Wed. Dec 11th, 2024

Hawaii, Maui County, HECO And Others Agree To Pay $4 Billion To Wildfire Victims

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The State of Hawaii, Maui County, Hawaiian Electric Industries, Kamehameha Schools and other defendants have agreed to pay $4.037 billion to settle legal claims related to wildfires that destroyed much of Lahaina and killed 102 people in August 2023.

HECO said in a statement its part of the agreement is $1.99 billion. The settlement term sheet, which was filed in Maui state court on Friday, did not disclose the amounts individual defendants would pay.

The agreement marks the culmination of months of court-ordered mediation and ends speculation that a deal was close. Also agreeing to settle are Spectrum Oceanic, Charter Communications, Cincinnati Bell, Hawaiian Telcom and several entities affiliated with West Maui Land Co. and Launiupoko Water Co.

“This Global Settlement of over $4 billion will help our people heal,” Gov. Josh Green said in a statement. “My priority as Governor was to expedite the agreement and to avoid protracted and painful lawsuits so as many resources as possible would go to those affected by the wildfires as quickly as possible.

“Settling a matter like this within a year is unprecedented, and it will be good that our people don’t have to wait to rebuild their lives as long as others have in many places that have suffered similar tragedies,” he added.

A wildfire destroyed buildings in he historic town of Lahania Thursday, Aug. 10, 2023, on Maui. (Kevin Fujii/Civil Beat/2023)
Multiple parties have agreed to pay more than $4 billion to settle claims related to a wildfire that destroyed much of the town of Lahaina a year ago. (Kevin Fujii/Civil Beat/2023)

“This global settlement will give fair justice to the people of Lahaina, and it was achieved before the one year anniversary of the fires, which is relatively quick in litigation,” Jesse Creed, who serves as liaison counsel for individual plaintiffs, said in a statement. “I hope the people can use the money to rebuild their lives, their homes, and their communities.”

Some 649 lawsuits have been filed on behalf of individual plaintiffs for wrongful death, injury and property damage, and the settlement would resolve those suits. The term sheet is signed by Creed and fellow plaintiffs liaison counsel Jacob Lowenthal and Jan Apo of Maui and Alexander Robertson IV, class counsel for a case consolidated in federal court.

The agreed upon terms still must be memorialized in an official settlement agreement that would supersede the term sheet in the court record, the term sheet says.

Still, the document makes clear that a wide variety of defendants have agreed to make a massive collective payout to end the lawsuits. The term sheet is the result of negotiations mediated by Louis Meisinger and Daniel Buckley of Los Angeles and Keith Hunter of Honolulu.

According to the term sheet, the mediators “engaged in multiple in-person and virtual mediation sessions over the course of months” and crafted a proposal that reflected their understanding of the maximum amount the parties could pay based on potential exposure, available insurance and other factors.

The $4.037 billion aggregate reflects a payment schedule that anticipates some payments being made over time, although the aggregate could be reduced if parties pay ahead of schedule. The mediators also specified each party’s respective share of the aggregate, the term sheet says.

However, the term sheet does not disclose the amount each party will pay. In a statement, Hawaiian Electric Industries said it will pay $1.99 billion.

Insurance companies, which have paid out more than $2 billion in claims, did not sign on to a settlement term sheet filed in court on Friday and thus remain the last potential holdouts that could prevent a settlement. (Hawaii Insurance Division)

A major outstanding question involves what happens to lawsuits brought by insurers who have paid out billions of dollars in claims.

According to the Hawaii Insurance Division, claims paid as of June 30 totaled $2.34 billion including $1.37 billion for property damage. Insurers have filed several so-called subrogation lawsuits seeking reimbursement from the defendants for these claims.

These insurers did not sign on to the settlement term sheet. And if they were given a priority for payments from the settlement fund, it would mean significantly less money for fire victims.

Plaintiffs have argued that Hawaii law calls for fire victims to be made whole before the insurance companies can be reimbursed.

The term sheet essentially creates a 90-day deadline for one of two things to occur: either the insurers settle the subrogation claims or a court determines that, in the event of a final settlement, the insurers’ recovery would come from policyholders who received settlement payments — and not from the defendants.

Creed said insurers “did not agree to this global settlement and are trying to take money back from the victims who paid their premiums and send it off-island to pad their profits. The insurance companies shouldn’t take a penny as long as the victims are not fully compensated.”

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

The contribution to the settlement from the state must be approved by the Legislature, the governor’s office said. The payments would begin after such approval and are expected to start by mid-2025.

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