The Hawaii Supreme Court affirmed the Circuit Court’s denial of the insurers’ motion to intervene in the class settlement proceedings finding the insurers did not have a protectable interest. Burnes, et al.v. Hawaiian Electric Co., Inc,, et al., SCAP-25-0000531 (Haw. Feb. 10, 2026).

Following the Maui fires, a class action suit and individual suits were filed against various defendants allegedly responsible for the fire. Both the class members and individual plaintiffs eventually settled under the terms of a global settlement term sheet that resolved all claims against defendants for an aggregate settlement amount of $4.037 billion dollars.

In a prior case, the Supreme Court held that based on applicable Hawaii statutes, when insureds and defendants settle, the insurer’s sole remedy is a lien on the settlement. In re Maui Fire Cases (Maui Fires), 155 Haw, 409, 565 P.3d 754 (2025). In the context of a tort settlement, insurers could not seek to recoup insurance payments through their own lawsuits against defendants. Limiting the insurer’s equitable subrogation upon a tort settlement applied also to class actions.

Now, the Subrogating Insurers wanted to intervene in the class action settlement proceedings, contending they had an interest in the proceedings. The Circuit Court denied their motion. The Supreme Court now affirmed.

The class plaintiffs had settled with defendants. The settlement activated the Hawaii Revised Statutes (HRS) sec. 661-10 lien framework. It foreclosed potential subrogation suits by Subrogating Insurers against defendants related to the class plaintiffs. A class action premised on a tort claim was a civil action in tort. Therefore, when class action parties settled, subrogating insurers were restricted to statutory liens on plaintiffs’ recovery. Class settlements received the same treatment as individual settlements under HRS sec. 663-10.

The Subrogating Insurers argued they retained equitable subrogation rights which justified intervention. It was possible that some class members would fail to submit their claim against the class settlement fund and would receive no settlement award. The Subrogating Insurers complained that there would be nothing for them to attach liens to under HRS sec. 663-10.

The court held, however, that a non-claiming class member’s choice did not provide equitable subrogation rights. For purposes of equitable subrogation, class members’ entitlement to recover from the settlement fund constituted recovery from the tortfeasor. When a class member settled, insurers were limited to their exclusive HRS sec. 661-10 remedy of liens. Maui Fires preserved insurers’ subrogation rights only where there was no recovery from the tortfeasor. It did not follow that subrogating insurers were entitled to equitable subrogation when class members failed to file claims against the settlement. Therefore, the insurers suffered to prejudice when policyholders settled and extinguishing subrogation rights without insurer consent.

Nor did the Subrogating Insurers have a protectable interest based on a claim that the settlement fund was insufficient. Economic interests alone did not confer intervention rights.

Further, even if Subrogating Insurers had a protectable interest, their motion was untimely. The Court held that the Subrogating Insurers should have intervened when they knew or should have known that the settlement would adversely impact their interests. When the class action settlement was publicized on November 4, 2024, Subrogating Insurers knew or should have known that settlement would adversely impact their interests. Waiting until after the March 2025 Maui Fires opinion was misguided. The motion to intervene was too late.

The Circuit Court also correctly exercised discretion in denying permissive intervention. Untimeliness supported the Circuit Court’s ruling.

The Circuit Court’s order denying Subrogating Insurers’ motion to intervene was affirmed.