Wiping Away Debts From Others’ Fraud Weighed by Supreme Court (1)

A bankrupt California woman told the Supreme Court that she should be able to wipe out debts incurred in a home sale because she was unaware that her husband failed to disclose material defects about their house.

Subjecting Kate Bartenwerfer to liability for her husband’s fraud would amount to a “financial death sentence” for her and others in similar situations, Bartenwerfer attorney Sarah Harris of Williams & Connolly LLP told the justices Tuesday.

The buyer of the San Francisco house, Kieran Buckley—who sued the couple after discovering defects in 2007—argued that Kate and David Bartenwerfer were partners in the sale ...