Opinion issued July 30, 2013




                                      In The

                               Court of Appeals
                                     For The

                          First District of Texas
                           ————————————
                               NO. 01-11-00545-CV
                            ———————————
                     LAWRENCE S. OLEKSY, Appellant
                                        V.
               FARMERS INSURANCE EXCHANGE, Appellee



                    On Appeal from the 400th District Court
                           Fort Bend County, Texas
                     Trial Court Case No. 08-DCV-165626



                                  OPINION

      It is a cardinal rule of Texas summary-judgment practice that “[i]ssues not

expressly presented to the trial court by written motion, answer or other response

shall not be considered on appeal as grounds for reversal.” TEX. R. CIV. P. 166a(c).
“[T]he reasons for the summary judgment and the objections to it must be in

writing and before the trial judge at the hearing.” City of Houston v. Clear Creek

Basin Auth., 589 S.W.2d 671, 677 (Tex. 1979). “A motion must stand or fall on

the grounds expressly presented in the motion.” McConnell v. Southside Indep.

Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993).

      Our resolution of this appeal arising from cross-motions for summary

judgment on a disputed question of insurance coverage flows from these settled

black-letter principles. Appellant Lawrence S. Oleksy appeals from an adverse

final summary judgment that a homeowner’s insurance policy issued by appellee

Farmers Insurance Exchange provided no coverage for personal injuries arising

from a snowmobile accident. We conclude, based on the appellate record, that

summary judgment was not warranted in favor of either party; accordingly we

reverse the judgment in favor of Farmers.

                                  Background

      In February 2007, Oleksy went snowmobiling in New York with his friend

Paul Pochron and several other people. Pochron was seriously injured when his

snowmobile collided with Oleksy’s. Pochron and his wife later sued Oleksy in

Fort Bend County. In his first amended original petition, Pochron alleged that

Oleksy was a resident of Texas and that the snowmobile accident occurred in New




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York. The petition did not clearly identify the owner of the snowmobile used by

Oleksy.

      Oleksy filed a declaratory judgment action against Farmers Insurance, his

homeowner’s insurance carrier, seeking a declaration that Farmers has a duty to

defend and to indemnify him in the lawsuit filed by Pochron.        Although his

homeowner’s policy includes an exclusion for personal injuries arising from the

use of motor vehicles, Oleksy based his claim for coverage on an exception to that

exclusion. The relevant policy provisions are:

      Section II—Liability Coverage
      Coverage C (Personal Liability)

      If a claim is made or a suit is brought against an insured for damages
      because of bodily injury or property damage caused by an
      occurrence to which this coverage applies, we will:

      1.     Pay up to our limit of liability for the damages for which the
             insured is legally liable. Damages include prejudgment interest
             awarded against the insured; and

      2.     Provide a defense at our expense by counsel of our choice even
             if the suit is groundless, false or fraudulent. We may
             investigate and settle any claim or suit that we decide is
             appropriate.

      ....

      Section II—Exclusions

      1.  Coverage C (Personal Liability) and Coverage D (Medical
      Payments to Others) do not apply to:

      ....
                                        3
      f.    bodily injury or property damage arising out of the
            ownership, maintenance, operation, use, loading or unloading
            of:
            (1) motor or engine propelled vehicles or machines designed
                  for movement on land, including attached machinery or
                  equipment;
            (2) trailers, semi-trailers or mobile homes;

      Which are owned or operated by or rented or loaned to an insured.

      However, this exclusion does 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 is not entitled to coverage because the motor-

vehicle exclusion applies.

      Farmers moved for summary judgment based on the motor-vehicle exclusion

in the homeowner’s policy. As summary-judgment evidence, Farmers attached the

insurance policy, Pochron’s petition, a copy of the New York statute requiring

registration of snowmobiles, and excerpts from Pochron’s deposition and Oleksy’s

recorded statement. Farmers argued that the recreational-vehicle exception did not

apply because the snowmobile was subject to registration in New York and

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because Pochron’s deposition and Oleksy’s statement supported an inference that

the insured, Oleksy, owned the snowmobile.

      Oleksy filed a cross-motion for summary judgment and response to the

motion filed by Farmers. He argued that the question of whether the snowmobile

was “subject to motor vehicle registration” had to be decided pursuant to Texas

law pursuant to Article 21.42 of the Texas Insurance Code, which is a statutory

choice-of-Texas-law provision. Oleksy thus argued that the exception applied

because the snowmobile was not subject to motor-vehicle registration in Texas.

He also argued that he did not own the snowmobile based on undisputed evidence

that Pochron obtained title to the snowmobile in his own name, maintained

possession of it, paid insurance premiums for it, and had an insurance policy that

named him as its owner. As summary-judgment evidence, Oleksy attached: the

homeowner’s insurance policy; Pochron’s first amended petition; an email from

the Texas Department of Motor Vehicles stating that it does not title or register

snowmobiles; an affidavit from Pochron in which he avers that he owned the

snowmobile in question; and his answers to interrogatories, in which Oleksy

denied ownership of the snowmobile.

      The trial court granted summary judgment in favor of Farmers, denied

Oleksy’s motion, and issued a final declaratory judgment that the insurance policy




                                        5
provided no coverage for the snowmobile accident and that Farmers had no duty to

defend or indemnify Oleksy in connection with the Pochron lawsuit.

      Shortly after the trial court’s final judgment, Pochron filed a third amended

original petition, specifically alleging that he, not Oleksy, owned the snowmobile.

Oleksy filed a motion for new trial, for the first time arguing that an insurer’s duty

to defend is determined by the third-party plaintiff’s pleadings considered in light

of the policy provisions, without consideration of facts outside of the pleadings. In

response, Farmers argued that Pochron’s amended petition should not change the

result of the declaratory-judgment action because the petition alleges facts which,

if true, invoke the motor-vehicle exclusion and negate the recreational-vehicle

exception. The trial court overruled the motion for new trial, and Oleksy appealed.

On appeal, Farmers now concedes that Pochron owned the snowmobile that

Oleksy drove at the time of the collision.

                                      Analysis

      When both sides move for summary judgment, and the trial court grants one

motion and denies the other, reviewing courts consider both sides’ summary-

judgment evidence, determine all questions presented, and render the judgment the

trial court should have rendered. E.g., Gilbert Tex. Constr., L.P. v. Underwriters at

Lloyd’s London, 327 S.W.3d 118, 124 (Tex. 2010). Each party must carry its own

burden to establish entitlement to summary judgment by conclusively proving all

                                             6
the elements of the claim or defense as a matter of law. See Atl. Lloyds Ins. Co. v.

Butler, 137 S.W.3d 199, 208 (Tex. App.—Houston [1st Dist.] 2004, pet. denied)

(citing CU Lloyd’s of Tex. v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998)). In a

case involving the proper interpretation of an insurance policy, the insured has the

burden to establish coverage under the terms of the policy. Gilbert Tex., 327

S.W.3d at 124. To avoid liability the insurer must then prove that the loss is

subject to an exclusion. Id. “If the insurer proves that an exclusion applies, the

burden shifts back to the insured to show that an exception to the exclusion brings

the claim back within coverage.” Id.

      Interpretation of an insurance policy is governed by well-established

principles of contract construction. Mid–Continent Cas. Co. v. Global Enercom

Mgmt., Inc., 323 S.W.3d 151, 154 (Tex. 2010).           We review a trial court’s

interpretation of a contract de novo. See In re Dillard Dep’t Stores, Inc., 186

S.W.3d 514, 515 (Tex. 2006); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223,

227 (Tex. 2003). The primary objective is to give effect to the intent of the parties

as reflected in the terms of the policy. Mid–Continent, 323 S.W.3d at 154; State

Farm Lloyds v. Page, 315 S.W.3d 525, 527 (Tex. 2010). “As with any other

contract, the parties’ intent is governed by what they said, not by what they

intended to say but did not.” Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746

(Tex. 2006).   “Moreover, in cases like this involving a standard form policy

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mandated by a state regulatory agency . . . the actual intent of the parties is not

what counts (as they did not write it), but the ordinary, everyday meaning of the

words to the general public.” Id.

      “An insurer is required to defend only those cases within the policy

coverage.” Fid. & Guar. Ins. Underwriters, Inc. v. McManus, 633 S.W.2d 787,

788 (Tex. 1982). We determine whether an insurer has a duty to defend under the

“eight-corners” or “complaint-allegation” rule. GuideOne Elite Ins. Co. v. Fielder

Rd. Baptist Church, 197 S.W.3d 305, 308 (Tex. 2006). “The rule takes its name

from the fact that only two documents are ordinarily relevant to the determination

of the duty to defend: the policy and the pleadings of the third-party claimant.” Id.

We consider the third-party plaintiff’s pleadings in light of the policy provisions,

without regard to the truth of the allegations. Id. “Facts outside the pleadings,

even those easily ascertained, are ordinarily not material to the determination and

allegations against the insured are liberally construed in favor of coverage.” Id. A

plaintiff’s factual allegations that potentially support a covered claim is all that is

needed to invoke the insurer’s duty to defend. Id. at 310.

      Both motions for summary judgment argued that New York and Texas law

conflict on the question of whether snowmobiles are subject to motor-vehicle

registration. Because the interpretation of a statute is a question of law that this

court determines de novo, we are not bound to accept the parties’ agreed but

                                          8
mistaken interpretation of law. See First Am. Title Ins. Co. v. Combs, 258 S.W.3d

627, 631 (Tex. 2008).

I.    False conflict

      Oleksy devotes a significant portion of his appellate briefing to addressing

the purported conflict-of-law question, i.e., whether Texas or New York law

regarding motor-vehicle registration should be applied to determine whether the

recreational-vehicle exception to the motor-vehicle exclusion applies. However,

because Texas and New York law do not conflict regarding any issue material to

the appeal, we need not address Oleksy’s Article 21.42 argument.

