Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-7_14-cv-02253/USCOURTS-alnd-7_14-cv-02253-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

WESTERN DIVISION

ARTURO J. OTERO,

Plaintiff,

v.

UNUM LIFE INSURANCE COMPANY

OF AMERICA,

Defendant

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CV-7:14-BE-2253-W

UNDER SEAL

MEMORANDUM OPINION

“Financial protection for what matters most” appears on the website of the Defendant,

Unum Life Insurance Company of America. Its vision statement includes providing products

that help “employees protect their families and livelihoods,” and its statement of values places

integrity above all others.1 

In this ERISA lawsuit, the Plaintiff, Dr. Arturo Otero, asserts, in essence, that Unum

failed to live up to its own motto and statements of values and vision when it failed to act with

integrity by denying him the financial protection for which he paid. He claims disability benefits

under a group long-term disability policy issued to his employer. He argues that Unum waived

any right to declare him ineligible for coverage based on his part-time work, because it knew he

was working part-time when it accepted his premiums, and failed to follow the mandated claims

procedures in processing his current claim. 

1 www.unumgroup.com 

1

FILED

 2017 Jan-13 AM 10:44

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 1 of 68
This case raises two issues that the Eleventh Circuit has not yet resolved: whether waiver

applies in an ERISA context in circumstances present here, and whether the correct standard of

review is de novo in a “deemed exhausted” ERISA case when the insurance company has not

exercised the discretion granted it by the plan.

This matter is before the court on cross motions for judgment on the administrative

record: “Plaintiff’s Motion for Summary Judgment” (doc. 21), converted to a Motion for

Judgment on the Administrative Record (doc. 30), with an accompanying brief (doc. 22); and

“Unum Life’s Motion for Judgment on the Administrative Record, or Alternatively, for Summary

Judgment” (doc. 23), with an accompanying brief (doc. 24). The parties responded to the cross

motions (Unum’s response - doc. 34; Plaintiff’s response - doc. 36), so this matter has received

thorough briefing. 

For the reasons stated in this Memorandum Opinion,2the court DEEMS these motions to

be requests for judgment as a matter of law, not judgment limited to the administrative record; 

the court FINDS that Dr. Otero is eligible for coverage under the group policy and FINDS that he

cannot perform the material and substantial duties of his regular occupation as a neurologist. 

However, the court WILL REMAND this case to Unum, directing it to request from Dr. Otero

the relevant W-2 forms and to make appropriate calculations based on the W-2 forms to

determine whether Dr. Otero’s monthly earnings after February 2, 2013 decreased by 20 % as

required to qualify as a disability under the policy.

2

 As discussed on pages 37-38 in this Memorandum Opinion, the parties submitted

materials outside the administrative record, and this court considered them on de novo review.

2

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 2 of 68
I. PROCEDURAL BACKGROUND

Dr. Arturo J. Otero is a licensed neurologist who is not board certified. This case

represents the second case he has filed against Unum, claiming disability benefits under the

group long-term disability policy that Unum issued to his employer, Neurology Consultants of

Tuscaloosa, P.C. To distinguish between the two related lawsuits, the court will refer to the first

case filed, Otero v. Unum Life Ins. Co., Case No. 7:10-CV-02554-SLB (N.D. Ala.), as “Otero I”;

and will refer to the instant case as “Otero II.” An understanding of Otero I sheds light on the

circumstances of this suit.

ERISA governs both the original claim made the basis of Otero I and the one made the

basis of the current suit. (29 U.S.C.A. §§ 1001 to 1461). Before 2005, Dr. Otero had worked 60-

80 hours per week as a neurologist, seeing patients in the office and hospital and taking night

call. (Otero I, Doc. 35-14, at 74). Prior to filing the first lawsuit, Dr. Otero filed a claim with

Unum for disability benefits beginning January 3, 2005, when he stopped working on a full-time

basis because of atrial fibrillation. Dr. Otero continued to work as a neurologist on a part-time

basis with no night call. (Otero II, Doc. 35-3, at 3). 

Unum provided Dr. Otero with full disability benefits of $10,0000 per month for 24

months beginning April 3, 2005 (id. at 3 & 5) based on policy provisions that provided for

benefits with a determination that the employee was “limited from performing the material and

substantial duties of [his] regular occupation due to sickness or injury and [that he has] a 20% or

more loss in [ ] indexed monthly earnings due to the same sickness or injury.” (Otero II, Doc.

3

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 3 of 68
25-1, Ex. 23

; Doc. 25-2, at 19). The company’s determination to provide benefits at this juncture

was based on Dr. Otero’s reported restriction of being unable to perform night call, a substantial

duty of his job. (Otero I, Unum Opp. Br., Doc. 31, at 3 ¶ 12 (resp. to “undisputed” fact 12.)).

 After that two-year period, the eligibility for benefits under the policy changed from the

determination of whether the employee could perform his “regular occupation” to whether he

was “unable to perform the duties of any gainful occupation for which [he] is reasonably fitted by

education, training or experience.” (Otero II, Doc. 25-1, Ex. 2; Doc. 25-2, at 19; Doc. 35-3, at 3). 

The policy defines gainful occupation as one that would provide the claimant with an income “at

least equal to your gross disability payment within 12 months of your return to work.” (Otero II,

Doc. 25-2, at 37).

On September 28, 2007, more than 29 months after the April 2005 commencement of

disability payments to Dr. Otero, Unum terminated his benefits. Although the policy’s disability

benefit was now based on the “any gainful occupation” standard, Unum terminated benefits

because it found that Dr. Otero could perform the full-time duties required of his regular

occupation as a neurologist, including working the necessary hours and taking rotational night

call. (Otero I, Doc. 35-13, at 70-74).

Dr. Otero appealed that decision, and, after review, Unum reversed the decision and

reinstated Dr. Otero’s disability benefits on January 17, 2008. That reinstatement letter quoted

various policy provisions, and quoted the definition of “regular occupation” but not “gainful

occupation.” Ultimately, the letter notifying of the reversal stated simply that the additional

3

 Although the court would prefer to cite to the specific page of the record, because Unum 

refiled a document filed in the previous case, the page number that would normally appear is

stamped over by the multiple filings.

4

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 4 of 68
information from Dr. Otero’s treatment providers “was reviewed by our physician and

restrictions and limitations were found to be supported.” (Otero I, Doc. 35-14 at 14-17, 19). 

According to Unum’s response to Dr. Otero’s statement of facts in Otero I, which it

adopts in Otero II, Unum based its reversal decision on the need for more information

concerning Dr. Otero’s restrictions and limitations in his occupation, including an independent

medical exam. (Otero I, Doc. 31, at 3-4 (responding); Otero II, Doc. 34, at 4 (adopting)). 

However the letter itself did not qualify the reversal or say that the reversal was based on the

need for more medical information. It did say that, in the future, the benefits center “will also

require periodic updates of your medical status to determine if you remain eligible for continued

benefits under the applicable policy provisions.” (Otero I, Doc. 35-14, at 17).

A document entitled “Appeal Reversal” in Unum’s file on Dr. Otero provided a rationale

for the appeal decision that the letter itself failed to provide: the Appeal Reversal document

focused on Dr. Otero’s pre-disability lengthy work hours and his report of sleep deprivation

triggering heart palpitations. Dr. Parisi, the medical reviewer, noted that Dr. Kay, Dr. Otero’s

cardiologist, had consistently restricted Dr. Otero from working night call, a restriction with

which Dr. Parisi could not disagree. That same Appeal Reversal document noted that vocational

reviewer Catherine Rogers had previously found night call to be a substantial and material duty

in the occupation of neurologist. Although vocational reviewer Shannon O’Kelley found that

night call could or could not be a substantial and material duty because some neurologists are not

required to do night call, O’Kelley did agree that lack of night call would result in a decline in

income. (Otero I, Doc 35-14, at 24). 

Unum paid disability benefits to Dr. Otero of $10,000 per month for two additional years

5

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 5 of 68
from January 2008 to March 4, 2010. On June 12, 2008, an independent medical doctor

evaluated Dr. Otero and determined that he would be able to practice as a neurologist without

night call or weekend call. (Otero I, Doc. 35-22, at 149). In a January 2010 telephone

conversation with Unum staff, Dr. Otero advised Unum that he was working as a neurologist and

general medical practitioner for about 20 hours per week, performing office-based clinical work

for four hours per day and seeing a limited number of patients, but not performing night call or

hospital call. (Otero II, Doc. 35-3, at 3). 

Once again, on March 4, 2010, Unum Lead Disability Benefits Specialist Andrew

Hamilton sent Dr. Otero a letter terminating his benefits. In that letter, Unum noted his part-time

work as a neurologist and stated that, although the medical data in his file did “not support [his]

reported inability to work 40 hours per week,” the data “supports the restrictions and limitations

of no night call, weekend call, and hospital work or hospital procedures.” Unum concluded that

Dr. Otero was not disabled under the “any gainful occupation” standard because he had

transferable skills that would allow him to earn $10,000 per month as an Insurance Physician

(working 40 to 67 hours per month or approximately 10 to 16 hours per week to receive an

income equal to $10,000 per month), Medical File Review Physician (same), or Peer Review

Physician (working 22 1⁄2 to 31 hours per month or approximately 5.5 to 7.6 hours per week to

receive an income equal to $10,000 per month). (Otero II, Doc. 35-3, at 2-5). Unum reached

that conclusion, in part, because of the vocational review completed on March 2, 2010. In that

report, the reviewer opined that Dr. Otero was qualified to perform the work in those three

identified jobs, and she did not discuss board certification as a qualification. (Otero I, Doc. 35-

22, at 143-45). Thus, Unum based this determination that Dr. Otero was not entitled to long6

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 6 of 68
term disability benefits upon a determination that he was able to perform a “gainful occupation,”

not upon a determination that he was able to perform his “regular occupation” as a neurologist.

(Otero I, Doc. 35-22, at 147-150; Doc. 35-23, at 1-3, & 5). 

Dr. Otero appealed that ruling administratively, and, in a letter dated April 30, 2010,

Unum Lead Appeals Specialist Robert Spellman acknowledged that Unum’s own consulting

physician agreed with part-time work restrictions for Dr. Otero “based on the fact that full time

work would increase [his] bouts of atrial fibrillation.” However, Unum determined that

termination of benefits was correct because Dr. Otero would perform other gainful employment

on a part-time basis. (Otero I, Doc. 35-23, at 105). That letter gave Dr. Otero until May 30,

2010 to provide additional information, and stated that, if Unum did not receive additional

information, the decision would be final. The letter also advised Dr. Otero of his right to bring a

civil suit under § 502(a) of ERISA if he disagreed with the decision. (Otero II, Doc. 35-4). 

The administrative record in Otero I reflected that Dr. Otero submitted a letter dated May

24, 2010 along with a letter from his cardiologist, Dr. Kay, dated May 20, 2010. Dr. Kay’s letter

stated in part:

[Dr. Otero] has repeatedly shown that when he increases his work load that

atrial fibrillation becomes a major problem for him. Thus, it is my opinion that

Dr. Otero’s current work load status is optimal for his cardiac condition. He

presently attends as a practicing neurologist in an outpatient clinic setting over

seeing low complex cases in a limited fashion. Asking Dr. Otero to carry out

the job description as suggested in your [termination of benefits] letter would be

far more stressful to him and can be expected to cause him to have more atrial

fibrillation. In order for him to carry out the duties as you described would

require additional training for him as he does not have expertise in these

matters. I believe that this markedly increases his risk of atrial fibrillation and

would hinder his health and well being . . . . My recommendation since 2007

[has] not changed and I would strongly encourage that his present level of work

duties not be changed.

7

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 7 of 68
(Otero I, Doc. 35-23, at 119). Mr. Spellman responded to that information with a letter dated

May 26, 2010, acknowledging receipt of that information and stating “we have completed our

appellate review and our decision was communicated to you by letter dated April 30, 2010. If

you wish to request a re-appeal of your claim, we would need a request in writing.” (Otero I,

Doc. 35-23, at 121). 

In Otero I, Dr. Otero appealed Unum’s 2010 decision terminating benefits by filing a civil

suit in this court. By final judgment of March 30, 2012, the court granted judgment on the

administrative record in Unum’s favor, and denied Dr. Otero’s motion. It found that the

information in the administrative record did not support a finding that Unum’s decision was

wrong when Unum concluded that actual jobs existed that would pay Dr. Otero $10,000 per

month, and thus, that he was not disabled under the “any gainful occupation” standard. At the

district court level, Dr. Otero argued that he was not qualified for the jobs that the VE identified

because he is not board certified in neurology, and, to establish that fact, relied on evidence that

was not in the administrative record. The court granted the motion to strike the evidence outside

the administrative record. Considering only the material available to Unum when it made its

determination, the court concluded: “[a]lthough plaintiff has argued that the VE’s report is

inaccurate, nothing in the administrative record indicated that defendant had any reason to know

or suspect that VE’s report was inaccurate and that plaintiff could not perform the jobs as

reported by the VE.” (Otero I, Doc. 36, at 5). Dr. Otero did not appeal that judgment against

him. (Otero II, Unum’s Br. Doc. 24, at 7-undisputed fact #11; Doc. 36, at 4-no dispute). 

III. FACTS

In Otero II, Dr. Otero argues that Unum accepted his premiums under the group long8

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 8 of 68
term disability policy from April of 2010 forward, knowing that he was working part-time, and

thus, it has waived any right to deny that he was not eligible for coverage because of his failure to

work the minimum hours. Dr. Otero also argues that, as of February of 2013, he once again

became disabled within the meaning of the group policy because of the deterioration of the same

condition of atrial fibrillation. Comparing the 2013 claim with his prior claim, as discussed in

detail below, the 2013 claim focuses on the same condition (atrial fibrillation) for a different time

period (beginning February of 2013 versus the prior claims’s disability commencement date of

2005 with a different disability standard applying after two years of payments) using a different

disability standard (“regular occupation” standard versus the prior claim’s “any gainful

occupation” standard). 

On the other hand, Unum asserts that Dr. Otero is not eligible for coverage because of his

part-time work and that Unum did not waive the 36-hour eligibility restriction because Unum did

not know that Dr. Otero was not working the minimum number of hours until he submitted a

claim. Further, Unum argues that, even if Dr. Otero were eligible for coverage, the decision to

deny his claim for disability was not wrong because he is able to perform his regular occupation

as a neurologist and because he did not receive a 20% or more loss in his indexed monthly

earnings because of his atrial fibrillation. In light of those arguments, the following facts are

relevant and material.

A. Factual Narrative

After the termination of his group disability benefits in March of 2012, Dr. Otero

continued to work part-time as a neurologist. He asserts that, by February of 2013, his condition

had so deteriorated that he was once again disabled within the meaning of his policy.

