Rasmussen, Faye F. v. Disch, Robert E.

In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 03-3363

ROBERT E. DISCH,

Plaintiff-Appellee,

v.

FAYE F. RASMUSSEN,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 03-C-153-C—Barbara B. Crabb, Chief Judge.

____________

ARGUED OCTOBER 28, 2004—DECIDED AUGUST 9, 2005

____________

Before RIPPLE, WOOD, and EVANS, Circuit Judges.

WOOD, Circuit Judge. While many observers have touted

Congress’s recent amendments to the Bankruptcy Code as

a major overhaul of the law in this area, the changes leave

intact one primary purpose of the Code: to provide only

honest debtors with relief. Under that standard, Faye

Rasmussen should not have received a discharge of her

debts, but the bankruptcy court initially ordered one. Later,

the court revoked the discharge on grounds that Rasmussen

contests. We hold that the bankruptcy court was authorized

to take the action that it did, and we therefore affirm.

2 No. 03-3363

I

In January 2000, Rasmussen, the proprietor of a café and

catering business called Faval, Inc., sought financial

assistance from her friend, Robert Disch, when the business

ran into difficulties. Among the business’s woes were the

inability to obtain credit and a pending default on two bank

loans due at the end of the month. Disch agreed to provide

assistance to Faval; he gave Rasmussen a check for $20,000

to stave off default and pledged to extend credit to the

business. True to his word, between January 2000 and

May 2001, Disch loaned more than $810,000 to Rasmussen

to use in Faval. Approximately $590,000 of this amount was

obtained through loans and lines of credit that Disch

secured with his own collateral and personal guarantees.

The remainder consisted of cash and checks from Disch to

Rasmussen to cover Faval’s operating expenses. The parties

agreed that Rasmussen would make all payments due on

the bank loans, but would not begin to pay Disch back for

his personal loans until Faval became “profitable.”

Notwithstanding the infusion of this considerable sum,

Faval closed its doors in October 2001. Soon thereafter,

Disch filed an action in the Wisconsin courts to recover his

investments. On February 12, 2002, Rasmussen filed a

Chapter 7 bankruptcy petition. As required by 11 U.S.C.

§ 341(a), the first scheduled meeting with her creditors took

place on March 18; her creditors then had 60 days from that

date to file objections to the discharge of all debts (11 U.S.C.

§ 727) or to seek to exclude particular debts from discharge

(11 U.S.C. § 523). See FED. R. BANKR. P. 4004(a), (c) (cited

hereafter as “Bankruptcy Rule X”). On May 15, Disch filed

a complaint seeking to exempt from discharge the debt

owed to him. The complaint alleged that the debt was based

on Rasmussen’s dishonesty in obtaining the loans, her

defalcation or embezzlement, and her willful and malicious

injury to him through embezzlement and conversion, actions

that prevent dischargeability under Code § 523(a)(2), (a)(4),

No. 03-3363 3

and (a)(6) respectively. Because no creditors filed an

objection under § 727 to contest the overall discharge, the

bankruptcy court granted a general discharge to Rasmussen

on August 19, reserving the determination of Disch’s

§ 523(a) claims until after an adversary hearing was

conducted.

Troubling facts regarding the manner in which Rasmussen

handled the funds in connection with the debts she sought

to discharge first came to light during the adversary pro-

ceeding. Although Rasmussen worked as a bookkeeper for

18 years at a large corporation with over 100 employees and

$26 million in annual sales prior to purchasing Faval, she

adopted a number of unusual (if not highly suspicious)

bookkeeping methods for the business. She did not keep a

general ledger for Faval or accurate records of her personal

and business transactions; instead, she generally relied on

her memory instead of books. As a result, she could not

explain a large number of transactions, many of which

involved the commingling of personal and business funds.

For example, she claimed that she made a number of short-

term loans to Faval, and though she was certain that she

paid herself back, she could not remember the amount of

these alleged loans, the source of the funds, when she paid

herself back, or from which funds she did so. She could not

track large sums from her many investors or recall how she

used much of the money Disch lent. While she could account

for the allocation of some funds, she was unable to explain

what she did with the funds in excess of the allocation. In

one instance, she used funds from Disch to pay off a

personal debt. In 2001, after examining Faval’s records,

Disch’s accountant discovered that despite Rasmussen’s

complaints about Faval’s financial difficulties, the busi-

ness’s assets, including Disch’s investments, exceeded its

liabilities by approximately $550,000.

