Hawaiʻi Supreme Court called upon as historic $4B Maui wildfire settlement faces hurdle from insurers

Second Circuit Court Judge Peter Cahill granted a motion on Friday to allow the Hawaiʻi Supreme Court to determine whether or not insurers can interfere with the historic $4.037 billion global settlement for plaintiffs in the Maui Wildfires Cases. The findings by the higher court could either provide more clarity on the role of insurers seeking to recoup money from payouts; or, if it does not reach a resolution in nine months, the settlement could be terminated.

Adam Romney, an insurance attorney who appeared in court on Friday expressed a desire for a resolution for all, but raised questions about jurisdictional issues saying he wants to ensure the legal rights of insurers are not compromised.

In court, Romney said the parties can settle for any amount they want but they canʻt release the claims of insurers, who were not a party to the settlement.

Attorney Jesse Creed, Liaison Counsel for individual plaintiffs in the Maui Wildfire Cases claims insurance companies outside of Hawaiʻi are trying to stop the settlement and payment of funds to wildfire survivors. “It’s a cynical effort. They tried to prevent the Hawaiʻi Supreme Court from taking this issue, and they’re going to fight every step of the way to prevent the recovery of the people of Maui, from this much needed relief to rebuild their homes in their lives,” said Creed.

These insurance companies filed their own lawsuits outside of Maui, for subrogation claims against the entities that reached the settlement.

The parties that have agreed to terms of the proposed settlement with wildfire survivors include Hawaiian Electric and its parent company, Hawaiian Electric Industries (HEI), the State of Hawaiʻi, the County of Maui, Kamehameha Schools, West Maui Land Co., Hawaiian Telcom and Spectrum/Charter Communications.

Cynthia K. Wong, fellow Liaison Counsel for individual plaintiffs in the Maui Wildfire Cases said, “It’s very clear that the we have a statute that governs the subrogation rights of the insurers. We have Hawaiʻi case law from our Hawaiʻi Supreme Court governing the issue. The subrogation insurers, they’re making arguments that this is something that Judge Cahill is doing that’s completely out of the norm.”

Both sides acknowledge, and the motion notes, that solvency concerns grow for Hawaiian Electric Industries, Inc. as litigation drags on.

“So the next step is for the Supreme Court to decide whether they’re going to take it. If they do, and they answer in favor of the plaintiffs, the settlement can happen. If they don’t take it at all, the settlement falls apart,” said Creed.

If the Hawaiʻi Supreme Court issues a decision in favor of the plaintiffs in the Maui Wildfire Cases, Creed said he anticipates clients will hear within a year, what their recovery will be. “People will get some letter or award notice saying this is how much you’ll get out of the total amount, and then they’ll get payments over the next three years,” said Creed.

Protocols for the claims administration process, which determines a priority for payouts, has not been set up yet.

A status conference will be held on Oct. 4.

“Really, if they take it we’re on one path. If they don’t take it, then obviously we’re back at square one. There’s no settlement on the table. And we have to prepare the case for trial. And potentially HECO goes bankrupt,” said Creed.

“I think not just the people of Lahaina, but the people of Maui, including the Upcountry victims—I want people to know that we are going to continue to fight for them until this is resolved, until we can get money into their pockets, until we can help them rebuild their lives, and move forward in, in the best way possible for the people,” said Wong.

“I think it’s a message of hope—of hope that right now it’s the best deal possible, and it will get them as much relief as as these parties are able to pay, as quickly as possible. And so the hope is that the court systems have set this on a path to achieve that historic resolution,” said Creed.