Supreme Court of the United States

“ Because petitioner does not dispute that she and her husband acted as partners, the debt is not dischargeable under the statute.
The Court here does not confront a situation involving fraud by a person bearing no agency or partnership relationship to the debtor. Instead, “ [t] he relevant legal context” concerns fraud only by “agents” and “partners within the scope of the partnership.” ”

“ Perhaps Congress concluded that these debts involved particularly deserving creditors, particularly undeserving debtors, or both. Regardless, if a fresh start were all that mattered, §523 would not exist. No statute pursues a single policy at all costs, and we are not free to rewrite this statute (or any other) as if it did. Azar v. Allina Health Services, 587 U. S. ___, ___ (2019) (slip op., at 15) .
It also bears emphasis—because the thread is easily lost in Bartenwerfer’s argument—that §523 (a) (2) (A) does not define the scope of one person’s liability for another’s fraud. ”

“ Unlike subparagraph (A) , the discharge exceptions in subparagraphs (B) and (C) expressly require some culpable act on the part of the debtor. According to Bartenwerfer, these provisions make explicit what goes without saying in (A) : The debtor’s own fraud must have given rise to the debt.
This argument flips the rule that “ ‘ [w] hen Congress includes particular language in one section of a statute but omits it in another section of the same Act,’ we generally take the choice to be deliberate.” ”

“ A contrary holding would be a throwback to the harsh days when “debtors faced ‘perpetual bondage to their creditors,’ surviving on ‘a miserable pittance [and] dependent upon the bounty or forbearance of [their] creditors.’ ” Brief for Petitioner 16 (quoting 3 J. Story, Commentaries on the Constitution of the United States 5 (1833) ) . ”

“ Similarly, if one partner takes a wrongful act without authority or outside the ordinary course of business, then the partnership—and by extension, the innocent partners—are generally not on the hook. ”

“ All of this said, innocent people are sometimes held liable for fraud they did not personally commit, and, if they declare bankruptcy, §523 (a) (2) (A) bars discharge of that debt. So it is for Bartenwerfer, and we are sensitive to the hardship she faces. But Congress has “evidently concluded that the creditors’ interest in recovering full payment of debts” obtained by fraud “outweigh [s] the debtors’ interest in a complete fresh start,” Grogan v. ”

“ In re Villa, 261 F. 3d 1148, 1151 (CA11 2001) (a debt cannot be discharged when fraud is imputed to the debtor under agency principles) . ↑ Buckley contends that Bartenwerfer has forfeited this argument because in her petition for a writ of certiorari and in the lower courts, she asserted that §523 (a) (2) (A) bars discharge when the debtor “knew or should have known” of her partner’s fraud. We disagree. The question presented is whether a debtor can be “subject to liability for the fraud of another that is barred from discharge in bankruptcy ... ”