JESSICA COOPER, DANIEL KUJAWA, PHILIP RINELLA, MELISSA RUMPF, and MATTHEW WILDER, individually and on behalf of all others similarly situated, Plaintiffs, v. ENDURANCE DEALER SERVICES, LLC, and ENDURANCE WARRANTY SERVICES, LLC, Defendants.
Case No. 25 C 2919
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
11/25/25
Judge Robert W. Gettleman
Defendants Endurance Dealer Services, LLC and Endurance Warranty Services, LLC (collectively, “Endurance“) are Illinois companies that sell aftermarket warranty coverage for car repairs that are sold in what are called “Vehicle Service Contracts” or “VSCs.” Plaintiffs are citizens of other states and, on behalf of themselves and a putative class of similarly situated people, have sued Endurance under
Plaintiffs thus filed a complaint here and assert ten counts: breach of contract (on behalf of themselves and a Nationwide Class) (Count I); unjust enrichment (on behalf of themselves and a Nationwide Class) (Count II); fraudulent concealment (on behalf of themselves and a Nationwide Class) (Count III); common law fraud (on behalf of themselves and a Nationwide
BACKGROUND
FACTUAL BACKGROUND
Plaintiffs allege the following facts in their complaint. Endurance sells VSCs—primarily through its website: EnduranceWarranty.com. VSCs are “auto service agreements in which ‘[t]he contract seller agrees to perform (or pay for) certain repairs or services outlined in the contract.‘” (Citation omitted). They are sold separately from the vehicle and typically provide coverage beyond the manufacturer’s warranty. Endurance touts itself as America’s “Best Vehicle Protection Plan Provider,” promises that customers will receive “complete coverage you can count on” (and that its protection plans are “the most comprehensive auto protection plans in the industry“), and advertises and markets that consumers will “never pay for
But when consumers file claims for repairs under their VSCs, Endurance shirks its contractual obligations: it takes several weeks or months to render decisions on claims, and it denies coverage without any basis. Customers are thus left holding the bag—often losing the use of their vehicles while waiting for Endurance to render its decision, and paying out-of-pocket for repairs that Endurance promised would be covered.
Plaintiff Cooper, for example, paid roughly $4,500 for a VSC from Endurance for coverage on her Ford F-150. Endurance advertised that her plan would protect the transmission, and the VSC she purchased provided for comprehensive coverage for the transmission. Yet when Cooper—who reasonably relied on those representations—filed a claim for coverage to replace her transmission, Endurance delayed more than a month in rendering a decision and then denied her claim in full. As a result, Cooper lost the full use of her truck while waiting and incurred about $8,500 in out-of-pocket expenses. The other named plaintiffs endured similar experiences.
Endurance’s “conduct amounts to false, deceptive, and misleading advertising in at least three ways.” First, Endurance is “not the direct administrators for all of [its] contracts, despite claiming” that it is. Indeed, plaintiffs allege that “Endurance claims that being the direct administrator provides benefits to consumers, including expedited claims processes, more approved claims, and an overall more seamless experience.” Yet “Endurance is not the direct administrator of all its contracts“—including for the contracts that plaintiffs Kujawa and Rumpf purchased. (Emphasis by plaintiffs).
Second, Endurance “promise[s] timely full coverage” but then “den[ies] covered claims.” According to plaintiffs, Endurance makes many statements on its website that “promote
But ultimately, “Endurance’s Vehicle Service Contracts do not live up to Endurance’s advertisements and representations.” “Rather than facilitating seamless claim resolutions, Endurance’s methods create significant barriers for consumers attempting to secure coverage under their contracts.” Endurance: subjects consumers to “frustrating and redundant procedures” and “often require[s] repair shops to perform superfluous labor after diagnosing the problem and recommending repairs“; denies claims based on “supposed pre-existing condition[s]” that, because Endurance requires nothing more that the vehicle’s make, model, year, and mileage, “neither [Endurance] nor consumers . . . have knowledge of“; “refuses to cover the full cost of parts and/or labor“; and limits liability amounts.
Finally, Endurance “employ[s] scare tactics and other unfair and misleading conduct to induce contracts that do not offer the promised coverage.” In particular, Endurance “sales representatives are directed to scare consumers that consumers’ vehicles are prone to suffering from certain failures and that they will be subject to high-cost repair bills,” and to “omit material information about coverage under the contract.”
Given the scope of Endurance’s alleged misrepresentations and actions, plaintiffs brought this case as a class action under Federal Rules of Civil Procedure 23(a), 23(b)(2), and 23(b)(3), proposing two classes:
Nationwide Class: All persons in the United States who purchased a [VSC] through Defendants.
State Sub-Classes: All persons of the Nationwide Class who are residents of the states of Michigan, New Jersey, Ohio, Pennsylvania, and Texas and purchased a [VSC] through Defendants in one of the aforementioned states shall be a member of a state Sub-Class.
