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Civil Litigation Click here for the full text of this decision FACTS: Benchmark Electronics Inc. sued J.M. Huber Corp. after a Huber subsidiary that Benchmark purchased lost significant customers and experienced a catastrophic income decline. Benchmark alleged the breach of various contract provisions, fraud, and negligent misrepresentation. Responding to dispositive motions by the parties, the district court treated Huber’s motion for judgment on the pleadings as a motion for summary judgment, applied New York law to all of Benchmark’s claims, and granted summary judgment and dismissal on the pleadings for Huber. HOLDING: Vacated and remanded. New York law governs Benchmark’s breach of contract claims pursuant to the parties’ contractual choice, Texas law governs its fraud and negligent misrepresentation claims. Further, Benchmark’s fraud and misrepresentation pleadings withstand a lack of particularity challenge under Rule 9(b). “What constitutes ‘particularity’ will necessarily differ with the facts of each case . . . .” Guidry v. Bank of LaPlace, 954 F.2d 278 (5th Cir. 1992). “At a minimum, Rule 9(b) requires allegations of the particulars of time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” Tel-Phonic Servs. Inc. v. TBS Int’l Inc., 975 F.2d 1134 (5th Cir. 1992). Benchmark’s final complaint satisfies the pleading requirements of Rule 9(b). The parties’ contract provides that the “Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York . . . .” Texas law gives effect to choice of law clauses regarding construction of a contract. In Re: J. D. Edwards World Solutions Co., 87 S.W.3d 546 (Tex. 2002); Restatement (Second) of Conflict of Laws �187 cmt. c. The court respects the parties’ determination that their agreement be construed under New York law. The contractual choice of law clause does not, however, address the parties’ entire relationship; Benchmark’s claims of fraud and negligent misrepresentation are not governed by the parties’ narrow choice of law provision. The provision at hand is narrow because it deals only with the construction and interpretation of the contract. Huber relies on Tel-Phonic Servs. Inc. v. TBS Int’l Inc., 975 F.2d 1134 (5th Cir. 1992), in arguing that this court should apply New York law to Benchmark’s tort claims. In Tel-Phonic, this court applied the parties’ chosen law to breach of contract and fraud claims, concluding that “the Texas Supreme Court would follow the conflicts principle that the effect of a misrepresentation or undue influence upon a contract is determined by the same law that governs the contract. Restatement (Second) of Conflicts of Law�201 (1971).” Because Tel-Phonic does not quote the parties’ choice of law language, the court does not know the breadth of the provision at issue in that case. When dealing with narrow choice of law provisions, Texas law requires an issue-by-issue choice of law analysis. In Stier v. Reading & Bates Corp., 992 S.W.2d 423 (Tex. 1999), the Texas Supreme Court held that a provision stating that an “agreement shall be interpreted and enforced in accordance with the laws of the State of Texas, U.S.A. . . . applies only to the interpretation and enforcement of the contractual agreement. It does not purport to encompass all disputes between the parties or to encompass tort claims.” This court’s decisions in Thompson & Wallace of Memphis Inc. v. Falconwood Corp., 100 F.3d 429 (5th Cir. 1996), and Caton v. Leach Corp., 896 F.2d 939 (5th Cir. 1990), are in accord. To the extent that Tel-Phonic is inconsistent with these cases, it has been superseded by subsequent developments in Texas law and does not control. Texas courts use the Restatement’s “most significant relationship” test to decide choice of law issues. Hughes Wood Prods. Inc. v. Wagner,18 S.W.3d 202 (Tex. 2000). Three Restatement sections guide the analysis. Section 145(2) provides the factors to be considered when applying the general choice of law principles set forth in �6 to tort cases. Texas courts also apply the Restatement section specifically addressed to the issue at hand. Id. Although the Texas Supreme Court has not yet applied �148, the Restatement section specifically addressed to fraud and misrepresentation, a Texas court of appeals recently relied on Hughes in applying �148 to determine the governing law in a misrepresentation case. Tracker Marine, L.P. v. Ogle,2003 Tex. App. LEXIS 3084 (Tex. App. Houston [14th Dist.] Apr. 10, 2003, no pet. h.). Consideration of the relevant Restatement factors demonstrates that Texas law should govern Benchmark’s fraud and misrepresentation claims. Although Huber hired New York attorneys and investment bankers, who provided data rooms for Benchmark’s review in New York, and the parties executed the Original Stock Purchase Agreement, held a formal closing, and exchanged stock in New York, neither Benchmark nor Huber nor AVEX has any other mentioned connection to New York. On the other hand, many factors weigh in favor of the application of Texas law. Huber touted AVEX’s profitability in a promotional memorandum sent to Benchmark representatives in Texas and in telephone conversations with representatives in Texas. Benchmark received drafts of the Stock Purchase Agreement in Texas, and participated in negotiations by conference call from Texas, and its attorneys drafted proposed revisions to the agreements in Texas. Benchmark representatives decided in Texas to purchase AVEX. The parties executed the Amended Stock Purchase Agreement in their respective home towns. Benchmark wired money from its Texas bank account to provide Huber the cash required under the Agreement. And as has been noted, Benchmark is a Texas company with its principal place of business in Angleton, Texas. The alleged injury occurred to Benchmark in Texas, and it arose from misrepresentations made in or directed to this state. Texas clearly has an interest in protecting its businesses from fraudulent activities. Texas has the dominant contacts with the parties and the transaction, while New York is an adventitious location, which, apart from the choice of law clause in the parties’ contract, is simply the domain of the professionals Huber chose to represent it in selling AVEX. New York’s undoubted interest in serving as the venue for significant financial transactions is less compelling than that of the home state of one of the parties. (No one urged application of New Jersey or Alabama law, corresponding to Huber’s or AVEX’s locations). Texas has the “most significant relationship” to Benchmark’s fraud and misrepresentation claims. OPINION: Jones, J.; Reavley, Jolly and, Jones, JJ.

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