9

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 9 of 68
Dr. Otero’s Ability to Perform His “Regular Occupation”

The evidence reflects that Dr. Otero’s regular occupation is neurologist, and his Unum

policy provides that Unum measures whether he can perform that regular occupation by how the

occupation is “normally performed in the national economy, instead of how the work tasks are

performed for a specific employer or at a specific location.” (Otero II, Doc. 25-2, at 25). While

the briefing does not clearly list all the duties of a neurologist as that job is performed in the

national economy, the evidence does reflect that such job would require working full-time, as

opposed to part-time hours, and some of the evidence supports the inclusion of night call as part

of those duties. Catherine Rogers, Unum’s Senior Vocational Consultant, found night call to be

a substantial and material duty in the occupation of neurologist. Another Unum Senior

Vocational Rehabilitation Consultant, Shannon O’Kelley, found that night call could or could not

be a substantial and material duty of the neurologist occupation, although a neurologist who did

not take night call would expect decreased income. (Otero I, Doc. 35-14, at 8, 12, 24). Marilyn

Howard of Unum stated in her note to Dr. Otero’s claims file dated January 10, 2008 that “all

statements indicate the insured would need to work over 40 hours per week to perform full

duties.” (Otero I, Doc. 35-14, at 11-12). 

Dr. Otero suffers from chronic atrial fibrillation that generally occurs with factors such as

stress, anxiety, and lack of sleep. (Otero II, Doc. 35-15, at 45). One of his cardiologists, Dr.

William Hill, characterized his symptoms as “very severe and incapacitating to the point that he

is unable to sustain any type of full time job. . . . [H]is clinical descriptions with his symptoms of

weakness, shortness of breath, and inability to function during and after his episodes are quite

consistent with the medical literature [and] there really is no question in my mind that based on

10

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 10 of 68
the above, he is unable to carry on any meaningful sustained job.”4

 (Otero II, Doc. 35-15, at 45

& 46). In addition to Dr. Hill, Dr. Otero has been under the care of cardiovascular

electrophysiologists, first Dr. Neal Kay, and, after he retired, Dr. Jose Osorio, both practicing in

Birmingham. 

The seriousness of Dr. Otero’s condition is reflected in the need to have medical

procedures to restore his heart rhythm. Even when working part-time in the office setting to

decrease the factors associated with atrial fibrillation, Dr. Otero has required several

cardioversion5

 and two ablation6 procedures to place his heart back into a sinus rhythm. 

The current claim for disability allegedly began in February of 2013 and represented a

further deterioration of his heart condition. On February 2, 2013, Dr. Otero underwent a

cardioversion procedure at DCH Regional Medical Center in Tuscaloosa, which successfully

reestablished a sinus rhythm, and another on October 20, 2013. (Otero II, Doc. 35-15, at 32, 41,

55, 59 & 62). On January 16, 2014, Dr. Osorio stated that Dr. Otero had been hospitalized on

December 4 and 5, 2013, for implementation of a new medical therapy involving a beta-blocker

called Sotalol HCL to treat his atrial fibrillation. He stated that Dr. Otero “will need to continue

leading a non-stressfull [sic] life and work part-time in a non-stressful environment, preferably

4

 While Dr. Hill stated this opinion in 2010, no evidence reflected that Dr. Otero’s

condition has improved since then, and, in fact, evidence reflected that his condition has since

deteriorated.

5

 Cardioversion is a procedure using a therapeutic dose of electric shock to convert an

abnormal rhythm to a sinus rhythm. 

6

 Cardiac ablation is a procedure that places a flexible tube into a blood vessel that is

guided to the heart and uses heat, cold or radio energy to scar some tissue inside the heart where

irregular beats are triggered.

11

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less stressful than what he works in now in order to help decrease the symptoms of his afib.” 

(Otero II, Doc. 35-15, at 39.)

Prior to the 2013 claim on appeal here, Unum had never made a final determination that

Dr. Otero was able to perform his “regular occupation.” Unum paid him long-term disability

benefits for years when the definition of “disability” under the policy was measured under the

“regular occupation” standard, and the 2010 determination that he was not entitled to long-term

disability benefits was based upon a determination that he was able to perform a “gainful

occupation,” not upon a determination that he was able to perform his “regular occupation” as a

neurologist. (Otero I, Doc. 35-22, at 147-150; Doc. 35-23, at 1-3, & 5). 

Unum’s Knowledge of Dr. Otero’s Part-Time Work

Unum’s complex history with Dr. Otero—involving numerous disability benefits

determinations, administrative appeals, and two years of litigation in federal district court, all

before the denial of the current claim—meant that the company had much information available

to it about Dr. Otero’s part-time work schedule. In Otero I, the court entered judgment in

Unum’s favor in March of 2012. The information in Otero I’s administrative record reflected

that, after filing claims for disability benefits, Dr. Otero worked part-time as a neurologist from

2005 through the approximate date of the 2010 decision, working four hours a day and sixteen to

twenty hours a week, seeing patients in the office. (Otero I: Doc. 35-14, at 7; Doc. 35-22, at 66;

Doc. 35-23, at 6-7 ). The decision makers on his March 2010 disability benefits termination and

the April 2010 administrative appeal, Andrew Hamilton and Robert Spellman respectively,

reviewed materials repeatedly referring to Dr. Otero’s part-time work hours, and those decision

makers repeatedly acknowledged his part-time work hours in their claim file documents in March

12

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and April of 2010. (Otero I: Doc. 35-23, at 6, 23, 25, 29, 31, 48, 51, 54). 

On March 26, 2010, Dr. Otero sent Andrew Hamilton a letter, advising him that he was

pursuing an administrative appeal of the termination of his long term disability benefits. In that

letter, Dr. Otero specifically asked for “clarification as to what is the current status of my group

policy for any premiums due or does the waiver of the premiums still apply to this policy while

the appeal is in process.” (Otero I: Doc. 35-23, at 22). The same March 26, 2010 letter also

contained confirmation that Dr. Otero was working part-time; it attached two letters from Dr.

Otero’s cardiologists, both dated in early 2010 and setting out his work schedule of four hours a

day and twenty hours a week. (Otero I: Doc. 35-23, at 23-26). Unum assigned the appeal to

specialist Robert Spellman. 

The administrative record reflects that Dr. Otero resumed paying premiums after

termination of his benefits with the knowledge of and based on the direction of Unum decision

maker Robert Spellman. Dr. Otero wrote to Unum, asking whether he needed to pay premiums

during the appeals process, and he and his staff called Unum repeatedly from March 24 through

April 1, 2010 to obtain an answer to that question; Dr. Otero and his staff left messages with

Robert Spellman, and the decision maker on his March 2010 termination, Andrew Hamilton,

among others. (Otero I: Doc. 35-23, at 18, 28, 36, 38, 39). Robert Spellman created the

following notation in the claims file dated April 2, 2010: “Spoke to [Dr. Otero.] I noted that he

should continue to pay premiums while his appeal is being reviewed as to avoid a lapse in

coverage. [Dr. Otero] said he would continue.” (Otero I: Doc. 35-23, at 41). 

Days before and after he gave that advice to Dr. Otero about resuming payment of

premiums, Mr. Spellman received documents referring to Dr. Otero’s part-time work status and

13

Case 7:14-cv-02253-KOB Document 37 Filed 01/13/17 Page 13 of 68
created documents in which he himself referred to Dr. Otero’s part-time work status:

• March 29, 2010: Mr. Spellman sent a letter to Dr. Otero acknowledging receipt of his

written notice of appeal; that appeal notice attached letters from Dr. Otero’s cardiologists,

both referring to his part-time work status. ( Otero I: Doc. 35-23, at 20, 22, 23, & 25).

• April 7, 2010: Mr. Spellman spoke with Dr. Otero over the phone, and Spellman’s

notation of the phone call states: “He continues to work on a PT [part-time] basis in the

same hours and has not applied for [social security disability income] as he has been

working pt [part-time]. (Otero I: Doc. 35-23, at 48). 

• April 8, 2010: Mr. Spellman acknowledged Dr. Otero’s part-time work status in a file

document, noting that in 2005 he had returned to work “part time . . . working appx 25-30

hours per week,” and that Dr. Otero was arguing “that he remains unable to work full

time in other gainful occupations.” (Otero I: Doc. 35-23, at 51, 54).

• April 12, 2010: a Clinical Consultant Resource file entry by Karen York duplicated the

information quoted above for the April 8 entry and quoted the information from Dr.

Otero’s cardiologists that, as of February 2010, Dr. Otero “[h]as to divide his schedule

into 2 hours in the morning and 2 hours in the afternoon . . . . He clearly reports a major

problem with working more than 20 hours per week.” (Otero I: Doc. 35-23, at 54-57).

• April 15, 2010: Doctor Resource file entry, created by Karen York for referral to Dr.

Alfred Parisi, again recounted Dr. Otero’s cardiologists’ explanation of Dr. Otero’s parttime work and part-time capabilities. (Otero I: Doc. 35-23, at 58-60).

• April 21, 2010: Appeals Opinion by Dr. Alfred Parisi contained numerous references to

Dr. Otero’s part-time work schedule, and Dr. Parisi’s conclusions focused on the issue of

whether he was capable of performing full time sedentary work: “R and L Supported for

not to undertake full time sedentary work . . . . In summary I cannot conclude with a

reasonable degree of medical certainty that claimant would more likely than not function

on a sustainable basis in a full time sedentary occupation which does not involve direct

patient care responsibilities. . . .The basis for restricting claimant from full time sedentary

work is the presumption that working full time would increase his stress to a level which

would engender more frequent bouts of atrial fibrillation such that he could not sustain

full time work on a regular basis. That is the opinion of his AP cardiologist Dr. Hill and

pointed out as a consideration to be weighed by his consulting electrophysiologist Dr.

Kay. I have no basis for refuting these opinions. . . . Claimant has the physical capacity

to undertake full time sedentary work. Whether he would be limited in doing so by

repeated bouts of atrial fibrillation is speculative.” (Otero I: Doc. 35-23, at 70-75).

• April 30, 2010: Appeal Decision Letter to Dr. Otero from Robert Spellman referred to his

part-time work status: “You have been working in the office setting four hours daily five

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days per week seeing patients. You have been allocating your work time each day from

9:00-11:00 am and again from 1:00-3:00 p.m.” The jobs that Unum found that Dr. Otero

could perform were “occupations [that] exist on a part-time basis.” Mr. Spellman stated

in his letter that the specific jobs identified could be performed on a part-time basis while

still generating the requisite income to meet the definition of gainful employment: the job

of Insurance Physician and Medical File Review Physician would require his working

“approximately 10-16 hours per week to be considered gainful” and the Peer Review

Physician occupation would require his working “approximately 5.5-7.6 hours per week.” 

(Otero I: Doc. 35-23, at 105).

 In Otero I court filings in 2011 and 2012, Dr. Otero consistently took the position, with

support from his cardiologists, that he was limited to working part-time. The briefs and

evidentiary submissions focused on Dr. Otero’s alleged part-time work limitation and gainful

employment options given that limitation. No reasonable inferences existed from the evidence

Dr. Otero produced or from Dr. Otero’s briefs in that litigation that Dr. Otero planned to work

more than the twenty hours per week; indeed, he claimed repeatedly that he could not. Unum did

not specifically take the position that Dr. Otero could work full time, and the “other gainful

employment” that it identified for him were all occupations that exist on a part-time basis. (Otero

I: Otero’s Br. Statement of Facts filed on 8/26/11 numbers 7, 12, 21, 32:; Doc. 24, at 4, 6, 8, 12;

Unum’s Resp. Doc. 31, at 3, 4, 6 with no dispute as to Dr. Otero’s work schedule of 20 hours per

week; Unum’s Br. Doc. 27, at 3, at 5 ¶ 8, at 6 ¶ ¶ 11-13, at 7-8 ¶ 20, at 9 ¶ ¶ 25-27, at 10 ¶ 31, at

11 ¶ ¶ 33-36, at 17, 19; Memorandum Decision Doc. 36, at 2, (entered 3/30/12 - “Dr. Otero

cannot take night call or work 40 hours a week. He currently works four days a week for four

hours a day.”)). 

The record reflects that Dr. Otero’s work schedule remained at approximately 20 hours

per week from January 2010 forward, continuing throughout the pendency of Otero I and the

claims period in Otero II. He sees approximately six patients from 9:00 until 11:00 in the

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morning and then six more from 1:00 until 3:00 in the afternoon with a two-hour break during

which he sits and reads or naps because he claimed to be unable to physically see patients for

four consecutive hours. Sometimes, he must cancel patients because of his symptoms. (Otero II,

Doc. 35-15, at 45-47).

Dr. Otero’s Premiums Paid During Period of Part-Time Work

 The administrative record in Otero II reflects that Neurology Consultants paid a

premium statement that Unum prepared monthly from Spring 2010 onward. Neurology

Consultants provided Unum with information, called a census, about its employees covered

under the policy and the earnings that were covered. The premium statement that Unum

prepared included “Employee Detail” sheets with a box individualized for each employee,

including Dr. Otero, listing in that box the employee’s name, ID number, coverage amount

(representing his earnings for that month) and the monthly premium due for that employee based

on his earnings. 

During the period that Unum paid disability benefits to Dr. Otero prior to the March 2010

termination, the Employee Detail sheets listed his name, but the premium listed was “0.00.” 

(Otero II, Doc. 35-13, at 66, 71, 74). After the termination in early March 2010 of Dr. Otero’s

disability benefits, Neurology Consultants did not simply add Dr. Otero’s premium to the

statement without consulting Unum. To the contrary, as noted, in the weeks after the March 2010

decision, Dr. Otero and Neurology Consultants repeatedly contacted Unum, asking Unum

whether Dr. Otero needed to resume payment of premiums. 

On April 2, 2010, Mr. Spellman of Unum specifically told Dr. Otero to resume paying

premiums. (Otero I: Doc. 35-23, at 41). On the April 2010 premium statement, the first

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premium statement that Unum prepared for Neurology Consultants after the termination of his

disability benefits in March, Neurology Consultants wrote a note: “Please add Premium for

Arturo Otero $105.00.” (Otero II, Doc. 35-13, at 75). In the May 2010 premium statement

Unum prepared for Neurology Consultants, Dr. Otero’s box in the Employee Detail sheet

changed the premium from $0.00 to $105.00. (Doc. 35-13, at 82). Therefore, each month Unum

produced a document that listed Dr. Otero’s name and listed the premium due for him based on

his earnings, and Neurology Consultants continued to submit monthly premiums on Dr. Otero’s

behalf based on his monthly earnings. (Otero II, Doc. 35-2, at 2-3, ¶ 2; Doc. 35-12 (premium

statements) & 35-13 (premium statements)). 

