Source: http://truthaboutlloyds.com/litigation/CO%20counterclaim%20120902.html
Timestamp: 2017-04-30 16:46:13
Document Index: 291836226

Matched Legal Cases: ['§ 1450', '§ 25701', '§ 11', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 11', '§ 14', '§ 29', '§ 13', '§ 13', '§ 13', '§13', '§ 1332', '§ 1450', '§ 2201', '§ 11', '§ 11', '§ 11', '§ 11', '§ 13', '§ 11', '§ 11', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 18', '§ 13', '§ 2201']

Colorado Answer, Counterclaim and Jury Demand, in the matter of The Society of Lloyd's v. Ray Lee
ANSWER, COUNTERCLAIM, AND JURY DEMAND
In Civil Action No. 02-RB-1979 (OES)
Civil Action No. 02-RB-1979 (OES)
THE SOCIETY OF LLOYD’S,
RAYMOND CHARLESWORTH LEE,
Defendant Raymond Charlesworth Lee ("Lee"), by and through his undersigned counsel, Bostrom, Sander & Scheid, P.C., for his Answer to the Complaint filed by The Society of Lloyd’s, states as follows:
I. RESPONSES TO ALLEGATIONS
1.	Lee is without knowledge or information sufficient to form a belief as to the truth of the matters contained in paragraph 1 of the Complaint, and therefore denies the same.
Lee affirmatively states that as to any money judgment obtained by Lloyd’s, it was, inter alia: (a) procured by fraud; (b) obtained in violation of and in direct conflict with prior Findings of Fact, Conclusions of Law, and Orders of the District Court for the State of Colorado; (c) procured in English Courts pursuant to choice-of-law and forum selection causes which were procured by fraud, violated the anti-waiver provisions of the U.S. and Colorado Securities laws, and were otherwise invalid and unenforceable; (d) rendered under a system which did not provide due process of law to Colorado litigants; (e) rendered by an English Court whose sole basis for jurisdiction was personal service, and was a seriously inconvenient forum for this Defendant; and (f) based upon a claim which is repugnant to the public policy of the state of Colorado. As a result, the Judgment is without legal validity or effect and is not entitled to recognition in this Court.
In particular, Lee further affirmatively states that:
a.	On or about December 18, 1995, the former Commissioner of the Colorado Division of Securities, Philip A. Feigin ("Commissioner") filed a Complaint for Injunctive and Other Relief Against Lloyd’s. A copy of the Complaint filed in Philip A. Feigin v. Lloyd’s, Denver County District Court Case No. 95-CV-5541, ("Commissioner’s Complaint") is attached hereto as Exhibit A and incorporated by reference herein. The Commissioner’s Complaint was filed on behalf of all Colorado Names, including Lee.
b.	On December 18, 1995, the Honorable Nancy E. Rice, Judge of the District Court for the District of Colorado, issued an Ex Parte Temporary Restraining Order ("Colorado TRO") which enjoined Lloyd’s, its agents, and its attorneys, from engaging in any debt creation or debt collection activities against Colorado Names. See Exhibit B attached hereto. This Defendant was specifically identified in Exhibit A to the Colorado TRO as one of the Colorado citizens for whose specific benefit the Colorado TRO was issued. c.	Lloyd’s sought immediate relief from the Colorado TRO by applying to the Colorado Supreme Court for a writ of prohibition. The writ was denied.
d.	On December 27, 1995, an evidentiary hearing was held before the Honorable Robert S. Hyatt, Judge of the District Court for the City and County of Denver ("Colorado Court"), on the Commissioner’s Motion for Preliminary Injunction ("Commissioner’s Motion"). At the hearing, Lloyd’s had ample opportunity to present evidence, cross-examine witnesses, make oral argument, and be heard.
e.	On December 27, 1995, the Colorado Court granted the Commissioner’s Motion and entered Findings of Fact, Conclusions of Law, and an Order with regard to the Commissioner’s Motion. A copy of the Reporter’s Transcript of the Colorado Court’s ruling, which was certified by the Reporter and the Colorado Court on January 29, 1996 (hereinafter, "the Colorado Court Ruling"), is attached hereto as Exhibit C and incorporated by reference herein.
f.	The Colorado Court Ruling enjoined Lloyd’s, its agents and its attorneys, from engaging, inter alia, in any of the following acts:
(i)	Creating or attempting to create a debt or liability for or on behalf of any Colorado Lloyd’s Member;
(ii)	Instituting or attempting to institute a proceeding to reduce any debt against a Colorado Lloyd’s Member to judgment; or
(iii)	Collecting or attempting to collect any debt, judgment, or cash call demand against any Lloyd’s Member located in the State of Colorado. See, Colorado Court Ruling (Exhibit C) at pp. 24-26 (hereinafter, the "Colorado Injunction").
g.	The Colorado Court Ruling also contained specific Findings of Fact and Conclusions of Law that Lloyd’s had: (i) offered to sell and sold unregistered securities in the State of Colorado in violation of Section 301 of the Colorado Securities Act. See Colorado Court Ruling (Exhibit C) at pp. 12-13; and (ii) employed a device, scheme or artifice to defraud, misrepresented, and/or failed to disclose significant material facts to Colorado Names in violation of Section 501 of the Colorado Securities Act, including:
Lloyd’s failure to disclose the quantity and nature of the asbestos and pollution-related claims in various underwriting syndicates in which Colorado Names were participating; Lloyd’s placement of Colorado Names at risk with respect to the underwriting of asbestos and pollution-related claims, in some cases contrary to specific instructions that such Names not be included in such underwriting; Lloyd’s inclusion of Colorado Names in such syndicates despite the fact that the inclusion was actively concealed from the Colorado Names; Lloyd’s misrepresentation that Colorado Names were only exposed to several liability for their individual underwriting losses through the various syndicates in which they participated; Lloyd’s exposure of Colorado Names to joint liability for claims and underwriting losses of other Names elsewhere; Lloyd’s failure to disclose the content and recommendations of the Cromer Report until approximately 1986, thereby concealing material information about the operation of Lloyd’s, including the inherent and irreconcilable conflict between the interests of agents and brokers within Lloyd’s and the implications of such conflict on the liability placed upon the Colorado Names through the various underwriting syndicates; Lloyd’s misrepresentation that various underwriting syndicates of Lloyd’s in which Colorado Names participate only carry five to ten percent of the underwriting risks with the remainder spread to other syndicates; Lloyd’s misrepresentation that in the event of a loss, a Colorado Name would only suffer a nominal loss; Lloyd’s failure to disclose the Colorado Names’ exposure to indefinite liability both in terms of amount and duration; and Lloyd’s failure to disclose to Colorado Names that a syndicate year of account would be left open indefinitely and in an undetermined amount after withdrawal. See Colorado Court Ruling (Exhibit C) at pp. 15-18.
The Findings of Fact and Conclusions of Law entered by the Colorado Court are hereinafter referred to as the "Colorado Findings."
h.	The Colorado Court Ruling, including both the Colorado Findings and the Colorado Injunction, was entered for the specific benefit of the Colorado Names, including Lee, and provided each Colorado Name, including Lee, with legal rights and interests. i.	The Colorado Court Ruling, including both the Colorado Findings and the Colorado Injunction, represented a final, appealable decision concerning issues actually litigated as against Lloyd’s. j.	The Colorado Findings established legal precedent under the doctrines of res judicata, collateral estoppel, stare decisis and/or Law of the Case as between Lloyd’s and the Colorado Names. k.	Lloyd’s had ample opportunity to seek review and/or an appeal of the Colorado Court Ruling. l.	Immediately after the Colorado Court Ruling was entered, Lloyd’s filed an appeal to the Colorado Court of Appeals. Lloyd’s subsequently abandoned, and thereby waived, its right to pursue that appeal.
m.	On January 17, 1996, having failed to obtain and/or declined to pursue appellate relief from the Colorado Court Ruling, Lloyd’s filed a Notice of Removal to the U.S. District Court for the District of Colorado. Philip A. Feigin v. Lloyd’s, Civil Action No. 96-Z-98.
n.	On or about July 11, 1996, without any notice to, consent, or opportunity to object by the Colorado Names, Lloyd’s and the Commissioner executed a document entitled State Agreement which purported to affect legal rights and interests of the Colorado Names with regard to the Colorado Injunction.
o.	The State Agreement provided no consideration to, and required no Release from, any Colorado Names who declined to accept Lloyd’s R&R Settlement Offer (hereinafter, the "Non-Accepting Colorado Names").
p.	The State Agreement provided "Credits" and included "Releases" only as to Colorado Names who accepted Lloyd’s Reconstruction and Renewal (R&R) Settlement Offer (hereinafter, the "Accepting Colorado Names").
