Full opinion text
ORDER KIMBA M. WOOD, District Judge. In a Report and Recommendation dated May 20, 1997 (the “Report”), Magistrate Judge Theodore H. Katz recommended that defendants’ motion to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) be granted in part and denied in part. Defendants (other than Michael Neary) have filed timely objection to the Report. These defendants object to the recommendation of the Report that defendants’ motion to dismiss be denied as to: (1) plaintiffs, fraud claims against all the individual defendants except Richard W. Broockman and David M. Jones, (2) plaintiffs’ negligent misrepresentation claims against all the individual defendants except Broockman and Jones, (3) plaintiffs’ civil conspiracy claims, and (4) plaintiffs’ tortious inference with contract claims against defendants R.D. Kennedy and Ralph Lutjen. Plaintiffs have filed a timely response to these objections. Pursuant to Federal Rule of Civil Procedure 72(b) and 28 U.S.C. § 636(b), I have reviewed de novo those aspects of the Report to which defendants object. I find that defendants’ objections are adequately addressed by the Report. I hereby accept and adopt the Report, attached hereto, in its entirety. For the reasons stated in the Report, I grant defendants’ motion to dismiss in part and deny it in part. Specifically, I:(l) dismiss plaintiffs’' state statutory claims brought pursuant to the Texas Deceptive Trade Practices Act, the Connecticut Unfair Trade Practices Act, and the California Franchise Investment Law; (2) dismiss all claims against defendant Union Carbide Corporation (“UCC”); (3) dismiss all claims for tortious interference with prospective business relations; (4) limit the remedy for breach of warranty claims against defendants Union Carbide Marble Care (“UCMC”) and Union Carbide Chemicals and Plastics Company, Inc. (“UCC&P”) to the replacement or purchase price of the warrantied goods. Defendants’ motion to dismiss is denied in all other respects. SO ORDERED. REPORT AND RECOMMENDATION KATZ, United States Magistrate Judge. This action was referred to me pursuant to your Order of Reference, for general pretrial supervision and the resolution of dispositive motions requiring a Report and Recommendation. Plaintiffs are five individuals and the five corporate franchises in which they hold stock and which were formed pursuant to agreements entered into with defendant Union Carbide Marble Care, Inc. (“UCMC”). Defendants are UCMC, Union Carbide Chemicals and Plastics Company Inc. (“UCC&P”), parent and owner of ninety-two percent of the stock of UCMC, Union Carbide Corporation (“UCC”), parent and owner of UCC&P, and a number of individuals who are current or former directors, officers or employees of the three corporate defendants. Plaintiffs assert numerous claims against defendants in connection with their franchise agreements with UCMC, alleging, inter alia, breach of contract and warranty, a number of tort claims alleging negligent and fraudulent behavior, and violations of a number of state statutes. Currently before the Court is defendants’ motion to dismiss in part the Amended Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Court heard oral argument on the motion on February 5,1997. For the reasons that follow, I recommend that the motion be granted in part and denied in part. BACKGROUND Between May, 1990 and August, 1991, each of the individual plaintiffs entered into franchise agreements with UCMC. (Plaintiffs Amended Complaint, dated August 14, 1996 (“Am.Compl.”), at ¶¶ 36, 44, 51, 57, 68.) In essence, in exchange for certain payments, the agreements granted each of the franchisees the right to operate one “Marblelife” business in a specifically defined territory. The Amended complaint sets forth in detail the background of the Marblelife enterprise, but a short synopsis will suffice for present purposes. In the late 1980s, UCC implemented the “Intrepeneurship” program, designed to foster new business ventures within Union Carbide. (Am.Compl. at ¶ 19.) As part of this program, UCC&P undertook an effort to exploit the market for marble care chemicals by providing a marble care service offering uniform chemicals, techniques and results. (Am.Compl. at ¶¶ 19-21.) The project was spearheaded by defendant Richard Brooekman (“Brooekman”), who later became President of UCMC, and a team from UCC&P, who set about developing a business plan for the implementation of a nationwide franchise system of marble care specialists. (Id. at ¶¶ 205-25.) In an effort to gain knowledge and experience in the marble care industry, UCC&P acquired an existing marble care company, which then became its subsidiary, UCMC. (Id. at ¶¶ 23, 28.) The new venture was coined “Marblelife.” (Id. at ¶ 29.) As a result of advertisements and other solicitations placed by UCMC, each of the individual plaintiffs inquired about, and eventually acquired, a Marblelife franchise. (See Id. at ¶¶ 31, 38, 46, 54, 63.) The individual plaintiffs allege that’prior to entering into the ‘ franchise agreements, defendants Brooekman and David M. Jones (“Jones”), Vice President of UCMC, made material misrepresentations about the Marblelife system, the chemicals used in the system and the right under the franchise agreement to use by the franchisees of the Union Carbide name and trademark, (Id. at ¶¶ 34, 40, 48, 55, 66), all of which they allege induced them into entering into the agreements. Plaintiffs further allege that they were induced to continue making purchases of chemicals and equipment under their franchise agreements because they were repeatedly, and falsely, assured by Brooekman and defendant Reed Freeman (“Freeman”) that UCC&P was not seeking a buyer for UCMC. (Id. at ¶¶ 70-73.) On October 27, 1995, plaintiffs commenced this action by filing two lawsuits in the Texas state courts, each of which was against some of the defendants named in the Amended Complaint. Those actions were removed by the defendants to the United States District Court for the Southern District of Texas (Houston Division) based on diversity jurisdiction. That court denied the plaintiffs’ motion to remand the cases to state court and the motion of the defendants to dismiss based on the forum selection clause in the franchise agreements. (See Consolidation and Transfer Order, dated April. 1, 1996.) The court then transferred the two actions to the Southern District of New- York “pursuant to the franchise agreements’ forum selection clause.” (Id.) In’ June, 1996, defendants moved to dismiss the Complaints, but later agreed to withdraw that motion to afford plaintiffs the opportunity to file an amended complaint in order to cure the deficiencies in the original Complaints. After the actions were consolidated for all pretrial purposes (See Order, dated October 1, 1996), plaintiffs filed their Amended Complaint. Read liberally, the Amended Complaint appears to allege as to all defendants the following causes of action: violations of the California Franchise Investment Law, the Massachusetts Regulation of Business Practices for Consumer Protection Law, the Connecticut Unfair Trade Practices Law and the Texas Deceptive Trade Practices Act (collectively, “the state statutory claims”); fraudulent misrepresentation; fraudulent omissions; breach of warranty; civil conspiracy; and negligence. As to UCMC, UCC and UCC&P only, the Amended Complaint also alleges breach of contract and, as to UCC, UCC&P and individual defendants Ralph Lutjen and R.D. Kennedy only, the Amended Complaint additionally alleges tortious interference with contract and tortious interference with prospective business relations. ■ Liability of UCC and UCC&P for the breaches of contract appears to hinge on the theory that UCMC was the alter ego of its corporate parent and grandparent. (Am.Compl. at ¶ 110.) Plaintiffs, seek an undisclosed sum in damages, attorneys fees, costs and interest. Defendants move to dismiss all of the claims as to all defendants with the exceptions, as to UCMC only, of the breach of contract claim and, as limited under the terms of the franchise agreements, the breach of warranty claims. DISCUSSION I. Motion ■ to Dismiss Under Rule 12(b)(6) In deciding a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must construe the allegations of the complaint in the plaintiffs favor. