A contempt order that triggered huge fines against Allstate Insurance will be lifted now that the insurance giant has produced documents in a bad-faith lawsuit.

The case generated national attention after Jackson County Circuit Judge Michael Manners levied $25,000-a-day fines against Allstate for failing to produce internal documents in the hotly contested action. Over several months, the fines had grown to exceed $7 million.
The case was scheduled to go to trial Monday, but the parties settled on confidential terms. At a brief hearing Wednesday, attorneys told Manners that Allstate had produced the documents and that the contempt citation, and the fines, should be purged. Manners agreed.
The case stemmed from a collision on Interstate 70 near the U.S. 65 exit. On Sept. 15, 2000, Warrensburg resident Dale Deer stopped in a construction zone. Some time later, a car driven by Paul Aldridge of Hawaii and traveling an estimated 70 mph slammed into the rear of Deer’s pickup truck.
After long delays, Allstate, Aldridge’s insurer, eventually settled with Deer for about $1.2 million. Before that settlement, Aldridge sued Allstate for allegedly mishandling the case and acting in bad faith.
In his suit, Aldridge sought internal Allstate documents purporting to show how the company set up a claims payment system in the 1990s that low-balled clients and allowed the company to reap huge profits.
The documents included slides prepared in the early 1990s by the consulting firm McKinsey & Co. that allegedly advised Allstate to settle claims quickly for pennies on the dollar and fight claimants who resisted — for years, if necessary. One slide was titled “Good Hands or Boxing Gloves,” an allusion to the insurer’s “You’re in good hands with Allstate” slogan.
Besides fining Allstate, Manners barred Allstate from mounting a defense. On Wednesday, he said that he sanctioned the insurer to coerce it into producing the documents.
Allstate claimed that it had not deliberately flouted Manners’ orders. Rather, it said, its now-former attorney — then with the firm of Wallace, Saunders, Austin, Brown & Enochs — had failed to respond to discovery requests.
Allstate said it was appalled when it learned last year that it was being threatened with contempt.
“Allstate litigates hundreds of bad faith cases each year,” Allstate stated in court documents. “And 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 in this case, where there is an underlying judgment of $1 million.”
Allstate said it “immediately removed” the attorney from the case and retained new counsel.
The attorney, who has since left the firm, could not be reached for comment.