After Dr. Otero asked in March and April of 2010 whether he should resume premium

payments and Mr. Spellman told him to do so, Unum did not subsequently revisit the issue of

whether Dr. Otero was eligible for coverage under Neurology Consultants’ group policy until

after he filed a new claim in September of 2013. Unum explained that, given the millions of

employees insured under its group disability policies, Unum’s practice is not to perform an

eligibility determination concerning whether an individual employee has coverage until that

employee submits a claim. 

Dr. Otero’s Earnings at Neurology Consultants

Part of the determination of disability rests upon Dr. Otero’s earnings as a neurologist and

his condition’s effect on those earnings. The administrative record of Otero II contains the

following specific information regarding Dr. Otero’s earnings. The premium statements reflected

Dr. Otero’s earnings of $6,250 per month from January 2010 through February 2012; earnings of

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$4,167 per month from May of 20127

 through January of 2013; earnings of $4,903 per month

from February of 2013 through February of 2014; earnings of $4,220.00 per month for March

and April of 2014. (Otero II: Spellman Decl. Doc. 35-2, at 3 (stating that premiums are based on

Dr. Otero’s monthly earnings); Docs. 35-12 & 35-13 (premium statements with Dr. Otero’s

earnings and premiums based on those earnings)).

Although the parties have pointed the court to no documents in the Otero I and II

administrative record showing Dr. Otero’s W-2 or K-1 forms for 2010, 2011, and 2012, Unum

presented the W-2 statements that Dr. Otero submitted to Provident Life in connection with his

individual claim. (Otero II, Doc. 25-4, at 2-8). As discussed subsequently, Provident Life is a

sister company to Unum, and Dr. Otero had also purchased an individual disability policy with

Provident Life and submitted a disability claim under that policy. The W-2 statements that Dr.

Otero submitted to Provident Life reflected that his wages for 2010 were $45,500.04, and that his

wages for 2011 were $49,291.71. Id. For the year 2012, neither Unum nor Dr. Otero presented a

W-2 form stating his income, but Unum presented Dr. Otero’s employee pay stub for the pay

period December 9, 2012 through December 22, 2012, which shows a salary year to date of

$58,012.89 with a notation of “NCV Compensation”8 of $819.00 for a total of $58,831,89, and

net pay of $36,848.84. (Otero II, Doc. 25-4, at 2-3 & 9).

Neither Unum nor Dr. Otero presented W-2 forms stating Dr. Otero’s income for the

7

 The March and April of 2012 premium statements of Neurology Consultants in the

Otero II administrative record do not reflect the salary of Dr. Otero. Doc. 35-12, at 94-98.

8

 The record does not explain the term “NCV Compensation.” 

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years 2013 and afterwards.9

 Because Unum never processed Dr. Otero’s disability claim for his

alleged disability beginning in February of 2013, which would require comparing his income

before and after the disability commencement date, it never requested information about his

earnings for that time period. 

Calculating Dr. Otero’s monthly earnings for the purposes of the policy does not include

income received from sources other than the employer. (Otero II, Unum Br. Doc. 24, at 13-14

(undisp. fact 36)).

Dr. Otero’s 2013 Claim for Disability Benefits

On September 6, 2013, over a year after the entry of judgment in Unum’s favor in Otero

I, Dr. Otero submitted through his attorney a request to Unum’s Benefits Center Coordinator that

the company find him disabled based on his current physical condition, which he characterized as

having deteriorated. Dr. Otero also attached a list of over 50 companies, most of which were

insurance companies, that he claimed to have contacted unsuccessfully concerning employment;

Dr. Otero took the position that the jobs were unavailable to him “specifically because he is not

board certified.” Dr. Otero’s attorney made the following request: “If UNUM continues to

maintain these jobs exist, would you please furnish the names of employers you can identify that

pay the amount of money that would disqualify Dr. Otero for disability benefits.” (Otero II, Doc.

35-6, at 1-19). Dr. Otero’s attorney also attached the medical records from Dr. Otero’s February

2, 2013 emergency room visit documenting his heart problems. (Otero II, Doc. 35-6, at 2-3 &

20-31). 

9 Otero I’s administrative record did contain a 2013 K-1 that shows a notation of “338"

as nonseparately stated income; “442" in small business health insurance premiums; “1" in

interest income and “60" as qualified dividend income. (Otero I, Doc. 35-15, at 78-79).

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Although Dr. Otero sent the September 2013 claim to Unum’s Benefits Center

Coordinator in Columbia, South Carolina and referred in the body of the letter to the prior district

court lawsuit involving the claim against Unum for group disability benefits, the paragraph of the

letter marked “Re:” mistakenly referred to Provident Life and Accident Insurance Company as

the company administering the claim. Provident Life is a separate company administering Dr.

Otero’s individual disability policy, and the office administering that policy was a different office

and in a different state than those handling Unum’s claims. However, both Provident Life and

Unum are sister companies under the umbrella of Unum Group. 

In a letter dated September 17, 2013, Carol McCue, Director of Unum’s Disability

Benefits Center, responded to the September 6, 2013 claim, stating: “It is our understanding you

are requesting a review of the denial made by Unum concerning Dr. Otero’s long term disability

claim 1794623. At this time a copy of your letter and the attachments have been forwarded to

the Appeals unit . . . .” (Otero II, Doc. 35-7). Thus, although the September 2013 claim sent to

Unum’s Benefit Center improperly referenced Dr. Otero’s Provident Life policy number, because

the companies were related under the Unum Group umbrella, the mistake did not prevent the

correct claims personnel from receiving it eventually; the September 2013 claim was forwarded

to the correct recipient, Robert Spellman of Unum’s Appeals department.

On September 17, 2013, Mr. Spellman responded: “Please understand this claim has been

closed since 2010 and we cannot consider any additional information. Also, your client’s

coverage ceased when he stopped working and therefore is unable to make a new claim.” (Otero

II, Doc. 35-9; 35-10, at 4). Mr. Spellman did not refer to the appeal of the 2010 claims

determination, which did not conclude until 2012; he provided no support for the incorrect

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statement that Dr. Otero had stopped working; and he did not offer in that letter to return the

premium payments made on Dr. Otero’s behalf during the three years that he had been working

part-time. 

In a letter dated November 22, 2013, Dr. Otero’s attorney responded, requesting a further

explanation:

Is it the position of Unum that once a claim is denied that its insured can never

file another claim for disability, even if his condition gets worse?

As I described in my previous correspondence, Dr. Otero’s health has continued

to decline affecting his ability to work. In fact, he is now awaiting admission to

the hospital . . . .

Please explain how his coverage ceased when he stopped work. I am anxious to

hear your explanation as my investigation reveals that he has continued to go

into the office on a periodic basis and has continued to pay premiums. If your

investigation is different, please furnish me with the source so we can get to the

bottom of who’s telling the truth and who is not.

I look forward to your prompt response and a detailed explanation of each and

every fact relied upon by Unum to deny Dr. Otero’s claim.

 This letter has a stamp on it: “RECEIVED Dec 02 2013 BCCPORTAPPEALS,” which appears

to reflect receipt at the Portland Appeals office in December of 2013. (Otero II, Doc. 35-10, at

2-3).

Neither Mr. Spellman nor anyone else on behalf of Unum provided the requested

explanation; in fact, the company did not respond at all to the November 22, 2013 letter. 

Spellman says the failure to respond was inadvertent, but provides no further explanation. 

(Otero II, Doc. 35-2, at 6, ¶ 17). 

On January 16, 2014, Dr. Otero’s attorney made another attempt to obtain the information

about the investigation of Dr. Otero’s new claim, sending a follow-up letter, and enclosing a copy

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of his November 22, 2013 letter. This letter has a stamp: “RECEIVED Jan 22 2014

BCCPORTAPPEALS.” (Otero II, Doc. 35-11, at 2). Once again, Unum did not respond. 

Despite the fact that the letter was correctly addressed to Mr. Spellman at Unum’s office in

Portland, Maine and had the correct group policy number plus a stamp that appears to state it was

received on January 22 at “BCCPORTAPPEALS,” Mr. Spellman stated in his declaration that

someone, but not Spellman, imaged and misfiled the letter into Dr. Otero’s individual disability

claim file administered by Provident Life in Massachusetts. Mr. Spellman provided no

documentary support for that statement, such as records showing the sending of the letter to

Massachusetts or receipt of the letter in the Massachusetts center, a “RECEIVED” stamp for the

Massachusetts center, or testimony from staff at the Provident Life’s benefits center

acknowledging that letter had somehow arrived there. Further, the only “RECEIVED” stamp on

the letter appears to reflect that the Portland Appeals office received it on January 22, 2014. Mr.

Spellman stated that no one in Provident Life’s Massachusetts office forwarded the letter to him

or otherwise advised him of it, despite the fact that it was properly addressed to him and was

apparently stamped received in his office. Mr. Spellman stated that he was not aware of the letter

until after Dr. Otero filed the instant suit. (Otero II, Doc. 35-2, at 7, ¶ 19). 

On April 3, 2014, Dr. Otero’s attorney sent yet another letter not only to Mr. Spellman

but also to Unum’s Executive Vice President/Chief Financial Officer, Chairman of the Board,

President/CEO, and Executive Vice President/Chief Operating officer. This letter purportedly

enclosed a report from Dr. Otero’s treating physician and proof of premium payments to Unum. 

It also referred to previous, unanswered letters from the attorney to Unum, explaining that the

attorney was sending the current letter to Unum officials in addition to Mr. Spellman “in hopes

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that each will respond to this letter because the claim department will not.” This letter bears the

stamp “RECEIVED APR 07 2014 BCCPORTAPPEALS.” (Otero II, Doc. 35-12, at 2-3). 

Spellman received the April 3 letter, and responded by letter dated April 9, 2014,

enclosing disability claim forms, and stating in relevant part as follows:

This letter is in response to your most recent correspondence, dated April 3, 2014.

We understand you are seeking to file a new disability claim. Please have the

enclosed disability claim forms completed by your client, his employer, and his

treating physician. We also have not received the report from Dr. Otero’s

physician that you reference in your letter. Please forward a copy of that report to

our office with the completed claim forms. 

Once this information is received, we will have The Benefits Center review it to

see if your client meets the eligibility and disability requirements under the policy.

(Otero II, Doc. 35-14, at 2). After Mr. Spellman discovered that the January 16, 2014 letter from

Dr. Otero’s attorney had gone astray, the record did not reflect that Unum took any measures to

determine why the error had occurred or to ensure that it would not reoccur.

In a letter dated July 9, 2014, Dr. Otero’s attorney returned the completed disability claim

forms and other 2013 and 2014 medical information from Dr. Otero’s treating physicians. 

(Otero II, Doc. 35-15, at 2-4). Those records and the claim form reflected that on February 2,

2013 and October 20, 2013, Dr. Otero underwent cardioversions to convert his atrial fib to sinus

rhythm, and that he was hospitalized in December of 2013. The update from cardiologist Dr.

Jose Osorio stated:

I have taken care of [Dr.] Otero for over a year now. He has a [ ] history of

chronice [sic] atrial fibrillation. It has progressively gotten worse and he recently

had to be hospitalized for implementation of a new medical therapy on December

4 and 5, 2013. He will need to continue leading a non-stressfull [sic] life and

work part-time in a non-stressful environment, preferably less stressful than what

he works in now in order to help decrease the symptoms of his afib. . . .

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(Otero II, Doc. 35-15, at 39). 

In the July 9, 2014 letter, Dr. Otero’s attorney disagreed with Unum’s position that Dr.

Otero could “earn the equivalent of his long term benefits performing other work, [as] Dr. Otero

has been unable to obtain other work and none is available to him. More significantly, Dr.

Otero’s condition has worsened and he has limited his practice even more. . . . I also request that

you pay Dr. Otero his benefits from February 2013 when he met the definition for disability and

submitted his claim.” (Otero II, Doc. 35-15, at 2-4). Dr. Otero’s attorney did not copy the CEO

and President of Unum on this letter. The July 9, 2014 letter attached the previous September 6,

2013 letter, which in turn had attachments.

According to Mr. Spellman, unbeknownst to him, the same misfiling error that occurred

in January of 2014 reoccurred in July of 2014. Once again, the July letter was properly addressed

to Robert Spellman in Unum’s Portland, Maine office with the correct group policy number. 

And, once again, according to Mr. Spellman, the letter and attachments were imaged and

incorrectly placed in Dr. Otero’s individual disability claim file with Provident Life in its

Massachusetts office instead of properly placing it in his group disability claim file with Unum. 

Again, the letter has a stamp marked “RECEIVED JUL 14 2014 BCCPORTAPPEALS,” which

appears to reflect receipt in the Portland Appeals office. (Otero II, Doc. 35-15, at 2). Mr.

Spellman provided no documentation from Provident Life records or personnel to support his

statement that the letter was misfiled in a Provident Life file, and the record does not reflect that

Dr. Otero had any individual disability claim on appeal. According to Mr. Spellman, Provident

Life personnel did not send the misfiled letter to him despite the fact that it was addressed to him

and stamped “received” in his office. Mr. Spellman claims that he did not respond to the letter

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and attachments because he did not receive them. The record does not reflect that Mr. Spellman

followed up with Dr. Otero in any way after his April 9, 2014 letter.

When Unum had failed to respond to his claim in any way over four months after his

attorney submitted the claim form and supporting information, Dr. Otero filed the instant suit on

November 20, 2104. (Otero II, Doc. 1).

B. Policy Provisions

Unum amended the group policy issued to Neurology Consultants effective April 1, 2005,

and the amended policy applies to disabilities that start on or after the effective date. (Otero II:

Doc. 25-2, at 5). Because the new claim made the basis of this suit asserted disability as of

February of 2013, the group policy amendment effective April 1, 2005 would apply.

10

 The

potentially relevant provisions of that policy are attached as an appendix to this Memorandum

Opinion. 

IV. STANDARD OF REVIEW

The Department of Labor’s claims-procedure regulation, 29 C.F.R. § 2560.503-1,

imposes minimum requirements for benefit claims procedures. ERISA does not, however, “set

out the appropriate standard of review for actions under § 1132(a)(1)(B) challenging benefit

eligibility determinations.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 108-09 (1989)

10

 If this claim represents a continuation of his disability beginning in 2005 that is treated

as part of the 2005 claim, then the old policy language could be relevant. See policy provisions

defining “recurrent disability” (quoted on page 66 in the appendix to this opinion) and stating

when a recurrent disability will be treated as part of the prior claim (quoted on pages 66-67 in the

appendix to this opinion). Because this court finds that this claim is not treated as a continuation

of the 2005 claim, the April 2005 policy applies. This amendment took effect after the beginning

of his disability that was litigated in Otero I. The court entered judgment in favor of Unum and

against Dr. Otero on the claim based on termination of disability benefits as of March of 2010. 