q.	Lee declined to accept the R&R Settlement Offer.
r.	The State Agreement contained no provisions which addressed the Colorado Findings, or required that the Colorado Findings be vacated, dissolved or modified.
s.	The State Agreement contained no provision that the Colorado Findings were merged into or extinguished by the State Agreement.
t.	The State Agreement contained material constitutional and statutory defects.
u.	On September 16, 1996, the Commissioner filed a pleading by which it specifically notified the U.S. District Court for the District of Colorado that it had advised Lloyd’s counsel that "certain material constitutional and statutory issues concerning the enforceability and validity of the State Agreement existed."
v.	On October 4, 1996, pursuant to the unconstitutional State Agreement executed by Lloyd’s and the Commissioner, and without any notice to, consent, or opportunity to object by the Non-Accepting Colorado Names, Lloyd’s and the Commissioner filed a Stipulation for Order Dissolving Order of Preliminary Injunction ("Stipulation") whereby they purported to "stipulate and agree to the entry of (an) Order Dissolving Order (of) Preliminary Injunction." The Stipulation did not address any other aspect of the Colorado Court Ruling, including the Colorado Findings.
w.	On October 8, 1996, pursuant to the unconstitutional State Agreement executed by Lloyd’s and the Commissioner, without any notice to, consent, or opportunity to object by the Non-Accepting Colorado Names, and without any request for or conduct of any pre-deprivation hearing, including any hearing as to the fairness or constitutionality of the State Agreement, the U.S. District Court for the District of Colorado ordered that the "preliminary injunction entered on December 27, 1995, is dissolved." The October 8, 1995 Order did not address any other aspect of the Colorado Court Ruling, including the Colorado Findings.
x.	The Colorado Findings entered by the Colorado Court were never vacated, dissolved, or modified by the U.S. District Court. Pursuant to 28 U.S.C. § 1450, they remained in full force and effect.
y.	On November 20, 1996, pursuant to a stipulation of settlement, the U.S. District Court for the District of Colorado dismissed the Commissioner’s cause of action with prejudice. 2.	Lee is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 2 of the Complaint, and therefore denies the same.
Lee affirmatively states that the alleged transactions between Lloyd’s and Equitas occurred solely as the result of acts taken by Lloyd’s pursuant to documents executed by the Colorado Names that have been specifically found and adjudicated by the Colorado Court to have been procured by fraud and in violation of the Colorado Securities laws.
Lee further affirmatively states that Lloyd’s failed to disclose several material facts concerning the manner in which such documents would be used to deprive Non-Accepting Colorado Names, including Lee, of due process of law in the English Court.
Lee further affirmatively states that any transaction between Lloyd’s and Equitas which has the purpose and/or effect of creating or attempting to create a debt or liability on behalf of Lee, or simply substituting one fraudulent "debt" with another, is without legal validity or effect as against Lee, and cannot form the basis for any judgment that is entitled to recognition in this Court.
3.	Lee admits generally the factual allegations contained in paragraph 3 of the Complaint, but denies that the matters alleged therein represent a complete or accurate picture of Lloyd’s history and organization or the frauds that have been perpetrated upon Lee, other Colorado Names, the Colorado Regulators, and/or the Colorado and English Courts. In that regard, Lee affirmatively alleges and incorporates herein: (a) the factual matters set forth in paragraphs 1-2, 4-111, 113-116, and 119 of the Commissioner’s Complaint attached hereto as Exhibit A (hereinafter referred to at times as "the Colorado Fraud"); and (b) the Colorado Findings set forth at pages 8-18 of the Colorado Court Ruling attached hereto as Exhibit C. To the extent any of the factual matters alleged in paragraph 3 of the Complaint are inconsistent with the matters set forth in the Commissioner’s Complaint and Colorado Findings, they are denied. 4.	Lee admits that he is a resident of the State of Colorado, and was a Name or Member of Lloyd’s. Lee affirmatively states that he submitted his resignation as a Name or Member of Lloyd’s in 1990. To the extent paragraph 4 contains additional factual allegations, they are denied.
5.	Lee admits that the amount in controversy exceeds the sum of $75,000, that Lloyd’s is a citizen of a foreign state, and that Lee is a citizen of this State. Lee affirmatively states that, to the extent the State Agreement was obtained for inadequate consideration, is unconstitutional, was procured by fraud, or is otherwise unenforceable and without legal effect as to Non-Accepting Colorado Names, including this Defendant, then the Colorado Court may continue to hold exclusive subject matter jurisdiction with regard to all matters related to the enforcement of the Colorado Court Ruling, including the Colorado Injunction.
Lee further affirmatively states that the State of Colorado and the Commissioner of the Colorado Division of Securities may be necessary and indispensable parties to this litigation. If so, the addition of these parties as third party defendants would destroy diversity jurisdiction in this matter.
To the extent paragraph 5 contains additional factual allegations, they are denied.
6.	Lee admits that he resides in the State of Colorado. However, Lee affirmatively states that, absent subject matter jurisdiction, venue is not proper in this District. To the extent paragraph 6 contains additional factual allegations, they are denied.
7.	Lee admits generally the factual allegations contained in paragraph 7 of the Complaint, but denies that the matters alleged therein represent a complete or accurate picture of Lloyd’s history and organization or the various frauds that have been perpetrated upon Lee, other Colorado Names, Colorado Regulators, and/or the Colorado and English Courts. In that regard, Lee affirmatively alleges and incorporates herein: (a) the Colorado Fraud set forth in paragraphs 1-2, 4-111, 113-116, and 119 of the Commissioner’s Complaint attached hereto as Exhibit A; and (b) the Colorado Findings set forth at pages 8-18 of the Colorado Court Ruling attached hereto as Exhibit C. To the extent any of the factual matters alleged in paragraph 7 of the Complaint are inconsistent with the matters set forth in the Commissioner’s Complaint and the Colorado Findings, they are denied. 8-9.	With regard to the matters alleged in paragraphs 8 and 9 of the Complaint, Lee admits that he executed certain agreements, including a General Undertaking. However, Lee affirmatively states that, as specifically found and adjudicated by the Colorado Court, he was fraudulently induced to execute such agreements. Thus the agreements are void ab initio and have no legal validity or effect. Lee further affirmatively states that the matters set forth in the Commissioner’s Complaint and the Colorado Findings, including the fraudulent inducement of Lee and other Colorado Names to execute such agreements, including the General Undertaking, and the legal precedent established by the Colorado Findings, were not disclosed to the English Court. As a result, any money judgment obtained by Lloyd’s against Lee was procured by fraud, is without legal validity or effect, and is not entitled to recognition in this Court. Lee specifically denies that he owes any underwriting obligations or remains subject to Lloyd’s regulatory authority.
To the extent paragraphs 8 and 9 contain additional factual allegations, they are denied.
10.	Lee denies the allegations contained in paragraph 10 of the Complaint. Lee affirmatively states that the Courts of the State of California have held that the "Choice Clause" is unenforceable because it was procured by fraud, is directly contrary to the anti-waiver provisions of the California Securities laws, and ignores strong policies favoring protection of American and California investors. See, e.g., West v. Lloyd’s, et al, 1997 WL 1114662 (Col. App. 2d Dist).
Lee further affirmatively states that the anti-waiver provision of the California Securities laws is identical to the anti-waiver provision of the Colorado Securities laws. See, California Corporation Code, § 25701; Colo. Rev. Stat. § 11-51-604(11).
In addition, Lee affirmatively states that the Colorado Court has also specifically found and adjudicated that Lee and other Colorado Names were fraudulently induced to execute the General Undertaking. In addition, Lloyd’s failed to disclose to Lee and other Non-Accepting Colorado Names several material facts concerning the manner in which the "Choice Clause," and other aspects of the Colorado fraud, would be used to deprive Non-Accepting Colorado Names, including Lee, of due process of law in the English Court. As a result, the Choice Clause was procured by fraud, is void ab initio, and is without legal validity or effect. Lee further affirmatively states that any judgment obtained by Lloyd’s against Lee or other Non-Accepting Colorado Names pursuant to the "Choice Clause" was procured by fraud, is without legal validity or effect, and is not entitled to recognition in this Court.