According to plaintiffs: the Class is so numerous that joinder would be impracticable; common questions of law and fact predominate over individual issues; the claims are typical because they “all arise out of [Endurance]’s uniform conduct and statements“; plaintiffs have no conflicting interests with the class members and thus can adequately represent the classes; and a class action is superior to other avenues of litigation.
Plaintiffs assert ten counts. In Count I, plaintiffs allege a breach of contract: they and the class members entered into VSCs with Endurance, who failed to timely process claims or cover repairs as promised. This forced plaintiffs and the class members to pay out-of-pocket for repairs they expected to be covered, resulting in financial damages.
In Count II, plaintiffs bring “in the alternative to [their] contract-based claims” an unjust enrichment claim, alleging that plaintiffs paid Endurance for VSCs, but Endurance failed to provide the promised coverage. Retaining these payments without delivering benefits is inequitable, causing plaintiffs financial harm.
Count IV alleges common law fraud. According to plaintiffs, Endurance marketed its VSCs as comprehensive, knowing that it would not provide the promised coverage. This caused plaintiffs to incur out-of-pocket repair costs and other expenses.
In Count V, plaintiffs allege negligent misrepresentation based on Endurance misrepresenting the coverage and claims process under the VSCs and on Endurance failing to exercise reasonable care in their statements. Plaintiffs relied on these misrepresentations, resulting in financial damages from uncovered repairs.
Count VI alleges promissory estoppel: Endurance promised coverage under VSCs, which plaintiffs relied on to their detriment when they purchased them. Plaintiffs demand that Endurance honor its contractual obligations.
Lastly, plaintiffs allege in Counts VII through X violations of various state consumer protection laws based on Endurance’s deceptive misrepresentations and omissions about its VSC’s coverage and timeliness, which, plaintiffs allege, caused damages.
DISCUSSION
Endurance has moved to compel Cooper, Rinella, Rumpf, and Wilder to arbitrate their claims, and to dismiss the complaint for failure to state a claim under
The Federal Arbitration Act (“FAA“) applies when written arbitration agreements involve interstate commerce.
Endurance argues here that Cooper’s, Rinella’s, Wilder’s, and Rumpf’s claims are subject to valid and enforceable arbitration agreements, that the claims here fall within the scope of those agreements, and that those individuals have refused to arbitrate. In response, plaintiffs do not dispute that all four individuals have refused to arbitrate or that their claims, if subject to an enforceable agreement, fall within the scope of the agreements. The issue here is thus whether there are valid and enforceable agreements in the first place.
Existence of an Enforceable Written Agreement to Arbitrate
Although “the FAA does not provide the evidentiary standard applicable for determining whether to compel arbitration,” the Seventh Circuit has “analogized the standard needed to that required at summary judgment.” Wallrich, 106 F.4th at 618. To that end, “[t]he party seeking to compel arbitration bears the initial burden to show that an arbitration agreement exists.” Id.
Endurance argues that Rinella, Cooper, and Wilder each have a VSC with Endurance that obligates them to arbitrate their claims. And Rinella and Cooper (along with Rumpf), Endurance contends, also agreed to arbitrate when they obtained a quote for a VSC through Endurance’s website. The court addresses each argument in turn.
The Arbitration Clauses in Rinella’s, Cooper’s, and Wilder’s VSCs
The issue of whether an arbitration agreement exists “is governed by state-law principles of contract formation.” Domer, 116 F.4th at 694. But because that issue “calls for the application of general rules of contract formation,” “the choice of law is not likely to affect the outcome.” Id. Endurance assumes here that Illinois law applies in arguing that there is an enforceable agreement to arbitrate. For their part, plaintiffs state that they “do not contest” that Illinois law applies. The court therefore assumes for purposes of the motion to compel that Illinois law applies. See Emplrs. Mut. Cas. Co. v. Skoutaris, 453 F.3d 915, 923 (7th Cir. 2006)
In Illinois—as “in virtually all jurisdictions“—contract formation “requires mutual assent.” Sgouros v. TransUnion Corp., 817 F.3d 1029, 1034 (7th Cir. 2016). Endurance argues that Rinella, Cooper, and Wilder are trying to “enforce the VSC in this litigation, clearly indicating their understanding and belief that their respective contracts are valid,” and that each VSC includes an arbitration provision. According to Endurance, Rinella’s VSC states under the heading “ARBITRATION” that “[a]ny controversy or claim arising out of or relating to this Contract, or breach thereof, shall be settled by arbitration.” (Quoting Rinella’s VSC). And Cooper’s and Wilder’s contracts, Endurance contends, clearly “grant[ ] Endurance the contractual right to demand arbitration [on] ‘any claim, complaint or demand’ initiated by Cooper and Wilder ‘relating to the Coverage provided under this Contract.‘” (Quoting Cooper’s and Wilder’s VSC). The arbitration clauses in these three agreements, Endurance asserts, include “clear and unequivocal language that obligates those Plaintiffs to litigate their claims in arbitration.” And although “the reservation of right to arbitrate belongs only to Endurance in Cooper and Wilder’s VSCs,” Endurance argues, “Illinois law does not require mutuality of arbitration agreements.” (Citing Williams v. TCF Nat. Bank, No. 12 C 05115, 2013 WL 708123 (N.D. Ill. Feb. 26, 2013)).