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). See also PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1197 (2d Cir.1996); Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.), cert. denied, 513 U.S. 836, 115 S.Ct. 117, 130 L.Ed.2d 63 (1994); Dahlberg v. Becker, 748 F.2d 85, 88 (2d Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1845, 85 L.Ed.2d 144 (1985). The Court must draw all reasonable inferences in plaintiffs’ -favor and may dismiss only if “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); Walker v. City of New York, 974 F.2d 293, 298 (2d Cir.1992), cert. denied, 507 U.S. 961, 113 S.Ct. 1387, 122 L.Ed.2d 762 (1993); Fields v. Soloff, 920 F.2d 1114, 1118-19 (2d Cir.1990). All pleadings should be construed so as to do substantial justice. Fed.R.Civ.P. 8(f). The Court should not weigh evidence that might be presented at trial but, instead, it should merely determine whether the complaint itself is legally sufficient. Culver v. Merrill Lynch & Co., No. 94 Civ. 8124(LBS), 1995 WL 422203, at * 2 (S.D.N.Y. July 17, 1995); see also Festa v. Local 3 Int’l Brotherhood of Elec. Workers, 905 F.2d 35, 37 (2d Cir.1990). ■Among the items that may be considered on a motion to dismiss are documents incorporated into the complaint by reference, documents attached to the complaint as exhibits, information that can be judicially noticed, or “‘documents either in plaintiffs’ possession or of which plaintiffs had knowledge and relied on in bringing suit.’” Culver, 1995 WL 422203 at * 2 (quoting Brass v. American Film Techs., Inc., 987 F.2d 142, 150 (2d Cir.1993)); Curti v. Girocredit Bank, No. 93 Civ. 1782(PKL), 1994 WL 48835, at '* 1 (S.D.N.Y. Feb.14, 1994). Therefore, on this motion to dismiss, the Court may properly consider the parties’ franchise agreements and the purchase agreements, both of which are integral to the allegations contained in the Amended Complaint and both of which are referenced in the Amended Complaint and in plaintiffs’ brief submitted in opposition to this motion. Additionally, the documents attached to the affidavit of plaintiffs’ counsel, Daniel Gildin, which were submitted with defendants’ motion papers, may also be considered, since they were in plaintiffs’ possession when the Amended Complaint was filed. See, e.g., Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir.1991) (“Where plaintiff has actual notice of all the information in the movant’s papers and has relied upon these documents in framing the complaint, the necessity of translating a Rule 12(b)(6) motion into one under Rule 56 is largely dissipated.”), cert. denied, 503 U.S. 960, 112 S.Ct. 1561, 118 L.Ed.2d 208 (1992); accord International Audiotext Network, Inc. v. American Tel. and Tel. Co., 62 F.3d 69, 72 (2d Cir.1995). II. Choice of Law As a threshold matter, this Court, sitting in diversity, must determine what state’s substantive law is to be applied to plaintiffs’ claims. Plaintiffs argue that Texas law applies to all of the claims. Defendants argue that New York law applies to all of the claims. It is my conclusion that New York law applies to the breach of contract claims and that the tort claims, as categorized below, are governed by Texas, Ohio and California law. Generally, in diversity cases, a federal court applies the substantive law of the state in which the court sits, including that state’s choice of law rules. See, e.g., Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941); Valley Juice Ltd. v. Evian Waters of France, Inc., 87 F.3d 604, 607 (2d Cir.1996). However, when a case is transferred from one federal jurisdiction to another, by either a plaintiff or a defendant, the law applicable subsequent to transfer depends on whether the transfer was made pursuant to 28 U.S.C. § 1406(a), because venue was improper and could not have been maintained in the transferor court, or pursuant to 28 U.S.C. § 1404(a), for the convenience of the parties. Caribbean Wholesales & Serv. Corp. v. U.S. JVC Corp., 855 F.Supp. 627, 629 (S.D.N.Y.1994) ; Jordache Enters., Inc. v. Brobeck, Phleger & Harrison, No. 92 Civ. 9002(KMW), 1994 WL 74860, at *2 (S.D.N.Y. Mar.7, 1994). If the transfer was made pursuant to § 1406(a), the transferee states law, including its choice of law rules, is applicable. Emjayco v. Morgan Stanley & Co., No. 95 Civ. 8546(DLC), 1996 WL 452266, at *4 (S.D.N.Y. Aug.8, 1996); Coraggio v. Time Inc. Magazine Co., No. 94 Civ. 5429(MBM), 1995 WL 242047, at * 3 (S.D.N.Y. Apr.26, 1995) ; Caribbean Wholesales, 855 F.Supp. at 629; Jordache, 1994 WL 74860, at *2. If, however, the transfer was pursuant to § 1404(a), the transferor jurisdiction’s substantive law, including its choice of law rules, are to be applied by the transferee court. Ferens v. John Deere Co., 494 U.S. 516, 519, 110 S.Ct. 1274, 1277, 108 L.Ed.2d 443 (1990); Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32, 108 S.Ct. 2239, 2245, 101 L.Ed.2d 22 (1988); Valley Juice, 87 F.3d at 607; Caribbean Wholesales, 855 F.Supp. at 629; Jordache, 1994 WL 74860, at *2. Here, the transfer order of the Texas District Court does not cite either § 1404(a) or § 1406(a) in support of the transfer. However, the order unambiguously states that the transfer was made “pursuant to' the franchise agreements’ forum selection clause.” Transfers made pursuant to forum selection clauses have consistently been construed as falling under the rubric of § 1404(a). See, e.g., Stewart, 487 U.S. at 31-32, 108 S.Ct. at 2245 (transfer made pursuant to a forum selection clause is controlled by' § 1404(a)); Huntingdon Eng’g & Envtl., Inc. v. Platinum Software Corp., 882 F.Supp. 54, 56 (W.D.N.Y.1995) (where venue is otherwise proper, forum selection clause is- not grounds for dismissal for improper venue under § 1406(a); rather, court will apply § 1404(a) to determine propriety of transfer); Caribbean Wholesales, 855 F.Supp. at 630 (motion to transfer premised on forum selection clause is decided under 5 1404(a) and not under § 1406(a)) (citing Stewart, 487 U.S. at 28, 108 S.Ct. at 2243); see also TUC Elecs., Inc. v. Eagle Telephonies, Inc., 698 F.Supp. 35, 38 (D.Conn.1988) (where federal venue statute lays venue in a particular district, forum selection clause providing to the contrary does not make that district improper within the meaning of § 1406(a)); Heyco, Inc. v. Heyman, 636 F.Supp. 1545, 1547 (S.D.N.Y.1986) (same). Therefore, since this action was transferred on the basis of a forum selection clause, not on the basis of improper venue, it