{1} This appeal turns on our construction of a single word, “sudden,” within a pollution exclusion clause in a series of liability insurance policies barring coverage for certain damages unless the events causing those damages were “sudden and accidental” — an issue of first impression in New Mexico, although one already considered by numerous courts in other jurisdictions. Concluding that “sudden” lacks a single clear meaning, we reverse the Court of Appeals’ holding that the word unambiguously signifies “quick, abrupt, or a temporarily short period of time.” United Nuclear Corp. v. Allstate Ins. Co.,
I. FACTUAL AND PROCEDURAL BACKGROUND
{2} United Nuclear operated several uranium mines in New Mexico from the 1960s through the early 1980s, one of which was the Northeast Church Rock Mine (Church Rock Mine) in McKinley County. Although the parties do not mention this fact in their briefs, in July 1979, a breach opened in a dam at the Church Rock Mine and about 94 million gallons of radioactive liquid escaped from a tailings pond and poured into the nearby Rio Puerco. See United Nuclear Corp. v. Allendale Mut. Ins. Co.,
{3} To insure its mining operations, United Nuclear obtained commercial general liability and umbrella liability insurance policies from a number of carriers, including the polices relevant to this dispute (the Policies), which were issued by two predecessor corporations of Respondent Allstate Insurance Company (Allstate). Together, the Policies were in effect between August 1, 1977 and June 1, 1981.
{4} United Nuclear either incurred actual costs or was exposed to potential liability for environmental contamination resulting from its mining operations through several different proceedings. Those proceedings included a 1996 lawsuit filed by the New Mexico Mining Commission ultimately requiring United Nuclear to remediate three of its mines (including the Church Rock Mine), see N.M. Mining Comm’n v. United Nuclear Corp.,
{5} United Nuclear ultimately filed a third-party complaint in the 1997 lawsuit filed by the mineral lessor, seeking a declaration that Allstate and various other insurers are required to defend and indemnify United Nuclear in the underlying suit. By April 2005, United Nuclear had amended the third-party complaint to seek declaratory relief against Allstate and the other insurers for all of its actual and potential liabilities mentioned above.
{6} In February 2006, Allstate moved for summary judgment on the sole ground that the Policies contain an exclusion clause removing from coverage all claims for damages caused by pollution or contamination unless the underlying discharges were “sudden and accidental.” Allstate further asserted that the term “sudden” as used in the Policies connotes an abrupt event or events, and because the discharges that lead to the contamination at United Nuclear’s mines occurred over a period of years, those events were not “sudden” and thus are excluded from coverage.
{7} In October 2008, the district court granted Allstate’s motion. The court found “the word ‘sudden’ and the word ‘accidental’ ... [to be] clear and unambiguous .... The word ‘sudden’ means quick, abrupt or otherwise a temporarily short period of time. . . . The word ‘accidental’ means unintended, unexpected or by chance.” United Nuclear appealed the district court’s determination to the Court of Appeals. In its opinion, a divided panel upheld the district court’s grant of summary judgment to Allstate on the meaning of “sudden” as used in the Policies’ pollution exclusion clause. United Nuclear,
{8} As the district court had done, the Court of Appeals relied heavily on the reasoning and holding of Mesa Oil, Inc. v. Ins. Co. of North America,
II. STANDARD OF REVIEW
{9} This Court reviews de novo an order granting or denying summary judgment. See Romero v. Philip Morris Inc.,
III. DISCUSSION
A. Analytical Principles
1. Ambiguities Construed Against The Insurer
{10} As with other contracts, where an insurance policy’s terms “have a common and ordinary meaning, that meaning controls in determining the intent of the parties.” Id. ¶ 13. Reviewing courts should not “create ambiguity where none exists, and
[tjhe typical insured does not bargain for individual terms within policy clauses; the insured makes only broad choices regarding general concepts of coverage, risk, and cost. Not only does the insurance company draft the documents, but it does so with far more knowledge than the typical insured of the consequences of particular words.
