Kentucky Accident Blog

Seven Million Dollars in Contempt Fines Against Allstate Lifted

In an accident dated September 15th, 2000 in Jackson County, MO It was reported Dale Deer had stopped his truck on Interstate 70 in a construction zone.  While his truck was stopped another car, driven by Paul Aldridge, ran into the back of Deer's truck.

It doesn't seem to be a very complicated incident but nearly eight years later litigation is still ongoing. Allstate was the insurer for Aldridge and after several excruciating delays settled with Deer for approximately 1.2 million dollars.  Prior to that settlement Aldridge filed suit against Allstate for acting in bad faith and mishandling the case.  Aldridge was basing his suit on a series of internal documents that intend to show a claims payment system that is designed to low-ball clients which allows Allstate to acquire huge profits.

Among these documents were a series of slides prepared by consulting firm McKinsey & Co. which supposedly suggest a protocol for Allstate to use to settle claims quickly and for pennies on the dollar.  It also suggests they fight claimants who resist the low settlements for as long as it takes.  For years if necessary.

During the litigation of this suit Jackson County Circuit Judge Michael Manners cited Allstate for contempt and levied fines against the company for not producing internal documents.  The fines were cited at $25,000 a day which gave the case national attention.  After several months the fines had reached over seven million dollars.

The contempt order has now been lifted as Allstate has produced the documents.  Allstate is claiming they did not purposely ignore the judges' orders.  They are claiming that their former attorney had failed to respond to discovery requests.  In court documents Allstate stated "Allstate litigates hundreds of bad faith cases each year.  It responds to discovery requests--just like the ones in this case--in many of them.  There is no reason in the world for Allstate not to participate in discovery--particularly on this case, where there is an underlying judgment of $1 million."

As an attorney that deals with insurance companies on a daily basis I find it very frustrating as do my clients when insurance companies use delay tactics.  This leads to lengthy litigation as well as what I consider unnecessary additional expenses.
 
For more information on Louisville attorney Mike Schafer go to www.mikeschaferlaw.com.