Owner of Hakubotan land sues company

The owner of a land in Chalan Laulau, where the closed Hakubotan is located, has filed a lawsuit against the successor or assignee of the former duty free shop for allegedly failing to get a liability insurance and allowing the premises to deteriorate rapidly.

Commco Ltd., through counsel Ramon K. Quichocho, sued Palm Garden Micronesia Inc. for breach of contract.

Commco asked the Superior Court to terminate its lease agreement and order Palm Garden to pay damages for injuries caused on the premises.

The plaintiff also demanded payment for attorney’s fees and court costs.

Quichocho stated in the complaint that in September 1994, Commco, as landlord, entered into a lease agreement with Hakubotan Saipan Enterprises Inc.

Under the agreement, Hakubotan, as tenant, leased Commco’s 1,811.61 square meters of land in Chalan Laulau. The lease was for a term commencing in September 1994 and ending on April 30, 2019.

Quichocho said that, in Septemvber 1998, Commco and Hakubotan amended the lease.

A provision of the lease, Quichocho said, obligated Hakubotan to maitain during the term of the lease, liability insurance on the premises to cover bodily injury, fatal or non-fatal, and injury to property of any person at Commco’s sole cost and expense.

The lawyer said that another provision of the lease stated that Hakubotan “shall not allow any waste or nuisance on the premises, or use or allow the premises to be used for any unlawful purpose.”

Quichocho said Hakubotan was involved in a foreclosure lawsuit filed in the Superior Court in 2002.

As a result of the lawsuit, the lawyer said, Palm Garden ended up acquiring all the rights and interests of the mortgages with respect to the indebtedness of Hakubotan.

Quichocho said that, on May 10, 2005, Hakubotan assigned to Palm Garden all of the former leasehold rights, title, estate, and interest in the property.

He said that under the terms of the assignment, Palm Garden agreed to assume all the rights and duties of Hakubotan as a tenant of the property.

Quichocho said his client sent a notice to inspect the premises on Jan. 22 2008, but Palm Garden did not respond.

He said Commco then found out that Palm Garden did not renew the liability insurance over the premises in breach of the lease agreement.

Furthermore, Quichocho said, upon ocular inspection, Commco discovered that Palm Garden had allowed waste and nuisance on the premises by leaving the premises idle and deteriorating rapidly.

He said Commco wrote more letters to inform Palm Garden of its breach of the lease agreement, but the company refused to respond.

“Palm Garden is now in default. Plaintiff Commco is entitled to termination of the lease on account of this breach,” Quichocho pointed out.

Hakubotan used to be the second biggest duty free shop on Saipan. With its closure in early 2000s, the company faced numerous lawsuits.

In 2003, the Guam Superior Court ordered the company to pay close to $1.7 million to Guam Marine Salvage Services Inc.

In April 2005, CNMI Superior Court associate judge David Wiseman ordered the termination of the court-sanctioned receivership placed on Hakubotan after determining that there is still no operating capital found to re-open its store on the island.