Insurance firm denies liability in chair collapse that injured guest

An insurance company has denied any liability or obligation to a company that sold to Saipan Laulau Development Inc. a white plastic chair that allegedly collapsed under the weight of a hotel guest.

Traders Insurance Co., through counsel R. Todd Thompson, asked the Superior Court to declare that Traders Insurance’s policy of insurance does not apply to any liability or other obligation that arises or may arise out of the complaint.

Thompson asked the court to relieve Traders Insurance of any duty to defend or indemnify Markikat Co., owner of Multiline Supply that sold the chair to Saipan Laulau Development Inc., under the public liability insurance policy.

Traders Insurance first issued Markikat Co. a public liability insurance policy on Jan. 14, 2010, providing certain coverage to Markikat for public liability. Thompson said the policy was renewed for several years on the same terms and conditions.

However, on Oct. 19, 2012, Markikat cancelled its public liability policy, effective Oct. 31, 2012, Thompson said.

On July 16, 2013, Danny Aquino Jr. was allegedly injured when the plastic white chair he was sitting on at Saipan Laulau Development collapsed. Six months later, Aquino and his wife, Joann, sued Saipan Laulau Development in Superior Court.

The couple is seeking damages against Saipan Laulau Development for negligence, violation of the Consumer Protection Act, and loss of consortium.

In April 2014, Markikat was served with a certain third-party complaint, alleging that Markikat was the seller of the chair that injured Aquino. The complaint alleges that Markikat is liable for indemnification, contributory fault, contribution, negligence, violation of the Consumer Protection Act, and products liability.

Markikat, through its counsel, tendered the complaint to Traders Insurance pursuant to the insurance policy, requesting a defense and indemnification against the allegations of the complaint.

Thompson said that Traders Insurance, through its attorney, denied any legal obligation to defend and indemnify Markikat, saying their policy expressly excludes indemnification for “bodily injury or property damage that arises out of [Markikat’s] products if the bodily injury or property damage occurs after it has relinquished possession of those products.”

Thompson said Traders Insurance further took the position that coverage was barred based on the fact that the policy was cancelled at Markikat’s request on Oct. 31, 2012, thus affording no coverage with respect to the accident, which occurred some months later in July 2013.