Haw. Rev. Stat. » Haw. Rev. Stat. / Chapter 663
Hawaii Revised Statutes

Haw. Rev. Stat. § 663-10 (2026)

  Collateral sources; protection for liens and rights of subrogation

✓ current as of July 2026
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     §663-10  Collateral sources; protection for liens and rights of subrogation.  (a)  In any civil action in tort, the court, before any judgment or stipulation to dismiss the action is approved, shall determine the validity of any claim of a lien against the amount of the judgment or settlement by any person who files timely notice of the claim to the court or to the parties in the action.  The judgment entered, or the order subsequent to settlement, shall include a statement of the amounts, if any, due and owing to any person determined by the court to be a holder of a valid lien and to be paid to the lienholder out of the amount of the corresponding special damages recovered by the judgment or settlement.  In determining the payment due the lienholder, the court shall deduct from the payment a reasonable sum for the costs and fees incurred by the party who brought the civil action in tort.  As used in this section, lien means a lien arising out of a claim for payments made or indemnified from collateral sources, including health insurance or benefits, for costs and expenses arising out of the injury which is the subject of the civil action in tort.  If there is a settlement before suit is filed or there is no civil action pending, then any party may petition a court of competent jurisdiction for a determination of the validity and amount of any claim of a lien.

     (b)  Where an entity licensed under chapter 432 or 432D possesses a lien or potential lien under this section:

     (1)  The person whose settlement or judgment is subject to the lien or potential lien shall submit timely notice of a third-party claim, third-party recovery of damages, and related information to allow the lienholder or potential lienholder to determine the extent of reimbursement required.  A refusal to submit timely notice shall constitute a waiver by that person of section 431:13-103(a)(10).  An entity shall be entitled to reimbursement of any benefits erroneously paid due to untimely notice of a third-party claim;

     (2)  A reimbursement dispute shall be subject to binding arbitration in lieu of court proceedings if the party receiving recovery and the lienholder agree to submit the dispute to binding arbitration, and the process used shall be as agreed to by the parties in their binding arbitration agreement; and

     (3)  In any proceeding under this section to determine the validity and amount of reimbursement, the court or arbitrator shall allow a lienholder or person claiming a lien sufficient time and opportunity for discovery and investigation.

     For purposes of this subsection:

     "Third-party claim" means any tort claim for monetary recovery or damages that the individual has against any person, entity, or insurer, other than the entity licensed under chapter 432 or 432D.

     "Timely notice of a third-party claim" means a reasonable time after any written claim or demand for damages, settlement recovery, or insurance proceeds is made by or on behalf of the person. [L Sp 1986, c 2, §16; am L 2000, c 29, §2; am L 2002, c 228, §2]

 

Case Notes

 

  Where plaintiff, an insured motorcyclist who sustained injuries when plaintiff was struck by a vehicle and obtained a $1.5 million tort settlement against the third-party driver of that vehicle, alleged that state statutes barred health insurer's claim for reimbursement for medical expenses insurer paid and insurer's lien on the settlement, the appellate court affirmed that this section and §431:13-103 did not conflict with the Employee Retirement Income Security Act of 1974 (ERISA) and did not impermissibly expand the scope of liability under §502(a) of ERISA.  Instead, this section and §431:13-103 only impacted the insurer's subrogation rights against a third party tort settlement fund and there were no statutory provisions of ERISA that addressed reimbursement limitations.  937 F.3d 1262 (2019).

  Where plaintiff, an insured motorcyclist who sustained injuries when plaintiff was struck by a vehicle and obtained a $1.5 million tort settlement against the third-party driver of that vehicle, alleged that state statutes barred health insurer's claim for reimbursement for medical expenses insurer paid and insurer's lien on the settlement, the appellate court affirmed that under the saving clause of §514 of the Employee Retirement Income Security Act of 1974, this section and §431:13-103 were saved from express preemption because they were directed at insurance practices and impacted risk pooling.  Read together, these statutes prohibited an insurer from seeking certain types of reimbursement, thus impacting the eventual net value of any payment made to a plan member, i.e., insurers face more risk than they would otherwise.  937 F.3d 1262 (2019).

  Appellant's motion to determine its lien on settlement was properly denied, because this section unambiguously applies to collateral source payors, which appellant was not.  76 H. 266, 874 P.2d 1091 (1994).

  Where personal injury plaintiffs petitioned for a ruling that health insurance company had no lien or subrogation rights in their personal injury settlements, the circuit court did not err in granting plaintiffs' petition because:  (1) a health insurer does not have equitable subrogation rights against a third-party tortfeasor in the context of personal insurance; (2) a health insurer's subrogation and reimbursement rights are limited by this section and §431-13:103(a)(10); and (3) any contractual provision that conflicts with this section is invalid.  This section takes precedence over health insurer's contractual subrogation rights.  140 H. 285, 400 P.3d 486 (2017).

  Cited:  73 H. 403, 833 P.2d 890 (1992).

  Discussed:  183 F. Supp. 3d 1094 (2016).

