Intermediate Court Ruling Could Lead to Substantial Cash Settlement for Victims of Ka Loko Dam Breach

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Ka Loko dam after the breach in March 2006 (photo by Jack Harter Helicopters)

BY MALIA ZIMMERMAN – When the Ka Loko Dam breached before dawn on March 14, 2006, killing 7 people and an unborn child and causing millions of dollars in property damage, there were three lawsuits that were filed by the victims as well as by landowner James Pflueger.

Several of the parties including Pflueger and former landowner C. Brewer and Company, Ltd., attempted to include 17 insurance companies that had insured the property and other entities since 1987.


However, in the case known as C. Brewer v. Industrial Indemnity Co. et al, Kauai’s Fifth Circuit Judge Kathleen Watanabe ruled the insurance companies could be exempt from paying C Brewer’s $38 million claim because the company had already been dissolved as a corporation.

C. Brewer appealed Watanabe’s decision to the Intermediate Court of Appeals. On Wednesday, the court said Watanabe had erred in her ruling that insurers had no duty to defend against “continuous, incremental, and indivisible” property damage, and remanded the case to the 5th Circuit.

The insurance companies could appeal the Intermediate Court of Appeals decision to the Hawaii Supreme Court, but if the ruling stands, that could mean the victims of the Ka Loko Dam breach could receive a second substantial settlement as high as $13 million over and above the $25.4 million already awarded to them.

Since C. Brewer shut down its operations, lawyers for the victims of the breach who sued James Pflueger and others would take over the case and pursue litigation against the insurance companies.

The 118-year-old earthen dam breached in 2006 after James Pflueger illegally graded around the dam and covered its main safety feature, its spillway. After more than 40 days of rain, the dam overtopped and breached.

Pflueger, listed as one of the state’s wealthiest residents in Hawaii Business magazine, blamed others for maintaining the dam and reservoir and for the breach.

James Pflueger

Pflueger Properties and Pflueger Management filed a total of 23 claims against insured parties tied to the Ka Loko property, and sought recovery of damages and indemnification.

Pflueger claimed C. Brewer and its subsidiaries failed to disclose issues surrounding the dam’s structural stability.

The civil cases, which involved 77 plaintiffs and 20 defendants, were largely settled in November 2009 for around $25.4 million.

The state agreed to pay $1.5 million for its lack of inspections of the dam as is required under state law, and Kauai County agreed to pay $7.5 million for its role in not stopping Pflueger’s illegal grading at Ka Loko as reported by concerned area residents.

Pflueger is three years overdue in paying his share of the civil settlement. If his delinquency continues, attorneys representing the victims of the breach could foreclose on one of his Kauai properties or take him back to court.

In a separate criminal case, the state attorney general indicted Pflueger in November 2008 on 7 counts of manslaughter and one count of reckless endangerment.

Aurora Fehring Dingwall, Alan Dingwall and their son Rowan were killed in the dam breach on March 14, 2006, along with four other people and an unborn child.

After years of appeals and delays that Pflueger was able to negotiate through a well-funded team of lawyers, he pleaded no contest to a reckless endangerment charge in July and will be sentenced on Jan. 23, 2014.

Pflueger’s company, Pacific 808 Properties LLC, which owns the property under the dam, pleaded no contest to seven manslaughter charges, and will be fined $50,000 for each of the 7 deaths.

Without warning or time to escape, the deadly force of the breach and the debris it carried, slammed into a 6-acre property owned by the Fehring family, sweeping Aurora Solveig Fehring, her husband Alan Gareth Dingwall, and their 2-year-old son, Rowan Grey Makana Fehring-Dingwall, to their death.

Christina Michelle McNees, who was 7 months pregnant, and Daniel Jay Arroyo, her fiancé who she was set to marry just hours later; Timothy Wendell Noonan, Jr., a friend of Aurora’s; and Wayne Rotstein, the Fehring’s caretaker and business partner, also were killed.