Unpublished Disposition, 909 F.2d 1488 (9th Cir. 1990)

No. 89-15322.

United States Court of Appeals, Ninth Circuit.

Before HUG and SCHROEDER, Circuit Judges, and JAMES A. VON DER HEYDT,^*  District Judge.

MEMORANDUM^** 

Debtors-appellants David L. Carraher and Phyllis D. Carraher appeal the decision of the Bankruptcy Appellate Panel ("BAP") affirming the judgment of the bankruptcy trial court. We find that the bankruptcy court did not abuse its discretion when it granted the motion for protective order filed by plaintiff-appellee George Ralph Morgan, Jr. See, e.g., Kirschner v. Uniden Corp. of America, 842 F.2d 1074, 1079 (9th Cir. 1988). When the Carrahers filed their motion to compel discovery, the bankruptcy court directed them to narrow their discovery requests in order that the parties might compromise their discovery dispute. Instead, the Carrahers responded with 210 additional requests for admissions and 21 additional compound interrogatories. We find that the limits on discovery imposed by the bankruptcy court's protective order are reasonable in light of the nature of the case and the issues raised therein. Fed. R. Civ. P. 26(b) (1), (c); Bankr.R. 7026; In re U.S. Financial Securities Litigation, 74 F.R.D. 497, 498 (S.D. Cal. 1975); Jarosiewicz v. Conlisk, 60 F.R.D. 121, 126-27 (N.D. Ill. 1973). We reject the Carrahers' argument that the bankruptcy court erred by ruling on Morgan's motion for protective order without ruling on the Carrahers' motion to compel. The bankruptcy court's order granting Morgan's motion for protective order rendered moot the Carrahers' motion to compel. Moreover, the Carrahers had ample opportunity to argue the merits of their discovery requests on the motions for protective order and for reconsideration, and we agree with the BAP's conclusion that requiring further discussions between the parties would have been pointless.

Further, the bankruptcy court did not err by finding against the Carrahers on the affirmative defense of fraud pleaded in their answer. Had the Carrahers not pleaded this affirmative defense, it would have been deemed waived, Fed. R. Civ. P. 8(c); Bankr.R. 7012(b); Taylor v. United States, 821 F.2d 1428, 1432-33 (9th Cir. 1987), cert. denied, 485 U.S. 992 (1988), and by the time the Carrahers asserted their wish to "withdraw" the fraud defense, the time for amending pleadings as a matter of course without leave of court or the written consent of the adverse party had long since expired. Fed. R. Civ. P. 15(a). The Carrahers' assertion in their trial brief and at trial that they wished to withdraw their fraud defense was insufficient to reserve this defense for litigation in the future. Accordingly, the fraud defense was before the bankruptcy court at trial and the court properly ruled against the Carrahers because they failed to bear their burden of proof on this affirmative defense.

Finally, we decline to impose sanctions against the Carrahers' counsel pursuant to 28 U.S.C. § 1927 or the court's inherent authority. It does not appear from the record that counsel acted recklessly or in bad faith on appeal. See In re Akros Installations, Inc., 834 F.2d 1526, 1532 (9th Cir. 1987).

AFFIRMED.