is to be viewed as a transfer under § 1404(a), for the convenience of the parties, and the choice of law rules of Texas, as the transferor state and the state in which the action was filed, determine the substantive law to be applied to the claims. The Franchise Agreement contains a New York choice of law provision and plaintiffs allege claims sounding in both contract and in tort. Therefore, the first step in resolving what substantive law is to be applied is to determine both the validity and the scope of the choice , of law provision under Texas choice of law principles. That is, in order to discern the proper law to apply, the Court must first determine whether Texas would honor the parties’ choice of New York law as set forth in the Franchise Agreement, and if Texas would interpret that provision in the Agreement as governing the tort as well as the contract claims. I find that Texas would enforce the choice of law clause and that, therefore, New York law governs all of plaintiffs’ contract claims. However, particularly in light of the narrow language contained in the choice of New York law clause, I find that Texas would construe that clause as governing only plaintiffs’ contract claims and not the tort claims. Therefore, with respect to plaintiffs’ tort claims, Texas choice of law analysis governing tort claims will be applied. As a means of protecting the justified expectations of the parties, Texas choice of law principles generally give effect to choice of law clauses in contracts. Salazar v. Coastal Corp., 928 S.W.2d 162, 166 (Tex.App.1996); Chase Manhattan Bank v. Greenbriar North Section II, 835 S.W.2d 720, 723 (Tex.App. 1992); State Nat.’l Bank v. Academia, Inc., 802 S.W.2d 282, 289 (Tex.App.1990); Caton v. Leach Corp., 896 F.2d 939, 942 (5th Cir. 1990) (construing Texas choice of law). Texas has adopted Section 187 of the Restatement (Second) of Conflict of Laws concerning contractual choice of law provisions. Under that approach, a court will apply the law of the state chosen by the parties if the particular issue being litigated “is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.” Salazar, 928 S.W.2d at 166 (quoting Restatement (Second) of Conflict of Laws § 187(1)). Moreover, even if the issue is one which the parties could not have determined by means of an explicit contract provision, courts in Texas will only refuse to honor the express wishes of the parties as to what law will control their contract disputes if the chosen law (1) bears no reasonable relationship to either the parties or the subject matter of the agreement, or (2) the chosen law would offend a fundamental public policy of a state whose laws otherwise would apply. Salazar, 928 S.W.2d at 166; Chase Manhattan, 835 S.W.2d at 723; Academia, 802 S.W.2d at 289;. Caton, 896 F.2d at 942. Here, the parties not only could have resolved through express provisions the issues now being litigated — the rights and duties of the parties under the contract and UCMC’s obligations in the event of a sale of the company — they most assuredly did so. Therefore, under Texas choice of law rules, the parties’ choice of New York law will be honored. See Salazar, 928 S.W.2d at 167. Moreover, even assuming that the issues could not have been resolved through an express provision, Texas courts would still honor the parties’ choice of law. Plaintiffs do not argue that a fundamental public policy of another state would be violated by enforcement of the choice of law provision. Rather, .they contend that Texas would not honor the choice of law clause in the Franchise Agreement because New York lacks a reasonable relationship to either the parties or the Franchise Agreements. I disagree. As defendants point out, UCMC, one of the parties to all of the Franchise Agreements, operates a training facility in Tarrytown, New York for franchisees, and additionally, it has a number of franchises in New York. (Def. Reply Mem. at 5.) Moreover, two of those franchisees were employed by UCMC as management consultants. (Id.) Finally, plaintiff Jerry Maltz (“Maltz”) claims that he twice met with UCMC employees in New York and that the misrepresentations at issue in this action were made to him during one of those meetings (Am.Compl. at ¶ 35), and plaintiff Nick Began (“Began”) claims he met with UCMC employees in New York prior to signing his agreement. (Am.Compl. at ¶ 57.) At that meeting, representatives of UCMC purported to arrange a demonstration of the Marblelife system. In fact, according to the Amended Complaint, Began was misled by UCMC at that meeting, since the system employed during the demonstration was not the Marblelife system. Plaintiffs do not dispute these contacts between New York and the parties to the Franchise Agreements, some of which touch on the very subject matter of the Amended Complaint. Rather, they argue that Texas courts will only find a reasonable relationship where the state whose law was chosen by the parties is the principle place of business of at least one of the parties. (PI. Br. at 6-8.) However, a fair reading of the cases cited by plaintiffs does not support this proposition. While Texas courts will find a reasonable relationship where one of the parties has its principle place of business in the chosen state, none of the cases suggest that this is a prerequisite for honoring a choice of law clause. See Salazar, 928 S.W.2d at 166-67; Chase Manhattan Bank, 835 S.W.2d at 723-25; First Commerce Realty Investors v. K-F Land Co., 617 S.W.2d 806, 808-09 (Tex. Civ.App. — Houston [14th Dist.] 1981). Under Texas law, however, the choice of law clause in the agreements governs only the contract claims and not plaintiffs’ tort claims. Texas courts look to the language of a choice of law clause to determine its scope, and unless that language indicates that the parties intend its scope to be broader than claims sounding in contract, it will be deemed to govern only contract claims. See Busse v. Pacific Cattle Feeding Fund # 1, Ltd., 896 S.W.2d 807, 812-13 (Tex.App.1995) (where language in choice of law clause states that “agreement and the rights and obligations of the parties arising hereto shall be construed in accordance with” the laws of a certain state, claims of misrepresentation and fraud in the inducement, which preceded execution of contract and did not deal with terms of contract, are not covered by clause); Thompson and Wallace of Memphis, Inc. v. Falconwood Corp., 100 F.3d 429, 432-33 (5th Cir. 1996) (where choice of law provisions apply to “agreement ... and enforcement” of contract, tort causes of action are not governed by provisions) (citing Busse); Caton,, 896 F.2d at 943 (narrow language such as “[t]his Agreement shall be construed under the laws [of a certain state]” does not govern tort claims, while broad language such as “govern, construe and enforce the rights and duties of the parties arising from or relating in any way to the subject matter of this contract” would cover all claims, including tort claims, related to the contract). The choice of law clause in the Franchise Agreement states, in pertinent part, that the “Agreement is to be construed in accordance with the law of the State of New York without recourse to New York choice of law or conflicts of law principles.” (Franchise Agreement at ¶ 29.01) (emphasis added). Applying the principles in the cases cited above, it is clear that this language does not encompass the tort claims in the Amended Complaint. Therefore, Texas choice of law principles must be applied to determine the substantive law governing those claims. Where, as here, the parties have not agreed to the application of a particular state’s law with respect to their tort causes of action, Texas will scrutinize the contacts between the parties and the occurrences that are material to the parties’ dispute to determine which state has “the most significant relationship to the particular substantive issue,” and will apply the law of that state to resolve that issue. