244 F.3d 876 (11th Cir. 2001), 98-5500, Shaps v Provident Life & Accident Insurance Co.

Docket Nº:98-5500, 99-4028.
Citation:244 F.3d 876
Party Name:Audrey SHAPS, Plaintiff-Appellant, v. PROVIDENT LIFE & ACCIDENT INSURANCE COMPANY, Provident Life and Casualty Insurance Company, a foreign corporation, Defendants-Appellees.
Case Date:March 16, 2001
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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244 F.3d 876 (11th Cir. 2001)

Audrey SHAPS, Plaintiff-Appellant,


PROVIDENT LIFE & ACCIDENT INSURANCE COMPANY, Provident Life and Casualty Insurance Company, a foreign corporation, Defendants-Appellees.

Nos. 98-5500, 99-4028.

United States Court of Appeals, Eleventh Circuit

March 16, 2001

March 28, 2001.

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[Copyrighted Material Omitted]

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Appeals from the United States District Court for the Southern District of Florida. (No. 95-08627-CV-DMM), Donald M. Middlebrooks, Judge.

Before EDMONDSON and MARCUS, Circuit Judges, and RESTANI[*], Judge.

MARCUS, Circuit Judge:

This is an appeal of a jury verdict in favor of Defendant Provident Life and Casualty Insurance Company ("Provident Casualty") in a suit brought by Plaintiff Audrey Shaps alleging two breaches of a disability insurance contract. In a special verdict, the jury determined that Shaps was not continuously disabled within the terms of her Provident Casualty disability policy from September 10, 1990 through October 23, 1994, and thereby rejected her first claim for relief. With respect to her second claim, the jury determined that Shaps was continuously disabled from September 8, 1995 through April 6, 1996, but denied relief because it found that she had failed to comply with certain conditions precedent. On appeal, Shaps argues that the district court committed multiple errors warranting a new trial.

We find all of Shaps' objections to be unpersuasive on this record, save one that cannot be decided at this time. Shaps contends that the district court erred by determining that a rule of Florida law placing the burden of proof on the insurer in this context was inapplicable because that rule is substantive and the substantive law of New York, not Florida, governs this case. Whether the Florida rule is substantive appears to turn in part upon proper characterization of the Florida Supreme Court's decision in Aetna Life Insurance Co. v. Fruchter, 283 So.2d 36 (Fla.1973). It is unclear, however, whether the opinion in Fruchter, which discharged a writ of certiorari as improvidently granted, constitutes binding Florida precedent. Moreover, it is unclear to what extent the court's remarks in Fruchter may be read to address the choice-of-law dispute now before us. Accordingly, we respectfully certify to the Florida Supreme Court the following two questions:

1.Is the burden of proof rule recognized in Fruchter v. Aetna Life Insurance Co., 266 So.2d 61 (Fla.App.3d Dist.1972), cert. discharged, 283 So.2d 36 (Fla.1973), part of the substantive law of Florida, such that it would not be applied in a case where under Florida's doctrine of lex loci contractus the substantive law of another state (New York) governs the parties' contract dispute?

2.Would requiring the insured to prove disability in this context violate the public policy of Florida, such that the burden of proof must be placed on the insurer? See Gillen v. United Services Automobile Ass'n, 300 So.2d 3 (Fla.1974).


The background to this appeal is as follows. In June 1987, Provident Casualty issued an individual disability insurance policy to Shaps, who at the time resided and worked in New York. The policy defines "Total Disability" in these terms:

Total disability ... means that due to Injuries or Sickness:

1. you are not able to perform the substantial and material duties of your Occupation; and

2. you are under the care and attendance of a Physician.

The policy defines "Sickness" as "sickness or disease which is first manifested while your policy is in force." The policy defines "Occupation" as "the occupation (or occupations, if more than one) in which

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you are regularly engaged at the time you become disabled." The policy defines "Physician" as "any legally qualified physician."

The policy also contains the following relevant provisions:


If the policy provides for a periodic payment for a continuing loss, you must give us written proof of loss within 90 days after the end of each period for which we are liable. For any other written loss, written proof must be given within 90 days after such loss....


After receiving written proof of loss, we will pay monthly all benefits then due for disability. Benefits for any other loss covered by this policy will be paid as soon as we receive proper written proof.


