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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FILED 

United States Court of Appeals 

Tenth Circuit 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

APR 27 2005 

PATRICK FISHER 

Clerk 

BERNARD OLCOTT, 

Plaintiff - Appellant, 

V. 

DELAWARE FLOOD COMPANY, a 

limited partnership under the laws of 

Oklahoma; LAYTON OIL 

COMPANY, a Kansas corporation; 

DELAWARE FLOOD COMPANY 

1976 DH; DELAWARE FLOOD 

COMPANY 1977 EH; DELAWARE 

FLOOD COMPANY 1978 FH; 

DELAWARE FLOOD COMPANY 

1979 Ltd.; MICHAEL GALES!; 

WILLIAM DOUGLAS LAYTON, 

individually and as general partner, 

Defendants - Appellees. 

No. 03-5156 

(N. District of Oklahoma) 

(D.Ct. No. 83-CV-179-E) 

ORDER AND JUDGMENT* 

Before KELLY, ANDERSON, and O'BRIEN, Circuit Judges. 

* This order and judgment is not binding precedent except under the doctrines of 

law of the case, res judicata and collateral estoppel. The court generally disfavors the 

citation of orders and judgments; nevertheless, an order and judgment may be cited under 

the terms and conditions of 10th Cir. R. 36.3. 

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This case is before us for the fourth time after a long and tortured history. 1 

Bernard Olcott (Olcott), who was previously awarded sanctions against the 

defendants in the amount of $1,526,032. 78,2 together with prejudgment interest in 

the amount of $2,573,974.77, all based on a $1.9 million investment turned sour, 

appeals the district court's denial of his application for additional sanctions and 

costs. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm. 

I. Background 

The facts germane to this appeal are these. Between 1976 and 1979, Olcott 

invested a total of $1.9 million in four oil drilling and exploration limited 

partnerships in Oklahoma. In 1982, he filed suit in federal court3 in which he 

alleged violations of federal securities law and various state claims based on tort, 

fraud and breach of contract. 4 As defendants, he named Delaware Flood 

1 See Olcott v. Delaware Flood Co., 327 F.3d 1115 (10th Cir. 2003) (Olcott III); 

Olcott v. Delaware Flood Co., 76 F.3d 1538 (10th Cir. 1996) (Olcott II). Olcott !was an 

unpublished order in which we remanded to correct statute of limitations problems. See 

Olcott II, 76 F.3d at 1543. Olcott II and Olcott III provide additional background to the 

instant appeal. 

2 This consists of $449,018.08 in fees and expenses and default judgment in the 

amount of$1,077,014.70. 

3 Olcott originally filed suit in the District of New Jersey. Applying the forum non 

conveniens doctrine, see 28 U.S.C. § 1404, the court transferred the case to the Northern 

District of Oklahoma. 

4 The district court eventually dismissed the federal claims as barred under the 

applicable statute of limitations, dismissed a number of Olcott's pendent state claims on 

summary judgment and entered default judgment on the remaining state claims alleging 

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Company and others (Delaware Flood). The gist of Olcott's complaint was that 

Delaware Flood had diverted his investment to purposes other than those stated in 

the limited partnership agreements. On February 8, 1986, he moved the court to 

order Delaware Flood to produce a formal accounting of his investment. On 

March 18, 1986, the court ordered Delaware Flood to: 

furnish [Olcott] with a full, complete, meaningful, and formal 

accounting of all of the financial affairs of [the four limited 

partnerships], setting forth all items of contribution, income, and 

expense as well as the disposition of all assets and monies, for 

each of the four limited partnerships, including a full and 

complete accounting for all monies paid by each of the 

partnerships under the turnkey drilling contracts .... 

See Olcott II, 76 F .3d at 1550-51. 

Delaware Flood submitted its accounting on January 13, 1987. Olcott 

complained it was insufficient and moved for sanctions, including entry of default 

judgment. The court agreed the accounting was insufficient. Although it 

declined to enter default judgment against Delaware Flood, finding no bad faith, 

it imposed sanctions against it on March 17, 1987, under FED. R. CIV. P. 37: 5 

2. [Delaware Flood] shall pay all costs and fees incurred by 

fraud and breach of contract. See Olcott III, 327 F.3d at 1120, 1126. 

