AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• United Nuclear Corporation operated several uranium mines in New Mexico from the 1960s through the early 1980s. A significant event occurred in July 1979 when a breach in a dam at the Church Rock Mine resulted in a substantial spill of radioactive material, marking the largest accidental release of radioactive material in U.S. history. United Nuclear obtained liability insurance policies from Allstate Insurance Company, which were in effect between August 1, 1977, and June 1, 1981. These policies contained a pollution exclusion clause that barred coverage for damages caused by pollution unless the events causing those damages were "sudden and accidental." United Nuclear faced actual costs and potential liability for environmental contamination from its mining operations and sought coverage under these policies (paras 2-4).

Procedural History

• District Court, October 2008: Granted Allstate's motion for summary judgment, finding the term "sudden" in the policies' pollution exclusion clause to mean quick, abrupt, or a temporarily short period of time, and thus excluded coverage for United Nuclear's claims (para 7).
• Court of Appeals: Upheld the district court's grant of summary judgment to Allstate, agreeing with the district court's interpretation of "sudden" (para 7).

Parties' Submissions

• United Nuclear: Argued that the term "sudden" in the insurance policies' pollution exclusion clause should be interpreted as "unexpected," thereby entitling them to coverage for the environmental contamination claims (para 1).
• Allstate Insurance Company: Asserted that the term "sudden" signifies an abrupt event or events, and because the discharges leading to contamination at United Nuclear’s mines occurred over a period of years, those events were not "sudden" and thus excluded from coverage under the policies (para 6).

Legal Issues

• Whether the term "sudden" in the pollution exclusion clause of the liability insurance policies issued to United Nuclear by Allstate unambiguously signifies "quick, abrupt, or a temporarily short period of time," thereby barring coverage for certain damages unless the events causing those damages were "sudden and accidental" (paras 1, 6-7).

Disposition

• The Supreme Court of New Mexico reversed the Court of Appeals' holding and remanded the case to the district court for further proceedings, interpreting the term "sudden" in the insurance policies at issue to mean "unexpected" (para 38).

Reasons

• The Supreme Court of New Mexico, per Justice Patricio M. Serna, found that the term "sudden" lacks a single clear meaning and is ambiguous within the context of the pollution exclusion clause in the liability insurance policies. The Court determined that the term "sudden" should be construed in favor of the insured, United Nuclear, to mean "unexpected" rather than indicating a temporal limitation. This interpretation was based on the absence of a definition of "sudden" in the policies, diverging definitions in standard dictionaries, the lack of consensus among courts nationwide, and the drafting history of the pollution exclusion. The Court emphasized the principle of resolving ambiguities against the insurer and in favor of coverage under the policies. The decision was unanimous, with all justices concurring (paras 10-38).