## Facts

- Audrey Shaps bought an individual disability policy from Provident Life and Accident Insurance Company while living and working in New York.
- The policy defined “total disability” as inability to perform the substantial and material duties of the insured’s occupation and being under a physician’s care.
- Shaps claimed disability, submitted proof, and the insurer paid benefits for a period.
- In 1990, the insurer stopped paying, asserting Shaps failed to provide required continuing proof that she remained totally disabled.
- After Shaps moved to Florida, she again claimed disability; an affiliated Provident entity resumed benefits for a later period and then terminated them.
- Shaps sued in federal court in Florida for breach of the disability policy, alleging both benefit terminations were wrongful.
- Applying lex loci contractus, the federal court treated New York law as governing the contract and assigned Shaps the burden to prove disability at the time benefits were terminated.
- A jury found Shaps did not meet that burden and returned a verdict for the insurer; the Eleventh Circuit certified a conflict-of-laws question to the Florida Supreme Court.

## Issues

1. For Florida conflict-of-laws purposes, is the rule allocating the burden of proof after an insurer has paid disability benefits procedural (governed by Florida forum law) or substantive (governed by the law of the place of contracting)?

## Decision

- The Florida Supreme Court held that allocation of the burden of proof is procedural for Florida conflict-of-laws purposes.
- Because the issue is procedural, Florida forum law governs even though New York law governs substantive contract issues under lex loci contractus.
- Under Florida law, once an insurer has acknowledged disability and paid benefits, the insurer bears the burden to prove the disability has ceased when it later terminates payments.
- The court answered the certified question accordingly, disapproved the contrary approach, and remanded for further proceedings consistent with its ruling.

## Legal Principles

- In Florida choice-of-law analysis, substantive contract issues in insurance disputes generally follow lex loci contractus, but procedural matters are governed by the forum.
- Substantive law creates or regulates rights and duties; procedural law concerns the means and methods of presenting and proving claims in litigation.
- Burden-of-proof allocation is generally procedural in Florida, even if it may affect the outcome.
- In Florida disability insurance cases, after the insurer begins paying benefits based on an acknowledged disability, the insurer bears the burden to prove the disability ended when it stops paying.

## Conclusion

Florida treats burden-of-proof allocation as a procedural issue for conflict-of-laws purposes; therefore, disability benefit termination disputes litigated in Florida apply Florida’s rule placing the burden on the insurer to prove cessation of disability after it has paid benefits.


Shaps v. Provident Life & Accident Insurance Co., 826 So. 2d 250 (Fla. 2002)