Ex-worker of defunct factory sues insurance firm

A former employee of defunct garment manufacturer Grace International Inc. has sued an insurance company for its alleged failure to pay her medical expenses and airfare.

Mei Li sued Oceania Insurance Corp. for breach of contract, violation of Consumer Protection Act, unfair claims settlement practices, and unjust enrichment.

Saipan Tribune tried but failed to get a comment from Oceania Insurance.

Li, through lawyer Joseph E. Horey, asked the Superior Court to order Oceania Insurance to pay her damages, court costs, attorneys’ fees, and restitution.

Horey stated in the complaint that on Sept. 23, 2002, the insurance company issued a surety bond to Grace International, guaranteeing payment in the event of Grace’s failure to pay each of 12 factory employees.

Horey said the employees include Li for the payment of $1,586 in wages, $500 in airfare, and $3,000 in medical expenses.

In August 2003, the plaintiff filed a complaint with the Department of Labor against her then employer, Grace International.

On July 5, 2007, the Labor Hearing Office issued an order finding Grace liable to pay Li $1,598 in unpaid wages, $1,598 in liquidated damages, and $2,332 in medical expenses.

Horey said the Labor Hearing Office also provided that “the bond that was filed with the contract shall compensate the complainant, to the extent of the limits of the bond, if the respondent does not meet its obligations within 15 days of the issuance of this order.”

Grace did not appeal Labor’s order and did not pay Li any of the amount.

It shut down its garment factory in Susupe in April 2007. Labor investigators reportedly did not find any labor violations committed by Grace management in closing down the factory.

Li sought payment of the unpaid wages and medical expenses from Oceania Insurance pursuant to the surety bond.

Horey said that on Nov. 30, 2007, Oceania Insurance issued a check to Labor for Li’s unpaid wages, amounting to only $1,586, the limit of the bond with respect to wages.

The lawyer said that on the same day, the worker purchased a plane ticket from Saipan to Beijing, China, for $390.35.

Li departed Saipan on Dec. 3, 2007. But she continued to seek payment from Oceania Insurance of the medical expenses and airfare pursuant to the bond in the remaining amount of $2,722.35.

“Despite repeated requests from plaintiff, however, defendant has thus far neglected and failed to make any payment of that amount,” Horey said.

The lawyer asserted that in the operation of its business, particularly in its dealings with respect to the bond, Oceania Insurance “willfully engaged in unfair methods of competition, and unfair or deceptive acts in the conduct of trade or commerce, in violation of the CNMI Consumer Protection Act.”