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(internal citation and quotation marks omitted). 

A. “De Novo” or Arbitrary and Capricious

The proper standard of review in this case presents an unresolved question within the

Eleventh Circuit. The Supreme Court has provided some guidance. It addressed the standard of

review issue in the Firestone decision, holding that “a denial of benefits challenged under §

1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the

administrator or fiduciary discretionary authority to determine eligibility for benefits or to

construe the terms of the plan.” Id. at 115. Thus, in a normal case, “[w]hen reviewing a denial

of benefits under ERISA, the scope of the district court’s review hinges upon whether the ERISA

plan granted the administrator discretionary authority to make eligibility determinations or to

construe the plan’s terms.” See Kirwan v. Marriott Corp., 10 F.3d 784, 788 (11th Cir. 1994). If

the ERISA plan included a grant of such discretion to the plan administrator and if the plan

administrator makes a decision, then the district court reviews that decision under the arbitrary

and capricious standard and may only consider “the facts known to the administrator” at the time

of the decision.11 If, on the other hand, the ERISA plan does not grant the plan administrator

11

 For a court reviewing a plan administrator’s benefits decision when the plan grants

discretion, the Eleventh Circuit’s standard of review follows these steps: “(1) Apply the de novo

standard to determine whether the claim administrator’s benefits-denial decision is ‘wrong’ (i.e.

the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm

the decision. (2) If the administrator’s decision in fact is ‘de novo wrong,’ then determine

whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and

reverse the decision. (3) If the administrator’s decision is ‘de novo wrong’ and he was vested

with discretion in reviewing claims, then determine whether ‘reasonable’ grounds supported it

(hence, review his decision under the more deferential arbitrary and capricious standard). (4) If

no reasonable grounds exist, then end the inquiry and reverse the administrator’s decision; if

reasonable grounds do exist, then determine if he operated under a conflict of interest. (5) If

there is no conflict, then end the inquiry and affirm the decision. (6) If there is a conflict, the

conflict should merely be a factor for the court to take into account when determining whether an

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such discretion, then the district performs a de novo review and may examine facts not before the

administrator. 

The instant case does not follow the normal path because the plan granted the discretion

to Unum but Unum did not exercise it. The policy granted discretion to Unum: “when making a

benefits determination under the policy, Unum has discretionary authority to determine your

eligibility for benefits and to interpret the terms and provisions of the policy.” (Doc. 25-2, at 15). 

If Unum had exercised its discretion and had made a decision on the claim, then the ruling in the

Firestone decision would govern, and this court must accord deference to its discretionary

determinations, including the decision on this claim.

However, both parties acknowledge that Unum did not respond to the letter submitting a

claim for disability benefits beginning February of 2013, and never made a determination of his

claim before Dr. Otero filed suit more than four months later. Therefore, Unum did not follow

ERISA claims-procedures on timely determinations on claims, which gives the plan

administrator only 45 days to act on a claim, unless the administrator properly extends that time

period. 29 C.F.R. §§ 2560.503-1(f)(3),12 2560.503-1(g)(1).13

administrator’s decision was arbitrary and capricious.” Blankenship v. Metro. Life Ins. Co., 644

F.3d 1350, 1355 (11th Cir. 2011). In the first step, unlike the usual de novo review, the

reviewing “court is limited to the facts as known to the administrator at the time the decision was

made.” Glazer v. Reliance Standard Life Ins. Co., 524 F.3d 1241, 1246 (11th Cir. 2008); see

also Blake v. Union Camp Intern. Paper, 622 F. App’x 853, 856 (11th Cir. 2015) (quoting

Glazer’s language with approval and explaining that under the arbitrary and capricious standard

of review, “the district court should limit discovery to the evidence that was before the plan

administrator when it denied the claim for benefits.”). 

12

 “Disability claims. In the case of a claim for disability benefits, the plan administrator

shall notify the claimant, in accordance with paragraph (g) of this section, of the plan’s adverse

benefit determination within a reasonable period of time, but not later than 45 days after receipt

of the claim by the plan. This period may be extended by the plan for up to 30 days, provided

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Subsection (l) of 29 C.F.R. § 2560.503-1 states that when a plan fails to act on a claim

within 45 days or to properly extend that claim, the claimant is deemed to have exhausted the

plan’s administrative remedies and may pursue other remedies, such as filing suit. 29 C.F.R. §

2560.503-1(l). Admittedly, subsection (l) says nothing about standards of review, and various

courts have interpreted the silence in different ways. The issue, then, is the appropriate standard

of review in a “deemed exhausted” case where the plan accords discretion to the plan

administrator but the administrator does not exercise it.

The Eleventh Circuit has acknowledged but refused to resolve this issue. In Torres v.

that the plan administrator both determines that such an extension is necessary due to matters

beyond the control of the plan and notifies the claimant, prior to the expiration of the initial 45-

day period, of the circumstances requiring the extension of time and the date by which the plan

expects to render a decision. . . .” 29 C.F.R. § 2560.603-1(f)(3).

13

 “Manner and content of notification of benefit determination. (1) Except as

provided in paragraph (g)(2) of this section [providing for oral communication of adverse benefit

determinations involving urgent care], the plan administrator shall provide a claimant with

written or electronic notification of any adverse benefit determination. . . .The notification shall

set forth, in a manner calculated to be understood by the claimant - (i) The specific reason or

reasons for the adverse determination; (ii) Reference to the specific plan provisions on which the

determination is based; (iii) a description of any additional material or information necessary for

the claimant to perfect the claim and an explanation of why such material or information is

necessary; (iv) A description of the plan’s review procedures and time limits applicable to such

procedures, including a statement of the claimant’s right to bring a civil action under section

502(a) of the Act following an adverse benefit determination on review; (v) In the case of an

adverse benefit determination by a group health plan or a plan providing disability benefits, (A) If

an internal rule, guideline, protocol, or other similar criterion was relied upon in making the

adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a

statement that such a rule, guideline, protocol, or other similar criterion was relied upon in

making the adverse determination and that a copy of such rule, guideline, protocol, or other

criterion will be provided free of charge to the claimant upon request; or (B) If the adverse

benefit determination is based on a medical necessity or experimental treatment or similar

exclusion or limit ....; (vi) [involves a claim involving urgent care].

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Pittston Co., the Eleventh Circuit reviewed a “deemed denial”14

 ERISA case, and acknowledged

a split in the Circuits regarding whether the “deemed denial” by an administrator with discretion

receives “de novo” review instead the more deferential standard:

Some court have held that . . . a deemed denial receives no deference upon

judicial review, since the plan administrator did not in fact exercise any

discretion. See Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 631 (10th

Cir. 2003)(holding that “when substantial violations of ERISA deadlines

result in the claim’s being automatically deemed denied on review, the

district must review the denial de novo, even if the plan administrator has

discretionary authority to decide claims.”); Jebian v. Hewlett Packard Co.,

310 F.3d 1173 (9th Cir. 2002) (reviewing denial de novo, where the plan

administrator did not issue decision until after deadline provided by plan

had elapse, and more than a month after beneficiary filed suit); Gritzer v.

CBS, Inc., 275 F.3d 291 (3d Cir. 2002) (extending no deference to plan

administrator’s post hoc justification for denying benefits, issued only

after commencement of litigation). Others, however have held that the

fact that the denial occurs by operation of ERISA regulations does not alter

the otherwise-applicable standard of review. See McGarrah v. Hartford

Life Ins. Co., 234 F.3d 1026 (8th Cir. 2000) (holding that ERISA plan

fiduciary’s failure to respond to beneficiary’s request for administrative

review does not trigger heightened scrutiny, absent showing of extreme

procedural irregularities);15 Daniel v. Eaton Corp., 839 F.2d 263, 267 (6th

14

 Amendments to 29 C.F.R. § 2560.503 were effective January 20, 2001, but the

Department made those changes applicable prospectively to claims filed after January 1, 2002,

and thus, the amendments did not apply to Torres’s claim. The Torres opinion uses the “deemed

denied” language instead of the “deemed exhausted” language in subsection (l). Among other

changes, the amendment changed the time in which the administrator must act from 90 days to

45 days and also modified the previous “deemed denial” provision to the subsection (l) language

quoted in this opinion.

15

 Within a few months of the Eleventh Circuit’s opinion in Torres, the Eighth Circuit

entered the opinion of Seman v. FMC Corp Ret. Plan for Hourly Emps., 334 F.3d 728, 733 (8th

Cir. 2003), which harmonized McGarrah with another case and determined the following:

“When a plan administrator fails to render any decision whatsoever on a participant’s application

for benefits, it leaves the court with nothing to review under any standard of review, so the matter

must be sent back to the administrator for a decision. When a plan administrator denies a

participant’s initial application for benefits and the review panel fails to act on the participant’s

properly filed appeal, the administrator’s decision is subject to judicial review, and the standard

of review will be de novo rather than for abuse of discretion if the review panel’s inaction raises

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Cir. 1988) (holding that, even though administrative review body failed to

act on claimant’s appeal of an initial denial, resulting in a deemed denial,

the denial should be reviewed under the arbitrary-and-capricious standard,

because “the standard of review is no different whether the appeal is

actually denied or is deemed denied.”).

346 F.3d 1324, 1332-33 (11th Cir. 2003) (per curiam); see also Rasenack ex. rel. Tribolet, v.

AIG Life Ins. Co., 585 F.3d 1311, 1315-18 (10th Cir. 2009) (following Gilbertson and finding

that de novo review was appropriate; when “the remedies were ‘deemed exhausted’ by operation

of law rather than the exercise of administrative discretion, [ ] Firestone’s rule of deference does

not apply.”); Nichols v. Prudential Ins. Co. of Am., 406 F.3d 98, 109 (2d Cir. 2005) (“[W]e may

give deferential review only to actual exercises of discretion.”); Pakovich v. Broadspire

Servs.,Inc., 535 F.3d 601, 606 (7th Cir. 2008) (adopting the Eighth Circuit’s rule set out in the 

Seman opinion, as discussed in fn 15 to this opinion, which held that when the plan

administrator did not issue any decision, and thus, the district court had nothing to review, the

district court must remand the case back to the administrator to make a decision). 

However, the Eleventh Circuit in Torres, having referred to these conflicting positions,

declined to adopt one. Because the district court in Torres had not addressed the “deemed

denial” argument and because the resolution of that argument might have been “affected by the

facts and circumstances,” the Eleventh Circuit vacated the district court’s decision, remanding

the case so that the district court could first address whether the “deemed denied” argument

further altered the standard of review. Id. at 1334; see also White v. Coca-Cola Co., 542 F.3d

848, 856 (11th Cir. 2008) (confirming that the Eleventh Circuit in Torres has not adopted any

serious doubts about the administrator’s decision.” Accordingly, the Eighth Circuit does not

always apply the arbitrary and capricious standard to deemed exhausted cases where the plan

afforded discretion to the administrator.

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position on the standard of review in ERISA deemed denial cases where the administrator has

discretion).

Given that the Eleventh Circuit has not resolved this issue,16 the court returns to the

regulation itself. Although paragraph (l) does not specify a standard of review, the preamble to

the regulation clarifies that, when a plan fails to comply with those minimum requirements, the

plan’s decision denying a claim should be entitled to no deference in court: the “Department’s

intentions in including this provision in the proposal were to clarify that the procedural

minimums of the regulation are essential to procedural fairness and that a decision made in the

absence of the mandated procedural protections should not be entitled to any judicial

deference” 65 Fed. Reg. at 70,255 (emphasis added). If the court reads the regulation with the

preamble, then the Department has interpreted its own regulation as saying that the failure to

follow the claims-procedure regulation entitles the claimant to have his claim reviewed de novo

in federal court. 

The court acknowledges that the Department’s interpretation of its own regulation is not

controlling if the language of the regulation is unambiguous. See Christensen v. Harris Cty.,

529 U.S. 576, 588 (2000). Yet, where ambiguity exists, the Department’s interpretation is

“controlling unless ‘plainly erroneous or inconsistent with the regulation.’” Auer v. Robbins,

16

 The court notes that, in an unpublished case, Martinez-Claib v. Bus. Men’s Assurance

Co. of Am., 349 F. App’x 522, 524 (11th Cir. 2009), both the district court and the Eleventh

Circuit Court of Appeals applied a de novo standard of review when the insurance company

failed to act on an appeal within the required time period, and the inaction was deemed to be an

implicit denial. Both parties to that action agreed that the de novo standard was proper, so the

Eleventh Circuit did not specifically address the issue of what standard of review applied. In any

event, the Eleventh Circuit provides by rule that it does not consider unpublished opinions to be

binding precedent. See U.S. v. Bonner, 712 F.2d 1418 (11th Cir. 1983) (citing Eleventh Circuit

Rules, Rule 36-2, 28 U.S.C.A.).

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519 U.S. 452, 461 (19997) (quoting Robertson v. Methow Valley Citizens Council, 490 U.S.

332, 359 (1989)). In a thorough, well-reasoned opinion analyzing the “timing, formality, and

history” of the preamble’s interpretation, the Second Circuit Court of Appeal concluded that the

regulation in question was ambiguous and that “the Department’s interpretation of its own

regulation as contained in the regulation’s preamble is entitled to substantial deference . . . .” 

Halo v. Yale Health Plan, Dir. of Benefits & Records Yale Univ., 819 F.3d 42, 53-54 (2d Cir.

2016). 

The Eleventh Circuit has not adopted the Labor Department’s interpretation of its own

regulation— it has adopted no position—but it did confirm the Department’s position in the

context of a “deemed denial” case: “The Labor Department has taken the position that a denial

occurring without the minimum procedural safeguards provided in the ERISA statutes and

regulations should not be reviewed deferentially.” Torres, 346 F.3d at 1333 n.11. In a

subsequent decision, White v. Coca-Cola Co., the Eleventh Circuit called the Department’s

position “broad,” but acknowledged that it had not adopted that position or any other; in any

event, that decision did not address a case involving administrative failure to exercise discretion,

and is not controlling here. 542 F.3d at 856. Therefore, the Eleventh Circuit has provided some

direction by confirming that the Department of Labor had interpreted its own regulation as

finding that a court need not accord deference to a plan administrator’s “deemed

denial/exhausted” decision, because it is a deemed decision, not an articulated one; the Eleventh

Circuit acknowledged both the split in the Circuits on this issue and its own refusal to take a

position on whether deference is due. 

