In 1979, Bennett signed a contract with Lloyd’s as a Name to provide underwriting capital for insurance syndicates. The contract contained clauses stating that English law applied to Names’ disputes and such disputes can only be resolved in the courts of England. At the time the contract was signed, Lloyd’s failed to disclose massive anticipated losses. In 1998, Bennett and 600 other Names sought to avoid the forum selection and choice of law clauses. The Ninth Circuit upheld the clauses. Lloyd’s sued in England and won a large judgment against non-settling Names to recover mandatory premiums. Lloyd’s then sought to enforce its claim against Bennett, a non-settling Name, in Utah District Court. The court found in favor of Lloyd’s. Bennett appealed, and this appeal was consolidated with other Names cases in the Reinhart case before the Tenth Circuit. The circuit court upheld the forum selection and choice of law clauses.
During the pendency of the Reinhart appeal, Bennett filed for bankruptcy and brought two separate lawsuits under the auspices of the bankruptcy case. The parties stipulated to the dismissal of the first suit, and the second suit went to trial. In the second suit, the court granted Lloyd’s summary judgment motion and a motion for sanctions, finding that the forum selection issue had been previously determined. Bennett appealed, but the district court affirmed the ruling.
Bennett appealed the bankruptcy court’s sanctions order, again advancing arguments against the forum selection clause. The court upheld the award of sanctions, finding the appeal from the bankruptcy court to be frivolous, and that “no reasonable attorney” could believe otherwise based upon the doctrine of res judicata and the Tenth Circuit’s prior opinions. Bennett v. Soc’y of Lloyd’s (In re Bennett), Case No. 2:07-CV-736 TS (USDC Utah Sept. 24, 2008).