Insurance Claim – Coverage

WI Supreme Court

Case Name: Kemper Independence Insurance Company v. Ismet Islami

Case No.: 2021 WI 53

Focus: Insurance Claim – Coverage

Ismet Islami seeks review of the court of appeals decision affirming the Waukesha County Circuit Court’s grant of summary judgment in favor of Kemper Independence Insurance Company (Kemper) denying coverage to Ismet for the loss of her home. Ydbi Islami, from whom Ismet is legally separated, intentionally set fire to the home. All parties stipulated that Ydbi concealed facts from Kemper about his involvement in the fire with the intent to deceive, and Kemper relied upon Ydbi’s concealment and fraud to its detriment. The circuit court ruled the “concealment or fraud” condition in Kemper’s insurance policy covering the home (“the Policy”) barred coverage for Ismet’s claims. The court of appeals agreed that the Policy did not provide coverage as a result of Ydbi’s conduct and affirmed the circuit court’s decision.

Ismet raises three arguments. First, Ismet contends that, given her legal separation from Ydbi, Ydbi is not her spouse and therefore not an “insured” for purposes of the Policy. Second, Ismet argues the Policy’s “concealment or fraud” condition is ambiguous, conflicts with the Policy’s “intentional loss” exclusion, and therefore does not bar coverage. Third, Ismet asserts she is an innocent insured and the victim of domestic abuse, thereby requiring Kemper to provide coverage under Wis. Stat. § 631.95(2)(f)’s domestic abuse exception to a property insurer’s intentional act exclusion.

We hold: (1) Ydbi is an insured under the terms of the Policy, both under the plain language of the insurance contract and because Wisconsin’s marriage laws recognize Ydbi as Ismet’s spouse; (2) the Policy’s “concealment or fraud” condition precludes coverage for Ismet——a conclusion unaffected by the Policy’s “intentional loss” exclusion; and (3) Wis. Stat. § 631.95(2)(f) does not apply because the record lacks any evidence showing Ydbi’s arson constituted “domestic abuse” against Ismet, as statutorily defined. Accordingly, we affirm the decision of the court of appeals.

Affirmed

Concur:

Dissent: KAROFSKY, J., filed a dissenting opinion in which ANN WALSH BRADLEY and DALLET, JJ., joined.

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Derek A Hawkins is Corporate Counsel, at Salesforce.