      Texas law specifically excludes off-highway recreational vehicles from the

requirements of motor-vehicle registration. Compare TEX. TRANSP. CODE ANN.

§ 502.040 (West 2013) (requiring registration of motor vehicle that “is used or to

be used on a public highway”), with id. § 502.140 (stating “a person may not

register an all-terrain vehicle or a recreational off-highway vehicle, with or without

design alterations, for operation on a public highway”).

      Under the New York Vehicle and Traffic Law, a motor vehicle is defined as

“[e]very vehicle operated or driven upon a public highway which is propelled by

any power other than muscular power, except . . . snowmobiles . . . and . . . all

terrain vehicles . . . .” N.Y. VEH. & TRAF. LAW § 125 (McKinney 2005). A

snowmobile is distinguished and treated differently from other kinds of “motor


                                          9
vehicles” under the New York statute. Compare id. §§ 400–499-d (Title IV—

Registration of Vehicles), with §§ 2220–2413 (Title XI—Registration of

Snowmobiles, Motorboats and Limited Use Vehicles).           “Notwithstanding its

limited use on highways, a snowmobile shall not be determined a motor vehicle

within the meaning of section one hundred twenty-five of this chapter or any other

successor statutes.” Id. § 2229 (“Snowmobile, not a motor vehicle”). Both the

motor-vehicle registration and snowmobile registration laws appear in Chapter 71

of the Consolidated Laws, i.e., the same chapter as section 125. See id. §§ 125

(definition of motor vehicle), 401–404-oo (Registration of Motor Vehicles), 2220–

2231 (Registration of Snowmobiles).

      Comparing the Texas Transportation Code and the New York Vehicle and

Traffic Law, we conclude that they are materially the same for purposes of

resolving this appeal: neither law subjects a snowmobile to “motor vehicle

registration.” Accordingly, we hold that there is no conflict of law in this appeal

and no choice-of-law analysis is needed.

II.   Interpretation of insurance policy

      Farmers’s motion for summary judgment purported to be a hybrid motion

both (1) establishing the applicability of the exclusion as a matter of law and

(2) negating the exception because there was no evidence to support it. But its

motion relies in part on its contention that snowmobiles are subject to motor-


                                           10
vehicle registration and in part on its contention that Oleksy owned the

snowmobile, an argument that it has abandoned on appeal.             In light of our

conclusion that snowmobiles are not subject to “motor vehicle” registration under

New York or Texas law, we cannot agree that Farmers conclusively disproved the

applicability of the recreational-vehicle exception. Therefore, we hold that the trial

court erred in granting summary judgment in favor of Farmers.

      Oleksy moved for summary judgment based on the applicability of the

recreational-vehicle exception. But his arguments were based on Texas motor-

vehicle registration and the question of who owned the snowmobile.                 In

supplemental briefing requested by this court, Oleksy argues for the first time that

the New York Vehicle & Traffic Laws establish as a matter of law that

snowmobiles are not subject to motor-vehicle registration. But Oleksy did not

make that argument in his motion for summary judgment in the trial court. “A

motion for summary judgment “must stand or fall on the grounds expressly

presented in the motion.” McConnell, 858 S.W.2d at 341; TEX. R. CIV. P. 166a(c)

(“Issues not expressly presented to the trial court by written motion, answer or

other response shall not be considered on appeal as grounds for reversal.”); see

also Fed. Deposit Ins. Corp. v. Lenk, 361 S.W.3d 602, 609 & n.7 (Tex. 2012)

(refusing to consider defenses which were not raised in the trial court); G & H

Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (“Summary judgments . . .

                                         11
may only be granted upon grounds expressly asserted in the summary judgment

motion.”); Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002)

(“A court cannot grant summary judgment on grounds that were not presented.”);

Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997) (“A motion for

summary judgment must itself expressly present the grounds upon which it is

made, and must stand or fall on these grounds alone.”). As observed by the

Supreme Court of Texas, to act otherwise by rendering judgment based on a

ground not raised in the trial court “may prejudice the nonmovant’s ability to

demonstrate that the issue raises a genuine issue of material fact.”        Stiles v.

Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993).

       The trial court denied Oleksy’s motion for summary judgment, and given the

arguments that were made, we cannot say that it erred in doing so. Cf. City of

Midland v. O’Bryant, 18 S.W.3d 209, 218 (Tex. 2000) (“Because the trial court

should not have granted summary judgment on an issue that was not presented, the

judgment of the court of appeals reversing and remanding the . . . issue to the trial

court was correct . . . .”).

                                    Conclusion

       Because we have concluded that the trial court erred in granting Farmers’s

motion for summary judgment and did not err in denying Oleksy’s motion for

summary judgment, we sustain Oleksy’s issues. We reverse the judgment of the

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trial court, and we remand this case for further proceedings consistent with this

opinion.




                                            Michael Massengale
                                            Justice

Panel consists of Justices Keyes, Massengale, and Brown.

Justice Keyes, dissenting.




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