No legal action may be brought to recover on this policy within 60 days after written proof of loss has been given as required by this policy. No such action may be brought after three years from the time written proof of loss is required to be given.

Shaps first submitted a claim for disability benefits to Provident Casualty's New York office on or about July 29, 1989, asserting that the nature of her sickness or injury was "TMJ syndrome" (temporal mandibular joint disorder) and that she last worked in July 1989. Shaps subsequently submitted additional claim forms to Provident Casualty's New York office, and thereby continued to receive benefits.

On September 7, 1990, Provident Casualty made a final payment to Shaps. Provident Casualty advised Shaps that it had determined that there was no evidence of continuous total disability as defined by her policy, and therefore it was discontinuing payments.

On December 15, 1994, Provident Casualty received from Shaps notice of a new claim for disability benefits, dated December 1, 1994. Shaps now stated that the nature of her disabling sickness or injury was breast cancer and TMJ syndrome. Shaps' claim form stated that her disabling illness began on October 24, 1994, and that she was disabled as of that date. Provident Casualty initially paid benefits on this claim. In May 1995, however, Provident Casualty stopped paying benefits on this claim. Provident Casualty explained that it stopped paying benefits based on a claim form from Shaps' physician which indicated that Shaps was no longer totally disabled. After receiving additional information, Provident Casualty sent Shaps a benefit check representing benefits from May through September 1995. Shaps did not submit claim forms to Provident Casualty for the period September 8, 1995 to April 6, 1996, and Provident in turn sent no payments for that period.

Shaps filed this lawsuit on September 18, 1995. In her suit, originally filed in the Circuit Court for Palm Beach County, Florida, and subsequently removed to the Southern District of Florida, Shaps alleged breach of insurance contract, naming Provident Life and Accident Insurance Company ("Provident Accident") as the defendant. As amended, Shaps' complaint eventually alleged three separate counts for breach of contract and specific performance against Provident Accident and Provident Casualty, and a count for intentional infliction of emotional distress against both defendants. Provident Accident and Provident Casualty moved for summary judgment on all counts. The district court granted the motion in part, dismissing the count for intentional infliction of emotional distress, and ruling that in the event Shaps prevailed at trial she would have no claim for attorneys' fees pursuant to Florida law. Shaps thereafter amended her complaint to seek disability benefits from October 1990 through the date of trial.

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As noted above, the policy at issue contains a clause providing that no action on the policy may be brought more than three years after the time proof of loss was required. Provident Casualty first discontinued payments in 1990, and Shaps brought suit five years later in 1995. Under New York law, which governs the contract, the limitations period for an insurance policy such as this one begins upon the termination of the disability. Accordingly, the district court ruled that Shaps' breach of contract claim related to the cessation of benefits in September 1990 would be time-barred unless she could prove that she was continuously disabled from October 1990 through October 24, 1994 (when Shaps alleged that a new period of disability, for breast cancer as well as TMJ syndrome, commenced).

The case went to trial in August 1998 on the breach of contract and specific performance counts against Provident Accident and Provident Casualty. At trial, Provident Casualty presented evidence that Shaps was not continuously disabled during the 1990-94 period. In particular, Provident Casualty pointed to evidence that during this time Shaps moved to Florida, arranged a mortgage, sold an apartment in New York, filed tax returns that stated that she was "disabled" in 1990, "unemployed" in 1991, "loan officer" in 1992, and "retired" in 1993 and 1994. Provident Casualty also admitted into evidence Shaps' March 20, 1991 application to Federal Kemper Life Insurance Company for a life insurance policy. The application lists her occupation as a mortgage loan officer who was "between jobs." The application stated that Shaps received disability payments in the past for TMJ as a result of stress, but also stated that she was "doing fine," with respect to TMJ had "[n]o problems. Haven't seen doctor for 2 years," and that all of her tests were "normal." Shaps also affirmed on the forms that she had no "mental or physical impairment or disease." The forms were signed by Shaps, although she testified at trial that she did not intend to make the statements contained in the forms.

For her part, Shaps presented the testimony of two health care providers that she saw during the 1990-94 period. Ethel Green, a social worker who Shaps saw from 1990 to 1992, testified that Shaps exhibited the symptoms of general anxiety disorder, but stated that she could not testify as a medical expert as to whether Shaps was disabled as...

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