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984); accord Caton, 896 F.2d at 943; Thompson, 100 F.3d at 433; Gutierrez v. Collins, 583 S.W.2d 312, 319 (Tex.1979). In implementing that test, Texas courts consider the four factors enumerated in section 145 of the Restatement (Second) of Conflict of Laws: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (4) the place where the relationship, if any, between the parties is centered. Duncan, 665 S.W.2d at 421; Gutierrez, 583 S.W.2d at 319; Parra v. Larchmont Farms, Inc., 932 S.W.2d 68, 73-74 (Tex.App.1995), rev’d on other grounds, 941 S.W.2d 93 (Tex.1997); Academia, 802 S.W.2d at 290. The outcome of the test does not turn merely on the number of contacts that any given state has to the case, but rather on the qualitative nature of those contacts, which itself is determined on a case-by-case basis by balancing each contact against the other contacts. See, e.g., Academia, 802 S.W.2d at 290-91 (citing Duncan, 665 S.W.2d at 421); Gutierrez, 583 S.W.2d at 319. Applying these factors to the tort claims at issue, it is clear that the law of a single state cannot be applied to all the claims, as suggested by the parties. Moreover, factors one and three tip the scales decidedly in favor of applying Texas law to the claims of Maltz and his franchise Marble-care of Houston, applying Ohio law to the claims of Began and his franchise Stone-works, Ltd., Inc., and applying California law to the claims of the remaining individual plaintiffs and their franchises, Doug Selik (“Selik”) and Marblelife of San Diego, Lynch and Marblelife of South Orange Co. and Joseph Hackett (“Hackett”) and Marblelife of Palm Springs. With respect to the first factor, the injuries purportedly suffered by the plaintiffs were sustained at the location of their respective franchises, which in all cases is the same state as that in which they reside. Thus, Maltz, who is domiciled in Texas, also suffered his injuries in the state of Texas, where his franchise is located. Likewise, Began, who is a resident of Ohio, suffered his injuries in the state of Ohio, where his franchise is located. Selik, Lynch and Hackett, all of whom are residents of California, the same state as the situs of their franchises, suffered their injuries in California. Moreover, due to its contractual relationships with the plaintiffs and its duties under the Franehise Agreements, UCMC was apparently doing business in all of these states. Finally, other relevant contacts point to plaintiffs’ home states as having the most significant relationship to the parties’ tort disputes. For example, all of the individual plaintiffs claim that they met with UCMC officials at least once in their respective home states about the prospect of entering into the Franchise Agreements, and Maltz, Began and Selik specifically allege that the very misrepresentations at issue in this litigation were made to them, respectively, in Texas, Ohio and California. (Am.Compl. at ¶¶34, 56.) Although there are a number of other states having contact with the tort causes of action, no other state has a more significant relationship, in qualitative terms, to the parties or the occurrences than do Texas, Ohio and California. For example, the defendants reside in and are incorporated in a number of different states, including Delaware, New York, Colorado and Connecticut. Although the Amended Complaint does allege that some conduct related to the torts occurred in some of those states, no plaintiff is alleged to have been injured in those states and the contact relevant to the causes of action occurring in those states was both sporadic and in certain states, was limited to only some of the plaintiffs. That conduct was not as significant as that which occurred in Texas, Ohio and California with respect to each of the plaintiffs whose franchises were located in those states. Thus, Texas choice of law principles dictate that New York law will be applied to the contractual claims in accordance with the choice of law provision in the Franchise Agreements. Texas law will be applied to the tort claims of Maltz, Ohio law will be applied to the tort claims of Began, and California law will be applied to the tort claims of Selik, Lynch and Hackett, as these states have the most significant relationships to those parties and their tort claims. III. Liability for Breach of Contract and Breach of Warranty Plaintiffs allege that their Franchise Agreements were breached when UCMC failed to deliver the products and services it had agreed to deliver under the Agreements, and when the UCMC Marblelife system was eventually sold to a financially unsound buyer, who was unable to perform the terms of their contracts with UCMC. (Hearing Tr. at 4-5; see also Am.Compl. at ¶¶ 101-02.) Plaintiffs also allege breach of both implied and express warranties, contending that defendants falsely represented that the chemicals used in the Marblelife system were safe and appropriate for use in cleaning marble surfaces. (Am.Compl. at ¶¶ 103-104.) Defendants seek to dismiss the breach of contract and breach of warranty claims as to UCC and UCC&P only, and additionally seek to limit any remedy that plaintiffs may recover against UCMC for breach of warranty to that provided for under the contract. For the reasons that follow, I find that plaintiffs have sufficiently pleaded an alter ego theory of liability so as to hold UCC&P liable for UCMC’s breaches of contract, but that the Amended complaint fails to state a claim under this theory against UCC. I further find that any recovery against UCMC or UCC&P for breach of warranty for defects in the chemicals or other goods supplied pursuant to the Purchase and Franchise Agreements is limited to the exclusive remedy agreed to by the parties, as embodied in those documents. A. Liability of UCC & UCC&P for UCMC’s Breaches Plaintiffs seek to “pierce the corporate veil” to hold UCC and UCC&P (the corporate grandparent and parent of UCMC), non-parties to their contracts, hable for UCMC’s alleged breaches, on the theory that UCMC was merely an alter ego of UCC and UCC&P and was actually doing the business of those entities. (See Am.Compl. at ¶ 110.) Defendants, on the other hand, argue that plaintiffs have failed to allege facts sufficient to support liability under an alter ego theory. For the reasons that follow, I find that the Amended Complaint is sufficient at this juncture to sustain the alter ego theory of liability as against UCC&P, but not against UCC. As an initial matter, I nóte that the allegations in the Amended Complaint are painted in extremely broad-brush strokes. Throughout, the word “defendants” is used indiscriminately, with no attempt made to identify the particular defendant to which a specific allegation refers, or, in some oases, to link particular