Proposed $4B Hawaii Fire Deal Faces Insurance Questions

Scott Greenspan, Co-Chair of the Sills Cummis & Gross Insurance Practice Group and Chair of the Firm’s New York Insurance Practice Group, was interviewed for an article discussing whether insurers can pursue subrogation under a settlement in principle made on behalf of victims in the 2023 Maui wildfire, an issue currently before the Hawaii Supreme Court.

As seen in the article, “Scott D. Greenspan, a member of Sills Cummis & Gross and co-chair of its insurance practice group, said the plaintiffs and tort claimants in the wildfire suits could face stiff legal headwinds based on two precedential Hawaii Supreme Court rulings. The 1999 decision in State Farm Fire v. Pacific Rent-All, Inc., Greenspan said, ‘has strongly protected the subrogation rights of property-casualty insurers even from deliberate attempts by settling parties who knew about them from destroying them.’ And the top court’s 2017 ruling in Yukumoto v. Tawarahara, which concerned the subrogation rights of health insurers, expressly and repeatedly held that its holding did not apply to property-casualty insurance policies, Greenspan told Law360. ‘From a practical perspective, some of these defendants have been making noises about impending bankruptcy so allowing subrogation claims to proceed in the wake of a massive $4 billion settlement may tip them over the edge into bankruptcy,’ he added. Greenspan also said he would expect insurance companies to argue that being precluded from a chance to recoup billions in wildfire loss payments could drive them out of Hawaii or at least make them much more reticent to underwrite such risks.”