RECREATIONAL VEHICLE EXCEPTION TO AUTO EXCLUSION APPLIES TO SNOWMOBILE

The issue presented to the First Court of Appeals in Oleksy v. Farmers Ins. Exchange, 410 S.W.3d 378 (Tex. App. – Houston [1st District] 2013, pet. denied) was whether the exception to the auto exclusion in a homeowner policy applied.  The exception provided that the auto exclusion does not apply to motor vehicles which are not subject to motor vehicle registration and are designed and used for recreational purposes and are not owned by an insured.  Farmers asserted that the exception did not apply because the snowmobile was subject to registration in New York, and there was an inference that Oleksy owned the snowmobile.  Oleksy filed a cross-motion wherein he argued that Texas law applied, and the exception applied because the snowmobile was not subject to motor-vehicle registration in Texas and he did not own the snowmobile.  The trial court granted summary judgment in favor of Farmers, denied Oleksy’s motion, and issued a final declaratory judgment that the policy provided no coverage for the snowmobile accident and that Farmers had no duty to defend or indemnify.

The parties disagreed on whether Texas or New York law should be applied.  However, after reviewing the Texas Transportation Code and the New York Vehicle Traffic Law, the majority concluded that they were materially the same for purposes of resolving the appeal:  neither law subjects a snowmobile to “motor vehicle registration.”   Thus, Farmers was not entitled to summary judgment because it did not disprove the applicability of the recreational vehicle exception.  As to Oleksy, on appeal, he contended that New York law established no registration needed.  However, the court found that Oleksy did not include such an argument in his motion and thus, remanded the case for further proceeding.

The dissent by Justice Keyes noted that the majority concluded that Oleksy made a new argument on appeal for why the law should be construed in his favor, and refused to construe and declare the law itself.  Justice Keyes found that the snowmobile was not required to be registered by the applicable motor vehicle law – that of New York.  It was plainly a recreational vehicle and there was no longer a dispute that Oleksy was not the owner.  Therefore, the summary judgment evidence established that the exception to the auto exclusion applied.

This entry was posted in Blog, Coverage. Bookmark the permalink.

Leave a Reply

Your email address will not be published.

*