A Hawai'i appeals court has sided with Lloyd's, London in a long-running insurance dispute tied to volcanic eruption damage.
The Intermediate Court of Appeals of the State of Hawai'i, in a summary disposition order dated April 23, 2026, affirmed a lower court's denial of a motion to reconsider the dismissal of Lloyd's from a consolidated lawsuit brought by property owners on the Big Island. The case centers on whether Hawai'i courts can exercise jurisdiction over the London-based insurance market – and, for now at least, the answer remains no.
The dispute traces back to a volcanic eruption that damaged properties on the island of Hawai'i. Michael W. Hale, along with Gregory C. Dencker, Carol K. Dencker, and Champagne Cove, LLC, filed insurance claims and eventually sued a long list of defendants, including Lloyd's, several of its syndicates, and a handful of insurance intermediaries such as Borisoff Insurance Services (doing business as Monarch E&S Insurance Services), Arms Claims Incorporated (doing business as Affirmative Risk Management), Pyramid Insurance Centre, and others. The three cases were consolidated in the Circuit Court of the Third Circuit under Judge Henry T. Nakamoto.
At the heart of the jurisdictional fight was whether Lloyd's – an entity based in London – had enough of a connection to Hawai'i to be hauled into court there. The circuit court said it did not. After allowing extensive jurisdictional discovery, the court found that the plaintiffs could not point to facts showing Lloyd's had purposefully directed any activities toward the state. That finding led to Lloyd's dismissal from the case in February 2023.
The plaintiffs moved for reconsideration, leaning on a then-recent Hawai'i Supreme Court decision in Yamashita v. LG Chem, Ltd., which broadened the test for personal jurisdiction. Under Yamashita, a court can exercise jurisdiction over a defendant even if the plaintiff's injury does not directly "arise from" the defendant's in-state activity, as long as the injury "relates to" it. The plaintiffs argued that their claims met this lower threshold. The circuit court disagreed, concluding that the broadened standard did not matter because there were simply no facts establishing that Lloyd's had purposefully directed activities toward Hawai'i in the first place. The appeals court found that conclusion was not wrong.
The plaintiffs also raised what may end up being the more consequential argument – conspiracy jurisdiction. After the circuit court had already denied reconsideration, the Hawai'i Supreme Court issued its opinion in Womble Bond Dickinson (US) LLP v. Kim, recognizing that courts can assert jurisdiction over an out-of-state defendant if a plaintiff can show the defendant participated in a conspiracy and a co-conspirator committed an overt act within the state in furtherance of that conspiracy. The plaintiffs had alleged that Lloyd's was part of a price-fixing scheme operating across Hawai'i's insurance market – exactly the kind of claim that could fit within this framework.
The appeals court acknowledged this but stopped short of applying it. Because the circuit court never had the chance to evaluate the conspiracy jurisdiction theory under Womble Bond, the ICA declined to take it up for the first time on appeal, noting that the issue may require additional factual findings.
Two of the plaintiffs' other arguments – that the circuit court improperly rejected expert reports and failed to consider admissible evidence – were found to be outside the scope of the appeal. The court determined that those challenges targeted the original dismissal order, not the denial of reconsideration, and the plaintiffs had only been granted leave to appeal the latter. A fifth argument, that the circuit court should have recognized jurisdiction under Hawai'i's antitrust statute, was deemed waived because the plaintiffs did not develop it with a distinct argument in their briefing.
The ruling is not a final decision, and the underlying cases are still very much alive in the circuit court. The conspiracy jurisdiction question under Womble Bond remains open, and depending on how the lower court addresses it in future proceedings, it could set a meaningful marker for how far Hawai'i courts can reach when foreign insurers are accused of participating in coordinated misconduct within the state's market.
For an industry built on global relationships and cross-border placements, the question of when and where a surplus lines insurer can be sued is never just academic. This case may not have delivered a final answer, but it has laid the groundwork for one.
