The world of insurance claims management was rocked recently when a federal court in Michigan clarified in-house counsel , may not invoke attorney client privilege to shield their routine claim-handling activities. The case, Wolverine Worldwide Inc. v. The American Insurance Company et. al., highlighted an often encountered, but rarely discussed circumstance of insurance claims management. This significant ruling underscores the importance of focusing on the nature of the work performed rather than the individual's professional title.

Background of the Case

In this case, Wolverine Worldwide Inc., a well-known footwear company, initiated a legal proceeding against its insurers, including Travelers, alleging a failure to provide coverage for numerous PFAS-related lawsuits. Wolverine aimed to depose Michael Ungaro, an in-house counsel for Travelers, who had played an integral role in the defense of the declaratory judgment action and offered advice throughout the coverage dispute.

Travelers opposed the deposition, invoking attorney-client privilege and asserted that as in house counsel, Ungaro, could not ethically testify against his client. However, Wolverine argued that because Ungaro was a central participant and even directed the routine claims handling aspect of the case, the privilege did not apply as these activities were primarily completed in his role as a supervising claim handler rather than as an attorney. Additionally, Wolverine asserted that the 8th Circuit's Shelton text, which restricts circumstances requiring the deposition of opposing counsel, was not applicable.

Implications of the Shelton Case

Shelton v. Am. Motors Corp. recognized that "circumstances may arise in which the court should order the taking of opposing counsel's deposition. But those should be limited to where the party seeking to take the deposition has shown:

  • No other means exist to obtain the information
  • The information sought is relevant and nonprivileged, and
  • The information is crucial to the preparation of the case." Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986)

The court granted Wolverine's motion to compel Ungaro's deposition testimony as it pertained to his role as a claim handler. It reiterated that communications by attorneys acting as insurance claims investigators are not necessarily protected by the attorney-client privilege. Fireman's Fund Insurance Co. v. Superior Court, 140 Cal.Rptr. 677, 679, 72 Cal.App.3d 786 (1977); The court found that Ungaro's involvement in requesting information and attending meetings related to Travelers claims investigation demonstrated his role as a supervising claims handler rather than a lawyer providing legal advice.

The court also determined that the Shelton test did not apply because Ungaro was not opposing counsel, where his work was done in the ordinary course of Traveler's business of claim handling. The Court contrasted Ungaro's work with that of in-house counsel that handled patent prosecution strategy, an entirely legal process. See, Jaguar Land Rover Limited v. Bombardier Recreational Products, Inc., 2018 WL 2276640. Even had it applied, the court concluded that Wolverine satisfied all three prongs of the text as Ungaro possessed unique knowledge, possessed information was relevant, privileged, and crucial to the case. Therefore, the attorney-client privilege did not apply.

The Wolverine ruling highlights a core principle in insurance claims handling. Insurers cannot employ attorney-client privilege to prevent the disclosure of relevant activities and materials solely because a claim handler is also an attorney. The applicability of privilege is determined by the function of the individual, not the title. When insurers use attorneys for routine claim handling, they should anticipate and willingly provide discovery involving work and analysis produced by those individuals.


The Wolverine decision holds significant implications for the insurance industry and is a stark reminder of the need for transparency and accountability in claims handling. Insurers must understand that claim handlers, even if they are lawyers, cannot invoke attorney-client privilege when performing standard claim handling work. This ruling serves as a reminder that the nature of the work is paramount, emphasizing the importance of fairness and efficiency in claims processes while maintaining the integrity of the attorney-client privilege.

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