JUDGE: Naomi Reice Buchwald, U.S.D.J.

Plaintiff Richard Tropp brings this suit seeking (1) a declaratory judgment that a judgment obtained against him in England (“English judgment”) by the Corporation of Lloyd’s (also known as the Society of Lloyd’s, hereinafter “Lloyd’s”) is unenforceable here under New York statutory law or the Due Process Clause of the Fifth Amendment; (2) an accounting of all transactions between himself and Lloyd’s; (3) an injunction restraining Lloyd’s from enforcing the English judgment in New York; and (4) class certification of all similarly situated plaintiffs.

Defendant Lloyd’s moves to dismiss all claims pursuant to Fed. R. Civ. P. 12(b) (3) for improper venue, since Tropp agreed in the “Choice Clause” of his contract with Lloyd’s to litigate all disputes with Lloyd’s in England, or in the alternative pursuant to Fed. B. Civ. P. 12(b) (6) for failure to state a claim. [*2]

Tropp is an individual underwriter, or “Name,” in the English insurance market that is regulated by Lloyd’s. Whereas Tropp initially invested $160,000 (the bulk of his retirement savings) in that market, due to its collapse, unlimited personal liability, and, according to Tropp, mismanagement and fraud on the part of Lloyd’s, Tropp now stands personally liable on a judgment entered by an English court for upwards of $900,000[FN1] The Society of Lloyd’s, extensively below, the judgment represents both Tropp’s purported individual underwriting losses as well as his share of a mandatory reinsurance premium imposed on all Names by Lloyd’s.

FN1 A judgment against Tropp for £463,801.28 (including interest and costs) was entered by the High court of Justice, Queen’s Bench Division on May 24, 2004. See Declaration of Richard A. Tropp Ex. AE (Soc’y of Lloyd’s v. Tropp [2004] EWEC l39 (Comm.) (Gross, J.) Tropp subsequently was denied permission to appeal. Tropp Decl. Ex. AF, [Tropp v. Soc’y of Lloyd’s, [2004] EWCA Civ. 1544 (Waller J.) ] The judgment is final. Under exchange rates as of March 4, 2008 (1.98 dollars to the pound) the judgment equates to approximately $918,484.93.

FN2 See also Soc’y of Lloyd’s v. Reinhart 402 F.3d 982, 988 (10th Cir. 2005) (“[N]umerous courts have summarized the basic facts applicable to the underlying litigation, and these facts are not in dispute”).

This case presents the latest episode in an epic saga between Names such as Tropp and Lloyd’s. The story — Dickensian in length and complexity — has been retold countless times by American courts. See, e.g. Soc’y of Lloyd’s v Siemon-Netto, 457 F.3d 94, 96 (D.C.Cir. 2006) (“Eight circuit courts have set forth the background information that is relevant to this appeal … [there is] no need to reinvent the wheel.”)[FN2] Not only are the basic facts well-known, but the results are as well. Since the year 2000, by this Court’s tally, Names have lost at least 23 separate challenges [*3] in American courts (including appeals in eight federal circuit courts) to various aspects of the enforceability of English judgments obtained by Lloyd’s.[FN3] Not a single Name has yet prevailed.

FN3 Names have generally lost challenges on one of two grounds. First, those Names that have sued Lloyd’s here have lost on the basis of the “Choice Clause,” which requires Names to litigate against Lloyd’s in England under English law. Second, Names against whom Lloyd’s has sought to enforce judgments here have lost under the various states’ enactment of the Uniform Foreign Country Money-Judgments Recognition Act, or under general common law principles of comity.

Cases that have enforced the Choice Clause include: Lipcon v. Underwriters at Lloyd’s, 148 F.3d 1285 (11th Cir. 1998); Richards v. Lloyd’s of London, 135 F.3d 1289 (9th Cir. 1998) (en banc); Haynswsorth v. Corp. of Lloyd’s, 121 F.3d 956 (5th Cir. 1997); Allen v. Lloyd’s of London, 94 F.3d 923 (4th Cir. 1996); Shell v. R.W. Sturge, Ltd., 55 F.3d 1227 (6th Cir. 1995); Bonny v. Soc’y of Lloyd’s, 3 F.3d 156 (7th Cir. 1993); Riley v. Kingsley Underwriting Agencies Ltd., 969 F.2d 953 (10th Cir. 1992).

