                                                                       [PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                                                                       FILED
                           ________________________          U.S. COURT OF APPEALS
                                                               ELEVENTH CIRCUIT
                                                                  January 13, 2003
                             Nos. 98-5500 & 99-4028             THOMAS K. KAHN
                           ________________________                   CLERK

                      D. C. Docket No. 95-08627-CV-DMM

AUDREY SHAPS,

                                                          Plaintiff-Appellant,

                                       versus


PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY, et al.,

                                                          Defendant-Appellees.

                           ________________________

                   Appeals from the United States District Court
                       for the Southern District of Florida
                         _________________________

                                (January 13, 2003)

Before EDMONDSON, Chief Judge, MARCUS, Circuit Judge, and RESTANI*,
Judge.


      *
        Honorable Jane A. Restani, Judge, United States Court of International Trade,
sitting by designation.
MARCUS, Circuit Judge:

      This is an appeal from a jury verdict in favor of two insurers and against

appellant Audrey Shaps, who asserts that the insurers breached a disability

insurance contract to which they and she were parties. We first considered the case

in early 2001, but we found that ambiguities in Florida law prevented us from

reaching a conclusive determination as to one of the issues raised by Shaps. In

particular, we were unable to decide whether the district court erred as a matter of

state law by placing the burden of proof as to the existence of appellant’s disability

on appellant.

      Accordingly, we certified to the Florida Supreme Court two questions. See

Shaps v. Provident Life & Accident Ins. Co., 244 F.3d 876, 878 (11th Cir. 2001).

Specifically, we asked:

      1.     Is the burden of proof rule recognized in Fruchter v. Aetna Life
             Insurance Co., 266 So. 2d 61 (Fla. 3d Dist. Ct. App. 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).

Id.

                                          2
      The Florida Supreme Court has now responded to our certified questions,

answering the first question in the negative and declining to reach the second

question. See Shaps v. Provident Life & Accident Ins. Co., 826 So. 2d 250, 254-

55 (Fla. 2002). Based on the Court’s answer to our first question, we conclude that

the district court’s placement of the burden of proof on the insured in this case was

error. Consequently, we vacate the district court’s entry of judgment in favor of

Provident Casualty on the breach of contract claim and remand for further

proceedings consistent with this opinion.1



                                          I.

      The facts and procedural history of the case are straightforward. In June

1987, Defendant Provident Life and Casualty Insurance Company (“Provident

Casualty”) issued an individual disability policy to Plaintiff Audrey Shaps, who at

the time resided and worked in New York. Shaps first submitted a claim for

disability benefits on or about July 29, 1989, asserting that the nature of her

disabling sickness or injury was “TMJ syndrome” (temporal mandibular joint

disorder). Shaps subsequently submitted additional claim forms to Provident

Casualty’s New York office, and thereby continued to receive benefits. On


      1
       We note, however, that the remainder of our earlier opinion is not affected.
                                           3
September 7, 1990, Provident Casualty made a final payment to Shaps, as it

determined that there was no evidence of continuous total disability as defined by

her policy.

      On December 15, 1994, Provident Casualty received from Shaps notice of a

new claim for disability benefits, in which she stated that the nature of her

disabling sickness or injury was breast cancer and TMJ syndrome, and that she had

been disabled as a result of this illness since October 24, 1994. Provident Casualty

initially paid benefits on this claim, but stopped doing so in May 1995, based on a

claim form submitted by Shaps’s physician which indicated that Shaps was no

longer totally disabled. After receiving additional information, however, 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 spanning 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 the Circuit Court for Palm

Beach County, Florida, against Provident Life and Accident Insurance Company

(“Provident Accident”), and the case was subsequently removed to the Southern

District of Florida. As amended, Shaps’s complaint eventually alleged three

separate counts for breach of contract and specific performance against Provident


                                          4
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, and the district court granted

the motion in part. Specifically, it dismissed the count for intentional infliction of

emotional distress, and ruled 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.

       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’s

breach of contract claim (which 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).




