Court Opinion

ID: 805961
Source: CourtListenerOpinion
Date Created: 2012-08-03 20:01:30+00
Date Added: 2024-06-11T18:00:17.996947
License: Public Domain

FILED
                            NOT FOR PUBLICATION                              AUG 03 2012

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

NICHOLAS OLIVA and JOAN OLIVA,                   No. 11-15527
                                                     11-15650
              Plaintiffs - Appellants -
              Cross-Appellees,                   D.C. No. 2:08-cv-01559-PMP-
                                                 LRL
  v.

NATIONAL CITY MORTGAGE                           MEMORANDUM *
COMPANY; et al.,

              Defendants - Appellees -
              Cross-Appellants.

                    Appeals from the United States District Court
                             for the District of Nevada
                      Philip M. Pro, District Judge, Presiding

                        Argued and Submitted July 20, 2012
                            San Francisco, California

Before:       TASHIMA, CLIFTON, and MURGUIA, Circuit Judges.

       Nicholas and Joan Oliva (“plaintiffs”) appeal from the district court’s

dismissal order and summary judgment in their action arising out of a mortgage

contract. National City Mortgage Company, Michael Deming, and Vivian Furlow

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
(“defendants”) cross-appeal from the district court’s orders sanctioning National

City for discovery violations and denying defendants’ motion seeking attorney’s

fees. We have jurisdiction under 28 U.S.C. § 1291. We review de novo a district

court’s summary judgment and dismissal order. Manzarek v. St. Paul Fire &

Marine Ins. Co., 519 F.3d 1025, 1030 (9th Cir. 2008) (dismissal order);

Blankenhorn v. City of Orange, 485 F.3d 463, 470 (9th Cir. 2007) (summary

judgment). We review for an abuse of discretion the denial of leave to amend as

well as orders concerning discovery sanctions and attorney’s fees. 389 Orange St.

Partners v. Arnold, 179 F.3d 656, 661 (9th Cir. 1999) (attorney’s fees); Adriana

Intl. Corp. v. Lewis & Co., 913 F.2d 1406, 1408 (9th Cir. 1990) (discovery

sanctions); Gabrielson v. Montgomery Ward & Co., 785 F.2d 762, 765 (9th Cir.

1986) (leave to amend). We affirm.1

      The district court properly concluded that plaintiffs failed to create a genuine

dispute of material fact that they suffered damages. Indeed, because defendants

sold plaintiffs a 3-year ARM (i.e., an interest rate fixed for the first three years of

the loan and adjustable thereafter) instead of the 7-year ARM (i.e., an interest rate

fixed for the first seven years of the loan and adjustable thereafter) they requested,

      1
        The parties are familiar with the facts, and we repeat them here only as
necessary to explain our decision.

                                            2                                     11-15527
plaintiffs’ interest rate and monthly payments decreased. Contrary to plaintiffs’

contentions, they are not entitled to damages based on the depreciation of their

house. See, e.g., Collins v. Burns, 741 P.2d 819, 822 (Nev. 1987) (party that was

fraudulently induced into purchasing a store was not entitled to damages based on

the store subsequently going out of business for reasons unrelated to the original

inducement). Accordingly, summary judgment was properly granted on plaintiffs’

fraud and negligence claims. See J.A. Jones Constr. Co. v. Lehrer McGovern

Bovis, Inc., 89 P.3d 1009, 1018 (Nev. 2004) (listing elements for a fraud claim);

Doud v. Las Vegas Hilton Corp., 864 P.2d 796, 798 (Nev. 1993) (listing elements

for a negligence claim), superseded by statute on other grounds as recognized in

Estate of Smith ex rel. Smith v. Majoney’s Silver Nugget, Inc., 265 P.3d 688 (Nev.

2011). Moreover, because plaintiffs failed to show damages, their contract claims

seeking damages necessarily fail. See Johnson v. Riverside Healthcare Sys., LP,

534 F.3d 1116, 1121 (9th Cir. 2008) (“we may affirm based on any ground

supported by the record”).

      The district court properly dismissed plaintiffs’ claims under the Truth in

Lending Act (“TILA”) because the loan at issue was a “residential mortgage

transaction” and therefore not subject to TILA rescission. 15 U.S.C. § 1635(e)(1)

                                          3                                   11-15527
(the right of rescission does not apply to a “residential mortgage transaction”); id.

§ 1602(x) (defining a “residential mortgage transaction”).

      The district court did not abuse its discretion by denying plaintiffs’ motion

to file a second amended complaint because the motion was both futile and

untimely. See Townsend v. Univ. of Alaska, 543 F.3d 478, 485 (9th Cir. 2008)

(“Leave to amend need not be granted, however, where the amendment would be

futile.”); Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 986 (9th

Cir. 1999) (denying motion to amend because, among other things, plaintiff’s

motion was untimely and failed to adequately explain the delay).

      We construe the $10,000 sanction against National City as a discovery

sanction.2 As such, the district court did not abuse its discretion because National

City failed to produce a document after being compelled to do so. See Fed. R. Civ.

P. 37(b)(2)(C) (permitting reasonable expenses, including attorney’s fees, caused

by a failure to comply with a discovery order). The amount of the sanction was

reasonably related to the additional expenses incurred by plaintiffs due to National

      2
        We do so because we may affirm on any basis supported by the record.
See Johnson, 534 F.3d at 1121. The district court characterized its sanction as
“contempt,” but contempt requires a finding of a violation by “clear and
convincing evidence.” In re Dual Deck Video Cassette Recorder Antitrust Litig.,
10 F.3d 693, 695 (9th Cir. 1993). We avoid examining this more difficult
question.

                                           4                                    11-15527
City’s recalcitrance, as the district court could fairly determine based on its

knowledge of the case and of customary fees and costs in the community.

      The district court did not abuse its discretion by declining to award

defendants attorney’s fees. Defendants were not entitled to attorney’s fees under

Nev. Rev. Stat. §§ 7.085 and 18.010 because plaintiffs’ alleged misconduct was

procedural in nature and, thus, is governed by federal law. See Galam v. Carmel

(In re Larry’s Apt., L.L.C.), 249 F.3d 832, 838 (9th Cir. 2001) (“federal courts

must be in control of their own proceedings and of the parties before them, and it is

almost apodictic that federal sanction law is the body of law to be considered in

that regard”). Insofar as defendants sought attorney’s fees under Fed. R. Civ. P.

11, they failed to comply with the safe harbor provision. See Barber v. Miller, 146

F.3d 707, 711 (9th Cir. 1998) (“[A] party cannot wait until after summary

judgment to move for sanctions under Rule 11.”). Defendants were also not

entitled to attorney’s fees under Nev. R. Civ. P. 68 and Nev. Rev. Stat. § 17.115

because plaintiffs reasonably declined defendants’ settlement offer. See Uniroyal

Goodrich Tire Co. v. Mercer, 890 P.2d 785, 789 (Nev. 1995) (listing factors for

awarding attorney’s fees under Nev. R. Civ. P. 68 and Nev. Rev. Stat. § 17.115),

superseded by statute on other grounds as recognized in RTTC Commc’n, LLC v.

The Saratoga Flier, Inc., 110 P.3d 24, 29 (Nev. 2005).

                                           5                                      11-15527
AFFIRMED.

            6   11-15527