Mark Stephan v. Unum Life Insurance Company Of

I. FACTUAL AND PROCEDURAL BACKGROUND

A. The Plan

The long-term disability insurance policy (“the Plan”) issued by Unum to TWP, Stephan’s employer, “provide[d] financial protection” for TWP employees should they become disabled, by ensuring that disabled employees would continue to receive sixty percent of their monthly earnings up to a max- imum of $20,000. The Plan authorized Unum to interpret its provisions and to determine claimants’ eligibility for benefits. STEPHAN v. UNUM LIFE INSURANCE 11083 B. Stephan’s Claim

On April 18, 2007, TWP offered Stephan a position as Managing Director in its Institutional Sales department. Ste- phan’s offer letter stated, in relevant part:

Your salary rate will be $200,000 annually. Your salary will be paid semi-monthly, less payroll deduc- tions and all required withholdings. You will be eli- gible to participate in Thomas Weisel Partners’ discretionary bonus program. Although bonuses are generally discretionary, you will be guaranteed [a] $300,000 bonus for your first 12 months of employ- ment, provided you perform at the level both you and we anticipate and that you have not voluntarily terminated your employment or been…

Opinion by Judge BERZON; Dissent by Judge O’SCANNLAIN.

OPINION

In August 2007, just three months after he had begun a new job at Thomas Weisel Partners (“TWP”), Plaintiff-Appellant Mark Stephan (“Stephan”) had a bicycling accident that resulted in a spinal cord injury, rendering him quadriplegic and thus permanently disabled. Stephan was insured under TWP’s long-term disability insurance plan, underwritten and administered by Defendant-Appellee Unum Life Insurance Company (“Unum”). Stephan disputes Unum’s calculation of his predisability earnings, upon which his disability benefits were based. In calculating his earnings, Unum included only Stephan’s monthly salary but not his annual bonus. Stephan’s earnings, and therefore his disability benefits, would be considerably higher if the bonus were included.

The central issue in this appeal is whether the bonus should have been counted. The district court reviewed Unum’s decision and upheld Unum’s benefit determination. The court also denied Stephan’s motion to compel discovery of a series of internal memoranda created by Unum’s in-house counsel regarding Stephan’s claim. Stephan appeals from each of the district court’s…

dissenting:

I agree with the majority that we evaluate Unum Life Insurance Company’s interpretation of plan terms under an abuse of discretion standard. I cannot agree, however, that remand is appropriate. The district court did not, as the majority contends, improperly weigh evidence at the summary judgment stage. And Unum’s interpretation of the plan — which is silent on whether a bonus should be counted as monthly income — is reasonable and supported by the record. I would therefore affirm the grant of summary judgment in favor of Unum.

*940 I

The majority holds that the district court “failed to apply the traditional rules of summary judgment to its analysis of whether and to what extent a conflict of interest impacted Unum’s benefits determination.” Op. at 921. I disagree. The district court properly considered the evidence before it. Stephan presented no specific evidence of bias; the exhibits he filed included correspondence with Unum, an expert report, and Unum’s notes from Stephan’s claim folder, all of which showed consistent handling of Stephan’s claim. 1 The district court considered all of Stephan’s evidence, as well as hundreds of pages of evidence submitted by…