SNOWMOBILES IN TEXAS? HOUSTON APPELLATE COURT EXAMINES THE RECREATIONAL-VEHICLE EXCEPTION TO THE MOTOR-VEHICLE EXCLUSION IN A HOMEOWNER’S POLICY

In Oleksy v. Farmers Ins. Exchange, 410 S.W.3d 378, Tex.App.— Hous. [1 Dist.], Jul. 30, 2013, review denied (June 6, 2014), Houston’s First Court of Appeals examined the applicability of the motor-vehicle exclusion and recreation vehicle exception in a homeowner’s policy. In 2007, Lawrence S. Oleksy, a Texas resident, went snowmobiling in New York with his friend Paul Pochron. Pochron was seriously injured when his snowmobile collided with Oleksy's.  Pochron and his wife later sued Oleksy in Fort Bend County, Texas.  Pochron alleged that Oleksy was a resident of Texas and the snowmobile accident occurred in New York.  Oleksy filed a declaratory judgment action against Farmers Insurance, his homeowner's insurance carrier, seeking a declaration that Farmers had a duty to defend and to indemnify him in the lawsuit filed by Pochron. Although his homeowner's policy included an exclusion for personal injuries arising from the use of motor vehicles, Oleksy based his claim for coverage on an exception to the exclusion that it did not apply to:

(1) motor vehicles which are not subject to motor vehicle registration and are:

....

(d) designed and used for recreational purposes; and are:

(i) not owned by an insured; or

(ii) owned by an insured while on the residence

    premises.

Farmers filed an answer, counterclaim, and third-party petition for declaratory relief naming Pochron as a third-party defendant and seeking a declaratory judgment that Oleksy was not entitled to coverage because the motor-vehicle exclusion applied.  Both parties asserted there was a conflict of law issue on whether or not snowmobiles were subject to motor-vehicle registration.

The parties both filed motions for summary judgment.  The trial court granted summary judgment for Farmers, denied Olesky’s motion, and issued a final declaratory judgment holding  the insurance policy provided no coverage for the snowmobile accident and Farmers had no duty to defend or indemnify.  On appeal, the Houston appellate court found the trial court erred in granting Farmer’s summary judgment motion because there was no conflict of law issue and in both Texas and New York snowmobiles were not subject to “motor-vehicle registration.”  As such, it reversed and remanded to the trial court.  Justice Keyes, in a detailed dissenting opinion, characterized the majority opinion as “advisory” and believed the trial court erred in granting Farmers summary judgment and in not granting Olesky’s.  The dissent concluded that the appellate court should reverse and render in favor of coverage for the insured.