Cases that have enforced Lloyd’s judgments against Names include: Soc’y of Lloyd’s v. Siemon-Netto 457 F.3d 94 (D.C. dr. 2005); Lloyd’s v Reinhart 402 F.3d 982 (10th Cir. 2005), cert. denied 126 S.Ct. 366 (2005); Soc’y of Lloyd’s v. Blackwell 127 Fed.Appx. 961 (5th Cir. 2005); Soc’y of Lloyd’s v. Borgers 127 Fed. Appx. 959 (9th dir. 2005); Soc’y of Lloyd’s v. Fuerst 138 Fed.Appx. 873 (6th Cir. 2005); Soc’y of Lloyd’s v. Cohen 108 Fed.Appx 126 (5th Cir. 2004); Soc’y of Lloyd’s v. Mullin, 96 Fed. Appx. 100 (3d dir. 2004); Soc’y of Lloyd’s v. Shields 118 Fed.Appx. 12 (6th Cir. 2004); Soc’y of Lloyd’s v Turner, 303 F.3d 325 (5th dir. 2002); Soc’y of Lloyd’s v. Ashenden et al., 233 F.3d 473 (7th Cir. 2000); Soc’y of Lloyd’s v. Edelman 2005 WL 639412 (S.D.N.Y. Mar. 21, 2005); Soc’y of Lloyd’s v Hudson 276 F.Supp.2d 1110 (D. Nev. 2003); Soc’y of Lloyd’s v. Byrens, U.S. Dist. LEXIS 26719[, Case #: 3:02-cv-00449-J-AJB] (S.D. Cal. May 29, 2003); Soc’y of Lloyd’s v. Webb, 156 F.Supp.2d 532 (N.D.Tex. 2001); Soc’y of Lloyd’s v Anderson, 2004 U.S. Dist. LEXIS 7351 (N.D.Tex. Apr. 27, 2004); Soc’y of Lloyd’s v. Campbell-White, 2005 U.S.Dist. LEXIS 22403 (D. Mass. Aug. 23, 2005); Soc’y of Lloyd v. Grace 718 N.Y.S.2d 327 (1st Dep’t 2000); Collins v Soc’y of Lloyd’s 874 So.2d 672 (Fla. App. 4 Dist,, 2004). Additionally, the following cases enforcing Lloyd’s judgments are unreported: Soc’y of Lloyd’s v. Tufts, No. 03-2316 (E.D.Mo. May 18, 2004); Soc’y of Lloyd’s v. McCarthy, No. 03-80247-CJV (S.D. Fla. July 16, 2003); Soc’y of Lloyd’s v. Evnen 02-07-118 (D. Neb. Apr. 26, 2003); Soc’y of Lloyd’s v. Davies, No. 02-07-1602-GET (N.D.Ga. Apr. 23, 2003), aff’d No. 03-13794 (11th dir. May 21, 2004); Soc’y of Lloyd’s v Bennett, No. 02-CV-204TC (D.Utah Nov. 12, 2003); Soc’y of Lloyd’s v Rosenberg, No. 02-1195 (E.D.Pa. Aug. 12, 2002); Soc’y of Lloyd’s v. El1is, No. 05-159-CA (Fla. Mat. Ct. 4th Dist. 2005); Soc’y of Lloyd’s v. Almond, No. 03CP406075 (S.C. Cir. Ct. Richland 2005). Defendant’s Appendix of Unreported Decisions, attached to the Declaration of Nicholas P. Demery, and filed concurrently with Defendant’s Motion to Dismiss.

BACKGROUND

While we concur with the D.C. Circuit that there is no need to reinvent the wheel, we need to provide enough factual background to set forth Tropp’s arguments.

I. Tropp’s Underwriting

A. The Lloyd’s Insurance Market

Lloyd’s is a 300-year-old market in which individual and corporate underwriters known as “Names” underwrite insurance. "The Corporation of Lloyd’s, which is also known as the Society of Lloyd’s, provides the building and personnel necessary to the market’s administrative operations. The Corporation is run by the Council of Lloyd’s,[FN4] which promulgates ‘Byelaws’ regulates the market, and generally controls Lloyd’s administrative functions.”

FN4 The Lloyd’s Council is elected primarily by Managing Agents of the various syndicates.

In order to participate in the Lloyd’s market, Names are required by English law to become members of the Society of Lloyd’s.[FN6] As members they underwrite insurance by joining various “syndicates” which pool and manage investments in assorted risks. While investment in Lloyd’s has typically been a “profitable venture&,#148;[FN7] Names are personally liable on losses incurred by the syndicates that they join, unless they buy a “stop-loss” insurance policy.[FN8]

Names’ underwriting activities are mediated by two sets of agents — Members’ Agents and Managing Agents. Members’ Agents, somewhat analogous to brokers, open the Names’ accounts, place their Names’ [sic] on various syndicates, and generally oversee their Names’ underwriting activities. Managing Agents, underwriting specialists, run the day-to-day business operations of each

FN5 See also Declaration of Nicholas P. Demery ¶ 3.

FN6 Demery Decl. ¶ 5.

FN 7 Soc’y of Lloyd’s v. Mullin, 96 Fed. Appx. 100, 102 (3d Cir. 2004) (“Underwriting in the Lloyd’s market has traditionally been a profitable venture, but Names began to incur substantial losses in the late 1980s and early 1990s”)

FN8 See Tropp Decl. ¶¶ 20, 26-30.