This court FINDS that the Department of Labor’s subsection (l) is ambiguous regarding

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the standard of review, as is perhaps obvious from the differing interpretations of it; and further

FINDS that the Department has expressed its own reasonable interpretation in the preamble. 

Therefore, this court will not accord deference to Unum’s “deemed exhausted” non-decision,

unless the Department’s interpretation is plainly erroneous or inconsistent with the regulation.

Subsection (l) states that a plan’s failure to follow reasonable procedures in the

regulation means that “a claimant shall be deemed to have exhausted the administrative

remedies under the plan and shall be entitled to pursue any available remedies under section

502(a) of the Act on the basis that the plan has failed to provide a reasonable claims procedure

that would yield a decision on the merits of the claim.” 29 C.F.R. § 2560.508-1(l) (emphasis

added). This court agrees with the Second Circuit that “[t]his language could be reasonably read

as incorporating the logic of Firestone and its progeny that a claim is subject to de novo review

if it is ‘deemed denied,’ the effective equivalent of being deemed exhausted under the 2000

regulation.” See Halo, 819 F.3d at 54; see also Torres, 346 F.3d at 1332 n.10 (explaining that

the revised regulations modified the “deemed denial” provision).

In addition, the court notes that the Secretary issued the preamble contemporaneously

with the regulation, which demonstrates “the Secretary’s intent at the time of the regulation’s

promulgation.” See Gardebring v. Jenkins, 485 U.S. 415, 430 (1988). Further “the preamble

[was] issued as part of a formal notice-and-comment rulemaking, formality that generally

entitles an agency’s interpretation to greater deference.” Halo, 819 F.3d at 54. Finally, the

explanation in the preamble is consistent with the regulation’s history, which reflects that the

Secretary issued the regulation as part of a system overhaul in recognition that ERISA plan

administrators were failing to follow the regulation in addressing claims. 63 Fed. Reg. at

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48,397. Ultimately, the Department implemented subsection (l) with the “stated purpose ... to

make clear that a decision made by a plan that did not establish or follow the regulation’s

minimum requirements ‘is not entitled to the deference that would be accorded to a decision

based upon a full and fair review that comports with the requirements of section 503 of the

Act.’” Halo, 819 F.3d at 55 (quoting 63 Fed. Reg at 48,397).

In light of this information, the court FINDS that the Department’s interpretation of its

own regulation set out in the regulation’s preamble is consistent with the regulation and is not

plainly erroneous; thus, the court determines that the Department’s interpretation is entitled to

substantial deference. The court has also considered ERISA’s dual statutory purposes:

“‘ensuring fair and prompt enforcement of rights under a plan and the encouragement of the

creation of such plans.’” Fifth Third Bancorp v. Dudenhoeffer, ___U.S. ___, 134 S. Ct. 2459,

2470 (2014) (quoting Conkright v. Frommert, 559 U.S. 506, 517 (2010)). The balance between

these dual purposes is skewed if the plan administrator does not follow the claims procedures. 

The Department explained in the preamble: “[i]nasmuch as the regulation makes

substantial revisions in the severity of the standards imposed on plans, we believe that plans

should be held to the articulated standards as representing the minimum regularity that warrants

imposing an exhaustion requirement on claimants.” 65 Fed. Reg. at 70,256. Put another way, if

plan administrators comply with the regulation, they receive the benefit of the exhaustion

requirement and the deferential standard of review; if they do not comply, they lose the benefit

of the deferential review, but still have to pay the claim only if it meritorious. The court FINDS

that this approach balances competing interests and that it is consistent with ERISA’s dual

purpose. See Halo, 819 F.3d at 56 (finding that applying the de novo review under these

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circumstances when a plan would otherwise be entitled to a discretionary review is consistent

with ERISA’s dual purposes).

Finally, the court notes Unum’s argument that any deviation from claims procedures was

inadvertent. (Otero II, Unum Br. Doc. 24, at 4, at 8 ¶ 19, at 9 ¶ 22; Doc. 34, at 6 ¶ 54, at 9 ¶ 14,

at 11, at 21). In Halo, the Second Circuit pointed to the Department of Labor’s own advice to

plans that certain inadvertent and harmless deviations will not trigger de novo review:

A plan that establishes procedures in full conformity with the regulation

might, in processing a particular claim, inadvertently deviate from its

procedures. If the plan’s procedures provide an opportunity to effectively

remedy the inadvertent deviation without prejudice to the claimant

through the internal appeal process or otherwise, then there ordinarily will

not have been a failure to establish or follow reasonable procedures as

contemplated by § 2560.503-1(l). 

819 F.3d at 57 (quoting Dep’t of Labor, FAQs About the Benefit Claims Procedure Regulation,

http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html). Unum bears the burden of proof on

the issue of whether the deviations were inadvertent and harmless, because the party claiming

deferential review has the burden of proving the predicate that justifies such a review. Id. As the

court will discuss more fully subsequently in this Memorandum Opinion, Unum failed to

substantiate any claims of inadvertence and harmlessness. For example, Unum asserted that it

did not receive the mailed claim form and other documents that Dr. Otero’s attorney submitted

on multiple occasions when the mailed documents contained the proper address, when the stamp

on them appears to reflect receipt by the correct office, and when, after supposedly being notified

of an office delivery problem with the correctly addressed mail, Unum took no steps to correct it. 

 The court FINDS that Unum has failed to meet that burden. 

For all of these reasons, the court FINDS that the de novo standard of review applies in

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this case. This court will not defer to a non-decision that occurred as the result of the mechanical

expiration of time as opposed to the actual exercise of administrative discretion. 

B. Which Documents?

Having determined that a de novo review is appropriate, the court must next address the

dispute over which documents the court may consider in its review. Obviously, the court may

consider the documents that are part of the ERISA administrative record. In Otero I, Unum

argued successfully that the court’s “determination can only be based on the record before the

administrator at the time [ ] its decision was made.” Arguing that the evidence was outside Otero

I’s administrative record, Unum filed a motion to strike evidence that jobs the Unum vocational

expert identified as open to a doctor such as Dr. Otero were not in fact open to him as they

required board certification and he is not board certified. (Otero I, Unum’s Br., Doc. 31, at 13-14

(citing Glazer v. Reliance Standard Life Ins. Co., 524 F.3d 1241, 1246 (11th Cir. 2008);

Townsend v. Delta Family-Care Disability & Survivorship Plan, 295 F. App’x 971, 976 (11th

Cir. 2008)). In the Memorandum Opinion, the court granted the motion to strike, and found, in

the first step of the arbitrary and capricious standard of review, that the review was limited to the

administrative record and that the decision was not wrong. (Otero I, Memo Op. Doc. 36, at 5). 

Although Unum disagrees that a de novo review is appropriate in the instant case, both

parties agree that, under a de novo standard of review with no deference accorded to the

administrator’s decision— as opposed to an arbitrary and capricious standard of review when the

court gives deference to the administrator’s decision—the court “is not limited to the facts

available to the Administrator at the time of the determination.” Kirwan v. Marriott Corp., 10

F.3d 784, 789 (11th Cir. 1994). 

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In its brief responding to Dr. Otero’s argument in Otero II, Unum objected to factual

paragraphs 34-37 and 39 and, as grounds, stated that these factual paragraphs are based on

Exhibits 30-36 in Otero I, which the court excluded in Otero I because they were outside the

administrative record. In Otero I, which was not a “deemed exhausted” case, the court held that

the arbitrary and capricious standard applied and that the court’s review was “based on the facts

known to the administrator at the time the decision was made.” Because Exhibits 30-3617

 were

not available to the administrator at the time the decision was made in Otero I, the Otero I court

struck those exhibits and could not consider the facts in paragraph 34-37, and 39 submitted in

that case. (Otero I, Memo. Op. Doc. 36, at 5; Order Doc. 37). Dr. Otero submitted those same

documents in this case. (Otero II, Pl.’s Br. Doc. 22, at 12, listing the same facts and documents

struck in Otero I and contending that the documents are part of the Admin. Record in Otero II). 

 This court’s review in the instant case, however, is a de novo review and is not limited to

the administrative record.18 To the extent that Unum argues that this court’s consideration of the

17

 In Otero I, Exhibits 30-33 were documents from the websites of two

companies—Professional Disability Associates and Medical Director Solutions—that hired

insurance physicians/medical file review physicians/peer review physicians and that Unum cited

as examples of jobs that existed in the national economy providing earnings of $10,000 per

month and that would be available to physicians such as Dr. Otero. Professional Disability

Associates’ Management and Office Support Team Biographies on its website, and Exhibit 34

was the information listed on PDA’s website regarding its expert medical consultants. Exhibit

35 was PDA’s website regarding the companies involved with managing disability related

products. (Otero I: Doc. 25 at 64-76). Exhibit 36 was the Medical Director Solutions LLC

website page stating minimum prerequisites for medical experts, including board certification. 

(Otero I: Doc. 25, at 77). Dr. Otero presented this information in support of his motion for

summary judgment, although it was not part of his claim file.

18

 The administrative record in Otero II would include stricken Exhibits 30-36 only if that 

administrative record included the entire Otero I court file. Dr. Otero filed those exhibits to

support his motion for summary judgment in Otero I, but they were not part of the Otero I

administrative record, nor were they part of the materials that Dr. Otero’s attorney submitted

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stricken Exhibits 30-36—which are found in Otero I, Case No. 10-CV-2554, Doc. 25, at 64-

77—is precluded by res judicata and collateral estoppel, Unum is incorrect; given the different

standard of review, different administrative record, and different claim, those doctrines do not

necessarily preclude the court from considering Exhibits 30-36 in Otero II merely because the

court struck them in Otero I. This court FINDS that it may consider those documents to the

extent, if any, that they are relevant and material. The determination hinges upon whether this

claim is treated as a continuation of the 2005 claim or as a separate claim, as discussed

subsequently. Because the court treats this claim as separate from the claim in Otero I and

addresses this claim under the “regular occupation” standard, the court further FINDS that

Exhibits 30-36 relating to the other gainful occupations are not relevant and material to this

claim. 

The court further notes that, despite its argument that this court is limited to documents

that are part of the administrative record, Unum also presented documents that were part of Dr.

Otero’s Provident Life claim file but were apparently not part of the administrative record for his

Unum claims: Dr. Otero’s 2010 and 2011 W-2 forms and his employee pay stub for the pay

period December 9, 2012 through December 22, 2012. Because this review is de novo, the court

will consider those documents as well as any relevant and material documents that Dr. Otero

offered that are outside the administrative record.

V. DISCUSSION

A. Otero I Decision

As a preliminary matter, the court first makes this clarification: this case is not a review

directly to Unum to support the 2013 claim that forms the basis of Otero II. 

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of the decision in Otero I. That decision found in March of 2012 that Unum’s decision to deny

Dr. Otero’s claim for long-term group disability benefits in March of 2010 was not de novo

wrong. This court accepts and applies that decision.

Res Judicata and Issue Preclusion

Dr. Otero did not appeal Otero I, and that final judgment bars the claim that Dr. Otero

was disabled within the meaning of the Unum policy as of March 2010. Res judicata applies to

bar a claim if four elements are present: “(1) there is a final judgment on the merits; (2) the

decision was rendered by a court of competent jurisdiction; (3) the parties, or those in privity

with them, are identical in both suits; and (4) the same cause of action is involved in both cases.” 

Ragsdale v. Rubbermaid, Inc. 193 F.3d 1235, 1238 (11th Cir. 1999); see Langermann v. Dubbin,

613 F. App’x 850, 853 (11th Cir. 2015) (citing Ragsdale and restating the elements). The court

FINDS that the first three elements are present in the instant case. The fourth element may be

present to the extent, if any, that this suit challenges the ruling that Dr. Otero was disabled as of

March 2010 or challenges his ability as of March of 2010 to perform the jobs the VE identified in

Otero I; res judicata bars any such challenges.

The Eleventh Circuit explained issue preclusion, also known as collateral estoppel, as

follows: “If, however, the subsequent litigation arises from a different cause of action, the prior

judgment bars litigation only of ‘those matters of issues common to both actions which were

either expressly or by necessary implication adjudicated in the first.’” In Re Justice Oaks II, Ltd.,

898 F.2d 1544, 1549 n. 3 (11th Cir. 1990) (quoting 2 A Freeman, A Treatise of the Law of

Judgments § 677, at 1429-30 (5th ed. 1925)). For issue preclusion to apply, the following

prerequisites must exist: 

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(1) the issue at stake is identical to the one involved in the prior litigation; (2)

the issue was actually litigated in the prior suit; (3) the determination of the

issue in the prior litigation was a critical and necessary part of the judgment in

that action; and (4) the party against whom the earlier decision is asserted had a

full and fair opportunity to litigate the issue in the earlier proceeding.

Miller’s Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d 1312, 1318 (11th Cir.

2012).

Whether denominated res judicata or issue preclusion, Otero I adjudicated the

correctness of Unum’s determination that Dr. Otero was not disabled according to Plan

provisions as of March of 2010 under the “gainful occupation standard.” The court found that

Unum’s determination was not wrong, Dr. Otero did not appeal that determination, and the

parties are now barred from contesting that issue. Because the instant suit cannot review the

claim addressed in Otero I, the only claim addressed here is the claim for benefits after March

2010, which is Dr. Otero’s claim asserting benefits for a disability beginning or recurring as of

February 2, 2013. The court reviews that claim de novo.

In his briefs, Dr. Otero claims to accept that previous ruling, as he must. However, some

of his arguments belie that acceptance and indicate that what he truly wants is for his claim for

disability benefits as of February 2013 to be, in effect, a continuation of his earlier claim with

supplemental evidence. For example, Dr. Otero points to his salary in 2005 as a measure of his

pre-disability earnings, but 2015 was the beginning of his first period of disability which 

terminated in 2010 as affirmed by the court in Otero I, not the alleged beginning of disability at

issue in this suit; he should point to his salary before February of 2013. As another example, Dr.

Otero asserts that the court should apply the “any gainful occupation” standard and accept further

evidence that he cannot perform other identified gainful occupations, but the policy provides that

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for each new disability claim, the “regular occupation” standard will apply for the first two years

of disability payments. If Dr. Otero accepts the court’s ruling that Unum’s 2010 termination of

disability payments under the first claim was not wrong, then those arguments make no sense;

accepting the court’s ruling means that the first disability terminated, and therefore, this disability

claim is a new one instead of a continuation of the first terminated claim. Dr. Otero’s argument

may stem from a misapplication or misunderstanding of the policy provision addressing recurrent

disabilities, discussed later in this Memorandum Opinion.19 To the extent, however, that Dr.

Otero asks this court to treat this claim for disability benefits as a continuation of the first

terminated disability, he is refusing, in effect, to accept the Otero I ruling. He must accept it, as

must this court.

