T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T NI C HO L AS OL I VA a n d J OA N O L I VA , P l ai nt i ff

s - A pp el l ant s - C ro ss-A p p el l ees, v. NA T I ON AL C I T Y MOR T GA GE C O M P A N Y ; e t a l., D ef

endant s - A pp el l ee s - C ro ss-A p p el l an t s. N o. 11- 15527 11- 15650 D . C. N o . 2 : 0 8 - c v - 0 1 5 5 9 - PM PLRL ME MOR AN DU M *

A pp ea l s f

rom the U ni t ed S t at es D i stri ctC ou rt f orthe D i s tr i c tof

N e va da P hi l i p M . P r o, D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d J ul y20, 2012 S a n F r a n c is c o , C a lif

o rn ia B efo re: T A S H IM A , C L IF T O N , an dM U R G U IA , C i rcu i tJu d g es. N ich o las a n d Jo an O li v a ( “p lain ti ff s” ) ap p ea l fro m th e d istrict co u rt’s di s m i s s a l or de ra nd s um m a ryj udgm e nti n the i ra c t i on a r i s i ng outof am ort ga ge c ontr a c t . N a t i ona l C i tyM ort ga ge C om pa ny , M i c ha e l D e m i ng, a nd V i vi a n F ur l ow 

# FI LED AU G 03 2012 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALST he part i es ar e f am i l i arw i th the fa ct s, and w e r epea tthem here on l y a s 1 n e c e s s a ryto e x p la in o u rd e c is io n . 11- 15527 2 (“ defe nd ant s” ) c ross -app ea l fr om the di stri ctcourt ’ s order s s anct i on i ng N at i on al C ity f o r d isco v ery v io lati o n s a n d d en yin g d ef en d an ts’ m o ti o n se ek in g atto rn ey ’s fe es . W e have j uri sdi ct i on un der 28 U . S . C . § 1 29 1. W e r evi ew de no vo a di stri ct c o u rt’s s u m m a ryju d g m e n t a n d d is m is s a l o r d e r . M an zare k v . St . P au l

Fi re & M ar i ne I ns . C o. , 51 9 F . 3d 10 25 , 10 30 (9th C i r. 20 08 ) ( di sm i ss al order) ; B lanke nhorn v . C i t

yof O r ange , 48 5 F . 3d 46 3, 47 0 (9th C i r. 20 07 ) ( sum m ary j ud gm ent ). W e r evi ew for an abu se of di sc re t i on the deni al of l eave t o am end as w e ll a s o r d e r s c o n c e rn in g d is c o v e rys a n c tio n s a n da tto rn e y ’s f e e s . 3 8 9 O r a n g e S t. P a r tn e rs v . A rn o ld , 1 7 9 F .3 d 6 5 6 , 6 6 1 ( 9 th C ir . 1 9 9 9 ) ( a tto rn e y ’s f e e s ) ; A dr i ana I nt l. C or p. v . L e w is & C o. , 91 3 F . 2d 14 06 , 14 08 (9th C i r. 19 90 ) ( di sc ov ery sanct i on s) ; G abr i e l

s on v . Mont

gom e r yW ard & C o. , 78 5 F . 2d 76 2, 76 5 (9th C i r. 1 9 8 6 ) ( l e a v e t o a me n d ) . W e a f f i rm. 1 T he di s tr i c tc ourtpr ope r l yc onc l ude d tha tpl a i nt i f f s f a i l e d t o c r e a t e age nui ne d is p u te o f

m a te r ia l f

a c t th a t th e ys u f

f e r e dd am a g e s . I n d e e d , b e c au s e d e f e n d a n ts s ol d pl a i nt i f

f s a3- y e a rA R M ( i . e . , a n i nt e r e s tr a t e f i xe d f orthe f i r s tthr e e y e a r s of th e lo a n a n d a d

ju s tab le th e r e a f

te r ) in s te a do f

th e 7 - y e a rA R M ( i.e ., a n in te r e s t r a te f i xe d f orthe f i r s ts e ve n y e a r s of