[*6] syndicate, and decide which insurance policies to underwrite. Both sets of agents assume contractual responsibilities over Names’ underwriting activities, and owe fiduciary duties to the Names.[FN9]

Each syndicate underwrites insurance for exactly one calendar year, beginning on January 1 and ending December 31. In order to calculate gains and losses, syndicates must stay “open” for at least three years afterwards.[FN10] After three years, a “closing” syndicate must find a new, open syndicate to reinsure its outstanding liabilities. This type of reinsurance is called “RITC” (reinsurance to close). In exchange for a certain premium, (“RITC premium”), a new syndicate agrees to accept the bundle of all outstanding liabilities from a closing syndicate, including the RITC policies that the closing syndicate itself had underwritten for prior syndicates. Thus, a single new RITC policy may pass down many syndicates’ worth of outstanding liabilities, thereby exposing new syndicates to potentially vast pre-existing liabilities.

Pursuant to § 14(3) of the Lloyd’s Act of 1982, Lloyd’s itself, as regulator of the market, is provided with immunity (“Lloyd’s Immunity”) from suits brought by Names, except for claims of fraud or bad faith. See, e.g., Soc’y of Lloyd’s v. Jaffray, 2000 WL 1629463[, Transcript] (Queen’s Bench Division (Comm. Court), Nov. 3, 2000) (Cresswell, J.) aff’d (2002) 146 S.J.L.B. 214 (AC), available

FN9 Compl. ¶¶ 26-34; Roby, 996 F.2d at 1357.

FN10 See Demery Decl. ¶ 11

Tropp Becomes a Name

Tropp was recruited to join Lloyd’s in 1987 through a Member’s Agent named John Hayter.[FN11] Tropp had recently retired from his job at the United States Agency for International Development, and had worked previously at the Environmental Protection Agency (“E.P.A.”).

Tropp complied with the various requirements to become a member of Lloyd’s: he passed a means test to ensure he had the ability to meet underwriting obligations, signed the necessary contracts, posted a fully collateralized $160,000 letter of credit,[FN12] and went through the required screening interview with the Lloyd’s Rota Committee on August 11, 1987. (As described by the Fifth Circuit: “Names must … personally appear in London before a representative of the Council of Lloyd’s to acknowledge

FN11 It appears that John Hayter originally worked for Hayter Agencies Ltd., and then later with a firm by the name of Hayter Brockbank

FN12 With leverage, such a letter of credit allowed Tropp to take on risks of up to $640,000.

The central contract that Tropp signed with Lloyd’s was the “General Undertaking”[FN13] The General Undertaking obliges Names to comply with all provisions of the Lloyd’s Acts, as well as with any current or future provisions of the Lloyd’s Acts, as well as with any current or future Byelaws promulgated by the Council of Lloyd’s.[FN14] Clause 2.2 (the “Choice Clause”) requires Names to litigate any and all disputes with Lloyd’s in English courts under English law, and also sets forth that the Names agree to personal jurisdiction in England is enforceable in other jurisdictions.[FN15]

Because of his work at the E.P.A. Tropp was sensitive looming environmental, particularly asbestos-related liabilities and wished to avoid investing in any syndicates exposed to such environmental risks. Tropp apparently confirmed with the Lloyd’s

FN13 Tropp Decl. Ex. B. (General Undertaking between Richard A. Tropp and the Society of Lloyd’s, effective as of January 1, 19881; see also Demery Decl. Ex. 2 [same].

FN14 Id.

FN15 Clause 2.2 of the General undertaking reads in pertinent part: “[T]he courts of England shall have exclusive jurisdiction to settle any dispute and/or controversy of whatsoever nature … [the Name] irrevocably agrees that a judgment in any Proceeding brought in the English courts shall be conclusive and binding upon each party and may be enforced in the courts of any other jurisdiction.” Tropp Decl. Ex. B at ¶ 2.2; Demery Decl, Ex. 2 at ¶ 2.2.

In April, 1990, however, things began to unravel. Tropp received back from Hayter Brockbank (his re-named Member’s Agent) an uncashed check for his stop-loss insurance policy for his 1990 syndicates. Hayter Brockbank told Tropp that stop-loss insurance was no longer available. Tropp now maintains that this was a lie, since Hayter Brockbank’s directors and officers had in fact procured stop-loss insurance to cover themselves for 1990 syndicates.[FN18]

Upon learning that he was no longer covered by stop-loss insurance, Tropp immediately tried to stop underwriting. Tropp

FN16 Tropp Decl. ¶¶ 12-13. Whereas Lloyd’s Rota Committee normally retains minutes, transcripts, and tape recordings of Rota Committee meeting, Lloyd’s has represented to Tropp that no such evidence can be found with respect to his August 11, 1987 interview. Id.

FN17 Tropp. Decl. Ex. F [Letter from Richard A. Tropp to John Hayter, dated September 11, 19871 (This letter is to reconfirm that you have placed me on no syndicate, under any circumstances, which either is or could become exposed to environmental liability of any kind. This is an absolute condition to my joining Lloyd’s, to my approving the Syndicate Arrangements enclosed, and to my underwriting for all future years, and I rely on your assurance – per our discussions on this – that none of the syndicates onto which the agency places me will ever carry such potential liability.”)).

FN10 See Tropp Decl. ¶ 15.

