Sacred Falls lawsuit When the Mother's Day 1999 rockslide killed eight people and injured dozens more at Sacred Falls State Park, the state had liability insurance coverage up to $25 million per occurrence in effect.
costly if appeal fails
The firm that would have covered part
of a large payment is basically bankruptBy Diana Leone
dleone@starbulletin.comSince then, however, one of the state's two liability insurance carriers at that time, Reliance Insurance Co., has been liquidated. Liquidation is essentially the insurance industry equivalent of bankruptcy and means that, should there be a claim on the policy, it probably won't be fully covered, said state Insurance Commissioner Wayne Metcalf.
State Attorney General Earl Anzai was more blunt: "We have a policy (with Reliance), but it's not going to do us any good."
The Reliance policy would have covered any damages against the state between $10 million and $25 million.
The state is asking Circuit Judge Dexter Del Rosario for permission to appeal his Sept. 24 ruling that the state was liable for the accident because it did not properly warn park users of rockfall dangers.
The judge is to consider the state's request at a 9 a.m. hearing Tuesday.
If the appeal request is denied, damages against the state would be determined in the second part of the trial, set for Jan. 23.
According to Marie Laderta, supervising deputy attorney general for tort litigation, if the state has to pay damages in the Sacred Falls case, it would:
>> Be responsible for the first $2 million of damages, since it is self-insured for that amount.
>> Be able to file claims on its policy with the Insurance Company of the State of Pennsylvania for damages between $2 and $10 million.
>> Face the possibility that its former policy with Reliance, which covered claims of $10 million to $25 million, would yield no payment from Reliance and as little as $300,000 from the Hawaii Insurance Guaranty Association.
HIGA Executive Director Blake Obata said he is investigating whether the limit of $300,000 would be per plaintiff or for the entire incident.
There are 29 plaintiffs in the case against the state -- four of those killed, 16 injured and nine family members, said plaintiff attorney Larry Remillard. Injuries of survivors include a man and two boys with fractured skulls, a girl whose foot was amputated, two women with crushed arms, and a number of people who suffered other fractures, he said.
Plaintiff attorneys asked the state before the trial to settle the lawsuit for less than $10 million, an amount that would have been covered by the solvent insurance company, but the state refused, Remillard said.
Anzai said it does not make sense for the state to consider settlement when it seeks to appeal the case.
"We basically feel the judge was in error" in finding the state liable, he said.
After Reliance's October 2001 liquidation, the state took out a replacement policy with another company.
State of Hawaii