In addition to her unorthodox bookkeeping methods,

Rasmussen engaged in a number of unscrupulous business

4 No. 03-3363

practices. She testified that she dealt in cash as much as

possible in order to avoid a Wisconsin Department of

Revenue levy for unpaid income taxes. To achieve this end,

she frequently converted checks from Disch into cash or

cashier’s checks in her name instead of depositing them into

a Faval account. She paid her suppliers with cashier’s

checks or cash and half the time, she paid her employees in

cash. In addition to concealing assets from the State, this

lack of a paper trail also made it difficult for creditors to

trace the money that went into the business.

Rasmussen also attempted to engage in a number of

transactions involving Disch’s financial information without

his knowledge, including unauthorized purchases on Disch’s

credit line. At one point, Rasmussen contacted one of the

banks with whom Disch obtained a loan for the business to

request that the address on file be changed from Disch’s

address to Faval’s so that Disch would not be notified when

she was late in making a payment on the loan.

At the adversary hearing, Disch argued that the particu-

lar debts Rasmussen owed to him should not be included

within the general discharge she had received, relying on

the various subsections of § 523 mentioned above. In addi-

tion, for the first time, he made the broader argument that

Rasmussen was not entitled even to a general discharge of

her debts, because she was disqualified under several of the

provisions of § 727(a). Section 727 requires the bankruptcy

court to grant a discharge unless it finds that certain

specified kinds of misconduct or fraud disentitle the debtor

to this relief. Rasmussen objected to the bankruptcy court’s

consideration of Disch’s new argument on the ground that

Disch had not properly raised this theory in the adversary

proceeding.

The court decided against Disch on his claim that his par-

ticular debts should be found nondischargeable, and Disch

has not taken a cross-appeal from this determination.

No. 03-3363 5

Nevertheless, it allowed Disch to amend the pleadings to

add the § 727 theory and then found that Rasmussen had

no right to a discharge under § 727. The problem, as the

court recognized, was that Rasmussen’s conduct did not

appear to meet the grounds for revocation enumerated in

§ 727(d), which specifically addresses the court’s power to

revoke a discharge. It found, however, that § 727(d) did not

exhaust the grounds for revocation. Relying on its equitable

authority under 11 U.S.C. § 105(a), it found that revocation

was necessary and authorized in this situation to prevent

manifest injustice. It also held in the alternative that it had

authority to revoke the order of discharge under Bank-

ruptcy Rule 9024, on the theory that the discharge resulted

from the court’s own mistake. The net result of all this was

a judgment in favor of Disch for $657,700. The district court

affirmed the decision in all respects, although it did not

address the alternate ground for revocation under Bank-

ruptcy Rule 9024.

II

On appeal, Rasmussen challenges the revocation of her

discharge on a variety of procedural grounds. She first

takes issue with the bankruptcy court’s consideration of the

§ 727 claim. She argues that it was improper and futile

because her discharge had already been granted in confor-

mity with § 727 and Bankruptcy Rule 4004. She also argues

that it was an abuse of the court’s discretion to allow the

amendment of the pleadings when it did, because she had

no opportunity to defend against the claim. Finally, Ras-

mussen challenges the court’s authority to revoke her

discharge and argues that it was an impermissible exercise

of the court’s equitable powers under § 105(a) and

Bankruptcy Rule 9024.

We have stated that “the Bankruptcy Code was meant to

discharge only an honest debtor from his or her debts,” and

6 No. 03-3363

that “the Code ‘should be liberally applied to protect the

[debtor] only in those cases where there is no intent to vio-

late its provisions.’ ” In re Suttles, 819 F.2d 764, 766 (7th

Cir. 1987) (quoting Matter of Garman, 643 F.2d 1252, 1257

(7th Cir. 1980)). A debtor in a Chapter 7 liquidation case

qualifies for an order discharging her nonexempt debts if

she satisfies the conditions stated in § 727(a) of the Bank-

ruptcy Code. 11 U.S.C. § 727(a) (grounds for entitlement to

a discharge); see Kontrick v. Ryan, 540 U.S. 443, 447 (2004).

The debtor cannot obtain a discharge, however, if one of the

conditions specified by the statute exists, such as where the

debtor had transferred, removed or concealed property

within a year prior to the filing of the petition, see 11

U.S.C. § 727(a)(2), failed to keep or preserve any recorded

information from which her financial condition or business

transactions might be ascertained, see 11 U.S.C. § 727(a)(3),

or failed to provide a satisfactory explanation for any loss of

assets or deficiency of assets preventing the satisfaction of

liabilities, see 11 U.S.C. § 727(a)(5).