Second, plaintiffs assert that all three VSCs are “procedurally unconscionable.” The reason for this, they argue, is straightforward: plaintiffs did not sign the VSCs; “Endurance never mentioned the arbitration provision when selling the VSCs“; Endurance “did not provide Plaintiffs with copies of the VSCs until they agreed to them by phone“; plaintiffs “had no ability to negotiate the contract of adhesion” beforehand; and the arbitration clauses were not “conspicuously noticed.” In support, plaintiff attaches to their response declarations from Cooper, Wilder, and Rinella.
In reply, Endurance contends that “Illinois courts regularly find” non-mutual agreements, like Cooper’s and Wilder’s, “enforceable.” And, it argues, it is “well settled law in Illinois that a contract is not unconscionable because one party may select the forum in the event of a dispute.” (Citing, e.g., C&G Closed Cir. Events, LLC v. Castillo, No. 14-CV-02073, 2017 WL 1079241 (N.D. Ill. Mar. 22, 2017)). Endurance further asserts that plaintiffs’ cited cases found substantive unconscionability because the “arbitration clauses unilaterally limit[ed] claims or
The court first finds that the arbitration provisions in Cooper’s, Wilder’s, and Rinella’s VSCs were not procedurally unconscionable. In Illinois, a contract can be either procedurally unconscionable, substantively unconscionable, or a combination of both. Razor v. Hyundai Motor Am., 222 Ill. 2d 75, 99 (2006). “Procedural unconscionability refers to a situation where a term is so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he was agreeing to it, and also takes into account a lack of bargaining power.” Jackson v. Payday Fin., LLC, 764 F.3d 765, 777 (7th Cir. 2014) (quoting Razor, 222 Ill. 2d at 100). Relevant considerations “include whether each party had the opportunity to understand the terms of the contract, whether important terms were hidden in a maze of fine print, and all of the circumstances surrounding the formation of the contract.” Id. at 778 (citation omitted).
Nor are the clauses hidden in a maze of fine print. The pages on which the clauses are located appear as follows:
Finally, the circumstances surrounding the formation of the VSCs also do not support procedural unconscionability. The fact is, in alleging that Endurance breached the VSCs, plaintiffs seek to enforce other provisions in the VSCs—including ones that were less conspicuous than the arbitration clauses. Indeed, as to all three plaintiffs, the complaint points to the clause of the VSCs that relates to coverage for the vehicle’s transmission. Plaintiffs fail to explain why they understood (and now want to enforce) other provisions in the VSC that were less conspicuous than the arbitration clauses.
In short, the arbitration terms were not “so difficult to find, read, or understand that the plaintiff[s] cannot fairly be said to have been aware [t]he[y] w[ere] agreeing to [them].” Jackson, 764 F.3d at 777. The court thus finds that the clauses are not procedurally unconscionable.
As a result, the court finds that Rinella is subject to an enforceable written agreement to arbitrate. Unlike with Cooper and Wilder, plaintiffs do not contend that the arbitration term in Rinella’s VSC is substantively unconscionable. The court therefore grants the motion to compel arbitration as to Rinella.
The court finds that Cooper’s and Wilder’s arbitration term is substantively unconscionable. The provision states:
B. ALTERNATIVE DISPUTE RESOLUTION: We reserve the right, in the interests of efficient and judicious resolution of disputes, to demand that any claim, complaint or demand initiated by You relating to the Coverage provided under this Contract be settled by an alternative dispute resolution procedure before a recognized and/or accredited third-party organization of Our choosing, including, but not limited to, arbitration, mediation, and/or conciliation, with the cost of such alternative dispute resolution to be paid entirely by Us. Should We elect to pursue alternative dispute resolution, We will provide a written Notice of Alternative Dispute Resolution to Your address, as identified on the Application Page, and You agree to promptly and voluntarily discontinue any pending complaint, demand or other proceeding and proceed with the alternative method selected by Us. (Emphasis in original).
