Hardy v. Unum Life Insurance Company of America

Background

Mark W. Hardy brought an employee-benefits dispute against Unum Life Insurance Company of America concerning his long-term disability claim. Unum initially approved Hardy’s claim in February 2019, later recertified his disability in July 2020, and terminated his claim in December 2020. Unum denied Hardy’s internal appeal in May 2022, and Hardy filed suit in March 2023.

Hardy moved to conduct additional discovery and to compel Unum to produce documents identified on a privilege log. The parties agreed that the court would review the benefits dispute from the beginning, without deferring to Unum’s decision. Hardy argued that additional discovery could show that Unum’s decision was affected by bias or bad faith and could explain the change in how it handled his claim. Unum argued that additional discovery was not justified and that its communications with in-house counsel were protected.

Additional Discovery

The court denied Hardy’s request for additional discovery. In employee-benefits cases governed by the Employee Retirement Income Security Act, courts generally review the evidence that was before the plan administrator and allow the administrative record to be supplemented only when good cause is shown. Good cause depends on whether the additional evidence is necessary for an adequate review of the benefits decision.

The court concluded that Hardy had not shown that the administrative record was incomplete or that medical or occupational information was missing. The information Hardy sought concerned Unum’s decision-making process, mental state, and intent. Because the court would independently review whether Hardy was disabled under the plan, the court found that information about an Unum employee’s subjective attitude was not relevant to that review. Hardy therefore did not demonstrate good cause for additional discovery.

Privilege-Log Documents

The court granted Hardy’s motion to compel Unum to produce the communications listed on its privilege log. Unum had withheld communications with its in-house attorney under attorney-client and work-product privilege.

The court applied the fiduciary exception to attorney-client privilege. In the Employee Retirement Income Security Act context, that exception generally requires a fiduciary to disclose legal advice concerning plan administration to a beneficiary because the beneficiary is treated as the real client for that subject. A separate liability exception can preserve privilege when the fiduciary seeks legal advice about defending itself after the relationship with the beneficiary has become adversarial and litigation is sufficiently imminent.

The court found that Unum had not shown that an adversarial relationship developed before the communications at issue. Hardy’s letters asking about changes in his claim, his retention of counsel, and his requests for information did not clearly signal imminent litigation. The court also found that the parties’ interests had not clearly diverged significantly before Unum’s final appeal decision. Two other factors could not be evaluated on the available record and were treated as neutral. The court therefore concluded that the fiduciary exception applied and that the liability exception did not.

Disposition

The order states that Hardy’s combined motion to conduct additional discovery and compel production of privilege-log documents was granted in part and denied in part. Judge John F. Docherty denied the additional-discovery request and granted the request to compel production of the listed communications.