United Nuclear Corp. v. Allstate Insurance, 285 P.3d 644

United Nuclear sought coverage from Allstate for pollution-related damages arising from mining operations in New Mexico (1977–1981 policies).
The pollution exclusion bars coverage for discharges unless they are “sudden and accidental.”
The 1979 Church Rock Mine breach and subsequent environmental remediation provide context but not the narrow ambiguity issue.
District court granted summary judgment for Allstate, holding “sudden” means rapid/temporary; Court of Appeals affirmed.
New Mexico Supreme Court held “sudden” is ambiguous and construed in insured’s favor as “unexpected,” remanding for further proceedings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is “sudden” ambiguous in the pollution exclusion language?	United Nuclear argues the term has multiple reasonable meanings.	Allstate contends “sudden” has a temporal, abrupt meaning.	Ambiguous; term has multiple reasonable meanings.
Can extrinsic evidence be considered to determine ambiguity?	Evidence outside the policy helps reveal ambiguity.	Extrinsic evidence should not be needed to interpret a clear term.	Extrinsic evidence permissible to assess ambiguity.
Should ambiguity be resolved in the insured’s favor?	Public policy favors insured protection when language is unclear.	Policy should be construed as written against insured only if no ambiguity.	Ambiguities resolved in insured’s favor.
Did drafting history and industry practice support a non-temporal meaning?	Industry drafting history supports “unexpected/unforeseen.”	Traditional readings support temporal interpretation.	Drafting history and industry practice support ambiguity and insured-favorable reading.
Does the lack of a policy-definition for “sudden” resolve the issue?	Undefined terms are ambiguous and require extrinsic context.	Undefined terms may still be interpreted by ordinary meaning.	Lack of definition contributes to ambiguity; insured-favorable interpretation adopted.

Queen City Farms, Inc. v. Cent. Nat’l. Ins. Co. of Omaha, 882 P.2d 703 (Wash. 1991) (ambiguous meaning of “sudden” in pollution exclusion; two readings exist)
Mesa Oil, Inc. v. Ins. Co. of North America, 123 F.3d 1333 (10th Cir. 1997) (held ‘sudden’ unambiguous as temporal; court rejected; panel disagreed with NM result)
Textron, Inc. v. Aetna Cas. & Sur. Co., 754 A.2d 742 (R.I. 2000) (interpreting ‘sudden and accidental’ as potentially ‘unexpected and unintended’)
St. Paul Fire & Marine Ins. Co., Inc. v. McCormick & Baxter Creosoting Co., 923 P.2d 1200 (Or. 1996) (recognizes ambiguity in phrases like ‘sudden and accidental’)