327 F.3d 1115 (2003) Bernard OLCOTT, Plaintiff-Appellee, v. DELAWARE FLOOD COMPANY, a limited partnership under the laws of Oklahoma; Layton Oil Company, a Kansas corporation; William Douglas Layton, individually and as general partner of Delaware Flood Company 1976 DH; Delaware Flood Company 1977 EH; Delaware Flood Company 1978 FH; Delaware Flood Company 1979 Ltd; Michael Galesi, Defendants-Appellants, and First National Bank of Oklahoma City, Defendant.
Nos. 01-5119, 02-5021. United States Court of Appeals, Tenth Circuit.
April 24, 2003. 1116*1116 1117*1117 R. Thomas Seymour (C. Robert Burton with him on the briefs), Seymour Law Firm, Tulsa, OK, for Defendants-Appellants.
David Feinsilver, The Feinsilver Law Group, P.C., Millburn, NJ, for Plaintiff-Appellee.
Before TACHA, Chief Judge, and BALDOCK and MURPHY, Circuit Judges.
BALDOCK, Circuit Judge.
Defendants appeal the district court's entry of a $1.1 million default judgment. The district court entered default as a discovery sanction after finding Defendants repeatedly, willfully, and in bad faith failed to comply with discovery orders. On appeal, Defendants assert the district court was without jurisdiction to enter a default judgment. Defendants also raise numerous additional challenges to the district court proceedings. We have jurisdiction pursuant to 28 U.S.C. § 1291.[1] We 1118*1118 affirm the judgment and damage award, but remand with instructions to recalculate the prejudgment interest award.
I.
Plaintiff Bernard Olcott, an investor in oil drilling and exploration limited partnerships, filed a complaint against Defendants in 1982 alleging federal securities law violations and various state law tort, fraud and breach of contract claims.[2] The claims arose out of Defendants' solicitation, sale and operation of oil tax shelter limited partnership units between 1976 and 1979. Plaintiff's suit sought damages and rescission of the investment contracts. In February 1986, after unsuccessfully attempting to employ more traditional discovery motions, Plaintiff filed a motion to compel Defendants to render an accounting of all partnership assets and income. On March 4, in exchange for the court's postponement of the jury trial scheduled to begin March 17, Defendants consented to entry of an accounting order requiring them to provide Plaintiff within six months "a full, complete, meaningful, and formal accounting ... setting forth all items of contribution, income, and expense as well as the disposition of all assets and monies. . . ."
Defendants subsequently submitted three accountings. After each submission, Plaintiff challenged the sufficiency of the accounting. The court-appointed accounting expert also found each of the submitted accountings wholly inadequate. The court held an evidentiary hearing after each submission and, after each hearing, concluded the submitted accounting did not comply with the court's accounting orders. After each hearing, the court ordered Defendants to file a supplemental accounting.
After the third submission, and a delay of almost four years, the court concluded Defendants' failure to comply was willful and in bad faith. The court partially based its conclusion on the testimony of two of Defendant Michael Galesi's former attorneys. Each testified Galesi agreed to provide an accounting solely to obtain a continuance and never had any intention of complying with the court's accounting order. Counsel also testified that Galesi still had no intention of complying with the court's order and would rather "take his chances" than provide the accounting. Plaintiff also introduced evidence that none of Defendants had requested bank records or made any other effort to produce an accounting in compliance with the court's order. As a result of the willful 1119*1119 discovery violations, the court entered an order of default on February 8, 1990. See Fed.R.Civ.P. 37(b)(2); Fed.R.Civ.P. 55(a). In its order, the court stated: