Full opinion text
OPINION CAHN, Chief Judge. This litigation was commenced by an insurance company seeking a declaratory judgment that it is not obligated to provide insurance coverage for the remediation of environmental damage which was caused, in part, by its insureds. The insureds have responded with several counterclaims. Numerous motions are currently before the court. Jurisdiction is proper pursuant to 28 U.S.C. § 1332. I. Background Continental Casualty Company (“Continental”) and Transportation Insurance Company (“Transportation”) (collectively, the “plaintiffs”) are Illinois corporations having their principal places of business in Chicago, Illinois. Diversified Industries, Inc. (“Diversified”), is a Delaware corporation having its principal place of business in St. Louis, Missouri. Diversified and its subsidiaries held a “Comprehensive General Liability” insurance policy (“CGL policy”) with plaintiffs from 1968 until October 31, 1991. During the period of coverage, Eastern Diversified Metals Corporation (“EDM”), one. of Diversified’s subsidiaries, operated a metal reclamation facility in Schuylkill County, Pennsylvania (the “Site”). At the Site, EDM reclaimed copper and aluminum from telecommunication cables and wires. The reclamation process involved mechanically stripping and separating the plastic insulation surrounding the wire. EDM stored the excess insulation material, known as “plastic fluff,” on an adjacent piece of land. It was later discovered that this excess material contained contaminants. In 1977, EDM sold the Site to Theodore Sail, Inc. (“Sail”), another subsidiary of Diversified. In March of 1987, the Environmental Protection Agency (“EPA”) notified Sail and over 170 other businesses that they were Potentially Responsible Parties (“PRP’s”) under Section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et. seq. As such, they would be responsible for the clean-up costs associated with the hazardous material collected at the Site between approximately 1968 and 1977. Diversified informed plaintiffs of the EPA’s claim and demanded that plaintiffs both defend against the EPA’s claim and reimburse Diversified for any expenditures associated with cleaning up the Site. In November 1991, plaintiffs filed this declaratory judgment action against Diversified. Plaintiffs sought a determination of whether they were obligated to indemnify Diversified for costs incurred in cleaning-up the Site. The court has been notified that the cost of the clean-up could exceed $300 million. This litigation has proceeded slowly, and has required the court to rule on various pretrial motions. For instance, this court has denied Diversified’s motion to dismiss based upon the doctrine of forum non conveniens. See Order (April 13, 1992). The court has also held that Pennsylvania law controls the plaintiffs’ declaratory judgment action. See Order (February 22, 1993). In addition, the litigation was delayed when, in March 1993, Diversified declared bankruptcy and this case was automatically stayed. See 11 U.S.C. § 362. The bankruptcy court lifted the stay on May 25, 1993. After the stay was lifted, the plaintiffs moved to amend their complaint to include Sail and AT & T Nassau Metal Corporation (“AT & T”) as parties to the action. Plaintiffs sought to add Sail because, like Diversified, Sail was a named insured under the CGL policies. Therefore, plaintiffs asserted that the issues raised by their denial of liability with respect to Diversified were the same as for Sail. Plaintiffs sought to add AT & T because AT & T was a major supplier to the Site during the relevant times, and had been notified by the EPA that it was a PRP. After incurring costs in responding to the EPA’s action, AT & T sued Sail for, inter alia, contribution. See AT & T Nassau Metal Corp. v. Fixman & Sail, Civil Action No. 93-001601 (E.D.Mo.1993) (the “Missouri Case”). Therefore, plaintiffs argued that, depending upon the outcome of this litigation, they could be required to defend and indemnify Sail against AT & T’s claims. The court granted plaintiffs leave to amend their complaint. On March 23, 1994, plaintiffs filed their Amended Complaint against Diversified, Sail, and AT & T. Diversified and its subsidiaries then entered into a settlement with AT & T which contained both an assignment (the “Assignment”) and an agreement (the “Agreement”). The Assignment provided, in part, that AT & T would be assigned Diversified’s potential right of recovery against the plaintiffs and would be given the power to prosecute this litigation. The Agreement stated that the parties would enter a Consent Decree to settle the Missouri Case. The Consent Decree provided that Diversified, Sail, EDM (now known as “Seullin”), and United Refining and Smelting Company (“United”), another Diversified subsidiary, were liable for “damages, expenses, and remediation and removal costs” arising from their status as PRP’s for the EDM Site. In addition, the Consent Decree stated that: (i) as between [Sail], Diversified, and Seullin and AT & T ..., that [Sail], Diversified, and Seullin are jointly and severally liable for 90% of the above-described liability at the [EDM Site]; and (ii) as between United and AT & T ..., United is liable for a de minimis portion of the above-described liability at the [EDM Site]. Although the plaintiffs objected to the Agreement, the Bankruptcy Court overseeing Diversified’s Chapter 11 proceeding approved it. On October 10, 1994, Diversified, Sail, and AT & T (the “defendants” or “counterclaim plaintiffs”) answered the plaintiffs’ amended complaint, asserting various affirmative defenses. In addition, the defendants alleged various counterclaims against the plaintiffs and other entities related to the plaintiffs. Specifically, defendants counterclaimed against Continental, Transportation, Transcontinental Insurance Company (“Transcontinental”), Continental National Association a/k/a CNA Insurance Companies (“CNA Insurance”), and CNA Financial Corporation (“CNA Financial”) (collectively “counterclaim defendants” or the “CNA Companies”). The defendants’ counterclaims sound in breach of contract, misrepresentation under the Illinois Consumer Fraud and Deceptive Business Practices Act, violation of the Illinois Consumer Fraud and Deceptive Practices Act, negligent provision of loss control services, conspiracy to misrepresent or conceal facts, and bad faith. Several motions are currently before the court. First, the defendants have moved this court to reconsider its ruling that the plaintiffs have not failed to join indispensable parties. Second, the counterclaim defendants have moved to dismiss or strike the defendants’ counterclaims on various grounds. Third, Diversified and Sail have moved for default judgment against Continental, Transportation, and Transcontinental based upon the failure of those parties to answer Diversified and Sail’s counterclaims. Finally, CNA Financial has moved this court to dismiss all causes of action filed against it on the grounds that the court lacks jurisdiction to adjudicate such claims. II. Defendants’ Motion to Reconsider On August 19,1994, this court denied defendants’ motion to dismiss this case based upon the plaintiffs’ alleged failure to join indispensable parties to this litigation. Defendants have moved this court to reconsider