11-12.	With regard to the allegations contained in paragraphs 11-12 of the Complaint, Lee denies that the matters alleged therein represent a complete or accurate picture of Lloyd’s history and organization or the various frauds that have been perpetrated upon Lee and other Colorado Names, the Colorado Regulators, and/or the Colorado and English Courts. In that regard, Lee affirmatively alleges and incorporates herein: (a) the Colorado Fraud set forth in paragraphs 1-2, 4-111, 113-116, and 119 of the Commissioner’s Complaint attached hereto as Exhibit A; and (b) the Colorado Findings set forth at pages 8-18 of the Colorado Court Ruling attached hereto as Exhibit C. To the extent any of the factual matters alleged in paragraphs 11-12 of the Complaint are inconsistent with the matters set forth in the Commissioner’s Complaint and the Colorado Findings, they are denied. Lee specifically denies that he owes or owed any underwriting obligations, Equitas Premiums, or any other obligation to Lloyd’s. Rather, as specifically found and adjudicated by the Colorado Court, Lee was the victim of a massive fraud that was perpetrated by Lloyd’s against Lee and other Colorado Names. Any litigation which "embroiled" Lloyd’s was solely the result of its own wrongdoing.	In addition, Lee specifically denies that there currently exists, or existed at any period of time relevant to this Defendant, any threat to the continued viability of the Lloyd’s market or that any of the Colorado Names ever caused or posed any such threat to Lloyd’s. Lee further denies that any aspect of Lloyd’s continuing fraud and conspiracy has ever been subject to any meaningful "oversight" by the U.K. Government. Rather, Lee affirmatively states that a September 30, 2002 Draft Report of the European Parliament has strongly condemned U.K. regulatory practice - - finding a specific failure to observe and apply European directives and noting that England’s own Courts "have so far found in cases relating to these matters: ‘Gross negligence’; ‘Misrepresentation’; ‘Staggering incompetence’; ‘Behaviour that has brought shame onto the City of London’; ‘Failure to properly audit’."
To the extent paragraphs 11 and 12 contain additional factual allegations, they are denied.
13.	With regard to the matters alleged in paragraph 13 of the Complaint, Lee admits that he did not accept the Settlement Offer and has not paid any "Equitas Premium," and affirmatively states that he neither has nor had any obligation to do so. Lee denies that any portion of the "Equitas Premium" is owed by Lee or any other Non-Accepting Colorado Name, and further denies that he has benefited from any aspect of the massive fraud that was perpetrated by Lloyd’s against him and other Colorado Names, including the "reinsurance cover" purportedly provided by Equitas.
Lee affirmatively realleges and incorporates herein the matters set forth in the Commissioner’s Complaint and the Colorado Court Ruling attached hereto. To the extent any of the remaining matters alleged in paragraph 13 are inconsistent therewith, they are denied.
To the extent paragraph 13 contains additional allegations, they are denied.
14.	With regard to the matters alleged in paragraph 14 of the Complaint, Lee is without knowledge or information concerning the alleged assignment transaction between Equitas and Lloyd’s. Lee denies, however, that any aspect of the Lloyd’s Fraud has been motivated by "regulatory prudence," or that any meaningful regulatory oversight has been exercised by the U.K. Government. Lee further denies that any aspect of the alleged assignment transaction between Equitas and Lloyd’s has any legal validity or effect as against Lee or other Non-Accepting Colorado Names. To the extent paragraph 14 contains additional factual allegations, they are denied.
15.	With regard to the matters alleged in paragraph 15 of the Complaint, Lee admits that Lloyd’s unlawfully commenced the English Action. Lee denies any obligation to pay any "Equitas Premium" or other sums claimed. Lee affirmatively states that the English Action was commenced in violation of and/or in direct conflict with the Colorado Court Ruling, including the Colorado Findings and the legal precedent thereby established, which were not disclosed to the English Court. Any judgment obtained in the English Action was obtained by fraud, is without legal validity or effect, and is not entitled to recognition in this Court.
To the extent paragraph 15 contains additional factual allegations, they are denied.
16.	With regard to the matters alleged in paragraph 16 of the Complaint, Lee admits that Lloyd’s unlawfully commenced the English Action and served him with English pleadings. Lee further admits that he retained the firm of Epstein Grower and Michael Freeman, but denies he was provided an opportunity to present defenses to the English Action.
Lee affirmatively states that the commencement of the English Action occurred pursuant to documents and transactions that had previously been found and adjudicated by the Colorado Court to have been induced by fraud. Thus, any efforts to serve Lee violated and/or were in direct conflict with the Colorado Court Ruling, including the Colorado Findings and the legal precedent thereby established, which were not disclosed to the English Court. Any judgment obtained pursuant to the English Action was obtained by fraud, is without legal validity or effect, and is not entitled to recognition in this Court.
To the extent paragraph 16 contains additional factual allegations, they are denied.
17.	With regard to the matters alleged in paragraph 17 of the Complaint, Lee denies that he was presented an opportunity to present defenses to the English Action. As to any judgment obtained by Lloyd’s, Lee affirmatively states that it was obtained in violation of and/or in direct conflict with the Colorado Court Ruling, including the Colorado Findings and the legal precedent thereby established, was obtained by fraud, is without legal validity or effect, and is not entitled to recognition in this Court. Lee specifically denies that the amount stated reflects any legitimate calculation of an "Equitas Premium" owed by Lee.
To the extent paragraph 17 contains additional factual allegations, they are denied.
18.	With regard to the matters alleged in paragraph 18 of the Complaint, Lee denies he was provided an opportunity to pursue an appeal of the Judgment. To the extent paragraph 18 contains additional factual allegations, they are denied.
19.	Lee denies the allegations contained in paragraph 19 of the Complaint.
20.	Lee denies the allegations contained in paragraph 20 of the Complaint.
21.	With regard to paragraph 21 of the Complaint, Lee incorporates his responses contained in paragraphs 1 through 20 above.
22.	Lee denies the allegations contained in paragraph 22 of the Complaint.
Lloyd’s Complaint fails to state a claim upon which relief can be granted against this Defendant.
In this diversity action, this Court must apply the laws of the State of Colorado, and determine whether the State of Colorado – exercising its right to make its own decision as to recognition and enforcement of foreign judgments according to its own laws – would refuse to recognize the English Judgment. Under the totality of the facts and circumstances applicable to the Judgments obtained against the Non-Accepting Colorado Names, including this Defendant, the balancing of equities and policies weighs heavily in favor of the Non-Accepting Colorado Names over any equities and policies that would be fostered by allowing Lloyd’s to conduct commerce in this State in violation of the U.S. and Colorado Securities laws, and to seek judgments which directly conflict with and are in violation of prior Findings and Orders of the Colorado Courts, and the legal precedents thereby established. THIRD AFFIRMATIVE DEFENSE
Lloyd’s claims are barred by the express terms of the Colorado Injunction, which should be reinstated nunc pro tunc December 27, 1995, or otherwise deemed to be in full force and effect, due to: (a) the lack of any consideration given in the State Agreement to the Non-Accepting Colorado Names, including this Defendant; (b) the unconstitutionality of the State Agreement; (c) the misrepresentations and non-disclosures made to the State of Colorado to induce the execution of the State Agreement; (d) the lack of notice to, consent given, or opportunity to object by the Non-Accepting Colorado Names, including this Defendant, as to the execution of the State Agreement and/or the dissolution of the Colorado Injunction; (e) the failure of the Commissioner to adequately represent the rights and interests of the Non-Accepting Colorado Names with regard to the preservation of the Colorado Injunction; (f) the misrepresentations and non-disclosure made to the U.S. District Court for the District of Colorado to induce the dissolution of the Colorado Injunction; and (g) the failure of consideration under the State Agreement, including the subsequent non-receipt by Non-Accepting Colorado Names, including this Defendant, of any "Credits" or other form of consideration pursuant to the State Agreement.
Lloyd’s Complaint is barred pursuant to C.R.S. § 13-62-105(2)(b) and other applicable law, because both the underlying debt and the English Judgment were procured by fraud, including inter alia, those matters described in the Commissioner’s Complaint, those matters specifically found and adjudicated by the Colorado Court, Lloyd’s failure to advise the English Court of such matters, and Lloyd’s failure to advise the English Court of the stare decisis effect of the prior Colorado Findings.
Lloyd’s Complaint is barred pursuant to C.R.S. § 13-62-105(2)(b) and other applicable law, because it seeks recognition of a Judgment obtained pursuant to choice-of-law and forum selection clauses contained in documents that were specifically found and adjudicated by the Colorado Court to have been procured by fraud, including inter alia, Lloyd’s fraudulent inducement of the execution of the General Undertaking.
