Wisconsin Supreme Court Concludes that “Innocent Spouse” May Not Recover for Spouse’s Arson and Fraud

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Ismet Islami asked the Supreme Court to reverse the court of appeals decision affirming grant of summary judgment in favor of Kemper Independence Insurance Company (Kemper) denying coverage to Ismet for the loss of her home. In Kemper Independence Insurance Company v. Ismet Islami, 2021 WI 53, No. 2019AP488, State Of Wisconsin In Supreme Court (June 8, 2021) the Supreme Court rejected her argument over a rather strenuous dissent.

ZALMA OPINION

Although the court presumed that Ismet was innocent but was not entitled to recover under the policy because of the fraud committed by her husband, Ydbi, she also signed the proof of loss under oath making a claim for the damage caused intentionally by Ydbi. Her falsely sworn statement should have defeated her claim of innocence. That fact was not needed to be established by Kemper because the clear language of the policy made it obvious that no insured could recover if a fraudulent claim is presented to an insurer and the insurer proves if was fraudulent.