defendants with the acts alleged. With respect to the individual defendants, potential liability for any given cause of action may be evident, because they are alleged to have performed at least some specific acts. However, with respect to corporate defendants UCC and UCC&P, although the Amended Complaint broadly asserts “alter ego” as the basis of liability against them, it is not at all clear for which specific claims pláintiffs seek to assert such liability. For instance, although plaintiffs use the word “defendants” in the breach of warranty section of the Amended Complaint, indicating that they seek to hold all defendants hable for that claim, inexplicably, they appear to limit the breach of contact claim to UCMC and UCC&P, while at the same time alleging alter ego liability against UCC. Under the circumstances, I construe the Amended Complaint to assert alter ego liability against UCC and UCC&P for UCMC’s breaches of contract, including breaches of the warranty provisions of the Franchise Agreements. Neither UCC nor UCC&P is a party to the Franchise Agreements and they therefore could not be held liable for breaches in the absence of alter ego liability. Generally, parent and subsidiary corporations are treated as separate legal entities, and a contract by one does not legally bind the other. See Carte Blanche (Singapore), Pte, Ltd. v. Diners Club Int’l, 2 F.3d 24, 26 (2d Cir.1993); Gmerek v. Scrivner, Inc., 221 A.D.2d 991, 992, 634 N.Y.S.2d 299, 299 (4th Dep’t 1995) (“As a general rule, a parent corporation is not liable for the acts of a subsidiary”) (citations omitted). Courts in New York are reluctant to disregard the distinction between corporate entities. Carte Blanche, 2 F.3d at 26 (citation omitted). In New York, the party seeking to hold a parent hable for a subsidiary’s breach of contract bears the burden of establishing both that the parent corporation “exercised complete domination of [the subsidiary] corporation in respect to the transaction attacked; and ... that such domination was used to commit a fraud or wrong against the plaintiff which resulted in the plaintiffs injury.” Morris v. New York State Dep’t of Taxation and Fin., 82 N.Y.2d 135, 141, 603 N.Y.S.2d 807, 810-11, 623 N.E.2d 1157 (1993); accord, e.g., Mass v. McClenahan, 893 F.Supp. 225, 233 (S.D.N.Y. 1995); Weinreich v. Sandhaus, 850 F.Supp. 1169, 1178 (S.D.N.Y.1994); Letizia v. Executive Coach Auto Repair, Ltd., 213 A.D.2d 382, 382, 623 N.Y.S.2d 327, 328 (2d Dep’t 1995); Hyland Meat Co. v. Tsagarakis, 202 A.D.2d 552, 552, 609 N.Y.S.2d 625, 626 (2d Dep’t 1994); see also Wamaco Inc. v. VF Corp., 844 F.Supp. 940, 946 (S.D.N.Y.1994) (“a parent company may be hable on a contract signed by its subsidiary if the subsidiary is shown to be a mere shell dominated and controlled by the parent for the parent’s own purposes”) (citing In re Sbarro Holding, Inc. ., 91 AD.2d 613, 456 N.Y.S.2d 416 (2d Dep’t 1982)). A party need not show that a parent’s domination of its subsidiary was “complete as to every detail,” but rather, it need only adequately allege that domination was “complete in respect to the transaction attacked.” Directors Guild of Am., Inc. v. Garrison Productions, Inc., 733 F.Supp. 755, 761 (S.D.N.Y.1990) (citing Gorrill v. Icelandair/Flugleidir, 761 F.2d 847, 853 (2d Cir. 1985)) (applying New York law); accord Apex Oil Co. v. DiMauro, 713 F.Supp. 587, 611 (S.D.N.Y.1989) (control must be established only as to the transaction attacked so that, as to that transaction, the entity had no separate mind). Courts in this state, and federal courts construing New York law, have identified certain factors relevant to determining whether a parent controls a subsidiary corporation to a sufficient degree to be considered its “alter ego.” Among those factors are (1) the absence of formalities of corporate existence on the part of the subsidiary; (2) an overlap in ownership, officers, directors and personnel between the two corporations; and (3) the amount of business discretion displayed by the subsidiary. Carte Blanche, 2 F.3d at 26 (citing Wm. Passalacqua Builders, Inc. v. Resnick Developers S., Inc., 933 F.2d 131, 139 (2d Cir.1991)); Weinreich, 850 F.Supp. at 1178; see also Austin Powder Co. v. McCullough, 216 A.D.2d 825, 826-27, 628 N.Y.S.2d 855, 856-7 (3d Dep’t 1995); 107 Realty Corp. v. National Petroleum U.S.A. Ltd., 181 A.D.2d 817, 818, 581 N.Y.S.2d 375, 376 (2d Dep’t 1992); 888 7th Ave. Associates Ltd. Partnership v. Arlen Corp., 172 A.D.2d 445, 445-46, 569 N.Y.S.2d 16, 17 (1st Dep’t 1991). Although the concept of “complete domination and control” is malleable and open to differing interpretations, depending on the particular factual matrix at issue, one certainty is that “liability can never be predicated solely upon the fact of a parent corporation’s ownership of a controlling interest in the shares of a subsidiary. At the very least, there must be direct intervention by the parent in the management of the subsidiary to such an extent that the subsidiary’s paraphernalia of incorporation, directors, and officers are completely ignored.” Billy v. Consolidated Mach. Tool Corp., 51 N.Y.2d 152, 163, 432 N.Y.S.2d 879, 886, 412 N.E.2d 934 (1980) (citation omitted). Even accepting as true all of the factual allegations in the Amended Complaint, which I must for purposes of this motion, plaintiffs have failed to satisfy the first part of the Morris two-part test with respect to UCC. The Amended Complaint baldly asserts, in a single four-line paragraph, that “UCMC is but the alter ego of UCC&P and UCC, acting solely as a conduit for the performance of [their] business, and resulting in actual fraud.” (Am.Compl. at ¶ 110.) While plaintiffs have stated the correct legal standard for determining alter ego liability under New York law, they fail to allege any facts which, if true, would indicate that UCC exercised any control over UCMC, much less a degree of control in its ongoing relationship with the franchisees as to render UCMC a mere shell or dummy corporation, operating at the behest of and solely for the benefit of UCC, so as to justify piercing the corporate veil to hold UCC liable for UCMC’s breaches of contract. See, e.g., Zi naman v. USTS New York, Inc., 798 F.Supp. 128, 132 (S.D.N.Y.1992) (dismissing alter ego claims where complaint failed to allege control and domination to a degree that company had no existence of its own) (applying New York law); Klockner Stadler Hurter Ltd. v. The Ins. Co. of the State of Pennsylvania, 785 F.Supp. 1130, 1136 (S.D.N.Y.1990) (same); People of the State of Illinois ex rel. Washburn v. Frank B. Hall & Co., Inc., 174 A.D.2d 562, 572 N.Y.S.2d 646 (2d Dep’t 1991); Metropolitan Transp. Auth. v. Triumph Adver. Prods., Inc., 116 A.D.2d 526, 497 N.Y.S.2d 673 (1st Dep’t 1986). Plaintiffs, in their brief in opposition, do not even attempt to point to factual allegations in the body of the Amended Complaint that would support their theory of liability against UCC applying these criteria. Indeed, read in the most generous light, as to UCC, the allegations merely establish that certain of the individual defendants who became officers, directors and employees of UCMC were at one time employees of UCC, that UCC may have taken steps to exploit the market for their chemicals by encouraging the establishment of ventures that would involve the sale of such chemicals, and that UCC held a controlling interest