B. Otero II: 2013 Claim of Disability

1. Coverage under the Policy for the 2013 Claim

 Unum argues that, because Dr. Otero’s claim is for a new disability and not a

continuation of the old within the policy definition, he was not covered under the policy in 2013;

thus, any new claim for a second, separate disability beginning in 2013 should be denied. Dr.

Otero argues that this claim is for a recurrent disability the court should consider as part of his

original claim, as the atrial fibrillation is the same condition that began in 2005 but worsened as

of February 2013. The court must first determine whether the claim was for a new disability, a

recurrent disability that the policy treats as a separate claim, or a recurrent disability that the

policy treats as part of his prior claim. 

19

 As discussed subsequently, the provision explaining when Unum will treat a disability

as part of a prior claim does not apply to Dr. Otero’s claim for disability beginning in February of

2013, because the 2013 disability did not occur within six months of the end of the prior claim.

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Under the policy, a recurrent disability “means a disability which is: caused by

worsening in your condition; and due to the same cause(s) as your prior disability for which

Unum made a Long Term Disability payment.” (Otero II, Doc. 25-2, at 37-40). No dispute

exists that the Dr. Otero’s pre-March 2010 disability was based on his atrial fibrillation, and that

this current claim is also based on atrial fibrillation, which Dr. Otero asserts worsened as of

February of 2013, and he became disabled again. Therefore, his atrial fibrillation is a recurrent

condition, but whether it indeed falls within the definition of disability, the court will address

subsequently. 

However, even assuming arguendo that the atrial fibrillation falls within the policy term

of recurrent disability, the policy does not treat all recurrent disabilities as part of the original

disability claim. The policy further provides that, “[i]f you have a recurrent disability, Unum will

treat your disability as part of your prior claim and you will not have to complete another

elimination period if: you were continuously insured under the plan for the period between your

prior claim and your recurrent disability; and your recurrent disability occurs within 6 months of

the end of your prior claim.” (Otero II, Doc. 25-2, at 26-27). 

The six-month limitation prevents Dr. Otero’s claim for disability as of February 2013

from being considered part of his prior claim. No dispute exists about the following dates: Unum

terminated Dr. Otero’s disability benefits in March of 2010; the court in Otero I entered a

judgment affirming that decision in March of 2012; and Dr. Otero’s current claim is for a

disability that occurred when his condition allegedly worsened as of February of 2013. February

of 2013 is more than six months after either of the dates that could possibly represent the end of

the last claim: March of 2010 or March of 2012. Therefore, the court FINDS that the policy

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treats this claim as a new disability claim, not part of the old one. 

Dr. Otero argues that the last provision quoted does not apply because its heading reads: 

“WHAT HAPPENS IF YOU RETURN TO WORK FULL TIME20 AND YOUR DISABILITY

OCCURS AGAIN?” Id. Because Dr. Otero never returned to work full time and he claims his

disability never terminated, he asserts that this section does not apply to him. As Unum notes,

however, the wording that Dr. Otero points to is in the title or heading, not the text of the

provision. “[T]he heading of a [contract’s] section cannot limit the plain meaning of the text. 

For interpretive purposes, they are of use only when they shed light on some ambiguous word or

phrase. They are but tools available for the resolution of a doubt. But they cannot undo or limit

that which the text makes plain.” Bhd. of RR Trainmen v. Baltimore & O.R. Co., 331 U.S. 519,

529 (1947) (internal citations omitted). Although the Supreme Court specifically referenced

statutory construction in this explanation, it “applies with equal force to the interpretation of

contracts,” including insurance policies. See Glenn v. Am. United Life Ins. Co., 2014 WL

3895429, at *9 n. 5 (N.D. Ala. Aug. 8, 2014) (using the quoted language and applying the Bhd. of

RR Trainmen explanation to an insurance policy); see also United States v. Leslie Salt Co., 350

20The use of the term “full time” makes sense because, as further discussed below, the

policy only covers employees that work 36 hours per week or more, and, thus, are considered

“full time.” In light of that coverage requirement, no policy provision exists that addresses the

coverage of disability recurring after the employee returns to work less than 36 hours per week. 

Contrary to Dr. Otero’s assumption, if the six month policy provision does not apply to meld the

subsequent claim with the old one, then the subsequent disability claim is logically a new,

separate claim. Without a provision specifically allowing the subsequent disability claim to be

treated as part of the prior claim, the termination of the first disability separates one claim from

the other and necessitates the treatment of the two claims as separate and distinct. If the

employee is working less than 36 hours per week at the time of the commencement of the

subsequent disability and if that commencement occurs more than six months after the end of the

prior claim, then no coverage would ordinarily exist for the new claim under the precise policy

provisions because he would not be eligible.

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U.S. 383, 389 (1956) (determining whether promissory notes were subject to documentary stamp

taxes and stating that the “‘essential characteristics’ of the instruments controlled ‘regardless of

their descriptive caption.’”).

The court FINDS the language of the provision itself to be unambiguous, and it need not

consult the heading. Therefore, the current claim that Dr. Otero was disabled as of February of

2013, more than six months after the termination of his prior claim, means that the court treats

this claim as a new disability claim under the terms of the policy, even though it is based on a

recurrent condition.

2. Waiver or Estoppel

Unum argues that, as this claim for disability is a new one, no coverage exists under the

policy, because, at the time the disability occurred in February of 2013, Dr. Otero was working

less than the minimum of 36 hours per week required for coverage. Dr. Otero argues that even if

he is not entitled to coverage under the precise terms of the policy itself, Unum is barred from

relying on the 36 hour per week work requirement under equitable theories of waiver and

estoppel. Those equitable arguments are based upon Unum’s acceptance of his premiums for

years after Unum knew he worked part-time. According to Dr. Otero, Unum knew that he

worked less than 36 hours per week when it directed him to pay premiums and it accepted those

premiums, and having retained the money with that knowledge, Unum may not now deny

eligibility for coverage. 

 The court first acknowledges Unum’s argument that Dr. Otero cannot raise these theories

because he failed to plead them. In his complaint, Dr. Otero stated that he was covered by the

policy and that he continued to pay premiums when he worked part-time after Unum terminated

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his long-term disability benefits. The other facts upon which waiver and estoppel are based are

contained in Unum’s own administrative record and could not represent a surprise to it. In its

own initial brief, Unum addressed, albeit briefly, the effect of the submission of those premiums,

and presented an alternative argument that Dr. Otero did not qualify for disability benefits if the

court determined that he was eligible for coverage. Unum also addressed the theories of waiver

and estoppel in its responsive brief. Unum cites no legal authority for its argument that Dr. Otero

may not rely on the theories of waiver and estoppel under these circumstances. This court knows

of no such authority and finds that Unum suffers no prejudice from Dr. Otero’s reliance on them;

accordingly, the court FINDS that Dr. Otero may raise the theories of waiver and estoppel, which

it addresses separately below.

In the ERISA context, the Eleventh Circuit has recognized estoppel, but has not yet

resolved the issue of whether waiver applies. While ERISA preempts state law claims of waiver

and estoppel, 29 U.S.C. § 1144(a), the ERISA statute itself does not specifically address whether

the theories of waiver and estoppel under federal common law apply to actions brought under the

statute. “However, the statute has interstices, and the Supreme Court has noted that Congress

expected, in passing the statute, for the federal courts to fill those gaps with ‘a federal common

law of rights and obligations under ERISA-regulated plans.’” Glass v. United of Omaha Life Ins.

Co., 33 F.3d 1341, 1347 (11th Cir. 1994) (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56

(1987)). To develop federal common law that fills in the ERISA gaps, a federal court “may use

state common law as the basis of the federal common law only if the state law is consistent with

the policies underlying [ERISA].” See Nachwalter v. Christie, 805 F.2d 956, 959-60 (11th Cir.

1986). The Eleventh Circuit has recognized a “very narrow common law doctrine under ERISA

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for equitable estoppel” but has “le[ft] open” whether waiver principles might apply to ERISA

actions. Glass, 33 F.3d at 1347 (emphasis supplied). 

(a) Estoppel

Dr. Otero argues that estoppel bars Unum from relying on the 36 hour per week work

requirement as a basis for ineligibility. The Eleventh Circuit has crafted “a very narrow common

law doctrine under ERISA for equitable estoppel when (1) the provisions of the plan at issue are

ambiguous, and (2) representations are made which constitute an oral interpretation of the

ambiguity.” Glass, 33 F.3d at 1347 (citing Kane v. Aetna Life Ins.Co?, 893 F.2d 1283, 1285-86

(11th Cir. 1990)). Estoppel does not apply “either for oral modifications (as opposed to

interpretations) or when the written plan is unambiguous.” Id. 

In the instant case, no party argues that the written policy is ambiguous as to the 36 hour

per week work eligibility requirement. Unum insists that the policy is unambiguous, and Dr.

Otero does not disagree, except as to the caption entitled “What Happens if You Return to Work

Full Time and Your Disability Occurs Again.” The court does not find that the plan is

ambiguous as to the 36 hour eligibility requirement or the “What Happens . . . .” provision;

accordingly, the court FINDS that the narrow common law doctrine under ERISA for equitable

estoppel does not apply. 

(b) Waiver

As noted, the issue of whether waiver principles apply in the ERISA context remains one

of first impression in the Eleventh Circuit. In Glass v. United of Omaha Life Ins. Co., the

Eleventh Circuit considered the application of a waiver theory in the context of ERISA. It

defined waiver as “the voluntary, intentional relinquishment of a known right” and stated that

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waiver is “a common law principle whose applicability under ERISA is an issue of first

impression in this circuit.” 33 F.3d at 1347. The Court examined opinions from the Fifth and

Seventh Circuits addressing this issue: Pitts v. Am. Sec. Life Ins. Co., 931 F.2d 351, 356-57 (5th

Cir. 1991) and Thomason v. Aetna Life Ins. Co., 9 F.3d 645, 647-50 (7th Cir. 1993), abrogated,

as to the 7th Circuit’s test of estoppel, by Coker v. Trans World Airlines, Inc., 165 F.3d 579, 585

(7th Cir. 1999). 

The Court agreed with the reasoning of the Seventh Circuit in Thomason that rejected the

waiver argument but left open whether waiver principles might apply in an ERISA case under

other circumstances. Glass, 33 F.3d at 1348. One example the Seventh Circuit gave of a

circumstance when other courts had applied waiver was, as the Eleventh Circuit recounted, when

“the insurance company was attempting to reap an unjust benefit, e.g., accepting premiums after

the insurer’s defense to coverage was known and clear, thus giving the insurance company the

option of keeping the premiums if beneficial to it or at its option returning the premium and

cancelling the policy when it was convenient to do so, i.e., after a claim is made.” Glass, 33 F.3d

at 1348 (recounting Thomason, 9 F.3d at 648 n. 3). 

Expressly agreeing with the Seventh Circuit’s reasoning, the Eleventh Circuit in Glass 

rejected the plaintiff’s waiver argument based on the factual circumstances before it. In Glass,

the defendant insurance company accepted premiums from a claimant whom the plan

administrator erroneously included on the list of eligible employees. However, the Court of

Appeals found that the summary judgment record contained “no evidence that [the insurance

company] attempted to unjustly enrich itself at the expense of an ineligible plan participant,” and

the defendant “attempted to return the few premium payment that it had accepted” immediately

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upon realizing the error. Rather, “the summary judgment record in [the Glass case] clearly

shows that defendant did not know beyond doubt that Plaintiff was inactive (i.e. not actively at

work) at the crucial time—when the plan and his coverage became effective.” Despite rejecting

the waiver argument under those circumstances, the Court of Appeals left open whether waiver

principles might apply in another ERISA case with different circumstances. Id. 

In Witt v. Metropolitan Life Ins. Co., 772 F.3d 1269, 1279 (11th Cir. 2014), the Eleventh

Circuit again addressed a waiver argument in the ERISA context, and stated that it had left open

in Glass the question of whether waiver principles apply in the ERISA context. However,

because it found that the waiver argument failed in the facts before it, the Court of Appeals again

chose not to decide whether waiver applied in the ERISA context. One reason the waiver

argument failed was that the plaintiff argued a “something-for-nothing” waiver claim; the

plaintiff wanted the defendant to relinquish the benefit of the statute of limitations but had not

given anything in return. The Eleventh Circuit explained that it could not accept such a claim,

and noted that the plaintiff had not given the defendant any premiums or any other benefit:

Witt introduced no evidence that MetLife collected further premiums

from Witt in 2009-2012 or received any consideration from Witt during

that time. While in Glass this Court left open the question of whether

waiver might apply under the federal common law in the ERISA

context, we rejected a “something-for-nothing” waiver claim where the

defendant made a misrepresentation but did not attempt to receive an

unjust benefit, such as premiums. 

Id. at 1280. 

Thus, although the Eleventh Circuit has not applied waiver in the ERISA context, it has

left the door open to apply waiver when the plan administrator knows no coverage exists but

received an unjust benefit such as premiums. See Glass, 33 F.3d at 1348.

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The instant case presents precisely that hypothetical scenario discussed in Glass and

Thomason. Here, Unum specifically told Dr. Otero to resume paying premiums in 2010 to

avoid a lapse in coverage when it knew he did not meet the minimum number of work hours to

be eligible for coverage. It accepted those premiums for years, unjustly enriching itself with

those payments, and only raised eligibility for coverage when Dr. Otero filed an additional

claim for disability benefits. Apparently, it has never tendered repayment of those premiums.

Unum argues that it did not know Dr. Otero was working part-time and thus ineligible

for coverage when it accepted his premiums, but the evidence contradicts that argument. The

evidence does not reflect that Dr. Otero’s employer unilaterally listed him as an eligible

employee without input from Unum. Neither does the evidence reflect that Dr. Otero began

making premium payments based upon the uninformed hope that coverage existed and that

some equally uninformed Unum clerk accepted those payments with no idea that he was

ineligible. Rather, the evidence reflects that Dr. Otero and his staff contacted Unum several

times to ask specifically whether he should resume paying premiums in 2010. They received a

specific answer from Unum and the answer was from Robert Spellman—not only a specialist

in coverage issues but one of the two Unum employees who was most familiar with Dr. Otero’s

part-time work status. He was an “appeals specialist” who was tasked with reviewing coverage

decisions, including reviewing on administrative appeal the termination of Dr. Otero’s

disability benefits in 2010, a decision he affirmed. 

The content of Mr. Spellman’s advice to Dr. Otero—that he should resume paying

premiums to avoid a lapse in coverage—is not a disputed fact but is documented by Mr.

Spellman’s own note in the administrative record. During the days before and after he told Dr.

