Stephan v. Unum Life Ins.Co. of America

697 F.3d 917 (9th Cir. 2012). The U.S. Court of Appeals overturned a lower court ruling that favored UNUM. The court determined that UNUM improperly calculated Mark Stephan’s benefits and that it had arbitrarily interpreted the insurance policy in a manner that diminished the benefits due by $10,000/month. The court ruled that Unum’s actions were motivated by financial bias and conflict of interest. In addition, the court negated UNUM’s claim that communications between its claim adjuster and in-house counsel were shielded from disclosure due to attorney-client privilege. The court recognized a “fiduciary exception” to attorney-client privilege and ruled that communications between a claim adjuster and in-house counsel during the course of the claim had to be revealed.