A federal court has sided, at least in part, with a Louisiana homeowner in an ongoing insurance dispute, telling Allstate Insurance Company to turn over internal documents that may shed light on the company’s handling of a storm damage claim.
Reed Chenevert sued his homeowner’s insurer, Allstate, after his roof was damaged in a storm. He alleges that the company failed to honor his claim in good faith, asserting breach of contract and seeking penalties under Louisiana's bad faith statutes, specifically La. R.S. 22:1973 and La. R.S. 22:1892. These statutes allow policyholders to seek damages and penalties when an insurer acts arbitrarily or capriciously in denying or underpaying claims.
Allstate resisted providing much of this information, raising objections that the requests were overly broad, vague, and unlikely to produce admissible evidence. The insurer argued that the demands for incentive plans and pricing documents extended far beyond what was relevant to Chenevert’s specific claim.
Magistrate Judge Carol B. Whitehurst, presiding over discovery matters, issued a Memorandum Order on March 13. Her ruling broke down as follows:
The court rejected Allstate’s blanket objections, ruling that these documents are relevant to Chenevert’s bad faith claims. Whitehurst cited precedent from several federal cases, holding that incentive plans or performance metrics tied to claim outcomes could potentially show whether there was a financial motive to underpay or deny claims unfairly.
The court specifically ordered Allstate to provide:
On the other hand, the court sided with Allstate in limiting the scope of discovery regarding contractor pricing materials. Chenevert had requested wide-ranging documents relating to price estimates used across various geographic areas of Louisiana over a nearly two-year period.
The judge deemed this request vague and overly broad, finding it went beyond the needs of the case. Allstate had already produced the specific estimates used in handling Chenevert’s claim, and the court ruled that was sufficient.
Chenevert also sought attorneys' fees and costs as sanctions, arguing that Allstate’s discovery objections were improper. However, under Rule 37 of the Federal Rules of Civil Procedure, Whitehurst declined to impose sanctions, noting that while the court partially overruled Allstate’s objections, there was no clear evidence of bad faith in the discovery process itself.
The court’s decision underscores how discovery of internal insurer documents—particularly those related to employee incentives and evaluation metrics—can be key evidence in bad faith litigation.
By compelling Allstate to disclose this information, the court opened the door for Chenevert to explore whether financial pressures or performance goals influenced the handling of his claim. This type of discovery has become increasingly common in insurance disputes where policyholders accuse insurers of prioritizing profits over fair claim resolution.
At the same time, the court also demonstrated a willingness to enforce reasonable limits on the breadth of discovery requests, balancing the need for relevant information against undue burden.
The case will now proceed, with Allstate required to supplement its responses as ordered. Chenevert will have the opportunity to review Allstate’s internal documents as he continues to press his claims of breach of contract and bad faith handling of his storm damage claim.