                                           5
      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 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’s March 20, 1991

application to Federal Kemper Life Insurance Company for a life insurance policy.

The application listed 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


                                           6
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 a result of TMJ syndrome. John Girard, an internist Shaps

began seeing in 1992, also testified. He stated that he had no medical knowledge

as to whether Shaps was disabled before he saw her in 1992, but said that Shaps

was disabled from June 1992 through June 1995. Shaps also pursued at trial her

separate claim that she was denied benefits between September 8, 1995, and April

6, 1996, in breach of her insurance contract. Among other things, Shaps presented

the testimony of her oncologist, Gerald Spunberg, who testified that Shaps was

totally disabled as a result of breast cancer. Shaps’s psychotherapist, Beth

Kreakower, testified that it was her opinion that Shaps was unable to perform her

duties as a loan officer from the time Shaps began seeing her in April 1995 until

Shaps moved to California in April 1996.

      At the close of the evidence, the trial court directed verdicts in favor of

Provident Accident on the counts remaining against it -- breach of contract and

specific performance -- and in favor of Provident Casualty on the count for specific

performance. However, the court permitted the jury to consider the remaining

claims involving the breach of contract allegations against Provident Casualty. In

a special verdict, the jury determined that Shaps was not continuously disabled


                                          7
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. The

district court entered final judgment in favor of Provident Accident and Provident

Casualty, and awarded costs to the defendants.

      Shaps appealed to this Court, arguing that the district court committed

multiple errors warranting a new trial. In our earlier opinion, we found all of

Shaps’s objections to the trial to be unpersuasive, except one which we could not

decide at the time -- that is, whether 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, governed the case. See Shaps, 244 F.3d at 888. Accordingly, we did

not completely resolve the appeal, and instead certified this issue to the Florida

Supreme Court.


                                          II.

      We now must determine, in light of the Florida Supreme Court’s answer to

our certified questions, whether the district court erred in applying New York law

                                           8
to the burden of proof question in this case. We review the district court’s choice

of law de novo. See Trumpet Vine Invs., N.V. v. Union Capital Partners I, Inc., 92

F.3d 1110, 1115 (11th Cir. 1996).

       As we noted in our earlier opinion, the basis of the district court’s

jurisdiction was diversity and suit was filed in Florida, so the district court was

required to apply Florida’s conflict-of-law rules. See, e.g., Maryland Cas. Co. v.

Williams, 377 F.2d 389, 392 (5th Cir. 1967) (citing Klaxon Co. v. Stentor Elec.

Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 1021-22, 85 L. Ed. 1477 (1941)).2

Under Florida’s conflict-of-law rules, the doctrine of lex loci contractus directs

that, in the absence of a contractual provision specifying governing law, a contract,

other than one for performance of services, is governed by law of the state in which

the contract is made. See Fioretti v. Mass. Gen. Life Ins. Co., 53 F.3d 1228, 1235

(11th Cir. 1995). The contract here was executed in New York, and the parties do

not dispute that New York law governs the interpretation and application of the

contract.

       Florida’s conflict-of-law rules also direct, however, that procedural issues

are controlled by the law of the forum, which in this case, is Florida. See Strauss


       2
        In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this Court
adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to the close
of business on September 30, 1981.

                                                 9
v. Sillin, 393 So. 2d 1205, 1206 (Fla. 2d Dist. Ct. App. 1981). The parties

vigorously disagreed as to whether the Florida law governing burden of proof

recognized in Fruchter v. Aetna Life Ins. Co., 266 So. 2d 61 (Fla. 3d Dist. Ct. App.

1972), cert. discharged, 283 So. 2d 36 (Fla. 1973), is procedural or substantive, and

in turn, whether it applies to the instant case. This issue is significant because in a

situation like this, where the insurer begins to pay total disability benefits to an

insured but later ceases to pay benefits based on a belief that the insured is not

disabled, the Florida law, unlike the New York law, places the burden of proof on

the insurer, requiring it to “establish by the preponderance of the evidence that the

condition of the insured is such that he no longer comes within the purview of the

policy in this regard.” Fruchter, 266 So. 2d at 63 (citation omitted). Because we

were uncertain whether the Florida courts viewed the Fruchter burden of proof rule

as procedural or substantive for conflict-of-law purposes, we certified this issue to

the Florida Supreme Court, and asked specifically whether this rule is part of the

procedural law of Florida.