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Otero to resume premium payments, Mr. Spellman received information that repeatedly

referred to and focused on Dr. Otero’s part-time work status; Mr. Spellman himself created

documents in the administrative record during this time referring to Dr. Otero’s part-time work

status. The evidence reflects that Mr. Spellman knew and, thus, Unum knew, that Dr. Otero

was working part-time when Mr. Spellman told Dr. Otero to resume premium payments.

The court acknowledges Unum’s argument that Dr. Otero is charged with knowledge of

the contents of his policy, and thus, knew he was ineligible for coverage from 2010 onward,

when he was working part-time. As the court has found previously, Mr. Spellman and, thus,

Unum, knew that Dr. Otero was working part-time when Mr. Spellman told Dr. Otero to

resume premium payments in 2010. Therefore, Unum is arguing, in effect, that Dr. Otero is

charged with greater knowledge of the policy’s contents rendering him ineligible when he paid

premiums, than Unum had of its coverage requirements rendering Dr. Otero ineligible when it

asked for and accepted his premiums knowing Dr. Otero did not work 36 hours per week! This

argument is disingenuous, and the court rejects it.

Unum also argues that the errors of Mr. Spellman and clerical staff cannot create

coverage where none existed, and points to a policy provision stating that Unum’s clerical error

or omission by Unum will not cause an employee’s coverage to begin or continue when the

coverage would not otherwise be effective. In light of Mr. Spellman’s position and his

familiarity both with Dr. Otero’s work status and with Unum’s policy provisions, his

affirmative action of advising Dr. Otero to pay premiums beginning in 2010 and the company’s

acceptance of those premiums from 2010 onward cannot reasonably be characterized as a

clerical error or omission. The court also rejects that argument.

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The court notes that, even when Mr. Spellman told Dr. Otero’s attorney in 2013 that the

doctor was ineligible for disability benefits, he did not offer to return the premium payments. If

the company subsequently made that offer, the parties have not pointed this court to that offer

in the very extensive record.

The court further notes that this scenario in the instant case falls outside the factual

scenarios that the Eleventh Circuit has specifically found do not constitute waiver in ERISA

cases. For example, in Glass, the Court of Appeals found that intentional waiver did not apply

when the record clearly showed that the defendant insurance company did not know that the

plaintiff was not actively at work, and thus, ineligible at the crucial time. Glass, 33 F.3d at

1348. Also in Glass, the Court found no evidence of any unjust benefit, noting that the

insurance company promptly attempted to return the few premium payments it had accepted

when it determined that the plaintiff was mistakenly included on the employer’s eligibility list. 

Id. at 1348 & n.6. 

In contrast to the fact situation in Glass, the evidence here reflected that Unum’s

acceptance of Dr. Otero’s payment of premiums beginning in 2010 was not based on the

uninformed mistake of his employer or Unum’s clerical error, but instead was based on Mr.

Spellman’s specific direction to Dr. Otero to pay premiums despite knowing he was working

part-time. Further, evidence exists here of unjust benefit to Unum, and the parties have pointed

this court to no evidence that Unum has ever returned that unjust benefit. 

The Eleventh Circuit has also explained that waiver would not apply to ERISA cases in

which the plaintiff attempted to assert a “something-for-nothing” waiver “where the defendant

made a misrepresentation but did not attempt to receive an unjust benefit, such as premiums.”

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Witt, 772 F.3d at 1280. Again, in the instant case, Unum received the unjust benefit of

premiums for years, so this situation does not fit into the rejected “something-for-nothing”

scenario. 

Although the Eleventh and Seventh Circuits have not yet applied waiver in the ERISA

context, the Fifth Circuit has done so. In Pitts v. Am. Sec. Life Ins. Co., the Fifth Circuit

recognized waiver as a viable theory under ERISA. 931 F.2d at 357. In that case, the group

policy required a minimum number of employees to enroll before coverage would be effective,

and the company did not have the requisite number. However, the evidence reflected that the

insurance company “accepted insurance premiums from [the employer] for five months after

learning beyond all doubt that Pitts was the only employee remaining on the policy.” Id. It also

had paid medical benefits under the policy without a reservation of its known rights. Focusing

on the “unilateral action of the insurer in failing to raise at the outset a known defense,” the

Court found that the insurance company had waived its right to assert that known defense in

denying coverage and the Court affirmed the district court’s finding the insurer liable for

payment of benefits to the employee. Id. 

This court could apply the Fifth Circuit’s reasoning in the instant case to find waiver

here because Unum accepted premium payments on behalf of Dr. Otero for years while

knowing beyond all doubt that he was working part-time and ineligible for coverage. Indeed,

here, Mr. Spellman of Unum not only knew about Dr. Otero’s part-time work but he told Dr.

Otero to pay premiums despite that knowledge. 

Having determined that this fact situation fits the scenario that the Eleventh Circuit had

proffered as one that might reasonably support waiver (and fits within scenarios accepted by

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the Fifth Circuit and suggested as appropriate by the Seventh Circuit), this court FINDS that

waiver should apply.

21

 Dr. Otero adduced sufficient evidence of Unum’s intentional

relinquishment of eligibility requirements of its plan that employees work at least 36 hours per

week when it unequivocally told Dr. Otero to pay premiums and it accepted those premiums

knowing that he was working less than 36 hours per week. Similarly, this court concludes that

Dr. Otero adduced sufficient evidence that Unum unjustly retained years of premium payments

on Dr. Otero’s behalf. In sum, the court FINDS that Unum has waived its right to assert the

defense that Dr. Otero was not eligible for coverage after the termination of disability benefits

in March of 2010 because Dr. Otero was not working the minimum number of hours per week. 

Unum presents no other basis for asserting that he was not eligible for coverage. According,

the court FINDS that Dr. Otero was eligible for coverage.

3. Disability Based on Policy Terms

The court next turns to whether, as of February 2, 2013, Dr. Otero was disabled within

the meaning of the policy. As noted previously, based on policy provisions, the court cannot

treat Dr. Otero’s claim as a continuation of his prior disability claim, but must treat it as a new,

21

 This court recognizes that some other Circuit Courts of Appeal have rejected waiver

altogether in the ERISA context, or have refused to apply waiver in cases when doing so would

expand the scope of coverage under an ERISA plan to an otherwise ineligible participant. See,

e.g., Juliano v. Health Maint. Org. of N.J., Inc., 221 F.3d 279, 288 (2d Cir. 2000) (quoting Albert

J. Schiff Assocs., Inc. v. Flack, 417 N.E. 2d 84, 87 (N.Y. 1980)) (“‘where the issue is the

existence or nonexistence of coverage (e.g., the insuring clause and exclusions), the doctrine of

waiver is simply inapplicable’”); Lauder v. First UNUM Life Ins. Co., 284 F.3d 375, 282 (2d Cir.

2002) (distinguishing Juliano and applying the doctrine of waiver when it would not expand the

coverage for which the plaintiff bargained and when the insurer possessed sufficient knowledge

of the circumstances regarding disability as a defense); White v. Provident Life & Accident Ins.

Co., 114 F.3d 26, 29 (4th Cir. 1997) (holding that “the federal common law under ERISA . . .

does not incorporate the principles of waiver and estoppel . . . . ERISA, however, does not

provide for such unwritten modifications of ERISA plans.”).

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separate claim even though it arises from a recurrent condition. 

As Unum acknowledges, the policy defines disability as follows:

HOW DOES UNUM DEFINE DISABILITY?

You are disabled when Unum determines that:

– you are limited from performing the material and substantial duties

of your regular occupation due to your sickness or injury; and 

– you have a 20% or more loss in your indexed monthly earnings due to

the same sickness or injury.

(Otero II, Doc. 25-2, at 19-20) (emphasis in original). 

(a). Regular Occupation

Unum first argues that Dr. Otero cannot meet the first element of this definition because

he has not provided evidence that, as of February 2, 2013 when his new disability allegedly

began, he was limited from performing the material and substantial duties of his regular

occupation as it existed when that disability began. The court notes that Unum is not arguing

that the “any gainful occupation” definition applies to this new claim, but acknowledges that the

“regular occupation” definition quoted above applies. The policy defines regular occupation as

meaning “the occupation you are routinely performing when your disability begins. Unum will

look at your occupation as it is normally performed in the national economy instead of how the

work tasks are performed for a specific employer or at a specific location.” (Otero II, Doc. 25-2,

at 37-40). To determine whether Dr. Otero is limited from performing the material and

substantial duties of his regular occupation of neurologist, this court should not look to how Dr.

Otero was performing his occupation at Neurological Consultants immediately before his

disability beginning in February of 2013, but rather, how the occupation of neurology is

performed in the national economy. 

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In support of its argument that Dr. Otero can perform the “material and substantial duties

of [his] regular occupation,” Unum presents one bare sentence: “There is no indication in the

records submitted by Dr. Otero that he has been limited from performing the substantial and

material duties of the occupation he was performing immediately before the February 2013

disability date.” (Otero II, Unum Br. Doc. 24, at 23). However, that statement is inaccurate. 

The record reflects that, as of February of 2013, Dr. Otero was unable to perform the full

duties of a neurologist as that job is performed in the national economy, because he is unable to

work full time, and was unable to work more than 40 hours per week. Catherine Rogers, Unum’s

Senior Vocational Consultant, found night call to be a substantial and material duty in the

occupation of neurologist. Another Unum Senior Vocational Rehabilitation Consultant, Shannon

O’Kelley, found that night call could or could not be a substantial and material duty of the

neurologist occupation, although a neurologist who did not take night call would expect

decreased income. (Otero I, Doc. 35-14, at 8, 12, 24). Marilyn Howard of Unum stated in her

note to Dr. Otero’s claims file dated January 10, 2008 that “all statements indicate the insured

would need to work over 40 hours per week to perform full duties.” (Otero I, Doc. 35-14, at 11-

12). The court FINDS that information in the administrative record reflects that performing the

full duties of a neurologist as that position is performed in the national economy would require

working over 40 hours per week.

The record further reflects that as of February of 2013, Dr. Otero’s atrial fibrillation does

not allow him to work over 40 hours per week. The administrative record contains an opinion

from Dr. Otero’s current treating cardiologist, Dr. Osorio, stating that Dr. Otero’s atrial

fibrillation condition requires him to work part-time. In January of 2014, Dr. Osorio stated that

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he had been treating Dr. Otero for over a year; that his condition had “progressively gotten

worse”; and that Dr. Otero “will need to continue leading a non-stressfull [sic] life and work

part-time in a non-stressful environment, preferably less stressful than what he works in now in

order to help decrease the symptoms of his afib.” (Otero I, Doc. 35-15, at 39). At the time of

that opinion, Dr. Otero had been working a reduced schedule for a number of years with no night

call and no hospital work. He worked in the office only 16 hours per week, two hours in the

morning four days a week, and two hours in the afternoon four days a week, with a rest period

between the work blocks. Even when he was working this part-time schedule in the office, Dr.

Otero’s heart problems were so serious that they required medical procedures and occasional

hospitalization: in 2013, he underwent two cardioversion procedures at different times of the

year when his heart could not naturally establish a sinus rhythm, and was hospitalized in

December of 2013 as he began a new medical therapy to treat that chronic condition. 

The opinion of Dr. Hill, another of Otero’s other treating cardiologists, also supports his

inability to work full time as a neurologist, confirming that his abbreviated work schedule

corresponded with the limitations that his chronic atrial fibrillation imposes. Dr. Hill determined

that Dr. Otero could not work full time as a neurologist, and explained the importance of limiting

work hours and activities to avoid stress and sleep deprivation that can trigger atrial fibrillation.

Dr. Hill characterized Dr. Otero’s symptoms as “very severe and incapacitating to the point that

he is unable to sustain any type of full time job. . . . [H]is clinical descriptions with his symptoms

of weakness, shortness of breath, and inability to function during and after his episodes are quite

consistent with the medical literature [and] there really is no question in my mind that based on

the above, he is unable to carry on any meaningful sustained job.” (Otero I, Doc. 35-15, at 45-

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47). 

The record reflects that Unum often took the position that Dr. Otero could not perform

the position of neurologist on a full time basis. Unum determined twice, once in 2005 and again

in 2007, that Dr. Otero was entitled to disability benefits because he could not perform his

“regular occupation.”22

 Then, in 2010, Unum’s own cardiology consultant agreed with Dr.

Kay’s restrictions on Dr. Otero regarding no night and weekend call, and no hospital work, which

appears to support Dr. Oterio’s inability to work over 40 hours per week. (Otero I, Doc. 35-22,

at 66). In the April 2010 Appeal Decision, Mr. Spellman acknowledged that Unum’s own

consulting physician agreed with part-time work restrictions “based on the fact that full time

work would increase your bouts of atrial fibrillation.” (Otero I, Doc. 35-23, at 105). No

evidence exists that Dr. Otero’s condition has improved, and rather, he has presented unrefuted

evidence from Dr. Osorio reflecting deterioration in his condition. 

For all of these reasons, the court FINDS that, as of February 2, 2013, Dr. Otero has been

limited from performing all of the material and substantial duties of his “regular occupation”of

neurologist as that occupation is performed in the national economy. He cannot work 40 hours

per week, much less work over 40 hours weekly, cannot take night call or hospital calls, and

working such hours would be part of the material and substantial duties of a neurologist. Dr.

Otero meets the first element of the disability determination set forth in his Unum policy as of

22

 The court recognizes that, although Unum did not qualify its reversal in its 2007

communication of that decision in its communication to Dr. Otero, its internal “Appeal Reversal”

memorandum indicated that it would continue investigating Dr. Otero’s entitlement to disability. 

However, after determining in 2007 that Dr. Otero was entitled to disability benefits under the

“regular occupation” standard, Unum never determined otherwise; future decisions regarding

entitlement to disability benefits were under the “gainful occupation” standard.

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February of 2013.

(b). 20% Loss 

The second element of the policy’s definition of disability is that Dr. Otero suffered a

20% loss of indexed monthly earning based on his income from the three most recent years prior

to his February 2013 claimed date of disability. Unum argues that Dr. Otero cannot meet his

burden to establish this element because no evidence of such a loss exists in the administrative

record,23and because the evidence Unum presents outside the administrative record does not

establish such a loss of monthly earnings. (Otero II, Unum’s Br. Doc. 24, at 23). Under the

policy in question, Dr. Otero’s monthly income is determined by averaging his K-1 and W-2

income of the three most recent tax years just prior to the February 2013 claimed date of

disability. Id. at 19-20 (see provision quoted on page 65 in the appendix to this Memorandum

Opinion). 