Lloyd’s Complaint is barred pursuant to C.R.S. § 13-62-105(2)(b) and other applicable law, because it seeks recognition of a Judgment obtained pursuant to its continuation of the fraudulent scheme that was specifically found and adjudicated by the Colorado Court. The continuing fraud included Lloyd’s failure to disclose to the Non-Accepting Colorado Names, including this Defendant, the consequences of declining to accept the R&R Settlement, including: (a) the inability of the Non-Accepting Colorado Names to conduct relevant discovery in any such action; (b) the inability of the Non-Accepting Colorado Names to present counterclaims, defenses, and set-offs in any such action; (c) the inability of the Non-Accepting Colorado Names to dispute the amount of the "Equitas Premiums" in any such action; (d) the inability of the Non-Accepting Colorado Names to obtain remedies in the U.K. that are substantially equivalent to the protections available under U.S. and Colorado Securities laws, including the ability to collect damages for non-disclosures made in connection with the offer or sale of securities; (e) Lloyd’s intention to create the "pay now, sue later" provisions; (f) Lloyd’s intention to create the "conclusive evidence" provisions; (g) Lloyd’s intention to designate unauthorized substitute agents to sign documents that included such provisions without the consent of the Non-Accepting Colorado Names; (h) Lloyd’s intention to force the inclusion of Non-Accepting Colorado Names into the Equitas reinsurance program through the use of an unauthorized substitute agent, without the benefit of Credits offered to the Accepting Colorado Names or otherwise required by the State Agreement; and (i) Lloyd’s failure to advise the English Courts of such matters.
Lloyd’s Complaint is barred pursuant to C.R.S. § 13-62-105(2)(b) and other applicable law, because it seeks recognition of a Judgment that was procured by fraud, including Lloyd’s failure to disclose to the English Courts its inability to accurately account for the amounts assessed against Non-Accepting Colorado Names, including this Defendant.
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(2)(c) and other applicable law, because the claim for relief upon which the Judgment is based is repugnant to the public policy of this State, including inter alia, the fact that the claim: (a) was presented in violation of and/or in direct conflict with the Colorado Court Ruling, including the Colorado Findings and the legal precedent thereby established; (b) was presented to the English Court by Lloyd’s without advising the English Court of the matters set forth in the Commissioner’s Complaint and the Colorado Court Ruling; (c) was based upon the assertion of jurisdiction pursuant to choice-of-law and forum selection clauses contained in documents which were specifically found and adjudicated by the Colorado Court to have been procured by fraud; (d) was presented in furtherance of a continuing fraudulent scheme whereby Lloyd’s failed to disclose material facts to the Non-Accepting Colorado Names concerning the consequences of declining to accept the R&R Settlement; (e) was based upon choice-of-law and forum selection provisions which have neither been recognized nor given any validity or effect in this State; (f) was based upon choice-of-law and forum selection clauses which conflict with the anti-waiver provisions of the U.S. and Colorado Securities laws; (g) sought to recover amounts for which no legitimate calculation existed; (h) suffered numerous other defects set forth in each of these Affirmative Defenses which are incorporated by reference herein; and (i) sought to reward Lloyd’s for its own fraudulent conduct at the expense of its Colorado victims.
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(d) and other applicable law, because it seeks recognition of a Judgment that conflicts with, and was obtained in violation of, the Colorado Court Ruling, including the Colorado Findings and the legal precedent thereby established.
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(d) and other applicable law, because the Judgment was obtained pursuant to choice-of-law and forum selection provisions which have no validity or effect in this State, and/or have been waived by Lloyd’s as against Colorado Names. In particular, the Colorado Court has already litigated and adjudicated substantive matters as between Lloyd’s and Colorado Names in the State of Colorado under Colorado law. The Colorado Court neither recognized nor gave any validity or effect to the choice-of-law and forum selection provisions of the General Undertaking, and specifically found such document to have been procured by fraud. In addition, Lloyd’s voluntarily submitted itself to jurisdiction before the Colorado Court by entering its appearance, filing pleadings, and presenting evidence and argument, without record of objection as to the exercise of jurisdiction by the Colorado Court over matters related to Colorado Names, or its application of Colorado law to such matters. ELEVENTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(d) and other applicable law, because the Judgment was obtained pursuant to choice-of-law and forum selection provisions in the General Undertaking which conflict with the anti-waiver provisions of the U.S. and Colorado Securities Laws, under circumstances whereby the English Court failed to provide remedies that are the substantial equivalent to the protections available in the U.S. and Colorado Securities Laws, including, inter alia, its failure to provide any ability to collect damages for non-disclosures made in connection with the offer or sale of securities. See, e.g., C.R.S. § 11-51-604(11); Securities Act of 1933 at § 14; Securities Exchange Act of 1934 at § 29.
Lloyd’s Complaint is barred because the Judgment was obtained pursuant to choice-of-law and forum selection clauses that have been found by other state Courts to be void and unenforceable. See, e.g., West v. Lloyd’s, et al., 1997 WL 1114662 (Cal. App. 2d Dist.).
Lloyd’s Complaint is barred because the Judgment was obtained pursuant to documents which were executed by unauthorized agents who acted under the sole direction and control of Lloyd’s.
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(f) and other applicable law because, in the absence of the fraudulently induced General Undertaking, the only basis for jurisdiction against this Defendant was personal service, and the English Court was a seriously inconvenient forum for the trial of this action.
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(1)(a) and other applicable law, because the Judgment obtained by Lloyd’s was rendered under a system that did not, in this case, provide proceedings compatible with the requirements of due process. Among other things, the English Court deprived the Colorado Names of any opportunity to be heard prior to seizure of property, at a time when no true exigency existed, without providing an effective post-deprivation remedy. In addition, the English Court enforced clauses contained in the Equitas Reinsurance Contract that: (a) were imposed by Lloyd’s upon the Non-Accepting Colorado Names without their consent; (b) barred the presentation of any defense, setoff, or counterclaim; (c) provided that the amounts claimed against the Non-Accepting Colorado Names would be "conclusive evidence" of the amount due unless they were able to show manifest error; and (d) barred the Non-Accepting Colorado Names, including this Defendant, from conducting any discovery as to the basis of the amounts claimed due, or presenting any evidence contradicting the amount claimed due.
Lloyd’s Complaint is barred by C.R.S. § 13-62-105(1)(c) and other applicable law, because, given the prior Colorado Court Ruling, the English Court did not have subject matter jurisdiction.
Lloyd’s Complaint is barred by reason of its failure to comply with any of the requirements of Colorado’s Uniform Enforcement of Foreign Judgments Act, C.R.S. §13-53-101 et seq, which under applicable Colorado common law, applies to foreign judgments sought to be recognized under principles of comity.
Lloyd’s Complaint is barred because, under the terms of its assignment from Equitas, it took no greater rights against the Colorado Names than those held by Equitas. There existed no valid contractual or other legal basis to create any "premium" or other debt owing from this Defendant to Equitas, nor did there exist any valid contractual or other legal basis for the English Court to exercise jurisdiction over any Non-Accepting Colorado Name with regard to any claim that could be asserted by Equitas. Thus, Equitas held no valid rights as against this Defendant which could be assigned to Lloyd’s. In addition, Equitas has received full payment of any and all "premiums" or other debts purportedly owed by this Defendant.
Lloyd’s Complaint is barred because it seeks recognition of a Judgment that was obtained pursuant to documents and transactions which represent contracts of adhesion.
Lloyd’s Complaint is barred because it seeks recognition of a Judgment that was obtained pursuant to documents and transactions that are void by reason of the doctrine of contractual unconscionability.
Lloyd’s Complaint is barred because it is based upon a series of acts and conduct that have no legal validity or effect. The entire commercial relationship between Lloyd’s and the Colorado Names has been specifically found and adjudicated by a Colorado Court to have been induced by fraud. Thus, the transaction is subject to rescission, and cannot be "cleansed" by any amount of subsequent manipulation of the U.S. and British regulatory and judicial systems. TWENTY-SECOND AFFIRMATIVE DEFENSE
Plaintiff’s Complaint is barred because it seeks to enforce a Judgment that was obtained as the result of several overt acts that were taken in furtherance of a far-reaching conspiracy to defraud the Colorado Names, U.S. and British Regulators, and/or U.S. and British Courts. TWENTY-THIRD AFFIRMATIVE DEFENSE
Plaintiff’s Complaint is barred by the doctrines of res judicata, collateral estoppel, issue preclusion, stare decisis, and Law of the Case.
TWENTY-FOURTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred by the doctrine of unclean hands.
TWENTY-FIFTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred by the doctrines of waiver and consent.
TWENTY-SIXTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred by the doctrine of laches.
TWENTY-SEVENTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred and/or subject to reduction based upon the doctrines of set-off and recoupment.
TWENTY-EIGHTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred by failure to join indispensable parties, including the State of Colorado and the Commissioner of the Colorado Division of Securities.
