Judge bars insurers from seeking defendants who agreed to $4 billion settlement in Maui

A Maui judge’s ruling resolves a critical hurdle to finalizing a $4 billion fire settlement: Insurance companies that paid out more than $2 billion in claims can seek reimbursement only for the amount that the defendants, whom the victims blame for causing the deadly tragedy, they accepted it. payment.

Lawyers representing plaintiffs in hundreds of lawsuits over fire deaths and destruction have asked a judge to bar insurers from filing independent lawsuits to recover money paid out to policyholders. Preventing insurers from pursuing defendants is a key regulatory term.

The settlement was reached earlier this month, days before the one-year anniversary of the fire, amid fears that Hawaiian Electric, the power company some blame for starting the fire, may be on the brink of bankruptcy. Other defendants include Maui County and large landowners.

The federal Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating the August 8, 2023 fires that killed 102 people, destroyed historic downtown Lahaina, burned thousands of homes and displaced 12,000 people.

Plaintiffs’ attorneys worried that allowing insurers to pursue reimbursement separately would be a deal breaker, waste what’s 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 remain as resistance to the settlement.

Jesse Creed, an attorney who serves as one of four liaisons to coordinate plaintiffs’ lawsuits, told Cahill that insurers want to get judgments for huge damages, “and leave a shell for the plaintiffs.”

Lawyers for the insurers argued in court filings that what they called the rush to reach a settlement was depriving the insurers of a fair trial.

The insurance industry has been unfairly maligned because outsiders are taking 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 weren’t fighting to be first in line for anything,” he said. “It has always been our position that individual plaintiffs should receive the lion’s share.

After the hearing, Raboteau declined to comment on Cahill’s ruling and did not say whether he plans to seek review of Cahill’s ruling by the Hawaii Supreme Court.

“We humbly ask surrogate attorneys across the continent to accept what Judge Cahill has made clear, which is that no one should stand in the way of the full recovery of our people,” Gov. Josh Green said in a statement Tuesday night. “The world has changed as a result of climate forces, and we need to work together – states, insurers, advocates – to create better ways for people to resolve differences so they can address risks and recover when needed.”

Jake Lowenthal, another liaison attorney for the plaintiffs, said they were encouraged by Cahill’s ruling.

“This will be a critical part of reaching a final resolution of everyone’s claims, as well as resolving the potential reimbursement rights of the insurance companies,” he said.

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