Appellants, the Hanson Development Company, a Delaware corporation,1 and the Hanson Development Company, a New Jersey corporation, appeal from entry of summary judgment in the amount of $670,000 in favor of appellees as beneficiaries of a lease guarantee against appellants as the guarantors. Jurisdiction in the district court was established by diversity of citizenship. 28 U.S.C. § 1332. On appeal, the Hanson companies challenge the District Court's2 jurisdiction and the imposition of various sanctions for their failure to comply with certain discovery orders and contend that the amount of the judgment was excessive.

In 1969, three brothers formed the Delaware corporation for the principal purpose of developing and promoting shopping centers in various states. The Hanson brothers continue to own this corporation as sole stockholders of the JEH Development Company. The New Jersey corporation, carrying the same corporate name, was organized in 1972, and is a wholly-owned subsidiary of the Delaware corporation. This New Jersey corporation shares not only the name, but the business purpose, officers and address of the Delaware corporation. The Hanson brothers also own 70% Of S & H Shopping Centers, Inc. (hereinafter referred to as S & H), another corporation formed for the purpose of developing shopping centers that shares the address of the Hanson companies. This latter corporation entered into an agreement with the Delaware corporation whereby in exchange for its providing services as an experienced developer, the Delaware corporation would receive 70% Of the profits on any shopping centers developed by S & H.

In 1971, the Hanson brothers became interested in some Nebraska property located in Grand Island. One of the brothers inspected the site and called the owners of the property, Grand Island Mall, Inc., regarding the leasing of the property as a shopping center site. Negotiations resulted in the execution on May 24, 1972, by Grand Island Mall, Inc. and Donald Hanson as vice-president of the Delaware corporation, of an agreement providing for a 99 year lease. The agreement included addenda amending portions of the basic agreement. One amendment provided that the lease would "be entered into by and between Grand Island Mall, Inc. and S & H Shopping Centers, Inc., a Delaware corporation, and guaranteed by The Hanson Development Company, rather than entered into as Hanson Development Company as Tenant." Donald L. Hanson signed both the original agreement and the addenda as vice-president of the Delaware corporation.

On October 18, 1972, Grand Island Mall, Inc. leased its property to EES Grand Island Associates Ltd. This limited partnership assigned all its interest in the lease to S & H, its general partner. Thereafter, S & H mortgaged the property to United Jersey Mortgage Company in order to finance a loan of $3,200,000 for the development of the shopping center, and in 1973 began constructing improvements and leasing space to retail businesses. This project became known as the Grand Island Mall and was one of three shopping centers started by S & H in Nebraska in 1972.

In accordance with the terms of its agreement with S & H, the Delaware corporation provided services to aid the development of these Nebraska projects. It maintained a regional office in Kansas City, Missouri, and personnel from this office traveled to Nebraska to inspect construction, review specifications, meet with tenants, and generally facilitate rapid and orderly progress. Another office opened in Omaha, Nebraska, and the Delaware corporation paid the salaries of the four employees working out of this office. These employees primarily handled contacting prospective tenants, leasing space and coordinating construction for these tenants. As consideration for the services rendered on behalf of the three shopping centers in Nebraska, the Delaware corporation received in excess of $1.7 million. In addition to providing services, the Delaware corporation in the course of its business of promoting and developing shopping centers guaranteed the performance of some of the agreements and undertakings of S & H with regard to these projects. The Hanson Development Company guaranteed the full performance of the lease of the Grand Island property, including the obligation of the lessee to make mortgage payments on the mortgage in favor of the United Jersey Mortgage Company. This guarantee was signed by John F. Hanson, president of the Hanson Development Company, and imprinted with the seal of the Delaware corporation. On August 20, 1974, John E. English and his sister, Mary E. English, traded property with Grand Island Mall, Inc., and thereby succeeded to all interests in the Grand Island property previously held by Grand Island Mall, Inc. Subsequently, S & H defaulted on the mortgage payments. In an action in the United States District Court for the District of Nebraska, with the Englishes and the Hanson company as parties defendant, the United Jersey Mortgage Company obtained a judgment of foreclosure as a result of which the land was sold at forced sale.

On October 12, 1976, the Englishes filed the complaint for damages in the present action, naming the Delaware corporation and S & H as defendants. Neither defendant responded, and a default judgment was entered against both. The Delaware corporation later entered an appearance and the District Court granted its motion to set aside entry of the default. In the course of discovery, the Englishes learned of the existence of the New Jersey corporation with the identical name and address, and amended the complaint to add it as a party defendant.

Discovery commenced immediately upon filing of the complaint, when plaintiffs-appellees served upon the Delaware corporation interrogatories and a request for production and copying of documents, but discovery did not proceed unimpeded. Lack of cooperation, inadequate responses, and dilatoriness on the part of the appellants hampered the orderly progression of discovery. Numerous times, the District Court issued orders to compel discovery, and also granted many of the appellants' motions for extensions of time. Finally, after appellants' continued failure to comply with court-ordered deadlines for discovery, the District Court imposed sanctions designed to establish as admitted those facts which appellees sought to establish by the discovery denied them. Thereafter, the District Court granted appellees' motion for summary judgment on the issue of liability and the issue of damages was tried to the court. Appellants contest the summary judgment on the basis that the District Court abused its discretion by its imposition of sanctions, and that sanctions cannot be utilized to establish jurisdictional facts. It also contests the amount of damages awarded.

Pursuant to Fed.R.Civ.P. 37(b)(2)(A),3 on December 27, 1978, the District Court entered an order establishing that the Delaware corporation was doing business in Nebraska and its involvement was substantial enough to give the court personal jurisdiction. The history of the discovery proceedings leading to this order amply supports the District Court's exercise of discretion.

On January 18, 1977, appellees moved to compel answers to the first set of interrogatories. In response, the court ordered that answers or objections be made by February 11, 1977. On that date appellants moved for an extension of time until the 14th of February. The court granted this extension, but received nothing on the 14th. Instead, on February 22, appellants filed vague and unresponsive answers together with a motion for an order granting an extension of time for the filing of the answers until the 22nd. Thereafter the parties entered into a stipulation that provided that the Delaware corporation would correct improper answers and properly frame its objections to interrogatories by May 23, 1977, and would answer fully and completely all interrogatories not objected to by June 9, 1977. On May 18, 1977, the court approved this stipulation and ordered compliance therewith. Appellant practically ignored the deadlines established by the stipulation, and on May 25 filed three corrected but unsworn answers and objections to eight of the interrogatories. On June 23, 1977, appellees moved for an order to show cause why the defendants should not be held in contempt of court because of their failure to comply with the orders, rules and procedures of the court and their failure to provide discovery. On August 10, 1977, appellees moved for an order treating the issue of personal jurisdiction as established for the reason that appellants were deliberately avoiding and delaying discovery of the facts pertaining to this issue by responding to interrogatories in an unresponsive, inconsistent, evasive, and incomplete manner. On August 17, the court denied appellees' motions and made further orders providing for the progression of discovery. On August 19, 1977, appellees again moved to compel answers to the first set of interrogatories. The court responded in a detailed memorandum and order requiring answers to specific questions and clarification of specific discrepancies to be made by September 6, 1977. On September 14, 1977, appellants filed a few answers. Appellees filed a second set of interrogatories on October 6, 1977. The Delaware corporation again ignored the schedule for discovery set out in Rule 33(a), Fed.R.Civ.P., and appellees on November 16, 1977, moved to compel answers. In turn, the Delaware corporation moved for a protective order. Following a hearing on these motions, on November 28, 1977, the court ordered the Delaware corporation to answer certain questions by December 5, 1977. On December 13, 1977, appellees moved to impose sanctions for failure to comply with the November 28 order. Finally, on December 27, the court imposed the sanction establishing personal jurisdiction.4

Fed.R.Civ.P. 37(b) provides comprehensively for sanctions for failure to obey discovery orders, and the imposition of these sanctions should not be reversed unless there has been an abuse of discretion. Denton v. Mr. Swiss of Missouri, Inc., 564 F.2d 236, 239 (8th Cir. 1977); Fox v. Studebaker-Worthington, Inc., 516 F.2d 989, 993-94 (8th Cir. 1975); 4A Moore's Federal Practice P 37.08 at 37-112-13 (2d ed. 1978). The court below carefully followed the procedures outlined in Rule 37. Exercising its discretion, it granted extensions of time for discovery, held hearings on discovery motions, entered orders to compel discovery, and finally, after the continued failure of appellants to respect discovery orders, it imposed a sanction drawn narrowly to establish as admitted the fact that the Delaware corporation had contacts with Nebraska sufficient to support in personam jurisdiction.

The imposition of this sanction did not deny the Delaware corporation its fifth amendment rights to due process.5 In accord with the sound policy favoring the use of less severe and harsh sanctions than dismissal or default, the District Court carefully tailored its order to address the specific information sought by discovery.6 See Edgar v. Slaughter, 548 F.2d 770, 773 (8th Cir. 1977).

The proceedings leading to the imposition of the sanction establishing the Delaware corporation as the guarantor were substantially the same as that leading to the sanction regarding jurisdiction. Appellants obstructed the discovery of certain documents by the use of dilatory and contumacious tactics. Appellees sought these documents to prove that the Delaware corporation and not the New Jersey corporation made the guarantee.7 The District Court repeatedly ordered the production of these documents.8 Finally, after holding a hearing and finding that no good cause was shown for the failure to produce the documents as ordered, it imposed the sanction. The District Court did not abuse its discretion.

Appellants also challenge the amount of the damages awarded. They contend that the damages assessed against the guarantor must be limited to the amount of the default judgment against the principal, S & H, and that the evidence does not support even that amount. The joint and several default judgment rendered against S & H and The Hanson Development Company was in the sum of $593,802. The Delaware corporation chose to have this judgment against it set aside and go to trial. At trial, expert testimony from a real estate appraiser established that appellees suffered a loss of $670,000 due to the default of S & H on the mortgage payments. The record clearly supports the District Court's judgment for damages in this amount.

We have reviewed the remaining arguments of appellants and find them to be without merit. The District Court's findings of fact are not clearly erroneous and it applied correct principles of law.

All motions are overruled except that all costs shall be taxed against the appellants.

Judgment affirmed.