Supreme Court Tackles Fraud Among Business Partners, Not Spouses

The US Supreme Court opinion that a bankrupt California woman can’t wipe out debts incurred through her husband’s fraudulent conduct in a home sale is a big win for fraud victims, but the justices were careful not to extend the ruling to all married couples.

The 9-0 opinion issued Wednesday rejected Kate Bartenwerfer’s attempt to use bankruptcy to discharge the debt, even though she didn’t personally perpetrate the fraud. And though the couple is married, the substance of the ruling is largely aimed at their business partnership.

By focusing on the pair as business partners, the high court skirted the ...