[*10] called Hayter Brockbank and orally resigned for the following year, beginning January 1, 1991. But, apparently because Tropp was an army-reservist called up to active military duty, he did not send written notice of his resignation until months later, on August 3, 1990. At that time, Hayter Brockbank refused to recognize his resignation for 1991 – again fraudulently according to Tropp[FN19] – because they maintained that resignations msut be made in writing by the end of June, at least six months prior to the start of the next calendar year. Therefore, Hayter Brockbank again placed Tropp on syndicates for the 1991 year, again without stop-loss insurance.[FN20]

C. Collapse of the Insurance Market

Tropp’s loss of stop-loss insurance, and his having been, in his words, “conscripted” to underwrite for another year could not have come at a worse time. Beginning in the early 1990s, syndicates at Lloyd’s were wracked by staggering losses of upwards of twelve billion dollars.[FN21] Ashenden 233 F.3d at 478 (“Huge

FN19 Tropp Decl. ¶¶ 16-17. Tropp maintains that Lloyd’s Byelaws only require four months notice before a resignation becomes effective. Lloyd’s counters that Tropp erred by sending his August 3, 1990 letter only to Hayter Srockbank, and not to Lloyd’s itself. Demery Decl. ¶ 12. Had Tropp written to Lloyd’s itself, on August 3, 1990, the letter would have amounted to effective resignation. But, under Lloyd’s Byelaws, Members’ Agents are not authorized officers or employees of Lloyd’s for purposes of accepting resignations.

FN20 Tropp’s resignation appears to have been effective at least for the 1992 calendar year. There is no evidence of any losses from 1992 syndicates.

FN21 The $12 billion figure comes from Lloyd’s itself. Demery Decl. 14. See also Edelman, 2005 WL 639412 at *3. A 1995 New York State Insurance

[*11] underwriting losses [ ] threatened to destroy the London insurance market”). The losses were due in large part to previously incurred but not yet reported environmental liabilities, which had cascaded down from previous syndicates through RITC reinsurance.

As the losses began to mount, Tropp received cash calls on his letter of credit in 1992 and then again in 1993,[FN22] to which he consented.[FN23] He then received a third cash call in 1994, which would have drained his original investment of $160,000 down to zero, and, according to Tropp, forced a second mortgage on his home.[FN24]

But, rather than accept the last cash call, Tropp began investigating. Tropp managed to inspect the accounts of six of his

Department audit of Lloyd’s for the period ended December 31, 1993 found an $18.4 billion deficiency. A copy of the report is available at www.truthaboutlloyds.com/regulation/nyidreport.html

FN22 Tropp Decl. ¶ 18. Cash calls were typically made by Member’s Agents, based on information provided to them by the managing agents for each of the Name’s respective syndicates. See also Demery Decl. ¶ 12.

FN23 Tropp Decl. ¶ 9.

FN24 Tropp Decl. ¶ 19. We, like previous courts in Names’s cases, remain sympathetic to the situation that Names found themselves in. As one English court put it:

It is easy to understand the depth of feeling of those names who became members of Lloyd’s between 1977 and 1987. They joined Lloyd.s at a time when there were many syndicates infected with asbestos-related risks which were persistently underestimated. The procedure at Lloyd’s was that each year’s accounts were, at the end of a three-year period, closed into the next year’s accounts. The effect was that the new names inherited losses of massive proportions.

Soc’y of Lloyd’s v. Jaffray, (2002) 146 S.J.L.B. 214 (AC), available at 2002 WL 1654876 at *1.

[*12] largest-loss syndicates.[FN25] He also hired a forensic accountant, who determined that approximately 98-99% of Tropp’s alleged losses stemmed from his being placed on syndicates which, ultra vires of his entering prohibition, were exposed to environmental risks through RITC policies.[FN26] According to Tropp, some of his syndicates were not underwriting new policies at all, but only writing RITC reinsurance of earlier syndicates, which had been exposed to massive environmental risks. In addition, Tropp further learned that his Member’ him on these risky RITC-heavy syndicates.[FN27]

Tropp then began negotiating with Lloyd’s for a settlement. Tropp claims that he reached an agreement in principle with senior Lloyd’s management in November, 1995, and was sent a “Settlement and Release Agreement” on December 11, 1995 that would have absolved him of liability.[FN28] Before any such agreement was formally executed, however, the Lloyd’s Council announced its massive Reconstruction and Renewal Plan (“R & R”) which applied mandatorily to all Names.

D. Lloyd’s R & R

FN25 Tropp Decl. ¶¶ 21-25.

FN26 Tropp Decl. ¶ 24.

FN27 Tropp Decl. ¶ 22.

FN28 Tropp Decl. ¶ 25.