Creditors have the right to object to a discharge, if they

act in a timely manner. Although no statute specifies a time

limit to file such an objection, Bankruptcy Rule 4004(a)

requires that a complaint “be filed no later than 60 days

after the first date set for the meeting of creditors” unless

the court allows an extension of time. After the expiration

of the time period, “the court shall forthwith grant the dis-

charge,” unless a complaint objecting to the discharge has

been filed, a motion to dismiss the case is pending, or the

time for filing has been extended. Bankruptcy Rule 4004(c).

As the bankruptcy court noted, it is permissible as a pro-

cedural matter for a court to grant a discharge when no

complaint objecting to discharge has been filed at the

expiration of the 60-day period, notwithstanding a pending

claim under § 523 seeking to exempt a particular debt from

discharge. See Administrative Office of the United States

Courts, Bankruptcy Clerk’s Manual (1997); Bankruptcy

No. 03-3363 7

Rule 4007 Committee Notes (1983) (“Although a complaint

that comes within § 523[ ] must ordinarily be filed before

determining whether the debtor will be discharged, the

court need not determine the issues presented by the com-

plaint filed under this rule until the question of discharge

has been determined under Rule 4004.”). Here, the court

clerk issued Rasmussen’s discharge under this relatively

automatic procedure even though, as the court later con-

cluded, she failed to meet the conditions stated in § 727(a).

The latter point underlies the court’s decision to undo the

discharge. Rasmussen has not taken issue with it before

this court, wisely in our opinion. The record from the

adversary proceeding strongly supports the conclusion that

she concealed property within one year of her Chapter 7

filing, failed to keep adequate business records, and failed

satisfactorily to explain her losses. These actions brought

her within the conditions described in § 727(a)(2), (a)(3),

and (a)(5), any one of which would defeat her right to a

general discharge.

Rather than claim a substantive right to her discharge,

Rasmussen argues here only that there was no procedure

available to the bankruptcy court to revoke the action it had

already taken. She first urges that the bankruptcy court

had no authority to consider the § 727 claim because Disch

raised it after the time period for raising objections to

discharge allowed by Bankruptcy Rule 4004 had expired

and the order of discharge had issued. If by this she means

that we should treat Bankruptcy Rule 4004’s 60-day time

limit for filing a § 727 objection as a jurisdictional predicate

that deprives the court of all power to consider a late claim,

the short answer is that the Supreme Court has rejected

this characterization of the rule. See Kontrick, 540 U.S. at

447 (holding that Bankruptcy Rule 4004 is not “jurisdic-

tional” and falls within a court’s adjudicatory authority). If

she is arguing that orders of discharge are somehow

immune from reconsideration because of their very nature,

8 No. 03-3363

we must again disagree. There is no reason to think that

such a rigid rule prevails in bankruptcy, when the power to

reconsider judgments is so well established throughout the

judicial system. See, e.g., FED. R. CIV. P. 59, 60 (motions for

new trial, for alteration or amendment of judgment, and for

relief from judgment or order); FED. R. APP. P. 40 (panel

rehearing); 28 U.S.C. § 46(c) (rehearing en banc). As long as

the bankruptcy proceeding has not reached a final resolu-

tion, the bankruptcy court has the authority to reconsider

the propriety of a discharge, as long as it does so in confor-

mity with applicable restrictions under the statute and

rules.

III

The only serious point is therefore whether the bank-

ruptcy court acted in excess of the authority granted to it

under the applicable statutes and rules. We consider first

whether the bankruptcy court abused its discretion when it

allowed Disch to amend the complaint to include the

§ 727(a) claim. This argument misses an essential point

about federal procedure: parties are not required to plead

legal theories. See Bartholet v. Reishauer A.G. (Zürich), 953

F.2d 1073, 1078 (7th Cir. 1992). Disch has wanted one and

only one thing all along: a ruling that Rasmussen must pay

him what she owes, or, put in bankruptcy terms, that her

debts to him should not be discharged. Under FED. R. CIV.

P. 54(c), which is made applicable to bankruptcy proceed-

ings by Bankruptcy Rule 7054, “every final judgment shall

grant the relief to which the party in whose favor it is

rendered is entitled, even if the party has not demanded

such relief in the party’s pleadings.” This means that it is

too late for Rasmussen to obtain any relief solely because

the pleadings were or were not amended.