the l oa n a nd a dj us t abl e the r e a f t e r ) the yr e que s t e d,11- 15527 3 p l ai n t i ffs’ i n t erestrat e an dm o n th l y p aym en t s d ecreased . C o n trary t o p l ai n t i ffs’ c o n te n tio n s , th e ya r e n o t e n title d to d a m a g e s b a s e do n th e d e p r e c ia tio n o f th e ir h o u s e . Se e, e . g. , C ol l i ns v . B urns , 74 1 P . 2d81 9, 82 2 (N ev. 19 87 ) ( party thatw as f r audul e nt l yi nduc e d i nt o pur c ha s i ng as t or e w a s note nt i t l e d t o da m a ge s ba s e d on the st ore s ub se qu ent l y goi ng ou tof bu si ness for r ea sons un re l at ed t o the ori gi nal i n d u cem en t ). A cco rd i n g l y, su m m ary j u d g m en tw as p ro p erl y g ran t ed o n p l ai n t i ffs’ f r au d an d n e g lig e n c e c la im s . See J. A . Jo n es C o n str. C o . v. L eh rer McG o vern B ovis, Inc. , 89 P . 3d 10 09 , 10 18 (N ev. 20 04 ) ( l i st i ng el em ent s f or a f raud cl ai m ); D oud v . L as V

egas Hi l ton C or

p. , 8 6 4 P .2 d7 9 6 , 7 9 8 ( N e v . 1 9 9 3 ) ( lis tin g e le m e n ts f o ran e g l i g e n c e c l a i m) , s u p e rs e de d b ys ta tu te o n o th e rg r o u n d s a s r e c o g n iz e d

in Estate of Sm i th ex r el. Sm i th v. M aj on ey ’s Si lve r N

ug get , Inc. , 265 P . 3d 688 ( N e v. 2 0 1 1 ) . M o r e o v e r , b e c au s e p l a i n t i f f s f a i l e dt o s h o w d a ma g e s , th e i rc o n tr a c tc l a i ms s e e k in g d a m a g e s n e c e s s a r ilyf a il. Se e J

o h n s o n v . Ri v e rs i de H

e a l th c a r e S

ys . , LP , 534 F . 3d 1116, 1121 ( 9th C i r . 2008) ( “ w e m a ya f f i rm ba s e d on a nygr ound supp ort ed by the re cord”). T h e d is tr ic t c o u rt p r o p e r lyd is m is s e dp la in tif f s ’ c la im s u n d e rth e T ru th in L e ndi ng A c t( “ T I L A ” ) be c aus e the l oa n a ti s s ue w a s a“ r e s i de nt i a l m ort ga ge tr a ns a c t i on” a nd the r e f

or e nots ubj e c tt o T I L A r e s c i s s i on. 15 U . S . C . § 1635( e ) ( 1)W e do s o be c aus e w e m a ya f f i rm on a nyba s i s s upport e d bythe r e c or d. 2 Se e J ohns on , 53 4 F . 3d at11 21 . T he di stri ctcourtchar ac t er i ze d i t s s anct i on as “ c ont e m pt , ” butc ont e m ptr e qui r e s af i ndi ng of avi ol a t i on by“ c l e a ra nd conv i nci ng evi dence. ” I n r e D ual

D e c k V i de o Cas s e t te R e c orde rA nt i tr us t L i t i g. , 1 0 F .3 d 6 9 3 , 6 9 5 ( 9 th C ir . 1 9 9 3 ) . W e a v o ide x a m in in g th is m o r e d if f ic u lt que s t i on. 11- 15527 4 ( th e r ig h t o f

r e s c is s io n d o e s n o t ap p lyto a“r e s id e n tia l m o rtg a g e tr a n s a c tio n ” ) ; i d. § 1 60 2(x) (defi ni ng a “ re si dent i al m ort gage transac t i on ”) . T he di s tr i c tc ourtdi d notabus e i t s di s c r e t i on byde ny i ng pl a i nt i f f s ’ m ot i on t o f i l e as e c ond a m e nde d c om pl a i ntbe c aus e the m ot i on w a s both f ut i l e a nd u n t i m el y. See T

ow nsend v. U

ni v. of A laska , 543 F . 3d 478, 485 ( 9th C i r . 2008) ( “ L e a ve t o a m e nd ne e d notbe gr a nt e d, how e ve r , w he r e the a m e ndm e ntw oul d be fut i l e. ”) ; L ockheed M

art i n C orp. v. N

etw ork Solut i on s, Inc. , 1 9 4 F .3 d9 8 0 , 9 8 6 ( 9 th C ir. 1 9 9 9 ) ( d en yin g m o ti o n to am en db ec au se , am o n g o th erth in g s, p lain ti ff’s m ot i on w as un t i m el y and fa i l ed t o adequ at el y e xp l ai n the del ay ). W e c on strue the $1 0, 00 0 sanct i on agai nstN at i on al C i ty a s adi sc ov ery sanct i on . A s s uch, the di stri ctcourtdi d n otabuse i t s di sc re t i on because N at i on al

2 C ityf a ile d to p r o d u c e ad o c u m e n t a f te rb e in g c o m p e lle dto d o s o . See F e d. R . C i v. P . 37 (b)( 2)(C ) ( perm i tt i ng re as on abl e e xp ense s, i ncl ud i ng att orney’ s f ee s, caused by a f ai l ure t o com pl y w i th a di sc ov ery order ). T he am ou ntof the sanct i on w as re as on abl y r el at ed t o the addi t i on al expenses i ncurred by pl ai nt i ff s due t o N at i on al11- 15527 5 C ity ’s r e c a lc itr a n c e , a s th e d is tr ic t c o u rt c o u ldf a ir lyd e te rm in e b a s e do n its k n o w l ed g e o f th e case an d o f cu st o m ary fees an dco st s i n th e co m m u n i ty. T he di stri ctcourtdi d n otabuse i t s di sc re t i on by decl i ni ng t o aw ar d defe nd ant s a tt orney’ s f

ee s. D ef endant s w er e notent i t l ed t o att orney’ s f ee s und er N ev. R ev. S t at . §§ 7. 08 5 and 18 . 01 0 b ec ause pl ai nt i ff s’ al l eged m i sc on du ctw as p r o c e d u r a l in n a tu r e a n d , th u s , is g o v e rn e db yf e d e r a l la w . See G alam v. Carm el ( I n r e L a rr y ’s Ap t., L .L .C .) , 2 4 9 F .3 d8 3 2 , 8 3 8 ( 9 th C ir . 2 0 0 1 ) ( “f e d e r a l c o u rts m u s t b e in c o n tr o l o f

th e iro w n p r o c e e d in g s a n do f th e p a rtie s b e f

o r e th e m , a n dit is a lm o s t ap o d ic tic th a t f

e d e r a l s a n c tio n la w is th e b o d yo f la w to b e c o n s id e r e din th a tr e g a r d ” ) . I n s o f

a ra s d e f e n d a n t s s o u g h ta tt o rn e y ’ s f e e s u n d e rFe d . R. Ci v . P. 1 1 , th e yf a ile d to c o m p lyw ith th e s a f e h a rb o rp r o v is io n . See B arber v . Mi l ler , 146 F . 3d 70 7, 71 1 (9th C i r. 19 98 ) ( “ [A ] party c anno tw ai tun t i l af t ersum m ary j udgm e ntt o m ove f

ors a nc t i ons unde rR ul e 11. ” ) . D e f e nda nt s w e r e a l s o not e nt i t l e d t o a tt orne y ’ s f

e e s unde rN e v. R . C i v. P . 68 a nd N e v. R e v. S t a t . § 17. 115 b e c au s e p la in tif

f s r e a s o n ab lyd e c lin e dd e f e n d an ts ’ s e ttle m e n t o f

f e r . Se e U

ni r oy al G oo dri ch T

i re C o. v. Mer ce r , 890 P . 2d 785, 789 ( N e v. 1995) ( l i s t i ng f a c t or s f or aw ar di ng att orney’ s f

ee s und erN ev. R . C i v. P . 68 and N ev. R ev. S t at . § 1 7. 11 5), supers eded by statute on o ther groun ds as re cogn i ze d i n R TTCC om m c’ n, L L Cv. T he Sa ratog a Fl i er

, Inc. , 1 1 0 P .3 d2 4 , 2 9 ( N e v . 2 0 0 5 ) .11- 15527 6 AF F I RME D.