First, Lloyd’s syndicates transferred all “open” liabilities for 1992 and preceding years onto a new special-purpose entity called Equitas, which would reinsure those risks.[FN30] In order to pay for this reinsurance, Equitas assessed on each Name a premium (the “Equitas Additional Premium”), which was individually calculated based on the Name’s current and projected future losses.[FN31] Equitas then assigned the right to collect these premiums to Lloyd’s.[FN32]

Second, Lloyd’s sent a “Settlement Offer” to each Name, whereby Names could agree to pay a discounted amount of moneys allegedly owed in exchange for a release from future liabilities. The Settlement offer contained a "Finality Statement”, which set forth the aggregate amount required to satisfy the Name’s prior

FN29 For other descriptions of R & R, see Allen 94 F.3d at 929-31; Haynsworth 121 F.3d at 958-6l, Roby 996 F.2d at 1357.

FN30 Tropp Decl. ¶ 30; Demery Decl. ¶ 15. Officially, Equitas is a holding company, owned by a trust, the beneficiaries of which are the reinsured Names, but the trust itself is controlled by the Lloyd’s Corporation.

FN31 Technically, Names were assessed an “Equitas Premium,” but only had to pay the amount by which the ”Equitas Premium” exceeded their reserves with Lloyd’s, hence their “Equitas Additional Premium.” see, e.g. Lloyd’s Memorandum of Law at 17 n.13; Tropp Decl. Ex. Z [Lloyd’s Statement of Reinsurance issued to Mr. RA Tropp]. For the sake of convenience and brevity, we refer exclusively to the “Equitas Additional Premium.”

FN32 Demery Decl. ¶ 20; Reinhart, 402 F.3d at 991.

[*14] unpaid underwriting liabilities (if any) and the Equitas Additional Premium. The Finality Statement also included and [sic] an individually calculated package of “settlement credits” that each Name who accepted the Settlement Offer by a certain date could use to reduce the amount owed.[FN33]

Tropp received his Finality Statement in August, 1996. It called for him to pay £253,409 in uncalled accrued cash calls (with interest) from his 1989, 1990, and 1991 syndicates, as well as £114,439 for his Equitas Additional Premium, a total of £367,848.[FN34] Tropp was also offered £281,077 in settlement credits, meaning he would have to pay only £86,771 if he accepted the Settlement Offer.[FN35]

Names were given until September 11, 1996 to accept. Although the Settlement Offer was optional, Lloyd’s exercised its regulatory authority to require all Names to reinsure outstanding liabilities with Equitas and pay the Equitas Additional Premium by September 30, 1996.[FN36] Lloyd’s did so pursuant to its authority under § 18(b) of Schedule 2 of the Lloyd’s Act of 1982 to appoint śsubstitute agents” for the Names whenever the Lloyd’s Council deemed it necessary. Through a series of Byelaws and resolutions

FN33 Demery Decl. ¶ 15; Allen, 94 F.3d at 927. In order to receive the settlement credits, Names had to agree to release not only Lloyd’s, but also their Member’s Agents, Managing Agents, and other market participants. Id.

FN34 Tropp Decl. ¶ 34; Demery Decl. ¶ 16.

FN35 Demery Decl. ¶ 16.

FN36 Demery Decl. ¶ 18; Turner 303 F.3d at 327-28.

[*15] under this Act, the Lloyd’s Council appointed an entity known as “AUA9” (Additional Underwriting Agencies (No. 9) Ltd.) as a “substitute agent” for the Names.[FN37] In turn, AUA9 signed the Equitas Reinsurance Contract (“Equitas Contract”) with Lloyd’s on behalf of all Names.[FN38]

According to Lloyd’s, close to 95% of all Names agreed to the Settlement Offer by September 11, 1996.[FN39] A few Names, including Tropp, did not (“non-accepting Names”).[FN40] It appears that Tropp refused to pay for a variety of reasons – he believed that the numbers in his Finality Statement were incorrect and overstated; he felt that the purported release would be ineffective since Lloyd’s reserved the right to collecdt future shortfalls even from those Names who accepted;[FN41] but most of all Tropp was still engaged in his own negotiations concerning a personal settlement for far less.

Indeed, Tropp appears to have been engaged in negotations with Lloyd’s throughout the entire time period from 1995 to 2001. The parties seem to have drawn the closest a few years later, in 1998. For instance, Tropp received a letter dated July 9, 1998

FN37 See Byelaw No. 82 of 1995; AUA9 Resolution of 1996. The sole shareholder of AUA9 is the Society of Lloyd’s. Simon-Netto, 457 F.3d at 97.

FN38 Demery Decl. ¶ 18.

FN39 Demery Decl. ¶ 17; Soc’y of Lloyd’s v. Ashenden, 233 F.3d at 478.

FN40 While Lloyd’s maintains that only about five percent of the Names did not accept their Settlement Offer, Tropp believes the number may be slightly higher. Tropp Decl. ¶ 33 n. 2.

FN41 Tropp Decl. ¶¶ 31-32.