5 "If a party ... fails to obey a ... pretrial order ... , the judge ... may make such 

orders with regard thereto as are just, and among others any of the orders provided in 

Rule 37(b)(2)(B), (C), (D)." FED. R. CIV. P. 16(±). "[T]he court ... may make such 

orders in regard to the failure [to discover] as are just, and among others the following: .. 

. (C) ... rendering a judgment by default against the disobedient party[.]" FED. R. CIV. P. 

3 7(b )(2)( C). 

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[Olcott] from December 19, 1986 regarding the accounting issues 

until all accounting issues are resolved .... 

5. [Olcott] shall file an application for costs and fees to date 

within ten (10) days of March 17, 1986 .... 

6 .... Statements for subsequent services may be rendered to the Court 

thereafter as appropriate. 

(Appellant Supp. App. Vol. I at 11-11 a.) The order directing Delaware Flood to 

produce an accurate accounting remained in effect. 

On May 12, 1987, Delaware Flood filed its first supplemental accounting. 

Olcott complained it, like the previous accounting, was insufficient. Again, he 

sought sanctions, including entry of default judgment. Again, the court agreed 

the accounting fell short of the mark. On October 14, 1987, relying on FED. R. 

Crv. P. 16 and 3 7(b ), the court sanctioned Delaware Flood a second time. 

Although the court again declined to enter default judgment, due to insufficient 

evidence of bad faith, it ordered Delaware Flood to pay the fees and expenses 

Olcott incurred in challenging the accounting. 6 The accounting order remained in 

6 "[I]t is just that [Delaware Flood] pay all fees and expenses of [Olcott's] counsel 

and [Olcott's] accountants incurred for services rendered in connection with resolving the 

sufficiency of the accounting." (Appellant Supp. App. Vol. I at 17.) Also, "[Delaware 

Flood] shall bear the cost of [Olcott's] attorney fees, accountant's fees, and expenses 

incurred in connection with resolution of the sufficiency of the accounting .... " (Id. at 

20.) For reasons we need not divine, the court later averred in an order filed April 30, 

1993, that "all orders prior to October 14, 1987, which touch on the accounting issues 

were not sanction orders and are, therefore, not under consideration herein." (Appellant 

App. Vol. 1 at 177 n.2.) We therefore conclude the court's October 14, 1987 sanction 

order covered fees and expenses incurred by Olcott from the beginning of the dispute 

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effect, the court explaining: 

So that there can be no further misunderstanding, [Delaware 

Flood is] hereby ordered to trace the monies contributed to each 

of these four limited partnerships so that the ultimate recipients 

and ultimate uses of these funds is revealed. [Delaware Flood] 

may not rest on simply disclosing what funds were received from 

limited partner contributions and what leases, wells, production, 

and income were received by the limited partnerships in return. 

(Appellant Supp. App. Vol. I at 16.) 

The court referred the calculation of fees and expenses to a magistrate 

judge. On July 28, 1988, the magistrate judge recommended a sanction award to 

Olcott in the amount of $386,637.98 for fees and expenses incurred between 

December 19, 1986, and October 14, 1987. 7 On August 29, 1988, the magistrate 

judge recommended an additional $1,615.00 for fees and expenses Olcott 

incurred. Thus, the total sanction recommended by the magistrate judge was 

$388,252.98. 

On April 15, 1988, Delaware Flood filed its second supplemental 

accounting. Again, Olcott contested its sufficiency and moved for sanctions, 

including entry of default judgment. This time, the court found Delaware Flood 

wilfully violated its order to produce an accurate accounting and demonstrated 

over the accounting and superceded the court's order of March 17, 1987. 