its ruling. The purpose of a motion for reconsideration is to “correct manifest errors of law or fact or to present newly-discovered evidence.” Harsco Corporation v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985). Because federal courts have a strong interest in the finality of judgments, motions for reconsideration should be granted sparingly. Rottmund v. Continental Assurance Company, 813 F.Supp. 1104, 1107 (E.D.Pa.1992). Defendants contend that there are various parties who are indispensable to this litigation pursuant to Federal Rule of Civil Procedure 19. The defendants argue that all parties who have been deemed PRP’s based upon their activities at the Site (the “PRP Group”) must be joined. In addition, the defendants claim ■ that United and Scullin must be joined in this litigation because they are named insureds under the CGL policies. Defendants conclude that this case must be dismissed because diversity jurisdiction will be lacking once these parties are joined. Because the court finds that neither the PRP Group nor United and Scullin must be joined in this litigation, the court will deny defendants’ motion to reconsider and will retain jurisdiction over the case. Federal Rule of Civil Procedure 19 governs this court’s determination of whether the joinder of United, Scullin, and the PRP Group is compulsory. When making this determination, the “court must first determine whether a party should be joined if ‘feasible’ under Rule 19(a).” Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 404 (3d Cir.1993). If the party should be joined but joinder is not feasible because it would destroy diversity, the “court must then determine whether the absent party is ‘indispensable’ under Rule 19(b).” Id. If the party is indispensable, the action cannot proceed. Rule 19(a) defines the parties whose joinder is compulsory if “feasible.” Rule 19(a) states in pertinent part: A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in the party’s absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person’s absence may (i) as a practical matter impair or impede the person’s ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. Federal Rule of Civil Procedure 19(a). A. The PRP Group Defendants contend that the PRP Group satisfies Rule 19(a)(2) because the PRP Group may be able to sue the defendants for contribution, and that therefore a ruling in favor of the plaintiffs will irreparably harm the PRP Group. However, even if the defendants’ prediction were 'to come true, the court is not persuaded that such an outcome makes the PRP Group indispensable. Under Rule 19(a)(2), the “interest relating to the subject of the action” must be more than a mere financial interest. 3A Moore’s Federal Practice § 19.07[2]; Micheel v. Haralson, 586 F.Supp. 169, 171 (E.D.Pa.1983); Cortez v. County of Los Angeles, 96 F.R.D. 427, 429 (C.D.Cal.1983); Swarovski American Ltd. v. Silver Deer Ltd., 537 F.Supp. 1201, 1206 (D.Colo.1982). Instead, to satisfy Rule 19(a)(2), an absent party must have a legally protected interest, and not merely an interest of convenience. The PRP Group is not necessary to the court’s determination of whether the plaintiffs must indemnify Diversified and its affiliates for the costs associated with the cleanup of the Site. In addition, the PRP Group has not incurred any significant clean-up costs for the site, and there is no evidence that any such costs are imminent. Therefore, the possibility of a contribution action by the PRP Group against the defendants appears remote. However, even if it were likely that a future contribution action would be brought by the PRP Group, the court would nevertheless conclude that the PRP Group’s interest in this litigation is not the kind of legally protected interest contemplated by Rule 19(a)(2). The PRP Group does not have any common law or other right to coverage under the CGL policies. Instead, this litigation might merely effect the amount of money which the PRP Group might be able to recover from the defendants from such a contribution suit. This purely financial interest is insufficient. The PRP Group fails to satisfy Rule 19(a), and, accordingly, the PRP Group need not be joined. This conclusion comports with relevant precedent. For instance, in Scott Paper Company v. National Casualty Company, 151 F.R.D. 577 (E.D.Pa.1993), an individual sued the Scott Paper Company in state court after slipping and falling on Scott’s land. Scott then filed a declaratory judgment action in federal court against its insurer, National Casualty, seeking an adjudication that National Casualty was obligated to defend and indemnify Scott in the state court action. National Casualty moved to dismiss based upon Scott’s failure to join the injured claimant in the suit. National Casualty argued that the claimant was necessary because “the result of [the] dispute may have a substantial impact on [the individual claimant’s] potential recovery from Scott Paper”. Id. at 579. The court denied the motion, holding that the claimant’s interest was insufficient to make him indispensable to the court’s determination of whether National Casualty had a duty to defend and indemnify Scott. Id. B. United and Scullin Defendants argue that United and Scullin are indispensable to this litigation because they are named insureds under the CGL Policies. Defendants contend that a ruling in favor of the plaintiffs will prejudice United and Scullin, and that therefore these parties must be joined. Because the court finds United’s and Scúllin’s interests in the present litigation to be more theoretical than real, however, the court disagrees. Rule 19(a)(2) directs courts to consider the practical consequences that an action may have on an absent party. With this in mind, the court easily concludes that the present action will have very little effect on United or Scullin. This is because their rights to pursue coverage from the plaintiffs have been assigned to AT & T. Therefore, even if plaintiffs prevail in this litigation, the practical effect on United and Scullin would be minimal. United’s and Scullin’s interests in this litigation are being fully represented by AT & T. This fact distinguishes the present case from Pennsylvania Insurance Guaranty Association v. Schreffler, 360 Pa.Super. 