In any event, the court was well within its authority to

permit the amendment. Bankruptcy Rule 7015 states that

No. 03-3363 9

FED. R. CIV. P. 15 applies in adversary proceedings. Rule 15

in turn allows the court to consider claims outside those

raised in the pleadings, as long as the objecting party would

not be prejudiced and the trial amendment will further the

consideration of the case on the merits. See FED. R. CIV. P.

15(b) (stating standard that applies when objection is made

to the new issues). Where the time limit for filing a new

claim has passed, Rule 15(c) allows the amended pleading

to relate back to the date of the original complaint if the

claim arises out of the same conduct, transaction or occur-

rence.

Both the bankruptcy court and the district court found

that Rasmussen failed to show that she was prejudiced by

the addition of the § 727 issues. She had ample notice that

she would have to explain what she did with Disch’s

money—that was what the whole adversary proceeding was

about. Disch’s complaint alleged that Rasmussen failed or

refused to provide an adequate accounting of Favel’s

activities and the financial status of the company. Rasmus-

sen was questioned at length at her depositions about the

extent to which she kept (or did not keep) personal and

business records. At the trial, she was given the opportunity

to explain the disappearance of the assets. The only reason

she was unable to do so, as the bankruptcy court found, was

because she had neither sufficient records nor a satisfactory

explanation for the absence of the records. In the district

court, Rasmussen also failed to point to any evidence that

she could have offered to explain where she had spent the

money. And now, before this court, she proffers no evidence

or argument to dispute the bankruptcy court’s conclusion

that her conduct did not entitle her to a discharge.

Because Bankruptcy Rule 4004 is not a jurisdictional rule

but rather akin to a statute of limitations, see Kontrick, 540

U.S. at 447, allowing the § 727 claim to relate back to the

date of the complaint is proper so long as it was sufficiently

linked to the claims raised there. Rasmussen argues that In

10 No. 03-3363

re Bozeman, 226 B.R. 627 (B.A.P. 8th Cir. 1998), holds as a

matter of law that no such link can ever exist between a

claim based on § 523 and one based on § 727. We do not

read Bozeman as establishing such a bright-line rule. The

amended complaint in Bozeman expanded the scope of the

issues raised in the original complaint, and it was this

expansion that made amendment of the pleadings improper

there. Disch’s § 727 claim, in contrast, arose from the same

conduct, transactions and occurrences as his § 523 claim. As

the district court noted, the complaint, discovery and entire

adversary proceeding focused on what Rasmussen did with

the money Disch loaned to Faval from 2000 to 2001.

Accordingly, the bankruptcy court did not abuse its discre-

tion when it permitted Disch to amend his complaint to add

the § 727 theory of recovery.

Even if Disch’s § 727 theory was properly before the

bankruptcy court, the question remains whether the bank-

ruptcy court was entitled to take the corrective action that

it did in response to this theory, or if something in the

Bankruptcy Code or rules barred Disch’s right to recover.

As we noted earlier, the bankruptcy court invoked two in-

dependent grounds for its action: its equitable powers under

11 U.S.C. § 105(a) and its power to correct its own orders

under Bankruptcy Rule 9024.

The Bankruptcy Code places strict limits on a court’s

authority to revoke a discharge. The statutory grounds set

forth in 11 U.S.C. § 727(d) permit revocation where the

discharge was obtained through fraud of the debtor, the

debtor concealed property from the bankruptcy estate, or

the debtor refused to comply with court orders. The parties

agree that § 727(d) provides no authority for revocation

under the facts of this case, and that was the bankruptcy

court’s view as well. The court believed nevertheless that

Rasmussen’s discharge had to be revoked to carry out the

primary provisions of the Bankruptcy Code, in particular

§ 727(a), because allowing it to stand would result in

No. 03-3363 11

manifest injustice. To prevent such a result, it exercised its

equitable authority under § 105(a).

Section 105(a) reads as follows:

The court may issue any order, process, or judgment

that is necessary or appropriate to carry out the provi-

sions of [the Bankruptcy Code]. No provision of this

title providing for the raising of an issue by a party in

interest shall be construed to preclude the court from,

sua sponte, taking any action or making any determina-

tion necessary or appropriate to enforce or implement

court orders, rules, or to prevent an abuse of process.

11 U.S.C. § 105(a). The question of how to interpret this

statute is one of law, and so we apply de novo review to this

part of the case.