As explained above, plaintiffs first argue that the clause’s “obligation to arbitrate is entirely one-sided.” (cleaned up). But “the parties do not have to bind themselves to identical obligations in order to avoid substantive unconscionability.” Williams, 2013 WL 708123, at
Yet the court agrees with plaintiffs that the clause is still substantively unconscionable. That is because the arbitration clause “gives [Endurance] the power to choose” any “forum and
Bain is instructive here. The Illinois Appellate Court there found substantively unconscionable an arbitration clause in a home-remodeling contract that gave the builder-defendant, Airoom, sole discretion to select the arbitral forum and procedures in the event of a dispute with the customer-plaintiff, Mary Bain. Id. at ¶ 42. The clause provided that “[a]ll arbitrations shall be conducted . . . before an arbitrator selected in accordance with, and shall be conducted pursuant to, the Construction Industry Arbitration Rules of the American Arbitration Association (www.adr.org) or any other alternative dispute resolution firm, at Airoom’s sole and absolute discretion.” Id. at ¶ 6. The court found that those “Construction Industry” rules “were designed primarily for complex construction industry disputes,” and that they required high administrative and arbitrator fees—far exceeding the more consumer-friendly AAA Home Construction Arbitration Rules. Id. at ¶¶ 42-46. So they were “plainly ill-suited for and unnecessarily costly for someone suing a company that has done renovation work on their residential home.” Id. at ¶ 42. Nor, the court further explained, did the language giving Airoom the right to choose different rules or a different forum “at its sole and absolute discretion” make the provision less unconscionable: “the provision simply g[ave] Airoom the power to choose another, perhaps even more expensive and less appropriate, forum and set of rules for resolving this dispute.” Id. at ¶ 48. The court thus held that the one-sided forum/rules provision was substantively unconscionable. Id. at ¶ 50.
The arbitration clause here is as unconscionable or worse than the one in Bain. It, too, gives Endurance the “power to choose” an expensive and inappropriate forum and set of rules.
Endurance’s reliance on cases like C&G is misplaced. Endurance argues that C&G supports the notion that “a contract is not unconscionable because one party may select the forum in the event of a dispute.” But the clause at issue in C&G “incorporate[d] JAMS rules expressly.” 2017 WL 1079241, at *9. “[S]o customers” there could “ascertain the dispute resolution processes and rules to which they were agreeing.” Id. (quoting Jackson, 764 F.3d at 778). Cooper and Wilder had no such ability here.
Because the clause here gives Endurance sole control to select a company-friendly process with uncertain costs and remedies, it creates an improper imbalance in obligations and rights. Further exacerbating that imbalance, moreover, is the fact that Cooper and Wilder had “no hand in [the] drafting of the agreement,” that “there is a disparity in bargaining power,” and
The court therefore finds that the arbitration clause in Cooper’s and Wilder’s VSCs is substantively unconscionable. The court consequently denies Endurance’s motion to compel Cooper and Wilder to arbitrate their claims based on their VSCs.
Rinella’s, Cooper’s, and Rumpf’s Website Use
Endurance argues that Rinella, Rumpf, and Cooper “each agreed to arbitrate any disputes when they accepted Endurance’s terms and conditions as part of obtaining VSC quotes” on Endurance’s website. “Illinois contract law requires that a website provide a user reasonable notice that his use of the site or click on a button constitutes assent to an agreement.” Sgouros, 817 F.3d at 1036. “One way” that a website can do that is by using “clickwrap” agreements. Domer, 116 F.4th at 694. A website, for example, “might be able to bind users to a service agreement by placing the agreement, or a scroll box containing the agreement, or a clearly labeled hyperlink to the agreement, next to an ‘I Accept’ button that unambiguously pertains to that agreement.” Sgouros, 817 F.3d at 1036. On the other hand, a website generally will not have provided reasonable notice if it uses “browsewrap” agreements—agreements that “provide veiled notice to customers that mere use of the website constitutes agreement to various terms and conditions.” Domer, 116 F.4th at 694-95. Indeed, “[b]rowsewrap agreements typically are not enforced.” Id. at 695.
“[F]all[ing] somewhere in between these two forms of agreement” are websites that “rely on simply displaying, somewhere on a webpage, a notice of deemed acquiescence and a link to the putative terms.” Id. (cleaned up). In that situation, “purported assent is largely passive.”
Endurance characterizes the agreements here as “click-wrap” agreements. As for Cooper, Endurance asserts: that she got her quote from “shopcarwarranty.com, a third-party website”; that she “assented to” Shop Car Warranty’s website’s Term & Conditions (“T&Cs”) by clicking a button to receive a quote; that those T&Cs “connect[ ] you with contractors and other providers who may be able to assist you with your AutoWarranty”; that under a “Links to Other Websites” heading, the T&Cs say that the website includes links to other websites and that “[y]our rights to such content will be governed by the terms of those third-party websites”; and that by accepting the Shop Car Warranty T&Cs “to obtain a quote from Endurance, Cooper agreed to Endurance’s” T&Cs, which include “an agreement to arbitrate.”
