Court Opinion

ID: 2998145
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:41:18.890229+00
Date Added: 2024-06-11T12:28:38.755823
License: Public Domain

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