319, 520 A.2d 477 (1987). In Schreffler, an insurer brought a declaratory judgment action against one of its insured’s claimants, Schreffler. The court ruled that the insured, Keenan’s Tavern, was an indispensable party. The court explained that the divergent interests between the insurer and Keenan’s Tavern made Keenan’s Tavern indispensable. The court stated: In its request for declaratory relief, [the insurer] asked the trial court to interpret the ... insurance policy with respect to the coverage available for [Schreffler’s] suit against Keenan’s Tavern. Clearly, Keenan’s Tavern had an interest in seeing that the court construed its insurance policy as providing the. maximum amount of coverage for any judgment entered against it in the Schreffler action. Keenan’s Tavern also had an interest in ensuring that [the insurer] performed its obligations to defend Keenan’s Tavern in the Schreffler action. Obviously, these interests have not been presented by [the insurer], who contended below and contends on appeal that no coverage is available under the Policy. Id. at 479. Unlike the insured in Schreffler, United’s and Scullin’s interests are being fully represented by AT & T. AT & T has been assigned United and Scullin’s rights under plaintiffs’ insurance policies, and has every incentive to vigorously pursue these rights. This court’s conclusion is consistent with the case relied upon most heavily by the defendants. In Travelers Indemnity Company v. Dingwell, 691 F.Supp. 503 (D.Me. 1988), aff'd, 884 F.2d 629 (1st Cir.1989), a landfill owner assigned his right to insurance proceeds to a group of polluters (the “Group”) who had already paid for most of the mandated environmental cleanup at the landfill. In return for the assignment, the Group agreed to drop its claim for contribution against the owner and seek satisfaction of the owner’s obligations solely from the insurance proceeds. In determining that the Group was indispensable to the declaratory judgment action brought by the insurer against the owner, the court stated: [The owner’s] interest is now negligible, since he has assigned the right to the proceeds to the Group, and, under the agreement, will not be pursued for any recovery out of his personal assets. Id. at 505. Like the owner in Dingwell, Scullin’s and United’s interest in this litigation is negligible. They have assigned their rights to AT & T, who seeks to folly enforce the CGL policies. Accordingly, the court finds that United and Scullin are not indispensable, and will retain jurisdiction over this case. III. Counterclaim Defendants’ Motions to Dismiss AT & T’s Counterclaims The counterclaim defendants have offered several reasons why this court should dismiss AT & T’s various counterclaims. In deciding the counterclaim defendants’ motions, the court will accept all facts alleged by AT & T as true, and will grant the counterclaim defendants’ motions only if AT & T could prove no set of facts entitling it to relief. Malia v. General Electric Company, 23 F.3d 828, 830 (3d Cir.1994); ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir.1994). The various arguments offered by the counterclaim defendants will be addressed seriatim. A. Validity of the Assignment Counterclaim defendants contend that language found within some of the CGL Policies (the “non-assignment clauses”) precluded Diversified from assigning its rights under the CGL Policies to AT & T without the consent of the CNA Companies. Typical of the various non-assignment clauses is the following: Assignment. Assignment of the interest under this policy, shall not bind the company until its consent is endorsed thereon— See, Amended Complaint for Declaratory Judgment, Exhibit M, Page 5 of Commercial Umbrella Liability Policy, § 16. However, because Pennsylvania law favors assignments of the sort contemplated by Diversified and AT & T, the court holds that the Assignment is valid. Generally, non-assignment clauses are included in insurance policies for the protection of insurers. Such clauses are designed to guarantee that an increase of the risk of loss by a change of the policy’s ownership cannot occur without the consent of the insurer. See Couch Cyclopedia of Insurance Law 2d, Volume 16, § 63:31. Because non-assignment clauses limit the amount of risk that' the insurer may be forced to accept, courts will generally strike down an insured’s attempt to assign its policy to a new insured. See, e.g., Carle Place Plaza Corporation v. Excelsior Insurance Company, 144 A.D.2d 517, 534 N.Y.S.2d 397 (1988). Consistent with the general purposes of non-assignment clauses, however, courts are reluctant to restrict the assignment of an insured’s right to payment which has already accrued. See, e.g., Santiago v. Safeway Insurance Company, 196 Ga.App. 480, 396 S.E.2d 506 (1990); National Memorial Services, Inc. v. Metropolitan Life Insurance Company, 355 Pa. 155, 49 A.2d 382 (1946). Therefore, because an insured’s right to proceeds vests at the time of the loss giving rise to the insurer’s liability, restrictions on an insured’s right to assign its proceeds are generally rendered void. In National Memorial Services, the Pennsylvania Supreme Court was confronted with a situation analogous to the one at bar. There, the beneficiaries of a life insurance policy assigned their proceeds from the policy to another individual. This individual subsequently assigned the proceeds to National Memorial Services. The insurer refused to pay National Memorial based upon the following language contained in the policy: Assignability — This Policy may be assigned to any national bank, state bank, or trust company, but any assignment or pledge of this Policy or of any of its benefits to an assignee other than one of the foregoing shall be void. The court rejected the insurer’s argument. Although the court stated that it could “understand why an insurer would limit the right of an insured to assign his interests in a policy,” it found “no sound reason for the insurance company to forbid or limit an assignment by a beneficiary of the amount due him or her after the .death of the insured.” Id. at 382-383. Addressing the issue more generally, the court wrote: Text writers and judicial decisions very generally recognize that stipulations in policies forbidding an assignment, except with the insurer’s consent, apply only to assignments before loss or death of the insured or the maturity of the policy. An assignment of the policy or rights thereunder after the occurrence of the event, which creates the liability of the insurer, is not, therefore, precluded. Id. at 383. See also Gray v. Nationwide Mutual Insurance Company, 422 Pa. 500, 223 A.2d 8 (1966) (because insured’s breach of contract claim against insurer for failure to pay for past injury was not personal in nature, such claim could be assigned); Santiago, 396 S.E.2d at 508 (“interest in the proceeds of a policy after a loss to the insured has occurred may be assigned just as any other chose in action”). See generally “Assignability of Insured’s Right to Recover Over Against Liability Insurer for Rejection of Settlement Offer,” 12 A.L.R.3d 1158 (1967). Later Pennsylvania Superior Court cases shed further light on this issue. For instance, in Alfiero v. Berks Mutual Leasing Company, 347 Pa.Super. 86, 500 A.2d 169 (1985), the court held that an insured could assign its rights to insurance proceeds to an injured claimant because the insurer had breached its contract with the insured. The court explained that the insurer’s refusal to participate in the resolution of the claimant’s case constituted a breach of the contractual duty of good faith and a repudiation of the insurance contract. In the present case, there has been no determination that the counterclaim defendants have breached their duty to defend. However, a determination of an insurer’s breach is not a prerequisite to the insured’s assignment. Barr v. General Accident Group Insurance Company, 360 Pa.Super. 