Despite the open-ended language of § 105(a), courts have

carefully limited the circumstances in which it should be

used. Otherwise, there is a real risk that more particular

restrictions found throughout the Code would amount to

nothing, because the court could always use the residual

equitable authority of § 105(a). For that reason, this court

has commented that the powers conferred by § 105(a) must

be exercised “within the confines of the Bankruptcy Code.”

In re Lloyd, 37 F.3d 271, 275 (7th Cir. 1994) (citation

omitted). We warned that a judge does not have “free-

floating discretion to redistribute rights in accordance with

his personal views of justice and fairness, however enlight-

ened those views may be,” Matter of Chicago, Milwaukee,

St. Paul, & Pac. R.R. Co., 791 F.2d 524, 528 (7th Cir. 1986),

or use the court’s equitable power to circumvent the Code.

In re Kmart Corp., 359 F.3d 866, 871 (7th Cir. 2004)

(Section 105(a) “does not create discretion to set aside the

Code’s rules about priority and distribution; the power

conferred by § 105(a) is one to implement rather than to

override.”). The question here is whether the court’s

12 No. 03-3363

reconsideration and vacation of an order of discharge is an

appropriate exercise of its equitable power under § 105(a).

Our decision in In re Greenig, 152 F.3d 631 (7th Cir.

1998), is instructive, if not dispositive, on this issue. There,

a creditor asked the court to allow it to file untimely proofs

of claim after the debtors’ reorganization plans had been

confirmed. We held that the bankruptcy court had improp-

erly exercised its authority under § 105 when it allowed the

creditor to circumvent Bankruptcy Rule 3002(c) and file the

untimely claims. Greenig, 152 F.3d at 635. While our

holding did not absolutely preclude the court from allowing

late-filed claims, the authority to do so must be based on

grounds found elsewhere in the Code or the rules (such as

under Bankruptcy Rule 7015) and not under the court’s

general § 105(a) powers.

The bankruptcy court here took the position that Greenig

did not control the outcome, because in this case it was

acting to enforce a specific Code provision, § 727(a), not to

achieve a reshuffling of the equities in a manner contrary

to the provisions of the Code. But this ignores the fact that

Bankruptcy Rule 4004 structures the way in which a claim

under § 727(a) must be presented. If § 105(a) offered a way

around the restrictions on filing § 727(a) claims found in

Bankruptcy Rule 4004, then the rule might as well not

exist. Similarly, such a broad interpretation of § 105(a)

would make the list of grounds for revoking a discharge

found in § 727(d) meaningless; anything not in the list could

come in through the back door of § 105(a). We conclude,

consistently with Greenig, that the revocation of Rasmus-

sen’s discharge exceeded the court’s equitable powers under

§ 105(a).

Although the bankruptcy court did not have authority to

revoke the discharge under § 105(a), this does not mean the

court was without any authority to set matters right. The

bankruptcy court also relied on Bankruptcy Rule 9024,

No. 03-3363 13

which applies FED. R. CIV. P. 60 to cases under the Code,

with several exceptions, one of which we discuss below.

Rule 60(b) allows the court to vacate an order that it en-

tered as a result of mistake, inadvertence, excusable

neglect, fraud, or to conform to newly discovered evidence,

or for any other reason justifying relief from the operation

of the judgment.

Rasmussen argues that Bankruptcy Rule 9024 does not

apply to the revocation of a discharge because one of the

exceptions it carves out from FED. R. CIV. P. 60 is for “a

complaint to revoke a discharge in a chapter 7 liquidation

case,” which “may be filed only within the time allowed by

§ 727(e) of the Code.” Section 727(e) permits a complaint

seeking revocation to be filed within one year after the

discharge was granted. We do not see how this provision

precludes the court from setting aside an order of discharge

under Bankruptcy Rule 9024 six months after its issuance,

which was the case here. Final bankruptcy orders can be set

aside under Bankruptcy Rule 9024, see In re Met-L-Wood

Corp., 861 F.2d 1012, 1018 (7th Cir. 1988), and nothing in

the rule indicates that it does not apply to the revocation of

discharges. See In re Cisneros, 994 F.2d 1462, 1466 (9th Cir.

1993) (recognizing that Bankruptcy Rule 9024 provides

authority for the court to revoke a discharge); In re Midkiff,

271 B.R. 383, 386 (B.A.P. 10th Cir. 2002) (same); In re Ali,

219 B.R. 653, 654 (Bankr. E.D.N.Y. 1998) (same); In re

Mann, 197 B.R. 634, 635 (Bankr. W.D. Tenn. 1996) (same);

In re Burgett, 95 B.R. 524 (Bankr. S.D. Ohio 1988) (same).

