Ill. Federal Judge Refuses to Dismiss Claims Accusing Warranty Providers of Failing to Set Up Captive Reinsurer

CHICAGO — A car dealership has sufficiently pled a counterclaim accusing warranty service providers of knowingly reneging on their promise to set up an offshore reinsurance company that would allow the dealership to retain warranty payments, an Illinois federal judge has ruled.

On May 22, Judge Harry D. Leinenweber of the U.S. District Court for the Eastern District of Illinois said the dealership stated a claim for promissory fraud under Illinois law by alleging that the warranty providers never intended to keep their promise to set up an offshore reinsurance company for the dealership’s benefit.

On Nov. 7, 2013, car …