334, 520 A.2d 485, 489, appeal denied, 517 Pa. 602, 536 A.2d 1327 (1987). A mere denial of coverage by an insurer triggers an in-, sured’s right to assign its rights to an injured claimant. As the Barr court stated: We think the insured should be allowed, as soon as the insurer denies coverage, to protect its interest by negotiating a settlement. The only valuable asset the insured may have is its cause of action against the insurer and the insured should be able to assign this right to the injured party to protect itself from further liability. Id. at 489. In the present case, the injury which could potentially place liability upon the CNA Companies — the environmental damage — occurred prior to the assignment. Because the assignment did not increase the amount of risk which the CNA Companies will face, but merely changed the name of the party to whom any payment may be made, it passes muster under National Memorial. In addition, counterclaim defendants have denied coverage to Diversified and its affiliated companies. Under Barr, this denial provides the insureds with the right to assign their interests in the policy proceeds to AT & T. The assignment to AT & T is valid. Therefore, despite the fact that AT & T was not directly owed a duty in its own right by the insurer, AT & T may proceed directly against the counterclaim defendants. See Gray, 223 A.2d at 11. Accordingly, counterclaim defendants’ motion to dismiss AT & T’s claims based upon the assignment’s invalidity is denied. B. The Law Governing AT & T’s Counterclaims AT & T alleges that the counterclaim defendants’ actions constitute a breach of contract, misrepresentation under the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill.Rev.Stat. ch. 121%, para. 261 et seq. (the “Consumer Fraud Act”), a violation of the Consumer Fraud Act, negligent provision of loss control services, conspiracy to misrepresent or conceal facts, and bad faith. Counterclaim defendants have moved to dismiss AT & T’s counterclaims, claiming that AT & T’s counterclaims must arise out of the law of Pennsylvania, not Illinois. Although the court disagrees with counterclaim defendants’ explanation of why AT & T’s counterclaims must arise out of Pennsylvania law, the court agrees that Pennsylvania law controls. 1. Law of the Case On February 22,1993, this court held that Pennsylvania law governs this court’s determination of the plaintiffs’ declaratory judgment action. See (Order February 22, 1993) (the “1993 Order”). Counterclaim defendants contend that the 1993 Order has become the law of the case, and governs all aspects of the instant litigation. Counterclaim defendants therefore conclude that AT & T’s counterclaims cannot arise under Illinois law. The court disagrees. The law of the case doctrine was developed “to maintain consistency and avoid reconsideration of matters once decided during the course of a single continuing lawsuit.” Casey v. Planned Parenthood, 14 F.3d 848 (3d Cir. 1994) (quoting 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Rules and Practice Procedure § 4478 (1981)). The doctrine dictates that “when a court decides upon a rule of law, that rule should continue to govern the same issues in subsequent stages in the litigation.” In re Resyn Corporation, 945 F.2d 1279, 1281 (3d Cir. 1991) (quoting Devex Corporation v. General Motors Corporation, 857 F.2d 197, 199 (3d Cir.1988)). Law of the case rules apply “both to issues expressly decided by a court in prior rulings and to issues decided by necessary implication.” Bolden v. Southeastern Pennsylvania Transportation Authority, 21 F.3d 29, 31 (3d Cir.1994) (citing Doe v. New York City Department of Social Services, 709 F.2d 782 (2d Cir.1983)). The law of the ease doctrine merely “directs a court’s discretion, it does not limit the tribunal’s power.” Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 1391, 75 L.Ed.2d 318 (1983); Bloom v. Consolidated Rail Corporation, 812 F.Supp. 553, 556 (E.D.Pa.1993), rev’d on other grounds, 41 F.3d 911 (3d Cir.1994). It is axiomatic that “the doctrine of the law of the case comes into play only with respect to issues previously determined.” Quern v. Jordan, 440 U.S. 332, 347 n. 18, 99 S.Ct. 1139, 1148 n. 18, 59 L.Ed.2d 358 (1979). The only issue before this court at the time it issued its 1993 Order was whether the plaintiffs’ declaratory judgment action, based upon the language of the CGL Policy, was to be governed by Pennsylvania or Illinois law. In deciding that Pennsylvania law governed the interpretation of the CGL Policies, the court expressed no opinion with regard to any counterclaims that might be filed. Moreover, the 1993 Order does not necessarily imply that all -counterclaims later filed would be governed by Pennsylvania law. Accordingly, because the issue currently before the court was not at issue in 1993, the court concludes that the law of the case doctrine does not mandate that AT & T’s counterclaims arise under Pennsylvania law. 2. The Relationship Between AT & T’s Contract and Tort Claims Counterclaim defendants also argue that, even if the law of the case doctrine does not directly apply, AT & T’s counterclaims are so closely related to the CGL Policies that Pennsylvania law governs them. In making this argument, counterclaim defendants rely heavily upon Unibase Systems, Inc. v. Professional Key Punch, No. CIV.A. 86-213, 1987 WL 41873 (D.Utah July 15, 1987), and First Commodity Traders v. Heinold Commodities, 591 F.Supp. 812 (N.D.Ill. 1984), aff'd, 766 F.2d 1007 (7th Cir.1985). Because these cases are easily distinguished from the present situation, however, the court disagrees. In both Unibase and First Commodities, the contracts at issue contained choice of law provisions. For instance, the contract at issue in Unibase stated: This agreement and any controversy between the parties relating to the subject matter of this agreement shall be governed by the laws of the State of Utah. Unibase, at *2. The Unibase court concluded that this choice of law provision governed tort claims which were closely related to the subject matter of the contract. Unibase, at *5. At the outset, the court notes that the reasoning of Unibase and First Commodities has not been accepted by all courts which have considered contractual choice of law provisions. For instance, in Jiffy Lube International v. Jiffy Lube, 848 F.Supp. 569 (E.D.Pa.1994), the court explained that contractual choice of law provisions “do not govern tort claims between contracting parties unless the fair import of the provisions embraces all aspects of the legal relationship.” Id. at 576. Similarly, in Sutter Home Winery, Inc. v. Vintage Selections, Ltd., 971 F.2d 401 (9th Cir.1992), the court explained that “claims arising in tort are not ordinarily controlled by a contractual choice of law provision.” Id. at 407 (citations omitted). See also Consolidated Data Terminals v. Applied Digital Data Systems, 708 F.2d 385, 390 n. 3 (9th Cir.1983) (“other issues in this case, which involve tort law and the law of punitive damages, are not controlled by the contract choice of law provision”); Computerized Radiological Services, Inc. v. Syntex Corporation, 595 F.Supp. 1495 (E.D.N.Y.1984) (“although the contract claim is governed by California law — by choice of the parties — a tort claim arising out of the contract may be governed by the law of a different forum”), aff'd, 786 F.2d 72 (2d Cir.1986). More important than the precedential value of Unibase or First Commodities, however, is the fact that, even if correct, these cases do not apply to the present litigation. None of the parties has alleged that any of the CGL Policies contain choice of law provisions. Such provisions are the foundation upon which the reasoning of Unibase and First Commodities rest. The Unibase court recognized as much when it declined to engage in a traditional choice of law analysis, explaining that “it is only when the parties have failed to make a valid choice of law that courts apply traditional conflicts of laws rules.” Unibase, at *3. In addition, the Unibase court was careful to limit its holding to the situation where “a tort or other claim is closely related to a contract with an express choice of law clause.” Id. at 5 (emphasis added). Accordingly, the court finds Uni-base and First Commodities to be inapplicable to the present litigation, and will deny counterclaim defendants’ motion to dismiss AT & T’s counterclaims on the basis that they are closely related to the CGL Policies. 