[*16] from the Head of Lloyd’s Financial Recovery Department “reconfirming” that once the necessary paperwork was complete, Lloyd’s would release Tropp in exchange for a payment of only $5,000.[FN42] Tropp later received similar letters confirming a settlement of £3,125 (approximately $5,000 at the time) on January 25, 2001, and March 15, 2001.[FN43] However, unfortunately for Tropp, the necessary paperwork was never completed.[FN44]

II. Legal Proceedings Arising From Lloyd’s R & R

A. Lloyd Enforces the Equitas Premium

Lloyd’s brought suits for breach of contract against non-accepting Names. Lloyd’s efforts to collect were aided by two highly controversial clauses in the Equitas Contract – the “pay now, sue later” clause, and the “conclusive evidence” clause. The “pay now, sue later” clause forbid Names, in suits brought by Lloyd’s, from raising any claims for set-off or fraud on the part

FN42 Tropp Decl. ¶¶ 35-37; Ex. L [Letter from Phillip R. Holden to Richard A Tropp dated July 9, 1998].

FN43 Tropp Decl. ¶¶ 35-37; Ex. M [Letters from Sarah Wilton, Financial Controller at Lloyd’s to Richard A. Tropp dated January 25, 2001. and March 15. 2001].

FN44 The ultimate reasons why a settlement was never finalized are missing from the record. The courts in England were sympathetic to Tropp’s near-settlement, but found his legal estoppel argument unavailing. See e.g., Tropp v. Soc’y of Lloyd’s, [2004] EWCA Civ. 1544 (Waller, J.) at ¶ 20 (“I have to say that I have some sympathy with Mr. Tropp on that, as far as I have looked at the correspondence. But one thing is clear, and that is that the judge was right in law [that Tropp could not assert estoppel.]”). See also Soc’y of Lloyd’s v. Tropp, [2004] EWHC 1397 (Comm.) (Gross, J.) at & 46 (noting that Tropp and Lloyd’s were “within a whisker” of settlement, arid “it is a matter to be much regretted [that they) drew further apart.”).

[*17] of Lloyd’s. Instead, Names had to press such claims in a separate proceeding, where the claims were denoted as “counterclaims.” The “conclusive evidence” clause made Lloyd’s determination of the amount of a Name’s Equitas Additional Premium conclusive “in the absence of manifest error.”

Non-accepting Names challenged the Equitas Contract, and specifically the “pay now, sue later” and “conclusive evidence” clauses, but to no avail.[FN45] Lloyd’s won across the board, and courts unanimously upheld the validity of the Equitas Contract despite the fact it had only been signed on the Names’ behalf by substitute agent AUA9. See generally Soc’y of Lloyd’s v. Ashenden, 233 F.3d 473; Soc’y of Lloyd’s v. Leighs, [1997] C.L.C. 759 (QBD) available at 1997 WL 1104338, aff’d, Soc’s of Lloyd’s v. Lyon, Leighs & Wilkinson, [1997] C.L.C. 1398 available at 1997 WL 1104500.

After winning judgments in England, Lloyd’s sought to enforce judgments against non-accepting American names in United States courts. American Names fought the enforceability of the English judgments, contending that the pay-now-sue-later clause end the conclusive evidence clause deprived Names of due process of law, and rendered the English judgments unenforceable here. American

FN45 See Demery Decl. ¶ 22. The defenses of the recalcitrant Names included that Lloyd’s lacked the regulatory authority to require Names to purchase reinsurance from Equitas that Lloyd’s lacked the regulatory authority to appoint substitute agents to negotiate on behalf of Names; that Lloyd’s lacked proper title to sue; that Names were entitled to litigate fraud in the inducement arid that Names were not bound by the “pay now, sue later” or the “conclusive evidence” clauses od the Equitas contract.

[*18] Names also lost these challenges across the board. See, e.g., Soc’y of Lloyd’s v. Ashenden, 233 F.3d at 479-481; Soc’y of Lloyd’s v. Edelman, 2005 WL 639412 at *4-6 (S.D.N.Y. Mar. 21, 2005) (collecting cases and noting that Names had already lost challenges to English judgments in fourteen separate federal and state courts.)

B. Tropp’s Legal Proceedings

Apparently since Tropp and Lloyd’s were still negotiating, Lloyd’s did not bring suit against Tropp in the first wave of enforcement actions in 1997 and 1998. But, as the parties never reached a final settlement, Lloyd’s eventually sued Tropp on August 22, 2002 in the High Court of Justice, Queen’s Bench Division.[FN46] Lloyd’s sought £433,560.19, representing Tropp’s unsatisfied underwriting liabilities, his unpaid Equitas Additional Premium, interest and costs.[FN47]

After yet another round of settlement talks failed,[FN48] Tropp moved to dismiss the complaint on April 28, 2003 for lack of proper

FN46 Demery Dccl. ¶ 23.

FN47 Interestingly, the amount claimed by Lloyd’s, pre-interest and costs, was less that the amount on Trcpp’s Finality Statement. Apparently. Lloyd’s did not sue Tropp for his "Central Fund Debt," one alleged component of the unpaid underwriting obligations, See Demery fled. ¶ 25.

FN48 Tropp Decl. ¶ 38, Demery Decl. ¶ 23. A sticking point appears to have been that Lloyd’s was only willing to settle with respect to itself, whereas Tropp insisted that any settlement cover Lloyd’s, Equitas, and any other subsidiary or affiliate.

