Court reverses course in Ka Loko dam case

LIHUE — The Hawaii state Intermediate Court of Appeals has vacated a prior judgment that said the former permit-holders would not be responsible to defend claims brought against the state related to the 2006 Ka Loko dam disaster.

The decision on Wednesday would require the then permit holders, Kilauea Irrigation Company and C. Brewer and Company, to defend claims directed against the state regarding care and maintenance to the Ka Loko dam and spillway prior to the disaster. The 2006 case now moves back to 5th Circuit Court for a judge to decide.

The appeals court ruled that under Hawaii state law, a court may not both grant in part, or deny in part, on one motion regarding claims in the case, said Deputy State Attorney General Reese Nakamura. The typical position in law is that if you defend one item in a suit then you defend them all, he said.

“The ruling states that Kilauea Irrigation Company has to defend on all claims,” Nakamura said.

Kilauea Irrigation did not file a challenge but Nakamura said all parties have the right to respond and another motion to reconsider is possible.

The state argued that in granting Kilauea Irrigation a permit for “rights, privileges and authority to develop and utilize government waters on land at Papaa within the Moloaa Forest Reserve,” with it came the expressed duty to defend the estate against claims filed in the aftermath of the Ka Loko Dam breach on March 14, 2006.

After several weeks of rain, a large portion of the dam collapsed and an estimated 300 million gallons of water rushed downhill toward the ocean. The disaster claimed the lives of seven people, destroyed several homes, a portion of Kuhio Highway and caused extensive environmental damage.

C Brewer was a former title holder to the property and formed Kilauea Irrigation Company to serve as a state-approved utility for the property, said Mark Zenger, an attorney involved with cases that may be affected by the appeal.

C. Brewer went defunct but Kilauea Irrigation was bought out by Tom Hitch just prior to the dam burst. The company was licensed to maintain the water removal permits as a public utility but did not have title to any land, Zenger said.

Under the permit, Kilauea Irrigation was granted the right to construct, operate, repair and maintain a water transportation system within the Ka Loko ditch right-of-way and the Puu Ka Ele stream. The permit required “due care” regarding public safety and to indemnify the state from claims of damage, injury or death arising from failure to maintain the permit.

Fifth Circuit Judge Kathleen Watanabe had granted a state motion arguing that Kilauea Irrigation was obligated to defend the state against allegations of premises or property ownership.

However, Watanabe at the time denied in part, saying Kilauea Irrigation was not obligated to defend claims that the state was aware the dam was in questionable condition; that the state did not require repair or replacement; and that the state did not intervene when the public utility failed to meet inspection obligations.

The court of appeal’s decision counters that opinion, saying the groups shouldn’t be split.

Nakamura said there are several appeal motions filed in this case and that the decisions are coming through. He said this decision is related to but is separate from another declaratory action case and appeal involving C. Brewer and Company.

Several other suits were filed after the disaster, some of which are still pending.

In the criminal case following the disaster, the primary property owner at the time, James Pflueger, 87, of Honolulu, pleaded no contest to felony first-degree reckless endangering, and his company, Pacific 808 Properties LLC, pleaded to seven manslaughter charges through his attorney, William McCorriston on July 18. Sentencing is scheduled with Chief Judge Randal Valenciano on Jan. 23, 2014.

There were several individual civil cases filed against Pflueger. He reached an undisclosed settlement with some of the parties prior to pleading in the criminal matter.

Pflueger, who purchased most of the property around the dam prior to the disaster, filed civil complaints against C. Brewer and its subsidiaries for failing to disclose contents of reports that questioned the structural stability of the dam or that purchasers existed on property makai of the Ka Loko dam.


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