Insurance Company Lawyers Debunk Green’s Fake Lahaina Fire Settlement

by Andrew Walden

Insurance companies have paid out $2.34B in Maui Wildfire damages and expect to pay as much as $1B more. 

Their reward from Hawaii’s venal and corrupt political system?

Those who caused the fires have gotten together in a Maui Court to protect themselves from insurers' efforts to hold them responsible. 

Now the insurers, calling themselves ‘Subrogation Plaintiffs,’ are responding. 

Their August 6, 2024, objection completely debunks Governor Green’s fake $4B ‘settlement’ of Maui Fire Claims. 

All other Hawai'i media are pretending Green's settlement is real.  Fortunately, you are reading Hawai'i Free Press.

Here are some key excerpts:

…

As an initial matter, Subrogation Plaintiffs, as non-parties, object that this Court has authority to issue orders affecting their rights. “It is elementary that one is not bound by a judgment in personam resulting from litigation in which he is not designated as a party or to which he has not been made a party by service of process.” ….

Non-Party Subrogating Insurers’ claims are already property venued in Honolulu, before the Hon. Judge Ochiai  ….

Despite not being parties in this case, and without waiving their due process and procedural rights, including those regarding proper jurisdiction, the Non-Party Subrogating Insurers hereby seek to protect their interests ….

…

IN THE CIRCUIT COURT OF THE SECOND CIRCUIT STATE OF HAWAIʻI IN THE MATTER OF THE PETITION FOR THE COORDINATION OF MAUI FIRE CASES

S.P. NO. 2CSP-23-0000057 (Other Non-Vehicle Tort – Maui Fire)

MEMORANDUM OF LAW

I. INTRODUCTION

Following weeks of stories in the media about confidential settlement negotiations and an alleged global settlement, the parties to the In Re Maui Wildfire Cases action announced that they reached a “global settlement” on August 2, 2024. Of course, the deal they announced was anything but global, as they have since asked this Court to dispose of the Subrogating Insurers’ independent claims against the Defendants on the basis that HRS § 663-10 applies to Subrogation Insurers’ claims, and in the process tramples upon Subrogating Insurers’ due process rights and ignores clear Hawaiʻi Supreme Court precedent. To be clear, Non-Party Subrogating Insurers take no issue if Defendants and Individual Action Plaintiffs wish to resolve their claims, but the parties cannot knowingly weaponize such a settlement as an end-around on Subrogating Insurers’ rights through this rushed process. This Court must carefully examine the factual and legal bases before approving a settlement that deprives the Subrogating Insurers of their procedural and substantive due process rights.

II. FACTUAL BACKGROUND

The Non-Party Subrogating Insurers include 163 different property and casualty insurers that, to date, have collectively paid more than $2.34 billion directly to the people and businesses devastated by the Maui Fires. The Insurers have put money in the hands of those individuals who suffered damage to their homes, businesses, and personal property, including automobiles and marine craft. They have also paid individuals the costs of finding alternate housing and transportation, loss of business and rental income, and other expenses suffered because of the Maui Fires. Importantly, the Non-Party Subrogating Insurers are not done paying as they maintain indemnity reserves of approximately $1 billion. No party that is contributing to the decidedly non-global settlement – the parties that caused the damage to all persons and businesses devastated by the Maui Fires – have contributed anywhere near what the Non-Party Subrogating Insurers already paid and will continue to pay to heal Maui.

The Non-Party Subrogating Insurers are party plaintiffs in a First Circuit action, Amguard Insurance Company, et al. v. Maui Electric Company, Ltd., et al., Civ. No. 1CCV-24-0000068, before the Honorable Judge Dean Ochiai (the “Subrogation Action”). Subrogating Insurers’ claims are being adjudicated in the First Circuit. Subrogating Insurers have chosen legal counsel to pursue their subrogation rights who have appeared on their behalf in the First Circuit, including certain attorneys who are admitted pro hac vice in the Subrogation Action only.

On July 26, 2024, after a 90-minute closed-door session with Individual Action Plaintiffs and Defendants in this Second Circuit action, this Court filed a Sua Sponte Order, finding:

Because the subrogation claims are inextricably tied to the just, efficient, and economic determination of all the Maui Fire Cases, this Court has the authority to bring together all necessary persons and entities to achieve that result. This authority also derives from the designation of all the Maui Fire Cases as complex matters pursuant to HRCC Rule 12.

Subrogating Insurers are not and were not a party to the In Re Maui Wildfire Cases before this Court and were not privy to the closed-door discussions that preceded issuance of the Sua Sponte Order.

In the Sua Sponte Order this Court advised of a special proceeding and that it “shall conduct a hearing on Tuesday, August 13, 2024, at 10:00 AM HST to review all matters that have or could arise by way of operation of HRS SEC 663-10 in the event that any single, group, or global resolution of the Maui Fire Cases is reached.” (Emphasis added). Importantly, the August 13th hearing date was selected without the input of the Non-Party Subrogating Insurers or their chosen legal counsel, whose rights this Court wants to address at this hearing. The Sua Sponte Order further sets forth the deadlines by which each party—and in the case of Subrogation Plaintiffs, non-party—“may file memoranda setting forth their position.” (emphasis added). At no point did the Sua Sponte Order suggest any motions should be set and heard for August 13, 2024, that involved the rights of any parties or non-parties to the In Re Maui Wildfire Cases action.

Rather than comply with the Sua Sponte Order, Individual Action Plaintiffs simultaneously announced an alleged “global settlement” and filed a Motion requesting “Orders Regarding Operating of HRS Section 663-10 and application for interlocutory appeal” (“Motion”) that seeks to convert this Court’s hearing to “review of all matters…in the event…resolution…is reached.” To a hearing to adjudicate the merits of the Non-Party Subrogating Insurers’ right to subrogation (emphasis added). If this was not enough, Individual Action Plaintiffs moved this Court ex parte to shorten both the time for the Non-Party Subrogating Insurers to oppose Individual Action Plaintiffs’ motion and the time for hearing. Further, the Ex Parte Motion was filed on Friday evening, August 2, at approximately 7:00 p.m. Hawaii time. The Court then granted the ex parte request at 10:15 a.m. on Saturday, August 3—depriving Subrogation Plaintiffs of any court-day time to object. The Order, which was not filed in the First Circuit action until 8:37 a.m. on August 5, 2024, also ordered that “objections or memoranda in opposition must be filed by Sunday, August 11, 2024, at noon.”

III. LEGAL ARGUMENT

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“In Anglo-American jurisprudence . . . one is not bound by a judgment in personam in a litigation in which he [or she] is not designated as a party or to which he [or she] has not been made a party by service of process.” … This rule is part of our “deep-rooted historic tradition that everyone should have his [or her] own day in court.”

…

IV. CONCLUSION

The rush by the parties to the In Re Maui Wildfires action to push through a non-global settlement that spares the Defendants—who devastated Maui—at the expense of the Non-Party Subrogation Insurers—who have paid billions of dollars to heal Maui—deprives Subrogating Insurers of their due process and substantive rights under Hawaiʻi law. Instead, this Court should allow the parties and non-parties to fully develop the record, brief the applicability of H.R.S. § 663-10 to the claims of Subrogating Insurers, and discuss the same at a hearing where Subrogating Insurers may be properly represented by their preferred legal counsel….

read … Full Text -- Objection to Order

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