3. Choice of Law: Applying Griffith to AT & T’s Counterclaims Without a choice of law provision governing AT & T’s counterclaims, the court must engage in a traditional choice of law analysis. Since this court’s jurisdiction is based on diversity of citizenship, Pennsylvania’s choice-of-law rules govern. See Klaxon Company v. Stentor Electric Manufacturing Company, 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941) (holding that in diversity cases, this court must use the choice-of-law rules that “conform to those prevailing in [Pennsylvania’s] state courts”). The seminal choice-of-law case in Pennsylvania is Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964). See Carrick v. Zurich-American Insurance Group, 14 F.3d 907, 909 (3d Cir.1994). In Griffith, the Pennsylvania Supreme Court held that instead of applying the lex loci delicti rule to tort cases by rote, courts should utilize “a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court.” Griffith, 203 A.2d at 805. The Griffith test, which is also known as the “flexible conflicts methodology,” “combines the approaches of both Restatement II (contacts establishing significant relationships) and ‘interest analysis’ (qualitative appraisal of the relevant States’ policies with respect to the controversy).” Carrick, 14 F.3d at 909 (quoting Lacey v. Cessna Aircraft Company, 932 F.2d 170, 187 (3d Cir. 1991)). The flexible conflicts methodology enables the court’s decision to be based on the quality, rather than the quantity, of the state’s contacts. Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854, 856 (1970). See Myers v. Commercial Union Assurance Companies, 506 Pa. 492, 485 A.2d 1113, 1115 (1984) (summarizing Pennsylvania’s choice of law rules). AT & T has alleged causes of action for breach of contract, statutory fraud, negligent provision of loss control services, conspiracy to misrepresent or conceal facts, and bad faith. In bringing these claims, AT & T stands in the shoes of its assignors, Diversified and Diversified’s affiliates. Therefore, for purposes of this choice of law analysis, the court will look to the Diversified Companies’ places of business and conduct. AT & T contends that its counterclaims, except for the breach of contract claim, do not directly involve the CGL Policies at issue, but are aimed instead at the counterclaim defendants’ tortious conduct. AT & T claims that since the CNA Companies are Illinois corporations, and since the alleged conduct occurred at their principal places of business in Illinois, Illinois has an interest in this litigation which mandates the application of Illinois law to AT & T’s counterclaims. AT & T’s argument is not totally without merit. There have been cases where courts appear to accord considerable weight to the location of the insurance company’s office and the place where the decision to withhold benefits was made. For instance, in holding that Pennsylvania law was to govern, the court in Thomson v. Prudential Property & Casualty Insurance Company, No. CIV.A. 91-4073,1992 WL 38132 (E.D.Pa. Feb. 20, 1992), noted that Pennsylvania was “the place where the alleged wrongful conduct in adjusting the claims submitted by the plaintiff occurred.” Thomson, 1992 WL 38132, at *4. Similarly, the court in Lowe’s North Wilkesboro Hardware, Inc. v. Fidelity Mutual Life Insurance Company, 319 F.2d 469, 474 (4th Cir. 1963), held that Pennsylvania law was to govern the litigation, explaining that the insurance application was sent to the insurer’s home office in Pennsylvania, and only there could the application be acted upon and rejected. There is no doubt that Illinois has some interest in this litigation given that the counterclaim defendants are Illinois corporations. In addition, Illinois certainly has an interest in monitoring the behavior of insurance companies within its borders. Indeed, it seems likely that the Consumer Fraud Act was enacted in part to deter insurance companies from taking advantage of insureds. See Fox v. Industrial Casualty Insurance Company, 98 Ill.App.3d 543, 54 Ill.Dec. 89, 92, 424 N.E.2d 839, 842 (1981) (“the sale of insurance is clearly a service and insureds are thus consumers within the protections of the Consumer Fraud Act”); P.I.A Michigan City, Inc. v. National Porges Radiator Corporation, 789 F.Supp. 1421, 1426 (N.D.Ill.1992) (“the sale of insurance is a service to which the protections of the Consumer Fraud Act apply”). However, despite Illinois’ interest in this litigation, the court concludes that Pennsylvania law governs AT & T’s counterclaims. At the heart of this litigation is a dispute between insurers and insureds about the extent of coverage under an insurance policy. The CGL policies at issue covered a Pennsylvania site, and were issued to companies doing business in Pennsylvania. During the relevant time periods, the insurers were licensed to sell insurance in Pennsylvania, and were subject to all applicable Pennsylvania . laws and regulations. See, e.g., 40 P.S. % let seq. (“The Insurance Department Act of 1921”); 40 P.S. § 1171 et seq. (“The Unfair Insurance Practices Act”). By enacting such regulations, Pennsylvania has demonstrated an interest in protecting businesses operating within -its borders from the type of tortious conduct alleged by AT & T. See Melville v. American Home Assurance Company, 584 F.2d 1306, 1313-1314 (3d Cir.1978) (“[a] state has a significant interest in prescribing the standards that will govern the insurance contracts purchased by its residents ... ”). In Asplundh Tree Expert Company v. Pacific Employers, Insurance Company, No. CIV.A. 90-6976, 1991 WL 147461 (E.D.Pa. July 25, 1991), Judge Reed was confronted with a situation similar to the one at bar. An insured filed claims against its insurer for breach of contract and bad faith. It was undisputed that Pennsylvania law governed the breach of contract claim. However, the insured contended that California law governed the bad faith claim. The insured argued that California law applied because the insurer was a California corporation, California was “where the denial of coverage occurred,” and the “bad faith motives for the denial took place in California.” Id. at *6. The court disagreed, and held that, under Griffith, Pennsylvania law applied to the bad faith claim. The court noted that “the same facts give rise to both the breach of contract and bad faith conduct.” Instead of looking at the place where the denial of coverage occurred, the court looked to Pennsylvania— the place “where the failure to receive the allegedly expected benefits was felt.” Id. at *7. In