Expedited Final Ruling Holding Up $4b Settlement Distribution

Two community organizations and two businesses that suffered Maui wildfire losses have petitioned the Hawaii Supreme Court to dismiss an insurance industry lawsuit on appeal that's delaying distribution of a $4 billion settlement to victims.

The four entities filed their petition Thursday night asking for immediate action to dismiss the litigation now pending before the Hawaii Intermediate Court of Appeals.

"Survivors and families who lost loved ones deserve closure and the ability to rebuild," Lance Collins, an attorney representing the petitioners, said in a statement. "Continued appeals push that recovery further into the future with no end in sight."

The petitioners are Na Aikane o Maui, Lahaina Jodo Mission, Lahaina Yacht Club and Kusina Asian Market LLC.

The petition follows a Hawaii Supreme Court decision Tuesday that represented a second ruling in two years by the court against nearly 200 insurance companies that have sought to use a process called subrogation to directly obtain damages from entities paying the settlement, or to alternatively share in the settlement, as reimbursement for claims they paid to fire victims with losses and related expenses.

Na Aikane and the other petitioners contend that the pending appeal of a lawsuit the insurers filed in 2024 against the settlement payers seeking damages involves the same legal issues the Hawaii Supreme Court has already decided twice, and is preventing settlement funds from reaching community members.

"The ordinary timeline for appellate review will delay justice in this case and without direction from this Court, Subrogating Insurance Plaintiffs will continue to assert new iterations and permutations of the same meritless claim that this Court has now twice rejected," the petition said.

The Aug. 8, 2023, disaster killed 102 people and destroyed most of Lahaina, including around 5,500 homes, businesses, government buildings and other property. There also was a fire that same day that destroyed about 20 homes in Upcountry Maui.

Hawaiian Electric Co., the state, Kamehameha Schools, Spectrum Oceanic LLC, Hawaiian Telcom and affiliates of West Maui Land Co. agreed in November 2024 to settle hundreds of separate lawsuits filed by victims in addition to a class-action suit. The consolidated individual cases and the class-action suit led to the two rulings against the insurers by Hawaii's high court.

Around 24,000 victims, including people who were injured or lost family members, homes, businesses, personal property, jobs, wages and more, are expected to divide settlement proceeds to be paid out in four annual installments. Attorneys representing victims also are to receive a share.

Final approval of the settlement in Circuit Court is conditioned on there being no legal decisions relating to the deal that are not final or subject to appeal.

Circuit Judge Peter Cahill on Dec. 30 dismissed the case that insurers had filed against the settlement payers. The insurers appealed to the intermediate court Jan. 20.

According to the petition filed Thursday, it could be several more months or longer before the appeal is decided by the Intermediate Court of Appeals. If the insurers lose, they could then appeal to the Hawaii Supreme Court.

The insurers have said they have been excluded from sharing in the settlement to cover some losses from paying policy claims and that the parties deemed to be at fault in the disaster were not held sufficiently accountable for their alleged negligence.

The insurers have reported paying around $2.5 billion in claims to fire victims and expect to pay around $1 billion more.

They remain able, under a court process, to seek settlement award proceeds from policyholders individually as reimbursement for payments insurers made to policyholders for wildfire property losses and related expenses.

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