TWENTY-NINTH AFFIRMATIVE DEFENSE
Lloyd’s Complaint is barred by lack of subject matter jurisdiction.
WHEREFORE, Lee requests that the Complaint be dismissed, that attorney’s fees and costs be awarded to Lee pursuant to applicable law, and that Lee be awarded any additional relief that is just and proper.
Raymond Charlesworth Lee ("Lee") by and through his undersigned counsel, Bostrom, Sander & Scheid, P.C., for his Counterclaim against The Society of Lloyd’s ("Lloyd’s"), states and alleges as follows:
1.	Counterclaim Plaintiff Lee is an individual who resides in the State of Colorado.
2.	Counterclaim Defendant Lloyd’s is a corporate entity that has its principal place of business located in the United Kingdom.
3.	This Counterclaim arises out of the transactions and occurrences which are the subject matter of Lloyd’s Complaint.
4.	This Court currently has subject matter jurisdiction over Lloyd’s Complaint under 28 U.S.C. § 1332(a)(2) (diversity jurisdiction). However, the Colorado Attorney General and/or the Commissioner of the Colorado Division of Securities may be necessary and indispensable parties to this litigation. If so, the addition of these third party defendants would destroy diversity jurisdiction in this matter.
5.	A substantial part of the events and omissions giving rise to the claims stated herein occurred in this District. Thus, in the event this Court has subject matter jurisdiction, then venue is proper in this District.
6.	This Court has personal jurisdiction over Lloyd’s because it has directly, and/or through its agents, transacted business and committed tortious acts in this State.
7.	Lee alleges and incorporates herein each of the factual matters set forth in paragraphs 1-2, 4-111, 113-116, and 119 of the Complaint for Injunctive and Other Relief filed on December 18, 1995 by the former Commissioner in Philip A. Feigin v. Lloyd’s, Denver District Court Case No. 95-CV-5541 ("Commissioner’s Complaint"), which is attached hereto as Exhibit A.
8.	The Commissioner’s Complaint was filed on behalf of all Colorado Names, including Lee. 9.	On December 18, 1995, the Honorable Nancy E. Rice, Judge of the District Court for the District of Colorado, issued an Ex Parte Temporary Restraining Order ("Colorado TRO") which enjoined Lloyd’s, its agents, and its attorneys, from engaging in any debt creation or debt collection activities against Colorado Names. See Exhibit B attached hereto. Lee was specifically identified in Exhibit A to the Colorado TRO as one of the Colorado citizens for whose specific benefit the Colorado TRO was issued.
10.	Lloyd’s sought immediate relief from the Colorado TRO by applying to the Colorado Supreme Court for a writ of prohibition. The writ was denied. 11.	On December 27, 1995, a hearing was held before the Honorable Robert S. Hyatt, Judge of the District Court for the City and County of Denver ("Colorado Court"), on the Commissioner’s Motion for Preliminary Injunction ("the Commissioner’s Motion"). At the hearing, Lloyd’s had ample opportunity to present evidence, make oral argument, and be heard.
12.	On December 27, 1995, the Colorado Court granted the Commissioner’s Motion and entered Findings of Fact, Conclusions of Law, and an Order with regard to the Commissioner’s Motion. A copy of the Reporter’s Transcript of the Colorado Court’s ruling, which was certified by the Reporter and the Colorado Court on January 29, 1996 (hereinafter, "the Colorado Court Ruling"), is attached hereto as Exhibit C and incorporated by reference herein.
13.	The Colorado Court Ruling enjoined Lloyd’s, its agents and its attorneys, from engaging, inter alia, in any of the following acts:
a.	Creating or attempting to create a debt or liability for or on behalf of any Colorado Lloyd’s Member;
b.	Instituting or attempting to institute a proceeding to reduce any debt against a Colorado Lloyd’s Member to judgment; or
c.	Collecting or attempting to collect any debt, judgment, or cash call demand against any Lloyd’s Member located in the State of Colorado. See, Colorado Court Ruling (Exhibit C) at pp. 24-26 (hereinafter, the "Colorado Injunction").
14.	The Colorado Court Ruling also contained specific Findings of Fact and Conclusions of Law that Lloyd’s had: a.	offered to sell and sold unregistered securities in the State of Colorado in violation of Section 301 of the Colorado Securities Act. See Colorado Court Ruling (Exhibit C) at pp. 12-13; and b.	employed a device, scheme, or artifice to defraud, misrepresented, and/or failed to disclose significant material facts to Colorado Names in violation of Section 501 of the Colorado Securities Act, including:
(i)	Lloyd’s failure to disclose the quantity and nature of the asbestos and pollution-related claims in various underwriting syndicates in which Colorado Names were participating; (ii)	Lloyd’s placement of Colorado Names at risk with respect to the underwriting of asbestos and pollution-related claims, in some cases contrary to specific instructions that such Names not be included in such underwriting; (iii)	Lloyd’s inclusion of Colorado Names in such syndicates despite the fact that the inclusion was actively concealed from the Colorado Names; (iv)	Lloyd’s misrepresentation that Colorado Names were only exposed to several liability for their individual underwriting losses through the various syndicates in which they participated; (v)	Lloyd’s exposure of Colorado Names to joint liability for claims and underwriting losses of other Names elsewhere; (vi)	Lloyd’s failure to disclose the content and recommendations of the Cromer Report until approximately 1986, thereby concealing material information about the operation of Lloyd’s, including the inherent and irreconcilable conflict between the interests of agents and brokers within Lloyd’s and the implications of such conflict on the liability placed upon the Colorado Names through the various underwriting syndicates; (vii)	Lloyd’s misrepresentation that various underwriting syndicates of Lloyd’s in which Colorado Names participate only carry five to ten percent of the underwriting risks with the remainder spread to other syndicates; (viii)	Lloyd’s misrepresentation that in the event of a loss, a Colorado Name would only suffer a nominal loss; (ix)	Lloyd’s failure to disclose the Colorado Names’ exposure to indefinite liability both in terms of amount and duration; and (x)	Lloyd’s failure to disclose to Colorado Names that a syndicate year of account would be left open indefinitely and in an undetermined amount after withdrawal. See Colorado Court Ruling (Exhibit C) at pp. 15-19.
15.	The Colorado Court Ruling, including both the Colorado Findings and Colorado Injunction, were entered for the specific benefit of the Colorado Names, including Lee, and provided each Colorado Name, including Lee, with rights and interests which could not be deprived without adequate consideration or in derogation of the U.S. or Colorado Constitutions. 16.	The Colorado Court Ruling, including both the Colorado Findings and the Colorado Injunction, represented a final, appealable decision concerning issues actually litigated as against Lloyd’s. 17.	The Colorado Findings established legal precedent under the doctrines of res judicata, collateral estoppel, stare decisis and/or the Law of the Case as between Lloyd’s and the Colorado Names. 18.	Lloyd’s had ample opportunity to seek review and/or an appeal of the Colorado Court Ruling. 19.	Immediately after the Colorado Court Ruling was entered, Lloyd’s filed an appeal to the Colorado Court of Appeals. Lloyd’s subsequently abandoned, and thereby waived, its right to pursue that appeal.
20.	On January 17, 1996, having failed to obtain and/or declined to pursue appellate relief from the Colorado Court Ruling, Lloyd’s filed a Notice of Removal to the U.S. District Court for the District of Colorado. Philip A. Feigin v. Lloyd’s, Civil Action No. 96-Z-98.
21.	On or about July 11, 1996, without any notice to, consent, or opportunity to object by the Non-Accepting Colorado Names, Lloyd’s and the Commissioner executed a document entitled State Agreement which purported to affect the legal rights and interests of the Colorado Names with regard to the Colorado Injunction.
22.	The State Agreement provided no consideration to, and required no releases from, any Colorado Names who declined to accept Lloyd’s R&R Settlement Offer (hereinafter, the "Non-Accepting Colorado Names").
23.	The State Agreement provided "Credits" and included "Releases" only as to Colorado Names who accepted Lloyd’s Reconstruction and Renewal (R&R) Settlement Offer (hereinafter, the "Accepting Colorado Names").
24.	Lee declined to accept Lloyd’s R&R Settlement Offer.
25.	The State Agreement contained no provisions which addressed the Colorado Findings, or required that the Colorado Findings to be vacated, dissolved, or modified.
26.	The State Agreement contained no provision that the Colorado Findings were merged into or extinguished by the State Agreement.
27.	The State Agreement contained material constitutional and statutory defects.
28.	On September 16, 1996, the Commissioner filed a pleading by which it specifically notified the U.S. District Court for the District of Colorado that it had advised Lloyd’s counsel that "certain material constitutional and statutory issues concerning the enforceability and validity of the State Agreement existed."
