any corporate formality.” Act of May 16, 1989,
71st Leg., R.S., ch. 217, § 1, 
1989 Tex. Gen. Laws 974
, 974. The statute
thus acted directly on specific veil-piercing theories that, at common
law, were methods to impose shareholder liability for corporate
contractual obligations despite shareholders’ general protection with
respect to such obligations. And it contained the same exceptions to the
liability restriction that remain in the current version: (1) the holder
used the corporation to perpetrate an actual fraud on the obligee
primarily for the holder’s direct personal benefit; (2) the holder
expressly assumed personal liability for the obligation; and (3) the
holder was otherwise liable by statute. 
Id.
       In 1993, the Act was amended to incorporate additional
veil-piercing theories, adding “alter ego” and the catch-all “or other
similar theory” to the list of enumerated bases on which shareholder
liability for corporate contractual obligations was restricted.         Act of
May 10, 1993, 73d Leg., R.S., ch. 215, § 2.05, 
1993 Tex. Gen. Laws 418
,
446. 14 In 1997, the Legislature amended the Act to apply not just to
liability for “any contractual obligation of the corporation” but also to
liability for “any matter relating to or arising from the obligation.” Act
of May 16, 1997, 75th Leg., R.S., ch. 375, § 7, 
1997 Tex. Gen. Laws 1516
,
1522. The Legislature also added “affiliate[s]” of the shareholder and
the corporation to the class of persons protected by the statute. 
Id.



       14 The 1993 amendment also added the preemption provision, stating

that when liability is limited by the statute, such liability “is exclusive and
preempts any other liability imposed [for the covered obligation] under
common law or otherwise.”



                                      15
       The statutory history and language confirm that the statute’s
focus has always been, and continues to be, on the liability of
shareholders for matters relating to corporate contractual obligations—
not the liability of corporate agents for their own misconduct. TEX. BUS.
ORGS. CODE § 21.223(a)(2) (protecting shareholders from liability with
respect to “any contractual obligation of the corporation or any matter
relating to or arising from the obligation” (emphases added)). Further,
the statute applies to shareholder liability for those obligations “on the
basis that the holder . . . is or was the alter ego of the corporation or on
the basis of actual or constructive fraud, a sham to perpetrate a fraud,
or other similar theory.” Id. 15 The statute simply does not address the
individual liability of corporate agents for their own tortious acts. And
again, we have repeatedly and recently confirmed that corporate agents
may be held liable for such conduct. Transcor, 650 S.W.3d at 479.
       In sum, we do not understand Section 21.223 to shield a corporate
agent who commits tortious conduct from direct liability “merely
because the officer or agent also possesses an ownership interest in the
corporation.” Kingston, 
82 S.W.3d at 765
. Accordingly, we hold that
Section 21.223 has no effect on the independent common-law principle




       15 Because Weller and IntegriTech do not seek to hold a shareholder

directly liable for his conduct as a shareholder, we need not address the
applicability of Section 21.223(a)(2) in such cases. In particular, we do not
decide whether this statute applies to non-veil-piercing theories of liability or
whether a particular direct-liability tort claim would impose liability “with
respect to . . . [a] contractual obligation of the corporation or [a] matter relating
to or arising from the obligation.” TEX. BUS. ORGS. CODE § 21.223(a)(2).



                                         16
that corporate agents who direct or engage in tortious conduct are
personally liable for that conduct.

                              D. Application

      In this case, Weller and IntegriTech allege that Keyes and
Nadeau      personally       made          false   “representations      and
commitments . . . regarding     incentive      compensation   for     revenue
generated” by Weller and “allowed Weller to commence with his
employment knowing that he believed the pre-employment terms to be
in effect because they had told him that this was so.” Further, Keyes
and Nadeau allegedly “accepted the benefit of Weller’s knowledge and
connections knowing that they did not intend to perform on the
agreement.” Whether the record supports those allegations is beyond
the scope of Keyes and Nadeau’s motion for partial summary judgment
and thus beyond the scope of our review. McConnell v. Southside Indep.
Sch. Dist., 
858 S.W.2d 337, 341
 (Tex. 1993) (holding that a motion for
summary judgment “must stand or fall on the grounds expressly
presented in the motion”).
      Rather, the only ground on which summary judgment was sought
on the fraud claims was that Section 21.223 bars the claims against
Keyes and Nadeau individually because all the alleged acts and
omissions “were performed in their capacities as authorized agents” of
MonoCoque.     In turn, Keyes and Nadeau maintain that they are
protected from liability absent evidence that they acted “primarily for
the[ir] direct personal benefit.”     TEX. BUS. ORGS. CODE § 21.223(b)
(excepting from the statute’s protections a shareholder or affiliate who
“caused the corporation to be used for the purpose of perpetrating and



                                      17
did perpetrate an actual fraud on the obligee primarily for the direct
personal benefit of the holder, beneficial owner, subscriber, or affiliate”).
       As discussed, the undisputed fact that Keyes and Nadeau made
the alleged misrepresentations in their “corporate capacity” does not
insulate them from liability under the common law.           Transcor, 650
S.W.3d at 479.     And Section 21.223 does not limit the liability of
corporate agents for their own fraudulent or tortious conduct merely
because they are also shareholders or members.            Accordingly, the
absence of evidence that Keyes and Nadeau perpetrated a fraud for their
“direct personal benefit” is not fatal to the plaintiffs’ claims, which
involve acts allegedly committed as corporate agents, not as owners.
       Our holding does not mean that Weller and IntegriTech should
prevail on their fraud claims or even that the record evidence is
sufficient to raise a genuine issue of material fact on the elements of
those claims; again, those issues are beyond the scope of our review.
However, it does mean that Keyes and Nadeau are not entitled to
summary judgment on the only ground they asserted.

                             III. Conclusion

       We hold that the trial court erred in granting summary judgment
on the fraud claims against Keyes and Nadeau and that the court of
appeals correctly reversed that judgment. Accordingly, we affirm the
court of appeals’ judgment and remand the case to the trial court.



                                          Debra H. Lehrmann
                                          Justice

OPINION DELIVERED: June 28, 2024



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Reference

Status
Published