7 Olcott had requested approximately $400,000.00 in fees and expenses. 

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bad faith. On February 8, 1990, it sanctioned Delaware Flood by entering default8 

against it, see FED. R. CIV. P. 55(a), for $1.9 million 

less any portion of those funds which [Delaware Flood] can establish 

were utilized for legitimate purposes under the terms and provisions 

of the Limited Partnership Agreements. There will be a [set-off 

hearing] at which the burden will be upon [Delaware Flood] to 

establish to the satisfaction of the fact finder that any portion of 

[Olcott's] contribution was utilized for legitimate purposes under the 

terms of the agreements among the parties. 

(Appellant App. Vol. I at 171.) The court reserved until the end of the set-off 

hearing the issue of additional sanctions in favor of Olcott for fees and expenses. 

The order for an accurate accounting remained in effect pending the set-off 

hearing. In fact, the court ordered a supplemental accounting be produced by 

May 31, 1990. Although Delaware Flood submitted such an accounting, the 

8 The district court mischaracterized its order of February 8, 1990, as an entry of 

default judgment against Delaware Flood. As we pointed out in Olcott III, "the [ district] 

court had not previously entered a default judgment pursuant to Fed.R.Civ.P. 55(b), but 

had entered an order of default pursuant to Fed.R.Civ.P. 55(a). The proceeding to 

quantify damages was not a trial but a hearing pursuant to Fed.R.Civ.P. 55(b)(2)." 327 

F.3d at 1120 n.6 (quotations omitted). 

The set-off hearing was [Delaware Flood's] final opportunity to comply 

with the court's accounting orders. In the event [Delaware Flood] complied, 

the court presumably intended to lift the default sanction and proceed to 

trial on the merits. See Fed.R.Civ.P. 55(c). When [Delaware Flood] failed 

to comply, the court enforced the sanction by entering judgment. See 

Fed.R.Civ.P. 55(b). 

Id. at 1121 n.7. 

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court's own expert examined the submittal and reported to the court on September 

26, 1990, that it was entirely insufficient. 

On April 30, 1993, the court adopted the two recommendations of the 

magistrate judge (July 28, 1988, and August 29, 1988) and ordered Delaware 

Flood to pay sanctions to Olcott in the amount of $388,252.98 for the period 

December 19, 1986, through October 14, 1987. We affirmed the imposition of 

these sanctions. Olcott II, 76 F.3d at 1558. 

The court eventually conducted the set-off hearing on August 29 through 

September 1, 2000. On June 6, 2001, the court ruled. It found "[Delaware Flood 

has] failed to render an accounting and [has] not accounted for the specific use of 

Mr. Olcott's moneys." (Appellant App. Vol. 1 at 268.) The court considered the 

parties' stipulation at the set-off hearing that Olcott received $623,161.00 in 

distributions from the partnerships. 9 In addition, the court found Olcott enjoyed a 

net benefit of $199,824.30 for the exercise of a "put" relative to the 1977 

partnership. The court thus concluded Olcott was entitled to default judgment in 

the amount of $1,077,014.70. It entered judgment in this amount, see FED. R. 

CIV. P. 55(b), plus prejudgment interest. On January 29, 2002, the court fixed 

9 Olcott complains the figure of $623,161.00 was available as early as March 1987. 

Even so, it was only after much testimony on the issue and on the last day of the set-off 

hearing that the parties agreed to stipulate that Delaware Flood was to be credited with 

$623,161.00 in distributions from the partnerships. 

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pre-judgment interest at$ 1,679,144.55 10 and awarded additional attorneys fees in 

the amount of$60,765.10 relative to the period December 19, 1986, through 

October 14, 1987. 11 

In its June 6, 2001 order, the court also provided: "Consistent with the 

terms of the February 8, 1990 Order, any additional sanctions for fees[,] expenses 

and costs will be addressed separately upon proper application or motion." 