29.	On October 4, 1996, pursuant to the unconstitutional State Agreement executed by Lloyd’s and the Commissioner, and without any notice to, consent, or opportunity to object by the Non-Accepting Colorado Names, Lloyd’s and the Commissioner filed a Stipulation for Order Dissolving Order of Preliminary Injunction ("Stipulation") whereby they purported to "stipulate and agree to the entry of (an) Order Dissolving Order (of) Preliminary Injunction." The Stipulation did not address any other aspect of the Colorado Court Ruling, including the Colorado Findings.
30.	On October 8, 1996, pursuant to the unconstitutional State Agreement executed by Lloyd’s and the Commissioner, without any notice to, consent, or opportunity to object by the Colorado Non-Accepting Names, and without any request for or conduct of any pre-deprivation hearing, including any hearing as to the fairness or constitutionality of the State Agreement, the U.S. District Court for the District of Colorado ordered that the "preliminary injunction entered on December 27, 1995, is dissolved." The October 8, 1995 Order did not address any other aspect of the Colorado Court Ruling, including the Colorado Findings.
31.	The Colorado Findings entered by the Colorado Court were never vacated, dissolved, or modified by the U.S. District Court. Pursuant to 28 U.S.C. § 1450, they remained in full force and effect.
32.	On November 20, 1996, pursuant to a stipulation of settlement, the U.S. District Court for the District of Colorado dismissed the Commissioner’s cause of action with prejudice. 33.	As a part of its fraudulent scheme described in the Commissioner’s Complaint and the Colorado Court Ruling, Lloyd’s has engaged in wrongful acts of collection against Lee, including the following:
(a)	Seized a personal reserve of £6911.03 ($11,748.75);
(b)	Drew down a Letter of Credit issued by the Royal Bank of Scotland in the amount of £16,000 ($27,200);
(c)	Drew down a Letter of Credit issued by United Bank of Denver in the amount of $119,000;
(d)	Required payment of approximately $40,000 pursuant to a liability imposed with regard to Syndicate No. 418; and
(e)	Imposed an initiation fee and made annual assessments.
34.	Thereafter, pursuant to and in furtherance of its continuing fraudulent scheme described in the Commissioner’s Complaint and the Colorado Court Ruling, Lloyd’s:
(a)	ordained that the agency relationships between the Non-Accepting Colorado Names and their member’s agents were terminated, without their prior knowledge or consent;
(b)	appointed new "Substitute Agents," called "Additional Underwriting Agency No. 9" (AUA9) to act on behalf of Non-Accepting Colorado Names, without their prior knowledge or consent;
(c)	ordered AUA9 to sign an "Equitas Reinsurance Contract" on behalf of Non-Accepting Colorado Names, without their prior knowledge or consent;
(d)	placed all Non-Accepting Colorado Names into Equitas, without their prior knowledge or consent;
(e)	paid premiums to Equitas which, according to Lloyd’s, were owed by the Non-Accepting Colorado Names, without their prior knowledge or consent;
(f)	failed to provide any Credits against such premiums (which had been provided to Accepting Colorado Names under the State Agreement);
(g)	took assignments from Equitas of its purported "claim" for the premiums purportedly due under the Equitas Reinsurance Contract, without the prior knowledge or consent of the Non-Accepting Colorado Names;
(h)	included provisions in the Equitas Reinsurance Contract, without the prior knowledge or consent of the Non-Accepting Colorado Names, which:
(i)	purportedly required each Non-Accepting Colorado Name to: pay the amount claimed by Lloyd’s up front, without any setoff or counterclaim, without seeking any stay of execution or injunction against enforcement; and consent to the immediate enforcement of any judgment obtained by Lloyd’s (the "pay now, sue later clause"); and
(ii)	provided that the amount of the payment to be made was that calculated by the Members’ Services Unit (MSU) of Lloyd’s, and that such calculations were to be "conclusive evidence" as between the Non-Accepting Colorado Names and Equitas, in the absence of "manifest error."
35.	By its acts and conduct described in paragraph 34 above, Lloyd’s required the Non-Accepting Colorado Names to, in essence, participate in the R&R Settlement against their will, without their prior knowledge or consent, and without their receipt of any of the Credits, Releases, or other consideration provided to the Accepting Colorado Names under the State Agreement.
36.	Lloyd’s failed to disclose any of its acts or intentions described in paragraphs 34 and 35 above to the Non-Accepting Colorado Names, the Commissioner, or the U.S. District Court for the District of Colorado. Thus, the dissolution of the Colorado Injunction was procured by fraud.
37.	On October 6, 2000, pursuant to and in furtherance of its continuing fraudulent scheme described herein, Lloyd’s purported to obtain a money judgment against Lee from the High Court of Justice, Queen’s Branch Division Commercial Court in London, England in the amount of £95,901 ($149,605), plus interest (hereinafter, "the English Judgment").
38.	Pursuant to and in furtherance of its continuing fraudulent scheme described herein, the English Judgment was, in effect, "confessed" against Lee. In particular,
(a)	Lee was not permitted to raise any defense, including Lloyd’s own fraud that had been specifically found and adjudicated by the Colorado Court;
(b)	Lee was not permitted to conduct any discovery as to the calculation process used by Lloyd’s; and (c)	Lee was not permitted to challenge the amounts claimed by Lloyd’s.
39.	As described in Lee’s Answer, which is incorporated by reference herein, the English Judgment was, inter alia: (a) procured by fraud; (b) obtained in violation of and in direct conflict with prior Findings of Fact, Conclusions of Law, and Orders of the District Court for the State of Colorado; (c) procured in English Courts pursuant to choice-of-law and forum selection causes which were procured by fraud, violated the anti-waiver provisions of the U.S. and Colorado Securities laws, and were otherwise invalid and unenforceable; (d) rendered under a system which did not provide due process of law to Colorado litigants; (e) rendered by an English Court whose sole basis for jurisdiction was personal service, and was a seriously inconvenient forum for this Defendant; and (f) based upon a claim which is repugnant to the public policy of the state of Colorado. As a result, the English Judgment is without legal validity or effect and is not entitled to recognition in this Court.
40.	On October 15, 2002, nearly seven years after a Colorado Court specifically found and adjudicated Lloyd’s to have committed a massive fraud and numerous securities violations as against the Colorado Names, including Lee, and more than two years after fraudulently procuring the English Judgment, Lloyd’s has suddenly filed a Complaint in this Court seeking recognition and enforcement of such Judgment in the State of Colorado against Lee.
41.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 40 above.
42.	There exist actual controversies between Lee and Lloyd’s with regard to their rights and legal relations concerning: (a) the Colorado Court Ruling, including both the Colorado Findings and the Colorado Injunction; (b) the State Agreement; and (c) the English Judgment.
43.	Lee is entitled, inter alia, to the entry of a declaratory judgment pursuant to Fed.R.Civ.P. 57 and 28 U.S.C. § 2201 that:
(a)	Lloyd’s had ample opportunity to present evidence, make oral argument and be heard at the December 27, 1995 hearing before the Colorado Court on the Commissioner’s Motion;
(b)	The Colorado Court Ruling represented a final, appealable decision concerning issues actually litigated as against Lloyd’s;
(c)	The Colorado Findings established legal precedent under the doctrines of stare decisis and/or Law of the Case as between Lloyd’s and Lee;
(d)	Lloyd’s had ample opportunity to seek review and/or an appeal of the Colorado Court Ruling;
(e)	Lloyd’s waived its right of appeal with regard to the Colorado Court Ruling;
(f)	Lee held rights and interests in the Colorado Court Ruling;
(g)	The State Agreement provided no consideration to Non-Accepting Colorado Names, including Lee;
(h)	The State Agreement contained material constitutional and statutory defects;
(i)	The State Agreement neither had nor has any legal validity or effect as between Lloyd’s and the Non-Accepting Colorado Names, including Lee;
(j)	The State Agreement contained no provisions which addressed the Colorado Findings, or required the Colorado Findings to be vacated, dissolved, or modified;
(k)	The State Agreement contained no provision that the Colorado Findings were merged into or extinguished by the State Agreement;
(l)	The Colorado Findings were never vacated, dissolved, or modified;
(m)	The Colorado Findings remained in full force and effect;
(n)	Lloyd’s is barred from relitigating any of the Findings of Fact or Conclusions of Law set forth in the Colorado Court Ruling under the doctrines of res judicata, collateral estoppel, issue preclusion, stare decisis, and Law of the Case;
(o)	The Non-Accepting Colorado Names, including Lee, are entitled to reinstatement of the Colorado Injunction, nunc pro tunc December 27, 1995;
(p)	The English Judgment was procured by fraud;
(q)	The English Judgment is based upon a claim which is repugnant to the public policy of this State;
(r)	The English Judgment conflicts with and was obtained in violation of the Colorado Court Ruling;
(s)	The choice-of-law and forum selection provisions have no validity or effect in this State, and/or have been waived by Lloyd’s as against Colorado Names;
(t)	The choice-of-law and forum selection provisions in the General Undertaking conflict with the anti-waiver provisions of the U.S. and Colorado Securities laws, and are void and unenforceable;
(u)	In the absence of the General Undertaking, the only basis for jurisdiction against Lee was personal service, and the English Court was a seriously inconvenient forum for the trial of the action;
(v)	The English Judgment was rendered under a system that did not provide proceedings compatible with the requirements of due process;
(w)	The English Court did not have subject matter jurisdiction over any claims asserted against Non-Accepting Colorado Names, including Lee;
(x)	There existed no valid contractual or other legal basis to create any "premium" or other debt owing from Lee to Equitas; (y)	There existed no valid contractual or other legal basis for the English Court to exercise jurisdiction over Lee with regard to any claim that could be asserted by Equitas;
(z)	Equitas has received full payment of any premium purportedly owed Lee, by virtue of its receipt of funds from Lloyd’s.	SECOND CLAIM FOR RELIEF
(Offer and Sale of Unregistered Securities)
44.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 43 above.