[*19] service.[FN49] (Like other Names, Tropp was only served by means of his “substitute agent,” the same AUA9 entity that had signed the Equitas Contract on his behalf.) The court denied Tropp’s motion by order dated January 20, 2004.[FN50]

On May 14, 2004, Tropp filed his “Defence and Counterclaim.”[FN51] Tropp argued inter alia athat the Equitas Equitas [sic] Contract was invalid because it was signed by AUA9 on his behalf;[FN52] that his purported losses stemmed from risks that he had not agreed to underwrite, either because he refused from the inception to underwrite environmental risks or because he timely resigned from the 1991 syndicates;[FN53] that the Managing Agents of his syndicates were engaged in fraud and self-dealing in underwriting RITC policies exposed to massive environmental liabilities, and in churning Names’ accounts;[FN54] that Lloyd’s was aware of the Managing Agent’s fraud and systematically failed to prevent it,[FN56] and also that Lloyd’s was in possession of substantial funds that should

FN49 Tropp Decl. ¶ 39; Ex. N. [Tropp’s;s statement of the Case]. Tropp argued that Lloyd’s had only served a local member’s agent, wholly controlled by Lloyd’s, and Tropp himself had never been properly served.

FN50 Tropp Decl. Ex. O [Soc’y of Lloyd’s v. Tropp, [2004] EWHC 33 (Comm.) (Gross, J.)]; Demery Decl. Ex. 5 [same].

FN51 Tropp Decl. Ex. P. [Tropp’s Defence and Counterclaim].

FN52 Tropp Decl. Ex. P at ¶¶ 8-9.

FN53 Tropp Decl. Ex. P at ¶¶ 22-24.

FN54 Tropp Decl. Ex. P at ¶¶ 19-20.

FN55 Tropp Decl. Ex. P at ¶ 38.

[*20] have been credited to Tropp’s account but had not been, including his stop-loss insurance proceeds of £28,831.29 for his 1989 syndicates, various proceeds of other successful syndicates, proceeds from various Names’s litigations against Managing Agents, and certain surpluses owing from Equitas to Lloyd’s which Tropp maintained had never been properly accounted for.[FN56]

Following submission of written argument, documentary evidence, and oral argument by both parties, on May 24, 2004 the High Court of Justice, Queen’s Bench Division granted summary judgment in favorf of Lloyd’s.[FN57] The court entered a 22-page opinion which summarized Tropp’s arguments and the research he had done, but found that Tropp’s objections to the Equitas Contract were precluded by earlier case-law;[FN58] that Tropp’s allegations of malfeasance on the part of his Member’s Agent and Managing Agents did not properly lie against Lloyd’s, since Names themselves bore the risk of negligence or mismanagement on the part of their Agents;[FN59] and, ultimately, in light of the “conclusive evidence” clause and the “pay now, sue later” clause, Tropp’s allegations against Lloyd’s were not sufficiently plausible or well-plead [sic] to

Tropp Decl. ¶¶ 40-74; Ex. P. at ¶¶ 25-28.

Compl. ¶¶ 147, 149; Tropp Decl. Ex. AD [Soc’y of Lloyd’s v. Tropp, [2004] EWHC 1397 (Comm.) (Gross, J.)]; Demery Decl. Ex. 6 [same].

Tropp Decl. Ex. AD at ¶¶ 16 [sic].

Tropp Decl. Ex. AD at ¶¶ 16(1); 18 (“[C]omplaints about whether the Managing Agents were properly running the syndicate business … do not lie against Lloyd’s.”].

[*21] meet the applicable stgandard of “manifest error” in the amount claimed by Lloyd’s.[FN60] Accordingly, the court entered an order in the amount of £463,881.28, representing principal and interest owed to Lloyd’s.[FN61]

Tropp then sought permission to appeal. Following another round of briefing, and another hearing, a judge of the Court of Appeals denied Tropp permission to appeal on November 2, 2004.[FN62] The appeals judge concurred with the court below that Tropp’s challenge to the Equitas Equitas Contract as a whole was fruitless, since his claims regarding his entering prohibitions, being wrongly conscripted into underwriting for 1991, and fraud on the part of his Managing Agents in underwriting certain RITC policies lay properly against his Member’s Agent or Managing Agents, not against Lloyd’s.[FN63] In this light, Tropp’s allegations against Lloyd’s

FN60 Tropp Decl. Ex. AD at ¶¶ 17-18. Thus, the court concluded that “most of Tropp’s arguments are … hopeless.”

FN61 Tropp Decl. Ex. AE [Order]; Demery Decl. Ex. 7 [same]. We note again that the court appears to have had much sympathy for Tropp’s plight, and expressed regret that a settlement between Tropp and Lloyd’s was never reached. The court examined the settlement documents and concluded that the parties were ’swithin a whisker” of settlement, and “it is a matter to be much regretted … [that they] drew further apaert.” Tropp Decl. Ex. AD at ¶ 46.