in UCC&P, the company that would eventually establish UCMC. Indeed, there is no allegation that any individual from UCC was in any way involved in the formation and operation of UCMC. Plaintiffs do not even allege that the individual defendants were employees, officers or directors of UCC at the same time they were employed by UCMC, and even if they had, such an allegation, by itself, would not suffice for purposes of pleading alter ego liability. See American Protein Corp. v. AB Volvo, 844 F.2d 56, 60 (2d Cir.1988) (existence of interlocking directorates between a parent and a subsidiary is a “commonplace circumstance of modern business [that] does not furnish such proof of control as will permit a court to pierce the corporate veil”), cert. denied, 488 U.S. 852, 109 S.Ct. 136, 102 L.Ed.2d 109 (1988); Pits, 911 F.Supp. at 715 (same); 1 William Meade Fletcher, et al., Fletcher Cyclopedia of the Law of Private Corporations § 41.30, at 664 (1990 rev. ed.) (decision to pierce corporate veil may not rest on a single factor). Nor do they allege that the financial structure or bookkeeping practices of UCMC were intertwined with those of UCC. In short, these bare allegations, even if true, cannot establish a basis for piercing the corporate veil. Rather than making particularized allegations, plaintiffs attempt to meet their pleading burden by pointing to numerous documents attached to the Amended Complaint. However, none of those documents suggest control and domination of UCMC by UCC. Indeed, the only thing that the documents suggest that UCC and UCMC shared was the “Union Carbide” name affiliation. Moreover, there is barely a mention in the documents of any officer or director of UCC, and simply no indication that UCC was acting in a way that would indicate domination and control by UCC of UCMC. Taken as a whole, the documents evidence nothing more than the establishment, by UCC&P, of a subsidiary that was expected to exploit the market for chemicals, presumably to the ultimate advantage of UCC and UCC&P, and that the subsidiary company was staffed with former employees of UCC and UCC&P. Plaintiffs do not contend, nor could they, that the mere establishment of a subsidiary, for the purpose of financial gain, in and of itself establishes “control” or “domination” on the part of the parent or grandparent. In short, despite their volume, none of the documents attached to the Amended Complaint support plaintiffs’ assertion that UCC dominated and controlled UCMC. At this early stage of the proceedings, however, I cannot draw the same conclusion as to UCC&P. The Amended Complaint, and the documents attached thereto, provide sufficient indicia of control and domination by UCC&P over UCMC to survive this motion to dismiss. As previously noted, in order to pierce the corporate veil, plaintiffs need not show UCC&P’s complete domination of UCMC as to every detail of the existence of UCMC, but rather, need only allege complete domination and control with respect to the specific transaction attacked. Here, one of the “transactions attacked,” and one of the bases for the breach of contract claims, is the sale of UCMC to an unfit purchaser, in derogation of a specific contractual term. Plaintiffs sufficiently allege that UCC&P completely dominated UCMC with respect to this particular transaction. They claim that UCC&P actually made the decision to sell UCMC to Ed Williams, an allegation that is not contested by defendants, and indeed one that is supported by a number of the exhibits attached to the Amended Complaint. See Am. Compl. at Exs. 31, 34, 37, 41. The allegation that UCC&P is a 92% shareholder of UCMC, again, a factual allegation that is not contested by defendants, further supports the conclusion that the decision to sell the company, and the decision to sell the company to a particular buyer, was made by UCC&P and not by UCMC. Moreover, plaintiffs claim that the decision to sell was hasty and ill-advised, thus supporting the inference that UCC&P failed to adequately investigate the potential purchaser, resulting in a “wrong” to plaintiffs when the contract was breached upon completion of the sale. Additionally, there is some support for the inference of an ongoing involvement by UCC&P in UCMC’s business, or a financial connection between the two companies, that might go beyond that of the normal parent/subsidiary relationship. (See Am.Compl.Ex. 21 discussing the fact that “UCC&P pays and charges” UCMC for the salaries of six UCMC employees and discussing UCC&P’s restructuring of UCMC’s operations). Without knowing more, I simply cannot disregard this indicia of possible control arid domination. Therefore, although pretrial discovery may prove plaintiffs alter ego theory to be without merit, I find that the allegations of alter ego with respect to UCC&P are sufficient to withstand a motion to dismiss. B. Remedies for Breach of Warranty The purchase agreement entered into between the plaintiff franchisees and UCMC contains an express warranty that the marble cleaning chemicals “meet[] Seller’s specification for Material or such other specifications as have been expressly made part hereof .” (Standard Terms for Purchase of Products, Equipment and Services from Franchisor, attached to Affidavit of Daniel Gildin as Exhibit C (“Purchase Agreement”), at ¶ 8.) The clause then goes on to disclaim all other express or implied warranties, including but not limited to “all implied warranties of merchantability and fitness for a particular purpose.” (Id.) Defendants seek dismissal of the breach of warranty claims in their entirety against all defendants but UCMC and, as to UCMC, they ask the Court to limit any remedy for breach of warranty to the purchase or replacement price of the allegedly defective items, as set forth in the Purchase Agreement and Franchise Agreement. Plaintiffs cite no law in support of their position that the unambiguous contract clauses limiting UCMC’s warranty liability should not be honored. Indeed, they appear to concede that the parties anticipated that the remedy for such breach' would be that requested by defendants — replacement of the goods or refund of the purchase price. (PI. Br. at 28.) In any event, I agree that under New York law, the breach of warranty claims must be so limited. It is well-settled -that under New York law, parties to a contract may exclude or modify implied warranties so long as the warranty disclaimer is conspicuous and specific. N.Y.U.C.C. § 2-316(2) (McKinney 1993); see, e.g., Grupo Sistemas Integrales de Telecomunicacion S.A de C.V. v. AT&T Communications, Inc., No. 92 Civ. 7862(KMW), 1996 WL 312535, at *6 (S.D.N.Y. June 10, 1996); Furniture Consultants, Inc. v. Datatel Minicomputer Co., No. 85 Civ. 8518(RLC), 1986 WL 7792, at *5 (S.D.N.Y. July 10, 1986); Sky Acres Aviation Servs., Inc. v. Styles Aviation, Inc., 210 AD.2d 393, 620 N.Y.S.2d 442 (2d Dep’t 1994); Farm Family Mut. Ins. Co. v. Moore Bus. Forms, Inc., 164 Misc.2d 656, 625 N.Y.S.2d 798 (N.Y.Sup.Ct.1995). Here, there is no question that these requirements have been met. The warranty disclaimer is in capital letters and specifies the warranties that are being disclaimed. See, e.g., Grupo Sistemas, 1996 WL 312535, at *6; Furniture Consultants, 1986 WL 7792, at *5. Plaintiffs contend that defendants warranted that the chemicals sold pursuant to the Purchase Agreement were safe and fit to be used for a