 

 

Notes of Decisions
Cited in 12 cases (4 in the last 5 years), 1992–2026 · leading case: Yukumoto v. Tawarahara., 400 P.3d 486 (Haw. 2017).
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Yukumoto v. Tawarahara., 400 P.3d 486 (Haw. 2017). · cites it 103× “The Yukumotos sought “a ruling that HMSA has no lien nor subrogation rights in their personal injury settlements because HMSA cannot satisfy the provisions of’ HRS § 663-10. 1 They alleged that under HRS *288 § 663-10, “[f|or a health insurer to receive any portion of a…”
In re: The Petition for the Coordination of Maui Fire Cases. S.Ct. Order, filed 02/10/2025 [ada]., 565 P.3d 754 (Haw. 2025). · cites it 210× “3d 486 [] (2017)[,] that limited the subrogation remedies available to health insurers to reimbursement from their insureds under HRS § 663-10 and barred independent actions against tortfeasors who settled with the insureds extend to property and casualty insurance carriers?…”
Ing v. Acceptance Ins. Co., 874 P.2d 1091 (Haw. 1994). · cites it 29× “Vit-tos’ motion was filed pursuant to HRS § 663-10. On June 9, 1993, the circuit court denied Vittos’s motion to determine the validity of Vittos’s lien.”
Randy Rudel v. Hawaii Mgmt. All., 937 F.3d 1262 (9th Cir. 2019). · cites it 4× “Haw. Rev. Stat. § 663-10 (a) (emphasis added).”
State Farm Fire & Cas. Co. v. Pac. Rent-All, Inc., 978 P.2d 753 (Haw. 1999). · cites it 4× “HRS § 663-10 (1993) 16 provides further support for an equitable requirement of diligence, insofar as it provides protection for an insurer that exercises due diligence by filing a timely notice of its claim.”
Shimabuku v. Montgomery Elevator Co., 903 P.2d 48 (Haw. 1995). · cites it 4× “On appeal, Employer argues that: (1) the stipulation dismissing Shimabuku’s claims was invalid under Hawaii Revised Statutes (HRS) § 386-8 (1985); (2) the circuit court erred in denying intervention under HRS § 386-8; and (3) it had a valid lien over Lauren Shimabuku’s…”
Burnes v. Hawaiian Elec. Co., Inc (Haw. 2026). · cites it 178× “Thus, Subrogating Insurers complain that there is nothing for them to attach liens to under HRS § 663-10. Subrogating Insurers are wrong.”
Pac. Ins. v. Esperanza, 833 P.2d 890 (Haw. 1992). · cites it 9× “To hold otherwise would merely create a different “gap” in compensation which would negate the intention of the legislature. Thus, we conclude that the statute gives Pacific only the right to recover settlement monies paid to Esperanza for lost wages.”
Moranz v. Harbor Mall, LLC., 502 P.3d 488 (Haw. 2022). · cites it 2× “” (emphasis added)); HRS § 663-10(a) (“The judgment entered . .”
AFL Hotel & Restaurant Workers Health & Welfare Trust Fund v. Bosque, 132 P.3d 1229 (Haw. 2006). “In addition to arguing ERISA preemption, Bosque opposed the summary judgment motion on the grounds that: (1) AFL was collaterally and judicially estopped to deny preemption on the basis of adverse circuit court *321 rulings and inconsistent positions taken in other cases; and…”
Hawaiian Dredging Constr. Co., Inc. v. Fujikawa Assocs., Inc., 420 P.3d 360 (Haw. 2018). · cites it 2× “" We conclude that the comprehensive workers' compensation reimbursement scheme established by HRS § 386-8 provides the exclusive remedy for an employer's recovery of workers' compensation benefits paid for its employee where injury is allegedly attributable to a third party.”
In re: The Petition for the Coordination of Maui Fire Cases (Haw. 2025). · cites it 6× “Question 2: Is a property and casualty insurer’s subrogation right of reimbursement prejudiced by its insured’s release of any tortfeasor when the settlement documents and release preserve those same rights under HRS § 663-10? Because the statutory lien under HRS § 663-10 is the…”
Haw. Rev. Stat. § 663-10(a): 4 cases
In re: The Petition for the Coordination of Maui Fire Cases. S.Ct. Order, filed 02/10/2025 [ada]., 565 P.3d 754 (Haw. 2025). “3d 486 [] (2017)[,] that limited the subrogation remedies available to health insurers to reimbursement from their insureds under HRS § 663-10 and barred independent actions against tortfeasors who settled with the insureds extend to property and casualty insurance carriers?…”
Moranz v. Harbor Mall, LLC., 502 P.3d 488 (Haw. 2022). “” (emphasis added)); HRS § 663-10(a) (“The judgment entered . .”
Yukumoto v. Tawarahara., 400 P.3d 486 (Haw. 2017). “The Yukumotos sought “a ruling that HMSA has no lien nor subrogation rights in their personal injury settlements because HMSA cannot satisfy the provisions of’ HRS § 663-10. 1 They alleged that under HRS *288 § 663-10, “[f|or a health insurer to receive any portion of a…”
In re: The Petition for the Coordination of Maui Fire Cases (Haw. 2025). “Question 2: Is a property and casualty insurer’s subrogation right of reimbursement prejudiced by its insured’s release of any tortfeasor when the settlement documents and release preserve those same rights under HRS § 663-10? Because the statutory lien under HRS § 663-10 is the…”
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