I found this on wowhead.com

Divine Storm is a smart heal.
Assuming DS hits your target, the heal effect will look for the lowest health member in your party then heal them. Only if the entire heal is consumed (no overhealing) does it spill over, so most of the time the heal will be hitting precisely one target.

I have to assume that if 4 hit at once, 3 are wasted.This has been a 'feature' of paladin spell mechanics since release.