The court finds that Cooper did not—and could not—assent to Endurance’s T&Cs. As plaintiffs note in their response to Endurance’s motion, “Cooper clicked a button to obtain a quote from ‘shopcarwarranty.com’” (emphasis removed)—not Endurance’s website. And on the page in which she clicked, “[n]owhere was Cooper provided with shopcarwarranty.com’s T&C[s]”—let alone Endurance’s T&Cs. In its opening brief, Endurance provides a screenshot of text that it claims Cooper would have seen and that underlines in red ink a link to Shop Car Warranty’s “Terms & Conditions.” (ECF 15-4, Exhibit D). Yet the video exhibit that
As for Rinella and Rumpf, Endurance argues that: they “obtained quotes for their VSCs directly through Endurance’s website”; the website “required them to actively accept Endurance’s” T&Cs—including the “agreement to arbitrate” contained therein; and they did this by clicking an “I Accept” button. In support, Endurance attaches a declaration from Daniel Wilner, Endurance’s “Litigation Manager,” in which he states that he has provided a “Certificate of Authenticity for Web Leads, certified log and certified TrustedForm video replay” of Rumpf’s and Rinella’s respective “interaction with the Endurance” website. He further states that the “Certificate of Authenticity shows that” Rumpf and Rinella “actively clicked ‘I Accept’ next to [Endurance’s T&Cs] before receiving a quote.” And the video exhibits, he further avers, show what Rinella and Rumpf saw on the website.
But Endurance fails to explain where in the Certificate of Authenticity there is support for Wilner’s assertion that either plaintiff clicked “I Accept” or clicked an “I Accept” button. The phrase “I Accept” appears nowhere in the documents. Nor do the video exhibits support Wilner’s assertion. Below are screenshot excerpts from their video attachments:
The button available to both Rinella and Rumpf was a “Get a FREE Quote” button—not an “I Accept” button. Contrary to Endurance’s assertion, then, these are not “clickwrap” agreements. See Domer, 116 F.4th at 699-700 (“Unlike with pure clickwrap agreements, clicking ‘SUBMIT ORDER’ does not specifically manifest assent to the additional arbitration terms, for the purchaser is not specifically asked whether she agrees or to say ‘I agree.’” (cleaned up)); Sgouros, 817 F.3d at 1036 (website “might be able to bind users to a service agreement by placing the agreement, or a scroll box containing the agreement, or a clearly labeled hyperlink to
Endurance fails to show that the webpage that Rumpf was on where she clicked the “FREE Quote” button provided reasonably conspicuous notice of the T&Cs or that she unambiguously manifested her assent to those T&Cs by clicking the button. Indeed, as shown above, the video exhibit shows only a sentence fragment under the button. And the text in that sentence fragment neither provides a link to the T&Cs nor suggests that by clicking the “FREE Quote” button, Rumpf would be consenting to any T&Cs.
Plaintiffs pointed this omission out to Endurance in their response brief. But Endurance failed to remedy it in its reply. Endurance instead doubled down and suggested that the same text that was shown to Rinella was shown to Rumpf. But the court cannot accept that suggestion. The only support Endurance provides for it is the video exhibit for Rinella (Doc. 15-2, “Exhibit B”)—not Rumpf. And the above screenshots show that Rinella and Rumpf were confronted with different looking webpages. Perhaps they were ultimately confronted with the same text. But the court cannot take Endurance’s unsupported word for it—especially given that Wilner’s assertion about Rinella and Rumpf both clicking “I Accept” appears to be wrong. And because Endurance had the opportunity to provide evidence to support its argument in reply—but did not do so—it has waived its ability to support that assertion. Cf. United States v. Farris, 532 F.3d 615, 619 (7th Cir. 2008) (“Farris failed to respond to the
As for Rinella, however, the court finds that an enforceable arbitration agreement was formed when Rinella pressed the button for a price quote. To start, Endurance’s notice was reasonably conspicuous and Rinella manifested his assent to accept the T&Cs by pressing the button to obtain the price quote. Plaintiffs do not meaningfully argue otherwise. That is not surprising. Based on the video exhibit, the webpage that Rinella was on: had a relatively simple screen; had a clear disclosure indicating that by clicking on the “Get a FREE Quote” button, the user would be bound to the T&Cs; and had a clearly marked link to the T&Cs, which was closely placed next to the button. These are relevant factors that all support reasonable conspicuousness. See Domer, 116 F.4th at 695 (setting forth factors in analyzing reasonable conspicuousness).
Plaintiffs tepidly suggest that a case in which a website did not include “language that linked the notice regarding . . . the terms and conditions to the ‘Continue’ button,” supports their argument that Rinella should not be bound. (Quoting Anand v. Heath, No. 19-CV-00016, 2019 WL 2716213, at *5 (N.D. Ill. June 28, 2019)). But their suggestion is misplaced. Again, the webpage that Rinella used here did include language that linked the T&Cs to the “Get a FREE Quote” button. In particular, the disclosure next to the button states in consecutive sentences: “By clicking the button, you consent to Endurance using automated technology to call, email and text you . . . . You also agree to the Endurance . . . Terms and Conditions.” (Emphasis added).