45.	The memberships in Lloyd’s and the participation in syndicates offered and sold by Lloyd’s are "investment contracts," as such term is used in the definition of a "security" set forth at C.R.S. § 11-51-201(17) and its predecessor statute.
46.	The memberships in Lloyd’s and the participation in syndicates offered and sold by Lloyd’s are "securities," as such term is defined in C.R.S. § 11-51-201(17) and its predecessor statute.
47.	Lloyd’s made "offers," "offers to sell," and "sales" of securities to Lee, within the meaning of C.R.S. § 11-51-201(13)(a) and (c), and its predecessor statute.
48.	Each annual decision as to the syndicates in which Lee participated was a separate investment decision each time it occurred, and thus, a separate "offer," "offer to sell," and "sale" of a security.
49.	Each annual decision as to the total premium limits, as recommended to Lee, was a separate investment decision, and thus, a separate "offer," "offer to sell," and "sale" of a security.
50.	As to each "offer," "offer to sell," and "sale" made by Lloyd’s, the securities were neither registered nor exempt from registration, as required by C.R.S. § 11-51-301 and its predecessor statute.
51.	Each specific issue of law and/or fact set forth in paragraphs 14(a) and 45 through 50 above, including Lloyd’s violation of Section 301 of the Colorado Securities Act, has been previously litigated by Lloyd’s and expressly decided against Lloyd’s by the Colorado Court. See, Colorado Court Ruling (Exhibit C attached).
52.	As a direct and proximate result of each violation by Lloyd’s, Lee has sustained loss or damage, and is entitled to:
(a)	rescission;
(b)	actual, consequential, and special damages;
(c)	interest at the statutory rate;
(d)	costs;
(e)	reasonable attorneys’ fees;
(f)	injunctive relief, including reinstatement of the Colorado Injunction; and
(g)	such other legal and equitable relief as the Court deems appropriate.
53.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for each claim arising out of each separate "offer," "offer to sell," and "sale" of unregistered securities does not expire until one year after service of Lloyd’s Complaint in this matter.
54.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 53 above.
55.	In connection with each "offer," "sale," or "purchase" of securities in Colorado, Lloyd’s has, directly or indirectly:
(a)	employed a device, scheme, or artifice to defraud Lee;
(b)	made written and oral untrue statements of material fact to Lee and/or omitted to state material facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading; and
(c)	engaged in acts, practices, or courses of business which operated and would operate as a fraud and deceit upon Lee.
56.	Lloyd’s conduct violated C.R.S. § 11-51-501(1) and its predecessor statute.
57.	Each specific issue of law and/or fact set forth in paragraphs 14(b) and 55 above, including Lloyd’s violation of Section 501 of the Colorado Securities Act, has been previously litigated by Lloyd’s and expressly decided against Lloyd’s by the Colorado Court. See, Colorado Court Ruling (Exhibit C attached).
58.	Lloyd’s acted recklessly, knowingly, or with intent to defraud Lee in connection with each sale of a security to Lee in violation of C.R.S. § 11-51-501 and its predecessor statute.
59.	Lee did not know of the untruths or omissions made by Lloyd’s.
60.	Lloyd’s made the representations of material fact with knowledge or intent that Lee would act or decide not to act in reliance on such representations, and omitted to state material facts with the knowledge or intent that Lee would take action he might not take if he knew the true facts.
61.	Lee relied upon the representations and omissions made by Lloyd’s.
62.	Lee’s reliance was justified.
63.	Lee’s reliance caused him to sustain loss or damages.
64.	As a result of Lloyd’s violations, Lee is entitled to:
65.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for each claim arising out of each separate violation of Section 501 of the Colorado Securities Act does not expire until one year after service of Lloyd’s Complaint in this matter.
66.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 65 above.
67.	Lloyd’s made false representations of material fact, as described above, concerning Lee’s Lloyd’s membership, his syndicate participations, and the R&R Settlement Offer.
68.	Specific issues of law and/or fact concerning Lloyd’s false representations have been previously litigated by Lloyd’s and expressly decided against Lloyd’s by the Colorado Court. See, Colorado Court Ruling (Exhibit C attached).
69.	Lloyd’s made the representations of material fact knowing them to be false, or with utter disregard and recklessness as to whether they were true or false.
70.	Lloyd’s made the false representations of material fact with the knowledge or intent that Lee would act or decide not to act in reliance on such representations.
71.	Lee relied on the false representations of material fact.
72.	Lee’s reliance was justified.
73.	Lee’s reliance caused him pecuniary loss, resulting in actual, special, and consequential damages.
74.	Lloyd’s conduct was attended by circumstances of fraud, malice, and willful and wanton behavior. As a result, Lee is entitled to an award of punitive damages.
75.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for each claim arising out of each instance of fraud does not expire until one year after service of Lloyd’s Complaint in this matter.
(Nondisclosure or Concealment)
76.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 75 above.
77.	Lloyd’s knowingly or recklessly concealed and/or failed to exercise reasonable care to disclose material facts which Lloyd’s had a duty to disclose concerning Lee’s Lloyd’s membership, his syndicate participations, and the R&R Settlement Offer.
78.	Specific issues of law and/or fact concerning Lloyd’s non-disclosures have been previously litigated by Lloyd’s and expressly decided against Lloyd’s by the Colorado Court. See, Colorado Court Ruling (Exhibit C attached).
79.	Lloyd’s knowingly or recklessly concealed and/or failed to exercise reasonable care to disclose material facts with the knowledge or intent that the concealment and/or nondisclosure of such facts would create a false impression.
80.	Lloyd’s knowingly or recklessly concealed and/or failed to exercise reasonable care to disclose material facts with the knowledge or intent that Lee would take action he might not take if he knew the true facts.
81.	Lee acted in reliance on the assumption that the concealed and/or nondisclosed facts did not exist or were different from the actual truth.
82.	Lee’s reliance was justified.
83.	Lee’s reliance caused him pecuniary loss, resulting in actual, special and consequential damages.
84.	Lloyd’s conduct was attended by circumstances of fraud, malice, and willful and wanton behavior. As a result, Lee is entitled to an award of punitive damages.
85.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for each instance of nondisclosure or concealment does not expire until one year after service of Lloyd’s Complaint in this matter.
86.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 85 above.
87.	Lloyd’s owed a duty to Lee to exercise reasonable care to ensure the truth and accuracy of its representations to Lee concerning his Lloyd’s membership, his syndicate participations, and the R&R Settlement Offer, and to further ensure, at all times, the complete, accurate, and truthful disclosure of all materials facts to Lee concerning such matters.
88.	Lloyd’s, acting in the course of its business and employment, generated and disseminated and/or engaged in acts, conduct, and omissions which caused the generation and dissemination to Lee of materially false, incomplete, and inaccurate information concerning his Lloyd’s membership, his syndicate participations, and the R&R Settlement Offer.
89.	Specific issues of law and/or fact concerning Lloyd’s misrepresentations have been previously litigated by Lloyd’s and expressly decided against Lloyd’s by the Colorado Court. See, Colorado Court Ruling (Exhibit C attached).
