Anthony Adrian v. Onewest Bank, Fsb

FILED
NOT FOR PUBLICATION
APR 03 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

ANTHONY ADRIAN; MARIA M. No. 15-15583
ADRIAN,
D.C. No. 2:12-cv-00189-FJM
Plaintiffs - Appellants,
MEMORANDUM*
v.

ONEWEST BANK, FSB,

Defendant - Appellee.

Appeal from the United States District Court
for the District of Arizona
Frederick J. Martone, Senior District Judge, Presiding

Argued and Submitted March 14, 2017
San Francisco, California

Before: WALLACE, McKEOWN, and BYBEE, Circuit Judges.

Anthony and Maria Adrian (Adrians) appeal from the district court’s

judgment in favor of OneWest Bank, FSB (OneWest) following a jury trial. We

have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
The Adrians argue first that the district court should have allowed them to

depose OneWest’s corporate representative after the discovery deadline established

in the scheduling order. This argument challenges two of the district court’s orders.

The first order rejected the parties’ stipulated extension of the discovery deadline,

and the second denied the Adrians’ motion for additional discovery under Federal

Rule of Civil Procedure 56(d). Both decisions are reviewed for abuse of discretion.

Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (motion to

modify scheduling order); Qualls ex rel. Qualls v. Blue Cross of Cal., Inc., 22 F.3d

839, 844 (9th Cir. 1994) (motion to conduct additional discovery).

Although the parties styled their agreed extension as a stipulation to extend

the discovery deadline, the district court properly treated it as a joint motion

because the judge must consent to any modification of a scheduling order. Fed. R.

Civ. P. 16(b)(4). Furthermore, a scheduling order “may be modified only for good

cause.” Id. The district court did not abuse its discretion by concluding that the

parties had failed to carry that burden because the only stated basis for the

extension was “conflicts caused by other cases.” On appeal, the Adrians assert that

the parties requested the extension because OneWest had not produced its

corporate representative timely to be deposed. There is nothing in the record,

however, to show that the parties informed the district court of this problem before

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it rejected the stipulation. We will not reverse the district court for failing to

account for information that was not before it. See Solis v. Matheson, 563 F.3d

425, 437 (9th Cir. 2009).

As a general matter, we encourage parties to cooperate in resolving this sort

of issue. If they can do so without court intervention, so much the better. But at

some point, a party must act to protect its interest in obtaining necessary discovery.

The Adrians did not use any of the available options to notify the court of their

predicament until the very end of the discovery period, and even then only advised

the court that the delay was caused by the attorneys’ workloads. This is not

adequate diligence. See Zivkovic, 302 F.3d at 1087–88. At the same time,

OneWest’s conduct in hiding behind the scheduling order after it failed to produce

its corporate representative timely is not something that should be emulated either.

Neither party acted as it should have, but the district court cannot be faulted for the

result because the parties did not provide it with the necessary information.

Nor did the district court abuse its discretion by denying the Adrians’

subsequent Rule 56(d) motion for additional discovery. Such a motion need only

be granted where “the movant diligently pursued its previous discovery

opportunities.” Qualls, 22 F.3d at 844 (emphasis omitted). As with the stipulation

to extend discovery, nothing in the record at the time the district court ruled

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supported a finding that the Adrians had diligently pursued their previous

opportunities. Accordingly, they were not entitled to additional discovery under

Rule 56(d).

Next, the Adrians contend that the district court should have excluded the

testimony of Justin Rock, OneWest’s corporate representative, and recordings of

calls between Mr. Adrian and OneWest that were not disclosed until long after the

scheduling order’s deadline. In both instances, the Adrians sought exclusion as a

sanction for OneWest’s alleged discovery violations. Accordingly, we review for

abuse of discretion. See Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d

1101, 1105–06 (9th Cir. 2001).

The district court did not abuse its discretion by allowing Rock to testify

because there is no evidence that the late disclosure of Rock’s identity prejudiced

the Adrians. See Wendt v. Host Int’l, Inc., 125 F.3d 806, 814 (9th Cir. 1997)

(identifying “risk of prejudice” to party affected by discovery violation as relevant

factor in reviewing district court’s imposition of sanction). The Adrians did not

need to know Rock’s identity to notice a deposition of OneWest’s corporate

representative, see Fed. R. Civ. P. 30(b)(6), and OneWest disclosed early on that

the “Person Most Knowledgeable for OneWest Bank” would likely have

discoverable information. Since Rock testified only in a representative capacity for

4
OneWest, it is not clear what other discovery the Adrians could have conducted

with respect to him other than that authorized by Rule 30(b)(6). Absent prejudice,

there was no abuse of discretion.

The admission of the call recordings solely for impeachment purposes, even

if an abuse of discretion, was harmless in light of the other evidence that OneWest

introduced at trial to impeach the Adrians’ credibility. This evidence included the

Adrians’ application for a loan modification under the Home Affordable

Modification Program (HAMP), Mr. Adrian’s written correspondence describing

his family’s dire financial situation, and OneWest’s letters to the Adrians

indicating that they might not be eligible for a HAMP modification. Because “it is

more probable than not that the jury would have reached the same verdict” even

without the call recordings, we will not reverse the judgment. Obrey v. Johnson,

400 F.3d 691, 701 (9th Cir. 2005); see also United States v. 1,071.08 Acres of

Land, 564 F.2d 1350, 1353 (9th Cir. 1977) (“[T]he admission of improper

evidence is to be ignored unless substantial rights of the parties are thereby

affected”).

The district court did not err by granting judgment as a matter of law on the

Adrians’ request for punitive damages. See Saman v. Robbins, 173 F.3d 1150,

1155 (9th Cir. 1999) (“We review the district court’s order granting . . . judgment

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as a matter of law de novo”). The Adrians presented no evidence that OneWest had

an “evil mind” as required to obtain punitive damages under Arizona law.

Rawlings v. Apodaca, 726 P.2d 565, 578 (Ariz. 1986). Furthermore, a request for

punitive damages is not a stand alone claim, but is instead “inextricably linked” to

an underlying cause of action. See Sisemore v. Farmers Ins. Co. of Ariz., 779 P.2d

1303, 1305 (Ariz. Ct. App. 1989). The jury returned verdicts for OneWest on all of

the Adrians’ claims, so there is no liability to which the punitive damages could

attach at this point. Accordingly, the district court properly granted judgment as a

matter of law.

Finally, the district court did not abuse its discretion by refusing to give an

adverse inference instruction as a sanction for OneWest’s failure to disclose all call

logs relating to the Adrians’ loans. There is no evidence that OneWest failed to

disclose the second call log in bad faith, so an adverse inference instruction was

not required. Cf. Med. Lab. Mgmt. Consultants v. Am. Broad. Cos., Inc., 306 F.3d

806, 824 (9th Cir. 2002) (“When relevant evidence is lost accidentally or for an

innocent reason, an adverse evidentiary inference from the loss may be rejected”).

AFFIRMED.