In sum, the court finds that Rinella was subject to an enforceable arbitration agreement based on both his VSC and his use of Endurance’s website. The court thus grants Endurance’s motion to compel arbitration as to Rinella. But the court finds that neither Cooper, Wilder, nor Rumpf were subject to an enforceable arbitration agreement. The arbitration agreement in Cooper’s and Wilder’s VSCs is substantively unconscionable. And Endurance failed to show that either Cooper or Rumpf assented to any arbitration agreement in Endurance’s T&Cs through their website use. The court therefore denies Endurance’s motion to compel arbitration as to Cooper, Wilder, and Rumpf.
MOTION TO DISMISS
The court turns now to Endurance’s motion to dismiss under
Endurance challenges the complaint on several grounds. The court addresses each challenge in turn.
Waiver of Class Action Rights
Endurance first argues that all five named plaintiffs—Rumpf, Rinella, Cooper, Kujawa, and Wilder—“waived their right to pursue their claims as a class action, requiring dismissal of their claims.” First, Endurance argues, “Rinella, Rumpf, and Cooper agreed to waive class participation via their acceptance of the Click-Wrap Agreement”—meaning, Endurance’s T&Cs. But the court has already determined that Endurance has failed to show that either Rumpf or Cooper were subject to Endurance’s T&Cs. The court thus denies the motion as to Rumpf and Cooper to the extent it is based on Endurance’s T&Cs.
As for Rinella, the court agrees with Endurance that he has waived his ability to arbitrate his claims as a class action. Arbitration agreements must be enforced “according to their terms.” Lamps Plus, Inc. v. Varela, 587 U.S. 176, 183 (2019) (citation omitted). A party therefore “may not be compelled under the FAA to submit to class arbitration unless there is a
Here, as explained above, Rinella is subject to the T&Cs—including the arbitration provision therein—based on his use of the Endurance’s website. Endurance argues that the arbitration provision states: “EACH PARTY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO JOIN CLAIMS OR DISPUTES WITH THOSE OF OTHERS IN THE FORM OF A CLASS ACTION, CLASS ARBITRATION OR SIMILAR PROCEDURAL DEVICE . . . .” (All caps in original, emphasis added). Yet (incredibly) the copy of the T&C’s that Endurance attaches to its motion as an exhibit omits the underlined language. Nevertheless, Endurance also cites its website—endurancewarranty.com/terms-and-conditions—where the full language does appear. And plaintiffs do not dispute that, if Rinella is subject to the T&Cs, he would be subject to the class waiver. The court therefore finds that Rinella has waived his ability to arbitrate his dispute as a class action.
Endurance next argues that Kujawa, Wilder, and Cooper each waived bringing class actions through finance agreements with a third-party company, MEPCO. According to Endurance, these three plaintiffs financed their VSCs through MEPCO. And the agreement with MEPCO has a “WAIVER OF CLASS ACTION,” which states: “PURCHASER HEREBY WAIVES ANY RIGHT TO BRING ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE CONTRACT OR ANY MATTER ARISING IN CONNECTION THEREWITH ON A CLASS ACTION BASIS. (All caps and emphasis in
In response, plaintiffs argue that New York law allows a third party to enforce a contract only “when it is . . . clear from the language of the contract that there was ‘an intent to permit enforcement by the third party.’” (Quoting Comm’r of the Dep’t of Soc. Servs. of the City of N.Y. v. N.Y.-Presbyt. Hosp., 82 N.Y.S. 3d 390, 394 (App. Div. 1st Dept. 2018)). But here, they assert, “there is no provision of the Agreement that permits enforcement by” Endurance. Rather, the “only provision of the Agreement that relates to third-party enforcement is assignment, which allows MEPCO to assign or pledge its rights.”
The court finds that Endurance is a third-party beneficiary of the class action waiver in the MEPCO Agreement. “Under New York law,” a third party can “enforce a contract if that party is an intended beneficiary of the contract.” Granite Partners, L.P. v. Bear, Stearns & Co. Inc., 58 F. Supp. 2d 228, 247 (S.D.N.Y. 1999). “The general test for third-party beneficiary status, as adopted by New York from the Restatement (Second) of Contracts is as follows:
(1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either (a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefits of the promised performance.”
Id. at 247-48 (quoting Restatement (Second) of Contracts § 302 (1981)). When “the obligation to perform to the third-party beneficiary is not expressly stated in the contract at issue, a court may look to surrounding circumstances to determine whether the contracting parties intended to benefit a third party.” Id. at 248 (cleaned up).
Applying these standards here, Endurance is a third-party beneficiary. As Endurance points out, the MEPCO Agreement states that it was “entered into to enable Purchaser to pay for the [VSC] . . . .” And it is included within the same document that includes the VSC. Kujawa, Wilder, and Cooper have thus each waived bringing class actions against Endurance.
