Shaps v. Provident Life & Accident Insurance Co.

Ms. Shaps (plaintiff), while living and working in New York, purchased a disability policy from Provident Life & Accident Insurance Co. (Provident) (defendant). A few years later, Shaps requested and received disability benefits. The following year, Provident quit paying benefits to Shaps because it claimed Shaps failed to provide evidence of her continuous, total disability as defined in the policy. Shaps moved to Florida and sued Provident. Florida choice-of-law rules required a court to apply the substantive law of the place where a contract is made to contract disputes. Under consideration was which party had the burden to establish whether Shaps was disabled when Provident quit paying her benefits. Under New York law, Shaps had the burden; under Florida law, Provident had the burden. Under Florida’s choice-of-law rules, there was no question that New York substantive law governed the claim. The parties disagreed, however, on whether the Florida burden-of-proof rule for insurance-benefit eligibility was procedural or substantive. If the rule was procedural, then the law of the forum—Florida—would apply. But if the rule was substantive, then New York law would apply. The Florida court held that the burden of proof was substantive and that New York law applied. The jury found that Shaps was not disabled when her benefits payment ended, and Shaps appealed.