MADISON, Wis. (CN) — The Wisconsin Supreme Court heard arguments on Monday in a nearly decade-old case in which a legally separated husband burned his wife’s house down for the insurance money but she was denied coverage because he lied about the arson under oath.
Fifteen years after Ismet Islami and her husband Ydbi got a legal separation in 1998, Ydbi in June 2013 torched Ismet’s house in Lac La Belle, a village around the Milwaukee exurb of Oconomowoc, while she was on vacation in her native Macedonia. The title to the home was solely in Ismet’s name and she was the sole named insured on her homeowner’s policy at the time.
During Kemper Independence Insurance Company’s investigation of the fire, Ydbi lied under oath about his involvement. Kemper soon discovered Ydbi’s lie and denied Ismet coverage because her spouse concealed or misrepresented facts about the fire.
The insurance company filed a lawsuit in December 2013 seeking a declaration of no coverage, and a Waukesha County Circuit Court judge granted Kemper summary judgment. Ismet appealed, arguing in part that Wisconsin law prevents Kemper from denying coverage because Ydbi’s actions were an act or part of a pattern of domestic abuse. She also claimed that he was not technically her spouse because they were legally separated at the time.
But the appeals court affirmed, holding it was bound to do so by the language in the policy while conceding that its decision resulted in a loss of coverage to an innocent person.
Ydbi was charged criminally with the arson in 2014 in Waukesha County and after multiple delays pleaded no contest and was sentenced to six years imprisonment in 2017, with credit for more than 1,000 days of time served. According to Wisconsin Department of Corrections records, Ydbi, 65, was released from Oshkosh Correctional Institution into extended supervision in May 2020.
Joseph Owens, a New Berlin, Wisconsin, attorney arguing on Ismet's behalf in a virtual hearing on Monday, put forth that apart from the technicalities over the Islamis' marital status, the arson of Ismet’s home could be considered a physical act engendering fear of imminent harm to her and therefore affords her protections under Wisconsin statutes handling domestic abuse.
Reacting to Justice Rebecca Grassl Bradley’s point that the court may have to “graft onto [a relevant statute]…language that isn’t there” to get to his position, Owens argued arson objectively fits the standard of fear of physical harm, comparing it to past terror tactics used by the Ku Klux Klan and other white supremacists against Black southerners.
When it comes to physical harm in that sense, “there’s only one thing left after your home and possessions, and that’s your body,” Owens said. Justice Brian Hagedorn, however, challenged that the official record complicates whether Ismet knew Ydbi had committed the arson and when.
Justice Jill Karofsky noted that, arson aside, the record bears out Ydbi’s history of abusive behavior, including that he refused to give her a divorce when asked for one, that he had been a registered sex offender in Wisconsin since 1989 but did not tell her, and had lost over $17,000 of their money gambling.
James Fredericks from Borgelt, Powell, Peterson & Frauen’s Milwaukee office appeared on behalf of Kemper, positing that “there is no evidence in the record of domestic abuse” and that, in any case, Ydbi burned the house down for the insurance money, not to threaten Ismet.
None of the three justices comprising the high court’s liberal bloc bought Fredericks’ rationale.
“What would you need to see in order for you to be convinced there was domestic abuse?” Karofsky prodded. “I certainly hope that in 2021 we’re not going to require women to show up in court with black eyes.”
Justice Rebecca Dallet offered that arson falls into the category of physical acts that would cause a reasonable person fear of domestic abuse, but Fredericks countered that there is not so much as an affidavit in the record from Ismet outlining such fears.
The insurance company’s lawyer claimed that the policy unambiguously denies coverage because Ydbi, as the spouse of an insured, lied about his fraud, but Justice Ann Walsh Bradley considered denying Ismet coverage based on Ydbi’s lie “a bit absurd.” An amicus brief filed in the case by the Wisconsin Association for Justice, the state’s largest voluntary bar organization, similarly called that reading of the policy a “bizarre interpretation.”
Evidence in the record showing millions of dollars in debt between a failing restaurant and investments in a casino in Macedonia showed neither Ismet nor Ydbi had sufficient income to cover their expenses, Fredericks stated, bolstering his claim that the arson was solely undertaken to defraud Kemper and not as an act of domestic violence. Fredericks also said the record shows the couples’ legal separation was only obtained to deal with Ydbi’s debts and protect Ismet’s assets from his liabilities.
Neither Owens nor Fredericks immediately responded to requests for further comment on Monday.
The high court did not indicate when it would issue a decision at the close of arguments.