{11} Cognizant of this imbalance in power, “as a matter of public policy” courts “generally construe[]” ambiguities “in favor of the insured and against the insurer.” Ponder v. State Farm Mut. Auto. Ins. Co.,
2. Consideration of Extrinsic Evidence in Assessing Ambiguity
{12} Because the Court of Appeals’ majority opinion held the term “sudden” to have a plain and unambiguous meaning, it did not consider extrinsic evidence necessary to resolve the appeal. United Nuclear,
{13} “New Mexico law . . . allows the court to consider extrinsic evidence to make a preliminary finding on the question of ambiguity.” Mark V, Inc. v. Mellekas,
1. Relevant Policy Terms
{14} The Policies’ general coverage forms provide that Allstate will defend and indemnify United Nuclear for “damages on account of... Property Damage ... caused by or arising out of each Occurrence . . . .” The Policies define an “Occurrence” as “an accident, event or happening including continuous or repeated exposure to conditions which results, during the policy period, in . . . Property Damage . . . neither expected nor intended from the standpoint of the Insured. . . . All such . . . Property Damage . . . caused by one event or by continuous or repeated exposure to substantially the same conditions shall be deemed to result from one Occurrence.”
{15} The Policies do not apply to every conceivable incident of property damage; they contain various exclusions, including the pollution exclusion at issue here which bars coverage for property damage “arising out of the discharge, dispersal, release or escape of. . . toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water; but th[e] exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental.” (Emphasis added).
1
The Policies’ pollution exclusion is a boilerplate form that once was widely used in the liability insurance industry. See, e.g., Century Indem. Co. v. Liberty Mut. Ins. Co.,
2. Sources for the Possible Meaning of“Sudden”
a. Other Provisions in the Policies
{16} Our inquiry begins with the other relevant terms of the Policies. See Rummel,
{17} United Nuclear presents both persuasive and unpersuasive arguments for the proposition that the Policies contain other language that inherently contradicts Allstate’s preferred meaning of the word “sudden.” One of the four Policies (the 1978-79 Policy), contains an endorsement, or modification, that alters coverage to exclude property damage caused by “seepage, pollution or contamination” unless the discharge “is caused by accident and results in property damage,” or subsequent to the discharge, “an accident ensues which causes property damage.”
{18} United Nuclear also attempts to establish an inconsistency between the pollution exclusion clause and the promise in the Policies’ general ‘insuring agreement’ to provide coverage for damages or claims arising from occurrences “including continuous or repeated exposure to conditions which results . . . in . . . Property Damage . . . neither expected nor intended from the standpoint of the Insured.” (Emphasis added). United Nuclear’s argument that this language is inconsistent with defining “sudden” within the pollution exclusion as requiring abruptness or a short duration is not persuasive. An exclusion does not conflict with an insurance policy’s insuring agreement simply because it affords less or different coverage as compared with what the policy would provide without the exclusion; that is the very purpose of an exclusion, to restrict the scope of the policy beyond what would otherwise be covered. See Century Transit Sys., Inc. v. Am. Empire Surplus Lines Ins. Co.,
b. Dictionary Definitions
{19} When a term is undefined in the policy, a reviewing court “may look to that term’s ‘usual, ordinary, andpopular’ meaning, such as found in a dictionary.” Davis v. Farmers Ins. Co. of Ariz.,
{20} Although “the mere existence of multiple dictionary definitions of a word, without more,” does not create an ambiguity, Citation Ins. Co. v. Gomez,
{21} Dictionaries define “sudden” as either synonymous with “unexpected,” or as the temporal descriptor of a brief occurrence, or both. Webster’s Third New International Dictionary defines sudden as “unexpected,” “to come up, occur unexpectedly,” “happening without previous notice or with very brief notice,” and “not foreseen or prepared for,” which do not necessarily convey a temporal meaning; as well as “characterized by or manifesting hastiness,” and “characterized by swift action,” which do convey a temporal meaning. Webster’s Third New International Dictionary 2284 (1993). Black’s Law Dictionary defines “sudden” as “[h]appening without previous notice or with very brief notice; coming or occurring unexpectedly; unforeseen; unprepared for.” Black’s Law Dictionary 1432 (6th ed. 1990). While “[hjappening with . . . very brief notice” may connote a temporal limitation, “occurring unexpectedly” does not. Similarly, another standard dictionary gives primary meanings of “sudden” as “[1] [hjappening or coming without warning; [2] unexpected, unforeseen; [3] abrupt, hasty,” the first two of which do not necessarily include a temporal element and the third of which does. 2 Shorter Oxford English Dictionary 3131 (5th ed. 2002). The Court of Appeals did not explain its preference for one set of these definitions over the other, but simply concluded that “the word ‘sudden’ . . . ordinarily means: quick, abrupt, or a temporarily short period of time.” United Nuclear, 201 l-NMCA-039, ¶ 20. The only support for that conclusion derives from Mesa Oil, which we discuss below. Allstate offers no arguments here as to why, where numerous sources indicate that there are multiple commonplace definitions for the word “sudden,” most of those definitions should be disregarded.