In short, the court finds: that Endurance has failed to show that either Rumpf or Cooper were subject to Endurance’s T&Cs; that Endurance has shown that Rinella is subject to the T&Cs and its class action waiver; and that Kujawa, Wilder, and Cooper each waived bringing class actions against Endurance based on the MEPCO Agreement. The court thus grants the motion to dismiss the class allegations as to Cooper, Kujawa, Rinella, and Wilder without prejudice to their ability to assert individual claims. It further denies the motion as to Rumpf.
Class Action Allegations
Endurance next argues that plaintiffs’ proposed class and subclasses must be dismissed or stricken.
Although “the decision to strike material is within the discretion of the court, . . .the general rule is that motions to strike are disfavored.” Id. (cleaned up). This general rule takes into account that the fact that, while plaintiffs generally must show that they meet the
Endurance argues that the class allegations here are facially and inherently deficient. It first contends that the classes are facially overbroad. According to Endurance, “Plaintiffs propose a Nationwide Class consisting of ‘[a]ll persons in the United States who purchased a
In response, plaintiffs argue that the classes are not overbroad. According to plaintiff, they allege that “they and all other Endurance consumers ‘paid for a [VSC] that does not provide the promised coverage that was the basis of the bargain’” (Quoting the complaint)—an injury that “occurred at the time of sale.” And they argue that any overbreadth can be refined through discovery. (Citing Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012)).
In reply, Endurance again contends that the claims broadly sweep within it persons who could not have been injured by the alleged conduct. (Citing Kohen v. Pac. Invest. Mgmt. Co., 571 F.3d 672, 677 (7th Cir. 2009)). And it further argues that the claims here are “governed by different States’ laws, a largely legal determination, and no proffered or potential factual development offers any hope of altering that conclusion.” (Quoting Hill v. Wells Fargo Bank, N.A., 946 F. Supp. 2d 817, 830 (N.D. Ill. 2013)).
The court agrees with Endurance that the currently pleaded classes are facially and inherently deficient. True, an overbroad class can often be refined through discovery. But
Fraud Allegations in Counts III and IV
Endurance next asserts that plaintiffs’ claims for fraudulent concealment (Count III) and common law fraud (Count IV) must be dismissed. Endurance first argues that plaintiffs failed to plead those claims with the particularity required under
When, as here, some of the “complaint’s allegations sound in fraud,” “those allegations are held to a heightened pleading standard under
To that end, the “who, what, where” formulation “is not meant to suggest that every possible who, what, where, when, or how within the alleged factual circumstances must be stated with particularity; . . . it is meant only to distill the specific inquiries under
With these principles in mind, the court turns to Endurance’s arguments. Endurance argues that “[n]owhere in” plaintiffs’ fraudulent concealment and common law fraud claims “do Plaintiffs identify with the requisite specificity Endurance’s alleged misrepresentations and omissions.” According to Endurance, the claims are missing the “what,” “when,” and “where.”
Plaintiffs assert in response that Endurance’s argument “ignores whole sections of the Complaint.” The complaint, plaintiffs argue, “includes Endurance’s statements (with citations) touting the VSCs and Endurance’s business practices, including promising coverage ‘at any licensed repair facility,’ covering vehicles with over 200,000 miles, a ‘stress-free claims process’ that takes as ‘little as 48 hours,’ and being the direct administrator of the VSCs.” (Quoting the complaint). And, plaintiffs continue, plaintiffs allege that they “purchased VSCs based on Endurances’ ‘advertisements and representations that [their] vehicle would be covered by the contract in the event it needed repairs, particularly for the parts listed on Endurance’s website.’” (Quoting the complaint).
Under the facts of this case, then, plaintiffs have set forth “the first paragraph of [the] newspaper story” on its fraud claims, Pirelli, 631 F.3d at 442. “Nothing more is needed.” Vanzant v. Hill’s Pet Nutrition, Inc., 934 F.3d 730, 739 (7th Cir. 2019) (reversing district court’s finding that the complaint lacked
Endurance is correct that “a fraud claim cannot rest on the same ground as a claim of breach of contract.” Five-Star AudioVisual, Inc. v. Unique Bus. Sys. Corp., 769 F. Supp. 3d 840, 852 (N.D. Ill. 2025). “After all, the mere fact that a defendant promised something and then failed to do it occurs every time a defendant breaches a contract.” Id. (cleaned up). So “[t]o bring a fraud claim, a plaintiff must allege a ‘fraudulent act distinct from the alleged breach of contract.’” Id. (quoting Greenberger, 631 F.3d at 401).