(Appellant App. Vol. 1 at 269.) On October 1, 2001, Olcott applied for fees, 

expenses and costs incurred between October 15, 1987, and June 6, 2001, in 

relation to resolving the sufficiency of Delaware Flood's accounting. In his 

application, relying alternatively on the court's earlier sanction orders (March 18, 

1987, and October 14, 1987) and FED. R. C1v. P. 16(f) and 3 7(b ), he requested a 

$562,329.00 sanction for fees and expenses for the period October 15, 1987, 

through June 6, 2001. He also applied for costs of $48,544.00 pursuant to FED. R. 

CIV. P. 54(d)(l) (allowing award of costs to prevailing party). 12 He also requested 

10 Pursuant to Olcott Ill's mandate to calculate prejudgment interest according to 

New Jersey law rather than Oklahoma law, the court on remand adjusted this award to 

$2,573,974.77. See Olcott Ill, 327 F.3d at 1126. 

11 On March 30, 1989, the magistrate judge recommended an award of an 

additional $60,765.10 to Olcott for attorneys fees relative to preparing his initial fee 

application. 

1

~ Of this sum, only $601.50 was not included in his sanction request of 

$562,329.00. In the alternative, he requested sanctions in the amount of $562,931.00 (a 

figure arrived at by adding the $601.50 in costs to his $562,329.00 sanction request and 

rounding up to the nearest dollar). 

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sanctions under FED. R. Crv. P. 11 (providing for attorney sanctions). In resisting 

Olcott' s application, Delaware Flood moved for Rule 11 sanctions of its own. 

On September 2, 2003, the court denied Olcott's application for additional 

sanctions and costs and denied Delaware Flood's motion for sanctions, stating: 

The Court is convinced that further sanctions in this case, in favor 

of either party, are not warranted and would not serve the interest 

of justice. In reaching this conclusion, the Court considers not 

only the considerable sanction received by [Olcott] to date, but 

also the conduct of [Olcott's] counsel that delayed resolution of 

the case and made the [set-off hearing] more difficult than 

necessary. The Court is convinced that the sanctions already 

levied are a sanction appropriate to the severity of [Delaware 

Flood's] abuse of the legal process, and that any further sanction 

would inappropriately reward, or at best ignore, [Olcott's] 

counsel's abuse of the legal process. The Court is also convinced, 

in light of its earlier rulings on sanctions, that a Rule 11 sanction 

is not appropriate as against [Olcott] for his current application. 

(Appellant Supp. App. Vol. III at 377-78 (quotation marks omitted).) Olcott 

appeals this order except insofar as it denies Rule 11 sanctions against Delaware 

Flood. 

II. Standard of Review 

We review an order imposing sanctions pursuant to FED. R. Crv. P. 16(f) or 

37(b)(2) for abuse of discretion. Olcott 11, 76 F.3d at 1557. The same standard 

applies to an order denying sanctions. Gomez v. Martin Marietta Corp., 50 F .3d 

1511, 1519 (10th Cir. 199 5). We also review an award or denial of costs under 

FED. R. CIV. P. 54(d) for abuse of discretion. Rodriguez v. Whiting Farms, Inc., 

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360 F.3d 1180, 1190 (10th Cir. 2004). We have previously stated: 

Under the abuse of discretion standard[,] a trial court's decision 

will not be disturbed unless the appellate court has a definite and 

firm conviction that the lower court made a clear error of 

judgment or exceeded the bounds of permissible choice in the 

circumstances. When we apply the abuse of discretion standard, 

we defer to the trial court's judgment because of its first-hand 

ability to view the witness or evidence and assess credibility and 

probative value. 

Moothart v. Bell, 21 F.3d 1499, 1504 (10th Cir. 1994) (quotation marks omitted). 

"An abuse of discretion occurs when the district court's decision is arbitrary, 

capricious or whimsical, or results in a manifestly unreasonable judgment." Id. at 

1504-05 ( quotation marks omitted). 

"[E]rroneous findings of fact constitute an abuse of discretion." Quarles 

v. United States ex rel. Bureau of Indian Affairs, 3 72 F .3d 1169, 11 71 (10th Cir. 

2004). See also Olcott II, 76 F.3d at 1557 ("We accept the district court's factual 

findings underpinning its sanctions order unless clearly erroneous."). There is 

also an abuse of discretion "where the trial court fails to consider the applicable 

legal standard or the facts upon which the exercise of its discretionary judgment 

is based." Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997). However, 

"[w]hcrc there are two permissible views of the evidence, the fact finder's choice 

between them cannot be clearly erroneous." Olcott JI, 76 F.3d at 1558 (quotation 

marks omitted). 

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III. Discussion 

We first observe that this appeal concerns the propriety of the district 

court's order denying sanctions ( and Rule 54( d) costs) to Olcott, and nothing 

more. It does not concern the sufficiency of Delaware Flood's accounting. That 

issue is a dead letter. The accounting was insufficient and its insufficiency was 

the basis for the district court's judgment against Delaware Flood. We have 

previously affirmed the court's determination that "the accounting presented was 

not in substantial compliance with the court's prior orders." Olcott III, 327 F.3d 

1125. 

Olcott complains the court's order denying an additional sanction award 

rested on inadequate factual findings and is thus clearly erroneous and an abuse of 

discretion. In addition, he claims a due process entitlement to a sanction award 

based on the court's earlier orders that he was entitled to sanctions for his fees, 

expenses and costs related to contesting the sufficiency of Delaware Flood's 

accounting. Finally, he argues the court erred in failing to properly rule on his 

motion for costs under FED. R. CIV. P. 54(d). 

A. Sanctions Under FED. R. C1v. P. 16(/) and 3 7(b)(2) 

Olcott takes issue with the district court's findings in support of its 

decision to deny sanctions for the period of October 15, 1987, through June 6, 

2001. The findings upon which the court relied in arriving at its decision were: 1) 

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"the considerable sanction received by [Olcott] to date" and 2) "the conduct of 

[Olcott's] counsel that delayed resolution of the case and made the trial more 

difficult than necessary." (Appellant Supp. App. Vol. III at 3 77 .) Reasoning 

from these findings to its decision, the court explained it was "convinced that the 

sanctions already levied are a sanction appropriate to the severity of [Delaware 

Flood's] abuse of the legal process, and that any further sanction would 

inappropriately reward, or at best ignore, [Olcott's] counsel's abuse of the legal 

process." (Id. at 377-78 ( quotation marks omitted).) It concluded that "further 

sanctions in this case, in favor of either party, are not warranted and would not 

serve the interest of justice." (Id. at 377.) 

We first evaluate the findings of fact for clear error. The first fact the 

court found, the considerable sanctions previously awarded to Olcott, is amply 

supported by the record. The most significant of the sanctions was the default 

judgment itself (together with prejudgment interest). When the court awarded 

default judgment as a sanction, Olcott was relieved of having to prove his case on 

the merits. This is no mean benefit, even for one who, like Olcott, clearly 

believes the rectitude of his case was self-evident from the beginning. 

Nonetheless, Delaware Flood, absent its self-defeating abuse of the legal process, 

would have enjoyed the right to have the claims against it considered on the 

merits. In addition to a default judgment, the court awarded Olcott a sanction for 

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fees and expenses in an amount close to what he now claims as his due. 13 We 

identify no error in the court's finding that it levied considerable sanctions 

against Delaware Flood. 

The second fact the court found, "the conduct of [Olcott's] counsel that 

delayed resolution of the case and made the trial more difficult than necessary[,]" 

invites closer scrutiny. 14 (Id.) Olcott claims there is no support in the record for 

it. However, the record of the set-off hearing, both standing alone and insofar as 

it is emblematic of Olcott's conduct throughout the litigation, 15 is damning to his 

13 Assuming Olcott's recent application for $562,329.00 is compensable at face 

value, this would mean he has already been awarded forty-four percent of his fees, 

expenses and costs. 

