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Martin Wasik held a homeowners policy with Allstate Insurance Company. After a fire destroyed his garage and its contents, he submitted a claim for $8,082 under the policy. Allstate denied coverage, claiming that because Wasik's stepson intentionally started the fire, it was not obligated to pay the claim.

Wasik filed a breach-of-contract action against Allstate. Both parties moved for summary judgment, and the trial court found in favor of Allstate. Wasik appealed.

The evidence showed that Wasik lived in a single-family home with a detached garage. Wasik's wife, Nancy (deceased at the time of the fire), had two children from a previous relationship. One of these children was William Fort. Fort, his wife, Kathleen, and his son were living in Wasik's home at the time of the fire, and they stored their belongings in the garage. They did not pay rent or household expenses.

Fort and Kathleen testified under oath, explaining their version of what happened the day of the fire. They denied that the fire was set intentionally. The fire department report filed after the fire concluded that the fire was suspicious. A fire investigation, completed at Wasik's request, found that the fire originated at or near floor level, was incendiary, and was caused by the ignition of a flammable liquid by an open flame.

Among the general policy declarations, the Allstate policy had a "joint obligations" clause. This clause stated: "The terms of this policy impose joint obligations on persons defined as an insured person. This means that the responsibilities, acts and failures to act of a person defined as an insured person will be binding upon another person defined as an insured person." The general policy declarations section also stated: "We do not cover any loss or occurrence in which any insured person has concealed or misrepresented any material fact or circumstance." There were also specific exclusions precluding recovery for a loss caused by wrongdoing.

The Appellate Court of Illinois found that the specific exclusions did not exclude coverage for all insureds in the event of some improper behavior by "any" insured. Under the Illinois Innocent Insured Doctrine, the terms of the policy must clearly state that the policy would be void or coverage would be excluded with respect to all insureds. The court found the exclusions did not meet this standard. Allstate argued, however, that the joint obligations clause satisfied the clarity requirement. The appellate court disagreed. Because the joint obligations clause was found among the general policy declarations and was not a part of the exclusionary clauses, a reasonable insured could not understand the clause to exclude coverage for all insureds when coverage was excluded for one insured. According to the court, the clause referred to an insured's obligations under the policy and not to any of the exclusions that preclude recovery for a loss caused by wrongdoing on the part of the insured.

The judgment of the lower court was reversed.