addition, the court noted that “[t]he Commonwealth of Pennsylvania certainly has a compelling interest in regulating the conduct of insurers operating in Pennsylvania ...” Id. See also Celebre v. Windsor-Mount Joy Mutual Insurance Company, No. CIV.A. 93-5212, 1994 WL 13840 (E.D.Pa. Jan. 14, 1994) (despite the fact that the allegedly tortious denial of insured’s claim occurred in Pennsylvania, New Jersey law applied to insured’s bad faith claim where the insured was' doing business in New Jersey, the insured risk was located in New Jersey, and the loss occurred in New Jersey). The Restatement (Second) of Conflicts supports this court’s conclusion that AT & T’s counterclaims are governed by Pennsylvania law. Section 145 sets forth the general principles to be considered when engaging in a choice of law analysis for causes of action sounding in tort. The contacts to be evaluated for tort claims include the place of the injury, the place where the injury-causing conduct occurred, the places of incorporation and business of the parties, and the place where the relationship of the parties is centered. Restatement (Second) of Conflicts, § 145(2); Griffith, 203 A.2d at 802; Compagnie des Bauxites de Guinee v. Argonaut-Midwest Insurance Company, 880 F.2d 685, 689 (3d Cir.1989). The substantial weight of the above considerations point to the application of Pennsylvania law to AT & T’s counterclaims. For instance, it is clear that any injury to Diversified and its subsidiaries occurred in Pennsylvania, the place where the failure to receive the expected insurance proceeds was felt. This contact is significant. This is because “persons who cause injury in a state should not ordinarily escape liabilities imposed by the local law of that state----” Restatement (Second) of Conflicts § 145, comment e. Although AT & T claims that the place where the tortious conduct occurred is paramount, Comment e to Section 145 explains that the place of the tortious conduct is usually significant only if the state where the injury occurred either cannot be determined or bears little relation to the parties. In the present case,' the injury occurred in Pennsylvania, a state having a significant connection to the parties. As noted above, all parties to the CGL Policies were doing business in Pennsylvania at the relevant time periods. Furthermore, it is beyond dispute that the insured risk which was the subject of the transaction was an environmental site located in Pennsylvania. For the foregoing'reasons, the court concludes that AT & T’s counterclaims must arise out of Pennsylvania law. Pennsylvania has both a greater interest in the outcome of this litigation and more substantial contacts with AT & T’s counterclaims than Illinois. It should be noted, however, that this conclusion does not leave AT & T without recourse. Pennsylvania recognizes claims for bad faith denial of coverage, misrepresentation, negligent provision of loss control services, and statutory fraud. See 42 Pa.C.S.A. § 8371; 73 P.S. § 201 et seq.; Henry v. State Farm Insurance Company, 788 F.Supp. 241 (E.D.Pa.1992). Accordingly, AT & T has twenty days from the date of this opinion and order to amend its counterclaims to allege causes of action under Pennsylvania law. C. Negligent Provision of Loss Control Services In Count IV of its counterclaims, AT & T alleges that counterclaim defendants negligently failed to provide loss control services to Diversified and its subsidiaries. Specifically, AT & T claims that counterclaim defendants represented that they had expertise in discovering environmental damage, and that despite Diversified’s reliance upon these representations, counterclaim defendants failed to discover or inform Diversified of the potential environmental liability arising from EDM’s metal reclamation activities. Counterclaim defendants have moved this court to dismiss Count IV. Counterclaim defendants claim that language within the CGL Policies (the “Disclaimers”) precludes AT & T’s claims for negligent provision of loss control services. Typical of the Disclaimers is the following: The [insurance] company shall be permitted but is not obligated to inspect the named insured’s property and operations at anytime. Neither the company’s right to make inspections nor the making thereof nor any report thereon shall constitute .any undertaking on behalf of, or for this benefit of, the named insured or others, to determine or warrant that such property or operations are safe or healthful or are in compliance with any law, rule or regulation. Counterclaim defendants conclude that because the Disclaimers allowed them to inspect at their option and for their benefit, no duty to reasonably inspect the Site could have arisen. AT & T counters that the Disclaimers do not preclude claims for negligent provision of loss control services. AT & T claims that, although counterclaim defendants did not have a contractual obligation to inspect the Site, counterclaim defendants’ voluntary inspections gave rise to a duty to inspect in a reasonable manner. AT & T alleges that Diversified reasonably relied upon counterclaim defendants’ inspections of the Site, and that therefore Count IV states a valid negligence claim. See generally “Breach of Assumed Duty to Inspect Property as Ground for Liability to Third Persons,” 13 A.L.R. 5th 289 (1993). In making this argument, AT & T relies primarily upon Section 323 of the Restatement (Second) of Torts (“Section 323”). Section 323 provides: One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if (a) his failure to exercise such care increases the risk of such harm, or (b) the harm is suffered because of the other’s reliance upon the undertaking. Restatement (Second) of Torts § 323. See Morena v. South Hills Health System, 501 Pa. 634, 462 A.2d 680, 684 (1983) (recognizing Section 323 as an accurate statement of the law of negligence in Pennsylvania). Section 323 has been applied by Pennsylvania courts, and federal courts applying Pennsylvania law, in the context of negligent inspections. Blessing v. United States, 447 F.Supp. 1160, 1187 (E.D.Pa.1978) (citing Evans v. Liberty Mutual Insurance Company, 398 F.2d 665 (3d Cir.1968)); Mays v. Liberty Mutual Insurance Company, 323 F.2d 174 (3d Cir. 1963); Evans v. Otis Elevator Company, 403 Pa. 13, 168 A.2d 573 (1961). Section 323 does not create a duty where one otherwise would not exist. Morena, 462 A.2d at 684. Therefore, AT & T’s negligent provision of loss control counterclaim could only stand if counterclaim defendants were under a duty to provide loss control services at the Site. Boyce v. U.S. Steel Corporation, 446 Pa. 226, 285 A.2d 459, 461 (1971) (“no negligence claim can be based upon a state of facts on which the law does not impose a duty upon the defendant in favor of the plaintiff’). If counterclaim defendants owed this duty to Diversified and its subsidiaries, then AT & T would be permitted to attempt to prove that counterclaim defendants did not exercise reasonable care in the performance of their duty. However, if AT & T has not alleged a duty on the part of counterclaim defendants to provide loss control services, then this court must dismiss Count IV. See Evans v. Liberty Mutual Insurance Company, 398 F.2d at 667 (affirming directed verdict in favor of insurer where plaintiff failed to establish insurer’s