      The Florida Supreme Court conclusively determined, upon review of our

certified questions, that the Fruchter burden of proof rule is a procedural issue for

conflict-of-law purposes. See Shaps, 826 So. 2d at 254-55. In so holding, the

court reviewed the procedural posture of the Fruchter case. In Fruchter, the Third


                                           10
District Court of Appeal held that the trial court erred in failing to instruct the jury

that the insurer had the burden of establishing that the total disability within the

insurance policy had ceased. See 266 So. 2d at 62. The insurer then sought review

by certiorari, which the Florida Supreme Court denied because it “fail[ed] to find

conflict and accordingly discharge the writ as improvidently issued.” Fruchter,

283 So. 2d at 37. In explaining its reasons for discharging the writ, the Florida

Supreme Court also stated that it upheld “the Third District’s correct application

and continued viability as a matter of substantive law of the holdings in Lecks3 and

Ewing4 and the district court’s reversal and remand of the cause for a new trial.”

Id. at 37-38 (emphasis added).

      After giving an overview of the Fruchter decisions in its response to our

certified questions, the Florida Supreme Court determined that its earlier language

in Fruchter, suggesting that the burden of proof rule is substantive, see id., does not

constitute binding precedent. See Shaps, 826 So. 2d at 253. It observed that a

“denial of certiorari . . . cannot be construed as a determination of the issues

presented in the petition . . . and cannot be utilized as precedent.” Id. (quoting

Southern Bell Tel. & Tel. Co. v. Bell, 116 So. 2d 617, 619 (Fla. 1959)).


      3
       New York Life Ins. Co. v. Lecks, 165 So. 50 (Fla. 1936).
      4
       Mutual Life Ins. Co. v. Ewing, 10 So. 2d 316 (Fla. 1942).
                                           11
      Turning to the crux of the certified question, the Florida Supreme Court next

addressed whether Fruchter’s burden of proof rule is substantive or procedural for

conflict-of-law purposes. Id. at 254. The court began by acknowledging that in

Florida, burden of proof generally is a procedural issue. Id. The court then applied

the definitions of substantive law -- which “prescribes duties and rights” -- and

procedural law -- which “concerns the means and methods to apply and enforce

those duties and rights” -- to the rule at issue. Id. (citation omitted). Finding that

“burden of proof clearly concerns the means and methods to apply and enforce

duties and rights under a contract,” the court concluded that it found “no reason to

depart from this general rule for conflict-of-law purposes.” Id. As a result, the

court answered our certified question by holding that the Fruchter burden of proof

rule is a procedural issue for conflict-of-law purposes.5 Id. at 254-55.

      Applying the Florida Supreme Court’s response to this appeal, we are

constrained to conclude that because burden of proof is part of the procedural law

of Florida, and because Florida’s conflict-of-law rules require its courts to apply

the procedural laws of Florida, the Florida burden of proof rule is applicable here.

Under this rule, because Provident Casualty had paid disability benefits to Shaps



      5
       Because the court answered our first certified question in the negative, it found it
“unnecessary” to answer our second certified question. Shaps, 826 So. 2d at 255.

                                            12
before it determined that she was not disabled and discontinued paying her

benefits, the burden is on the insurer -- i.e., Provident Casualty -- to prove that

Shaps was not disabled. See Fruchter, 266 So. 2d at 63. It therefore follows that

the district court erred in applying the New York burden of proof law that places

the burden on Shaps to prove that she was still disabled.

      Accordingly, we vacate the district court’s entry of judgment in favor of

Provident Casualty on the breach of contract claim and remand for further

proceedings consistent with this opinion.

      VACATED and REMANDED.




                                           13