14 In our view, when the district court singled out the conduct of "[Olcott's] 

counsel" it was referring to counsel in his representative capacity. As such, the conduct 

of Olcott's counsel is attributed to Olcott. As the court stated during the set-off hearing, 

"[T]here has been over $2 million spent in this case on attorneys' fees involving a 

controversy of 1.9. That disturbs me for the process. The ill feeling between [Olcott] and 

[Delaware Flood] that has been demonstrated has poured over to the lawyers, and I regret 

it." (Appellant App. Vol. 2 at 445-46.) Viewing the record as a whole, we conclude it 

was appropriate for the district court to attribute the conduct of Olcott's counsel to Olcott. 

15 Delaware Flood cites in its brief to forty-nine instances in the docket it claims 

illustrate Olcott's penchant to delay the proceedings. (See Appellee Br. at 4-5.) A bare 

docket entry, without more, does not suggest abuse of the legal process. On the other 

hand, we are confident the district judge placed Delaware Flood's record of 

obstructionism and the conduct of Olcott's counsel at the set-off hearing in the context of 

the entire history of the case in arriving at its conclusion both parties abused the legal 

process. 

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claim he did not abuse the process. 16 The transcript is riddled with examples of 

argumentative and improper conduct on the part of Olcott's counsel. Brevity and 

clarity restrain a detailed elaboration. Suffice it to say, Olcott's counsel's 

conduct was plainly exasperating to the presiding judge. 17 It dispels any notion of 

16 We remind Olcott that in finding he abused the legal process, the district court 

was not exonerating Delaware Flood oflike behavior. Nor do we. Indeed, it was 

Delaware Flood's record of obstructionism (which we need not detail here) that resulted 

in enormous sanctions of $1,526,032.80 (plus $2,573,974.77 in pre-judgment interest). 

By comparison, Olcott was not sanctioned and was only denied sanctions of $562,329.00. 

17 At the conclusion of the four day set-off hearing, the court, in declining to 

impose sanctions against Olcott's counsel, summarized its view of the proceedings: 

And I will address one further issue: The issue of sanctions 

that had been requested by [Delaware Flood] against [Olcott]. Also 

the issue of counsel's conduct before the Court. 

And I will simply state to Mr. Feinsilver that only on two 

other occasions, in the last 21 years, has my temperament been 

affected in the way that it has been in these proceedings. It has been 

so destructive to the process and so against what I believe to be 

conduct of counsel, that it causes great concern to the Court. 

What really bothers me is that you would leave the Northern 

District of Oklahoma with the mistaken impression that would 

confuse courtesy with weakness because that's a misconcept [sic]. 

I am not going, I am not going to impose any sanction. I'm 

not going to charge you with any money that you would have to the 

[sic] pay by reason of your conduct. 

But I would hope that you would remember this event and 

your appearance and that in the future, when you appear before any 

judge, you will watch the expression on your face, you'll not raise 

your voice and shout, and conduct yourself as a professional. That's 

what I would hope. 

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error in the court's finding. 

In an attempt to divert attention from his conduct, Olcott points the finger 

at Delaware Flood and the court itself. In his view, the district court erred in 

failing to enter default judgment in his favor on February 8, 1990. He maintains 

that all of the evidence necessary to support entry of judgment on June 6, 2001, 

was available to the court on February 8, 1990, including proof of the set-off to 

which Delaware Flood eventually stipulated ($623,161.00 in distributions from 

the partnerships) and proof of the net benefit Olcott enjoyed from the exercise of 

a "put" relative to the 1977 partnership ($199,824.30). He faults the court for 

permitting the parties to drag the proceedings on for eleven additional years at 

great expense to him. As he colorfully puts it, "the District Court required [him] 

to proceed as an involuntary 'hostage' to the process that [ defendants] 'hijacked' 

in 1986 in bad faith." (Appellant Br. at 52.) 

We have previously suggested why the court, having entered default against 

Delaware Flood in 1990, gave it one last chance to render an accurate accounting 

of Olcott's investment. See Olcott II, 76 F.3d at 1558 ("The purpose of the [ entry 

I hope you have gained some understanding about that. If you 

have not, there's no amount of money sanctions that I can impose on 

you that would make that change. So that matter is resolved in my 

mind. 

(Appellant App. Vol. 2 at 809-10.) 

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of default] was to coerce [Delaware Flood] into completing the accounting for 

trial.'''); Olcott Ill, 327 F.3d at 1121 n.7 (10th Cir. 2003) ("The set-off hearing 

was [Delaware Flood's] final opportunity to comply with the court's accounting 

orders. In the event [Delaware Flood] complied, the court presumably intended to 

lift the default sanction and proceed to trial on the merits. When [Delaware 

Flood] failed to comply, the court enforced the sanction by entering judgment.") 

( citations omitted). While Olcott may take issue with the manner in which the 

trial court managed the case, and its strategy in doing so, this is the court's 

prerogative. 18 

In reviewing a Rule l 6(f) or 3 7(b )(2) sanction order, "we examine the 

totality of the circumstances involved in the case." Olcott II, 76 F .3d at 1557. 

The sanctions "must be in the interests of justice and proportional to the specific 

18 We hasten to add the delay of eleven years in conducting the set-off hearing is 

explained by more than abuse of the legal system by the parties. The hearing was 

originally set for August 20, 1990. However, Delaware Flood filed a motion to dismiss 

Olcott's federal claims on the grounds they were barred by the statute of limitations. On 

September 25, 1991, the district court granted the motion. In an unpublished order, we 

reversed and remanded. See Olcott II, 76 F.3d at 1542-43. On remand, Delaware Flood 

renewed its motion to dismiss the federal claims, which the district court granted. In a 

February 26, 1996 decision, we reversed and remanded. Id. at 1549. The scarcity of 

docket activity between 1990 and 1996 with respect to the set-off hearing is explained by 

our observation that ''[ a ]fter the court dismissed Mr. Olcott's cause of action, the [ entry of 

default] became moot because the court's decision abrogated the possibility of a trial." Id. 

at 1558. On remand, the set-off hearing was reset for February 9, 1998. By our count, it 

was reset ten times, once by joint motion, three times on Delaware Flood's motion, four 

times at the court's instance and twice on Olcott's motion (the second time on the eve of 

the date the hearing finally commenced). 

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violation of the rules." Id. Examining the totality of the circumstances presented 

in this case, we conclude the facts found by the district court, in which we find no 

error, amply support its reasoning and decision that further sanctions were "not 

warranted and would not serve the interest of justice." (Appellant Supp. App. 

Vol. III at 3 77.) The district court has labored long in this vineyard. We are 

loath to substitute our judgment, drawn from a cold record, for that of the trial 

judge informed by events and tenured by time. Instead, we are mindful of our 

responsibility to "defer to the trial court's judgment because of its first-hand 

ability" to assess the proceedings over which it presides. Moothart, 21 F .3d at 

1504 (quotation marks omitted). Applying these principles to the facts, we 

conclude the district court did not abuse its discretion in denying additional 

sanctions to Olcott. 

B. Due Process Violation 

Olcott contends he has been denied his right to procedural due process 

inasmuch as the court deprived him of a protected interest, to wit, his alleged 

entitlement to a sanction award, without notice and an opportunity to be heard. 

To make out a Fifth Amendment due process claim, an individual must "prove 

that he or she was deprived of a protected interest and that the deprivation 

occurred without the appropriate level of process." Fed. Lands Legal Consortium 

v. United States, 195 F.3d 1190, 1195 (10th Cir. 1999) (quotation marks omitted). 

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"To have a property interest in a benefit, a person clearly must have more than an 

abstract need or desire for it. He must have more than a unilateral expectation of 

it. He must, instead, have a legitimate claim of entitlement to it." Bd. of Regents 

of State Coils. v. Roth, 408 U.S. 564, 577 (1972) (stating requirements for 

Fourteenth Amendment due process claim). We need not reach the constitutional 

question because Olcott did not possess an entitlement, constitutional or 

otherwise, to prospective sanctions. Olcott contends the court's orders of March 

17, 1987, October 14, 1987, February 8, 1990, and June 6, 2001, vested in him an 

entitlement to sanction awards for fees and expenses incurred until the conclusion 

of the litigation over the sufficiency of the accounting. This is not so. 

