The federal district court granted preliminary approval of the class action settlement reached on behalf of insureds who suffered property damage due to the 2018 Kilauea eruption on the Big Island. Aquilina v. Certain Underwriters at Lloyd's London, 2021 U.S. Dist. LEXIS 152614 (D. Haw. Aug. 13, 2021). [Dislcosure - our office served as local counsel for the plaintiff class].     After destruction of their homes due to lava flow, plaintiffs sued various insurers and agents as a putative class action. Plaintiffs claimed they purchased surplus lines policies brokered and underwritten by various defendants. The policies each contained an exclusion for the peril of lava flow, which plaintiffs claimed rendered them worthless or unsuitable given that their properties were located in a high-risk lava zone.     Plaintiffs alleged that defendants breached obligations under the Hawaii Surplus Lines Act, which required that surplus lines insurers conduct a diligent search for other available coverage before placing a homeowner with surplus lines coverage. Plaintiffs alleged defendants should have advised them of the availability of lava-damage coverage through the Hawaii Property Insurance Association (HPIA), a statutorily created association of admitted insurers established in part in response to Kilauea's eruption patterns, which made the private insurance market less likely to Insure certain high-risk areas.      After three years of litigation, the parties reached a settlement before the class was certified. Under the settlement, defendants agreed to pay $1.8 million to be allocated among class members. The expense of notice and administration, service awards of $5,000 to the class representatives, attorneys' fees and litigation costs would be deducted from the Settlement Fund. The class members who chose not to opt out of the Settlement would agree to release all defendants from all claims and liability arising from the allegations made in the case.     The court first considered whether to enter an order provisionally certifying the proposed Settlement Class. The court found that the Rule 23 (a) factors of numerosity, commonality, typicality and adequate representation were satisfied. The proposed class consisted of about 162 households. There were common factors of law and fact involving defendants' alleged conduct and the injuries to plaintiffs and class members. Typicality was satisfied because plaintiffs' claims challenged a course of conduct that applied to all the class members such that they all suffered the same or similar injury. Finally, the court found that the named plaintiffs and their counsel were adequate representatives of the class.     The court next found that the Rule 23 (b) (3) requirements of predominance and superiority were satisfied.     The court then turned to the preliminary approval of the settlement. The settlement properly struck a balance between the strengths of plaintiffs' case and risks of continued litigation before a jury. The settlement provided plaintiffs with a fair and meaningful resolution of their claims.      The settlement also appeared to be fair. The parties participated in arm's length settlement discussions, exchanged settlement communications for several months, attended a settlement conference and further mediation. In agreeing to a $1.8 million settlement, the parties appeared to have made serious, good faith efforts to settle, with both ceding ground on their initial positions. The settlement provided a favorable outcome to plaintiffs and the class members, each of whom were projected to receive 100% of premiums paid.     Regarding fees to be paid to plaintiffs' counsel, the court noted that the 33.3% of the gross Settlement Fund that would be requested was not excessive, but the court was not likely to approve more that the 25% benchmark set by the Ninth Circuit. Plaintiffs' counsel, however, would have the opportunity at the final fairness hearing to present compelling evidence supporting a departure from the benchmark.      Finally, the court agreed that the named plaintiffs were entitled to a service fee of $2500 each. Both played a critical roll in the ligation in assisting class counsel.

from Insurance Law Hawaii https://ift.tt/3mq2oSz