{22} The Rhode Island Supreme Court considered the competing definitions of “sudden” to demonstrate the ambiguity of the term:
Giving the word “sudden” its “plain everyday meaning” is no easy task. Both sides muster dictionary support of their respective positions, half of which accord a temporal meaning to the word and the other half of which give it the meaning of unexpected. This diversity proves only that the word’s meaning is legitimately subject to different interpretations - in other words, that it is ambiguous.
Textron,
{23} Other courts, while not relying quite so heavily on dictionaries, nonetheless have found the conceptually distinct definitions of “sudden” to render the term ambiguous. See St. Paul Fire & Marine Ins. Co., Inc. v. McCormick & Baxter Creosoting Co.,
c. Divergence of Opinion Among Courts
{24} Perhaps more consequential than the fact that “sudden” has multiple definitions in the abstract is the split among other courts that have considered the issue in similar insurance coverage disputes. While it is true that “[a] split in legal authority may he indicative of an ambiguity in the policy, [it] does not establish one.” Davis,
{25} The Tenth Circuit opinion relied upon by the district court and Court of Appeals in the present case, Mesa Oil,
{26} The second basis for the Tenth Circuit’s determination is that “the word ‘sudden’ would be superfluous if it did not impose a temporal requirement on the exemption.” Mesa Oil,
{27} Numerous courts finding ambiguity in the phrase “sudden and accidental” have interpreted the term to mean “unexpected and unintended” — two words that, while conceptually related, are not identical in meaning. See, e.g., Queen City Farms,
{28} Even assuming, arguendo, that defining “sudden” as “unexpected” renders the term superfluous, this fact alone does not preclude our holding the term to be ambiguous. New Mexico’s public policy of protecting
{29} Many courts have reasonably concluded, both inside and outside of the insurance context, that such a lack of interpretive consensus is itself an indicator of ambiguity. See Greenville,
d. Industry Practice and Drafting History
{30} United Nuclear urges this Court to consider the “custom and usage” of the phrase “sudden and accidental” within the insurance industry, arguing that prior use of the term in other kinds of insurance policies supports “a non-temporal construction.” United Nuclear similarly asks the Court to consider the drafting history of the pollution exclusion, arguing that documentation from the drafting process supports the understanding that the pollution exclusion was intended to only disallow coverage for deliberate pollution.
