During the late 1980s and early 1990s, the Lloyd’s market sustained losses of more than $12 billion, thanks in part to large claims from American workers afflicted with asbestosis and lung cancer. With its survival threatened, Lloyd’s instituted a plan that required each member to buy reinsurance for their pre-1993 underwriting responsibilities.

But Sundlun never paid the required premium, according to the lawsuit. And in June 1997, a default judgment was entered against him in England for $163,835.

Sundlun had maintained he didn’t owe anything.

In an affidavit, Sundlun said he “understood that any membership in Lloyd’s would be an honorary position and that I would face no risk or liability.” He also claimed he never signed a membership application or a 1987 “General Undertaking Agreement,” but he has since withdrawn that legal argument.

In a pretrial memorandum filed Sept. 28, Flanders said Sundlun’s “legal position in a nutshell” was that the default judgment should not be enforced because Lloyd’s failed to serve Sundlun before obtaining that judgment.

“Instead of causing Sundlun to be personally served with legal process, Lloyd’s served process on an entity in England that it unilaterally designated as Sundlun’s ‘agent’ three years after Sundlun resigned (effective Jan. 1, 1993) as a member of Lloyd’s,” Flanders wrote. “But Sundlun never even knew about such a designation, much less did he even agree to it.”

In its pretrial memo, Lloyd’s said, “Sundlun personally signed applications and provided financial information to Lloyd’s with the specific purpose of becoming an underwriting member of Lloyd’s. Moreover, Sundlun acknowledged his potential unlimited liability and risks of membership.”

The memo, written by Oliverio, said that while Sundlun stopped underwriting, his membership would continue until all his obligations were settled by Lloyd’s. Oliverio argued that serving Sundlun’s agent in England constituted valid service on Sundlun himself.

Lloyd’s asked the court to make Sundlun pay for the attorney’s fees and costs it incurred in defending the validity of Sundlun’s signature.

“It is appropriate for this court to impose a monetary sanction of reasonable attorney’s fees and costs to be paid to the plaintiff, as defendant Sundlun was objectively unreasonable in contesting his signature,” Oliverio wrote. “This defense thwarted summary judgment, as it purportedly created a genuine issue of material fact, and it necessitated the retention of a handwriting expert to authenticate Sundlun’s signature.”

Last week, Flanders said Sundlun had dropped the challenge to the signature’s validity because “we wanted to focus on the service of process and cut the length of the case. It simplified the case greatly.”

Today, Flanders and Oliverio declined to comment on how the signature issue had been resolved.