particular purpose. These warranties are not contained in the Purchase Agreements and in fact have been specifically disclaimed. Therefore, any claims based on these purported warranties fail as a matter of law. Similarly, parties to a contract may limit the remedies for its breach, and the statute allowing such limitations specifically anticipates the limitation agreed to by UCMC and the individual plaintiffs in this, case — the price of the goods or replacement of the goods. N.Y.U.C.C. § 2-719(a) (McKinney 1993). Such limitations clauses are enforced unless the specified remedy “fail[s] of its essential purpose.” N.Y.U.C.C. § 2-719(2); Scott v. Palermo, 233 A.D.2d 869, 649 N.Y.S.2d 289, 290 (4th Dep’t 1996); see also Rubin v. Telemet America, Inc., 698 F.Supp. 447, 449-50 (S.D.N.Y.1988); Mateo Elec. Co. v. American Dist. Telegraph Co., 156 A.D.2d 840, 843, 549 N.Y.S.2d 843, 845-46 (3d Dep’t 1989). A remedy fails of its essential purpose if “the circumstances existing at the time of the agreement have changed so that enforcement of the limited remedy would essentially leave plaintiff with no remedy at all.” American Tel. & Tel. Co. v. New York City Human Resources Admin., 833 F.Supp. 962, 986 (S.D.N.Y.1993) (citations omitted). Generally, whether changed circumstances have caused a limited remedy to fail of its essential purpose is a question of fact and not of law. Piper Acceptance Corp. v. Barton, No. 83 Civ. 4998(CSH), 1987 WL 5801, at *2 (S.D.N.Y. Jan.14, 1987). Here, however, plaintiffs have not even suggested that enforcement of the limited remedy clause would effectively deprive them of a remedy, nor do any of the facts pleaded support such a conclusion. The remedy provision provides plaintiffs with the option of replacement, of the chemicals or the price they paid for the chemicals. Compare Seybert-Nicholas Printing Corp. v. MLP U.S.A., Inc., No. 92 Civ. 6143(RPP), 1992 WL 315643, at *1 (S.D.N.Y. Oct.22, 1992) (motion to dismiss cause of action to reform contract clause that limited the remedies for breach to repair and replacement is denied where complaint alleged that repeated attempts to repair the item had failed and that the item continued to malfunction). In short, the clauses limiting liability for breach of warranty are enforceable and plaintiffs’ claims for any purported breach may only lie against UCMC and UCC&P for replacement of the chemicals or refund of the purchase price. IV. The Fraud & Negligent Misrepresentation Claims Plaintiffs lodge numerous allegations of fraud and negligent misrepresentation in connection with the Marblelife enterprise. I find that these claims are sufficient to survive this motion to dismiss, with the exception of those against UCC, which I find to be insufficient as a matter of law. Indeed, although the Amended Complaint is neither specific nor clear as to which defendants plaintiffs seek to hold liable for any or all of the tort claims, any tort claim against UCC must fail as a matter of law. It is black-letter law that a corporation can only act through its officers, directors and employees. The Amended Complaint does not allege that any of the individual defendants were employed by and acting on behalf of UCC at the time they purportedly committed the tortious acts. Moreover, the Amended Complaint does not allege that any non-defendant UCC officer or director committed a tort. Therefore, UCC is not a proper defendant as to the tort claims. What follows is a discussion of the fraud and negligent misrepresentation claims as they relate to the remaining defendants. A. Fraud Plaintiffs’ fraud claims generally fall into two categories — allegations that defendants made affirmative misstatements to them and allegations that defendants omitted to disclose material facts to them. Because many of the causes of action in the Amended Complaint hinge on these purported misstatements and omissions, it may be helpful to set them forth in some detail. Most of the purported misrepresentations occurred before the plaintiffs entered into their agreements, and plaintiffs contend that the misrepresentations were meant to induce them to enter into those agreements. Plaintiffs claim that misstatements were made to them about the Marblelife system itself— that it was unique in that it offered specialized support staff, proprietary chemicals that were safe to. use under normal conditions, and that it had numerous competitive advantages that would assure its growth. (Am. Compl. at ¶¶34(1), 34(2), 34(7)). Also at issue are purported misrepresentations made about the computer software and the use of the Union Carbide name and trademarks by the franchisees. (Am.Compl. at ¶¶ 34(3), 34(6).) Plaintiffs also allege that they were falsely assured that there had been a dramatic increase in the use of marble in the United States (Am.Compl. at ¶ 34(4)), and that neither UCMC nor any person listed in the offering circular for Marblelife was a defendant in any pending litigation, when in fact UCMC and others were defendants in a lawsuit based on fraudulent conduct in connection with the sale of Marblelife franchises. (Am.Compl. at ¶ 34(5)). Finally, plaintiffs allege that they were falsely informed, sometime after they had.signed their agreements and established their franchises, that there were no plans to sell UCMC and that, relying on these assurances, they continued to purchase supplies, chemicals and equipment under the terms of the Agreements. (Am. Compl. at ¶¶ 74 & 75.) Alternatively, plaintiffs appear to allege that defendants were negligent in making these misrepresentations. (Am.Compl. at ¶ 117.) Plaintiffs also contend that material information was deliberately withheld from them, including the details of UCC&P’s business plan for UCMC, which provided for limited investment by UCC&P and “bail out” provisions under certain conditions (Am.Compl. at ¶¶75(1), 75(2)), and the fact that Master Marble Finishing, Inc., the company acquired by UCC&P which eventually became UCMC, was being sued, based on its failure to adequately perform marble care work. (Am. Compl. at ¶ 75(3).) The elements of a claim of fraud in California, Ohio and Texas are essentially the'same. In order to state a claim for fraud in these three states, a complaint must plead (1) that defendant made a misrepresentation; (2) with knowledge that the representation was false; (3) with the intent to induce reliance on the misrepresentation by the plaintiff; (4) that the plaintiff reasonably or justifiably relied on the misrepresentation; and (5) that the plaintiffs reliance resulted in damages to him. Lazar v. Superior Court of Los Angeles, 12 Cal.4th 631, 49 Cal.Rptr.2d 377, 909 P.2d 981, 984 (1996); Sears, Roebuck & Co. v. Meadows, 877 S.W.2d 281, 282 (Tex. 1994) (per curiam); Friedland v. Lipman, 68 Ohio App.2d 255, 429 N.E.2d 456, 456-57 (1980). Defendants’ principle line of attack against the fraud claims is that the Amended Complaint fails, as a matter of law, to plead one of the necessary elements of fraud-reasonable reliance on the alleged misrepresentations and omissions. They rely mainly oh Rosenberg v. Pittsburg Co., 718 F.Supp. 1146 (S.D.N.Y.1989), for the proposition that merger and integration clauses such as that in the Franchise Agreement, “negate reasonable reliance by one party upon representations not expressly contained in the body of the contract.” (Def.Mem. at 41.) The Court’s research, however, has