In a recent 9th Cir. Opinion, Stephan v. Unum Life Insurance Company of America, __F. 3d __, 2012 WL 3983767 (9th Cir. September 12, 2012), the Court held that the fiduciary exception to attorney-client privilege applied to internal memoranda created by Unum’s in-house counsel, at the request of Unum’s claims analyst because it constituted advice on plan administration and was given before the interests of the parties became adverse. The Court also held, in some circumstances, a bonus may be considered in benefit calculations. The Plaintiff in this case earned $200,000 annually, plus a $300,000 guaranteed annual bonus. He became permanently disabled and Unum paid benefits using his monthly salary without considering his bonus in calculating his benefit. The Court affirmed the district court’s ruling that the proper standard of review is abuse of discretion but reversed the district court’s grant of summary judgment to Unum. The case was remanded to the district court for reconsideration of the weight Unum’s conflict of interest ought to be accorded in determining whether Unum abused its discretion. The district court was instructed to reconsider the nature and impact of Unum’s conflict of interest and to re-weigh the relevant evidence and determine whether Unum abused its discretion in failing to include Plaintiff’s bonus in its pre-disability earnings calculation.
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