In Cheney v. Standard Insurance Company and Long Term Disability Insurance, the Seventh Circuit Court of Appeals dealt with an issue concerning when the last day was that the plaintiff actually worked in order to determine whether or not she was covered under Standard’s long term disability policy. The question was a complicated one since this plaintiff, an attorney, worked some of the time at home, took long vacations, and also took extended leaves of absence to flirt with a career in politics. The Seventh Circuit remanded to the Illinois district court since “the district court had made no explicit finding about the onset date of Cheney’s long-term disability.” The last day she worked as well as the date upon which she became disabled are crucial questions that must be answered in order to determine if she had coverage under the policy.

Overview of Relevant Facts

In 1991, Cheney began working as an attorney at the Illinois law firm of Kirkland & Ellis (Kirkland) where she worked for more than 20 years before applying, in July 2012, for long term disability benefits with Kirkland’s insurer, Standard Insurance Company (Standard).

Cheney suffered from spinal disease for many years and first requested work accommodations from Kirkland in 1994. This did not stand in her way of becoming a law firm partner in 1997. Her spinal conditions continued to plague her, so in 2003, the firm granted her request to work mostly from home.

Following a 2007 diagnosis of degenerative disease of her cervical spine, she underwent many therapies including physical therapy and cervical epidural injections. Ultimately, she underwent a cervical spinal fusion in August 2012. About six weeks before the operation, on July 17, 2012, she submitted a claim for long-term disability benefits. Her claim was denied and, after exhausting her administrative remedies, she filed an ERISA lawsuit.

Standard found her last day at work, according to the policy, which included the last day she was capable of working, was in March 2012. According to the terms of her policy, this meant she was no longer covered by the plan when she filed for disability benefits on July 17, 2012. The district court gave her the benefit of the doubt and inferred she was disabled “sometime between December 19, 2011, and September 3, 2012, and lasted for at least the 180-day benefit-waiting period.”

Coverage Depends on The Last Day Cheney Worked

According to the policy terms, coverage ended automatically on the earliest of, “The date your employment terminates” or during a temporary leave of absence of less than nine months as long as the leave is not due to the disability. The last day Cheney worked any hours was on December 19, 2011, even though she remained on the payroll until January 30, 2012. She was on a leave of absence from December 20, 2011, until July 2012.

Standard argued that, according to the terms of the policy, December 19, 2011, would be the plaintiff’s last day at work, so she had no coverage in July 2012 when she filed her claim for disability. If her leave of absence was for a reason other than disability, then she would have coverage, but if because of her disability, she would have no coverage. The plaintiff presented conflicting reasons for her leave of absence, alternatively claiming it was for disability purposes and at other times, saying it was not.

In its remand order, the Seventh Circuit stated, “The district court impermissibly stretched Cheney’s policy coverage by ignoring certain provisions and making conclusions of fact without supporting evidence. Standard asks for a new trial, which is fully warranted on this ground.”