Maui judge rules against insurers who agreed to $4B wildfire settlement

HONOLULU (AP) — A Maui judge issued a ruling Tuesday that resolves a critical hurdle in ending a $4 billion wildfire. colonyInsurance companies that have paid out more than $2 billion in claims can only seek compensation from the settlement amount that fire victims accused of causing the deadly tragedy agreed to pay.

Lawyers representing plaintiffs in hundreds of lawsuits over deaths and damage caused by the fires have asked a judge to bar insurance companies from filing a separate lawsuit to recover money paid to policyholders. Preventing insurance companies from pursuing defendants is a key settlement condition.

The settlement was reached earlier this month, days before 1 year anniversary From the fires, amid fears that Hawaiian Electric, the power company that runs some blame The arsonists may be near bankruptcy. Other defendants include Maui County and large landowners.

The Federal Bureau of Alcohol, Tobacco, Firearms and Explosives is Investigation The August 8, 2023 fires, which killed 102 people, destroyed the historic downtown area of ​​Lahaina, burned thousands of homes and displaced 12,000 people.

Plaintiffs’ attorneys were concerned that allowing insurance companies to pursue claims separately could be a major drag, draining what was available to pay fire victims and prolonging litigation.

A group of more than 160 property and casualty insurers, which have so far paid out more than $2.34 billion to people and businesses affected by the fires, has remained resistant to settlement.

In court filings, lawyers for the insurance companies alleged that what they called the rush to reach a settlement deprived the insurers of due process.

Vincent Raboteau, a lawyer representing the insurance companies, told the judge that the insurance industry was being unfairly tarnished while those responsible for the fires would not be held accountable.

“We are not asking to be the first to get anything. Our position has always been that individual plaintiffs should get the lion’s share,” he said.

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

Jake Lowenthal, an attorney who was selected as one of four coordinators to coordinate the plaintiffs’ lawsuits, said they were relieved by Cahill’s ruling.

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