Plaintiffs have done that here. Plaintiffs’ breach of contract claim alleges that Endurance “breached [its] contracts with Plaintiffs and the Class when [it] failed to timely process claims and/or cover repairs under the [VSC] by denying claims.” Plaintiffs’ fraudulent concealment claim alleges that Endurance “made material misrepresentations and omissions,” “did not fully and truthfully disclose to customers the true nature of the coverage under the [VSCs] or the timeliness upon which [Endurance] would render decisions” under the VSCs, and that plaintiffs and the class “were fraudulently induced to purchase” the VSCs. And plaintiffs’ common law fraud claim alleges that Endurance “marketed that [its] [VSCs] provided comprehensive coverage and peace of mind and protection from repair bills,” which “induced Plaintiffs and the Class members to purchase” the VSCs.
For these reasons, the court denies Endurance’s motion to dismiss Counts III and IV.
Count V – Negligent Misrepresentation
Endurance next argues that plaintiffs’ negligent misrepresentation claim (Count V) fails under the “economic loss doctrine.” Under the economic loss doctrine—“also known as the Moorman doctrine”—“a plaintiff cannot recover purely economic losses in tort.” Five-Star AudioVisual, 769 F. Supp. 3d at 855. “Economic losses include damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits – without any claim of personal injury or damage to other property.” Id. (cleaned up).
Endurance contends that plaintiffs allege in Count V that Endurance had a duty to pay for plaintiffs’ vehicle repairs and that this duty arises solely out of the VSC obligations. Because
In response, plaintiffs argue that the “economic loss doctrine does not preclude claims where fraudulent inducement is adequately alleged.”7 Because plaintiffs allege that Endurance‘s negligent misrepresentations induced plaintiffs to purchase the VSCs, plaintiffs assert that their claim falls within a recognized exception to the economic loss doctrine.
The court disagrees. To be sure, courts recognize an exception to the economic loss doctrine when the claim “involves intentional misrepresentations.” Five-Star AudioVisual, 769 F. Supp. 3d at 855. Indeed, “[t]hat‘s why the intentional fraud claims can survive.” Id. “But a carve-out for intentional acts cannot save a negligence claim, like [plaintiffs‘] negligent misrepresentation claim.” Id. “So the . . . exception doesn‘t apply.” Id. The court thus dismisses Count V. Id. at 858 (dismissing negligent misrepresentation claim).8
Count II – Unjust Enrichment
Finally, Endurance argues that plaintiffs’ unjust enrichment claim (Count II) fails because plaintiffs “concede an express contract.” Endurance argues that “unjust enrichment ‘is unavailable where the conduct at issue is the subject of an express contract between the plaintiff and the defendant,‘” and that “[a]llegations of an express contract that governs the parties’
Plaintiffs respond, asserting that Endurance “overlooks . . . that pleading alternative claims is permitted.” (Citing
Plaintiffs are wrong. As the Seventh Circuit has “long recognized“: “when two parties’ relationship is governed by contract, they may not bring a claim of unjust enrichment unless the claim falls outside the contract.” LKQ Corp. v. Rutledge, 96 F.4th 977, 981 (7th Cir. 2024) (cleaned up) (applying Illinois law). As a result, when, “as here, the existence of a contract between the parties is undisputed, an unjust enrichment claim will seldom survive a motion to dismiss.” Id.
Plaintiffs do not “suggest that [their] claim falls outside” the VSCs. Id. Just the opposite: they “maintain[ ] that [they] properly and sufficiently pleaded unjust enrichment as an alternative theory of recovery.” Id. “But a party may not incorporate by reference allegations of the existence of a contract between the parties in the unjust enrichment count.” Id. (cleaned up). Yet plaintiffs do just that in their complaint: they “incorporate by reference each of the allegations contained in the foregoing paragraphs of this Complaint” (quoting the complaint)—including the allegations of the preceding Count I breach-of-contract claim. “This pleading
CONCLUSION
For the above reasons, the court grants in part and denies in part Endurance‘s motion to compel arbitration and to dismiss the class action complaint [14]. As for the motion to compel arbitration, the court grants the motion as to Rinella and stays this action as to Rinella pending the outcome of the arbitration. The court denies the motion as to Cooper, Wilder, and Rumpf.
As for the motion to dismiss based on class action waiver, the court denies the motion as to Rumpf, but grants the motion as to Rinella, Kujawa, Wilder, and Cooper. As for the motion to dismiss or strike the class action allegations, the court grants the motion and strikes the class action allegations. And as for Endurance‘s motion to dismiss Counts II through V, the court denies the motion as to Counts III and IV but grants it as to Count II and Count V. Counts II and V are thus dismissed.
The remaining plaintiffs are given leave to file an amended complaint consistent with the holding in this opinion on or before December 23, 2025. Endurance is directed to answer or otherwise plead to the amended complaint on or before January 20, 2026. The parties are directed to file a joint status report using this court‘s form on or before January 27, 2026.
So ordered.
ENTER:
_________________________________________
Robert W. Gettleman
United States District Judge
DATE: 11/25/2025