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Insurance companies have a month to make public lists of every insurance claim related to the wildfire that killed 102 people on Maui and destroyed much of Lahaina, including the amount of each claim, the amount actually paid out and the rationale for the payment. 

Maui Circuit Court Judge Peter Cahill acknowledged the task is a “heavy lift.” But Cahill said he needs the information filed in court by Dec. 2 “to evaluate the best means and method to manage each case, individual claims, and trials.”

Cahill’s order promises to provide an extraordinary, perhaps unprecedented, cache of data normally hidden from the public, including details of contracts between more than 140 insurance companies and thousands of policyholders – and how those contracts are playing out in the context of a mass disaster.

But the insurance industry is pushing back. On Wednesday, industry lawyers asked for a conference with the judge to discuss numerous issues, including the legal basis of Cahill’s order. The industry also wants to discuss the need for a protective order to prevent confidential information from being made public. 

Cahill’s order underscores the enormity of the litigation potentially facing Hawaii courts. 

If a proposed, $4 billion settlement of the wildfire litigation can’t be finalized, Cahill could face the wildly complicated task of managing hundreds of trials related to the fires. 

Potential plaintiffs include victims who lost loved ones, homes and businesses. Defendants include Hawaiian Electric Industries, which has been found to have started the fire, and Kamehameha Schools, which has been accused of allowing the fire to spread by not cutting back fire-prone grass on its property. 

Fire Relief: Maui settlement cases inch toward victim payout

The companies have paid out more than 10,033 wildfire claims totaling more than $2.34 billion to fire victims, according to the latest available data from the Hawaii insurance division. The insurers want to sue those responsible for starting the fire and enabling it to spread to recoup the money paid out to the victims – a standard procedure called subrogation. 

Cahill’s order would let the judge begin to get his arms around the sprawling universe of potential subrogation suits. 

Cahill’s order comes as the Hawaii Supreme Court prepares to answer a bigger, more basic, question: whether the insurers have the right to file subrogation suits at all, given the proposed settlement between fire victims and the parties responsible for the fire’s ignition or spread.

The insurers are the lone holdouts to the proposed settlement. As a result, according to the proposed settlement, the settling parties need a court order foreclosing the insurers’ subrogation rights in order for the settlement to be made final. The practical reason for the provision is that no defendant wants to pay out a big settlement only to be sued later by the insurers.

Whether the insurers have subrogation rights in this case is murky enough that Cahill punted the issue to the Supreme Court to sort out. 

On Monday lawyers for both sides filed opening briefs exploring the intricacies of Hawaii laws governing subrogation and the extent to which victims have the right to be made whole before insurers can step in to get paid.

Settlement Depends On Limiting Insurers’ Rights

Lawyers for the parties wanting to settle – fire victims and the alleged wrongdoers – say Hawaii law and legal fairness require the court to stop the insurers from competing with the fire victims for a limited pot of money. After all, the argument goes, the insurers were paid to accept the risk of loss due to a fire, so if anyone is left with a loss, it should be the insurers.

“Allowing the insurers to compete with their policyholders means the policyholders bear the risk of under-compensation for their losses, which is contrary to Hawai‘i law and the law of the majority of other jurisdictions,” plaintiffs’ lawyer Jesse Creed wrote. 

Hawaii law requires the fire victims to be made whole for all claimed injuries or damages before insurers can pursue subrogation suits, Creed wrote.

The insurance industry lawyers argue that the settling parties have every right to settle – but not to limit the ability of the insurers to sue.

Among other things, the industry lawyers’ 51-page brief points to a  that says, “In the context of fire and casualty insurance … the insurer may maintain a subrogation action against the tortfeasor regardless of outside settlement.” 

The insurance industry’s brief goes on to outline the history of subrogation rights in Hawaii dating back to 1885, when the Supreme Court of the Kingdom of Hawaii held that “King Kamehemeha IV’s Minister of Finance was entitled to amounts paid to satisfy the debts of another.”

The law of the kingdom established that a settlement didn’t extinguish subrogation rights, industry lawyers Vincent Raboteau, Adam Romney and Mark Grotefeld wrote.

“In the earliest reported subrogation case in �Ჹ�ɲ���ʻ��, the highest court in the Kingdom understood that subrogation rights survive even after the injured party’s original claim has been fully resolved,” they wrote.

The Supreme Court is expected to make a decision in early 2025. In the meantime, lawyers for both sides will be preparing additional briefs. The Supreme Court also is likely to hold oral arguments.