Unum’s administrative record contains no W-2 forms for the three years immediately

preceding 2013 or W-2 forms for 2013 and afterwards. Unum has supplemented the record with 

Dr. Otero’s W-2 forms for the years 2010 and 2011, and his employee pay stub from Neurology

Consultants for the pay period 12/9/12-12/22-12 that he submitted as part of his Provident Life

individual claim. (Otero II, Doc. 25-4). Given that this court’s review is not limited to the

administrative record, that supplement is helpful but not complete: it contains no W-2 form for

23

 Unum argues, on one hand, that this court’s review is limited to its administrative

record, an argument that this court has already rejected. On the other hand, to support this

particular argument, Unum has supplied documents that are not part of the combined Otero I and

II administrative record: the declaration of Nicole Johnson, an Unum Group senior dispute

resolution consultant, attaching Dr. Otero’s W-2 forms for the years 2010 and 2011, and his

employee pay stub from Neurology Consultants for the pay period 12/9/12-12/22-12 that he

submitted under his individual policy with Provident Life. (Otero II, Doc. 25-4). 

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2012. Because the policy purports to average the wages stated on the employee’s W-2 forms for

the three years preceding the disability date to obtain the monthly income—so, here 2010, 2011,

and 2012—the court needs the information from 2012, too. 

Dr. Otero provided no help on the 20% calculation, as his argument is based on the 2013

claim being a recurrent disability that harkens back to his pre-2005 income and not a new claim. 

The court has previously rejected that argument.

Obviously, Unum never required such documents from Dr. Otero, and made no such

calculation during the claims process as it never addressed Dr. Otero’s claim. And, the

calculations that it provides in the brief, but not in evidence, do not make sense without further

clarification.24 

In any event, Unum asserts that Dr. Otero has the burden of showing that he meets the

Plan’s definition of disability, including the 20% reduction in monthly earnings, and that he has

failed to do so. See Horton v. Reliance Standard Life Ins. Co., 141 F.3d 1038, 1040 (11th Cir.

1998) (per curiam) (Under ERISA, “the plaintiff bears the burden of proving his entitlement to

contractual benefits.”). Dr. Otero attempted to meet this element of the definition by presenting

premium statements for 2010 through part of 2014, and those statements list his monthly salary;

24

 To cobble together the wage information needed to show that Dr. Otero has not shown

a 20% reduction in income after February 2, 2013, Unum purported to add the W-2 wages for the

twenty-four months of 2010 ($45,500.04) and 2011($49,291.71), which total $94,791.75, plus

the 2012 pay stub wages (listing a salary of $58,012.89 plus NCV Compensation of $819.00 for a

total compensation of $58,831.89 through 12/22/12). The record does not explain what NCV

Compensation is. Those numbers for the three years of 2010, 2011, and 2012 do not add up to

the $164,144.64 total that Unum provides for those three years. (Otero II, Unum Br., Doc. 24, at

24). 

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to the extent that the monthly earnings on these statements do not coincide with the W-2 forms,25

they do coincide with the premiums that Unum charged. 

Those premium statements show that in 2010, 2011 and in the first two months of 2012,

Dr. Otero earned $6,250 per month; that his earnings decreased later in 2012 to $4,167 per

month; that his earnings for most of 2013 were $4,903 per month; and that his earnings

decreased in 2014 to $4,220.00 per month. The premium statements do not reflect Dr. Otero’s

earnings for the months of March and April of 2012. The court acknowledges that, although

these documents are not W-2 statements, they reflect a significant decrease in monthly earnings

after February of 2013. Depending on what Dr. Otero’s earnings were during the missing

months, they could show a 20% decrease in monthly earnings. The court notes that, although the

policy specifies that Unum should use earnings reflected on W-2 forms for a three-year period

prior to the alleged disability date and average those to obtain monthly earnings, it does not

specify what period after the alleged disability date Unum should use to determine post-disability

monthly earnings. The court further notes that Unum never required Dr. Otero’s W-2 forms

because it never considered the merits of his 2013 claim.

In the end, the court is left with W-2 forms for some but not all relevant years, premiums

for most but not all of the relevant months which do not correlate with the earnings on the W-2

25

 The court also notes that comparing the wages on the premium statements to the wages

on the W-2 forms, as Unum attempts to do, appears to be comparing apples and oranges: Dr.

Otero’s wages on the premium statements for 2010 and 2011 were significantly greater than the

wages appearing on the W-2 forms for those years. For example, the wages on the premium

statements for 2010 and 2011 were $6,250 per month, which multiplies out to $75,000 per year,

significantly higher than the yearly wages listed on the W-2 forms of $45,500.04 and $49,291.71,

respectively. The court is unsure about the reason for this discrepancy, but merely acknowledges

that the discrepancy exists.

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forms, and calculations that do not make sense. While Dr. Otero could have done a better job of

providing the relevant documents, because Unum did not address his claim, did not provide a

basis for denying the claim, did not specifically request the W-2 forms, and did not clarify the

issues, his confusion about what documents were key is understandable. Under these

circumstances, the court will not allow Unum to take unfair advantage of the confusion that it

created when the lack of information resulting from that confusion is remediable.

In an ERISA benefits case, a court has discretion in fashioning a remedy on de novo

review. Accordingly, the court WILL REMAND this claim to Unum, directing it to obtain the

relevant W-2 forms and any other relevant documents that it does not have and to make

appropriate calculations based on those W-2 forms to determine whether a 20% decrease in fact

exists in Dr. Otero’s monthly earnings after February 2, 2013. 

The court has already determined that Unum has waived its right to challenge Dr. Otero’s

eligibility for coverage based on his part-time work, and has already determined that Dr. Otero

has been unable, as of February of 2013, to perform his “regular occupation” of neurologist as

performed in the national economy. Therefore, if the appropriate calculations reflect such a 20%

decrease in Dr. Otero’s monthly income after February 2, 2013, then Unum shall pay Dr. Otero

long-term disability benefits based on his monthly earnings at the time he became disabled in

February of 2013; the court reiterates that as long as Dr. Otero otherwise meets the definition of

disability under the policy, Unum cannot raise his part-time work and failure to work the

minimum 36 hours per week to challenge his eligibility for coverage under the Plan. The court

WILL RETAIN jurisdiction and WILL INSTRUCT Unum to determine Dr. Otero’s claim at the 

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first level within 45 days of this opinion and to notify the court of the results.

Dated this13th day of January, 2017. 

 ____________________________________

 KARON OWEN BOWDRE

 CHIEF UNITED STATES DISTRICT JUDGE

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APPENDIX

The following are some relevant or potentially relevant provisions of Dr. Otero’s group 

long-term disability policy with Unum.

1. Administration

The amended policy provides that Neurology Consultants is the policyholder and the plan

administrator, but that the benefits administrator is Unum. (Otero II, Doc. 25-2, at 6 & 31). Dr.

Otero argues that Unum’s acceptance of premium payments while it knew he was working 20

hours per week affects his coverage status. Unum points to the following policy provisions as

relevant.

WHAT INFORMATION DOES UNUM REQUIRE FROM THE

POLICYHOLDER?

The Policyholder must provide UNUM with the following on a regular

basis:

– information about employees:

• who are eligible to become insured;

• whose amounts of coverage change; and/or

• whose coverage ends;

– occupational information and any other information that may be

required to manage a claim; and

– any other information that may be reasonably required.

Policyholder records that, in UNUM’s opinion, have a bearing on this

policy will be available for review by UNUM at any reasonable time.

Clerical error or omission by UNUM will not:

– prevent an employee from receiving coverage;

– affect the amount of an insured’s coverage; or

– cause an employee’s coverage to begin or continue when the

coverage would not otherwise be effective.

(Otero II, Doc. 25-2, at 12-13).

DOES YOUR EMPLOYER ACT AS YOUR AGENT OR UNUM’S

AGENT?

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For purposes of the policy, your Employer acts on its own behalf or as

your agent. Under no circumstances will your Employer be deemed the

agent of Unum.

(Otero II, Doc. 25-2, at 18.

2. Eligibility for Coverage

Unum points to the following policy provisions as relevant to its assertion that Dr. Otero

was not eligible for coverage after the termination of his disability benefits in March 2010,

because he was not in active employment working the minimum number of hours per week. 

ELIGIBLE GROUP(S):

Group 1

 Owners in active employments

Group 2

 Physicians in active employment

* * *

MINIMUM HOURS REQUIREMENT:

 Employees must be working at least 36 hours per week.

(Otero II, Doc. 25-2, at 8). 

GENERAL PROVISIONS

WHEN DOES YOUR COVERAGE END?

Your coverage under the policy or a plan ends on the earliest of:

* * *

– the date you no longer are in an eligible group;

* * * or 

– the last day you are in active employment except as provided under the

covered layoff or leave of absence provision.

Unum will provide coverage for a payable claim which occurs while you

are covered under the policy or plan.

(Otero II, Doc. 25-2, at 17).

ACTIVE EMPLOYMENT means you are working for your Employer

for earnings that are paid regularly and that your are performing the

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material and substantial duties of your regular occupation. You must be

working at least the minimum number of hours as described under

Eligible Group(s) in each plan. 

(Otero II, Doc. 25-2, at 37).

3. Disability Benefits

Unum points to the following provisions as relevant to and supportive of its assertion that

Dr. Otero was not disabled as of February of 2013:

HOW DOES UNUM DEFINE DISABILITY?

You are disabled when Unum determines that:

– you are limited from performing the material and substantial duties

of your regular occupation due to your sickness or injury; and 

– you have a 20% or more loss in your indexed monthly earnings due

to the same sickness or injury.

After 24 months of payments, you are disabled when Unum determines

that due to the same sickness or injury, you are unable to perform the

duties of any gainful occupation for which you are reasonably fitted by

education, training or experience.

We may require you to be examined by a physician, other medical

practitioner or vocational expert of our choice. Unum will pay for this

examination. We can require an examination as often as it is reasonable to

do so. We may also require you to be interviewed by an authorized Unum

Representative. 

(Otero II, Doc. 25-2, at 19) (emphasis in original).

HOW MUCH WILL UNUM PAY YOU IF YOU ARE DISABLED?

We will follow this process to figure out payment:

Owners, Physicians

1. Multiply your monthly earnings by 60%.

2. The maximum monthly benefit is $10,000.

3. Compare the answer from Item 1 with the maximum monthly benefit. 

The lesser of these two amounts is your gross disability payment.

(Otero II, Doc. 25-2, at 19-20) (emphasis in original).

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WHAT ARE YOUR MONTHLY EARNINGS?

***

Physicians, All Other Full-Time Employees

“Monthly Earnings” means your gross monthly income from your

Employer in effect just prior to your date of disability and is computed

based on your Schedule K-1 and W-2 income averaged over the lesser of:

a. the 3 most recent tax years (36 months); or 

***

W-2 income is derived from the income box on your W-2 form that

reflects “wages, tips and other compensation” received from your

Employer. It is your total income before taxes. It is prior to any

deductions made for pre-tax contributions to a qualified deferred

compensation plan. 

It does not include . . . income received from sources other than your

Employer.

(Otero II, Doc. 25-2, at 20) (emphasis in original). 

ELIMINATION PERIOD means a period of continuous disability

which must be satisfied before you are eligible to receive benefits from

Unum.

INDEXED MONTHLY EARNINGS means your monthly earnings

adjusted on each anniversary of benefit payments by the lesser of 10% or

the current annual percentage increase in the Consumer Price Index. 

Your indexed monthly earnings may increase or remain the same, but

will never decrease.

* * *

Indexing is only used to determine your percentage of lost earnings

while you are disabled and working.

GAINFUL OCCUPATION means an occupation that is or can be

expected to provide you with an income at least equal to your gross

disability payment within 12 months of your return to work.

MATERIAL AND SUBSTANTIAL DUTIES means duties that:

– are normally required for the performance of your regular

occupation; and

– cannot be reasonably omitted or modified.

RECURRENT DISABILITY means a disability which is:

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– caused by worsening in your condition; and 

– due to the same cause(s) as your prior disability for which Unum

made a Long Term Disability payment.

REGULAR OCCUPATION means the occupation you are routinely

performing when your disability begins. Unum will look at your

occupation as it is normally performed in the national economy, instead

of how the work tasks are performed for a specific employer or at a

specific location. 

SICKNESS means an illness or disease. Disability must begin while

you are covered under the plan.

(Otero II, Doc. 25-2, at 37-40).

WHEN WILL PAYMENTS STOP?

We will stop sending you payments and your claim will end on the earliest

of the following:

– during the first 24 months of payments, when you are able to work in 

 your regular occupation on a part-time basis but you choose not to; 

– after 24 months of payments, when you are able to work in any gainful 

 occupation on a part-time basis but you choose not to; 

– the end of the maximum period of payment;

– the date you are no longer disabled under the terms of the plan;

– the date you fail to submit proof of continuing disability;

– the date your disability earnings exceed the amount allowable under 

 the plan;

– the date you die.

(Otero II, Doc. 25-2, at 25) (emphasis in original).

WHAT HAPPENS IF YOU RETURN TO WORK FULL TIME

AND YOUR DISABILITY OCCURS AGAIN?

If you have a recurrent disability, Unum will treat your disability as part

of your prior claim and you will not have to complete another elimination

period if:

– you were continuously insured under the plan for the period between

your prior claim and your recurrent disability; and

– your recurrent disability occurs within 6 months of the end of your

prior claim.

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Your recurrent disability will be subject to the same terms of this plan as

your prior claim.

Any disability which occurs after 6 months from the date your prior claim

ended will be treated as a new claim. The new claim will be subject to all

of the policy provisions.

(Otero II, Doc. 25-2, at 26-27) (emphasis in original).

4. Claims Procedures

Unum will give you notice of the decision no later than 45 days after the

claim is filed. This time period may be extended twice by 30 days if

Unum both determines that such an extension is necessary due to matters

beyond the control of the Plan and notifies you of the circumstances

requiring the extension of time and the date which Unum expects to render

a decision . . . .

If your claim for benefits is wholly or partially denied, the notice of

adverse benefit determination under the Plan will:

- state the specific reason(s) for the determination;

- reference specific Plan provision(s) on which the determination is based;

- describe additional material or information necessary to complete the

claim and why such information is necessary;

- describe Plan procedures and time limits for appealing the

determination, and your right to obtain information about those procedures

and the right to sue in federal court; and

- disclose any internal rule, guidelines, protocol or simlar criterion relied

on in making the adverse determination (or state that such information will

be provided free of charge upon request).

Notice of the determination may be provided in written or electronic form. 

Electronic notices will be provided in a form that complies with any

applicable legal requirements.

(Otero II, Doc. 25-2, at 33).

5. Discretion

When making a benefit determination under the policy, Unum has

discretionary authority to determine your eligibility for benefits and to

interpret the terms and provisions of the policy.

(Otero II, Doc. 25-2, at 15).

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