duty to inspect). Insurers of property are not under a general duty to inspect their insureds’ property. See Atlantic Mutual Insurance Company v. Center Capital Corporation, No. CIV.A. 91-1636, 1992 WL 38164, at *4 (E.D.Pa. Feb. 21,1992) (no public policy supports the imposition of a general duty on insurers to investigate insureds). However, a duty to inspect may arise where the insurer has contracted to provide inspection services, Otis Elevator, 168 A.2d at 573, or as a result of the insurer’s conduct. In the present case, the Disclaimer provides the CNA Companies with the right to inspect the Site at their option and states that any inspection should not constitute an “undertaking on behalf of, or for the benefit of, the named insured or others.” This language is insufficient to create a duty to inspect. As courts have noted, an insurance company can not be found “liable for its mere failure to take advantage of a clause in the insurance contract affording it permission to inspect.” Clark v. Employers Mutuals of Wausau, 297 F.Supp. 286, 289 (E.D.Pa.1969) (citing De Jesus v. Liberty Mutual Insurance Company, 423 Pa. 198, 223 A.2d 849, 850 (1966)). In addition, various courts have held that a contractual duty to provide inspection services was lacking in light of language similar to the Disclaimers. See, e.g., Henry v. First Federal Savings & Loan Association, 313 Pa.Super. 128, 459 A.2d. 772 (1983); Blalock v. Syracuse Stamping Company, Inc., 584 F.Supp. 454 (E.D.Pa.1984). In addition to contract, a duty to inspect in a reasonable manner may arise where an insurer has voluntarily assumed such a duty through its conduct. In Blessing, Judge Becker discussed the type of conduct which could create a duty to inspect. The court was confronted with the question of whether Occupational Safety and Health Administration inspectors could be found liable for negligently inspecting a private employer’s premises where such negligence resulted in an injury to one of the employer’s employees. The .court noted that even when an inspector is not under an otherwise enforceable or contractual duty to inspect, a duty of reasonable inspection could arise when the “inspector has physically undertaken to inspect (1) the specific instrumentality causing the injury; or (2) the entire physical plant of which the specific instrumentality is a part.” Blessing, 447 F.Supp. at 1189. Cf. Evans v. Liberty Mutual, 398 F.2d at 667 (where insurer was under no contractual obligation to inspect, no duty to inspect arose from its “spot” inspections). Because AT & T has alleged that counterclaim defendants actually inspected the Site, the narrow question before the court is whether the Disclaimer negates such a duty. There appears to be a split of authority among courts construing Pennsylvania law as to whether language similar to the Disclaimer will negate a voluntarily assumed duty to inspect. For instance, in Henry, a borrower sued his lender, alleging negligent inspection of the borrower’s house. The lender defended on the grounds that no duty to inspect had arisen. The court agreed, noting that the loan agreement between the parties gave the lender the right to inspect “for its own protection” and not as an agent of the borrower. Henry, 459 A.2d at 775. The court did not discuss whether an inspection had actually been undertaken by the lender, and instead concluded that the contractual language was dispositive of the issue. The analysis in Henry contradicts both Blessing and Evans v. Liberty Mutual. In a footnote, the Henry court explained that a duty to inspect could only arise if the lender “contractually undertook to make quality inspections” for the borrowers’ benefit. Henry, 459 A.2d at 775, n. 3. However, as discussed above, such a duty can also arise through an inspector’s voluntary inspection of the either the specific instrumentality which later causes the injury or the insured’s entire physical plant. Blessing, 447 F.Supp. at 1189. Therefore, because it is beyond dispute that a duty to inspect can arise through an insurer’s gratuitous inspection, and because the Henry court’s focus on the language of the contract overlooks the justified reliance of insureds, the court will decline to follow Henry. In Blalock, an employee sued his employer’s insurance carrier, alleging that the insurer failed to properly perform safety inspections. The insurer defended on the grounds that language in its contract with the employer negated any duty to inspect which might have otherwise arisen. After concluding that a contractual duty to inspect was effectively negated by the contractual language, the court nevertheless noted that it was obliged to “examine one additional factor” — the conduct of the insurer. Blalock, 584 F.Supp. at 457. Based on its examination, the court assumed that such a duty had been alleged by the employee: Id. at 458 (citing Blessing, 447 F.Supp. at 1189). See also Clark, 297 F.Supp. at 289 (“even though it may have no contractual obligation to inspect, an insurer which actually undertakes a safety inspection ... may be found liable”). Therefore, in light of Blalock, the court concludes that, under Pennsylvania law, a contractual waiver is ineffective to negate a duty to inspect which has arisen through an insurer’s conduct. Although Pennsylvania state courts have been relatively quiet on whether contractual language can effectively negate a duty to inspect which has arisen through conduct, this court’s conclusion is in accord with those courts which have examined this issue. For instance, in Derosia v. Liberty Mutual Insurance Company, 155 Vt. 178, 583 A.2d 881 (1990), the insurer claimed that it had no duty to inspect because language in the insurance contract provided that' any inspections were for the insurer’s benefit and were to be performed at the insurer’s option. The court agreed that the contract “standing alone” did not subject the insurer to liability. Nevertheless, the court concluded that a duty to inspect could have arisen through conduct. Quoting Thompson v. Bohlken, 312 N.W.2d 501, 507 (Iowa 1981), the court stated: [Defendant insurer] also argues that it cannot be held under a duty of inspection under its insurance contract with [employer], However, its liability for its inspections does not arise from, nor is it circumscribed by, the contract of insurance; it arises ... from its undertaking the responsibility of making such inspections in such a manner as to increase the risk of harm or create reliance to another’s detriment. Derosia, 583 A.2d at 885 (emphasis added). Accord. Hartford Steam Boiler Inspection & Insurance Company v. Pabst Brewing Company, 201 F. 617, 629 (7th Cir.1912); Corson v. Liberty Mutual Insurance Company, 110 N.H. 210, 265 A.2d 315, 318 (1970); American Mutual Liability Insurance Company v. St. Paul Fire & Marine Insurance Company, 48 Wis.2d 305, 179 N.W.2d 864, 868 (1970). AT & T has alleged that the CNA Companies gratuitously inspected the Site, and did so in a negligent manner. The Disclaimer is ineffective to negate a duty to inspect in a reasonable manner. Accordingly, the court will deny counterclaim defendants’ motion to dismiss Count IV. D. Conspiracy to Misrepresent or Conceal Facts In Count V of its counterclaims, AT & T alleges that counterclaim- defendants conspired with various members of