While the March 17, 1987 order stated that "[Delaware Flood] shall pay all 

costs and fees incurred by [Olcott] from December 19, 1986 regarding the 

accounting issues until all accounting issues are resolved[,]" (Appellant Supp. 

App. Vol. I at 11 ), suggesting entitlement to sanctions for the entire period until 

the sufficiency of the accounting was resolved, 19 the court later disavowed it as a 

sanction order. See supra note 6. Therefore, the operative sanction orders were 

those of October 14, 1987, February 8, 1990, and June 6, 2001. None of these 

19 We need not and do not decide whether it is possible, under any circumstances, 

for a litigant to be vested with an entitlement to prospective sanctions. Nor do we decide 

whether language of the kind included in the March 1 7, 1987 order establishes such an 

entitlement, of constitutional dimension or otherwise. 

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orders contains prospective language, and only the order of October 14, 1987, 

actually fixes a sanction award. 20 It provided: "[I]t is just that [Delaware Flood] 

pay all fees and expenses of [Olcott's] counsel and [Olcott's] accountants 

incurred for services rendered in connection with resolving the sufficiency of the 

accounting." (Id. at 17 (emphasis added).) The February 8, 1990 order provided: 

"The issue of additional sanctions for fees, expenses and costs are reserved until 

completion of trial." (Appellant App. Vol. 1 at 171 (emphasis added).) The June 

6, 2001 order stated that "any additional sanctions for fees[,] expenses and costs 

will be addressed separately upon proper application or motion." (Id. at 269 

(emphasis added).) Without language awarding prospective sanctions, there is no 

entitlement, constitutional or otherwise. Without an entitlement, there can be no 

deprivation subject to constitutional protection. 

C. Costs Under FED. R. C1v. P. 54(d) 

Finally, Olcott contends the district court abused its discretion in failing to 

explain its reasons for denying his motion for Rule 54(d) costs. We have 

explained how we analyze Rule 54( d) claims: 

Rule 54 creates a presumption that the district court will award 

the prevailing party costs. Thus the established rule is that costs 

are generally awarded to the prevailing party. The burden is on 

20 Olcott contends that after the order of October 14, 1987, all that was left for the 

court was to fix, from time to time, the amount of sanctions due him, not his entitlement 

to those sanctions. 

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the non-prevailing party to overcome this presumption. When a 

district court exercises its discretion and denies costs to a 

prevailing party, it must provide a valid reason for the denial. 

Rodriguez, 360 F.3d at 1190 (citations omitted). 

In the district court, Delaware Flood opposed Olcott's motion for costs on 

the grounds he was not a prevailing party and, even if he was, he was not entitled 

to costs. While Delaware Flood has not in any great detail addressed on appeal 

the issue of Rule 54( d) costs, we construe its arguments in opposition to sanctions 

as its argument against costs as well. And while the district court did not 

separately outline its reasons for denying the motion, we construe the reasons it 

gave for its denial of the sanctions application as intended to also serve as the 

basis for its denial of the Rule 54( d) motion. 

We need not reach the question whether Olcott was a prevailing party 

because, even if he was, the court did not abuse its discretion in denying him 

costs. We observe that all but $601.50 of the Rule 54(d) motion was included in 

Olcolt's application for sanctions. The district court appropriately denied those 

costs for the reasons we have already explained in the sanctions discussion. As to 

the $601.50, the court's reasoning in denying sanctions equally serves to deny this 

sum. 

IV. Conclusion 

The order of the district court denying additional sanctions and costs to 

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Olcott is AFFIRMED. 21 

Entered by the Court: 

Terrence L. O'Brien 

United States Circuit Judge 

21 We decline to consider Delaware Flood's motion, stated in one sentence on Page 

9 of its brief, demanding fees and costs on appeal on the ground Olcott's appeal is 

frivolous. Rule 38 of the Federal Rules of Appellate Procedure requires such a motion be 

separately filed. It was not. 

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