Rasmussen also suggests that using Bankruptcy

Rule 9024 to vacate a discharge order is essentially an end-

run around the express terms of § 727(d). This argument

assumes, however, that the standards for relief under

Bankruptcy Rule 9024 are identical to those under § 727(d),

and this is incorrect. Section 727(d) makes revocation

mandatory if the criteria spelled out in that section are

satisfied, while Bankruptcy Rule 9024 (like its civil counter-

14 No. 03-3363

part Rule 60(b)) places a heavy burden on the party seeking

to undo an existing judgment. In addition, Bankruptcy Rule

9024 incorporates the one-year time limit for motions under

the analog to Rule 60(b)(1), (2), or (3), while § 727(d) has no

such built-in deadline. It is reasonable to allow correction

on any equitable ground within a short time period, and

then to impose stricter restrictions thereafter. A closer look

at § 727(d) shows that it creates a two-way street: it gives

a right to revocation to the trustee, creditor, or United

States trustee when fraud is proven, and at the same time

it protects the debtor by limiting the circumstances under

which the trustee, creditor, or United States trustee has

such a right. This limited right of the debtor is not infringed

when a court exercises its discretion to reopen an order of

discharge for one of the reasons recognized by Bankruptcy

Rule 9024.

Our conclusion is consistent with the one reached by the

Ninth Circuit in an analogous situation in In re Cisneros,

994 F.2d 1462 (9th Cir. 1993). There, the court had to

reconcile the limited grounds for vacating a discharge order

in a Chapter 13 proceeding recognized by 11 U.S.C.

§ 1328(e) with Bankruptcy Rule 9024. As in our case, the

bankruptcy court had relied on Bankruptcy Rule 9024 to

vacate a discharge order that had been issued in a Chapter

13 proceeding, even though it could not have revoked the

order under 11 U.S.C. § 1328(e). The court rejected the deb-

tors’ argument that the court’s application of Bankruptcy

Rule 9024 conflicted with § 1328(e) by expanding the

grounds for revocation. Id. at 1465. It found that the debtors

should not be able to use § 1328(e) as a sword when they

had no right to the discharge to begin with. Id. at 1466. The

court also found no reason to believe that Congress in-

tended § 1328(e) to preclude the bankruptcy court from

exercising its discretion to correct a mistake. Id.

In the case before us, the bankruptcy court noted that it

was only at the adversary hearing that it became aware of

No. 03-3363 15

the inappropriateness of Rasmussen’s order of discharge,

which had been granted more or less automatically. Had

the court known of the facts concerning her conduct, it

would never have issued the order. We find that the initial

grant of a discharge for Rasmussen was the sort of “mis-

take” or “inadvertence” that the court was empowered to

reach under Bankruptcy Rule 9024, and the court did not

abuse its discretion by taking corrective action under the

circumstances presented here.

Finally, Rasmussen argues that the court abused its

discretion because it referred to FED. R. CIV. P. 60(a) (as

incorporated by Bankruptcy Rule 9024), and there was no

showing of the type of clerical mistake covered by that

subsection of the rule. At most, however, this argument

criticizes the court for a citation error. Rasmussen is correct

that the mistake here was not the kind for which Rule 60(a)

was designed. It does fall within Rule 60(b)(1), however,

and nothing in Bankruptcy Rule 9024 prevents the use of

that part of the civil rule. We may affirm the judgment

below on any ground supported by the record. Boyd v.

Illinois State Police, 384 F.3d 888, 897 (7th Cir. 2004).

16 No. 03-3363

IV

For these reasons, we AFFIRM the judgment of the district

court.*

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

*

Disch has moved to dismiss this appeal altogether, representing

to this court that on July 5, 2005, Rasmussen was convicted in

Wisconsin state court of violating the Wisconsin securities laws.

That court is expected to issue an order requiring her to make

restitution to Disch in the full amount of the monies he loaned to

her, and Disch argues that the restitution order will make this

appeal moot. We disagree. Our holding goes beyond any restitution

order and upholds the bankruptcy court’s decision to revoke the

general discharge in bankruptcy that it had granted to Rasmus-

sen, which is a matter with at least potential significance beyond

any debt owed to Disch. In addition, we see no reason why an

additional reason for Rasmussen must pay Disch affects the

analysis of these debts for bankruptcy purposes. We therefore

DENY the motion to dismiss.

USCA-02-C-0072—8-9-05