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Parties are so close to a global settlement of Lahaina wildfire lawsuits that lawyers on opposing sides are asking a Maui judge to help remove a last apparent obstacle to a resolution.

Lawyers for Hawaiian Electric Industries on one side and the liaison counsel for thousands of individual plaintiffs on the other have both asked Maui Circuit Court Judge Peter Cahill to hold a status conference on Friday to resolve the issue: Whether insurers that have paid claims can get reimbursed before victims get compensated completely for the damages they suffered.

Insurers had paid out an astounding $2.09 billion in claims to policyholders for property, business interruption and other losses through the end of March, and the sum is growing. Insured losses are projected to top $3 billion. The sums are so staggering that they would eat up most of the pool of money defendants would put up as part of the global settlement, which is said to be more than $4 billion, according to parties familiar with the talks.

The concern is that victims who were underinsured or uninsured will never be made whole if insurance companies get a priority when it comes to settlement payouts.

Regardless, the insurance industry is pressing for compensation. In January, lawyers representing more than 140 insurers, including global giants like , Japan’s  and  of London filed a so-called subrogation action in Circuit Court in Honolulu, saying they should be reimbursed for claims paid. Their suit alleges Hawaiian Electric, Hawaiian Telcom, Kamehameha Schools and other parties were negligent in allowing the fires to start and spread.

But last week, two lawyers leading the litigation as liaisons for plaintiffs — Jesse Creed and Cynthia Wong — fired off their own court filings pushing back against the insurers. They assert that under Hawaii law, plaintiffs must be made whole for their losses before insurers can start collecting their reimbursements.

Now, in a letter filed with the court, Wong has asked Cahill to hold a status conference on Friday “regarding the mechanics of resolving subrogation rights and liens in the context of a potential global settlement.”

“In order to set up a framework for a potential global settlement, it is vital for the parties to understand the Court’s views regarding the mechanics of the resolution of subrogation liens,” Wong added. She called the issues “vital and time sensitive.”

In a rare sign of unity with the plaintiffs, lawyers for Hawaiian Electric Industries and its utility subsidiaries wrote a separate letter to Cahill, backing Wong and asking the judge to step in. 

“Hawaiian Electric supports the request made by Liaison Counsel for the Individual Plaintiffs,” wrote Joachim Cox and Randall Whattoff, the companies’ Honolulu attorneys.

Letters Point To Insurance Issues As Cause Of Delay

Status conferences allow judges to discuss a wide range of issues with lawyers in an informal setting. Sometimes this involves minor things like hearing dates. But in some cases, discussions can focus on disputed issues, in which the judge offers a framework for resolving the dispute.

Often attorneys will infer a potential outcome from that discussion and respond accordingly. In the context of the wildfire mediation, a status conference could as a practical matter resolve the subrogation issues as they relate to a global settlement, even as the subrogation lawsuit remains pending in Honolulu court. 

The letters provide a rare public glimpse into a highly confidential mediation process, which is being administered by  of Honolulu and  of Los Angeles. Following a weeklong series of mediation sessions in Los Angeles in late June, parties familiar with the process said, the mediators crafted the proposed global settlement in which various defendants would contribute certain amounts of money in exchange for the plaintiffs dropping their lawsuits.

The settlement is all or nothing. If just one defendant holds out, the settlement collapses.

Other defendants include the state of Hawaii, Maui County and Spectrum.

Since mid-July, parties with knowledge of the talks have repeatedly said a deal was close but not done, although it was unclear what was blocking an agreement. On Friday, Gov. Josh Green told Civil Beat that the hold-up was the result of “some parties on the mainland that are simply asking for too much of the settlement, resources that I am insisting must go to those families who were devastated by the fire.”

Later on Friday, Wong and Creed filed their court papers implying the insurers were cause of the delay.

Chip Lezy, a Honolulu lawyer representing the insurers, did not return a call for comment.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.