Case Law Update: Endurance Warranty Services v. Pelican Investment Holdings — Federal Court Orders Expedited Discovery and Hearing on Alleged Consent Decree Violations

On October 28, 2026, Chief Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois, Eastern Division, granted in part and denied in part a contempt motion by Endurance Warranty Services, L.L.C. against Pelican Investment Holdings, LLC and National Administrative Service Co., LLC (“NASC”) in Endurance Warranty Services, L.L.C. v. Pelican Investment Holdings, LLC, No. 1:26-cv-01257 (No. 26 C 1257; Dkt. 54). In the lawsuit filed February 4, 2026, over alleged telemarketing calls inducing Endurance vehicle-service-contract holders to cancel and switch providers, the court entered a Consent Decree and Final Judgment on April 27, 2026 (Dkt. 39). Addressing Endurance’s contempt motion (Dkt. 40), the court denied without prejudice an immediate contempt finding and emergency injunction, granted leave to file a supplemental brief (Dkt. 48), and ordered expedited discovery and a hearing; the contempt request was denied without prejudice as of October 28, 2026.

How the Dispute Reached the Contempt Stage

According to the complaint (Dkt. 1) summarized by the court, Endurance has sold direct-to-consumer vehicle service contracts since 2006 to cover repairs after a manufacturer’s warranty expires; Pelican also sells vehicle service contracts nationwide, and NASC allegedly writes and enforces them. Endurance alleged that starting around September 2025, customers called to cancel after the Defendants and their agents made misleading statements to induce them to switch companies, prompting Endurance’s February 4, 2026 seven-count suit under federal and state law, including the Lanham Act.

On February 11, 2026, an Agreed Order (Dkt. 20) barred use of “Endurance’s customer list” or “Endurance’s trade secret customer list” and required the Defendants to instruct sales agents not to make false or materially misleading statements. On April 27, 2026, the court entered the Consent Decree (Dkt. 39), retaining jurisdiction to enforce it. The decree bans the Defendants “[i]n telemarketing calls or other customer-facing communications” from stating, “in form or substance, that: (a) Endurance is being sued by a federal agency, (b) Endurance is going out of business or is about to go out of business, (c) repair shops or car dealers will no longer accept Endurance plans or coverage, (d) Endurance’s policies are no longer in effect, (e) Endurance has stopped paying claims or does not pay claims covered by its plans,” or falsely claiming to know a consumer is an Endurance customer.

What Endurance Alleged in Its Contempt Motion

In its Motion for Contempt (Dkt. 40), Endurance alleged that Pelican—rebranded as HomeDrive Assurance (“HDA”)—contacted Endurance customers with misleading statements, while NASC allegedly administered HDA’s contracts. Considering the Defendants’ supplemental filing (Dkt. 48), the court noted in a footnote that “while Pelican rebranded as HDA, NASC remains a distinct entity from HDA” and “has not rebranded as HDA but retains its individual identity as NASC.”

From April 15, 2026, until Endurance blocked 888-984-1438 on May 21, 2026, Endurance allegedly received over 1,200 calls from that number in which customers said they sold or planned to sell their cars and wanted to cancel. (The court did not consider conduct before April 27, 2026.) Linking the number to the Defendants and their sales agents, Endurance transcribed calls from that number and calls mentioning HDA, alleging it lost over 600 customers. In transcripts recounted by the court—whose accuracy the Defendants dispute (Dkt. 47 at 5)—customers reported being told Endurance was “about to file bankruptcy,” that a caller was “red flagged because she could see that nobody in the [] area took Endurance,” that “your Endurance policy is going to be terminated or whatever, that you have to switch over to them,” and that Endurance engaged in “widespread systemic, unfair deny of claims” and related conduct. Those excerpts reflect disputed allegations, not findings.

What the Court Decided

Citing U.S. S.E.C. v. Hyatt, 621 F.3d 687, 692 (7th Cir. 2010), and Nat’l Lab. Rels. Bd. v. Haven Salon + Spa, Inc., 60 F.4th 1058, 1060 (7th Cir. 2023), the court noted that civil contempt requires clear and convincing proof of an unambiguous command, a significant violation, and a failure to make a reasonable, diligent effort to comply. Quoting Taggart v. Lorenzen, 587 U.S. 554, 561 (2019) (cleaned up), it added that “[c]ivil contempt is a severe remedy” that “should not be resorted to where there is a fair ground of doubt as to the wrongfulness of the defendant’s conduct.”

Chief Judge Kendall wrote: “While Endurance has provided the Court with sufficient evidence to indicate that the Defendants have likely violated the Consent Decree, the parties dispute the truth of the evidence provided by Endurance and the scope of the Defendants alleged contemptuous actions. The Court, therefore, needs additional information to resolve the question of contempt. As such, the Court grants Endurance’s request for expedited discovery and a hearing to establish the scope of the Defendants’ conduct.” Adopting Endurance’s proposed limits (Dkt. 40 Ex. 1), the court allowed each side 10 interrogatories and requests for production, a three-hour Rule 30(b)(6) deposition of each Defendant on up to 10 topics, and two three-hour depositions of Endurance on up to 10 topics.

What This Means If You Have a Vehicle Service Contract Claim

This October 28, 2026 order is an interim ruling in an Illinois competitor suit; it makes no final contempt finding, decides no consumer’s repair claim, and does not bind Florida courts. Still, it highlights precautions for contract holders:

• Verify switch calls independently. If a caller claims your provider is going out of business, your policy is terminating, or shops no longer accept your plan, do not cancel during the call; contact the administrator named on your contract and check with your repair shop.
• Check waiting periods and exclusions. Replacing a contract can trigger a new waiting period, deductible, or exclusion.
• Keep contract and claim records. Preserve your contract, payment records, repair estimates, and call logs.

See what a vehicle service contract is, our Case Law & Industry Insights page, or request a free case evaluation. This article is general information as of November 6, 2026, not legal advice.