D. Conn. Court: Insurer Has No Duty to Defend Over False Masonry Application

In Union Mutual Fire Insurance Co. v. Krajewski, the U.S. District Court for the District of Connecticut granted summary judgment in favor of an insurance carrier due to false statements provided by the insured on his application of insurance.

In March 2022, Michael Krajewski sought insurance for his masonry business, Mike’s Masonry & Chimney Sweep. Through his insurance agent, Krajewski completed an application to submit to Union Mutual for insurance. Notably, Krajewski indicated on the application that he performed only masonry work, did not have any incidental operations, did not have any employees, did not subcontract work, did not perform any demolition or excavation operations, and did not use heavy equipment, cranes, or scaffolding. Subsequently, Union Mutual processed the application and issued insurance to Krajewski’s business.

In March 2023, when the Union Mutual policy was in effect, Krajewski contracted with the Hartwells to perform work on their home. However, the contract and proposal for the home project included areas of work outside of masonry, including excavation work, removal and installation of a foundation, installation of new drainage, a new roof, etc. The contracted work also required the use of heavy equipment. In addition, Krajewski subcontracted much of the work on the Hartwell project.

In August 2024, the Hartwells brought a breach of contract action against Krajewski for failing to complete the work as prescribed under the contract and for performing substandard work. Krajewski sought coverage under the Union Mutual policy.

Union Mutual sued Krajewski, seeking a declaration that the insurance policy was void because: (1) Krajewski had provided material misrepresentations on his application for insurance; and (2) Krajewski failed to cooperate with Union Mutual in his investigation of the claim (including failing to attend EUOs, notifying the carrier of the breach of contract lawsuit, providing answers to discovery, etc.). Union Mutual moved for summary judgment.

Applying Connecticut law, the district court held that Union Mutual had to satisfy three elements to void the insurance policy issued to Krajewski. To succeed in voiding the policy, Union Mutual had to show there was (1) a misrepresentation by Krajewski that was (2) knowingly made and (3) material to Union Mutual’s decision whether to insure. The court also noted that an insurance contract could not be voided if the misrepresentations were “innocent,” i.e., due to ignorance, mistake, or negligence. Significantly, Connecticut law holds that an insured cannot claim an innocent misrepresentation because the insured failed to read the application before signing.

In granting summary judgment, the district court found that Union Mutual satisfied all three elements. First, there was no dispute that Krajewski provided false information on the application, including the scope of work his company provided, the use of subcontracts, and use of heavy equipment.

Second, the district court held the misrepresentations were knowingly made by Krajewski, who signed the insurance application. Specifically, Connecticut law required him to answer in good faith and to use due diligence to see the answers were accurate.

Third, the district court held there was no genuine factual dispute that the misrepresentations were material. The court acknowledged that a policy for only masonry work, as sought by Krajewski, had much less risk for the carrier than a policy for the work actually provided by Krajewski, including work performed by unknown subcontractors. Simply put, the application prevented Union Mutual from having the ability to determine the amount of risk it was insuring, and that it would not have provided the insurance if Krajewski provided accurate information.

Accordingly, the district court determined the insurance application was void due to the material misrepresentations made by Krajewski. As such, the district court did not consider the second issue of whether Krajewski’s failure to cooperate with Union Mutual was grounds for voiding the policy. The court granted summary judgment in favor of Union Mutual, holding the carrier had no duty to defend of indemnify Krajewski in the breach of contract action.