uncovered no cases in California, Ohio or Texas that support this broad proposition and, in fact, cases from California and Ohio addressing the issue conclude that an integration clause does not per se preclude a claim of fraudulent inducement based on statements that are not contained in the contract. E.g., California State Auto. Assoc. Inter-Ins. Bureau v. Policy Management Sys. Corp., No. C-93-4232, 1996 WL 45280, at *11 (N.D.Cal. Jan.9, 1996) (“Under California law, a contract integration provision stating that all representations are contained therein does not bar a claim of fraudulent inducement by parol misrepresentations____”); Continental Airlines, Inc. v. McDonnell Douglas Corp., 216 Cal.App.3d 388, 264 Cal.Rptr. 779, 799 (1989) (integration clause does not bar reliance on representations made in pre-contract promotional brochure that are at variance with negotiated agreements); Coal Resources, Inc. v. Gulf & Western Indus., Inc., 756 F.2d 443, 447 n. 2 (6th Cir.1985) (“[A]n integration clause does not bar a party from demonstrating fraud in the inducement.”) (construing Ohio law). Moreover, whether or not reliance is reasonable under any particular set of circumstances is generally not resolved as a matter of law,' but is a question of fact. See Paper Savers, Inc. v. Nacsa, 51 Cal.App.4th 1090, 59 Cal.Rptr.2d 547, 556 (1996); Blankenheim v. E.F. Hutton & Co., 217 Cal.App.3d 1463, 266 Cal.Rptr. 593, 599-601 (1990); Crown Prop. Dev., Inc. v. Omega Oil Co., 113 Ohio App.3d 647, 681 N.E.2d 1343, 1349 (1996); Hall v. Harris County Water Control & Improvement Dist. No. 50, 683 S.W.2d 863, 868 (Tex.App. — Houston [14th Dist.] 1984). But see Hadland v. NN Investors Life Ins. Co., 24 Cal.App.4th 1578, 30 Cal.Rptr.2d 88, 93 (1994) (rehanee on oral misrepresentations of insurance agent about scope of pohey coverage unreasonable as a matter of law where purchaser failed to read the pohey); R.J. Wildner Contracting Co. v. Ohio Turnpike Comm’n, 913 F.Supp. 1031, 1040 (N.D.Ohio 1996) (motion to dismiss granted where rebanee on oral representation was unreasonable as a matter of law because contract contained specific disclaimer and warning). Although I am unable to conclude as a matter of law that plaintiffs’ rehanee on all of defendants’ purported misrepresentations was unreasonable, portions of this issue may be capable of resolution on a motion for summary judgment, after the factual record has been more fully developed. Indeed, my decision sustaining the adequacy of the fraud pleadings at this juncture of the litigation is not intended to indicate that I necessarily view ah of the alleged fraud claims as viable or sustainable under the laws of California, Ohio and Texas. For example, defendants challenge the viability of a fraud claim arising out of a number of specific misrepresentations, arguing that they are either barred by explicit contradictory contract terms, or that they are dupheative of the breach of contract claims, or are not actionable as a matter of law because the statements were predictions of future performance. While there may be some merit to these challenges to particular purported misrepresentations, I decline to address them at this stage of the proceedings. Defendants’ arguments are premised on the appheation of New York law, and not the state laws that I have found to be apphcable. Moreover, it is not clear that the particular language of the Franchise Agreement would, as a matter of law, render any rehanee on the purported misrepresentations unreasonable. Therefore, the elimination of any particular misrepresentations from the larger fraud claim would, in the Court’s view, be more appropriately addressed after discovery has been completed and the issues have been properly briefed under the appropriate states’ laws, in a motion for summary judgment. B. Negligent Misrepresentation As an alternative to their theory that certain UCMC and UCC&P employees made intentional, fraudulent misrepresentations, plaintiffs allege that these same statements were neghgently made. Plaintiffs’ allegations sufficiently support a cause of action under a theory of negligent misrepresentation. In California, to state a cause of action for negligent misrepresentation, plaintiff must plead (1) that defendant made a misrepresentation of a past or existing material fact; (2) that defendant had no reasonable ground for believing the statement to be true; (3) that defendant intended to induce plaintiff’s reliance on the misrepresentation; (4) that plaintiff was ignorant of the true facts and justifiably relied on the misrepresentation; and (5) that plaintiff was damaged as a result. Lincoln Alameda Creek v. Cooper Indus., Inc., 829 F.Supp. 325, 330 (N.D.Cal.1992) (citing Fox v. Pollack, 181 Cal.App.3d 954, 226 Cal.Rptr. 532 (1986)); accord Home Budget Loans, Inc. v. Jacoby & Meyers Law Offices, 207 Cal.App.3d 1277, 255 Cal.Rptr. 483, 487 (1989). Ohio and Texas follow the approach laid out in the Restatement (Second) of Torts requiring allegations that (1) defendant, during the course of his business, profession or employment or during the course of a transaction in which he had a pecuniary interest, supplies false information to plaintiff for his guidance in his business; (2) defendant fails to exercise reasonable care in obtaining or communicating that information; (3) plaintiff justifiably relies on that false information; and (4) plaintiff suffers damage as a result of such reliance. Delman v. City of Cleveland Heights, 41 Ohio St.3d 1, 534 N.E.2d 835, 838 (1989); Gutter v. Dow Jones, Inc., 22 Ohio St.3d 286, 490 N.E.2d 898, 900 (1986); Federal Land Bank Assoc. of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex.1991); Weakly v. East, 900 S.W.2d 755, 759 (Tex.App.1995). Although some cases suggest that the “during the course of his business” language of the first element requires that the defendant be in the business of supplying information, such as an accountant or a lawyer, see, e.g., Geosearch, Inc. v. Howell Petroleum Corp., 819 F.2d 521, 525 (5th Cir.1987), liability has not been limited to that narrow class of individuals. See, e.g., Sindel v. Toledo Edison Co., 87 Ohio App.3d 525, 622 N.E.2d 706 (1993) (customers prevail in action alleging negligent misrepresentation of electric company for erroneous projections of electricity needed for new store). Moreover, with respect to the alternative “pecuniary interest” prong, “officers of a corporation, although they receive no personal consideration for giving information concerning its affairs, may have a pecuniary interest in its transactions, since they stand to profit indirectly from them.” Restatement (Second) of Torts, § 552 cmt. d (1977). Additionally, plaintiffs claim that the information was given to them in order to induce and persuade them to purchase the franchises, thus satisfying the requirement that the misinformation be relayed for their guidance in their business transactions. Defendants, relying solely on New York law, assert that the allegations in the Amended Complaint fail to state a claim of negligent misrepresentation because plaintiffs have not alleged “some special relationship between the parties.” (Def.Br. at 60.) What specific type of relationship is required under New York law and whether plaintiffs have alleged such a relationship are matters I need not decide, since New York law is inapplicable to the to