HONOLULU– A Maui judge’s ruling Tuesday clears a critical hurdle to ending a $4 billion wildfire town: Insurance companies that have paid out more than $2 billion in claims can seek reimbursement only for the settlement amount that defendants, fire victims blamed for causing the deadly tragedy, agreed to pay.
Lawyers representing plaintiffs in hundreds of lawsuits over the death and destruction caused by the fires asked the judge to prohibit insurers from bringing independent lawsuits to recover money paid to policyholders. Preventing insurers from going after defendants is a key term of the settlement.
The agreement was reached earlier this month, days before the one year anniversary of the fires, amid fears that Hawaiian Electric, the energy company that some guilt for causing the fire, it could be on the verge of bankruptcy. Other defendants include Maui County and large landowners.
The Federal Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating On August 8, 2023, fires killed 102 people, destroyed the historic center of Lahaina, burned thousands of homes and displaced 12,000 people.
Plaintiffs’ lawyers feared that allowing insurers to seek reimbursement separately would violate the agreement, exhaust what is available to pay fire victims and lead to protracted litigation.
A group of more than 160 property and casualty insurers that have so far paid out more than $2.34 billion to people and businesses devastated by the fires remained a settlement holdout.
Jesse Creed, an attorney who serves as one of four liaisons for coordinating the plaintiffs’ cases, told Cahill that insurers want to obtain judgments for enormous damages, “and leave a carcass for the plaintiffs.”
Lawyers for the insurers have argued in court filings that what they called the rush to approve a settlement deprives insurers of due process.
The insurance industry has been unfairly villainized as outsiders take resources from the community, while those responsible for the fires will not be held accountable, Vincent Raboteau, a lawyer representing the insurers, told the judge.
“And we’re not arguing to be first in line for anything,” he said. “It has always been our position that individual plaintiffs should get the lion’s share.
After the hearing, Raboteau declined to comment on Cahill’s decision and did not say whether he plans to request a review of Cahill’s decision by the Hawaii Supreme Court.
“We humbly ask mainland surrogacy attorneys to accept what Judge Cahill has made clear, which is that no one should stand in the way of our people’s full recovery,” Gov. Josh Green said in a statement Tuesday night. It’s a result of climate forces, and we need to work together – states, insurers, lawyers – to create better ways for people to resolve differences so they can address risks and recover when needed.”
Jake Lowenthal, another attorney liaison for the plaintiffs, said they are encouraged by Cahill’s ruling.
“This will be a critical part of reaching a final resolution of everyone’s claims, as well as resolving potential reimbursement rights from insurance companies,” he said.
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