the insurance industry to deceive state regulators, the public, and, specifically, the counterclaim defendants. AT & T alleges that in 1970 various insurance companies restricted their coverage for pollution-related claims despite the fact that they were informing government regulators, and insureds, that coverage was not being altered. Counterclaim defendants have moved to dismiss Count V. . AT & T’s Count V relies heavily upon the history of the ratification of the “pollution-exclusion” clauses contained within- many standard CGL Policies. Therefore, the court will briefly discuss the background events that led the insurance industry to adopt the standard pollution-exclusion clause. The history of the adoption of the pollution exclusion clause is largely uncontroverted and thoroughly documented elsewhere. See, e.g., Richard Hunter, “The Pollution Exclusion in the Comprehensive General Liability Insurance Policy,” 1986 U. of Ill.L.Rev. 897, 903-906; E. Joshua Rosenkranz, Note, “The Pollution Exclusion Through the Looking Glass,” 74 Geo.L.J. 1237, 1241-53 (1986); Morton International v. General Accident Insurance Company, 134 N.J. 1, 629 A.2d 831, 849-855 (1993), cert. denied, — U.S. -, 114 S.Ct. 2764, 129 L.Ed.2d 878 (1994); Just v. Land Reclamation Ltd., 157 Wis.2d 507, 456 N.W.2d 570, 573-75 (1990). Therefore, the court will look beyond the four corners of AT & T’s counterclaim when describing the drafting and adoption of the pollution-exelusion clause. Prior to 1966, standard CGL Policies afforded liability coverage for bodily and property damage “caused by accident,” the term ■ “accident” being undefined. See, e.g., Casper v. American Guarantee & Liability Insurance Company, 408 Pa. 426, 184 A.2d 247 (1962). Although insurers argued that these policies covered only brief - catastrophic events, courts generally construed these policies to cover ongoing events that inflicted injury over an extended period so long as the injury was both unintended and unexpected from the insured’s viewpoint. Morton, 629 A.2d at 849. See, e.g., Casper, 184 A.2d at 249 (“to constitute an accident, the occurrence must be an unusual or unexpected result attending the operation or performance of a usual or necessary act or event”). Therefore, the pre-1966 policies covered injury or damage resulting from extended exposure to poilutants. New Castle County v. Hartford Accident and Indemnity Company, 933 F.2d 1162, 1196 (3d Cir.1991) (citing Moffat v. Metropolitan Casualty Insurance Company, 238 F.Supp. 165, 172-73 (M.D.Pa. 1964)). In 1966, the insurance industry revised its standard CGL Policy to afford coverage based upon the happening of an “occurrence.” An occurrence was defined as “an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.” Britamco Underwriters v. Grzeskiewicz, 433 Pa.Super. 55, 639 A.2d 1208, 1210 (1994). The 1966 revision of the standard CGL Policy “was generally understood to cover pollution liability that arose from gradual losses, and was acknowledged as having been intended to broaden coverage by avoiding an implication that there was no coverage for a continuing condition as distinguished from a sudden event.” Morton, 629 A.2d at 849 (citations omitted). As the Court of Appeals for the Third Circuit has noted, “the standard occurrence-based policy ... covered property damage resulting from gradual pollution.” New Castle County, 933 F.2d at 1197. In 1970, the insurance industry, foreseeing an increase in the number of environmental claims and cognizant of the interpretation being given to the 1966 CGL Policies, set out to draft the standard pollution-exclusion clause. The standard pollution-exclusion clause was drafted by committees of insurance representatives sponsored by the Insurance Service Office (“ISO”), and its predecessor organization, the Insurance Rating Board (“IRB”). The standard pollution-exclusion clause bars insurance coverage for: bodily injury or property damage arising out of the discharge, dispersal, release, or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic materials or other irritants, contaminants, or pollutants into or upon land, the atmosphere, or any watercourse or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental. After gaining industry approval for the clause, the IRB and the Mutual Insurance Rating Bureau (“MIRB”) sought state regulatory agencies’ permission to add the pollution-exclusion clauses to standard CGL Policies. AT & T alleges that the IRB and MIRB, on behalf of the counterclaim defendants, filed the pollution-exclusion clauses with state regulatory agencies throughout the country. In filing the clauses, the IRB and MIRB allegedly contended that the pollution-exclusion clauses merely clarified the “occurrence” based insurance policy, and did not restrict coverage in any manner. Because the pollution-exelusion clause has been interpreted as a limitation on insurance coverage, however, AT & T contends that the insurance industry fraudulently misrepresented the meaning of the pollution-exclusion clause in 1970. Specifically, AT & T contends that counterclaim defendants engaged in a conspiracy with the entire insurance industry to defraud the public, and that as a result of these fraudulent misrepresentations counterclaim plaintiffs were injured. Counterclaim defendants have moved to dismiss on several grounds. Counterclaim defendants claim that AT & T’s cause of action is repugnant to Pennsylvania law. They contend that any evidence of the drafting or approval history of the clause must be disregarded because Pennsylvania courts construe the pollution-exelusion clause to be unambiguous. In making this argument, counterclaim defendants rely heavily upon Lower Paxon. There, the court stated: Amicus seek to convince us that the [insured’s] coverage-promoting interpretation of the exclusion is correct because it was insurers’ own interpretation at the time they drafted it and was the interpretation relied upon by insurance regulators in approving it. We express no comment on these arguments. Having found the exclusion unambiguous on its face, we are bound to construe it in accordance with its plain meaning and may not refer to extrinsic evidence of the drafter’s intent. Lower Paxon, 557 A.2d at 402 n. 5. Lower Paxon involved a breach of contract claim, and therefore the court applied the traditional plain-meaning and parol evidence contract rules when it construed the pollution-exclusion clause. However, because the court finds Lower Paxon to be distinguishable, the court disagrees with counterclaim defendants that AT & T’s misrepresentation claim is repugnant to Pennsylvania law. Pennsylvania’s parol evidence rule provides that “in the absence of fraud, accident, or mistake, parol evidence as to preliminary negotiations or oral agreement is not admissible in evidence if it adds to, modifies, contradicts, or conflicts with the written agreement between the parties.” Resolution Trust Corporation v. Urban Redevelopment Authority, 536 Pa. 219, 638 A.2d 972, 975 (1994). Because Count V sounds in misrepresentation, not breach of contract, the parol evidence rule does not operate to preclude the admission of evidence involving the history and drafting of the pollution-exclusion. In Mellon Bank Corp. v. First Union Real Estate Equity & Mortgage Investments, 951 F.2d 1399 (3d Cir.1991),