{31} In support of its argument, United Nuclear points to court decisions involving boiler and machinery insurance policies, which are policies that insure losses or breakdowns to equipment and fixtures. Boiler and machinery policies had employed the term “sudden” within the policies prior to use of the term’s use in the pollution exclusion context. See Ala. Plating Co. v. U.S. Fid. & Guar. Co.,
{32} More recent decisions analyzing “sudden and accidental” in the context of other types of insurance policies are also instructive. For instance, the New Hampshire Supreme Court found “sudden and accidental” to he ambiguous in a ‘special farm package
{33} Turning to the drafting history of the pollution exclusion, “[a]round 1970,” United Nuclear asserts, “the insurance industry ‘tacked’ the pollution exclusion onto general liability policies as a way to distance insurers ‘in the public mind from deliberate polluters.’” United Nuclear contends that documents from the policy drafting process show “the insurance industry expected the exclusion merely to clarify the industry’s intention to exclude pollution events that are expected or intended ....” The propriety and necessity of considering drafting history in evaluating the meaning of the term “sudden” has featured prominently in prior decisions. Our Court of Appeals, however, deemed it unnecessary to do so in this case because “[t]he hypothetical reasonable insured with limited knowledge of insurance law would understand the word ‘sudden’ to mean what it ordinarily means: quick, abrupt, or a temporarily short period of time.” United Nuclear, 201 l-NMCA-039, ¶ 20. We do not conclude, as did the Court of Appeals, that “sudden” has only one reasonable meaning. Moreover, unlike the Court of Appeals we view the consideration of extrinsic evidence as important to the initial determination of whether an ambiguity exists in the insurance policy. See generally Ponder,
{34} The crux of United Nuclear’s argument with respect to drafting history is that the insurance industry sought regulatory approval for the pollution exclusion without being required to reduce premiums by reassuring state regulators that the exclusion was merely a clarification, rather than a limitation, of coverage. Allstate offers two substantive arguments in response. First, it contends that the drafting history “concerns alleged representations only by third parties . . . . Neither [United Nuclear] nor Allstate participated in either the drafting or the approval of the form language.” The purpose of exploring the drafting history of the pollution exclusion, however, is not to demonstrate Allstate’s participation in the drafting of the pollution exclusion or even its assent to other insurers’ representations, but rather to show that the term acquired a particular meaning as the pollution exclusion worked its way through the regulatory approval process. See generally Queen City Farms,
{35} Second, Allstate asserts that a reasonable insured would not be apprised of the intricacies of the insurance industry’s common trade practices, and therefore such information should not be considered. This argument contradicts the policy rationale underlying the “reasonable expectations” standard and the ultimate resolution of ambiguities in favor of the insured. As we have established, a reviewing court may use extrinsic evidence to answer the preliminary question of whether the language of an insurance agreement is clear on its face. See Mark V,
{36} As the dissent to the Court of Appeals’ opinion recognizes, “[t]he events leading up to the creation of the pollution exception by the insurance industry are ‘well-documented and relatively uncontroverted.’” United Nuclear,
{37} Judge Vigil’s dissent viewed the industry’s preferred meaning of the pollution exclusion during the drafting and approval process to be in tension with the meaning that Allstate urges, as do we. See United Nuclear,
III. CONCLUSION
{38} The absence of a definition of the term in the Policies, taken together with diverging definitions in standard dictionaries and the lack of any consensus among courts nationwide, we hold that the meaning of the term “sudden” as used in the Policies is ambiguous. In recognizing the inherent imbalance of the two parties to an insurance contract — that often times “language in standard policies does not involve mutual negotiations between the insurers and the insureds” — we must resolve such ambiguities against the insurer. Queen City Farms,
{39} Typically, the determination that a term in an insurance policy is ambiguous is “a matter of law rather than a factual determination.” Rummel,
{40} IT IS SO ORDERED.
WE CONCUR:
Notes
One of the four policies in question (the 1980-81 Policy), has a slightly different version of the exclusion, providing that coverage does not apply if the discharge “is both sudden and accidental.”
States whose high courts have found the term “sudden” to be ambiguous include Colorado, Georgia, Illinois, Oregon, South Carolina, Washington, and Wisconsin. See, e.g., Hecla Mining Co. v. N.H. Ins. Co.,
States whose high courts have held the term “sudden” to be unambiguous include Florida, Massachusetts, Michigan, Nebraska, Oklahoma, South Dakota, and Utah. See, e.g., Dimmitt Chevrolet, Inc. v. Se. Fid. Ins. Corp.,