90.	The generation and dissemination of materially false, incomplete, and inaccurate information to Lee was caused by Lloyd’s failure to exercise reasonable care or competence in obtaining or communicating the information, and/or its failure to exercise reasonable care or competence to prevent the communication of false information.
91.	Lloyd’s knew or intended that such information would be supplied to Lee, or that Lee was one of a limited group of persons for whose benefit and guidance Lloyd’s intended to supply such information.
92.	Lloyd’s intended the information to influence Lee in his determination of whether or not to invest in Lloyd’s and/or whether or not to accept the R&R Settlement Offer.
93.	Lee was an intended and foreseeable recipient of the false, incomplete, and inaccurate information concerning his Lloyd’s membership, his syndicate participation, and the R&R Settlement Offer.
94.	Lee relied upon the false, incomplete, and inaccurate information supplied to him.
95.	Lee’s reliance was justified.
96.	Lee’s reliance caused him pecuniary loss, resulting in actual, special, and consequential damages.
97.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for each misrepresentation does not expire until one year after service of Lloyd’s Complaint in this matter.
98.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 97 above.
99.	Lloyd’s owed fiduciary duties to Lee.
100.	Lloyd’s breached its fiduciary duties, as described above.
101.	As a direct and proximate result of Lloyd’s breach of its fiduciary duties, Lee has sustained actual, special, consequential, and unjust enrichment/restitutionary damages.
102.	Lloyd’s conduct described herein was attended by circumstances of fraud, malice, and willful and wanton behavior. As a result, Lee is entitled to an award of punitive damages.
103.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for Lee’s breach of fiduciary duty claim does not expire until one year after service of Lloyd’s Complaint in this matter.
104.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 103 above.
105.	As a result of its acts, conduct, and omissions described herein, including its wrongful collection activities, Lloyd’s has been unjustly enriched at Lee’s expense.
106.	Under the circumstances described herein, it would be unfair to allow Lloyd’s to profit from its wrongdoing.
107.	Under the circumstances described herein, it would be unfair to allow Lloyd’s to retain its economic benefit derived from its wrongful collection activities.
108.	As a direct and proximate result of Lloyd’s unjust enrichment, Lee is entitled to an award of unjust enrichment/restitutionary damages.
109.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for Lee’s claim of unjust enrichment does not expire until one year after service of Lloyd’s Complaint in this matter.
110.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 109 above.
111.	By its acts and conduct described above, including its wrongful collection activities, Lloyd’s has exercised unlawful dominion and control over Lee’s personal property.
112.	As a direct and proximate result of Lloyd’s conversion of Lee’s property, Lee has sustained and is entitled to an award of actual, special, consequential, and unjust enrichment/restitutionary damages.
113.	Lloyd’s conduct was attended by circumstances of fraud, malice, and willful and wanton behavior. As a result, Lee is entitled to an award of punitive damages.
114.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for Lee’s conversion claim does not expire until one year after service of Lloyd’s Complaint in this matter.
115.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 114 above.
116.	By its wrongful collection activities, Lloyd’s knowingly took funds which rightfully belonged to Lee, and used them for its own benefit.
117.	Lloyd’s acted without legal right, justification or excuse when it misappropriated Lee’s funds.
118.	At the time of the taking, Lloyd’s intended to permanently deprive Lee of the use and benefit of such funds.
119.	As a direct and proximate result of Lloyd’s wrongful acts, Lee has been damaged in an amount to be proven at trial.
120.	Pursuant to C.R.S. § 18-4-405, Lee is entitled to recover actual damages, treble damages, attorneys’ fees and costs.
121.	Pursuant to C.R.S. § 13-80-109, the statute of limitations for Lee’s civil theft claim does not expire until one year after service of Lloyd’s Complaint in this matter.
(Extreme and Outrageous Conduct – Emotional Distress)
122.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 121 above.
123.	By its acts, conduct, and omissions described herein, Lloyd’s engaged in extreme and outrageous conduct.
124.	Lloyd’s did so recklessly or with the intent of causing Lee severe emotional distress.
125.	Lloyd’s conduct did cause Lee severe emotional distress.
126.	As a direct and proximate result, Lee has sustained both economic and noneconomic losses, for which he is entitled to an award of actual, special, and consequential damages.
127.	Lloyd’s conduct described herein was attended by circumstances of fraud, malice, and willful and wanton behavior. As a result, Lee is entitled to an award of punitive damages.
128.	Pursuant to C.R.S. 13-80-109, the statute of limitations for Lee’s claim for extreme and outrageous conduct does not expire until one year after service of Lloyd’s Complaint in this matter.
129.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 128 above.
130.	The Colorado Court has previously found and adjudicated that Lloyd’s perpetrated a massive securities fraud against Lee and other Colorado Names.
131.	Based upon such findings, the Colorado Court previously enjoined Lloyd’s from engaging in any debt creation or debt collection activities against Lee and other Colorado Names.
132.	For the reasons described above, the circumstances by which the Colorado Injunction was dissolved as against Lee and other Non-Accepting Colorado Names, and by which the English Judgment was obtained against Lee, were against equity.
133.	There exists an ongoing threat that Lloyd’s will continue to manipulate U.S. and U.K. regulatory and legal systems to create bogus "premiums" or other "debt" purportedly owed by Lee and other Non-Accepting Colorado Names, and will seek to collect such "premiums" or other "debt" in a manner which deprives Lee and other Non-Accepting Colorado Names of due process of law.
134.	Lee is entitled to reinstatement of the Colorado Injunction nunc pro tunc December 27, 1995, and such other preliminary and permanent injunctive relief necessary to prohibit Lloyd’s or its agents or attorneys from engaging in any further debt creation or collection activities as against Lee.
135.	Lee realleges and incorporates herein the allegations contained in paragraphs 1 through 134 above.
136.	Pursuant to law and equity, Lee is entitled to an accounting as to the manner in which the amount of the Equitas Premium payments were calculated by the Members’ Services Unit of Lloyd’s as against Lee, the other Non-Accepting Colorado Names, and the Accepting Colorado Names.
WHEREFORE, Lee requests entry of an Order in his favor and against Lloyd’s as follows:
A.	Declaratory Judgment. On his First Claim for Relief, a declaratory judgment pursuant to Fed.R.Civ.P. 57 and 28 U.S.C. § 2201 as to those matters set forth in paragraph 43 above.
B.	Colorado Securities Act. On his Second and Third Claims for Relief, an Order and Judgment against Lloyd’s for:
1.	Rescission;
2.	Actual, consequential and special damages in amounts to be proven at trial;
3.	Pre-judgment interest at the statutory rate;
4.	Costs;
5.	Reasonable attorneys’ fees; and
6.	Injunctive relief, including reinstatement of the Colorado Injunction.
C.	State Common Law. On his Fourth through Ninth and Eleventh Claims for Relief, a judgment against Lloyd’s for:
1.	Actual, consequential, special, and unjust enrichment/restitutionary damages, in amounts to be proven at trial;
2.	Pre-judgment interest at the statutory rate;
3.	Expert fees, costs of action, and reasonable attorneys’ fees;
4.	Exemplary and punitive damages in an amount to be determined at trial.
D.	Colorado Civil Theft Statute. On his Tenth Claim for Relief, a judgment against Lloyd’s for:
2.	Treble damages;
3.	Pre-judgment interest at the statutory rate; and
4.	Expert fees, costs of action, and reasonable attorneys’ fees.
E.	Injunction. On his Twelfth Claim for Relief, reinstatement of the Colorado Injunction nunc pro tunc December 27, 1995, and/or entry of a new preliminary and permanent injunction prohibiting Lloyd’s, its agents, and its attorneys from engaging in any further attempts to create or collect any "premiums" or other "debt" purportedly owed by Lee.
F.	Accounting. On his Thirteenth Claim for Relief, an accounting as to the manner in which the Equitas Premium payments were calculated by the Members’ Services Unit of Lloyd’s as against Lee, the other Non-Accepting Colorado Names, and the Accepting Colorado Names.
G.	All other and further relief as this Court deems just, proper, and appropriate.
DEFENDANT REQUESTS TRIAL TO A JURY ON ALL CLAIMS SO TRIABLE
BOSTROM, SANDER & SCHEID, P.C.
1625 Broadway, Suite 2100
Telephone: (303) 592-5300
Facsimile: (303) 592-5330
Counsel for Defendant Raymond Charlesworth Lee
I hereby certify that on this _____ day of December, 2002, a true and correct copy of the foregoing ANSWER, COUNTERCLAIM, AND JURY DEMAND was placed in the U.S. mail, postage prepaid, addressed to:
Jay Horowitz, Esq.
Carole K. Jeffery, Esq.
Horowitz & Wake
370 17th Street, Suite 3950
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