FN62 Compl. ¶ 149; Tropp Decl. Ex. AF [Tropp v. Soc’y of Lloyd’s, [2004] EWCA Civ. 1544 (Waller, J.)]; Demery Decl. Ex. 8 [same].

FN63 Tropp Decl. Ex. AF at ¶¶ 8-24. Indeed, Justice Waller concluded by suggesting that although Tropp would be disappoainted by his decision to deny him leave to appeal, he believed that he was in fact doing Tropp a favor because an appeal would simply rachet up the fees and costs that Lloyd’s could eventually saddle onto Tropp. Tropp Decl. Ex. AF at ¶ 25.

[*22] failed to state a plausible claim of “manifest error” in Lloyd’s calculations.

Next, unlike many American Names who later challenged English judgments in American courts, Tropp fought on. He pursued his counterclaim against Lloyd’s in a separate proceeding,[FN64] maintaining that Lloyd’s acted fraudulently and in bad faith, in particularly by turning a blind eye on Managing Agents’ RITC practices, which, in Tropp’s account, were more like a Ponzi scheme than a legitimate investment. Tropp alleged “a systematic institutional performance failure by Lloyd’s … in turning its head to and consciously avoiding … wrongful behavior by particular agencies which victimize Mr. Tropp and others on his particular syndicates.”[FN65]

Following yet another round of written and oral arguments, and the submission of testimonial and documentary evidence, on November 5, 2004, the High Court of Justice struck Tropp’s counterclaim.[FN66] The Court noted that while Tropp may have stated claims against his Member’s Agent and Managing Agents, Lloyd’s itself was not liable for the acts of those agents.[FN67] Further, Lloyd’s was protected from suits for mere negligence by “Lloyd’s Immunity” under section 14 (3)

FN54 Compl. ¶ 149.

FN65 Tropp Decl. Ex. P [Tropp’s Defence and counterclaim] at ¶ 38, See also Tropp Decl. Ex. AG [Soc’y of Lloyd’s v. Tropp, [2004] EWEC 3335 (Comm.) (Gloster, j.)] at ¶ 5.

FN66 Tropp Decl. Ex. AG. The court also denied Tropp leave to amend his complaint so as to add numerous other parties, including his Managing Agent and his Member’s Agent.

FN67 Tropp Decl. Ex. AG at ¶ 10.

[*23] extensive research which showed that Parliament had only intended “Lloyd’s Immunity” to protect Lloyd’s acting in its public capacity as regulator of the insurance market, not in its private capacity as an institution; and that Lloyd’s Immunity applied only to suits for damages, not suits seeking equitable remedies." 'rropp forcefully presented these arguments in his appeal, but on January 23, 2006 a judge of the Court of Appeals denied Tropp permission to appeal.” The judge commended Tropp’s “redoubtable” research, but held that, even assuming arguendo that Tropp was correct, his counterclaim failed because his claim against Lloyd’s was against Lloyd’s in its public capacity as regulator of the insurance market,” and even though Tropp nominally sought equitable remedies

FN68 Tropp Decl. Ex. AG at ¶¶ 2, 17, 25. The court also dismissed Tropp’s claims against Lloyd’s for libel and slander as unfounded.”

FN69 Tropp Decl. ¶¶ 92-92; Ex. AH [Soc’y of Lloyd’s v. Tropp, [20067] EWCA Civ. 88 (Rix, J.)] at ¶¶ 21-23; Demery Decl. Ex. 10 [same].

FN70 Id. See also Compl. ¶¶ 15O, 151.

FN71 Tropp Decl. Ex. AH at ¶ 22.

[*24] such as a declaration, unwinding and disgorgement, his claims were in essence claims for monetary damages against Lloyd’s.[FN72]

On April 27, 2006 Tropp petitioned the House of Lords for review of the Court of Appeals decision,[FN73] but his petition was denied by decision dated July 18, 2006.[FN74]

The Instant Suit

Tropp acknowledges that he has not paid Lloyd’s judgment against him.[FN75] Upon receiving correspondence from Lloyd’s suggesting that Lloyd’s would seek to have its English judgment enforced in the United States,76 Tropp filed the instant suit on January 18, 2007.

Tropp has now moved for partial summary judgment on his claim for a declaratory judgment that the English judgment is unenforceable here, and Lloyd’s has moved to dismiss under both Fed. R. Civ. P. 12(b)(3) and 12(b)(6). After extensive briefing from both parties, this Court held oral argument on these cross motions on December 7, 2001.

FN72 Tropp Decl. Ex. AE at ¶ 23.

FN 73 Tropp Decl. Lx. AlT [Tropp’s Petition to the House of Lords].

FN74 compi. & 153; Tropp Decl. Ex. AK [Tropp v. Soc’y of Lloyd’s, [2006] Parl. Deb. H.L. (6th ser.) (2006) (July 16, 2006)].

FN75 Compl. ¶ 154.

FN76 Tropp Decl. Ex. AL [Email from Ian Bradford, Lloyd’s Legal & Compliance to Tropp, dated January 16, 2007].